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On March 29, 2016, we attended the Hart Energy Oil and Gas Investor Energy Capital Conference in Austin, Texas, where Executives from E&P companies, financial institutions and private equity firms “spent two days networking, strategizing and hearing from some of the industry’s top experts.”

The presentations were all very enlightening, and provoked a lot of energetic and thoughtful discussion.

In particular, the lead-off presentation by S. Will VanLoh at Quantum Energy Partners wove together a number of the larger themes that we’ve been looking at during the past couple of years of activity, and I thought I would use his 7 Market Themes as a springboard for discussion here on the blog. So lets.

1 This downturn is supply driven, like the 80’s downturn, but with much less OPEC spare capacity

We have spent some time discussing the current global inventory levels –  the ~1  MBOE/day or so surplus of crude available to the market. We have also discussed from early on the differences amongst OPEC member countries as to whether they’re willing or able to provide a supply cap for stabilization. However, I think Mr. VanLoh’s point about OPEC spare capacity is quite interesting.

Image Source: Quantum presentation at ECC

2 Technology will continue to drive down costs, increase recoveries and thus lower break‐evens

This has certainly been explored – we see that even at the much lower drilling rate...