In the Energy News Beat – Conversation in Energy with Stuart Turley and Rey Trevino III discuss the current state of the oil and gas industry, emphasizing the ongoing demand for oil, the challenges posed by rising costs, and the role of independent oil companies in the U.S. They highlight the importance of effective cost management, the potential of using stranded natural gas for Bitcoin mining, and the impact of political and economic factors on energy production. The conversation also touches on the differences between energy policies in Texas and California and the upcoming 2024 election.
Rey is on news shows and is a great resource for what is going on in the energy markets. He has his own podcast the Crude Truth, and is also a co-host on the 3 Podcasters Walk into a Bar.
Thank you Rey, for stopping by the ENB Podcast. I had an absolute blast.
Please follow Rey on his LinkedIn HERE: https://www.linkedin.com/in/reytrevinoiii/
Check out Rey’s podcast the Crude Truth HERE: https://thecrudetruth.com/
Pecos Operating is HERE: https://pecosoperating.com/
For Audio Chapters
Highlights of the Podcast
00:00 – Intro
00:39 – Current Drilling and Production
01:07 – Importance of Low-Cost Energy
02:28 – Global Oil Demand and OPEC vs. IEA
03:00 – Impact of Rising Costs and Bidenomics
04:00 – Independent Oil Companies’ Role in U.S. Energy
04:40 – Family Business Background and Outlook
07:45 – Comparison of Energy Policies: Texas vs. California
10:00 – Due Diligence in Drilling Operations
12:05 – Reworking Wells for Increased Production
13:08 – Challenges and Opportunities in Oil Deals
14:39 – Climate Transition and Economic Impacts
15:06 – Security and Technology in Oil and Gas
16:15 – Gas Prices and Natural Gas Production
18:08 – Bitcoin Mining and Stranded Gas
19:59 – Political Commentary on Digital Currency and Regulation
21:14 – Podcast Performance and Audience Engagement
23:56 – Final Thoughts and Contact Information
25:19 – Closing Remarks
Full automatic transcription.
Stuart Turley [00:00:06] Hello, everybody. Welcome to the Energy News Beat podcast. My name’s Stu Turley, president and CEO of Sandstone Group. We’ve got a joint effort going on out here today. I also got the Rey Trevino “RT” Trevino’s at third. He is a big dog over there at Pecos Operating Country. But he’s “also the co-host and I mean, excuse me, the host of the Crude Truth podcast. He’s sitting out on an oil Derrick. Where are you? Yeah, and.
Rey Trevino III [00:00:35] I’m right here in the great state of Texas right now. Can you hear me? Okay. It’s a little windy out here.
Stuart Turley [00:00:39] Oh, yeah. You look great, man. You’re getting a suntan. Got a beach, you know. How’s the drilling going right now?
Rey Trevino III [00:00:47] We’re doing very well. Knock on wood, that we continue to be a successful. Excuse me. And as smooth as we’ve gone all throughout the weekend. Oh, you know, that’s one thing, about the oil and gas industry. You know, it never stops. So it’s been a very smooth Monday, and it was very, very amazing Sunday and Saturday as well. So it’s been going phenomenal.
Stuart Turley [00:01:07] Outstanding. I’ll tell you, as an you know, that is great because we need all the low cost energy we can, in the United States. And for our podcast listeners, we’ve got a heck of a lineup here.
Rey Trevino III [00:01:22] Yes. Oh.
Stuart Turley [00:01:24] Oh, yeah. Oil is extremely important for our economy, and I didn’t. A lot of folks don’t realize that. When you take a look at, how much of it is transportation of this industry, 45% get as gasoline. A barrel of oil. Wow. So think about that. If you want to transport anything and the way things are cooking out there, you gotta use that, global demand, right? I don’t see it going away anytime soon.
Rey Trevino III [00:01:55] Oh, it’s not going away anytime soon. I agree. And as you look here at these figures, I mean, the demand is only going to continue to go up. I love how the IEA is a little bit lower than OPEC which makes sense. OPEC obviously just like us. We want the demand to be as bigger as possible. However, I would definitely lean more towards OPEC numbers rather than the IEA. When you figure they’re working hand in hand with the European Union to try to just really juice and eliminate fossil fuels from the energy space.
