Daily Standup Top Stories
Where Do Total Recoverable Oil Reserves Stand?
In a statement sent to Rigzone recently, Rystad Energy revealed that, according to its research, total global recoverable oil reserves now stand at 1.624 trillion barrels. Rystad highlighted in the statement that, since the company’s […]
Goldman Sachs Sees Oil Prices Rising On Record Demand
Oil prices are set to rise to $86 per barrel at year-end, from $80 now, as record-high oil demand and lowered supply will lead to a large market deficit. “We expect pretty sizable deficits in […]
“It’s A Way To Destroy The Dollar” Jim Rickards Warns Of Supply Chain Fragility and BRICS Currency Plan
Via Greg Hunter’s USAWatchdog.com, Seven-time, best-selling financial author James Rickards predicted in his most recent best-seller called “Sold Out” why broken supply chains would cause big inflation. He was right, and he still contends, […]
Eni “fast tracks” Indonesian natural gas development with Chevron acquisition
(WO) – Eni announced the acquisition of Chevron interests, including operatorship, in the Indonesian Blocks named Ganal PSC (Chevron 62%), Rapak PSC (Chevron 62%) and Makassar Straits PSC (Chevron 72%), in the Kutei Basin, offshore […]
Highlights of the Podcast
00:00 – Intro
02:49 – Where do all the total recoverable oil reserves stand?
07:50 – Goldman Sachs sees oil prices rising on Record Demand
09:32 – It’s a long way to Destroy the Dollar. Jim Rickards warns of supply chain Frailty and BRICS Currency Plan
13:46 – Eni fast tracks Indonesian Natural Gas Development with Chevron acquisition
15:29 – Market Updates
23:24 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:07] What is going on. Everybody, Welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Thursday, July 27th, 2023. [00:00:16][8.9]
Michael Tanner: [00:00:17] As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, 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? [00:00:31][14.6]
Stuart Turley: [00:00:32] Beautiful neighborhood. Ill have to pay you for that intro. [00:00:35][2.4]
Michael Tanner: [00:00:36] Yeah, you just take it out of my tab. Speaking of menu, Stu, we have a great show lined up for everybody we appreciate you guys sticking through here on this Thursday. First up, Where do total recoverable oil reserves stand? This is a great article from Rigzone covering what’s actually going on, amount of oil and gas reserves out there. [00:00:59][23.0]
Michael Tanner: [00:00:59] Next up, Good to beat on Goldman Sachs they see oil price rising on record demand, Stu will dive into this article and talk about what Goldman Sachs bulls are saying now. Quote, It’s a way to destroy the Dollar Jim Richards Warns of supply Chains Fragility amid BRICS Currency plan. You know, we’re very scared of what’s going on with the BRICS so Stu is going to dive into and all this is on our toes. [00:01:25][25.3]
Stuart Turley: [00:01:26] New Spin. [00:01:26][0.0]
Michael Tanner: [00:01:26] New spin on it we like it. And then finally, Eni fast tracks Indonesia natural gas development with Chevron acquisition Stu will kick it over to me I’m going to quickly touch on oil and gas prices. [00:01:36][10.0]
Michael Tanner: [00:01:37] We did see the Fed raise 25 basis points nothing really new there the markets actually held up fairly well, only down about a basically flat considering what happened today. [00:01:47][9.9]
Michael Tanner: [00:01:47] So we’ll mainly going to cover a couple earnings that dropped big week in earnings so you’re going to hear a lot from me on that front. You know, we’ve got Hess, EQT and Matador. Each of them, I think have really interesting nuggets which we will cover. Northern oil and gas, one of our favorites also dropped their guidance in which they expect. So I will cover all of that in a bag of chips in my segment, guys. [00:02:10][23.0]
Michael Tanner: [00:02:10] But first, as always, check us out world’s greatest website www.EnergyNewsBeat.com the best place where all your energy and oil and gas news. Stu does a great job curating their website make sure it’s up to speed on all of your you know oil and gas news needs guys. [00:02:27][16.9]
