Daily Energy Standup Episode #321 – TotalEnergies Resumes Denmark Gas Field, Solar Farms on the Market, and More

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TotalEnergies upholds March restart date for Denmark’s largest natural gas field

Solar Farms are being sold early and cheap – Here is one: Solar for sale: 1,100 acres, $15 million, in the Town of Sharon

BofA Reveals Where it Sees The Oil Price Heading

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

Michael Tanner: [00:00:14] What’s going on, everybody? Welcome in to the Monday, March 4th edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up TotalEnergies upholds March restart date for Denmark’s largest natural gas field. Next up solar farms are being sold early and cheap. Here is one solar for sale. 1100 acres, 15 million in the town of Sharon. Interesting article on kind of some of those solar farm economics. Next up, canceled U.S. offshore wind farms back at a higher price. Who would have saw that coming? Next up, Bank of America reveals where it sees oil prices heading. And then we will end up with a little OPEC chat. Oil markets await the next OPEC announcement stool. Then toss it over to me. I will quickly cover what happened with oil and gas prices on Thursday. Friday we did see a little bit of a rip up above 80, before settling just a little bit below $79 US $80. At 79.97. I’ll cover what’s going on with rig count and then finish up with an interesting Reuters article. Kim Ridge trying to take over Silver Ball, where at least they’re pushing for it. So we’ll cover a little, little of what’s going on there, and then we’ll let you guys get on out of here and get back to work. As always, I am joined by Stuart Turley. I am Michael Tanner. Stu, go and kick us off. [00:01:34][80.2]

Stuart Turley: [00:01:35] All right. Hey, let’s get rolling over to, total energy or total energy, as I say in Texas Oak upholds March restart date for Denmark’s largest natural gas field. Michael. Holy smokes. This is, EP Denmark, a subsidiary of the big, Total Energy. This is a lot of gas that’s coming back online. The tire has been a center of processing for more than 90% of the natural gas produced in the Danish North Sea. Holy smokes. There was a crane that went into a process module. Listen to this. Two point 8,000,000,000m³ of gas per year. Unbelievable. That’s a lot of. And they call it the Danish Underground Consortium, which is duck, which is not what we consider a duck here in the U.S., and it’s operator 43.2%. And then the Blu Nord is 36.8 and North 14 at 20%. Pretty incredible amount of natural gas that’s needed for Europe. [00:02:49][74.5]

Michael Tanner: [00:02:50] It is. And it and it also shows you the imbalance about what’s going on here at home with our natural gas markets. I mean, you’ve got companies like Chesapeake, southwest and they’re shedding rigs like crazy. We’ll see it in the rig counts numbers coming up here yet overseas, with the spreads being so high, you’re being you’re be able to get, these type of, projects evaluated. I mean, it’s great for Norway. They really need this. And specifically what’s going on? I mean, in the North Sea. Excuse me. This is going to account, as you mentioned, 80% or 90% was 80 or 90% of the natural gas that’s coming through. This facility is going to be from the tire facility. [00:03:29][39.1]

Stuart Turley: [00:03:30] Isn’t that nuts? That’s a big boy. I mean, when you look at the picture, that thing, I wonder how many crew members that thing holds. It’s a. [00:03:38][8.5]

Michael Tanner: [00:03:39] Lot. It’s a decent amount. So. No, good for, total going back in there and, and bringing up that gas field, it’s going to be needed. Trust me, it’s only going to get worse. [00:03:48][9.3]

Stuart Turley: [00:03:49] Hey, one last comment. We’ll go to the next story here. When, I think total and, the other European, big oil, we’re going off the deep end like beyond petroleum. Now that they’ve come full circle. [00:04:04][14.7]

Michael Tanner: [00:04:05] Yep. Exactly. They’re back on. They’re drilling for natural gas offshore. [00:04:09][4.5]

Stuart Turley: [00:04:10] Wow. [00:04:10][0.0]

Michael Tanner: [00:04:10] I love it. [00:04:11][0.2]

