Daily Standup Top Stories
Winter Freeze Cuts U.S. Natural Gas Output
Sub-zero temperatures in much of the United States have frozen gas wells, leading to the drop in production to the lowest in 11 months, Reuters has reported, citing local data. The report added that demand for […]
BlackRock Scoops Up Energy Infrastructure Giant GIP
Investment management giant BlackRock has struck a $12.5 billion deal for Global Infrastructure Partners (GIP) in preparation of an expected surge in worldwide infrastructure needs, driven partly by the low-carbon energy transition. “If we are […]
Highlights of the Podcast
01:06 – Winter Freeze Cuts U.S. Natural Gas Output
03:27 – BlackRock Scoops Up Energy Infrastructure Giant GIP
06:41 – Markets Update
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:14] What’s going on? Everybody? Welcome in to the Tuesday, January 16th, 2024 edition of the Daily Energy News Beat Standup. Here are your top headlines. First up. Winter freeze cuts US natural gas output immensely. Hopefully everyone is staying warm right now. Next up Blackrock scoops up energy infrastructure giant G IP. I will then quickly cover uh, what happened in the oil and gas markets today and opine, um, on a new Talos energy strategic acquisition of Water North Energy specifically in that offshore area. Guys, it’s going to be a great show. As always, I’m Michael Tanner. Stuart Turley is out with a sickness that would have killed an average man. He’s still alive, so that’s great. Um, luckily he’s above average, so, um, we’ll see him back in the chair tomorrow. Um, but let’s go ahead and dive in, guys. [00:01:06][51.8]
Michael Tanner: [00:01:06] First story. Winter freeze cuts U.S natural gas output for everybody who’s in the Midwest right now. I’m sure you are experiencing the quote unquote deep freeze. Um, that’s going on right now. I’m here in Dallas. It’s only 11 degrees, so it’s not horrible. People here are are a little ridiculous, but subzero temperatures in much of the United States have frozen gas wells, leading to a drop in production to the lowest levels in eight months, according to Reuters, citing local data. This report also added that demand for electricity, on the other hand, was heading for a record high in some states, notably the one I sit in, which is Texas the grid. Later there, Ercot issued a conservation, um, call for Monday on expectations that demand will break last summer’s record. Here’s that quote out of air. Uh, Ercot operating reserves are expected to be low Monday morning due to the freezing temperatures, record breaking demand, and unseasonably low wind. Gotta throw that last part in there for all of our renewables, folks. Unseasonably low wind. It’s what happens when there’s no wind. Unfortunately, the turbines don’t spin. Rotors also cite some data from LCG. Its market research unit suggested that demand for natural gas, including exports, could hit 164 point 6,000,000,000 cubic feet today, rising to a further 171.9 BCF on Tuesday. Both figures would be record breaking. In North Dakota, we saw gas production was down somewhere around 700 and 800,000,000 cubic feet a day, while oil production had declined by somewhere around 150 to 280,000 barrels of oil per day. Absolutely unbelievable. Ironically, we did see, you know, futures prices didn’t hold up great, but we did see spot prices specifically that Henry Hub spot price surge by 400% over the weekend. Um, hitting about $17 per British thermal unit pound. That compares about $3. And then BTU that is currently what’s kind of getting traded on right now. Um, absolutely incredible what’s going on? I mean, it comes out to say, you know, you can put up the tweet from David Blackmon. I mean, this says it all right. Now you’ve got 0% wind going on. That’s never going to help you. Also 0% solar. It is at 530 in the morning. So it’s a little bit of a uh a smoke and mirrors there. But absolutely unbelievable. Natural gas even with being frozen is saving the day. Hope everybody this morning took a warm shower and thank your local oilfield worker. [00:03:27][140.5]
Michael Tanner: [00:03:27] Next up Blackrock scoops up energy infrastructure giant Jip. Absolutely incredible guys. Investment management giant Blackrock has just gone ahead and struck a deal today to acquire uh Global Infrastructure Partners GIP, um, for $12.5 billion in preparation of an expected surge in worldwide infrastructure needs. This is the quote me. This is absolutely scary, guys. We are going to decarbonize the world. The amount of capital and infrastructure is going to be very necessary, Larry Fink, our favorite um, CEO, told investors on Friday. You know, I mean, what’s hilarious is this is his other, quote, infrastructure is a $1 trillion market forecast to be one of the fastest growing segments of the private market. So there, you know, it’s sleight of hand. They they wave their hand up front and say, no, no, no, we’re doing this because of climate change. And we need to make sure that everybody decarbonize and blah, blah, blah. Then they sneak in there. Wow. Really what we’re discovering is an infrastructure is $1 trillion market. It’s one of the fastest growing private markets of all time. We’re going to go and invest in it because we feel like we’re going to make money. So let’s again, let’s be very clear. Why are they making this investment. They’re they’re telling you they’re making it because of climate change and decarbonization and blah blah blah blah. No, no, no. They’re doing this to make