Stuart Turley [00:02:28] You bet. Now, here is one that I talked to Josh young over at bison. Interest. He is a cool cat. And this is from Novi Labs. When you talk about productivity, we want to talk about, what you’re going through as an MP. Operator, your costs have gone through the roof thanks to Buy Dynamics. And when you take a look at your your piping costs and everything else. But your efficiencies of scale have been great for your investors. Is that a fair statement?
Rey Trevino III [00:03:00] Yes. You know, one thing being one, an independent oil and gas company, but to being a I’ll use the word small, independent, we can really do things to help bring those costs down and streamline during this time of biodynamics, we’ve seen the price of steel to labor to just even water skyrocketed over the last three years. And as the price of oil has stayed very steady during that time, Stu, all these other costs have gone up. So as an operator and more importantly, as an MP, we’ve done what we can do to keep those costs as low as possible without, you know, putting any how do they said, you know, we’re making sure that we’re not cutting costs where they don’t need to be cut. You know, we’re definitely spending the right money where it needs to be.
Stuart Turley [00:03:48] Well, I like that especially because when you take a look at your, your plan and, and I know the team that looks at your, your, your plans and stuff, you’re not wasting money, which is, very important.
Rey Trevino III [00:04:01] No, no, we can’t afford to, you know, again, we are an independent, and America is made up of almost 50% of all oil and gas is made by independents here in America. And, you know, we’re very proud of that. And for us to do that, we have to really do our best to, cover costs and and watch out for costs where we can, you know. Oh, yes.
Stuart Turley [00:04:23] For our podcast listeners, I brought up a slide out of our deck about Pecos operating. You’re a second generation oil family and 50 years of family experience, and you’ve got a nice track record there, and then you have your outlook improved.
Rey Trevino III [00:04:40] Yeah. No, I mean, when you look at the outlook here, again, we continue to only see an increase in oil demand for at least the next two. I would say, you know, I don’t have the data, but at least in the next 2 to 5 years, probably even longer. And what that really means is not only is the demand going to be there, but that means we’re going to need the production to only increase in. Right now here in America, we’re actually producing some of the most oil in the world right now. If not, I haven’t looked at today’s numbers, but we are definitely fighting with the large other countries that produce oil, like Saudi Arabia and the other OPEC countries as the number one producer on a daily basis. And that’s just because we’ve been able to do so much in just producing oil rather than drilling for it. You know, during the last administration, we’re averaging anywhere between 12 to 15 wells a year. Right now, we’re doing anywhere between 6 to 10. And that’s just due to this administration and their climate for oil and gas, so to speak.
Stuart Turley [00:05:42] Yeah. I’m getting a producer asking me questions here. Anyway, so.
Rey Trevino III [00:05:46] Yeah, well, this is live. And, you know, I’m a little nervous to be doing this live. I know we’ve done the three podcasters before, but I feel a little different to be on the energy news me today.
Stuart Turley [00:05:56] Well, we’re just having a little bit of a discussion here as we go rolling through this as we go through. You’ve got some great information on this. And how do people reach out to you to get more information on your drilling opportunities?
Rey Trevino III [00:06:09] Yeah. Well, first of all, definitely that deal there that that you’re showing. We can get rid of that one because that’s already been closed out. And, so let’s yeah, we don’t need to do any of that. And, so that’s just awesome. That was a great project that we did. And what I really am excited about is, this project and only continuing it through. Hey, great to see you, drew. And I’m out here again, sir. And, real quick, they’re doing a shout out to Drew Ludlow. He was actually out here on location on Saturday. We had a great opportunity to bring him, his wife and his family out and, to see what’s going on, and and drew said it best. He goes, you know, he works in the oil and gas industry. And, you know, his kids really had no idea they hadn’t had a chance to be out on a rig and know this is not the multimillion dollar EOG wells out east, west Texas. But these right here produce multi-million dollars. And that’s what we’re trying to do here. And, yeah. Thank you drew. I’m glad you like the stuff that’s just, showing the NSB. They are one heck of a group. So if anybody’s out there looking to recruit anybody from the oil and gas industry, reach out to NSB Omega. They do some great work out there and placing people not only in America, but all over the world. And it is another great spot right now down to right near Venezuela and Brazil. That whole area has just blown up right now. And and I think I said it right, but it’s in South America. But, you know, people can definitely reach out to me. You know, via LinkedIn or, the website, Pecos operating.com. And we’re just only continuing the success that we’ve done here, Stu. And so I’ve just really had a great time.