Stuart Turley: [00:04:11] Hey, solar farms are being sold early and cheap. Here’s one for sale. 1100 acres. 15 million in the town of Sharon. Michael, this story goes with what is happening in what you’ve heard me at nauseum talking about. And that is that there’s a, early death to wind and solar that’s not being talked about. Now, let’s go through some of these numbers, and, I, I got a lot of, feedback after I put this out on my LinkedIn. The total current income over one year is 1.1 million a year. This is, so your cash flow, you could almost sit down and do the cash flow on this. There’s also rental property on here. But here’s where it gets a little dicey okay. This does not include when the thing, is over and done with. The owner would probably get to get. That is taken care of. So it’s got a lease for 25 years. But here’s where it really is a problem. Who’s got reclamation costs associated with it? And in most solar farms, it’s the landowner. [00:05:25][73.6]

Michael Tanner: [00:05:26] Yeah. I mean it’s it’s it’s going to be interesting to see the life cycle of these project. I think you’re absolutely right. The cleaning these sites up and reclamation, I mean, the mining business went through this 15, 20 years ago or more, really more like 20 years ago when reclamation really became a thing and you couldn’t just deface an entire mountain and move on. Thank goodness we’ve moved beyond that. But these mining projects have started to bake. You’ve had to bake all of that into your future capital expenditures. And it’s widely known in the space that the life cycle of these things will be 50 years. You’ll produce for 20, and then the next 30 years is going to be a massive year over year reclamation project. It’s going to that’s going to eventually fall into, you know, it’s going to fall and it’s already coming to the oil and gas space. We’ve seen that with the orphan wells. We’ve seen that with some of the the money that’s actually, ironically, pouring in from the federal government to attempt to clean up some of this stuff. It’s one of the the few smart investments our government has made. They need to make more of those smart investments, but we know they won’t will. So we got to take. We got to take the winds where we can. You’re going to see this reclamation come to, you know, the wind and solar space here very quickly. It just it may take five, ten years for it to actually become a point. [00:06:36][69.7]

Stuart Turley: [00:06:37] Absolutely. And how many landowners are already going to get clobbered by this? Hey, let’s roll over to the next one. This story is, very wild and huge. Canceled US offshore wind farms back at a higher price. Remember when those other, they were all canceled, because they had no bidders? Recall, leading developer Orsted were hit with 5.6 billion in impairments for walking away from the multiple deals. Now they’re signing new ones with prices that are almost double. That’s why they walked away. I did not know that until after reading this article. Then they have the, there’s a chart in here. And if you take a look, Miss Producer, if you could pull that in the aey. The levelized cost of energy comparison. I found this very interesting. And the author brings out a van tastic point. Take a look in that center, Michael, where the wind offshore is absolutely out of line 140 to $200. On technologies and conventional. General. Unbelievable. I mean, they are. Here’s where you and I have talked about the wind farms, being fiscally unsound from day one. After eight years, they have to be redone. Guess what’s happening, Michael? I’ve been talking to some wind folks and some solar folks, and what’s happening is in that a in that seven year mark, they start refiling for reworking these wind farms using the particulars bill, the Inflation Reduction Act. They’re double dipping only after eight years. Do you know how despicable that is for the consumers and the wasted products. And this is not good for the environment. And then, the reason that those first two were canceled, Michael, is because they would not approve a rate increase. This is a Ponzi scheme. [00:08:51][134.6]

Michael Tanner: [00:08:52] It is a shell game of okay, I can take my subsidy here and move it into this category, make my accounting look good. I go snag my profit from this, new bill that got passed. And as you can see, these the cost of energy development specifically for wind offshore is being massively reduced. Is, is is the chart that we just saw that that Aey chart wrong. No. It’s just not factoring again the full lifecycle I thought it’s you know really interesting. You know you’ve got nuclear at absolutely atrocious levels. 141 to 221 and you know that stripping out a lot of the other costs unfortunately associated with it. So not in my opinion with this shows, is that we need to figure out a way to bring nuclear down on this on, on this chart so that we can actually roll this out at a lot better of a chance. But no, I mean, these these offshore wind projects and I sleight of hand, they’re doing no, hey, we’re going to cancel this project and reinstate this one at a higher price. [00:09:46][54.2]

