Daily Standup Top Stories
Iran Oil Exports Hit A 5-Year High
Iranian crude exports exceeded 1.5 mb/d in May, the highest level since 2018 despite the country still being under U.S. sanctions. Last month Tehran said it has boosted crude output to above 3 million bpd, again […]
Russia’s Energy Industry Is Betting Big On South Asia – Sanctions Don’t Work
ENB Pub Note: Andrew Korybko is a Russian Substack author with an interesting point of view on the world’s geopolitical issues, and is worth reading his material. While I do not agree with all of […]
Putin Reveals Details Of Draft Treaty On Ukrainian Neutrality During Meeting With African Leaders
Russian President Vladimir Putin unveiled previously undisclosed details of a draft treaty on Ukrainian neutrality during a meeting with African leaders in Saint Petersburg on Saturday. The African leaders’ delegation, which included representatives from Senegal, […]
The EV Charging Challenge: U.S. Needs A Million More Stations By 2030 – Who will pay for them?
The growth in EV demand is outpacing the infrastructure needed to charge them, with experts predicting the need for more than a million new public EV charging stations in the U.S. by 2030 to accommodate […]
China Steps Up Game With 1st ‘Floating Oil Factory’
China has delivered its first smart floating production storage and offloading (FPSO) with land-sea integrated operation system, marking a breakthrough in the country’s application of the digital twin technology. The offshore oil and gas FPSO with a […]
Natural gas bans aren’t about your health
Don’t be fooled into thinking the natural gas ban is good policy. And don’t be fooled by the politicians who declare a natural gas ban to be a conspiracy theory. Rep. Jared Moskowitz (D-FL) has claimed, “I’m […]
Earthstone Energy to buy Delaware Basin-focused Novo Oil & Gas for $1.5 billion
June 15 (Reuters) – Earthstone Energy Inc (ESTE.N) said on Thursday it would buy Novo Oil & Gas Holdings for $1.5 billion in a bid to boost its presence in the Delaware Basin. Delaware Basin, a part […]
Highlights of the Podcast
00:00 – Intro
03:36 – Iran oil exports hit a five year high
06:03 – Russia’s energy industry is betting on big Southeast Asia Sanctions don’t work
09:30 – Putin reveals details of a draft treaty and Ukrainian neutrality during a meeting with the African leaders
12:01 – The U.S. needs to do needs a million more stations by 2030. Who will pay for them?
13:57 – China steps up game with first floating oil factory
17:47 – Natural gas bans are about your health
20:53 – Market Updates
24:12 – Earth Stone Energy buying Nova oil and gas for 1.5 billion
28:55 – Outro
Follow Stuart On LinkedIn and Twitter
Follow Michael On LinkedIn and Twitter
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:01:03] What is going on Everybody, Welcome to another edition of the Daily Energy News Beat Stand Up here on this gorgeous Monday, June 19th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, is joined by the Executive Producer of the show, the Purveyor of the show and the Director and Publisher of the world’s greatest website, EnergyNewsbeat.com, Stuart Turley, my man, how are we doing today? [00:01:28][24.8]
Stuart Turley: [00:01:29] It’s a beautiful day in the neighborhood and I don’t know how you did it, but you kind of white me out right before we started with that joke about high school dating. [00:01:36][7.5]
Michael Tanner: [00:01:37] Yeah, no kidding. I am glad to be back off assignment I appreciate Stu you holding down the fort. There is so much happened I my my last show was Wednesday turn around we’ve got Earth, Stone Energy and Northern Oil and Gas doing a nice divestitures, so I will cover that. But first Stu’s got a great line up for us a lot’s happened this weekend. [00:01:57][20.1]
Michael Tanner: [00:01:57] And first up on the menu, Iran oil exports hit a five year high, Next up, Putin reveals details of draft treaty on Ukraine neutrality during a meeting with African leaders brokered by none other than Stuart Turley himself. Next up, The EV charging challenge U.S. needs a million more stations by 2030. Who will pay for them? News flash you probably Stu would say the consumer will always take it in the drive thru. [00:02:27][29.2]
Michael Tanner: [00:02:27] Next up, China steps up game with first floating oil factory, this is amazing I’m excited to Stu to cover this one. Next up, Natural gas bans aren’t about your health though, so still will cover one of the more obvious stories we’ve covered in the past week. And finally, Russia’s energy industry is betting big on South Asia as Stu always says, sanctions don’t work he’ll then toss it over me. [00:02:52][24.8]
