G. Alan Petzet
Exploration Editor
One U.S. major oil company has taken the offensive to combat tightness of drilling capital in the U.S. and the overseas flight of interest in elephant hunting.
ARCO Oil & Gas Co. with substantial acreage and seismic data covering most of the U.S. Lower 48 states, is communicating with a broad audience to try to make activity happen on its properties. The company sponsored a booth in Calgary in late June at the annual convention of the American Association of Petroleum Geologists.
Most booths are sponsored by service and supply companies, computer vendors, geological societies, universities, and publishers. ARCO is looking to bring others in on its prospects, hawk seismic data, and take deals from others. On some acreage that internal funds are not available to evaluate, ARCO was offering 100% farmouts.
Company personnel manning the booth had business terms in mind but told visitors they were amenable to an extremely broad range that could be discussed, depending on the magnitude of a given deal.
The Calgary booth, and another at the AAPG Pacific Coast regional meeting in Sacramento in April 1992, were part of a change in thinking at ARCO regarding the Lower 48, said Steve Hendrick of Bakersfield, exploration manager for the California business unit.
BUILDING RELATIONSHIPS
The booth idea stemmed from a desire to offer others quality prospects on which ARCO is interested in building long lasting relationships, Hendrick said.
The booths were not designed as a way for ARCO to push "dog" prospects off on others, he stressed. The idea was to spread the word that the company has changed its stripe in terms of willingness to deal with others while retaining its commitment to operate in the Lower 48 states.
ARCO has operated solo in most areas of the U.S. for years. Out of pride of ownership and adequate availability of capital, it operated most wells with 100% of the working interest.
Today ARCO has recognized that others, especially independent operators, can more readily raise funds while its own capital for domestic purposes is constrained.
ARCO also feels its chances of success are better if it works with people that have different geological and geophysical slants on a given basin, Hendrick said. This also allows ARCO to spread its investments over more opportunities.
Explorationists and landmen who manned the booths were there to assess first level interest in ARCO's opportunities. This is different from AAPG's "Deal Room," where space is available for geologists to spread out and discuss specific projects and prospects.
The company's objective is not to give away assets but to show that ARCO is open to ideas other than its own, Hendrick said.
BOOTH CONCEPT
ARCO hopes to have similar booths in New Orleans during the Society of Exploration Geophysicists annual meeting Oct. 25-29 and the AAPG convention April 25-28, 1993.
The company said 100 of the 600 people that attended the Sacramento meeting took ARCO brochures, and several deals are pending.
Visitors at the Calgary booth included several other U.S. major oil companies that are considering sponsoring similar booths at the next AAPG convention and one large international oil company that expressed an interest in participating with ARCO in the U.S., Hendrick said.
Other visitors included U.S. independent oil operators, consultants, non-U.S. delegates, university representatives, college students, active retirees, and journalists.
Dennis Giovannetti, Rusty Riese, and Shawn Conner of Bakersfield got the idea for the booth when AAPG solicited ARCO for an advertisement in the Sacramento meeting program.
ARCO's eastern district, covering states east of the Mississippi River, likely will be represented at the October SEG meeting and the next AAPG convention. Primarily western district prospects and seismic data were represented in Calgary.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
