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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 to the Wednesday, November 6th, the 2024 edition of the Daily Energy News. Beat Stand Up. Here are today’s top headlines. First up, EU. Jorgenson wants cheaper energy end to Russian fuel imports. Interesting. Next up, Russia’s oil revenue plunged 29% in October as crude oil prices fall. And finally in the news segment, Bulgaria starts constructing an irreversible nuclear project within U.S. nuclear reactors. Spicy Stu then tossed and I will quickly go cover what happened in the oil and gas markets and mainly talk about oil prices relative to what’s happened with earnings. The really the one earnings I want to dive into is northern oil and gas and then the elephant in the room. Yes, we will be talking about the US election. As you guys listen to this on Wednesday. We’re recording this about 5:00 on Tuesday night. So polls are closing. What we’re going to do is then we’re going to come back around 11 and 11 p.m. as things are wrapping up, throw it on the back end so that you can get our kind of analysis of what we see going on and mainly how it pertains to the energy business will bring on most likely good friend of the show, Rey Trevino. We may bring on some other people, but stay tuned. We will have an election roundup at the end. Stu But man well, it’s going to be a long night for us, so let’s kick it off. Where do you want to begin? [00:01:30][80.1]

Stuart Turley: [00:01:30] Hey, let’s get started over here to e used Jorgenson wants cheaper energy in Russian fuel imports. Dan Jorgensen is the designate for the next EU energy commissioner. Michael, listen to this. If I’m approved as a commissioner, I will make it a top priority to bring down the prices for energy for our industry. That sounds like karma for the former Danish climate and energy minister told the Assembly in Brussels. He’s not going to make it. [00:02:02][32.2]

Michael Tanner: [00:02:03] No, there’s no way. And I think, you know, from the hard part about EU is it’s a little damned if you do, damned if you don’t from the standpoint of they need to get off Russian gas in order to shore up their energy security, but in doing so is going to massively raise energy prices. So the real question is what do you do if you are EU energy commissioner, what would you do? [00:02:22][19.1]

Stuart Turley: [00:02:22] I would be rooting for the end of the war. I would be buying all the cheap Russian gas that I can so that I could get my economies going again. And then I plan for new technologies of low energy, then low cost to replace that Russian gas and do it in an orderly fashion. [00:02:43][20.7]

Michael Tanner: [00:02:44] No, absolutely. All right. [00:02:45][1.3]

Stuart Turley: [00:02:45] What’s next? Let’s go to our buddies over there, Russia. Russia’s oil revenues plunged 29% in October as crude oil prices fell. Listen to these numbers. Bloomberg’s calculations, the Russian budget received last month, 10.8 billion or 1.5 trillion rubles from oil, which is down from 29%. Total budget proceeds from oil and natural gas combined also declined about 25% to $12.4 billion. That’s a significant chunk to Russia. [00:03:25][39.7]

Michael Tanner: [00:03:25] Here’s significant chunk. Even the fact that it plunged. And again, it goes to show you how much oil prices affect underlying profitability of these upstream companies and how much that then flows backwards into the economy. Again, you know, it’s not breaking any new ground here. Oil prices affect oil revenues when it comes to these companies. But something like Russia, specifically Saudi Arabia and OPEC, I mean, they’re all for this. It’s why you’ve seen, in my opinion, Saudis step back and say we don’t really want lower oil prices because this is what’s going to happen. [00:03:54][28.6]

Stuart Turley: [00:03:54] Exactly. What they’re now saying is that this is a indicator and why I picked this story was because they need higher prices just to meet their budget numbers. So you’re going to see OPEC plus continue to lower production. [00:04:09][15.0]

Michael Tanner: [00:04:10] Yep, absolutely. All right. Let’s move to Bulgaria. [00:04:12][1.7]

Stuart Turley: [00:04:12] You got to love a good Bulgaria. I reached out to Irene Slava on this one. Bulgaria starts constructing an irreversible nuclear project with U.S. reactors. This one is really a long term problem for Bulgaria. I think this is fantastic and we should export our nuclear technology. But this is from South Korea and Westinghouse out of the US. I did not know that the reactors are expected to cost more than $14 Billion, and the state has already invested $1 billion out of the new cold and new capacity project company. That’s unbelievable. [00:04:53][40.6]