Michael Tanner: [00:02:52] I’ll cover what’s going on in the oil and gas markets I mean, we saw oil pop up to 71,68 and a mix of interesting demand data coming out of China. Also, we saw natural gas pop all the way up to $2.61 looks like it could be more demand supply driven by some by two pipelines or by the Sabine Pass pipeline being down about 1.6 Bcf and Freeport seeing but I’ll cover all that And then what’s going on with the Earth stone energy divestiture or acquisition of some core mid or some core Delaware Basin stuff that was then kept back company Nova Energy. So we will cover all that in the bag of chips in the finance section guys. [00:03:33][40.4]
Michael Tanner: [00:03:33] But again, before we get into all this, all these stories are courtesy the world’s greatest website, Energy News Beat you can find all of the stories that we’re about to cover here in the description below. The team does a great job of making sure it’s all set, working on making sure that those timestamps are perfect it is a little tricky, when we’re inserting ads and all that stuff, but the team is hard at work making sure that you can check that description to jump to whatever segment you want. [00:03:57][23.6]
Michael Tanner: [00:03:57] Stuart does a great job of curating the entire website to make sure that any you can stay up to speed on. The best Energy News hit is a Dashboard.Energynewsbeat.com the best place for your data and energy news combo. We are hard at work trying to update that to V2 it’s going to go by a paywall guys so just be aware you know. [00:04:13][16.2]
Michael Tanner: [00:04:14] You’ve heard about this for weeks now we’re slowly just tempting it’s like we’re just tempting you with it’s come and it’s coming so when it comes, you can’t say no, get it while you still can. You can email us Questions@EnergyNewsbeat.com but I’m ready to go here’s Stu where do you want to begin? [00:04:29][15.3]
Stuart Turley: [00:04:30] Hey let’s start with my buddies over there in Iran, Iran oil exports hit a five year high. Michael this is pretty darn crazy. Iranian crude exports exceeded 1.5 million barrels per day in May, the highest level since 2018. Despite the country still being under U.S. sanctions. Sanctions don’t… [00:04:54][23.9]
Michael Tanner: [00:04:55] Work! [00:04:55][0.0]
Stuart Turley: [00:04:56] Okay. Last month, Tehran said that it had boosted crude output to above 3 million barrels per day, again the highest since 2018. This is dramatic from the standpoint a part of this article kind of scares me as a successful nuclear deal could change the oil markets with former Iran oil Minister Bijan Naba Dear Zang Hi boy. I butchered that from Oklahoma. You know. [00:05:29][33.3]
Michael Tanner: [00:05:30] I actually think you did pretty good on that one. [00:05:32][1.6]
Stuart Turley: [00:05:32] Okay, I’ll take the credit where the credits do, saying that his biggest dream has always been to increase Iran’s oil output to 6 million barrels per day, earn 2 trillion through oil experts over the next two decades to use income to invest in the country’s developments. [00:05:53][20.3]
Stuart Turley: [00:05:55] Okay. Here’s the little geopolitical thing little geopolitical thing is a guy name like this tall. He’s just a hair shorter than you, Michael his name’s Putin super nice guy, wrong!. But he is sitting here you’ve got Iran, Iraq, Russia, India, China. They’re all coming into BRICS plus. And now that you’ve got Iranian crude coming in there big time, this is huge. [00:06:31][35.9]
Michael Tanner: [00:06:32] So the question here is, is there pressure on the Biden administration to make a nuclear deal because they understand that oil prices will fall? [00:06:40][7.8]
Stuart Turley: [00:06:41] They’re too stupid to figure that one out what they’re planning to do is probably get another airplane and drop off billions of dollars in cash. [00:06:49][7.6]
Michael Tanner: [00:06:51] Okay, can they do that to us? Can we get on that schedule? [00:06:53][2.0]
Stuart Turley: [00:06:54] I don’t want to have anything to do with that. Okay I’m going to the next one here. Russia’s energy industry is betting on big Southeast Asia Sanctions don’t work. Michael, you notice that kind of falls right in line with that first. [00:07:09][15.1]
Michael Tanner: [00:07:10] Yaya. [00:07:10][0.0]