Michael Tanner: [00:02:28] Dashboard.EnergyNewsBeat.com the best place for all of your energy data news combo. Going on a paywall soon so get it while you still can hard at work at V2 Questions@EnergyNewsBeat.com. Where do you want to begin Stu? Big show today. [00:02:43][14.4]
Stuart Turley: [00:02:43] Oh, we do. We’re going to have a lot of fun. And this one where I’m going to kind of lean on you a lot like I normally do. Where do all the total recoverable oil reserves stand? Now, this is kind of important, and I didn’t realize there’s a few things in there. [00:02:59][16.0]
Stuart Turley: [00:03:01] In a statement sent to Rigzone, Rystad Energy revealed that according to its research, that global recoverable oil reserves now stands at 1.624 trillion barrels. Okay, here’s where I down in here. It says 1.624 trillion barrels are technically recoverable. Fewer than 1.3 trillion are likely to be economically viable before 2100 at an average brant price of $50 a barrel. I mean, this is quite a wide range in 2100. You know, you sit there and take a look 1.3 trillion, what’s a half a trillion between friends or quarter of a trillion. [00:03:51][50.3]
Michael Tanner: [00:03:52] 300 billion. I mean, that’s not a huge thing, what I don’t get is so they break it down here. So number one, number one country coming in was Saudi Arabia, obviously 273 billion barrels. [00:04:06][14.8]
Stuart Turley: [00:04:07] Right. [00:04:07][0.0]
Michael Tanner: [00:04:08] Which I want to come back to Saudi Arabia for a second. Second was U.S. with 168 billion. Russia was third, 140 billion, Canada fourth with 122 billion. So we’re not we’re not slim on oil tell you that they are much. [00:04:23][15.4]
Stuart Turley: [00:04:24] No, I’m not slim either. In fact, round is a shape and I’m trying to lose 25. [00:04:28][3.7]
Michael Tanner: [00:04:29] So but the question is. How do we know that Saudi Arabia, number two, be it? [00:04:36][7.7]
Stuart Turley: [00:04:38] I don’t think they know, and I. [00:04:39][1.6]
Michael Tanner: [00:04:40] Can we believe that? [00:04:40][0.0]
Stuart Turley: [00:04:41] I don’t think they would tell us if they would. We don’t even know what. Iraq, Iran, Venezuela. I mean, there’s a lot that we don’t know. I think there’s a lot we do know and I don’t think we’ve even scratched the surface around the African area. [00:05:01][20.4]
Michael Tanner: [00:05:03] Yeah. I mean it’s but but also the idea that Saudi Arabia is going to be forthcoming with the notion that they don’t have basically an unlimited supply of oil is ludicrous. [00:05:19][16.4]
Michael Tanner: [00:05:21] And, you know, I don’t want to, you know, either dive into it smart. Yeah, we really need to dive into all of the deep, dark parts of Twitter. But I mean, you can you can you can log on to Twitter and it you know, what is it, seven steps from Kevin Bacon. [00:05:35][14.8]
Michael Tanner: [00:05:36] You’re not seven steps away from finding somebody who’s going to tell you that Saudi’s lying about their oil reserves because you don’t know that. I mean, it’s in their best interest to have by far and away the most amount of oil because they want to control it now. [00:05:49][13.4]
Michael Tanner: [00:05:52] You know, with Rystad want to you know, is Rystad taken money from Saudi Aramco? Of course they are. So, of course they’re going to come out and say, of course they’re going to come out and say, oh, yeah, they’re you know, they’re going to back them up. You know what I mean? They’re it’s like Pfizer handing the data to the people and saying, here’s the data you should look at to write the thing. It’s like, okay, cool. [00:06:13][20.5]
Stuart Turley: [00:06:14] As they calmly pay off government officials. What did you? [00:06:17][3.0]
Michael Tanner: [00:06:18] Absolutely. [00:06:18][0.0]
Stuart Turley: [00:06:19] Yes, that’s what I thought you said. [00:06:20][1.3]
Michael Tanner: [00:06:21] Yeah, that’s exactly what I said. So, again, I think. I take this with a grain of salt. I think the majority of things says I don’t buy that Saudi baby Number two saved my life. But I do buy the U.S. and Canada number, if only because they’re more free and open. I mean, you can argue about Canada that doesn’t quality is appropriate but I guess, you know, I, I buy that U.S. number only because they’ve got that data. [00:06:49][27.8]
