Barnett Shale Expo exhibitors report tough times, but hold out hope

BY JOHN-LAURENT TRONCHE
March 12, 2009


Under dark clouds and heavy rain, about 3,000 attendants turned out for the latest Barnett Shale Expo, even as exhibitors said times are tough and there appears to be little in the way of positive outlook for 2009.

In spite of the tough economic times, economist Ray Perryman pointed out that 2008 was the best year on record for the Barnett Shale.

Waco economist Perryman, president of The Perryman Group, told about 575 luncheon attendants to put the current boom and bust into perspective, saying despite a grim situation compared to 2008 or 2007, production still remains at levels well above previous years in North Texas.

“These fluctuations are a normal part of the energy market – it’s volatile,” said Perryman, adding, “The Barnett primarily has been developing in a period that was all up, so for the first time this area is getting to see the downside of an energy cycle.”

The Fort Worth Chamber of Commerce-sponsored luncheon and expo, hosted at the Fort Worth Convention Center on March 11, attracted 94 exhibitors and about 3,000 attendants, compared to 147 exhibitors and more than 5,000 attendants at the 2008 Barnett Shale Expo, according to chamber estimates.

According to the latest update of Perryman’s study, commissioned by the Fort Worth Chamber of Commerce, the Barnett Shale was responsible for $11 billion and 111,000 jobs in 2008, compared to about $8.4 billion and 84,000 jobs in 2007. Perryman and his group project Barnett Shale-related activity will account for $6.8 billion and 70,000 jobs in 2009 – or a drop of about $4.2 billion and 40,000 jobs.

Donnie Smith cites natural gas prices as the most important bellwether to exploration and production activity. Prices are expected to remain flat – below $5 per million British thermal units – for the remainder of 2009 and into 2010.

“It’s not as good as it was from the standpoint of your natural gas prices,” said Smith, mid-continent business development manager at Houston-based Champion Technologies. “When they go down, business slows. A lot of rigs are being pulled out of the Barnett Shale right now due to that. All we need is a government that allows more natural gas to be used, and our gas prices will go up. We all hinge on what that price is.”

Strata Control Service Inc.’s Jim Kirkpatrick said his work with energy producers in southeastern Oklahoma keeps his firm busy.

“I’m not going to say there aren’t some guys who have lost their jobs but it isn’t as bad for us up there,” Kirkpatrick said.

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