Location, Location, Location: Why Drilling Success Depends on the Basin – ENB Weekly Recap

As the world gears up for the 30th United Nations Climate Change Conference (COP30) in Belém, Brazil, from November 10-21, 2025, the global conversation on climate action is undergoing a notable shift. Bill Gates, the […]

Highlights of the Podcast 

00:00 – Intro

00:15 – U.S. Drilling Programs Are Resilient, but It Depends on the Location

03:53 – U.S. Natural Gas Futures Up on Record LNG Export Demand, and Low Storage Numbers

07:25 – Pine Gate Renewables files for bankruptcy, selling solar business and project portfolio

13:04 – COPs from the UN have failed and it is time for a real dose of climate realism – What will Gavin Newsom do now for a speech punch line?

16:01 – Trump Predicted the return of Coal, but not to it’s glory days in the U.S. – Doug Sheridan

18:34 – Chevron Rolls Into West Texas for First Data Center Power Project – Following Liberty Energy’s Business Model

21:09 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

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Michael Tanner: [00:00:00] Location, location, location is about the same as drill baby drill. We’ll find out next on the Energy Newsbeat Weekly Recap. [00:00:07][7.0]

Stuart Turley: [00:00:15] US drilling programs are resilient, but it depends on the location. Location, location, and basin. In the ever volatile world of US energy markets, U.S. Oil gas producers are demonstrating remarkable staying power amid oil prices hovering around $60 a barrel. That is uncomfortably close to many of the things. Michael, you and I have talked about this before. We’ve got the Dallas Fed chart in there, but there is some new information that I want to talk about. Permian break-even is around that $31 range in there. Other US shale 34. Oklahoma scoop stack 35. Permian Midland 38. You really can’t say that that’s break-even pricing when you’re trying to drill new wells when they’re 15 million dollars for a horizontal well. So I I found that kind of funny when we take a look at this. And then you have Big offshore wells that are breaking even. Guyana now, ExxonMobil just announced their break-even is thirty dollars at break-even offshore. That to me was huge news as well. Location, location, location. But as we sit here, you’ve got a great story on Kanico Phillips. Conico Phillips up in Alaska is not $30 break even up there in Alaska. So it’s all about the basins. And I broke it out by how much we are on track to do 13.7 million barrels. [00:01:47][91.5]

Michael Tanner: [00:01:47] Yeah, no, I I I like this chart. I think you pointed out exactly the the nuance with it is that’s for existing wells. I mean, once a well is already producing, the opex is fairly low. You’re talking somewhere, you know, eight to twenty dollars, you know, per Boe. The question is when you include the capex to drill, which is obviously very different. And and we’re coming across that. You know, I you you mentioned in that in in in your opening paragraph that US oil producers are demonstrating remarkable staying power. The question is, what do you mean by staying power? Do you mean that they’re just around still drilling wells? Or the question is, should they be drilling some of these wells? And I think that’s the interesting steel man to the other side is should we actually be drilling? And if you’re an oil driller, should you be wasting your top locations at this moment? Now, on the the steel man, the steel man, what what are we gonna do as an oil company? Not drill. It’s literally what we do. So of course, when price is low, you’ve got to go take your top most economic locations and drill them. I do find it it really interesting how each of these companies are playing it. We’ve kind of seen that play out in earnings. I I do think you’re seeing different basins attack this a heck of a lot differently. I think you’re seeing the Powder River Basin and the Backen really begin to take off a little bit from the standpoint of I think a lot of untapped. Economic value is being seen there. I can’t see, can’t tell you how many different AFEs I’ve seen from that area. Whether or not that’s a good thing is is not. I think you’re seeing a lot of obviously what’s going on in the Permian, but I think what’s really hurting the Permian is lack of takeaway and our ability to actually get that gas to market. I know gas prices a spike, but I find it I find it really interesting. It’s a it’s an interesting overview here. [00:03:27][99.7]

Stuart Turley: [00:03:27] And and one of the key things, Michael, it’s about the change in molecule demand that I’m going to cover here more in a second. The Alaska’s North Slope Conaco Phillips is hiked from nine billion is up to 9 billion up from 7 billion. Michael, you and I have said for years, what’s a few billion between friends? That’s how much Alaska has increased. So, but it’s the change in molecule demand. U.S. Natural gas futures up on record LNG export demand and low storage. The US natural gas market is experiencing a bullish run with futures pricing climbing in unprecedented liquefaction natural gas. That’s Michael LNG for us OSU guys. Export volumes in storage injections have fallen short of expectations. Germany, Michael, the LNG and natural gas for Germany is really low. I mean, if they have even a cold front, if Nancy Pelosi opens her freezer to get more ice cream in Germany, they’re going to have some serious problems. But you take a look at this, I think this is really bringing up a big point. Rigs have been staying steady in oil and gas. I mean, in gas, and they’ve been declining in oil. So this has been a trend you and I have been talking about. [00:04:52][84.8]

