Daily Standup Top Stories
US oil industry giant warns Democrats’ green energy push fuels a ‘doomed’ economy
An American fracking and oil pioneer has cautioned that the Biden administration’s green transition means the end of the energy renaissance and economic prosperity. “If we don’t handle policy right on energy, then we’re doomed to repeat […]
Arizona driver says he was ‘trapped’ in hot Tesla after battery died
PHOENIX — A Peoria man says he was trapped in his Tesla in the extreme heat after the power died and he didn’t know how to escape. The ABC15 Investigators found dozens of drivers have […]
Highlights of the Podcast
00:00 – Intro02:32 – U.S. Industry Giant Warns Democrats Green Energy Push fuels, Quote Doom Economy04:24 – Arizona driver says he was trapped in hot Tesla after Battery Died 06:27 – Market Updates09:53 – Silver BOE more of a gas weighted company10:20 – Civitas, absolute beast, 84,000 barrels of oil a day11:55 – Pioneer decides to crush it per usual 13:01 – Exxon was touting, you know, the 15,000 foot lateral is a much more preferred to the 10,000 foot lateral14:03 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:07] What is going on Everybody, Welcome into another edition of the Daily Energy News Beat Stand up here on this gorgeous Thursday, August 3rd, 2023. As always, I’m your humble respondent, Michael Tanner coming to you from an undisclosed location here in Dallas, Texas. Stu has the afternoon off, so I am taking a solo show today. But fear not, guys, I still am here to bring you the news. [00:00:29][22.6]
Michael Tanner: [00:00:30] I’ve got two stories that are really going to cover what I think is the biggest story today, which is oil prices dropping amidst a 17 million barrel bill dropped by the EIA. I’ll dive into that. [00:00:41][10.7]
Michael Tanner: [00:00:41] First I’ll talk about, though. U.S. oil industry giant Warns Democrats Green Energy Push Fuels A Doomed Economy this is a great I would say a great article. It’s it’s exactly why Harold Ham bought Continental so he can go on Fox News and scream about the Democrats green energy push so we’ll dive into what he said there. [00:01:00][19.1]
Michael Tanner: [00:01:00] And then finally, this has got to be a nightmare. Arizona driver says he was trapped in hot Tesla after Battery dies. Ooh, ooh, ooh that’s not good. One of the downsides of being all electric and automation is things like that. [00:01:15][14.9]
Michael Tanner: [00:01:16] I will then again, as I mentioned, cover what happened in the oil markets today. We were seeing prices 79,72 as a record that’s about 6:09 here on August 2nd. We started the day a little bit above $82 considering the fact that we had one of the largest stock draws we’ve seen in recent memory is through everyone for a little bit of a whirl. [00:01:36][19.2]
Michael Tanner: [00:01:36] And I’ll and I’ll warn you, I don’t know if there’s a clean answer that will come due, but we will attempt to break it all down we’ve got a few earnings I’ll cover Silver, BOE, Civitas and Pioneer all dropping their their earnings. So I will dive into a little bit of what they said and see if there’s anything interesting along that front. [00:01:54][18.5]
Michael Tanner: [00:01:55] Guys, before I do all that, remember all the articles about to cover all the analysis brought to you by the world’s greatest website www.EnergyNewsBeat.com the best place for all your Energy News. [00:02:06][11.0]
Michael Tanner: [00:02:06] Stu does a great job of curating that website, making sure it’s up to speed with everything that you need to crush and stay up to speed on what’s going on in the energy markets. [00:02:14][8.2]
Michael Tanner: [00:02:16] Dashboard.EnergyNewsBeat.com is our, you know, attempt at a data energy news combo hard at work at V2 guys. Questions.EnergyNewsBeat.com hit them up. [00:02:28][11.8]
Michael Tanner: [00:02:28] But let’s go ahead and just start off quickly, I just find this hilarious. You got first article. U.S. Industry Giant Warns Democrats Green Energy Push fuels, Quote Doom Economy. The American Fracking and Oil pioneer, the interesting American oil Pioneer. [00:02:41][12.4]