Stuart Turley [00:07:45] Hey. Fantastic. And I’ll tell you, I want to give a shout out to Mark Lancaster. Hey, how do you do it, man? You guys are a outstanding group over there with Mark Lancaster. You need to follow Mark on LinkedIn. He is always got his hands in the oil field and, looking at, moving products and, things around there as well too. So, hey, there are some things coming around the corner here. When we go to the the efficiencies of scale on drilling, I find this pretty amazing in your area that you’re taking a look at here. We also got another howdy there. So goes the red states. This is from Vance again. I interviewed him the other day, and this is really, really important when you take a look at California versus Texas, because you’re out there drilling and you got Texas with good energy policies. You got Elon on X moving to Texas. You got everybody moving out of California. You got good energy policies. You’ll have growth. They go hand in hand.
Rey Trevino III [00:08:48] Oh absolutely. You know, I had a chance to go to California earlier this year. And and I have to say what a beautiful place. It is just a great place. Beautiful. I mean, if you can take Texas policies and move on to California, what a thriving economy you would have there. I understand keeping places beautiful. I think Texas is the most beautiful place in the world. Okay, so we know how to keep places clean. So if you can take our policies, then I think we could really do a much, much better job in California because they have a ton of oil still there that hasn’t even been tapped into. So they have resources that could not only help their state but help America. And that’s what makes us proud to be Texans, is that we have the entire the country on our shoulders, as I’ve said before.
Stuart Turley [00:09:34] Oh, I agree, and I absolutely love this one from drew. Drew, all the X’s are in Texas. I think it is okay that A is a great song. All my exes are in Texas, but also X moved to Texas. Yeah.
Rey Trevino III [00:09:49] Oh, I love it. And X marks the spot. I’m going with that one also. Hey, X marks the spot.
Stuart Turley [00:09:55] As an as an investor in oil and gas. I like it when X marks the spot.
Rey Trevino III [00:10:01] Yeah. And I tell you what, the due diligence that goes into that stew is tremendous. From grabbing information and data from the time the leases were even involved. And sometimes that’s in the 1950s or even earlier, and then just going through the data, and you got great grooves like combo Curve that you’re able to then do great projections with. You know, we spared no expense as far as making sure that we’re we’re drilling the hole. We’re in the right spot.
Stuart Turley [00:10:28] Yeah. You know, and and I’ll tell you, one of the things I like about the way that your management looks at it, which is you and and says, hey, wait a minute. We want to look at a deal or an operation. Tell us your thoughts on production as well as taking a look at the offset. Well, what do you got going on there?
Rey Trevino III [00:10:47] Yes. No. All all of that great question. You know, obviously when we first look at any existing producing leases, we look at what is the production now and we kind of look at that as a form of, okay, can we make money at what the production is today. Now anybody knows this is a depleting asset. So why is it that we’re looking at it from can we make oil. Well make money from today moving forward. We look at what’s the upside to this lease. Meaning where else can we go drill new wells. What’s the geology like? And for any existing wells we look at what’s behind pi. And what that means is what a lot of people may not know about investing in oil and gas is we are going to we have one main target zone that we are going to be producing from in the beginning. However, there are other formations that are going to be down this hole that we can extract hydrocarbons from at future dates, which give this, well, even longer longevity. And you can find, as much as I’ve even heard, some even have an 18 separate zones, two and one. Well, that’s 7000ft deep. So it’s out there to have more than one shot at earning a dollar in oil and gas on the same well.
Stuart Turley [00:12:05] So a rework rig, it has a different structure than a new.
