Daily Energy Standup Episode #94 – Biden says oil cut’s are “Not Advisable” – The world responds “So What” – Nat Gas strike price $1.50 – Protect Off Shore Pipelines

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

Michael Tanner: [00:00:15] What is going on, Everybody, Welcome into another edition of the Daily Energy News. Beat stand up here on this gorgeous Tuesday, April 4th, 2023. 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 show the beginning of the show, the Director and Publisher of the world’s greatest website, EnergyNewsBeat.com Stuart Turley, My man. How we doing today? [00:00:36][20.7]

Stuart Turley: [00:00:36] It’s a beautiful day in the neighborhood. Holy smokes there’s a lot of news going on, dude. [00:00:42][5.9]

Michael Tanner: [00:00:43] If you’ve ever seen it. We’re sitting in and getting ready for an absolutely banger of the show by now you guys are reacting to the OPEC plus 2.5 million barrel cut we have all of that analysis followed by some great stories that Stewart put together. Again, all of these stories are available via the world’s greatest website, EnergyNewsBeat.com. [00:01:01][17.8]

Michael Tanner: [00:01:02] First up on the menu, Opec+. Output cuts are advisable, U.S. says. Of course, we think that Stew will dive into what the administration is saying about these opec+ cuts. Let me tell you, it’s chock full of goodies that one. [00:01:16][14.2]

Michael Tanner: [00:01:16] Next up, $2 natural gas is temporary. Just like $10 natural gas was so boring headline. But in lies, I think some great truths. Next up, Lower natural gas price is not all good news for Europe. You would think with their high cost of energy, just being able to lower natural gas prices would be as simple as having natural gas prices trade lower but that’s not necessarily the case. Stu, we’ll dive into why. [00:01:41][25.1]

Michael Tanner: [00:01:42] Next up on the menu, Protect or perish. Europeans subsea lifelines. You know, this is has to do with energy security, but a little bit to do with some national security topics as well. Stu will dive in. Next up, The Dallas Fed Energy survey just drops some really fascinating tidbits that will pull from that, specifically around supplier engagement they get supply is why vendors get roasted in this one. So it’s a it’s a it’s a it’s a huge one. [00:02:10][27.9]

Michael Tanner: [00:02:10] Stu’s worst nightmare is next up, Mexico considering joining BRICS as relationship begins under Biden. He’s been calling this a BRICS expansion for months now. And it officially Mexico looks like it’s lined up. I mean, that would bring it that would bring it close to our borders that’s a little creepy. Once we get all that taken care of, he’ll kick it over to me. I will cover what’s going on in the oil and gas markets I mean, clearly, oil prices over $80. So we will breathe a sigh of relief. That’s great for everybody around. Natural gas still trading at $2.10. We’ll break it all down. M&A deal Ovintiv buying fort and cap back companies, a total of 65,000 net acres in the Permian. We will break it all down. [00:02:47][36.9]

Michael Tanner: [00:02:47] But first, guys, check us out. World’s greatest website, www.EnergyNewsBeat.com The best place for all of your oil and gas and energy news. Trust me, guys, you can hear all the stories we’re about to read in the description below. If we were 16 and on YouTube, which we are, I would say smash that like Button But I’ll refrain from doing it in solitude with the people listening again. Dashboard.EnergyNewsBeat.com EnergyNewsBeat.com. Check us out everywhere mobile as well. I’m out of breath though. Stu, Where do you want to begin? [00:03:17][29.8]

Stuart Turley: [00:03:18] Let’s start with my buddy Biden here. OPEC output Yesterday on the call when you were out taking a nap somewhere, OPEC’s output cuts are unadvisable. US. says, well, there’s more to that story. We know that yesterday when I covered it on the show that OPEC is putting out 1.6 million barrels those one day, right. [00:03:45][26.8]

Michael Tanner: [00:03:45] That’s 1.16 million per day per day. [00:03:47][2.3]

Stuart Turley: [00:03:48] And now, when you add that up, Novak, who is the Russian energy minister, said he is going to keep his down his cuts till the end of the year. You add these quotes, Michael, is it a conspiracy finger or is it a finger to Biden? Those numbers match how much we need in the SPR. So is it a coincidence that they’re reducing their amount of oil by the amount we need in the SBIR? I don’t think so. [00:04:26][37.5]