Michael Tanner: [00:04:53] Yeah, I I think part of it is just is is the winter season. We we see this happen every winter. Natural gas prices spike. I think they’ve spiked far and beyond I think what people have expected. You know, you I like how you put this in the article. You go back and look at the the EIA’s weekly natural gas report comes out every Thursday. So we don’t quite get a cover it live. But last week we actually only had an increase of about 33 BCF for the week that ends in October 31 with brought total working gas storage to about 3.9 BCF. But to give you guys an idea, that was slightly below the expectations and relative of about 34 BCF. And we’re actually seasonally a little bit lower than what we would expect. And so I think you’re also seeing that there’s maybe a a slight deficit when it comes to natural gas. And I think people are expecting obviously all of this LNG stuff. I find it interesting, you know. The real question is this move of natural gas prices positively. You know, we’re sitting at four dollars and thirty-three cents. Is that mostly seasonal with a smidge of LNG export demand future built into that? Or is it reverse? Because one is an investable thesis. One, if LNG export is the reason the 80% of the reason prices move from $3 to $4. Well, now all of a sudden you have a great long-term bull thesis to go drill wells. Yep. If it’s reversed, like I said originally, 80% of the move is mostly seasonal, which happens every winter. We see natural gas prices like rise, and then in the summer they fall due to the injection and draw season that we happen to. Well, then companies might end up on the wrong side of some economic capital spends because a lot of the value is sure in a natural gas well, you do get a nice IP, but gas wells decline much slower than an oil well, meaning it’s much more pertinent what you use to model long-term gas prices at than you don’t oil. An oil well, it really matters six months from when you drill the well. That’s the majority of your cash is going to come back in that first six to twelve months. Well, I think I think understanding I don’t know what the correct answer is. And I don’t think anybody knows. I think people can make theories and I think people can guess, but it’s critical to know what side of the thesis you’re on, and that’s really going to play, I think, where capital begins to get deployed. [00:07:05][132.8]

Stuart Turley: [00:07:06] You bet. Hey, the other day I put out an article from the EIA EIA, the lower 48’s crude and natural gas production by well vintage. It has an X, they put out an outstanding report. U.S. Crude and natural gas have increased so the volume, but they go through and do the chart. What’s the natural gas decline rate of horizontal versus vertical? And so you take a look at the natural decline curves are different if they’re just a gas well vertical or if they’re a horizontal basin. So anyway, that was pretty cool right there. Just as a side note, that’s also on energynewsbeat.co. Pine Gate Renewables files for bankruptcy selling solar business and project portfolio. If it’s sustainable, how come the end of life is not funded in a start indicator of mounting challenges for the facing renewable energy sector, Pine Gate Renewables, a prominent national solar developer operating Michael in 32 states is filed for chapter 11. The company founded in 2016 is putting its solar and energy storage portfolio up for sale. I don’t know about you, but I’d rather buy a tanker. [00:08:19][72.6]

Michael Tanner: [00:08:19] Absolutely. Can we have a quick moment of silence for Pine Gate Renewables? All right, well that’s enough of that. [00:08:25][5.6]

Stuart Turley: [00:08:25] That’s enough. I mean, and in echoes, this is almost echoing of Orsted’s problems that you and I covered last week. I mean, Orsted just had a staggering Q3 net loss of 1.7 billion Danish kroner, which is approximately 262 million. The pattern is clear. The energy sector people are going through and they’re investing in utilities because they have steady cash flow and you can budget your money. They’re also looking at investing in oil and gas. This is huge for returns. Clean coal is coming out big, Michael. You you talked about natural gas just a minute ago. There’s a limit to how much natural gas can be implemented or permanently changed over to demand because it’s a limitation of the huge turbines. The limitation is the turbines. We are on a five year wait for turbines. [00:09:21][56.4]

Michael Tanner: [00:09:22] Yeah. Think about that. No, absolutely. And and and we’re definitely not that on the on the coal side. So I completely agree with you. I think long term, though, I think natural gas is gonna have a much easier path to solving this problem than coal, because I think the moment the Republicans aren’t in the the the the executive branch, the moment they’re not in control of all three branches, you’re gonna see coal have a really, really difficult time getting permitted. So I think you have to look at what’s the best chance to outlive any administration, not just what’s the best right now. [00:09:49][27.0]

