Daily Energy Standup Episode #66 Yet more train derails, are they intentional? Where is the ESG activist over massive wild life deaths? And who is doubling down with horrible energy policies?

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

ENB Podcast Daily Stand-up Episode 66

Michael Tanner [00:00:15] What is going on. Everybody, welcome into another edition of the Daily Energy News Beat stand up here on this gorgeous Wednesday, February 22nd, 2023. As always on respondent 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, the director and publisher of the world’s greatest website, EnergyNewsBeat.com Stuart Turley. My man, how are we doing today.

Stuart Turley [00:00:39] This real day neighborhood? And I’m in rare form did we’re going to have a great show.

Michael Tanner [00:00:43] You are an absolutely rare form people so I would buckle up and if you are driving I would pull over for this episode because I’m not sure you’re going to want to be driving for this one. We have an absolutely great lineup for you in terms of stories. First, we have another train derails in Midwest as Blue Ridge Edge announces Visit to Ohio crash sites. Nice to see Mayor Pete doing his job. Next. We have number of eagles killed by wind farms in Wyoming. Severely underestimated, according to biologists. I mean, if you didn’t see this one coming, you know, you probably think people are just doing a great job as transportation secretary. So more power to you. It’ll be fascinating to see us two days into the actual map, but I don’t doubt that these birds are getting absolutely slaughtered. We’ll cover what that means for the wind energy movement next. California Public Employee Retirement system makes new $3.82 million investment into Aquarians midstream. You got to love it, guys. What is it? Bite. Don’t bite the mouth. It feeds you. And in this case, providing you gas and and return. So this is absolutely hilarious.

Stuart Turley [00:01:50] We didn’t make these up.

Michael Tanner [00:01:52] No, these are real articles, unfortunately. We appreciate Gavin Newsom for signing off on this one. And then finally, Germany throws weight behind energy transition to defend its turf. Will kick it over to me. I will cover quickly what’s happening in the oil and gas and natural gas markets. You know, where are $2.06 on natural gas? Not good even in the midst of Freeport getting full approval. There’s also a nice little M&A deal that happened between Chesapeake and a first time entrance into a first time entrant into the U.S. market. I’m a world company. I’ll cover what that divestiture in the Eagle Ford, I think, is the Eagle Ford. Is the E agle Ford. Or give me a second. That’s scary.

Stuart Turley [00:02:35] Considering we’ve got a bunch of Eagle Ford’s driving around getting as.

Michael Tanner [00:02:39] Eagle Ford. It was Eagle Ford Shale. I’ll cover what that M&A deal looks like. They also are Chesapeake also did announce earnings and so did Matador. So I’ll quickly throw out highlights and then we will let you get out of here and get back to work on. Before we begin, check us out. World’s greatest website EnergyNewsBeat.com Everything is available in the description. Below are the all the articles that we mention are courtesy of our websites. Stu a great job of keeping it up to date now. www.EnergyNewsBeat.com I’m out of breath Stu. Where would you like to begin?

Stuart Turley [00:03:10] Oh, did I have to give a shout out to you for putting up with me? You know, a little inside baseball for we got started. This is our fourth take. I was in rare form and you kept cutting me and keep me back on the lines. All right, first one coming around the corner. Another train derails in Midwest as Pete Bernard charge Mayor Pete is the only way I can say announces Visit to Ohio crash site. Michael. This one was in Nebraska and it shows about a dozen cars that actually went off. But it was coal instead of the really bad gas that’s in. There you go, guys.

Michael Tanner [00:03:51] Coal. That’s why we should have it all coal grade for this reason right here.

Stuart Turley [00:03:56] It’s a lot easier to clean up coal. And I do want to give a shout out to everybody. Go to the energy news, BET.com. Go to the section that’s in, publish your notes or the podcast. I had Dr. Chalmers on there and I mean, that thing’s going off. Michael That is going amuck. He is a fabulous doctor and he told us about all the stuff. Michael He said, You’d rather die than be around. That stuff in there is now acid rain. There’s cars that are missing. Paint Toronto now has its water supply. Toronto, this thing went bonkers. So anyway, you got to go see that one from Dr. Chalmers. So we got us also for other disasters in the last two days that are now polluting big time. This is scary, dude. Lots of stuff going on across the U.S. Hey, let’s go to the next one, Eagles. This goes into our story three weeks ago in which we had whales that were there were seven whales between the last week in December and the third week in January, one month time period, seven whales died. A couple interesting things on that up. You that here in a sack number of eagles killed by wind farms in Wyoming underestimated. Biologists say this is disgusting. Michael, I have a set of bald eagles out here that I love. They are beautiful, beautiful animals. Where is the outrage for all the ESG folks on this? You never hear them. Now, if it was a whale flying into a windmill, I can understand everybody, you know, calling or who are. But the number of carcasses that they’re finding is despicable. Another project will add another 1100 more turbines, and they range from 400 to 600 feet. That is pathetic. The impacts are going to be a lot worse. Anyway.