Michael Tanner: [00:02:42] We’ve got Continental Chairman and Founder Harold Hamm on Fox News today “Kudlow” Quote is Energy Independence it means world peace hes, Quote, is it’s very important. I’m a patriot. I love America we produce something that’s very good we have to maintain that. [00:02:57][15.5]
Michael Tanner: [00:02:58] Basically, you know, and then in my opinion, it was his first opportunity to get out in front of the news cycle because now that Continental is no longer public, it’s private he can say whatever he wants. [00:03:10][11.9]
Michael Tanner: [00:03:11] So, you know, he’s definitely going to dive in on that. He argued that even though President Biden has waged war on over the last three years, he says that Americans are not going for it he says EV sales are down, Big companies are losing tons of money, the oil tycoon said, likely hinting at Ford’s recent multibillion dollar losses people are not going for it. [00:03:30][18.6]
Michael Tanner: [00:03:30] The American people don’t want it. I don’t know if they don’t want that around. But what I do know is this EV stocks are getting pounded we know that. Oil and Gas stocks are getting pounded I’m looking at my board right now, a lot of red. [00:03:42][12.4]
Michael Tanner: [00:03:43] He’s coming out to make a push again luckily, he’s private they play by a different set of rules. So he kind of comes out at a critique from from you can kind of come from the sidelines. [00:03:54][10.9]
Michael Tanner: [00:03:54] He can he can say whatever he wants and not necessarily need to be subjugated to it, to a board. He is the now he’s got creditors but, you know, he he’s he famously wrote a $1 billion check to his ex-wife I’ve seen a picture of that. It’s kind of crazy but. [00:04:11][16.9]
Michael Tanner: [00:04:12] Good for Harold Hamm getting out there it’s why he bought it, spending $20 billion to buy back Continental stock and also go on CNBC it’s the world’s most expensive time slot and I’m here for it. [00:04:22][10.3]
Michael Tanner: [00:04:23] Next up this is scary, guys. Arizona driver says he was trapped in hot Tesla after Battery Died we’re going to read a little bit of this guy. So this is in this is in Arizona, guys so obviously smoking hot, 112 degrees. [00:04:35][12.6]
Michael Tanner: [00:04:36] A Peoria man says he was trapped in his Tesla in extreme heat after the power died. Didn’t know how to escape Abc 15 investigators found a dozen of drivers have filed complaints with the federal auto safety regulators who are arguing or urging car owners learn how to manually get out an emergency. It’s definitely safety concerns one of the hotter days, 73. [00:04:51][15.2]
Michael Tanner: [00:04:52] Okay, so this is all a scam because the dude was 73 year old Newsflash if you’re too stupid to get out of a car and have to learn how to get out of a car just educate yourself a little bit, man. [00:05:01][9.6]
Michael Tanner: [00:05:02] 73 years old, like I get it you know, if this was a 25 year old, I think a little bit different. But the fact that this dude, 73, might be a little bit old on my blog, he was stuck in his Tesla model Y in his garage back in June. [00:05:15][13.9]
Michael Tanner: [00:05:17] Youd feel bad for this is an old guy I feel if she was here, I’d ask Stu when the last time he did this was but I only kid you feel sorry that’s not good. I mean, all jokes aside, getting stuck in a hot car is not good. But you should probably figure out how to, like, open your car. [00:05:33][16.1]
Michael Tanner: [00:05:35] You know, to give you guys an idea, you know, they say Tesla needs to address this. I mean, this is an interesting quote. Car safety expert Norman Hubele it’s essentially a computer on wheels that runs on a battery. [00:05:46][10.6]
Michael Tanner: [00:05:46] That’s very true to I personally when I was in the market, you know, five years ago for a truck, I wanted something that more, you know, had the manual seats, something that was as little as electronics as possible so I could replace the stuff. [00:05:58][12.1]
Michael Tanner: [00:05:59] That’s the thing with these computers, you’re going to geek out all these cars. I think it’s great I’m a computer guy nine screens I’m looking at right now. But what happens when they brake on a car? [00:06:06][7.3]