Stuart Turley: [00:07:10] This is from a random dude on Substack as you love to call these folks. Andrew Corbett Joe is actually a Russian Substack author. He’s got an interesting point of view, Michael that is the world’s geopolitical and it’s worth reading his material. Since he is Russian he’s got a Russian slant on everything and I have to put this disclaimer in here. [00:07:35][24.4]
Stuart Turley: [00:07:36] I do not agree with all of his perspectives or viewpoints, but he does have some excellent information. First line out of here. It says, China will remain one atop Russia’s top energy partners for economic, geographic and political reasons. [00:07:54][18.2]
Stuart Turley: [00:07:55] But Moscow doesn’t want to become dependent on exports to the People’s Republic is why it’s preemptively diversifying betting on South Asia in general, India in particular. And later on in the article, they talk about Pakistan. They’re putting in a new natural gas pipeline into Pakistan. That’s huge. I would love to see that for the Pakistan folks, they need it. [00:08:22][27.0]
Michael Tanner: [00:08:23] Yeah. I mean, you’ve paid, you know, you were on the sanctions don’t work years ago when they you know, when we first started to show when they were trying to when this first the whole ESG motion was still rolling out. You were on this from the beginning and you clearly see it playing out right here. [00:08:42][18.9]
Stuart Turley: [00:08:45] And Michael, you nailed it, the weaponization of the dollar is going to come back worse than a slingshot rubber band breaking in, and slapping in the forehead believe me, I’ve had that happen. [00:08:57][12.4]
Michael Tanner: [00:08:58] Yeah. [00:08:58][0.0]
Stuart Turley: [00:09:00] So Russia’s taking a look at China and it’s going to have them as a big export partner. India is going to be their biggest, but Putin has about one of the most brilliant dudes I’ve ever seen by going after Southeast Asia, India and going into that area for LNG, for everything else, all of his oil. They’re selling more oil and natural gas than they did when they had the dang pipelines. [00:09:32][31.7]
Michael Tanner: [00:09:34] Yeah. I mean, it’s going to be interesting when they get all of these pipelines back online. You know. [00:09:42][7.3]
Stuart Turley: [00:09:42] There’s just there’s still one Nord Stream one pipeline still is capable of transporting gas. [00:09:52][9.4]
Michael Tanner: [00:09:52] Well, it’s pretty crazy. Russia is supplying 42% of India’s crude oil. [00:09:57][4.1]
Stuart Turley: [00:09:58] Yep. [00:09:58][0.0]
Michael Tanner: [00:09:58] 42%. [00:09:58][0.0]
Stuart Turley: [00:10:00] At about $40 a barrel. [00:10:04][4.1]
Michael Tanner: [00:10:06] Ooh. [00:10:06][0.0]
Stuart Turley: [00:10:06] So India is not going to go buy anything from anybody. [00:10:10][4.0]
Michael Tanner: [00:10:11] Why would you, why would Modi go and do anything else? [00:10:14][3.0]
Stuart Turley: [00:10:14] I applaud them for buying the cheapest stuff they can to get their elevate their people out of poverty. I, you know, go get em. Okay. Hey, the next one coming around the corner is Putin reveals details of a draft treaty and Ukrainian neutrality during a meeting with the African leaders. Michael, you know, the humanitarian in me is tired of Western civilization taking advantage of Africa. [00:10:44][29.8]
Michael Tanner: [00:10:45] Yep. [00:10:45][0.0]
Stuart Turley: [00:10:45] Let’s let these Africans utilize their own natural resources, let’s elevate them out of poverty let them use natural gas, let them save, let’s just get them out of poverty get them some power. So they’re going and meeting with Putin A, I want you and I joke about me and Putin, you know, I’m a Putin kind of guy I’m not a button fan. [00:11:12][26.4]
Stuart Turley: [00:11:13] However, Putin is doing Russia first in Africa first he had a African leaders delegation from Seagal, Egypt, Zambia, Uganda, Congo, Gomorrah, South Africa had visited Kiev Friday before arriving in Saint Petersburg. [00:11:34][21.7]
Stuart Turley: [00:11:36] You know what? And they sit there and they sat down in the meeting right in the beginning of the meeting, and they said, you need to stop this war. On the picture on this. Andy, we may want to have you fly this in for our podcast listeners. Putin is holding up a treaty and he goes, Hey, guys, I even had this to them. I signed it, they signed it, and the West told them not to go through it. [00:12:07][31.4]
Michael Tanner: [00:12:08] Is that because of Crimea? Does this all come down to Crimea? [00:12:11][2.9]