Michael Tanner: [00:04:27] I don’t think it’s a coincidence either. I mean, they’ve been I mean, ever since the outrage. I mean, let’s go back to what it was, the murder of Jamal Khashoggi. They have been outright in defiance of all of us. And so this is it absolutely is not a coincidence. This is absolutely a middle finger to America. [00:04:44][17.4]

Stuart Turley: [00:04:45] You bet. Now, this is from who said this, quote-unquote, from the Biden office. We are focused on prices for American consumers, not barrels. And prices have come down significantly since last year, more than a dollar 50 a gallon from their peak last summer. Yeah, but it was still $2 a gallon more than previous people. [00:05:07][22.7]

Michael Tanner: [00:05:08] Yeah, and it’s going back up, unfortunately, if prices. You stay above 80. We’re going to see again, it’s going to go to 320, three, 30, 350. I mean, I’m talking around I mean, it’s 350 nationally right now. I’m you know, here in Texas, it’s just gone above $3. Everyone’s annoyed. It used to be it got down to about 260 here at one point. [00:05:25][17.2]

Stuart Turley: [00:05:26] Yes. The average gasoline price was 350 on Sunday going into the triple A. Now, here’s the thing. The Biden administration spent all the money that they made off the SPR. The SPR cannot be refill because the price is going up and there is no budget money for spending it to come back in and it is not in the new budget. [00:05:51][25.8]

Michael Tanner: [00:05:53] Other than there’s no budget for like american energy security, but there’s just a black box budget that the Defense Department has that is undeniably bigger than what they want. [00:06:05][12.6]

Stuart Turley: [00:06:06] It’s right. But the money they sold for, there was all that oil out of the SPR, 400 million barrel, whatever the number is, I have to go look. But it at ballpark 400 million barrels that they sold and they pocketed that money. [00:06:23][17.1]

Michael Tanner: [00:06:24] No, no, no. Those proceeds went to some real good uses. Do they install gender neutral bathrooms at all public schools? [00:06:29][5.2]

Stuart Turley: [00:06:30] At that price, they probably only did two. So. Okay. Let’s go to the next story. All right. The next one, let’s to take a look. $2 natural gas is temporary, just like $10. Natural gas was the same. Analysts believe that gas was heading to 15 or 20 last year are now calling for a dollar 50. Michael, do you know somebody was calling for a dollar 50 a little while ago? [00:06:57][27.3]

Michael Tanner: [00:06:57] I don’t. I don’t. I Well, I know. I know I don’t. [00:07:02][5.0]

Stuart Turley: [00:07:03] I’m going to go pull the tape. It was me. Pull the. [00:07:06][2.6]

Michael Tanner: [00:07:06] Tape. It was you. [00:07:07][0.7]

Stuart Turley: [00:07:09] Anyway, take a look at this article, Michael. Seasonality. I don’t know anymore how to even judge anything. That was actually, I’m going to admit, you know, be shocked. It was actually a lucky guess. I just knew it was going to go down but the bottom line in this article, we believe that tune dollar and natural gas is unsustainable as $10 natural gas. Yet it may take time for the pessimism and supply glut to work itself out. We can’t rule out the front month touching on 60 as it did in in 2016, but it isn’t likely. And then they come in and say dollar 50 right after that. So what are your thoughts? [00:07:53][44.0]

Michael Tanner: [00:07:53] Yeah, I mean, I think it’s a boring headline, but it’s true. I mean, I don’t think we’re going to be sustained here at $2, but I don’t necessarily like comparing $2 to $10 natural gas because there has been much more sustained periods of $2 natural gas than there has been $10 natural gas. [00:08:11][17.3]

Michael Tanner: [00:08:11] So I think the headline is somewhat misleading to that standpoint is they’re trying to compare to all natural gas the $10 natural gas. And I think that’s a false equivalency equivalency is should natural gas be $2? It should be more like three or $4 or from a long term perspective, you know, oil has or natural gas has been $2 for a sustained period. But I have flipped from being very bullish on natural gas to being very bearish. And I’m going to stay on that train until told otherwise. [00:08:38][27.2]

