WHAT THE INDUSTRY EXPECTS IN 2008

Oil prices driving companies to invest in new Barnett Shale-like plays

William Donald (Donnie) Harris III, President/CEO, Forrest A. Garb & Associates, Inc., Dallas

Oil prices are again one of the hottest topics in our industry today. You can quote me from last years’ article “We expect oil prices to maintain a $50-$60 per barrel of oil in 2007 and the near future.” Obviously the “near future” is less than one year. With oil prices nearing and surpassing the $100 per barrel mark, everyone is seeing an increase of activity in all aspects of the oil industry. Fields that were below their economic limit are now once again economically developable. Plays that would never have been developed in the past are now being fiercely developed. Companies and individuals that were not part of our industry in the previous years are seeing opportunities and deciding that they too need to be “oil men” and try and get a part of the action.

A lot of the new players are investing in the Barnett Shale, which has had a major impact in my own backyard of North Texas. Leasing, developmental drilling and completion techniques are evolving on a daily basis. The North Texas development has also caused some companies to take a look at similar shale plays throughout the United States, and to use the learning curve of North Texas on these other shale plays. Even though we are seeing new blood in our industry, I do not think this is a good time to be purchasing properties. The current owners are seeing ever-increasing oil and gas prices, and are asking a premium for their interests, but they could be right in doing so, even if they buy at $100 per barrel, and the oil prices continue to climb.

At Forrest A. Garb & Associates, Inc., we have hired new staff and lost some to the ever-growing populace of small operating companies. Our workload has increased a great deal, but with the new staff comes a growing computer literacy. This allows each individual in our company to perform more evaluations and to be more efficient in his or her time.

I believe the future of our industry is very promising. We all have opportunities to expand our niches. Large oil companies, small oil companies, large consulting firms and small consulting firms all have the availability to prosper in this environment. I talked to my stock broker, and he believes there is no reason for oil prices to fall in the future, and in his opinion that is not good. A high price is good, but the price should also be stable.

Next year should be a banner year for us at Forrest A. Garb & Associates, Inc., and I believe we, and industry as a whole, will prosper in the years beyond. 

THE AUTHOR
	W.D. (Donnie) Harris III is CEO and President of Dallas-based Forrest A. Garb & Associates, Inc., where he first joined as president in August 1998. He is responsible for the firm’s daily operations and the supervision of engineering projects. Mr. Harris began his career with ARCO Oil & Gas as a reservoir engineer. He also was vice president at DeGolyer and MacNaughton, where he prepared and supervised engineering and reserve studies, plus appraisal reports for fields in many countries. He holds a BS degree in petroleum engineering from Texas A&M University and returned to school in 1998, earning an MBA from Southern Methodist University. Mr. Harris is a member of SPE and is a registered professional engineer in Texas.