The state and local oil and gas industry looks to continue a big rebound that began in 2021 following a tough pandemic-affected year in 2020.
“It’s a lot more positive. It’s a lot more optimistic,” said Dewey Bartlett Jr., president of Keener Oil and Gas and chairman of the Oklahoma Energy Producers Alliance.
After a dramatic drop with the onset of the COVID-19 pandemic in 2020, the prices of oil and gas made a roaring comeback in 2021.
Producers said it was difficult to make a profit with oil prices at $60 per barrel or lower, and many oil and gas wells were shuttered as a result.
But in 2021, oil prices began a big rebound and reached $90 per barrel or more in the latter half of the year — much faster than many analysists thought during the depths of the pandemic.
Many local and state energy companies saw big profits as a result.
Tulsa-based Williams, for example, reported 2021 earnings of $1.5 billion, compared to $208 million in 2020. A Fortune 500 company, Williams specializes in natural gas processing and transportation.
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Bartlett, a former mayor of Tulsa, in February attended the North American Prospect Exposition in Houston, an event attended, he said, by about 12,000-14,000 people — including some “that are the real movers and shakers of the entire oil and gas industry.”
Bartlett said there is a renewed interest in companies looking at drilling projects that are conventional, or involve vertical drilling, rather than horizontal.
“Horizontal drilling has become overheated,” he said.
“There was a lot of talk that maybe we can go back to the tried and true way of drilling vertical wells.”
Though usually involving a bigger financial investment, “it is a much more stable production and not so flashy,” he said.
Williams and other companies, including Tulsa-based ONE Gas and ONEOK, in their earnings reports have included comments from top company executives addressing commitments for carbon emissions reductions and other measures — a nod to the environment and potential climate change.
Asked if such statements were simply public relations moves or if companies were taking actual measures to try to reduce adverse effects on the environment, Bartlett said, “I think it’s both.
“Public companies, especially the ones that have shareholders that care, are extremely interested in the environment,” he said.
“And management is buying into it. They see it as the right thing to do. We all live here and we all need to do what we can to protect the environment.”
Meanwhile, forecasts from JPMorgan and other investment firms suggest that crude oil — already more than $90 a barrel — could exceed $125 a barrel due to tight supplies, and Russia’s invasion of Ukraine.
Developments regarding the invasion and resulting fallout could also have a huge impact on the industry and consumers, depending on what happens, Bartlett said.
President Joe Biden in late November ordered the release of a record 50 million barrels of oil from the U.S. strategic reserve to reduce price pressures.
Gasoline prices did fall in the weeks after the oil was released, though prices have since eclipsed the levels at the time when Biden announced the drawdown.
Gas prices are up about 40% from a year ago and more than 6% from mid-January to mid-February, according to AAA.
However, adjusted for general inflation, gas prices as of February were not necessarily that high. Average prices were generally higher from 2011 to 2014 during Barack Obama’s presidency and during George W. Bush’s second term, according to the Energy Information Administration.