Michael Tanner: [00:06:07] We figured out that screens are cheap oh, another screen. 75 bucks stan, what about, you know, real easy to get spun up on more screens. How easy is it to get spun up on some of these parts? It’d be super interesting to see how it goes. I’d want an ejector seat. Where’s the James Bond ejector seat on this? Because I’m all for that. [00:06:25][18.7]
Michael Tanner: [00:06:27] Let’s look at oil prices, though, guys, because, I mean, if you looked at the news and saw 17 million barrel draw, which is what the EIA came out with today and said, With 17.0 million barrel draw from commercial crude oil reserves excluding the SPR. You would have said, wow, prices to the moon. [00:06:47][20.2]
Michael Tanner: [00:06:48] Well, guess what? To the floor we’re down 3% today unbelievable. Crude rolled over from $82 to its current position, about 79,73. You know, depending on as you guys listen to this Thursday, we could have had a bullish move overnight, up or down, but absolutely insane. [00:07:07][18.3]
Michael Tanner: [00:07:07] I spent some time trying to scan the news and figure out what to make of it and to be honest, the sentiment out there is mixed. There’s a little bit of only so much good news can happen we are eventually going to roll over. [00:07:20][13.7]
Michael Tanner: [00:07:21] This further cements the point that algorithmic trading drives the majority of the day to day movements in crude oil, if only because small bits of bad news get a bunch of computers trading one way, then so goes the sentiment. Sentiment flips now you have all these sentiment analysis stocks trading down. Interesting point on there, though. I heard a bunch of people saying it’s not algorithmic trading, it’s it’s other things. [00:07:47][26.1]
Michael Tanner: [00:07:48] But to be honest, there’s no consensus I’ve talked to multiple different people. They’re all answer is “What?” They don’t in the words of Stu “Huh!?”, they don’t know it’s a super interesting move. [00:07:57][9.0]
Michael Tanner: [00:07:57] What we do know is that technical are fundamentals of Supply and Demand are not driving this price action. It’s evident that I’ve been saying it for weeks now, really for months, that supply and demand is not driving pure fundamentals, is not driving this, this is easy, as it seemed. [00:08:12][15.6]
Michael Tanner: [00:08:13] To give you guys another idea there was no draw of the Strategic Petroleum Reserve domestic production held flat at about 12.1 million, only about 3.8 million barrels imports. [00:08:25][12.0]
Michael Tanner: [00:08:26] Let’s go down here to Refinery Utilization sitting strong about 92.7 that’s down from 93.4 so we see a little bit of ease on the supply side there. Quickly touch on earnings, folks. Silver BOE, this was funny, there is 64% natural gas. [00:08:44][18.2]
Michael Tanner: [00:08:45] To give you guys an idea, Adjusted net income, $25 million, which includes an unrealized loss on the value of their derivatives contracts, still a loss about 10 million on hedging so not terrible. [00:08:54][9.4]
Michael Tanner: [00:08:54] They’re drilling,You know I’m just reading their IR Guy of the week highlights Drilling Completion spend below planned cost, Capital budget guidance looking to be somewhere between 440 and 425 million, which is an 11% decrease in that midpoint compared to their previous guidance. [00:09:11][16.8]
Michael Tanner: [00:09:12] They do they still estimate about 325 to 345 million cubic feet per day, which a 24% increase over that guidance. They’re going to run two rigs in their development program in an in an attempt to deliver a 100% year over year oil growth. [00:09:31][19.1]
Michael Tanner: [00:09:33] There are optionality to improve a complete some DUCs over in Webb County probably won’t do that. To give you guys an idea they’re 93% hedged on gas for the remainder of the year which is in tell you what people think about gas prices from here forward because you give you an idea where $2.40 there. [00:09:51][18.4]
Michael Tanner: [00:09:52] So I think the interesting thing is Silver BOE more of a gas weighted company. Obviously you can see they’re trying to move themselves at about 12,000 barrels a day. They’re trying to move himself into a little bit more of an oil company. [00:10:01][9.2]