Michael Tanner: [00:04:54] It is pretty unbelievable. What’s creepy is the title Irreversible Nuclear Project. It just kind of creeps me out. It’ll be interesting to see. I mean, I’m all for nuclear here. We know we have got a good friend of the show. Ridge. Yes. Dug in. Sand Ridge. He’s on. The oil and gas for nuclear. We love that. [00:05:11][17.0]

Stuart Turley: [00:05:11] Yes, he is the chair over there of the oil and gas executives in support of nuclear. It’s a good organization. [00:05:18][7.4]

Michael Tanner: [00:05:19] Yeah, it’s it’s a it’s a great one. Just I asked you a question. I was reading how over the Bulgarian nuclear project must be notified of the European Commission, which must approve the construction of the two reactors. And I posed it to you. I said, Do you think the EU will? [00:05:33][14.1]

Stuart Turley: [00:05:34] I think they will. And I really think that they will do. I think they’ll approve it. It won’t be any problem because I think they want us nuclear as opposed to a Russian nuclear. Well. [00:05:44][10.0]

Michael Tanner: [00:05:45] I see. Well, let’s quickly jump into some oil and gas finance. And before we do that, guys, as always, we’ve got to pay the bills again, as always, the news and quote unquote analysis that you hear is brought to you by the world’s greatest website www.energynewsbeat.com the best place for all your energy and oil and gas news to in 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 subscribe to our Substack There’s a link in the description below. There’s also a link with the timestamps links to the articles that we cover. But again, check out our substack. We really appreciate everybody subscribing there. Also, guys, again, I know it’s the eve of the election. You’re thinking about other things, but if you are trying to save money on taxes this year, if you are paying taxes in 2024, that’s so 2023, there are ways to mitigate your tax burden. Investing in oil and gas is one of them. Check us out. Invest in oil dot energy news beat.com. If you want to learn more information about how to do that, not only are you going to be able to mitigate your tax burden, but you are also going to get us, you know, get some monthly dividends and also diversify your portfolio. Again, taxes are 2023, move into 2024. We can and have options for you. Invest in oil dot energy news beat.com. [00:06:55][70.4]

Michael Tanner: [00:06:56] You know we look at the markets do you mean everything was was was fairly you know you know on a on an open basis the stock market was actually down today finished lower actually finished about 15 points lower but it was up overall from from the opening. It was up about 1.3 percentage points on the day. Nasdaq was actually up about 1.3 percentage points on a day over day basis. A two year yields up a 10th of a percentage point. Ten year yields up ten percentage points. Dollar index tumbles actually about a half a percentage point, a Bitcoin up 2.75 percentage points, just right at that 70,000 mark. Crude oil was actually up about one and a half percentage points. Today, sitting at about $72 is actually up over 7250 earlier in the afternoon. Brant up a little bit, slightly less than that, up about half a percentage point 75, 77. Natural gas, you know, pretty explosive today and then kind of fell off the table. We were up over $2.80, fell all the way down to $2.68. Main reason for the movements on both of those commodities is, is one, tensions of what’s going on. Obviously, there’s an election. We’re in the process of, you know, it’s 5 p.m. right now. Polls are closing as we spoke the EIA we are awaiting more API and EIA crude oil inventory. Number eight, the API crude oil inventories numbers must have just dropped. So we’ll go ahead and pull that up right now. But the other thing that is interesting. Yeah, so we actually saw the API right here, I guess got a pulled up 3.13 million barrel build of the API. Crude oil inventories is actually probably what caused a little bit of a drop off in the late afternoon. Again, we are up at 70 to 50. But again, the hurricane season that is going on right now is mainly the shut ins that we are expecting could come in there. And then we are also looking at just some other kind of, again, overall craziness which goes with what is going on in the election right now. [00:08:48][112.0]