Michael Tanner [00:06:04] The problem with this is and it’s mentioned here in the article, Stewart’s this guy, what’s his name? Mike Lockhart, a wildlife biologist specializing in eagles. His worked for the US Fish and Wildlife Service more than 30 years. You know, he’s got a bunch of quotes here. I think it’s interesting is what he’s you know, one of the things he said is specifically is that Wyoming is the worst place you could possibly put wind farms. And it seems to be this has to be a massive rush to get things developed as fast as they can. He goes on to say the reason for that is because the fact that these migration patterns for all of these birds fly directly through Wyoming. So I mean, and part of the reason he then goes down to mention is when did he say this?

Stuart Turley [00:06:42] Let me while you’re finding.

Michael Tanner [00:06:43] A lot of the impacts are hidden and he says we’ll never find out because birds are struck and they’re never found. So there’s no evidence that’s convenient. There’s no evidence.

Stuart Turley [00:06:51] Well, there’s Bigfoot or there’s no Bigfoot. I believe the number of they’re finding the number of birds is significantly going way.

Michael Tanner [00:07:00] Way to your bigfoot. Your Bigfoot guy.

Stuart Turley [00:07:03] Oh, yeah, I saw one. Just kidding. But you sit back and take a look. This line right in here. Wind farms in Wyoming have faced a high profile fines for killing in April. Next area energy plays pleaded guilty to violating the Migratory Bird Treaty Act and was ordered to pay more than 8 million. Duke Energy, which operates a few wind farms in Wyoming. Wyoming was fined a million for deaths of golden eagles. Pacificorp was received 25 million in fines for 38 Eagles. We don’t have enough eagles, period. If you want to sit there and say you’re ESG, I love these medals. They are beautiful animals and I’m anyway, you know that. So I just find it despicable that the energy hypocrisy and ESG hypocrisy does not roll over when it’s a wind renewable. But financially, we’ll go into that. I’ve got some new info coming out here real quick on that.

Michael Tanner [00:08:07] I see your sources. I love it. What’s next?

Stuart Turley [00:08:10] Okay. Rolling around the corner here. I love this one. In the article it has Shell, Are the oil majors destined for extinction? When Bernard Looney became the oil majors BP CEO in 2020 as well, he went to the left and started saying, We’re getting out of renewables. I’m not going to spend much time on this one because we already covered a lot of this. Already. There was the pivot back towards oil and gas. The prioritization of shareholders over renewable confirms a critical lesson for the for profit Corp is poorly equipped to deliver the energy transition at the required speed, Matthew Lawrence, director of Commonwealth, said in a press statement. In response to BP’s results, its incentives and purpose dangerously misaligned with the needs of the people on the planet. What this goes along with, with the next story that we’ll go ahead and jump to, and that is Germany is doubling down and tripling down on stupid. They are now in World War three. Michael, in this article, I am going to bounce between these two articles. Germany throws weight behind energy transition to defend its turf. I don’t even need to go in to that article. They just suffered and got through getting off of a horrible experience coming off of the addiction, the crack addiction to Russian natural gas. They’ve had to build all these. They’re now using Norway. They’re now using those pipelines. They’re now importing LNG from everywhere. They’ve done a good job. They’re still not out of the woods. And now the German chancellor is over here saying, we got to double down on stupid. What are you saying? They’re now not going to follow through with their nuclear. I mean, this is let’s find something that’s proven not sustainable. And let’s jump back in and do it. This is like saying I mean, I don’t know what to say on these two articles.

Michael Tanner [00:10:19] Your thought, it says down here, you know, a little into the article. Berlin’s goal is to generate at least 80% of electricity from wind inside by 2030, a target that is more pressing after a drop in Russian fossil fuel exports. To give you an idea, they need 67 gigawatts of new onshore wind turbines, 22 gigawatts of offshore turbines and 150 gigawatts of what’s known on the street as photovoltaic capacity, a.k.a. solar that must be built according to a paper outlining key measures. So they don’t need a lot of help. And, you know, they also mentioned the state banks are going to be involved. Oh, okay. I see where it’s going.

Stuart Turley [00:10:59] We’ve talked about this. I’m going to run the numbers on this and I’ll tell you how many wind farms there at windmills, they’re actually going to need to hit those numbers based off of Meredith Angwin and Don Dias and all the other experts we’ve talked to about the grid in order to do that. I’m going to give you some numbers on this, probably tomorrow or the next day. This is just not going to happen. So anyway.

