No 2024 Offshore Drilling

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Daily Standup Top Stories

Electric Vehicle Sales Are Stumbling. Here’s Why

Highlights of the Podcast

00:00 – Intro

01:24 – Electric Vehicle Sales Are Stumbling. Here’s Why

03:53 – Biden-Harris Admin Won’t Hold Offshore Oil And Gas Lease Sales In 2024, First Time Since 1958

06:05 – Newsom’s War On Big Oil Continues, Calls Them The ‘Polluted Heart Of The Climate Crisis’

08:26 – TotalEnergies boosts US LNG position with Eagle Ford deal

09:31 – Ted Cruz Demands FERC Appeal After Court Nixes Texas LNG Terminal Approvals

12:59 – Markets Update

15:58 – Shale producer Validus to buy Citizen Energy in deal worth over $2 billion, sources say

17:59 – Outro

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

Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Monday, September 30th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up. Electric vehicle sales are stumbling. Here’s why. Shocker that next up, Biden-Harris admin won’t hold offshore oil and gas lease sales in 2020 for first time since 1958. That’s that’s almost as old as you. Next up, it is War on Big oil continues. Calls them the polluted heart of the climate crisis. I actually think it’s his hair gel, but we’ll we’ll go to the next. TotalEnergies boost U.S. LNG position with Eagle for deal. We love a good little M&A deal there. Next up Ted Cruz demands Ferc appeal after court nixes Texas LMG terminal approvals Stu Then toss over to me. I will quickly cover what happened to oil and gas prices on Friday. We did see another M&A deal also with Valdis picking up Citizen Energy and a little private equity deals. So we will cover all that and a bag of chips guys. As always I’m Michael Tanner joined by Stuart Turley. Where do you want to begin. [00:01:23][73.3]

Stuart Turley: [00:01:24] Mr. Tanner let’s start out with electric vehicle sales are stumbling. But here’s why. This was an outstanding article. I hate to say this, but it was on Bloomberg and it’s like, hey, what happened to EV demand? Do you remember in animal House when Bluto John, he John Belushi was down there and he’s jumping from one side to the other going up? That’s exactly what this is. Nobody knows what’s going on. He’s trying to sneak a 300 pound guy through the thing. Although China continues to post healthy growth demand in Europe, it has been softening, according to Bloomberg. And if sales of all electric vehicles plus hybrids, they can also power by gasoline grew 62% in 2022, but growth slowed to 31% last year. Here’s a kicker if we missed producer, you could pull up this chart. Europe’s pullback in EV sales drags on market. Look at August. Holy smokes. Bad new car registrations fell 16.5%. But let’s go down to the real reason why I did not know this Michael China is much cheaper. Batteries and electric cars are a big chunk of it. Is the batteries. 2023 Global average 2024. Global average cost is 53%. Look at that. Yeah China 53% of the cost. That’s that’s the key point. So either you’re going to want extra technology like is in Tesla. Tesla will win the battle or you are going to go cheap and you’re going to have cheap crap from China. It’s either going to be one or the other. [00:03:08][103.6]

Michael Tanner: [00:03:08] Absolutely. There’s usually no middle class car. And that’s really how the entire car market has found itself. It’s either extremely expensive or extremely cheap. So of course the EV is going to end up in the same area. I do think Tesla, as you said, will win mostly because of their full self-driving, which I think will become the key key point for their company. But no, I mean, it is pretty crazy. You’d think you’re being so progressive with all the EVs. You’d think they’d be all for it. Man, that just fell off a cliff in August. [00:03:36][27.4]

Stuart Turley: [00:03:37] I mean, that was like, Holy smokes, Batman. Anyway, shout out to Bloomberg. [00:03:40][3.1]

Michael Tanner: [00:03:40] And but you also see why China has been picking up all of the critical minerals. It’s for this right here. [00:03:46][5.5]

Stuart Turley: [00:03:46] Oh, critical minerals are going to be in the headline in the news this next week because of the lithium stuff going on. All right Biden-Harris admin won’t hold offshore oil and gas lease in 2024. First time since 1958. Holy smokes. Bad man Michael. If she says that she’s for fracking hogwash, I’m going to tell you right now, a vote for Kamala is a continued death on low cost energy. This year will be the first year since the 1958 Bureau of Ocean Energy Management held no offshore oil and gas leases, and the reason they did it last year was because of the poor Oculus Bill or the Inflation Reduction Act mandated that they did. That doesn’t mean that any of them were released. So they are still doing legislation through regulatory action and holding up crap. Listen to this one, Michael. Offshore production for the Gulf of Mexico is 14% of total U.S. production. They know where the juggler is. [00:04:51][65.2]