Stuart Turley: [00:09:47] Well, and then there is, this is all about the lobbyists in, in Congress. And who’s paying them. So you wonder why John Kerry flies in private jets. All right, let’s go to the next one. Michael, getting into the, B of A, the Bank of America reveals where it has seen the. Oil price. Hitting interesting points on this. And I want your opinion on this. This is a quote out of here. Robust U.S shale supply growth, warm, winter weather, more renewables and fast interest rate hikes have now forced OPEC to pare back oil production for 18 months now to firm up crude prices, even as geopolitics, political have turned more, complex. The analysts stated in their report. What does this mean for oil prices $100 a barrel? Now, they’re saying in here is it would be between the 80 and 85, dollar mark. [00:10:53][65.6]

Michael Tanner: [00:10:54] What do you think is which is is conservative? They point out a few things. You know, OPEC has has shown that it’s going to really set a floor of about $70 a barrel. They’ll cut to maintain that. And we’re talking Brant oil prices right now. But also one of the reasons they point out why oil prices are kind of capped around that 100 mark is that there’s enough spare capacity sitting out there, around 5 million barrels and enough non-OPEC supply growth to counteract whatever cuts are going on with OPEC. And we’ll cover here in the next final article, what what OPEC might seek to be doing at their next meeting. But I think it’s imperative to point out that, you know, we’re already almost at $80. This is probably at most where you’re going to see oil prices in my opinion. Stay I would tend to agree with where be of a has their analysis. I don’t think they’re being too bullish. They’re clearly, you know, in a sober mindset thinking about how the markets are going to react. You know, what does this mean? I think this has a lot of, you know, this is going to drive a lot of thinking, especially because, Bové is, is is somewhat active. Is it I mean, they’re not as active in the oil and gas, M&A space as maybe Goldman Sachs is or some of the other smaller, more specialized energy investment banks. But it’s clear that their sentiment is somewhat felt around the industry in that, you know, we may be not to say we’re at a structural top right now, but we may not see prices push much higher than this ought to be. Interesting what that means, I think, for deals as it goes forward, specifically in the United States. Again, we’re talking about bread prices. So subtract about, you know, five $5. And then I mean to think about the rents at $84 right now. So we we may even be a little bit above that band. And I think it’s time I think let’s roll into the next one. Because really a lot of where prices are going has a lot to do with what OPEC is going to not just do at this meeting, but what they will then signal at this meeting, go forward for the rest of 2024. [00:12:47][112.6]

Stuart Turley: [00:12:48] You bet. Oil markets await the next OPEC plus announcement. This is out of oil price, dot com. They’re good folks over there. And when you take a look at these charts, there’s a lot of I love this report that you get out of there. But when you sit back and take a look, let’s take a look here. There’s the. Yeah. At the time of this, this is about right. Same thing. 79, 97 is what. [00:13:15][27.4]

Michael Tanner: [00:13:16] Well, yeah. That was the close on Friday. Markets don’t open here for another. Yeah 30 ish minutes. We’re recording this about 4 p.m. here on the third. So you know we we still got a little bit to go but that was yeah as of the close there 830. You know. [00:13:29][12.9]

Stuart Turley: [00:13:29] No I’m sitting here trying to take a look here. BP doubles down on Egyptian upstream. Boy. There’s another 1.5 billion in gas projects in Egypt over the next 3 to 4 years. And when you take a look at what OPEC plus and what, the B of a, are also looking at is the amount of 2.3 million barrels per day in 2023 that would say, oh, that’s peak oil. Are you tired of hearing peak oil yet? [00:14:02][32.3]

Michael Tanner: [00:14:03] We, we’ve heard peak oil for, for years now. I think what’s interesting is this is yet this BP doubling down on the drips in upstream. It’s really a gas project. Notice the trend. All of the gas is going overseas that will come back to bite us in the Bahamas soon. [00:14:20][16.9]

Stuart Turley: [00:14:21] Trust me, it is sad that it’s also by this U.S, administration. Yeah. [00:14:27][6.6]