Rey Trevino III [00:12:08] Well, yes. You know, not only do they have a different structure from the actual type of rig it is to the way we attack that asset. You know, we look at it from how much oil can we go back and actually drill, for an example, if the wells doing ten barrels a day, can we get 20 out of it? Can we get 100 out of it? And if we can’t get that ten to our, you know, 20 barrels additional, how long can we get that for? And our rule of thumb has always been try to get, our initial investment back in, you were anywhere between 12 to 18 months, because when we started doing oil and gas, it was this was all we had. These were the funds. And in order to go invest again, we had to get our investment dollars back as soon as possible. And that’s something I think that a lot of people that resonates with us too, is that, hey, we’re in this just as much as, if we are blessed to bring on investors in our projects, we’re in this just as much as they are. And, you know, we want to make sure that they’re getting their money back as quickly as possible, just like we want to do the same.
Stuart Turley [00:13:08] You know, I want to just say I’ve got a great team of folks that work with me because I when I you say, hey, go look at this deal. And they just strip the deal apart. And Michael leads that group up and does such a great job on on tearing apart oil and gas deals. So it is nice being able to look at the difference between a good deal and a bad deal.
Rey Trevino III [00:13:31] Yes. No. Michael Tanner, shout out to him. He’s been doing great things for our team over at Pecos Country Operating and our family office as well. And, you know, we’ve really been able to, like you said, dissect different projects, look at them, see where the returns are going to be at. You know, how fast do we need to run towards a deal, and how fast do we need to run away from a deal? Because, you know, for every, you know, Taylor away, there’s no 100 bad deals and maybe two great deals, you know.
Stuart Turley [00:14:00] Absolutely. But you know, and you always hear about those that are that you say, well, you may or may not make a dime, that that’s not a good play. And I think we’re going to see. Did we did you see the story about Janet Yellen saying we’re going to need $3 trillion a year for now, what’s called the climate transition. They are now throwing away the energy transition. And they’re now throwing away climate crisis. And they’re now saying we have a climate transition to go straight to the source of money laundering.
Rey Trevino III [00:14:39] At least $3 trillion a year. I mean, I know that that’s probably what it would take, because you look at the infrastructure in America alone. Right? Okay. Our infrastructure took 100 years to build it to where it is today, and the majority of it runs off of coal. Natural gas and oil would take us alone. Another 50. Two years to transition all of our infrastructure to wind and solar. If we did that today, is that correct?
Stuart Turley [00:15:06] Yeah, we got Blair. Shout out to Blair.
Rey Trevino III [00:15:09] Hey, how are you? She’s going to be a guest on The Crude Truth. And, we’re going to be talking about cyber security. And I know that’s something you and your team have been talking about with this whole. Whatever happened?
Stuart Turley [00:15:20] Yeah, yeah.
Rey Trevino III [00:15:20] I wasn’t crashed like I’m a Southwest Airlines guy, so I wasn’t affected. There you go. I was right, or something like that.
Stuart Turley [00:15:27] That’s right. I got to give a shout out to, energy transition as a joke and a way to transfer wealth. Absolutely ridiculous. Way to go, Nathan Hammer. So we got another shout out here. Can’t wait. This will be a lot of fun. I can’t wait to see that one.
Rey Trevino III [00:15:43] So it’s going to be exciting because, you know, the more and more you know, because as an oil and gas company, sometimes the family companies are the last ones to truly, dare I say the word transition to the 22nd century. You know, AI is coming up. The cloud is now safer than it was three years ago. So security in in I don’t know, in security in computers, in technology is just so, so important now. I mean, it shows how good I am at it. That’s why I’m bringing excited to bring on an expert on to the truth about it.
Stuart Turley [00:16:15] Oh, there you go. I’ll tell you, you know, when we sit back and kind of go, look, we also want to look at why you’re out there and trying to earn a living. Take a look at gas prices. This was four years ago in November. A dollar and 85 verses 408. You know, same station four years apart.