Michael Tanner: [00:04:52] Yeah, really. The Gulf of Mexico is really the only place where that marginal incremental oil production will come from. Yes. You go drill a while in West Texas and that’s great. We see all we see the Permian cranking along, but it’s really the Gulf of Mexico. And really what we’ve seen is, is Exxon, Chevron and these big boys have moved. Even to offshore Guyana. I mean, that’s really where the explosive growth of international oil and gas comes from. And the it’s truly a global market. I do find it very interesting per se that that they’re doing this. You know, I would have thought they would have at least held one just for the sake of it. It is a money maker for the government. But, you know. [00:05:28][36.5]

Stuart Turley: [00:05:29] Here’s a paragraph in here that’s funny. This will be near and dear to your heart. What quote? While these are same environmental groups that the Biden-Harris administration have continually denied, the whales are harmed by hundreds of wind towers being pounded into the seabed floor. The administration would have gone forward with the restrictions in 2023. Leigh Sales, were it not for a federal judge determining the restrictions to be unlawful. So it’s not about the environment anymore. It’s about political and placating their political base. [00:06:02][32.7]

Michael Tanner: [00:06:02] Interesting. We’ve been saying that for years. All right. What’s next? [00:06:05][2.6]

Stuart Turley: [00:06:05] Let’s go to my favorite greasy salesman, Newsom. Newsom’s war on big oil continues. Call them the polluted heart. He calls them the polluted heart of the climate crisis. Holy smokes. What a knucklehead. Governor Newsom, if you ever listen to this podcast, God bless you. And you’re welcome anytime. Because I got a few questions for you. Governor Newsom signed laws that further restricted oil and gas facilities in California, aiming to close wells, penalize idle sites, and push California toward greener energy. Meanwhile, they are still importing even more oil from Iran, Iraq, China, Russia and they’re all coming in from the bad folks that don’t know how to do oil and gas environmentally correct. Quote. They’re ripping you off, Newsom says. They’ve been gouging. They’ve been taking advantage of you. They’re lying to you. They’re the polluted heart of this climate crisis. This time, we are not falling prey to those lies. He is totally out to the line and should go get another table at the street vendor next to the pool machine, I guess. I don’t know, that was awful. [00:07:20][75.1]

Michael Tanner: [00:07:21] Yeah, it’s I mean, again, we talked about in the last segment, it’s all about political posturing. This is all about political posturing. It’s all about making sure that, oh, we don’t like oil and gas. So we’re going to blame them for everything. And nickel falls on the street by Chevron’s fault. You know, your car won’t say it’s Chevron’s fault. Gas prices are high. It’s Exxon’s fault. And that’s the funny part. You know, there he called for this special session with the state legislature to meet to discuss high gas prices. And I love how this article says he’s never used such sessions to reconsider the extremely high gas tax they have unduly legislate or regulations or the atrocious cap and trade system that. So it’s you know, it’s almost like, you know, when you’re looking for something lost all and it’s nighttime, all you look at is what’s in the light. It’s like, maybe you should, like, expand the light a little bit and see what else is going on. But he’s clearly spending enough time greasing his hair back. It’s getting greasier by the minute. [00:08:15][54.1]

Stuart Turley: [00:08:16] Let’s talk. Yeah, yeah, but you and I have laughed. If you ever dove into the bay, I guarantee you there’d be an oil slick. I mean, it would. It would be a disaster. Okay. Total energy boost U.S. LNG position with Eagle for deal. I love this one. TotalEnergies operates a technical production around 500 MCB mcf B in the Barnett. This acquisition further strengthens our upstream gas position in the United States and contributes to our integrated LNG position with a low cost of upstream gas supply, said Nicolas Torres, president and exploration production at TotalEnergies. 10 million tons export in 2023. Holy smokes. Yeah, I. [00:09:01][45.1]

Michael Tanner: [00:09:01] Mean, they’re gonna they want access to a lot of that good dry gas that’s going down in the Eagle Ford right now. You know it’s pretty pretty pretty clear that Lewis Energy that company wanted out of that. If you could sell dry gas at the lowest possible point. But I mean, from a total standpoint, as we’re about to cover, gas is about to pop over $3. So maybe there is something to be said there. Really interesting stuff there on that standpoint. So we will we will keep going. But but good for them. They need access to fill up all those LNG facilities. [00:09:27][26.4]