Michael Tanner: [00:08:39] I obviously, with record outflows going out of Freeport, we saw that happened last week. We covered that on here on the show. It it it it’s done nothing to support prices and with the continuance of new supply getting added to the market day over day, I have a hard, hard time seeing how seeing our prices have a chance to go back up into that four or $5 range. But I’ve been wrong before. I’m ready to be wrong. I am ready to be hurt again. [00:09:03][24.5]

Stuart Turley: [00:09:04] I think I’ll reach out to Michael Zimbalist. He is the chairman of Market investment strategy over at Jp morgan High. They might as well reach out and see if I can getting. [00:09:15][10.6]

Michael Tanner: [00:09:16] Your insaine What’s next?. What’s next? [00:09:20][3.9]

Stuart Turley: [00:09:20] To protect or perish, let’s say here. Okay, Protect your perish. Europe’s subsea lifelines. Advanced nations are worrying about vulnerable. I love the way I can’t say that attacks to underwater pipelines carrying energy and data defending them is certainly high on the agenda. The EU is now updating its maritime security in response to the Nord Stream gas pipelines. It is calling for more naval patrols, more joint exercises and better coordination. [00:09:55][35.0]

Stuart Turley: [00:09:57] Michael In 2021, Norway sent 82 BCM of gas to the Bloc, accounting for 25% of its gas needs. Norway is huge, but you blow up some of them. Pipes out of the North Sea and you have two ports coming in to the in the U.K. you have two coming into Germany, You have two coming in right below that. There are six places that it comes into huge amount that they need. Now, there was no for whoever blew up the Nord Stream pipeline, there has been no repercussions. It is now. [00:10:40][42.9]

Michael Tanner: [00:10:42] Because it was us. Why would the United States take repercussions on ourselves? [00:10:46][4.0]

Stuart Turley: [00:10:47] What I’m saying is nobody said, okay, I think I know who did it, but nobody else is admitted to it and the evidence is not there other than that one pleasure cruise that went out for 3 hours on a on a pleasure cruise sailboat that was frozen. [00:11:03][16.4]

Michael Tanner: [00:11:03] And they tried to attempt to tell us that Ukraine did it right. [00:11:06][2.8]

Stuart Turley: [00:11:07] And that was from a random dude on Substack but you know what I am going to be very cognizant of is now anybody can go out and destroy a pipeline and then go retro, pull a Scooby and then wait for them to go try to find out who’s Mr. McLaughlin behind the mask. You know, this is it’s really stupid. So, all right. [00:11:30][23.5]

Michael Tanner: [00:11:31] Anyone can blow up a pipeline and pull a Scooby. Hey, we. Someone needs to make a T-shirt out of that. [00:11:36][5.8]

Stuart Turley: [00:11:39] Well, I mean, think about it. Scooby Doo and the mystery machine always tried to go around, find a, you know, a you know, whoever was doing something stupid. Nobody is asking about the pipeline. [00:11:49][10.4]

Michael Tanner: [00:11:50] All right, If this whole Norway pipeline blows up, I mean, that would just be insane. [00:11:53][3.7]

Stuart Turley: [00:11:54] I got my other opinions, but let’s not get blown up off of the airwaves here. Okay. And, you know, I was asking somebody on their tin foil, do they use good value on their tinfoil for the tinfoil hat, or do you use rental wrap and then double wrap it and I think I’m in the double rent Reynolds rap for higher quality the tin foil on my hat. [00:12:16][21.8]

Michael Tanner: [00:12:17] Yes. [00:12:17][0.0]

Stuart Turley: [00:12:18] Dallas Fed Energy Survey. Oil and gas expansion stalls amid surging cost and worsening outlook. Michael, it was really pretty interesting on the Dallas fed. I always light reading they’re not. They have some great articles. Oil and natural gas production increased at a slower pace compared with the prior quarter, according to executives at exploration and production AMP firms. [00:12:43][25.4]

Stuart Turley: [00:12:44] The oil production index remain positive, but declined to 10.9 in the first quarter from two 25.8 in the fourth. And so they’re in here and you and I both know the costs for drilling rigs is gone through the roof. Firms are reporting rising costs for a ninth consecutive quarter is one of the biggest things. [00:13:11][26.8]