Michael Tanner: [00:10:02] Moves like this where you see 93% of their gas production hedged, which means what, they want to keep their gas production steady. They want to know what they’re getting on their gas production and again, move everything to oil. They’ve come out and said it, but they’re actually doing it with their moves and remember, I don’t care what you say, it’s what you do it’s what they’re doing, which is nice. [00:10:18][16.2]
Michael Tanner: [00:10:19] Next up here, Civitas, absolute beast, 84,000 barrels of oil a day they spent about 226 million in CapEx. Adjusted net income stood at about 139.3 million net cash provided by operating activities 337 million. [00:10:37][18.3]
Michael Tanner: [00:10:38] They did a nice little small repurchase program of about 20.2 million, and they’re going to give about one point a Dollar 75 per share. I’m nice liquidity sitting at about 3.7 billion. [00:10:50][12.0]
Michael Tanner: [00:10:51] to give you guys and idea they are. 49% Crude oil, 29% Natural gas and NGL sit at 23%. Average sale prices before drillers $70 give you guys an idea what they doing up there in Colorado, Natural gas only a Dollar 60 cents. Not good came here a year ago 106 and seven, meant good to be an oil company a year ago. [00:11:15][24.4]
Michael Tanner: [00:11:16] Getting about 71 or 40 1ab crude oil body equivalent all the way around. Again, they bought Tap Rock they’re going to go ahead and and continue integrating that 53,000 barrels of oil per day that officially closed today. So you’re going to go ahead and be able to kind of load that in. [00:11:36][19.8]
Michael Tanner: [00:11:36] To give you guys an idea on their pro forma now on an oil production somewhere between 95 and 105,000 barrels of crude oil day, they’re going to be crossing back 100,000 barrel of oil per day Mark chu-chu, got to love it. [00:11:51][14.5]
Michael Tanner: [00:11:52] A little bit of increase in their LOEs, but you’ll take that Pioneer decides to crush it per usual. You know they reduce their I I you know free cash flow 750 million. It’s good to be on top, baby good to be on top I’ll tell you that much. [00:12:08][16.0]
Michael Tanner: [00:12:09] 369,000 barrels of oil per day near the top end of their guidance will warp 711,000 BOEs top into their quarterly guides. There’s a crushing into both categories quarterly based plus variable debate about a dollar 40 a doing a small repurchase program around 124 million shares. [00:12:33][23.7]
Michael Tanner: [00:12:34] I mean continue to truck truck truck truck truck along I mean they’re the big players thinking they’ve got the prime acreage they’re the largest independent out there besides the. You know, besides the mid-majors out there up there with Oxy. [00:12:45][11.0]
Michael Tanner: [00:12:46] Again, there’s not much they can really do wrong at this point other than really try some new stuff. I think the other thing, if you were to dive deep into all three of these and some things I’ve been seeing really in all of the different earnings releases is the commitment to longer lateral lengths. [00:13:01][14.8]
Michael Tanner: [00:13:01] You know, Exxon was touting, you know, the 15,000 foot lateral is a much more preferred to the 10,000 foot lateral just due to the overall Coombs are coming in at more at more than a 1 to 1 ratio which is interesting which tells me there’s got to be something going on with the completion side. [00:13:16][14.6]
Michael Tanner: [00:13:16] And when they tell you it’s just lateral length, the a little bit where yes, lateral needs something, how much of that is completed and the what are you doing to treat that? And that, I think, is where some of that secret sauce comes in do so. Don’t be fooled by the longer lateral length. Yes. Love to see that. You know. You know, it’s a guy who loves drilling himself, you know, let’s go 20,000 B. [00:13:34][18.0]
Michael Tanner: [00:13:34] I think again, it comes back to how are you actually turning and rolling those wells over to production. So we’ll continue to watch that guys, appreciate you checking us out here on this gorgeous Thursday guys. [00:13:43][9.4]
Michael Tanner: [00:13:44] Tomorrow’s the Weekly Recap. You will hear from Stu and I Monday Morning, which will record Sunday night just for you guys. As always, we appreciate it as always www.EnergyNewsBeat.com. We’ll see you on Monday, folks. [00:13:44][0.0]
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