Stuart Turley: [00:09:28] Oh absolutely. But speaking of LNG, let’s go to my buddy Ted Cruz. Ted Cruz demands FRC appeal after court nixes Texas LNG terminal approvals. I want to give a shout out to Senator Cruz. Senator Cruz, you are absolutely fighting horrific front against lies and people need to go to Ted cruz.org and donate for his reelection. We need Senator Cruz back in the there. This is horrible. Here’s a quote from Ted. I can call him Ted. I’ve met him. So, you know, the decision sets a chilling precedent that will harm the development of infrastructure. Projects related to all forms of energy, directly undermining American energy security and therefore national security. Cruz wrote in his letter. If permits are not reauthorized, over 7000 high paying jobs will disappear, and roughly $24 billion in investment in the Rio Grande Valley will be lost. Ted is out there fighting for energy for all Americans. I gotta hand it to Senator Cruz, and God bless you. [00:10:39][70.6]

Michael Tanner: [00:10:39] Well, he’s also in the fight of his life here in Texas, trying to maintain as the Texas senator with that, with that in his name. I know we don’t even need to say today. We don’t need. He’s he’s fighting and we need to make sure that he stays. But no, he’s doing a great job trying to stand up. I mean, the problem with all of this LNG back and forth is you are completely ripping the cord out. It’s like when the Dakota Access pipeline, you line up all of this infrastructure, you line up all these jobs, and then you just rip the cord out from underneath it. And the problem is, again, energy is secured. And I can’t say that enough. And especially the fact that these LNG export terminals, yes, I know we’re exporting the LNG, but what does that allow us to do? It allows us to support our local economy so we can actually drill natural gas. That’s the problem. No one’s drilling for natural gas right now because the cost is so cheap, and you can’t send it elsewhere to where it’s more expensive. So if you actually want more natural gas here, you actually might want to consider shipping it elsewhere so that we can be a little bit more competitive on the global stage. [00:11:39][60.0]

Stuart Turley: [00:11:40] Oh, absolutely. And what just drives me nuts is Ted’s all over his business in and I mean, he is very knowledgeable. That’s why he’s not liked by the other side. Yeah. [00:11:51][11.3]

Michael Tanner: [00:11:51] And with, you know, legislation through regulation, you know, if it’s going to take years and years and years only for you to get regular, get the regulatory cord ripped out from underneath you, why would you want to do this in the first place? Yeah. All right. Well let’s go ahead and jump over oil and gas finance guys. But first let’s pay the bills. As always, thank you for checking us out on the world’s greatest website. www.energynewsbeat.com the best place for all your energy in oil and gas news Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit that description below all the links to the timestamps links to the articles and you can check us out. The Energy News Beat.substack.com. You can also check out our direct working interest project that we are partnering up with the team at Pecos Country Operating. It’s really an awesome project. I highly recommend you check that out if you’re interested in portfolio diversification. Want a little bit of exposure to the oil and gas business or as we come towards the end of the year, need a tax deduction? That’s the one beautiful thing about the oil and gas business is the tax deductions are crazy. So go ahead and hit investinoil.energyNewsbeat.com. If you would like to go ahead and check out that project, we will get you all the information that you need. [00:12:59][67.3]

Michael Tanner: [00:12:59] But let’s look at the overall market still on Friday S&P 500 fairly flat down about a 10th of a point. Nasdaq was actually down about a half a percentage points a two and ten year yields down 1.9 and 1.2 percentage points respectively. Dollar index down about a 10th of a percentage point. Bitcoin still at 65,000. So it was basically flat over this weekend here. Crude oil is actually up on Friday after posting the first negative week it has in your posting. A negative week relative to last week, 6818. That was actually up about three quarters of a percentage point. Brant oil was up about 5/10 of a percentage point 7239 natural gas spikes, a whole nother five percentage points for $0.14 up the $2.90. A little bit of that has to do with the contract rollover to the October front month contract. But also we have been seeing some some shut ins relative to this hurricane. And first off, I want to say anyone who’s been affected by this hurricane down in the southern part of the southern east part of the country, SEC territory. Hopefully you are all good. We know people that live in North Carolina. We got we got people that live in Tennessee, Florida. We hope you’re staying safe out there. You got wallop down there, but that’s a lot of the reason why natural gas is spike. But hey, $2.90. You got to love it. You know, when when we look at oil price, I think, again, we’ve got some stuff coming out of China from from a fresh stimulus package. I don’t know if that has anything to really do with it. They did, though, lower their interest rate. So I think that’s weighing in. You know, I think the big question mark is what’s OPEC plus going to do. They’re beginning to signal the market that they’re going to unwind. They’re not just they’re 2 million barrels a day topper from Saudi Arabia but also unwind kind of the more basically their entire, you know, cuts and try to put a lot of that barrels back on the market. So you know I think that’s really, really, you know, kind of leveled crude. This week WTI was down about five percentage point. Brant was down about three percentage points. Just hedging. We love those guys. Despite aggressive China’s stimulus concerns of oversupply from OPEC’s plan to bring back production have pushed prices lower. That’s according to a note they sent out on Friday. You know, they’re basically going to increase production by about 180 barrels per day each month starting in December, according to two OPEC officials. This is according to a Financial Times report on Wednesday that said, the. Plan increased due to Saudi Arabia’s decision to abandon their $100 oil price target and just go back and regain market share. Saudi Arabia has officially come out and denied targeting a certain oil price, and, according to our friends at ruder, said that the plans to raise output from December do not represent any major change from existing policy. So obviously, you know, Libya’s bringing some more barrels back on the market, and we have started to see some of that production coming back in. [00:15:34][155.3]