Michael Tanner [00:11:24] I love the research from the random dude on Substack.

Stuart Turley [00:11:27] That would be me. Okay. Okay. This one, Michael. Hold on to your seats, Batman. Are you ready for this one? California Public Employees Retirement System makes new $3.82 million investment in. Are you ready? Give me a drumroll. Equity Trans Midstream Corporation, New York Stock Exchange, e d r in what do we have the an entire employee retirement for California, the state of California run by the wonderful governor Gavin Newsom. And they’re now investing in a midstream natural gas company. Oh, the energy hypocrisy say it’s not so.

Michael Tanner [00:12:17] I also think.

Stuart Turley [00:12:19] There.

Michael Tanner [00:12:20] Is some there’s at least one smart person in California outside of Mike Umbro. We now know there’s a second smart person.

Stuart Turley [00:12:26] Well, there’s also Chad Hathaway. We love Chad Hathaway and we also love the senator.

Michael Tanner [00:12:31] I don’t know the senator. So I’m lumping them in with the people.

Stuart Turley [00:12:33] Trying to get her. She’s already committed to being on our podcast.

Michael Tanner [00:12:36] So she has been on the podcast, Oh, you’re dead to us if you’re not on. Do you ever go on the pod?

Stuart Turley [00:12:40] She’s committed to be on it. I’m I’m trying to get her schedule. Cesare said Make may get it. So. Okay, you heard it here. Third. But anyway, I thought it was this article. Okay, You got Germany doubling down and tripling down on stupid. California has always been doubling down and tripling down. And now you’re seeing the hypocrisy in action because even the employees are bailing out because financially and fiscally, it is not responsible to go into the renewables anyway. All of these interact with each other very nicely. Okay.

Michael Tanner [00:13:17] Yeah, I think I mean, you have to point out they do have a negative pivot or price to earnings ratio of -1.43. Not good. And if your thesis is we’re going to need more pipelines or we’re not going to be able to develop pipelines and they’re only going to become their physical investors, they’re only going to become more valued. This is a great move. I mean, I would see exactly why a hedge fund or a this is great. I mean, the people who are in the this is probably the first sweet move they’ve made in a while for their public. Well, this is this is better than any tax credit you could give them.

Stuart Turley [00:13:50] Oh, absolutely. But as an employee investment firm, they don’t really have to worry about a lot of that per say. Now.

Michael Tanner [00:13:58] Know, I’m just I’m just I’m just saying, Well, what do you got next?

Stuart Turley [00:14:02] The last one is one that I think we’re going to table. And this one can really run at any time. But how a country loses its currency reserve status, we need to get a little more impressing.

Michael Tanner [00:14:13] It’s been too depressing of a day.

Stuart Turley [00:14:15] And I’m on such a roll. I’m a funny. I’m legend in my own mind. Let’s not ruin that with this article so.

Michael Tanner [00:14:23] We don’t need your blood gushing.

Stuart Turley [00:14:25] It’s off to you and finance the.

Michael Tanner [00:14:28] Yeah, we will keep it quick. Overall, markets did not have a great day. S&P was down two percentage points. NASDAQ dropped 2.4 percentage points. Crude oil down to about 7614. As we record this the night before here on the 21st. I think the big thing to point out with the crude oil markets is, again, all of this quote unquote, demand side pull on the bull side is coming from Chinese, from China. Demand if as today if you know, things come in and are a little bit more spicy on that demand side, we are going to see prices drop. I think you’re also seeing that, you know, with the with with the release of the minutes from the latest Fed meeting that they had today, showing that, you know, interest rates are going to. Remain high for the long term. I think that doesn’t also bode well and probably why you’re seeing crude oil stumble just a little bit. You know, on the natural gas side, guys, I mean, it’s $2.05. I mean, there’s not much to say other than Wolf. I mean, Freeport got approval today for full exports and it’s dropped to the lowest it’s been in two years. So this warm weather is obviously coming in a lot stronger than people realize. We are oversupplied a little bit, I think, you know, specifically in certain regions, specifically out like in West Texas. I think, you know, Appalachia specifically, you’re seeing two choke points that I think are just starting to fill up. There’s too much I mean, we look at what the storage draws and because yesterday was President’s Day, the EIA and API will not drop their stuff until Thursday. API will drop to Mosul tomorrow show, which I think I’m doing. So low cost is going to be driving.

Stuart Turley [00:15:58] Actually Thursday I’ll be driving so.