Michael Tanner: [00:08:49] The other thing I wanted to point out was was northern oil and gas. They went out to drop their earnings today. Pretty, pretty good numbers If if you’re northern, their stock popped about 1.2 percentage points on the news. Problem is that’s about how much oil was up. So how much you can say their earnings contributed to that. Who knows? Kind of top line headlines, 121,000 BOE per day. That’s about 58% oil or broke. If you break that down, that’s about 70,913 barrels of oil per day. They only had about 9.5 wells come online during the quarter, which is, you know, they’re claiming is low cash flow was up at about $385 million at about $178.1 million of free cash flow, which is actually up 32 percentage points. You know, basically they’re there. They’re very they did seed and spent for about 52.2 net wells, which is actually up 11.1 net wells since the quarter 22. They repurchased about 400, that a little less than 400,000 shares. And the big thing that they they they they talk about is they finally have closed their Asam, their joint venture with some energy of from purchasing of Xcel resources of about $519 million. You know what I what I what I find interesting you know when you dig through the numbers here, I’m always interested in kind of figuring out, okay, you know, how much you got to spend to maintain EBITDA again, growing. Ebola is great. The question is how much are you spending? And so when you when you when you look at what they have here from an Ebola reconciliation standpoint or an in a year by year standpoint, you’re talking about about, you know, their EBITDA is about 300 and you know, you’re talking about $340 million, let’s give or take in in in, you know, overall in in in kind of the year, maybe a little bit more. Let’s give it about $400 million. But in terms of spending, in terms of spending, man, you got to stay there. They’re spending about, gosh, $500 million a year and Ebit is fairly flat. I mean, they’ve grown EBITDA from a 325 million a year or per quarter. So you’re talking little over you know, to me, you know, you’re looking at about 2 billion of EBITDA over on a year by year basis. But that’s basically about what they’re spending to get that. So again, it comes back to guys, the idea of and there’s a lot of money that’s got to get spent in order to to to maintain your EBITDA margins. The nice part is, in my opinion, northern oil and gas does the best job of doing that from the standpoint of, you know, a lot of what they do is not out there very slim on the side. They don’t necessarily need a huge amount of spend. I mean, you’re only spending about $7.3 million on G&A per quarter. That’s pretty crazy relative to what their Ebit to spend is. But it just goes to show you how much capital is required in this business. It’s one of the reasons why when capital is hard to come by, these people get dogged. But without further ado, we’re going to come back with you in a bit with our election recap. Who k nows what’s going to happen, folks? It’ll be spicy. Buckle up. [00:11:48][178.5]

Michael Tanner: [00:11:48] Well, Stu, we’re back. It’s about five hours ish later since we recorded one. And by all accounts, I think Trump’s going to win. [00:11:56][8.2]

Stuart Turley: [00:11:57] I think he is. I don’t want to jinx it because I think it’s still too before 2:00 in the morning when all the voters, you know, the votes show up like they did before that was allegedly showed up. But I think that what we did see is that they did get it too big to rig. And and you’re watching the CNN. They’re not have and you’re watching see the other folks. I think the Trump team did an outstanding job getting it out there and making it too big to rig and getting people to vote early. Ted Cruz won. Yeah, Ted, this is going to be I bet that we will also see right now President Trump is up in the popular vote as well. This is going to be a mandate. We’re going to take the House right now at the time that we’re recording this. Yet it looks like they’re going to take the Senate and possibly even gaining a seat or two in the House. This is huge because it now means that if he gets the popular vote, how can he get the popular vote and have all of those things that they have been saying about him with all of the gains of the minority men and all of the Hispanic men and women gaining and him gaining all those things, how can he be such a racist if all these people vote for him? This is a huge win. And Michael, in the end, energy space, that means that we’re going to get some help with the regulatory issues. We’re going to get some help. The the Chevron difference is actually going to make a difference, that we’re going to be able to be a good partner. I’ve been watching and communicating with some of my friends around the world and they are out of their mind. There are a go trump parties all over the world. This man is there wanting peace around the world. [00:13:55][118.0]