Michael Tanner: [00:14:28] Yeah. It’s it’s it’s it’s absolutely unbelievable. We also I love this they, they kind of roll through a bunch of these top stories. We’re also seeing another 3 million specie refill. So not unlike buying at the top. And it’s sour crude to we can’t even get the good stuff. [00:14:41][13.5]

Stuart Turley: [00:14:42] Oh yeah. I wonder if they’re buying it. Never mind. If you take a look at U.S. hit sanction on. Yeah. You knew where I was going with that one. [00:14:51][9.0]

Michael Tanner: [00:14:52] See, this is what we call self-censoring. Thank goodness. [00:14:54][1.8]

Stuart Turley: [00:14:54] Stew, thank goodness. I just walk right up to that social barrier. And I did not want you to hit me in the back of the head with a shovel. [00:15:00][5.7]

Michael Tanner: [00:15:00] Michael, we need to do a second take. Trust me. [00:15:02][2.2]

Stuart Turley: [00:15:03] Yes. And then you’ve got a story that from, readers, right? Yeah. We’ll do. [00:15:09][5.9]

Michael Tanner: [00:15:09] Let’s go ahead. And then switch over to and cover and finance here. But before we do that, let’s let’s go ahead and pay the bills here real quick guys. As always, the news and analysis that you’re hearing is brought to you by the world’s greatest website www.energynewsbeat.com. The best place for all of your energy and oil and gas news. Doing 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 business. Hit that description below. You’ll see everything all the links to the articles, timestamps, and the ability to interact with the show. You can check out dashboard.EnergyNewsBeat.com the best place for all your data news combo. Got some really, really cool things coming from there. We’re going to be rolling out a survey here very shortly, so we hope you guys go ahead and take that. You’ll be able to find that in the description below. We’re going to be rolling out what I think is a really cool, subscription service. And we really guys want your opinion on what you would like in that things, you know, whether it’s more premium news feeds, whether it’s, it’s specialized more and more, you know, analytical style content from us, whether it’s maybe some of the tech projects that we have working on. We really appreciate everybody’s feedback. Go ahead. Hit that description below for the survey. And whoa whoa whoa whoa. It would be it would be awesome to hear you and and and filling that out get you access to our to be able to kind of beta test and dogfood the original product. So once we get once we get it up and running, you guys will have first and access to be able to get a look, take a look, give us feedback and, and get a little bit of a free trial access. So go ahead and fill that out. Hit the description below. And check that out. [00:16:38][88.8]

Michael Tanner: [00:16:39] Well let’s move over to the market. To me was on Friday. The market is actually, up fairly big Nasdaq up 1.5 percentage points, S&P 500 up 8/10 of a percentage point. 5137. That’s again rolling near all time highs. Bitcoin trading above 62,000 right now. So we’re almost back to where it was prior to prior to kind of that that crash that happened to having more quote unquote that’s coming. And we could see an impact to where, prices go from there. So everyone’s going to be kind of, you know, watching watching that per se, if you’re in the crypto space. We did see crude oil rise about 2.1 percentage points from a WTI perspective closing at eight 7997. It’ll open here somewhere around that 7981 marks a little bit of softness this weekend. But we saw all the way up to about 80 80, 90 in terms of the top price too, mainly off the back of just some, somewhat aggressive, announcements coming from OPEC. The signal is going to be that they’re going to most likely extend these cuts. The OPEC is has has signaled for I think for weeks now. And then as they meet here in the coming weeks they’ve gone ahead and and basically said hey we’re going to continue to cut these cuts are going to stay within for the rest of the year. Remember, there’s not only the cuts coming from OPEC, but Saudi has the little Saudi sprinkle on top, which is that extra million barrels. So when you talk about the spare. [00:18:06][87.5]

Stuart Turley: [00:18:07] Components you say Saudi sprinkle. [00:18:08][1.4]

