It is a pleasure to talk to you today about an increasingly important part of the oil and gas industry-the funded companies. It is my thesis that this approach to financing industry activities will grow to major significance and that its eventual size and importance may well depend on the ability of you petroleum evaluation engineers to create new concepts for evaluation of properties at all stages of their development.
Mr. Calhoun's paper surveyed both technical and ethical considerations in evaluation in the form of guidelines. Mr. Evans has given us all something to think about with his projections of the nearly overwhelming problems of meeting energy demands from available and known resources. His chart on estimated needs for all forms of energy forcefully displayed much of what I had intended to say on that subject. However, I do want to discuss what this huge growth in demand may mean in terms of the capital requirements of the oil industry and the problems associated with attracting this needed capital.
The Chase Manhattan Bank estimates that demand for oil and gas in the United States is growing at a rate of 500,000 barrels per day per year and in the Free World at a rate in excess of 3 million barrels per day per year, rates that cast grave doubts on the industry's ability to meet estimated demand by 1980.
The United States will require two-thirds more oil and 100 percent more natural gas in the 1965-1980 period than in the 15 years immediately preceding. They estimate that at least an additional $2.8 billion must be added each year for the next 10 years to the$4.4 billion average expenditure on domestic exploration and development for the decade ending in 1967.