Michael Tanner: [00:13:55] Yeah, I mean, it’s I would not have expected. I think what you said is quite true. He’s going to win the popular vote. I mean, I’m looking at The New York Times. They have the little election meter. It’s it’s 939 here Central Time. And it’s he’s up he’s at 86% chance to win. I mean, that’s pretty crazy. This early on, I would have told you it would have been way more improbably. I was I figured it’d be toss up until, like you said, 2 a.m. when all the votes finally arrive. So it’s pretty crazy that he’s already gotten to this point. And like I said, it’s 940. As we record this currently, The New York Times Live presidential forecast. Trump will estimate to have 297 Electoral College votes. Kamala Harris with 241. He’s a point eight percentage points on the popular vote. I mean, you’re right there. That’s a mandate right there. I mean, for so long it’s been there’s no way there’s no way for the Republicans. I mean, no one’s even talked about the popular vote. You know, historically, we’ve you know, Republicans have always lost the popular vote going back to 2016 or historically just in the last really two elections from the standpoint of, you know, we always talk about New York and Florida going to tip the scales. They have a holy smokes. It’s pretty great. [00:15:05][69.7]

Stuart Turley: [00:15:05] Here’s the thing. If we don’t get our elections. Under control. And if any of the funny business that’s been going on in elections, people need to go to jail for ten years. I’m serious. This needs to stop. There’s boo shenanigans around elections and cheating has to stop. [00:15:24][18.7]

Michael Tanner: [00:15:24] Nope, it absolutely will. Two things. Yeah. As you said on Ted Cruz, I think it was a lot. He kind of blew it out relative to what I think the all sides pointed to. So that’s great to hear. But let let’s turn now as we are the Energy News be podcast and then finish up with the impacts on energy. You go first. [00:15:41][16.5]

Stuart Turley: [00:15:41] Well, I’ll tell you what the with this impact and with what’s needed around the world right now, and that is LNG exports. We are looking at more investments from foreign countries into the US on our energy is fantastic for us jobs in our economy. This is huge. People are going to want to buy our natural gas. [00:16:06][24.8]

Michael Tanner: [00:16:07] So I’ll answer this question, but I want to pose it to you first. The question I keep getting asked is if Trump wins with his drill, baby, drill strategy, where do prices go? You’re up. [00:16:19][12.0]

Stuart Turley: [00:16:19] First. I think we’re going to hit the 85 to 90 still. And the reason I say that I am a bull because we talked about that a little earlier in the show, Russia needs it. Russia took a 26% hit in this past quarter on their as a lower numbers. Take a look at Saudi Arabia. Saudi Arabia cannot pay the sovereign debt or the sovereign fund and anything less than $80. They control a significant chunk. The US controls a significant chunk and at $80 oil, we can lower our interest rates. If we stop putting renewable energy out there, You’re going to see the death of the wind farms and the whales go near. And we if we stop doing that, you’re going to see a lower energy price. It’s all about getting lower energy prices. And if we go to natural gas everywhere we can and get that cost per kilowatt per hour down, yeah, Trump will do it. He said he’s going to lower. Trump said, I will lower your electric bills at 50% in my first year. The only way President Trump can lower your your energy bills by 50% is natural gas takes too many years for nuclear. I see a big boom for natural gas power plant. [00:17:37][78.4]

Michael Tanner: [00:17:37] Yeah, I think there is. You know just as a quick you know, we’re now it’s now 943 and it’s up to it’s now 85% chance of victory. So it’s it’s it was up at 88. It’s going down. I think it’s because they’re calling Wisconsin for Kamala Harris. I think that’s what they’re they’re doing right now. No, no, no, no, no. It’s 66% project. What did they what are they calling for? Harris Something’s flipping around here. I got CNBC up in the background because all I want to know is what happens to big tech. Okay, So to answer the question, and then we’ll let everybody get out of here, you’re going to hear enough politics for a whole week, so we don’t want to bother you. But as is goes with energy, I tend to take the opposite approach from you of you would you would expect prices to fall solely based on the theory that a Republican administration going back to really Bill Clinton prices have risen during Democratic administrations and fallen during Republican administrations. So if you just lay that theory out over the arc of his presidency, you will see prices come down. The question is, where do they bottom out? Is it 50? Is it 60? Is it are we at the bottom now? It’s 70 is still right. Well, we actually see a curve. I think you bring up a very key point. And I know our team Trevino, are a good friend of the show. He was supposed to join us, but he’s in his pajamas right now. He texted us, so we didn’t want to we we didn’t want to scare anybody. Everybody with that. But he’s go get it. He’s go. It comes down to Saudi Arabia. It really does. What is Saudi going to do? Are they going to turn the taps on or are they going to keep tightening it up? [00:19:05][87.9]

