A sample of energy industry experts attending the Dain RauscherWessels Energy Conference in Houston expect prices to strengthentoward the end of this year, only to give way to general priceweakness in 2000. Many of the 146 people polled at the conferencesaid they expected gas prices at the Henry Hub to surge towards$3.10 before the end of this year, then fall to the $2.50 levelearly next year. Overall, 800 energy industry experts, companyrepresentatives, institutional investors and securities analystsattended the four-day conference, which ended last week.

The poll was distributed to all attendees. Respondents wereasked six questions about oil and gas prices, stock performance andenergy companies likely to merge. Answers to the pricing questionswere averaged to calculate the results.

“The results reflect some skepticism about the current commodityprice environment,” said Jim Wicklund, managing director and headof energy research at Dain Rauscher Wessels. “However, theexpectation is that prices will be high enough to continue pushingstocks and activity higher. They all believe the oil patch recoveryhas started.”

The fact that many in the industry are not bullish about pricesin 2000 is an effect of the previous warm winters, Wicklund said.”We assume that the record warm winters seen over the past twoyears have made many of the participants somewhat cynical.”

Yet, despite what others in the industry feel, Wicklund is abull. “Overall, considering the very harsh operating environmentthe oil and gas industry has seen over the past 18 months and howweak the cyclical recovery has been so far, the consensus outlooksare actually very bullish.”

Oil prices were predicted to retreat slightly from the currentprice of $24 per barrel to $22.70 by the end of this year with anaverage price for the year 2000 placed at $20.70. The poll alsofound that the vast majority of respondents believed that crude oilproduction would increase over the next year by an average of 2.7%.

The group also took a stab at the next merger candidates,answering that Chevron and Texaco were the “favorite pair for asuccessful marriage of oil companies.” Nearly every oil companymade the list, but those two companies were included in more than15% of the survey responses.

John Norris

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