In 2019, there has been a significant shift in crude oil and natural gas markets. Prices have remained stubbornly low, even when faced with the risk of significant turmoil like the Saudi drone attacks. Investors are far less forgiving, and energy-related equity values continue to lag most other sectors, despite most companies returning more of their earnings to shareholders. Oil and gas producers are focused on their sweetest of sweet spots, wringing every crumb of financial return from their investments. The risk-return equation has changed. All this makes now a good time to examine the strategies and tactics necessary for survival in this challenging phase of the Shale Era. That is especially true for the players who seem to be doing everything right, because some of the worst management mistakes can occur when performance is good.
Introduction from Rusty…
Commander Terry Virts has had an amazing career as a U.S. Air Force test/fighter pilot and is a NASA veteran of two spaceflights — a two-week mission onboard the Space Shuttle Endeavour in 2010 and a 200-day flight onboard the Space Station in 2014-15. He is a celebrated thought leader, speaker and author who is currently working on multiple projects, including a new book and television series. We met about a year ago through a mutual friend, which is when I discovered that Terry is an avid reader of RBN’s blogs!!
Why would an astronaut read an energy blog? Well, over lots of conversations we discovered that energy markets and space travel have a lot more in common than you might think. Terry talked about the concepts in his keynote presentation at our recent School of Energy. Following up on those thoughts, in this blog he illustrates how lessons learned in the space program have direct applications for companies navigating today’s volatile energy markets.
Yes, even in 2019’s challenging market environment, a number of companies appear to be performing well, regardless of how their stock price is doing. Production volumes continue to increase. New infrastructure projects are coming online. Export volumes are through the roof. But when industry players really look at their business decision-making, are these measures the right metrics? Do they answer the question, “Did we make the right decision?” Or is it more subtle than that?
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