Stuart Turley: [00:19:06] Well, OPEC plus just said that they are going to Russia, said they’re going to stop the. [00:19:11][5.5]

Michael Tanner: [00:19:12] Well, that’s what they said. The question is, you can say one that we hear too often. People say one thing and do the other. So, yes, that’s the that’s all the report. But things can change. Maybe they were saying that based off the right based off that maybe they thought Carmelo was going. I don’t know. All I would say is if you’re an oil, if you if you’re in oil and gas, I would brace for a slightly lower oil price. Now, I think the interesting thing to think about is a lot of why companies aren’t as profitable as you’d think they were at 70, $80. Oil is inflation, so they bring down inflation overall. That means the cost to procure services is a lot better and a lot cheap, meaning that there could actually be more of a margin to be made at a slightly lower oil price if in fact the overall inflation comes down. I think you’re absolutely right on the renewables standpoint, is that obviously I’m I’m going to go out on a limb and this is a huge limb that a lot of the green. New scam is going to get rolled back, meaning hopefully that contributes to a lower cost of energy regardless of where oil prices go. I do think natural gas is going to naturally rise, if only because we’re going to start exporting more. And the more natural gas we export, the higher that price will go. Part of the reason why the prices domestically have been so constrained is we don’t have anywhere to put it and we can’t quite export it. So obviously, things are going. You know, it’s now 947 is up to an 87% chance of victory. And he’s plus one percentage point, according to The New York Times on the popular vote. It’s about time we switch over to MSNBC. I saw this great tweet by one of my good followers on Twitter by RV. He says Fox until it’s called then MSNBC to see a meltdown. [00:20:51][99.5]

Stuart Turley: [00:20:52] I’ve been watching X, I’ve got Decision USA over here with their war room. [00:20:57][5.2]

Michael Tanner: [00:20:58] Look. [00:20:58][0.0]

Stuart Turley: [00:20:58] I got my war room working, you know, getting to see General Flynn and Larry, of. [00:21:04][5.7]

Michael Tanner: [00:21:04] Course, you got General Flynn. [00:21:05][1.0]

Stuart Turley: [00:21:06] A he a he’s my people. [00:21:07][1.7]

Michael Tanner: [00:21:08] Well, all right, that’s it, folks. We’ll let you get out of here. You’re going to hear so much political talk. We just wanted to make sure we tie in in energy. So, Stu, still saying 85 to $90 oil and gas. I’m probably saying 60 to 70 is kind of that threshold. Maybe you might see high 50s, but I don’t necessarily see it getting it lower down there. I think we both see natural gas prices increasing either way. I think that’s good for oil. Either way, Trump is going to be good for the oil business if you work in there, Stu’s already call. A shocker. Stu, you voted for Trump. Who would have thought so? [00:21:38][30.2]

Stuart Turley: [00:21:39] Wow. I like President Trump. [00:21:40][1.1]

Michael Tanner: [00:21:40] Absolutely. So. Well, I guys will. With that, we will let you get out of here, get back to work. And maybe you don’t have to hear about the election for the next two weeks, which we’re for, at least for the next month, which will be great. I do. [00:21:51][10.5]

Stuart Turley: [00:21:51] Want to see another. [00:21:52][0.4]

Michael Tanner: [00:21:52] Election down and no more so Stu can sleep at night. There was no coup. There was no you know, we still can finally get a good night’s sleep, which is which is good. So we appreciate it. Guys. Thanks for checking this out. World’s Greatest Podcast for Stuart Turley. I’m Michael Tanner. We’ll see you tomorrow, folks. [00:21:52][0.0][1283.5]

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