money. They understand the amount of capital that’s going to flow into infrastructure in general, regardless of whether or not it’s for payment change or not. Grid updates, that’s just updating the grid. All the other stuff that’s in, you know, the clueless bill is do would like to say the Inflation Reduction Act, all of that stuff. BlackRock’s got its checkbook out and says, money, please, money please. Yes. We’ll sign up, give us checks, give us checks. We’ll do this. It’s absolutely unbelievable. You know, Larry Fink also in this press release cited greater role in private capital. Oh, I. I’m sure. I’m sure you do think that Larry Fink. I’m sure Larry Fink does think that private capital will play a greater role in the infrastructure space, given the rise of public estimates in the sheer amount of capital required to modernize the digital world and advance energy independence. I love how they say energy independence and energy transition, because now, okay, even if we end up on natural gas, that’s better because we’re independent. I mean, the sleight of hand that’s going on right now, and what’s hilarious is what they’re doing right now is they’re evaluating whether or not we think these large oil and gas mergers that took place are happening. The funny part is what they should be doing, what they should be doing is looking at how Blackrock is going around, scooping up all of the companies that theoretically could benefit from things like the Inflation Reduction Act. There’s where the FTC needs to be involved, not figuring out a Chevron buying. Hess is going to give Chevron more market control. Newsflash it’s not you know, what’s going to give Chevron more control the more regulations you put on it, because they’re the only ones can handle it. I’m going to get down that road again. But it’s funny how we just see these companies like Blackrock. They continue to swoop up more and more companies and they say oh it’s for decarbonization. No no no no no. It’s for profit. This is familiar territory. Remember Blackrock is one of the largest investors not only in a lot of the top ENP companies. We won’t talk about that. Forget I mentioned that what they are attempting to do is investing more in that infrastructure space. They own a piece of Saudi Aramco’s gas pipeline subsidiary, and they also have a direct interest in the Abu Dhabi National Oil Company. Thank goodness for Blackrock helping us decarbonize. [00:06:40][192.7]
Michael Tanner: [00:06:41] Let’s move over to finance guys, which I think was a little bit of a of a shocking move today, specifically when when we talk about what happened with the overall markets, we did see, um, with, you know, uh, the 15th being MLK day, we did not necessarily have S&P 500 and the Nasdaq, the overall stock market was closed. Futures were open, though we did see crude oil open, uh, gap upwards a little bit. We opened in about 7273 kind of where we trade right now for the spot price. We did see us, uh, down to somewhere around uh, 7115, mainly off the back of of of of some kind of weak. I mean, everything right now is being driven by the conflict of what’s going on in the Middle East. We saw over the weekend, we saw the US attack, some of the Houthis, um, in Yemen today. Some of that stuff has kind of we’ve crawled back a little bit in order to. Yeah. You know, we we were less hawkish, but but really a lot of what they’re seeing with the swings of the market has a, has more to do with the kind of the geopolitical tension and risk that’s being priced in on the natural gas side. As I mentioned, we saw prices for spot prices over the weekend spike up to $17. But really what we’re seeing on the futures market is actually a forecast for a little bit of a warmer January, which happened to actually drive prices down. We are at about $3.40 per MMBtu, which we’re now seeing that at about $3.08, mainly, again off the back of that, um, future, uh, updated, uh, forecast. Uh, it’s going to be a lot warmer, which unfortunately is going to have a larger effect on prices, specifically that future price going forward. But the only other thing that I saw today, um, was Talos Energy. They’re going to go ahead and and announce an acquisition of Qatar North Energy. Um, is a privately held US Gulf of Mexico exploration, um, with ownership in several Pacific fields. Again, it’s about 30,000 boe per day. Um, they added about 1.7 billion, um, of proven reserves. Now that’s a PB ten. So it’ll be interesting to see how that works. Um, they’ve got a bunch of synergies that are expected to save about $50 million aka layoffs. So we’re unfortunate for people there. They paid about 965 million in cash. So, uh, pretty good from a, uh, uh, on a strategy standpoint. You know, this is, uh, Talos CEO Tim Dunn. Ah, Duncan. Today’s announcement marks one of the most big milestones to build a large scale offshore exploration company. You know, they have multiple deepwater. They have a big deepwater portfolio, which is where Talos is trying to get to. So good for them for for linking up. [00:09:08][146.4]
Michael Tanner: [00:09:08] We we we may go ahead and see this on a, uh, on a deal spotlight here soon, but that’s really all I have guys. Hopefully still feels better. You will see us back in the chair tomorrow. Uh, but we’ll let you get out of here, guys. As always, news and analysis. You just heard world’s greatest website, energynewsbeat.com. Hit the description below. Dashboard dot energy news. We’ll see you tomorrow, folks. [00:09:08][0.0][531.4]