Stuart Turley: [00:09:50] Exactly. Hey, I just want to give President Trump a shout out before turning it over to you and our and our commercial there. When President Orban from Hungary was in the White House, I gotta give him a shout out. Trump grants Hungary exemption from Russia’s sanctions. Orban actually tried to hire the press secretary because of how good she was doing. I gotta hand it to Orban. He is a capitalist and he’s trying to run his country to the best. He’s taking energy security at home first. Hats off to him. [00:10:21][31.7]

Michael Tanner: [00:10:22] As always guys, the news and analysis you just heard. Is brought to you by world’s greatest website, www.energynewsbeat.com. Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit the links in the description below for all links to the timestamps, links to articles, and specifically subscribe to the show on YouTube,subscribe to this show on Apple iTunes. Give us a follow there. Subscribe to our show on Spotify. Please leave comments there and subscribe to our sub stack, www.energynewsbeat.substack.com. That’s probably the best place to support the show. Stu does a great job of releasing two to three articles a week that really encompass the big themes that are going on. We also drop all of our podcasts there, which give a little bit of a breakdown. We just had a great, great podcast. So I highly, highly recommend everybody subscribe to the energy newsbeat.sub stack.com We’d also like to thank friends of the show Reese Energy Consulting for supporting the show guys. Reese Energy Consulting is the foremost midstream expert. Guys, if you had at all. Are dealing with issues in the midstream space, whether you’re an upstream company and need help with your first purchaser’s contract or renegotiating your gas contracts or figuring out where you’re gonna tie in your next pad because you’ve got multiple different options and you’re trying to break it all down. Reese Energy Consulting can help. If you’re in the mainstream space, I need an extra pair of hands, need some permitting or regulation help, or need some red team analysis on a final investment decision, guys. They have the team that can help you check out ReeseEnergyConsulting.com They have clients everywhere and all throughout the country from two people in a garage all the way up to the largest publicly traded companies in the world. So if you’re wondering, are you a good fit for them? The answer is yes. ReeseEnergyConsulting.com And finally guys, investinoil.energynewsbeat.com We are coming up on the end of the year. And I promise you guys, you do not wanna be paying money to Uncle Sam. You wanna keep as much money in your pocket. You wanna diversify your portfolio a little bit and you want to get some dividends. You can do that by investing in oil and gas. Check out investinoil.energynewsbeat.com Fill out our portfolio survey and our tax calculator. And guess what, you guys, you guys are gonna get and get a nice ebook that tells you here’s what you should look for when you invest in oil and gas. And also figure out what your tax burden is and figure out how much you might save relative to your tax burn if you did invest in Oil and Gas, guys. We practice what we preach here, guys, we do this stuff ourselves. Investin oil.energy newsbeat .com Don’t give your money to Uncle Sam. Figure out and find out if oil and gas investing is for you. Depending on if you qualify, we will, again, send you all that information and we may or may not point you in the right direction. Again, investin oil.energynewsbeat.com. [00:13:01][159.1]

Stuart Turley: [00:13:04] Cops from the UN have failed, and it’s time for a real dose of climate realism. What in the world will Gavin do for a speech punchline now? Holy smokes, you can’t buy this kind of entertainment. Gavin Newsom is speaking at COP 30. And you know, when President Trump came out and started going drill baby drill, he ran right smack into Gavin Newsom in Brazil. What are we talking about here? Gavin or Newsom on stage enters in on COP 30, clutching his script like a lifeline in a Sao Paulo site event along a Milken Institute CEO Richard. I don’t want to mispronounce his name, but I believe it’s Ditso. Newsom dropped a zinger that’s equal, puts alarm and irony. China gets it. America is toast. If we don’t snap out of our fossil fuel stupor and chase Beijing’s dominance in a clean energy supply chains manufacturing and market flooding across the EU and Africa and beyond, he is so out to lunch. Michael, this man is absolutely weird. And I’m gonna use this. He is up there with Timmy from you know the weird guy that war loved who is the vice president pick for Kamala Harris. Hold punch bag Timmy cannot even keep hold of candle to this one. This is terrible. Gavin Newsom’s war on oil and gas in California has elevated California to a national security risk of biblical proportions. Cats and dogs are gonna be falling out of the sky before we get energy security in California. [00:14:48][104.5]

Michael Tanner: [00:14:49] Yeah, I I think that I think just Gavin Newsom, he he understands the talking points, but he doesn’t he doesn’t understand the substance behind it. He’s not wrong when he says China is running the clean energy supply chain. They they are. They truly are. But that does not mean that China is using said supply chain to power their economy. Just because they’re making solar panels doesn’t mean they’re putting them up in Beijing. What they’re actually doing is buying more oil, buying more coal. We’ve been talking about that for years now. So it’s one of those, you know, signal versus the noise. The signal is, oh, they’re making all these solar panels. The question is, are they using all these solar panels? What China has aptly, in my opinion, figured out is that the world wants solar panels. The world is put itself on this clean energy trajectory that it feels won’t that at least the China feels like it they won’t back away from. So if we can go ahead and create a moat around what is going to be theoretically the world’s new energy source, whether or not China uses it or not, it gives them a strategic national security advantage. So it’s just a classic, classic Gavin Newsome understanding the talking point, but not looking a layer deep and looking at what’s actually going on. [00:16:00][70.9]