Michael Tanner: [00:13:12] For natural gas. The index fell from 29.4 to 7.4. What was that, 7.4? I really want to know who that 7.4 is, Who those last little people hanging on, running models with their $2 natural gas script price in like, I think we’re going to keep drilling. [00:13:29][17.0]

Stuart Turley: [00:13:29] Oh yeah. Somebody from Jp morgan. [00:13:31][1.6]

Michael Tanner: [00:13:32] Heroes that 7.4 you are heroes in my book. I think this is also interesting. [00:13:37][4.9]

Stuart Turley: [00:13:38] Respond to. [00:13:39][0.5]

Michael Tanner: [00:13:39] That. There’s there’s a couple of interesting indexes here. First off, I’m going to read you the curve. I’m just going to read you the current index. And then I want you to try to guess what the previous index was. [00:13:50][10.7]

Stuart Turley: [00:13:50] Okay. [00:13:50][0.0]

Michael Tanner: [00:13:51] Fun little game, Fun little game. Let’s start off with uncertainty the current index was 62.60, really? High. What do you think it was last quarter? 51 40.1. 68% of people report an increase in uncertainty well, that’s not good. Oh, that’s not good. [00:14:13][21.6]

Michael Tanner: [00:14:13] I thought this was interesting. We’ve got the natural gas wellhead production, employment or employee hours, current index, 10.5. Wow they don’t think anybody really works, but 10.5. [00:14:23][9.9]

Stuart Turley: [00:14:24] Wow. [00:14:24][0.0]

Michael Tanner: [00:14:25] They don’t think anybody what do you think it was last quarter? [00:14:27][2.1]

Stuart Turley: [00:14:28] Seven. [00:14:28][0.0]

Michael Tanner: [00:14:29] 16.4 so maybe they really think we’re getting worse only 13.7% of responders say it was increased no change, 83.2 reporting a decrease, 13 points. I mean, no, they don’t think anybody’s working. [00:14:42][12.8]

Stuart Turley: [00:14:42] No. [00:14:42][0.0]

Michael Tanner: [00:14:43] , I thought this was interesting. Company outlook, current index, -18.9. What do you think it was last quarter? [00:14:52][9.0]

Stuart Turley: [00:14:53] I do not even know. [00:14:54][1.4]

Michael Tanner: [00:14:55] 6.50 16%. 16.7% of people thought it reported that it was that it improved. 47.8 reported no change and 35.6% thought it was worse. And that 60 per. It’s still living how do you think your how do you think oil going from 120 to 60 and you felt you feel better about your company’s outlook. [00:15:19][23.7]

Michael Tanner: [00:15:19] Now I want to work at that company I hope they’re hiring. I thought this was interesting. Operating margin current index 1.9 what do you think it was last quarter? [00:15:31][12.2]

Stuart Turley: [00:15:32] 2.3,. [00:15:32][0.0]

Michael Tanner: [00:15:34] 25.9. Oh, that. No, I saved that one for last because I think that’s a sign of Q1 earnings. If there was ever a little tidbit. Wow. Where I think Q1 earnings is going, it’s in this tidbit right here. Operating margin. Unbelievable. [00:15:52][18.8]

Stuart Turley: [00:15:53] Wow! That’s an eye opener. [00:15:55][1.7]

Michael Tanner: [00:15:56] Yeah and that’s for oilfield service companies so, I mean, they’re getting squeezed squeezed. I think Q1 earnings, oil fuel operators or service companies is not going to be as good as what you think it is. [00:16:08][11.5]

Stuart Turley: [00:16:08] No. And I think only the ones with good management will be able to squeak their numbers by good management, good numbers and it’s going to be I got a liberty. [00:16:17][8.7]

Michael Tanner: [00:16:18] Liberty will be on track you know, Halliburton will lose a bunch of money, you know, to lose about 20 on new tax. [00:16:25][7.3]

Stuart Turley: [00:16:25] The managers over it at liberty, they watch it like the numbers like off the mark. I mean I mean it’s amazing what they do. I mean a week goes by and if there’s a bourbon, those numbers just they’re. [00:16:40][15.0]