Stuart Turley: [00:12:12] It does in memory I said that, it’s the land bridge. But he in this treaty was going to sit there and say, Give me my land bridge, Let me have Crimea, and I’ll shut everything down. Okay, that’s willing to talk let’s get to the table we could have talked six months ago. But anyway, the whole piece about this is Putin is talking to the Africans like a human. Okay. He may be less than a human for all the people he’s killed, but he’s at least treating Africans Right. [00:12:45][33.2]
Michael Tanner: [00:12:46] No, he really is, he really is. All right what’s next? [00:12:48][2.4]
Stuart Turley: [00:12:49] Let’s go to The EV charging station, The EV charging challenge this almost sounds like a new game show, Michael. The U.S. needs to do needs a million more stations by 2030. Who will pay for them? Dude these things are not cheap and when you sit back and kind of go, there’s three bullet points that got me on this one. The growth in TV demand is outpacing the infrastructure. Really? [00:13:18][28.9]
Stuart Turley: [00:13:19] Both cobalt and silicon are both critical for renewable energy resources like heavy batteries. Guess what? We talked about this before them kids in the Congo are digging this out. And I do not like taking advantage of a the kids and be, you know, in Africa paying them a dollar 50. Why don’t we pay our politicians a dollar 50 to go sit there and dig in the Congo? [00:13:44][24.9]
Stuart Turley: [00:13:45] All those in favor of sending all of Congress to dig out of the Congo. Okay. The renewables and my monthly metals index continued to edge sideways. I didn’t even know what an MRI was before I looked at this. I thought it was Mini and Mickey Mouse.no idea who that was. So anyway, you got any questions on this other than… [00:14:13][27.6]
Michael Tanner: [00:14:13] Well, no. I mean, I think it’s interesting I think the heart of what this article is talking about is the fact that, okay, we’re making this huge push and write, you know, let’s put it aside the, should we or should we not transition to EVs? Let’s just say that’s what we’re doing. Well, we should think about how not only are we going to build good cars, but build good infrastructure so that people can use those cars. [00:14:36][22.5]
Michael Tanner: [00:14:36] There’s two interesting facts that this article points out. First off, there’s only one car EV charging station for every 4 to 8 gas pumps, which is at best like a 1 to 4 ratio. And also only 6% of charging stations lie along interstate highway systems, which is like the central connection of the entire system, especially if you’re talking about trucks, which people, which is mainly the car. If you’re talking about how to really cut down on emissions from vehicles, it’s trucks because they’re really the things driving 24 seven it’s not me and you your car’s half parked half the time. [00:15:10][34.3]
Stuart Turley: [00:15:11] You know how long it takes to charge a semi? [00:15:13][1.7]
Michael Tanner: [00:15:14] Yeah. So to the U.S. is the S&P global Mobility assessment quote says the US much triple its charging infrastructure by 2025, which is an eight X increase over the current country’s current charge capacity. [00:15:28][14.7]
Michael Tanner: [00:15:29] We’ve been on this from the beginning Stu the grid is not ready for this stuff and if we’re going to go this route, we have to make sure that there’s infrastructure in place so that we don’t end up. You know, instead of people making gas runs, we’re going to need to make battery runs. [00:15:44][14.8]
Stuart Turley: [00:15:45] The only thing that the only way they can make this is to put in gas fired plants and coal fired plants and turn all the wind farm and all the natural resources over to these EV charging stations. [00:15:59][13.7]
Michael Tanner: [00:15:59] And so then the title asks a good question Who’s going to pay for all this? Well, you know, you know, Tesla is building their own network. So, you know, maybe this gets absorbed by and, you know, maybe there’s cost, but then that’s just going to raise the cost of the vehicles. [00:16:14][15.4]
Stuart Turley: [00:16:15] And Ford canceled their network and signed a deal with Tesla, Smart move by Ford. [00:16:20][5.1]
Michael Tanner: [00:16:21] Because there’s probably only going to be room for one or two players then that’s great. We love that industries where there’s only 1 to 2 players, that’s always led to the best prices for consumers. [00:16:30][9.9]
Stuart Turley: [00:16:31] Oh yeah. [00:16:32][0.3]
Michael Tanner: [00:16:32] No, we’ll just have one seller of the good it’ll be fine. They will ask what the price is to make more money. [00:16:37][5.3]