Stuart Turley: [00:06:50] Right. And there’s you when you go down to the previous total reserve reports, they had the previous one at 1.7. So the trending is they think that there’s a little bit less. The country with the most proved oil reserves at the end of 2020 was Venezuela with 303 billion. [00:07:13][23.2]
Michael Tanner: [00:07:16] Well, absolutely. I mean, that that’s not a shock, the problem is it’s extremely expensive to go get that. You’re talking about extremely heavy crude that requires massive steam flooding. I mean, you basically need $100 oil to make it profitable. So the point is. [00:07:29][12.8]
Stuart Turley: [00:07:30] No infrastructure anymore you got to rebuild it. [00:07:32][1.9]
Michael Tanner: [00:07:32] You know, got to come through us now. Sucks to suck. [00:07:35][2.6]
Stuart Turley: [00:07:37] Yeah, unless we fund it just kidding. Okay. Coming around the corner to any more fancy. [00:07:43][6.3]
Michael Tanner: [00:07:43] Secret Oil analysts. [00:07:43][0.0]
Stuart Turley: [00:07:45] Yeah let’s go to speak to an oil analyst, watch me pull a rabbit out of my hat. We’ve got Goldman Sachs sees oil prices rising on Record Demand. I don’t know how to even talk about this one. I’m going to. [00:08:00][15.7]
Stuart Turley: [00:08:01] Here’s a quote. We expect pretty sizable deficits in the second half with deficits are almost 2 million barrels per day in the third quarter as demand reaches an all time high, said Dan Struyven head of oil research at Goldman Sachs. Hey, he applied to be a podcast host here. [00:08:21][20.0]
Michael Tanner: [00:08:23] He did. He’s about to take my job. [00:08:24][1.2]
Stuart Turley: [00:08:27] He didn’t have your sense of humor. He, According to Goldman’s Struyven, We expect U.S. crude supply to slow down pretty significantly to a subsequent place of just 200 barrels per day from here. Rig count fell to six, six, nine last week, according to Baker Hughes. [00:08:49][21.6]
Michael Tanner: [00:08:50] So, I mean, based on what they’re saying, $86 oil, we stand it basically 79 bucks. I mean, I think this is a whole lot of nothing like I agree with Goldman Sachs in this point, but I wouldn’t call this a bullish outlook by any stretch of the imagination, which is not this funny coming from the king of pump. [00:09:08][17.5]
Stuart Turley: [00:09:09] This was a nothing merger, kind of like saying they’re about to go arrest some politicians and nobody shows up, not even the politicians. [00:09:16][6.8]
Michael Tanner: [00:09:17] Absolutely. Speak about here. Yes. [00:09:19][1.6]
Stuart Turley: [00:09:19] Saudi Arabia’s crude exports decline below 7 million barrels per day in May. [00:09:24][5.3]
Michael Tanner: [00:09:25] Interesting. [00:09:25][0.0]
Stuart Turley: [00:09:26] First time. [00:09:26][0.6]
Michael Tanner: [00:09:27] Wow. All right What’s next here?, We got to talk about BRICS. [00:09:29][2.3]
Stuart Turley: [00:09:31] Okay, let’s go to BRICS. It’s a long way to Destroy the Dollar. Jim Rickards warns of supply chain Frailty and BRICS Currency Plan. This article is phenomenal and I’ve already reached out to him to come on the podcast. [00:09:48][17.4]
Stuart Turley: [00:09:49] He is a seven different book, is Sold Out was his recent best selling book Why Broken Supply Change would Cause Big Inflation? Oh yeah, we’ve had a bunch of it, but I’ve been reading some of his other stuff and I’ll let you know as soon as he calls me if I have to get off this podcast because he’s calling I’ll let you know. [00:10:09][19.8]
Stuart Turley: [00:10:11] I love one of his line in here, Rickards points out Putin has been very patient about the deal is in the Green Deal is what he’s referring to, he had a deal. Ukraine was not living up to their end of the deal. [00:10:27][15.6]
Stuart Turley: [00:10:28] Putin says we are the ones getting attacked, so screw the deal. What’s that going to do to the price of grain? It’s going to send grain prices up, and that’s already up 10% in a matter of days. [00:10:39][11.8]
Stuart Turley: [00:10:41] Now, here’s where it fits into BRICS and everything else. Putin’s over there. Putin in Kiev already had a signed contract and the U.S. begged. So here he is again and Putin had a grain deal with Kiev and they backed out and redid it. So, Old Putin’s over here, tired of everything and it’s coming in. [00:11:08][27.0]