Michael Tanner: [00:16:41] On with they’re not busy rebranding their corporate brand like Schlumberger is like they’ve got bigger fish to fry, like worrying about their operating margin, which, according to this survey, is near zero. [00:16:52][11.5]

Stuart Turley: [00:16:54] Oh, man. Let’s go to this one here, Mexico. Are you done on that? [00:16:59][5.9]

Michael Tanner: [00:17:00] Yeah, I just thought it was an absolute the dead fellas we could spend years talking about the Dow Smith survey. I think there’s one take away the future for oil and gas is choppy people feel very mixed and I think Q1 earnings is going to be spicy. [00:17:15][15.1]

Stuart Turley: [00:17:18] I think for the if the rest of the year, they did say in the Dallas Fed that they think WTI will be 80 by the end of the year for the rest of the year. I, I can agree with that as an average, I think WTI will range between the 80 and 92. [00:17:34][15.9]

Stuart Turley: [00:17:35] If I had to do the crayon math just based off what I know, but that could be totally wrong I can’t even predict, you know what I’m going to have for breakfast tomorrow based on this Mark. [00:17:46][11.2]

Michael Tanner: [00:17:46] Whats Next? [00:17:46][0.0]

Stuart Turley: [00:17:46] All right. Mexico considering joining BRICS as relationships weaken under Biden, U.S. dollar is facing a new emerging threat as the BRICS group Brazil, Russia, India, China and South Africa is seeking to add more countries and imposing a force on the United States financial security. [00:18:12][25.2]

Stuart Turley: [00:18:13] Mexico is now rumored to be interested in joining the coalition according to a new report, the BRICS countries are recognized for their significant influence in regional and global affairs. They represent about 41% of the world’s population and 24% of the world’s GDP and 16% of the world’s trade. This is a holy cow Batman moment this. [00:18:49][35.9]

Michael Tanner: [00:18:49] I think Mexico has a very compelling case to join BRICS. If you’re sitting back in your drafting countries, you’re the BRICS leadership. You probably want Mexico, big population, diverse hard workers, a lot of oil and gas. [00:19:01][11.6]

Stuart Turley: [00:19:02] And open to the border to the United States. [00:19:04][2.5]

Michael Tanner: [00:19:05] You just write open border. [00:19:06][1.5]

Stuart Turley: [00:19:07] Open border and it it is Russia will be in there as well. If Russia has a say in it, yes, BRICS will be approved immediately with Russia’s help. Oops. this is huge the president Biden and the administration brought this on by a horrible global geopolitical, unbelievable. [00:19:36][28.4]

Michael Tanner: [00:19:37] Shocking take from you that you would blame Biden on this one shocking take. My real question is when are they going to add new countries? [00:19:43][5.7]

Stuart Turley: [00:19:44] Soon. We’ll be meeting very soon they’ve been meeting for like monthly. [00:19:47][3.4]

Michael Tanner: [00:19:48] For so like this summer will know?. [00:19:49][1.4]

Stuart Turley: [00:19:50] Very easily and you you will see the petro dollar is already going south. [00:19:57][7.0]

Michael Tanner: [00:19:58] I know. Been here. Yeah. [00:19:59][1.0]

Stuart Turley: [00:20:00] Oh, hey, whoa, whoa, whoa, whoa, whoa, whoa. LNG is already being traded by Brazil to China in the one you already have. India. Russia. You already have Iran and you have Iraq all trading outside the petrodollar. It’s here. [00:20:17][17.7]

Michael Tanner: [00:20:18] Now it is here. It’s it’s it’s definitely here all I guess my. I think I think we save this for another show. But I think the real question is, what does that mean? Like, what does that mean? What does that actually mean? That if we start trading oil and gas in one of these open ended question, what does it mean? [00:20:39][20.8]

Stuart Turley: [00:20:40] Well, it’s going to mean two things and I don’t know the answer to this I’ve asked the question, I can’t get an answer on it to a lot of industry folks around the world, and that is will opaque lose control over the pricing metric. I mean, they can sit there and say our production, but if BRICS is actually buying outside of the production and the petro dollar and I know you’re going to laugh, I know you’re going to laugh, but the dart fleet, all of that is outside of the opaque, the constraints. [00:21:16][36.3]