Stuart Turley: [00:16:38] Now, that’s how you get somebody like Bill Gates meeting with President XI about how to destruct the world. [00:16:43][5.3]
Michael Tanner: [00:16:44] I it only took us 12 minutes before we got the Bill Gates reference. What’s next? [00:16:49][5.1]
Stuart Turley: [00:16:50] Okay. I don’t like that, man. Okay. China steps up game with first floating oil factory. Michael, I love this. China has delivered its first smart floating production, storage and offloading and fp s o with land sea integrated operating system speaking of Bill Gates, no wonder he’s over there talking as the marking breakthrough in the country’s application with digital technology. [00:17:19][28.4]
Stuart Turley: [00:17:20] Michael, This is going to be storage capacity of a hundred thousand tons is the first of the one. There are some numbers in here that just are amazing. There are 48 FS are used in operation globally. The EU has 19 of these coming online that’s nuts their putting it, they’re looking at some imports. What is this second order of magnitude impact to that U.S. shipping to Europe Russia is going to be shipping to Europe. Do you know how that’s going to happen? It’s going to go through Iran, Iraq. [00:18:03][43.4]
Michael Tanner: [00:18:06] It and it’s going to be go through these floating storage units. [00:18:10][3.4]
Stuart Turley: [00:18:10] It’s exactly right. [00:18:11][1.1]
Michael Tanner: [00:18:12] It’s interesting the Koreans are the ones that build this, good for them. [00:18:15][2.8]
Stuart Turley: [00:18:16] Well, the South Korea actually has the most number in in their inventory of their fleet. [00:18:22][5.9]
Michael Tanner: [00:18:23] It is interesting do you think you’d ever you know, you’re run I imagine a network of these bad boys set up you run them in parallel. [00:18:29][5.6]
Stuart Turley: [00:18:30] Oh, yeah. Yeah, I’m in we got to use that when we were going to be using our bathtubs. [00:18:36][5.8]
Michael Tanner: [00:18:37] I mean, absolutely this was a much better idea. [00:18:39][2.0]
Stuart Turley: [00:18:40] Oh, much better. Okay, let’s go to the last one for me. Natural gas banss are about your health. Don’t be fooled into think natural gas ban is good policy. Don’t be fooled by the politicians who declare natural gas ban to be a conspiracy theory. Love me a good gooseberry theory. Rep. Representative Jared Moskowitz, Democrat out of Florida, has claimed I’m not hearing about this issue back home no one wants to bet against those neither does Biden administration. Right. [00:19:19][38.9]
Michael Tanner: [00:19:20] Yeah Right. [00:19:21][0.3]
Stuart Turley: [00:19:24] And then Chuck Schumer, he’s this guy that’s been he and Noah were buddies. The Democrat ad in New York called The idea is something cooked up by mega Republicans. Now you got to be. It was them that came up with it. [00:19:40][16.6]
Michael Tanner: [00:19:41] I know I was going to say, isn’t it New York that just like what? Weeks after that, they they did a natural gas ban on and on new furnaces and new buildings. I mean, talk about hypocrisy. [00:19:52][10.9]
Stuart Turley: [00:19:53] And they say that getting rid of it, some estimates put the cost at ten $2 billion. What’s a few million between friends? Hey, a couple of things that that article on what I’m noticing about AI is A frightening and B if anybody uses a keyboard or a spreadsheet, their product is now AI. I am so sick of this this is almost greenwashing or ESG investing on steroids. Every product I’m seeing on the Internet is now a I certified. What knuckleheads come up with a marketing scheme if you’re using a spreadsheet, it’s AI. [00:20:39][45.3]
Michael Tanner: [00:20:41] This Podcast is machine learning, who knows? This could not actually be us in an alternate reality machine learning is having this conversation. [00:20:49][7.3]
Stuart Turley: [00:20:50] Oh, my head just exploded. [00:20:52][2.0]
Michael Tanner: [00:20:53] that was a good one, that was a good one. Is that all you’ve got? [00:20:57][4.3]
Stuart Turley: [00:20:58] Oh, yeah. Hey, I just want to give a shout out to Dr. Moore I’m holding up the book Confessions of a Greenpeace Dropout. Dr. Patrick Moore I’m interviewing him tomorrow it’s going to be a great interview. [00:21:13][14.9]
Michael Tanner: [00:21:14] Yeah, we’re going to have to tease this one a little bit I think we’re going to have to handle this one a little bit differently. Just we’re going to have to hold this one and then we’re going to cut it up good. After thereafter, release some teasers at best, Roland, out of it we’re going to do this one right. But just go ahead in real quick. [00:21:29][14.8]
