NAPE (North American Prospect Expo) ARTICLE
Bob Harvey of Harvest Petroleum - Washington Post- February 2009



The same cheap crude that just crushed year end profits for oil and gas producers in making the industry's biggest annual dealmaking event an even more bustling affair. No one attending this week's North American Prospect Expo is happy about the crude prices hovering at five-year lows around $ 40 a barrel. However, like anywhere else, there are deals to be had in a recession. An investment made in the current economic climate could pay big returns when oil and gas prices bounce back, as everyone expects them to do. "There's a sense of blood in the water," said Thomas Wilson, and investment banker from New Orleans who's representing The Delek Group Ltd., an Israeli energy firm. "The opportunities are here." NAPE, started in 1993, is an annual marketplace to pitch and ponder prospective oil and gas deals that can include a couple of acres ripe for drilling or joint ventures with multimillion-dollar price tags.

This year's expo is expected to attract more than last year's record 15,700 participants, even with oil about $ 50 a barrel cheaper. The expo takes a huge chunk of the city's massive George R. Brown Convention Center, where hundreds of companies can spend thousands of dollars for exhibit space. The roster includes giants like Exxon Mobil and Shell, but most participants are smaller independent producers. Exhibitor booths are adorned with maps and geologic data that, if interpreted right, could spell riches for those willing to take a gamble. Potential investors drop by, ask questions, take notes-sort of like shopping for a new vehicle. And like anyone kicking the tires on a car lot these days, it's a buyer's market.

Still, because of tighter budgets and limited or no access to credit, many attendees say they're more focused this year, searching harder for deals that make the most economic sense. "People are here with a little different attitude," said Robin Forte, one of the event's organizers. "They're nervous, they're anxious, but they're here to keep their business going. Robert Harvey, the principal of Harvest Petroleum, Inc., a small firm in Frisco, Texas, said he's looking to invest in four or five drilling projects, perhaps spending as much as $ 2 million in the next couple days. Harvest Petroleum already has interests in wells in parts of South Louisiana and Texas. He figures the economy will rebound sometime next year, and so will the fortunes of the oil industry. "This is a chance to get some good prospects and ride this out, Harvey said. "This thing is going to turn around in 18 months or so, and 18 months is nothing in this business. We look at five, six, seven year horizons."

Transactions at NAPE can range from $ 10,000 to tens of millions. Forte said the biggest deal he's been privy to was worth $ 40 million. David Pursell, an analyst at energy-focused securities firm Tudor Pickering Holt & Co., said NAPE has become a can't miss event for industry wheeler dealers, even when prices are depressed. If you're not there, you're afraid you might miss something. If you go and you're smart, Pursell said, you could walk away with "the next big play." Most of these guys have been through cycles," he said. "They recognize if you want to make money in this business, you buy low and sell high."


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