Michael Tanner: [00:21:17] Dark Fleet. [00:21:17][0.4]

Stuart Turley: [00:21:19] Dark Fleet, Darkness. It is. I mean. [00:21:22][3.3]

Michael Tanner: [00:21:23] I think I think you’re right. I just I don’t know. I pause and say every other country exists by not having their currency be pegged to oil. So we will survive as a nation without being pegged to oil. So it’s not the death to America? [00:21:39][16.6]

Stuart Turley: [00:21:40] No, it’s not death but financially, by printing money, we owe, what, 30 to $36 trillion in our debt. We have passed. [00:21:49][8.8]

Michael Tanner: [00:21:49] Really between friends. [00:21:50][0.7]

Stuart Turley: [00:21:51] Oh, you know, and you and I started years ago going, what’s a few billion now? It’s what is it? You trillion between friends. Nobody even can imagine what $1,000,000,000,000 is. But would. [00:22:00][9.6]

Michael Tanner: [00:22:01] If you like to give me $1,000,000,000,000 though? I’ll let you know how it feels. So happy, Happy to partake. [00:22:05][4.1]

Stuart Turley: [00:22:05] I’d be thrilled to pay taxes on that. I’d even pay half. Give me half a trillion and I’d pay half of it. Today. [00:22:11][5.6]

Michael Tanner: [00:22:11] I’d pay 90%. Bernie. [00:22:13][1.0]

Stuart Turley: [00:22:13] I’d still be happy. All right, back to you. [00:22:16][2.6]

Michael Tanner: [00:22:16] All right. Well, I think moving over to the finance section, guys, I think there’s two big things to worry about overall markets. S&P 500 was up three quarters of or a quarter of a percentage point. NASDAQ dropped a quarter of a percentage point. [00:22:28][11.8]

Michael Tanner: [00:22:28] The real kicker, though, oil price is currently trading $80.36, up over 5% and over $4 for the day. As Stu mentioned in our opening segment off the back of a 1.16 million barrel per day cut to go along with some other Russian cuts, which bring it up to about 2.5 million barrels a day. Obviously a surprise cut. [00:22:50][21.6]

Michael Tanner: [00:22:51] I did catch wind on Twitter I think I catch what I noticed on Twitter that there was a report out that the Biden administration actually got a heads up of this cut. So they were informed of this on Sunday night before markets opened, which was fascinating. Funny how this drops on a Sunday. [00:23:04][13.3]

Michael Tanner: [00:23:04] This is probably negotiated weeks in advance but, you know, they understand the media cycle very, very well over there at OPEC. Maybe they understand it mightily. Well, understanding the nice little Sunday afternoon, OPEC’s drop, production supply drop will well will cook markets. And they were absolutely right Brant jumping up to around 8634. So you know they’ve got their sights set on $100. Brant So the real question is where do we go from here? [00:23:26][21.6]

Michael Tanner: [00:23:26] I think, you know, with these cuts we probably could see 85 WTI, probably somewhere in that $95 range for Brant. Do we get up to 100? I don’t quite know. I think we’ll see how these next few weeks trade forward on the natural gas guys side. [00:23:38][12.0]

Michael Tanner: [00:23:39] Unfortunately, nothing’s really changed. We’re still sitting at $2.11. You know, the oversupply is still a factor. We’ve got Thursday, we’ll find out what happens with the natural gas storage numbers. Looks to be a slight draw. It is getting a little warm here throughout the Midwest. And specifically sitting here in Dallas is a nice cooker today. So, you know, those axes are starting to kick on. We’re going to enter into into storage season. [00:24:00][21.0]

Michael Tanner: [00:24:00] So, you know, not much to cover in the nat gas side. I think there’s there’s only one thing that we really have to cover is doing the finance side, and that is Ovintiv. The artist formerly known as in Cana to boost Permian oil operations with $4.3 billion acquisition from NCAP. And it was really four acquisitions in one, even though all four of these companies were private equity backed by in CAP investments I’ll read you off the name of the four companies. Where is it? [00:24:29][28.6]