Stuart Turley: [00:21:29] I did not realize that he saved the whales originally. First, it was oil and gas and electricity, save the whales the first time. And then it was Dr. Patrick Moore with the Save and Club Baby seals and whales the dude’s an animal. All right. [00:21:47][17.8]
Michael Tanner: [00:21:47] Yeah, no pun intended let’s move to oil and gas finances here. We’ve got oil prices up to 71,68, mainly due to a couple different things. We have Chinese refinery data coming out totaling the fact that they had their second highest total utilization, which is awesome. Russian news out of Russia says they’re, quote, realistic oil price targets are about $80 interesting I thought they had sanctions on there so wonder they don’t care. [00:22:17][29.4]
Michael Tanner: [00:22:17] Bank of England expected to raise interest rates next week, which is all bullish signs. We did see U.S. rigs fall to the lowest level since 2022. All factors weighing on this on oil prices. I think going forward this week, what to expect is another choppy season, though the sentiment is lining up on the bullish cycles so if you have to ask me, are we going to see a week over week gain? I’m going to lean bullish versus bearish and probably how I would tack this week. [00:22:44][26.9]
Michael Tanner: [00:22:46] You also have to realize, you know, Chinese demand will continue to climb that’s really the other thing you know, we got the Kuwaiti Petroleum Corp CEO saying he’s expecting more Chinese demand to come in during the second half, specifically lining up contracts. You know, we also have the voluntary cuts going on again, the Russian ruler, the Russian energy minister saying, you know, they think it’s going to be $80 bill, which is hilarious because apparently there are sanctions right now. [00:23:13][26.9]
Michael Tanner: [00:23:14] They said they do expect their production to fall, though, by Mount 20, mill above by about 400,000 barrels per day but that’s, I guess, in line with their expectations. And we already covered what’s going on in Iran, setting new highs in 2023. And then again, those rigs down 4 to 550 to those lowest level since 2022. [00:23:34][20.8]
Michael Tanner: [00:23:35] Gas rigs are also down 5 to 130, their lowest level since March 22nd, which is interesting because we did see natural gas pop a little bit, were up at $2.61. This was when I was on a little I was down an assignment in Colorado, so I was all tapped out of the news, sat down this morning, was like, holy smokes, natural gas takes off. [00:23:53][17.3]
Michael Tanner: [00:23:53] Again I think there’s a few reasons for that. One, I think the bullish sentiment has turned around a little bit. We’ve seen a we saw a very bullish draw from the natural gas reserves last Thursday. We all saw seeing Sabine Pass enter some spring maintenance, which is clustered around May-June we did see that on average, which was released on June 16th, they were down to three Bcf per day that’s down from 4.6 in May not good or good for natural gas price. [00:24:23][29.6]
Michael Tanner: [00:24:23] We also saw Freeport noticed there was no comment after there was a recent drop in utilization its facility. But you know, confirming some of the information via Boardwalk pipeline partners it looks like the three board confirmed to take some of its confirmed gas quantities, which mean those flows would be down about 700 million cubic feet per day and more than two Bcf on June 12 so that’s or on June 12. That’s really what’s going to cause those prices to spike a little bit in the short term. [00:24:54][30.8]
Michael Tanner: [00:24:54] What that means this week, you know, who knows? We’ll probably see ourselves end up in that $2.40 range, which means on average, I’m going to be I’m going to be bearish. But, you know, we’ll probably play this one fairly neutral. [00:25:04][10.1]
Michael Tanner: [00:25:05] The only other interesting thing that we missed, guys, was the Earth Stone Energy buying Nova oil and gas for 1.5 billion, but really 1 billion because no northern oil and gas, our favorite non-op team is going to come by some working interest for about $500 million. It’s like 33% working interest for about 500 million. So that total deal for Earth stone is about $1 billion. [00:25:27][21.6]