Stuart Turley: [00:11:08] But here’s where it gets down to it. BRICS, Michael, as you know, is going to be a gold backed security. He comes down into here and says, you don’t actually have to have gold in order to be a gold backed security. I’m kind of interesting on this. [00:11:25][16.6]
Michael Tanner: [00:11:25] So what does that make it? I mean, it may part is, is that what BRICS decides to do is going to be extremely influential around the world. [00:11:35][10.0]
Stuart Turley: [00:11:36] Exactly. Here’s here’s what he says. Let’s say the BRIC, quote unquote, BRIC or, you know, their dollar is worth one ounce of gold today that is 1,970 per ounce except the BRIC is not anchored to the dollar it’s anchored to gold, which stands in the middle of this equation. [00:11:54][17.9]
Stuart Turley: [00:11:55] So the dollar is the price of gold going up or down all the time, which means the dollar or the BRIC exchange rate is going to go up all the time. They don’t have to back it up with gold, they actually don’t need any gold. [00:12:13][18.2]
Stuart Turley: [00:12:14] If you make your currency anchored to gold, you will want the price to go up or down. You want the price of gold to go up because that means the BRIC is worth more in the dollar. [00:12:25][10.5]
Stuart Turley: [00:12:26] To summarize the rest of the article, he says, all you have to do then is you get off the dollar. You have a fake gold standard that you’re going to use and then crumple the supply and everything’s going to go to hell in a handbasket. He’s just outlined a whole blueprint on how to take down the Dollar. [00:12:48][22.2]
Stuart Turley: [00:12:49] Now, everybody was saying that we go to BRICS it could be years and decades. If you have people that really understand the supply side of things, you combine BRICS and a gold standard with somebody trying to kill the supply side, That’s a really, really quick, I found this very, very important. [00:13:10][21.9]
Michael Tanner: [00:13:11] Yeah. No, I mean, I think as I’ll say it again, I sound like a broken record. What BRICS decides to do with the currency is scary because they’re going have a lot of weight influentially. Who are the companies in BRICS? Brazil, Russia, India, China, South Africa just like the biggest economies in the world. [00:13:28][16.0]
Stuart Turley: [00:13:28] So when they get done with BRICS plus, Michael? 50% of the world’s population will be in it. [00:13:35][6.8]
Michael Tanner: [00:13:36] And Energy News Beat. Don’t forget that. What’s next? [00:13:39][3.0]
Stuart Turley: [00:13:40] Okay, let’s go to the last article here, dude. Anyway, more on that author he is a good dude. Okay. Eni fast tracks Indonesian Natural Gas Development with Chevron acquisition. [00:13:51][11.3]
Stuart Turley: [00:13:53] This one’s pretty big. Eni announced the acquisition of Chevron Interest, including the upper operatorship in the Indonesian blocks name Ganal P. S C, Chevron, 62%. Rapak PSC, Chevron 62% and Massacre Straights PSC Chevron 72% in the Kuti Basin offshore of East Kettleman Eni already has a 20% in the non-op. [00:14:22][28.6]
Stuart Turley: [00:14:23] This is pretty cool because this is actually showing. LNG. Natural gas is huge and it’s here to stay. I just visited with a gentleman in Croatia. He’s dealing with Germany and American countries working on getting long term natural gas thing. I also was also visiting with a gentleman in Brazil yesterday and I’m then visiting tomorrow with somebody in Yugoslavia. So it’s it’s nuts what’s going on around the world dude [00:15:00][36.7]
Michael Tanner: [00:15:01] No you’re keeping up with the gases is, you know, obviously important for energy security. You know, I think what we’re about to see with some of these earnings, it doesn’t necessarily turn out well on the investment bottom line but that’s from an American standpoint. So that that’s what I think we’ll find out. You got anything else Stu? We’ve got earnings to cover. [00:15:27][26.0]
Stuart Turley: [00:15:27] Go Earnings Go! [00:15:28][0.3]