Stuart Turley: [00:16:01] No, and I I believe President Trump in his name calling Scaven Newsom is actually pretty funny and accurate. President Trump predicted the return of coal, but not to its glory days in the U.S. This is from Doug Sheridan on LinkedIn. And Doug Sheridan is a one cool cat. Javier Blaz from Bloomberg wrote that Trump has confidently predicted the return of coal in America. Trump won’t resurrect coal consumption to its glory days, but he’s likely to arrest its decline, freezing demand around current levels. U.S. Coal demand will rise this year to about 465 million short tons driven by higher electricity generation that’s down 60% from 2007’s record high. Michael, if we did not do this, Secretary Chris Wright’s team out there at the energy department put out aptly that we would have rolling blackouts across the United States if the Trump administration through Secretary Chris Wright, Doug Bergum, and Lee Zeldon did not take aggressive action and restore our coal. We’re actually putting in a new coal plant. We’re actually working on clean coal things. Coal is gonna be here for a while. Will it be where it was? No. But are there gonna be more new coal plants? Nuclear is decades away from really making a difference. So you’re either gonna have coal, natural gas, or smaller nuclear, and it’s not gonna be enough to make a difference. So it’s back to coal and natural gas. [00:17:38][97.2]

Michael Tanner: [00:17:38] Well, and I think you say back to coal. I think Doug Sheridan in this article points it out that it’s important to remember that coal consumption year over year throughout the entire world has been increasing for the last ten years. So it’s not like we haven’t kept in not using coal. We the world’s been using it. It’s certain sectors of the world have lowered their coal consumption. But other areas, like we talked about China, like we talked about some developing nations, they’re going, I don’t want to say all in on coal, but they’re using coal because it can be a good power generation resource. [00:18:08][29.8]

Stuart Turley: [00:18:09] And clean coal is good. And when you take a look at the map that you can find off of energy newsbeat.co and then go to resources tab, go look at the global coal tracker, and you will see. In fact, I will go add that to this article in here. The amount of new plants that are still being constructed in India and Asia and China is huge. Chevron rolls into West Texas for first data center project following Liberty’s business model. I had fun writing this one in a bold move to capitalize on the surging energy demands of artificial intelligence. Can you see the theme for today’s show? Chevron has announced its first dedicated power project for a data center in West Texas. This initiative marks the giant strategic pivot in the power generation sector, leveraging its abundant natural gas resources from the Permian, which is really needed at this time to fuel the AI boom. However, Michael, as we get into there, they’re gonna be powering this bad dog. GE’s Vernova’s advanced 7HA natural gas turbines, and the setup is for colocation, meaning the power plant will sit adjacent to the data center. Behind the meter to minimize the transmission losses and enhanced reliability, which means the Permian folks will not be paying for the transmission lines, or they will take advantage of the cost increases. This is a great thing. However, my interview with Ron Gusick over there at Liberty Energy, they’ve been doing this now for about three years, running down this path and creating data center natural gas, and they have snotched it up to a lead-in nuclear as well. So hats off to good management over there at Ron Gusick at Liberty Energy. He’s cool cat. They are on this long before Chevron. [00:20:11][122.3]

Michael Tanner: [00:20:12] No, absolutely. They were they were on it. I think they’re doing a a great job over their liberty. Obviously, that’s a lot of why Secretary Wright is now in the position that he’s in because of what he started. Ron Gussick has sort of picked up the mantle and continue to run down the road. But no, I absolutely think what Chevron’s doing is I think they’re trying to get into trying to pivot themselves. I mean, you know, your only really pure competitor if your Chevron is Exxon and you I don’t want to say lag behind them. You’ve always been smaller than them. But if you have any desires to catch up and eventually surpass ExxonMobil, you’ve got to do things a little bit differently. So I like this new transition, I guess, to new energies. I mean, it’s always great when McKinsey gets a nice big consulting check to come in and do another reorg that doesn’t really mean anything, but it gives you it gives some consultants ability to build some nice billable hours. [00:20:59][46.7]

Stuart Turley: [00:20:59] You bet. When the when the bobs show up to lay people off, right? So what what exactly do you do here? You’re not a great one. What exactly do you do here? You always are a little worried about. [00:20:59][0.0][1239.7]