Michael Tanner: [00:18:09] Yes. They got a little they sprinkled some fairy dust and gave a little Saudi topper. It’s like when you’re it’s like when you go order a drink and you want a little topper on top. That’s what you get. That’s what they do. Okay? Pickled an extra million barrels on top of that. And, really, that’s what’s kind of driving sentiment right now. I think that’s why again, Bové is is fairly, it I, in my opinion, has it fairly spot on. But we will go ahead and stay updated with everything that’s going on with OPEC. We did see rig counts drop on Friday. We saw three three count rig increase specifically in the United States. We saw two land, one offshore rig get picked up. And to give you an idea, with the, there was four oil and, minus one natural gas rigs. So we can we kind of see that early sentiment of rigs being peeled off right now. You know, the only other interesting thing that I saw, was a nice little Reuters scoop that came out, Silver Bowl Resources announced on Friday. Well, hey, I’ll read you the top headline. Jim Ridge Energy seeks Silver Bowl board seats. You know, Friday, excuse me, silver, but went ahead and announced that it’s one of its top shareholders or the top shareholder, Cambridge Energy Management, which is a, oil and gas private equity company or, you know, private investment management company, well known for their, their, their control of Civitas is also being the top shareholder, in Civitas, which is that combination of extraction, Crestone Peak and Bonanza Creek up there. They go ahead and attempt to nominate three candidates to the board following multiple failed attempts in order to take the company private, which I found was very interesting. Silver bow in this whole announcement said that Cambridge last February made an all cash takeover offer to take the company private, which is interesting. All cash takeover, to be honest. And we will cover. Yeah. And let me finish this, but I found that fact very interesting. The proposal actually fell through as Cambridge was unable to secure total funding for the deal, which means it was fairly debt loaded, which is another interesting. Note to manage. In light of that silver, both shares actually popped about 2.6 percentage points. I love how Reuters says in light of that, markets were up 2%. So that’s of course why oil? Well you know civil broke up. So just it just happens. Fact I don’t think this news necessarily meant anything. What this does show is that Cambridge just taking a more active approach and a more activist stance in silver and silver rose pushing back a little bit, basically that said, you know, they’re the you laughed at this quote when we were reading it earlier, Stu. The company’s board says they will review the nominations, said in the regulatory filing, adding that some of the nominations, quote, appear to have close ties with Cameron. Well, you don’t say, you don’t say, oh, wait, yeah, you mean they’re not? They’re related to the company that’s nominated him. Who would have thought that? They also said, I mean, they went deep in this regulatory note. They also said that this was these nominations were part of a nearly two year effort by Cambridge to force a merger with Cambridge, Texas Gas, on unfavorable terms to the shareholders. Oh, interesting. Lots of tidbits in this silver. Wilson has been engaged with Cambridge several times over a possible deal, including last week, but has not received any actual proposal. This article finalizes by saying Cambridge and hedge fund Rip Sot capital, both two of the largest silver investors, have been pushing U.S. oil and gas producer revamp stored on board to address government’s concerns and boost its lagging performance. Here’s what I find super interesting. So market caps about $740 million right now. Yeah. Here’s me take two steps back. Silver bow. There are pure play Eagle Ford producer. They originally started back in 2013. or excuse me in in Q2 of 20. You know they they’ve been around for for about ten years now. But going back to Q1 2021, they were sitting at about 35,000 BOE per day, have made 12345678 different, eight different kind of mergers and acquisitions, culminating in their Chesapeake Eagle Ford acquisition, which takes them to about 85 to 94,000 boe per day. We do know that that’s about 43% like our 43% oil weighted. So cut that number in about half. And what I find interesting is so they’re sitting at about a 75, you know, $740 million market cap right now, today last February that was probably you know, they’re down about you know I we got to look at their chart here. But but it’s going to be more than what it is now. You just take their current oil production. Multiply that by $25,000 per barrel okay. That’s an average deal cost for a flowing barrel of oil. Today you got about $875 million. What’s hilarious is Silver Bow touts on its website they have 1000 undeveloped gross locations. Well, guess what the market thinks those are worth? Literally nothing because they’re literally it’s worth nothing or negative. They feel like they’re going to to develop those locations. You’re going to end up losing. I mean, it’s not exactly what the market thinks of it, but it gives you an idea of the inventory that Silver Bow has the market think Sox, which I find really interesting. And and I always love one of the few facts I like. Now you can find flowing barrels for a little bit higher, but even if you’re paying 35,000 per flowing boe or barrel of oil, holy smokes, you’re looking at, you know, there is very little distinction, right? Your undeveloped locations and what the market thinks they’re worth. I find that hilarious. What I also find interesting is I wonder if Cambridge, the reason why they won’t make a deal to take over the company right now is Dave, is they’ve realized, oh, yikes. Maybe we don’t want to get in bed with an eagle for an eagle for an operator. It’s only 43% oil. With where gas prices are right now, they would have massively overpaid last February relative to where Silver Bows acquisition, and they would have paid all cash. That’s the interesting part. They would have overpaid last year and paid all cash for, which means it was mostly debt. And when they could have, if they make the deal now, they could have theoretically not paid in stock. But they, you know, because they really can’t Cambridge can’t pay in stock per se, but they could have done something and at least gotten a bigger discount, which is absolutely hilarious. Or they could have forced a merger with one of their other public companies. I mean, you think about it, they have a roster of public companies that they could have gone ahead and merged with. I don’t quite know who the best fit was, but I find it super interesting. It also seems like, you know, in Cambridge’s defense, you know, Silver Bow does have a consolidated board in which a lot of those board members have very little, very little equity investment in the company. And that’s the part of the big reason you see activist investors in the oil and gas space. I mean, it’s it’s this is this is something that has plagued the business for a while, is you’ve got a board of directors and a management team who has zero stake in the company. They’re just collecting paychecks and you’re spending shareholder money. So somebody like Cambridge is definitely going to want kind of there. And they’re known for kind of having their their, their control. We’ve seen what’s going on with Civitas in Colorado. Very interesting that they were also trying. They’re also trying to force a merger with their Texas Gas subsidiary. Cow hemorrhages case. I don’t know the full economics behind that. I think you, you know, that’s, in in interesting. But clearly Severo doesn’t think it’s right for the shareholders. What’s hilarious is Kim Ridge is their shareholder. So I always find it interesting when if their biggest shareholder wants it. But Silver Bow doesn’t think it. Well, what shareholders are you talking about? So what the digging more. I found this very interesting though. Just dropped on Friday. [00:25:29][440.2]