Michael Tanner [00:16:00] Thursday so we’ll we’ll we’ll we’ll actually get you a really decent show on Thursday from Qatar. So I think that’s what you’re seeing on the crude oil side. I think I’d be remiss if I didn’t say two things. One, matador came out and announced their earnings. I think you’d be remiss to highlight quickly in fourth quarter of 400 or 461.8 million of adjusted EBITDA. To give you an idea, in the full year, 2.3 billion of adjusted EBITDA in the quarter, they did about 62,000 barrels of oil per day and averaged over the year 60,000 barrels of oil production on the first year. The company has also averaged over a thousand BOE each day. So they took advantage of high prices to continue to Crank, Crank and Crank Matador just down the street actually from where I’m at. So I got to love that. You know, to be honest, they’re one of the more fiscally sound oil and gas operators out there, considering, you know, the frenzy that they could have got out. Their debt structure’s not terrible. So, you know, I like what what they got going on. I mean, I mean, they’re still founder, chairman and CEO, this Joseph guy. I mean, so that gives you an idea of the align that he’s got. The incentives are provided for him to be fiscally responsible, if only because he’s got his neck on the line. Now. I mean, they’ve IPO’d, but it’s a little bit different. We like that. Let me a good founder, chairman, CEO. Next. Two stories are Chesapeake. First off, they also provided and dropped their earnings today. Let’s go over see the highlights adjusted EBITDAX, which again is a lie, but it tells you something $1.03 billion free cash flow of 526 million adjusted free cash flow, 273 million inclusive of the effective asset sales. They declared a quarterly dividend of $1.29 per common share. They did about 4.05 Bcf per day, but 90% natural gas. Yep, it’s coming in. I love how they also put it in here, securely secured, independent, responsibly sourced national gas certification for 100% to approximately six Bcf per day of gross operating produce gas volumes, responsibly sourced natural gas, maybe ESG friendly Chesapeake. You know, right before they you know, right before they go bankrupt, at least they can say they were ESG friendly. I mean, there’s this pricing structure and it can’t be good for them right now. They did good quarter this quarter. Q1, Do you do? Oh, we’ll see, though. We’ll see. Good old Nick O’Dell still, you know, his first quote, the premium rock returns and runaway on our standing assets delivered and as a result, a strong results in 2020. So this is you’re going to ride these 2022 coattails as long as they can. Maybe it was a record year in 2022. Don’t worry about what’s happening in 2023. Don’t look, don’t worry about it now. But they did see a nice little cash infusion today. Stu So to give you an idea, Chesapeake announced today that it has executed an agreement to sell the remaining portion of its Eagle Ford assets to Enos energy for 1.4 billion. Give you guys an idea. They’re selling about 172 net acres and approximately 2300 wells in the more black oil portion of its Eagle Ford asset in LaSalle. In the Collin County, it’s about 36,000 Bowie per day, which is about 81% liquid. They expect the transaction will close second quarter 2023. They will give 1.175 billion upon closing with the additional 225 paid in annual installments of 56.25 million. Chesapeake anticipates the proceeds will be applied to repay borrowings under its revolving credit facility and be available for its share repurchase program, which they’re not going out of the way to tout up and down. So they’re taking the ConocoPhillips way, which I like because, you know, I mean, it’s kind of tough to go bankrupt that six months later be touting your two years later to be touting your your share repurchase program. But you didn’t hear that from me. Do I like this deal? I’m a broke this afternoon. Haven’t quite had a chance to break it down. I do know this Enos energy stew. They’re not a they’re not a U.S. oil and gas company. They’re an Internet. Operator. This is their first step into this space. My question is to you, is that is this going to open the opportunity or open the floodgates for international operators to start moving in to the United States? That’s really I think the high level question here is this is a drastic move.

Stuart Turley [00:20:30] There are other energy, and as we talk energy on everything else, there is a gigantic move for renewables as well as the MP coming in. So if you take a look at the energy across the board, the investments coming in and energy into the United States is amazing. And I disagree that we should be selling things to foreign countries, but that’s my personal opinion.

Michael Tanner [00:20:57] No, I think you’re absolutely right. It will be interesting to see how it plays out. But I just thought that was sort of the high level thing that came from it.

Stuart Turley [00:21:04] So if it’s happening in the other storage as well as tankers, as well as other things coming around the corner.

Michael Tanner [00:21:11] So they’re taking over. I mean, we’re about to be sponsored by the Chinese Daily News. So, you know, it’s China’s coming, whether you like it or not.

Stuart Turley [00:21:18] Where when they tried to interviews. Yeah. Hey, we’re famous over there.

Michael Tanner [00:21:24] Legends in our own mind. Hi, guys. With that, we will let you get out of here. Get back to work. Finish up your day. Thanks for checking us out. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, maybe.