Rey Trevino III [00:16:35] Yeah. I mean, you know, that’s what we’re doing here. We’re fighting our best and keep those prices down. And right now, we’re also trying to drill and produce as much oil as we can, because we need to get these prices back down to $2. Okay. I think if we were at $2 oil, we would be in a great spot for the economy to grow and get this inflation down. Drew Ludlow since 2010, natural gas demand has grown by 15% and the interest in infrastructure by 20% and transportation by 10%. You know what could happen next? I mean, we need to grow it some more. You know, as you know, we are the Saudi Arabia of natural gas. And, you know, right now we are producing so much gas that, on Friday, when I looked, I think gas was at less than $2 an MCF. I mean, we’re literally just flaring it. And so, you know, so I’m not 100% sure what the price is today as we look, but I know the national average, to sell was, less than $2 last Friday. Right. But, you know, natural gas. Oh. Go ahead.
Stuart Turley [00:17:36] Oh, no. But this is all important. And we bring up a very, very critical point because we won’t have an energy transition with AI, coming around the corner, because if Janet Yellen is saying we need to have more renewables and wind and solar on our grid, we’re not going to be able to do it. The only way we’re going to survive is with natural gas oil and nuclear coal. And it’s amazing to me they’re fighting like hell trying to keep it out of there. Yeah.
Rey Trevino III [00:18:08] Yeah. You know, I’ve said this once and I’ll say it again. Nuclear is also not, I think natural gas and nuclear to end. I think those are going to be really the best ways to go.
Stuart Turley [00:18:18] Markel buying anything stranded I guarantee you a little Bitcoin mining going on there. I bet Mark and Mark Lancaster has got generators. And I want to give a shout out to President Trump and his Bitcoin speech. because I love Bitcoin mining on stranded gas. Yeah. And I tell you what if we got enough stranded gas let’s get a Bitcoin mining operation. Ted Cruz Senator Cruz loves bitcoin. I love bitcoin for helping extra money and burn access natural gas. Let’s roll.
Rey Trevino III [00:18:52] Man. What is Bitcoin at today. You know I don’t know. And I’d love to you know I’ve talked to several people. there’s even other podcast groups that talk about Bitcoin all the time. I’d love to meet a real bitcoin group that actually wants to give an operator some real returns. You know, I, I will say that, you know, don’t come to me with this. Hey, I’ll give you one bitcoin a month for your natural gas shenanigan. That’s that’s ridiculous. Okay. I’ll tell you that right now. Don’t come at me with that. When, one bitcoin is 15 grand a month or what is it? Probably 40,000 a day. And you’ll just take my natural gas off my hands? No, I don’t think so. It needs to be a win win for both sides. I tell you that, right?
Stuart Turley [00:19:30] Well, it’d be interesting. So if anybody, it will reach out to Artie or myself and you’ve got some Bitcoin. We may have some stranded gas for.
Rey Trevino III [00:19:39] You know, and, you call up Ted Cruz. You know, we had a great opportunity last month to visit with him. And he is also he is 100% on board for Bitcoin. I mean, he’s a miner. Now let me ask you this. If we do get the Bitcoin in it, does it then become regulated. So then how does everybody feel about the bitcoin after that.
Stuart Turley [00:19:59] I don’t. I’ll tell you what. If. Here’s where it gets into a really big conversation. If President Trump, puts, Bitcoin in as a holding as part of the Treasury plan. I think it’s a great thing because we do not want a digital currency. We do not want the U.S. dollar where they can say, you tweeted out something mean you cannot eat this week. So I’m all in. I’m serious man. They they will do that. They’re doing it in China. And that’s going to get actually. Here is Bitcoin. Drew Ludlow 66. 935. He just sent you an invite on LinkedIn, you guys. And and Mark, you got to get on the courage. Truth. Mark’s numbers when he was a guest on mine went nuts. So, we need to have you back again, Mark.
Rey Trevino III [00:20:50] Yeah. In fact, we’re getting updated numbers right now on the crude truth. And we have just in the last year, really done well. And, I can’t wait to share those with all of everybody out there because, you know, I’ve, I’ve enjoyed I reluctantly started doing a podcast. I’ve enjoyed it so much. It’s been an honor, a blessing. And I know especially that I get to be out here today and I’ve met so many great people. But yeah, I know. So I look forward to getting those numbers for this year.