Michael Tanner: [00:15:29] All right. Well, we’ll quickly cover. We’ve got oil prices here, 78,99 as we record this about 6:30 here on the 26th so, you know, basically sitting at $79, fairly muted day. [00:15:41][11.8]
Michael Tanner: [00:15:41] Obviously, we did see the Fed come out and decide to raise rates 25 basis points as expected. I think the key is they were wishy washy on what the next trade was going or the next interest rate trade was going to look like. [00:15:54][12.4]
Michael Tanner: [00:15:54] Maybe a 25 basis points increase they did leave the possibility that there was not going to be a development raise an increased rate. So, you know, again, we’ll see how the chips fall on that one. [00:16:07][13.0]
Michael Tanner: [00:16:08] You know, we saw a few earnings dropped in an hour ending it’s important and I’d like to cover just one of them. One we’ll talk about HESS, give you guys an idea how much oil prices have to do with earnings. You could talk about, you know, we joke about acquisitions, we joke about production, we joke about all this stuff. [00:16:26][18.4]
Michael Tanner: [00:16:27] All you need to know for an oil and gas company is what’s the oil price? Why? Because for HESS, three months ending in 2022, $723 million in the three month span was a three month span. This quarter, 155 million, 82% loss. Reuters can’t figure out what to say they’re criss cross. [00:16:53][26.1]
Michael Tanner: [00:16:53] Obviously, the people who write the articles are different than the people who write the titles because their title is oil producer has beat profit estimate on U.S. production boost first since Oil Gas producer Hess on Wednesday reports an 82% year on year decline, you got to get on the same page, folks. [00:17:12][18.6]
Michael Tanner: [00:17:12] Now, they did beat net production specifically with some higher Gayuna guidance so good for them they did come out and say some interesting things. But I bring this up only to say Stu, Oil prices mean everything in this business, so don’t let anybody fool you otherwise. [00:17:26][13.4]
Michael Tanner: [00:17:27] Speaking of IR Guy of the week, Matador, I love these guys Stu they drop earnings today? You know what? You know I like them. They’re their founder and chairman and the CEO. I like that. I like that. Okay. [00:17:42][14.9]
Michael Tanner: [00:17:44] Second off here the other thing I love, you got to scroll 10 minutes down there. Down there press release before you see anything about cash flow. It’s all BOE, BOE Oil here’s what we’re doing. You finally come down here. Oh, sweet. Net cash flow from from operating activities 449 million adjusted free cash flow about 77 million net income of about 160 for adjusted net income, about 170. [00:18:12][28.3]
Michael Tanner: [00:18:13] So about the same as what HESS did but that gives you the idea of of of a you know, of the differences when people come down you know has to is going to take take some hit on oil prices but they’re also going to probably do a lot. They’ve got you know, they have a lot of capital expenditures going to this. [00:18:28][15.5]
Michael Tanner: [00:18:29] Matador they’re just looking at, you know, you’re looking at income to production. So I think on this front, it’s just funny to say, I love Matador they only care about production. They’ll eventually sprinkle in here some financial data, which I find hilarious. [00:18:44][14.9]
Michael Tanner: [00:18:45] And then thirdly, I thought it was interesting EQT drop their finance today. I mean, natural gas prices hasn’t been big, though they were up 4% today. Again, off record second quarter of a production of about four 471 billion cubic feet. CapEx ended up in line with expectations. [00:19:03][18.4]
Michael Tanner: [00:19:05] You know, they did retire 800 million of debt and brought them now down to debt free. So when we look at their numbers here, take it with a grain of salt, but talk about pricing on the other end Stu. Net income last year or three months ending in 2022 891 million. This month. This quarter, -67 million. [00:19:28][23.2]
Stuart Turley: [00:19:29] Whoops. [00:19:29][0.0]