Stuart Turley: [00:15:35] And just in my call two hours ago, massive explosions rocked the port of Ross in western Yemen as oil tanks were were hit. [00:15:43][8.3]

Michael Tanner: [00:15:44] So things are getting spicy stew. Things are getting spicy internationally. You know, I may be coming to you live from Lebanon here soon. Hopefully not though. [00:15:53][9.9]

Stuart Turley: [00:15:54] Oh, I hope not. Not if you get drafted, dude. [00:15:56][2.3]

Michael Tanner: [00:15:57] No no no no, not at all. All right. The only other thing. I’ve got all this validus energy. They go ahead and swoop up citizen energy in a deal that’s worth a little bit over $2 billion. Privately held Valdez Energy is is mainly backed by the old Felix Energy team. They’ve got a few other people in there, but Citizen Energy, mid Conn based company, they’re backed by Warburg Pincus. They actually did a they actually started a a if you go ahead and read the article we’ve got on Newsbeat, they actually went ahead and started a bid process only because they got an unsolicited offer from Valdis, which kind of kicked off the entire sale process, ended up Valdis ended up still getting it. Pretty interesting from the standpoint of this is all Midcontinent stuff, which is, you know, kind of their second acquisition this year, they bought about a $450 million worth of assets from continental earlier this year, if you remember that. So they’re really trying to tie up that mid con. And they’re really you know they’re more in in in Grady County I you know our good friends over at Weld Database I got the majority of their production up right now. I mean it’s a lot of Grady County stuff which is some big wells in there, a lot of big wells in there. You know, it’ll be interesting to see again, from a production standpoint, what they decide to do with it. There’s a bunch of blame. There’s a little bit of kingfisher stuff in there, but the majority of that stuff, like I said, is and the heart of that stuff really is in Grady and Kingfisher County, which, I mean, these are big wells that they’re big high, big boe. There’s some of those fees, those a little bit expensive, but good deal, I think. Good deal all around. I think these are the type of deals you’re going to see going forward from the standpoint of I think a lot of the big, big consolidation is done. I do think there’s maybe a few more big moves. I would personally say watch out for continental. You know, word on the street is they they’re out there looking to make a move at some level. I’ve got a few ideas of what that might be, but it’ll be interesting. Wow. They’re big mid-cap operator. They’ve got a lot of stuff in the block, and I wouldn’t be surprised if there’s some interesting moves that happen there. But, you know, we’ll keep our eyes peeled and peeled to the ground to make sure that you guys stay up to speed. You also have to remember, citizen was launched with about a $300 million equity commitment in 2018 and a pretty good return on investment. Obviously, there’s some CapEx thrown into it. So super interesting. But hey, it’s it’s super interesting. Stu, what else you got? What should people be worried about this week? [00:18:01][124.0]

Stuart Turley: [00:18:01] Well, we got another hurricane coming in, so be careful. Fortunately it looks like it’ll be another one. So we’ll be watching that. And currently on the power outage you can go to Energy News Bidco go to resources. And it has a power outage across the U.S. there’s still a ton of people out there without power. Our prayers go to everybody affected in the storms. [00:18:24][23.4]

Michael Tanner: [00:18:25] Absolutely does stay safe out there, folks. It’s going to be a it’s going to be a long week for us guys. So we appreciate you checking us out and staying in with us. But with that we’re going to let you get out of here, get back to work. Start your week. Thank you for checking us out here on the World’s Greatest Podcast energy news podcast for Stuart Turner and Michael Tan. We’ll see you tomorrow, folks. [00:18:25][0.0][1082.8]

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