Stuart Turley [00:21:14] Hey, with that, I just want to share this as well. Right. I’m seeing it out there. This is, Bryan Cranston saying he is a left wing or. Excuse me, Democrat and former prosecutor Kamala Harris, convict or convicted Donald Trump. He had to redo this twice. And if he’ll notice the vote, he goes, who would you vote for? 79% for Donald Trump. And it was, 500,000 vote person vote. So don’t trust the polls out there. This is on edge. I did one and I only had 40 votes, but it was at 75%. So when you sit back and take a look at, you know, wait a minute here, 500,000 and then take a look at that. It does make a difference, you know.
Rey Trevino III [00:22:01] So it does, you know, right now, I’m excited for the election. I do think a lot of things have been.
Stuart Turley [00:22:08] Turning.
Rey Trevino III [00:22:09] In former President Trump’s favor from the drop of the lawsuits to the FBI actually investigating this, assassination attempt to even, he had the Florida one dropped. He’s now I know he appealed. The one in New York, which will probably also be dropped. So it’ll be really exciting to see how the election goes. All I can say is, right now get out and vote. Yeah, we all know that our votes truly do count. For everybody out there in 2016 that said that the president was always already predicted and elected. Donald Trump was voted president in 2016. That was because people got out and voted. So we just need to be sure, get out and vote. Get out and I’ll say it the proper way. Get out and vote early if you need to. Let’s let’s make sure, that, you know, these votes get out there and and not just wait till the last day. I know I’ve got a. That’s something I’m working on to try and try to be more proactive and, so, so just get out, 2024.
Stuart Turley [00:23:05] And yeah, I’ll tell you, I just saw a quote today from one of the guys I follow on X, and I thought it was very interesting. You can vote yourself into socialism, but you’ll need to shoot your way out. Don’t give your guns up. I thought that was a great quote. I also got David Blackmon. We’ve only got about another two minutes here. This is David Blackmon. What happens if David Blackmon was going to run for office. This is the way David Blackmon would run for office. Let’s watch this one.
Rey Trevino III [00:23:34] And then I can throw in and line can be critical. He stumps. He ain’t no legacy. Oh on legacy where is he. Oh my gosh. well I think you you cracked me up Stu I love coming all the energy news media. So it’s always a fun time. It’s always a fun time.
Stuart Turley [00:23:56] I’ll tell you what. And so, R.T., how do people find you again?
Rey Trevino III [00:24:00] Yeah. No, please, you to reach out to us on LinkedIn or, you know, Paco’s operator.com. You can reach out to me, Ruben Trevino. Chrissy burns. We’d be more than happy to answer any questions that you have. Even Michael Tanner. He’s a field. A few questions for us here, there. And, if you’re looking for anybody else to talk to about oil and gas, I’ll throw out their names. Drew Ludlow and, Keith. Stelter. Also, he’s another great guy. And you know what else I love about, the online gas industry is that you always meet new people. I had a chance over the weekend to meet the new gentleman in Barrett, and I’m going to butcher his last name. Z. And, he’s just an amazing guy. And he’s out of the West Texans area also, and I love it. I shook his hand. And also that, you know, 11:00 in the morning and we were, you know, cut it up by 12:00, having a good time, joking around by 12:00 out here on the field. And, also, thank you, for a shout out on LinkedIn over the weekend. I appreciate that.
Stuart Turley [00:24:53] Well, fantastic. I’ll tell you what. Thank you so much. And that get back to working hard. You know, I always thought you were just a really. Tycoon kind of guy sitting in that shit?
Rey Trevino III [00:25:03] No, sir. No, sir. I don’t think so. I don’t think that that’s in my, in my repertoire here. For the next 30 years. We’ll be out here. You want to shout out to the team out here? They’re doing a darn good job. And, we should be zone here in the next two hours. So we’re here watching a real close at all.
Stuart Turley [00:25:19] Keep me posted. As an investor, I’m extremely interested.
Rey Trevino III [00:25:23] And thank you to everybody that listened to tuned in today. That’s what an honor. And, so thank you all so much for a few minutes, y’all.
Stuart Turley [00:25:29] Back to you guys. You. You see.
Energy News Beat