Michael Tanner: [00:19:30] And that’s again, has a lot to do with debt retirement. Okay. So you’re going to go and retire a lot of debt, but that’s a dollar difference on average realized price and no nasties and no necessarily little difference when it comes to their overall CapEx expenditures guidance only up about, say, 100 million so that doesn’t incorporate for the difference. [00:19:52][21.9]
Michael Tanner: [00:19:52] So I mean, it’s you see why that overall net loss in that net loss or what we call net income, the street doesn’t trade off that because if it was true, EQT would be in the tank. Why? It’s because you have to look at, you know, again, the total of their balance sheet. [00:20:10][18.0]
Michael Tanner: [00:20:11] You know, again they’re also ESG heavy so IR Guy the week right here the you know they released you know they got to put in there that they released their 2022 ESG report so we got to love that. Product 20% year over year reduction scope one scope two emissions we got to love that. [00:20:27][16.0]
Michael Tanner: [00:20:28] So but you know, but a dollar less on realized pricing translates into a pretty large change. But again, that has a little bit to do with the debt retirement and that’s really interesting Stu is you got to give them idea they have no credit facility borrowings currently and only 25 million letters of credit under their $2.5 billion credit facility they’re giving you something. [00:20:49][21.0]
Michael Tanner: [00:20:50] The other thing that came into my mind is they’re gearing up for a purchase. They’re clearing the decks, they’re clearing their debt decks for a purchase, thats my bet. [00:20:58][8.5]
Stuart Turley: [00:20:59] That was my next comment was they’re they’re getting the war chest open. [00:21:03][4.7]
Michael Tanner: [00:21:04] Yes. They’re coming up with cash on hand. We do have a couple other earnings. We’ve got Chevron and Exxon announcing later this week. But yeah, it’s going to be a full week earnings I thought there was some interesting tidbits there. You have any thoughts, Stu? Have you seen anything is as these numbers have rolled out that pique your interest? [00:21:25][20.5]
Stuart Turley: [00:21:27] No, not not on the numbers right now, but we’re not done with M&A. M&A, I think, is going to heat up here for too long. [00:21:33][6.6]
Michael Tanner: [00:21:33] I think you will. I don’t think that’s a I think it’s a pretty common belief. I’ve seen a lot of articles written about that, and I would agree with that sentiment that I think the the war chests are being driven because I think there’s there’s a price at $80. Everybody’s happy. You can find something that looks good on paper as a buyer and sellers prices look good to sell. [00:21:54][20.6]
Stuart Turley: [00:21:55] I missed that one point on you know Toby there on EQT. So when you sit back and and take a look at that and I missed even that he was moving that money around totally missed it. So yeah. [00:22:10][15.1]
Michael Tanner: [00:22:11] I if they’re maybe not but maybe. [00:22:14][3.1]
Stuart Turley: [00:22:15] But that’s a great analyzation good job. Yeah. [00:22:18][3.1]
Michael Tanner: [00:22:18] So it’ll be. [00:22:19][1.1]
Stuart Turley: [00:22:20] Did I compliment you? Dang,. [00:22:21][1.3]
Michael Tanner: [00:22:22] You did. Unfortunately, you did. Unfortunately. You got anything else Stu? We’re going to let these people get out of here. They got the weekly recap tomorrow. Yeah. So they the is the last they’ll hear from us. [00:22:33][11.0]
Stuart Turley: [00:22:34] But here’s the thing. Watch out in the next few weeks because there’s been things going on in the market and they don’t want to know or the Fed is now talking again. [00:22:45][11.0]
Stuart Turley: [00:22:45] You mentioned they didn’t have anything? When is the Feds Speak? When are they lying? When their lips are moving. That is causing a lot of the day traders nuts right now theres much for it. [00:22:59][13.7]
Michael Tanner: [00:23:00] Absolutely! So Alright Guys well, we’ll let you get out of here. Tomorrow’s the Weekly Recap. Do tune in to that. It kind of covers all of our top segments from the week will be back live and in person here on Monday. So for Stuart Turley I`m Michael Tanner guys. Have a great weekend, guys. You almost made it, it’s Thursday we’ll see you guys Monday. [00:23:00][0.0]
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