Michael Tanner: [00:25:28] To give you guys some high level details on that, you’ve got 11,300 net acres this is most of that’s held by production. We’re in core Delaware Basin in Eddy County, Culberson County. I mean, you can call this core one of my favorite terms, high return drilling inventory with 200 gross operator locations with a break even of $40 barrel for oil. I doubt that IR Guy of the Week. Who is it? Clay Johnstone or Stone Energy? I’m trying to buy any of that, but we’ll see maybe there’s 12 hopefully there’s 20. I bet you know, I’m dead serious. [00:26:06][37.4]
Michael Tanner: [00:26:07] If you gave me a line and said, okay, all we’re going to drill all 200 of those you have to give me a you have to basically say, how many of them break even at $40 a barrel? I would if you I would set the line at 20 and I probably take the under. There is absolutely no way that is what is crazy about when they 200 gross locations. I get thrown off by that. [00:26:30][23.6]
Michael Tanner: [00:26:32] You know again if you’re going to buy buying and buying in the core of the Delaware Basin, it’s not a bad idea, though so I don’t necessarily think I disagree with this move by Earth Stone If there was ever a way to find it. [00:26:44][12.1]
Michael Tanner: [00:26:44] You know, there they are financing the deal a little bit that’s not great. No, Northern is going to come in and buy it with cash, which is interesting. But they do expect that these three transactions that they’ve recently closed, which includes this. No, but it’s going to, you know, you know, incur encourage their free cash flow they do see it jumping about 33% or 30% of what they would call unlevered free cash flow what that means, I could tell you I have a master’s degree in economics. [00:27:14][29.5]
Michael Tanner: [00:27:14] So when they tell you non-gap accounting terms, you never really know. You got to read the footnotes. There’s literally two footnotes on that one. So you got to go read footnote three and footnote five. Newsflash, if there’s two footnotes, don’t believe it that means because you got conflict, it just cracks me up. [00:27:31][17.0]
Stuart Turley: [00:27:32] You know. [00:27:32][0.1]
Michael Tanner: [00:27:32] What notes? [00:27:32][0.1]
Stuart Turley: [00:27:33] You know what non-gap means, don’t you? [00:27:34][1.6]
Michael Tanner: [00:27:36] No. [00:27:36][0.0]
Stuart Turley: [00:27:36] Written by some random dude on substack [00:27:38][1.8]
Michael Tanner: [00:27:39] Yeah, exactly some random dude on Substack. You know, I can’t drilling inventory you know, they do a hunt they think there’s a thousand gross locations, but there’s only two of them that are. See, that’s what’s hilarious there’s a lot there’s a thousand locations that’s a lie I’ve been a part of these meetings you’re just drawing sticks on a map. I’ve done this before. You just drawn stakes you’d never drill these bad boys. Whatever. That’s sweet. 13 year with a five rig drilling program? Doubtful. [00:28:10][31.5]
Stuart Turley: [00:28:12] But why did he say five rigs running all the time? [00:28:15][3.6]
Michael Tanner: [00:28:16] Yeah, five well, if the if the inventory life, they’re not going to actually do that. [00:28:19][3.7]
Stuart Turley: [00:28:20] I was going to say, dude, and I’m calling it. [00:28:23][3.1]
Michael Tanner: [00:28:23] Yeah, they’re going to end with a 1.1 leverage not horrible even though they’re they were below one before this. So nothing like dipping into the financing market to get yourself 20 new locations or 200, but well, will Capital who? Who? It doesn’t matter. What else you got, Stu? That’s all I’ve got what would people be scared about this week. [00:28:45][21.3]
Stuart Turley: [00:28:47] Bill Gates visiting with Gene. [00:28:49][1.6]
Michael Tanner: [00:28:50] Yeah, that is scary. [00:28:50][0.5]
Stuart Turley: [00:28:51] We also had the secretary of state over there and, you know, when you sit back and kind of take a look. Why don’t we have Putin and Ukraine, who both want to sign a deal? I would love for them to stop the war. [00:29:09][17.7]
Michael Tanner: [00:29:11] Yeah. You think so? We need you broker in that deal we need you on a flight to Kiev now! [00:29:16][5.4]
Stuart Turley: [00:29:18] I. You know why I can’t go? Why? I’m ethical. [00:29:23][5.2]
Michael Tanner: [00:29:24] Oh. Oh, good, good and that’s good for everyone. [00:29:28][3.6]
Stuart Turley: [00:29:29] Yeah. [00:29:29][0.0]
Michael Tanner: [00:29:29] Not our pocketbooks, though. So I’ll take it in the shorts for you guys. Well, with that guys, we’ll let you out of here get back to work we appreciate you sticking through us. We’ve got a long week ahead of us. Stay tuned lots to cover for Stuart Turley, Im Michael Tanner guys, we’ll see you tomorrow. [00:29:29][0.0]