Stuart Turley: [00:25:30] My, my head hurts a little bit from hearing this analysis, but I can’t wait for more of it. But we almost need a, miracle pill. Chocolate pill from, miracle Max. And, this story is not quite dead yet. [00:25:44][14.4]

Michael Tanner: [00:25:45] No, I think there’s more to come. I mean, I think Kim is going to be acting me. I mean, right now, it’s it’s their thesis. Their investment thesis over the last 5 to 10 years has been the M&A space needs consolidation. There needs to be mergers. The only way that that’s been their their overall investment thesis. And so they’re loving what’s happening right now. And you would expect them to continue to push that way as really the industry has caught up to what their thesis is now. Right. It doesn’t mean that they’re going to make great decisions on who to merge, you know, but what it does mean is that their overall thesis was somewhat correct. So it’s just a matter of how that kind of plays out in the future. You know, I think precipitous it’s gone okay. You know, we’ll see what happens and we’ll be following what’s going on with silver. But but I always find that find that hilarious. You’re right. The street basically values your locations at nothing. Good luck. [00:26:37][52.0]

Stuart Turley: [00:26:38] Retro. [00:26:38][0.0]

Michael Tanner: [00:26:40] Hey, you and a lot of other companies. So yeah, it’s not just silver, but trust me. [00:26:44][4.0]

Stuart Turley: [00:26:45] Oh yeah. [00:26:45][0.2]

Michael Tanner: [00:26:46] What else are you watching out for? This week’s do. [00:26:47][1.5]

Stuart Turley: [00:26:48] Oh, just kind of buckle up. Should be an entertaining week. [00:26:51][3.1]

Michael Tanner: [00:26:52] Should be a very entertaining week. And with that, guys, we’ll go ahead and let you get out of here. Get back to work. I appreciate everybody checking us out. World’s greatest website, energy news b.com. We’ll see you tomorrow. [00:26:52][0.0][1568.4]

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