Michael Tanner: [00:24:29] Here we go, Black Swan Oil and Gas, Petro resources and Petro Legacy two again, those are all small, are not small, but private backed oil and gas companies buy and get that when you combine their acreage make up about 65,000 net acres core in that Midland Basin purchase price, 3.13 billion in cash and 32.6 million common shares of Ovintiv to finance this deal. [00:24:57][27.6]

Michael Tanner: [00:24:57] There was also a separate transaction of some Ovintiv Bakken acreage to another end cap affiliate Greyson Mill barking for 825 million. So a little bit of private equity shuffle there at Ovintiv. Remember guys, that’s the artist. Formerly known as in Kanter, who decided after bankruptcy to reinvent themselves as Ovintiv come up with probably the dumbest name in oil and gas history but we will leave it there. [00:25:21][24.1]

Michael Tanner: [00:25:22] Our friend Andrew Dettmer over at in Enverus was quoted in the Reuters article. Quote, The deal addresses one of the most vivid concerns with Ovintiv, which was the relatively short runway of core locations. [00:25:32][10.4]

Michael Tanner: [00:25:33] To add a long Mac to quote from chief executive brand McCracken as shale hits its middle innings. I love how these as shale hit his middle innings. You don’t know what any shale is in mixture McCracken but whatever he thinks, it’s in the middle innings. We believe that high return drilling inventory locations are going to be more valuable than ever. I mean, that’s just some gobbledygook, I don’t know if that doesn’t add anything. [00:25:54][21.1]

Michael Tanner: [00:25:55] To give you guys an idea, let’s look at the press release. What’s the core acreage or how many locations do they claim? I’m going to see what they put in the thing. They’ve got to put a location, number 800 premium locations with another 250 high potential upside. All of that, they have to put a they put a footnote number one premium return well locations defined as generally greater than 35% intro rate of return at $55 WTI and $2.75 MTBE natural gas. [00:26:25][29.7]

Michael Tanner: [00:26:25] So that’s what they think that’s what they think premium locations are so give you but that’s a thousand locations they paid for 4.3 billion, probably worthless it’ll be interesting to see what it comes to, but it’ll probably not be $4.3 billion. [00:26:38][12.4]

Stuart Turley: [00:26:38] I wouldn’t write that check. [00:26:39][0.8]

Michael Tanner: [00:26:40] Not only crack and cracked on it though, I Here’s my take. You just fool me once, shame on me, fool me twice. I get a little spicy. I’ve seen this deal before from Ovintiv. You know it’s new. I’ve just seen this same song and dance from them before, you know? Great. You’ve picked up these locations, but now we’re financing this was with cash, a.k.a. debt. I mean. [00:27:01][21.3]

Stuart Turley: [00:27:02] Who did this PR guy? There needs a little word. [00:27:04][2.1]

Michael Tanner: [00:27:05] Yeah, well, my plate’s full. Sorry, I don’t quite. I don’t quite have the time. No, unfortunately. What else you got Stu? [00:27:12][6.7]

Stuart Turley: [00:27:13] It’s going to be a crazy week there are some upcoming geopolitical things that I’ll be leaving out the rest of the week. [00:27:22][9.2]

Michael Tanner: [00:27:23] I’m tired of you looking like Houdini and just picking up all these you’re. You’re. You’re looking too good. [00:27:28][5.3]

Stuart Turley: [00:27:28] I’ll tell you. It’s sad, is that I have been right a lot and that’s the part that’s scary. [00:27:33][5.0]

Michael Tanner: [00:27:34] I’m I know, I know because it’s doom and gloom all the time you’ve predicted the end of America. [00:27:38][3.4]

Stuart Turley: [00:27:38] It’s a beautiful day in the neighborhood, Michael. [00:27:40][1.7]

Michael Tanner: [00:27:41] Beautiful day in the neighborhood. Did not have the petro dollar anymore. The beautiful day in the dollar to be now lived under Chinese anarchy regime. You’re so positive. [00:27:50][9.5]

Michael Tanner: [00:27:52] Alright guys where you let you get out of here thanks for checking us out. Stuart Turley. I’m Michael Tanner. We’ll see you guys tomorrow if we survive. [00:27:52][0.0]