RACHEL MARTIN, HOST:
Oil prices are down by about 50 percent. Good for consumers at the pump, not so good if you're investing millions of dollars to drill wells. In Houston, bankers, oil producers, drilling companies - more than a thousand companies in all - are gathered to talk business. Much of that talk revolves around the challenges created by low oil prices. NPR's John Ydstie is at the massive George R. Brown Convention Center where the conference is taking place. John, what are you finding there?
JOHN YDSTIE, BYLINE: Well, Rachel, this is the gathering where the oil and gas industry and investors come together to make deals to get access to areas they might want to be like the Bakken in North Dakota or offshore in the Gulf of Mexico, or to sell off assets they just don't want anymore. And kind of surprisingly, it's happening right out in the open here in this huge exhibition hall where I am right now.
MARTIN: Out in the open - so that goes against the image of these deals kind of happening behind closed doors in some board room. How does it all work?
YDSTIE: Well, people just set up booths, lots of them with maps and charts on the wall showing locations and geological formations that they're offering, and people just walk through looking for a particular deal in a specific location. And there are big companies like ConocoPhillips and little mom-and-pop operators, too. I talked earlier with Don Mortimer from a small company called Tuzo Energy. It's based up in Calgary. He wants partners to develop wells in Alberta. And he's trying to distinguish his project from all the others.
DON MORTIMER: I guess one key point about our play - we think there's so much natural fracturing available that we're hoping someday that we won't have to use hydraulic fracking. And I understand there's concerns about that, so we're hoping that mother nature's already done all that.
YDSTIE: And fracking can be very expensive, so not having to do it is very attractive.
MARTIN: OK, but are these deals actually getting done, or is everyone gun-shy because of the uncertainty about the low oil prices?
YDSTIE: Well, it's not really clear yet. While I was at the Tuzo Energy booth, several people did come in and seem very interested. And I also talked to a former independent operator, Kenny DuBose from Houston, who is now an investor in several wells. He says he's looking to consolidate his interest in those wells, many of which have many different investors. And he says he's had some luck today.
KENNY DUBOSE: I've seen one - I'll call it a relatively small transaction - that I am interested in, yes.
YDSTIE: And is that transaction something that will consummate by the end of the day or by the end of the week or - what do you think?
DUBOSE: With some of these folks there will be a handshake and we'll have a deal. We will not actually close the deal for likely 30 days or so. But for some of these folks, they're people I've known for years and a handshake will be just fine.
YDSTIE: So DuBose is making deals, but he thinks of some bottom-feeders - people looking to buy really cheap - may be disappointed here. He says he doesn't think sellers are going to be ready to sell at prices that reflect the current very low price of crude oil because they expect prices to bounce back relatively quickly.
MARTIN: So is that the general view, or is there a fear prices might stay low and drive lots of people out of business?
YDSTIE: Well, at some level everybody's worried. But people like Don Mortimer have a philosophical approach. He's been through seven oil busts. He says it's very exciting on the way up and you weather the down periods and move on. Now, just from the huge crowd here today - close to 20,000 people according to the organizers - it doesn't appear people are running away from the industry just yet. But if prices don't rebound, the story could be very different next year.
MARTIN: NPR's John Ydstie at an oil industry conference in Houston, Texas. Thanks so much, John.
YDSTIE: You're welcome, Rachel.
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