Oil and Gas Investor Magazine - May 2024
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Oil and Gas Investor presents part two in a multi-part series exploring the Permian Basin, Permian Plays - Rebuilding the Most Prolific Paradigm in the U.S. In Decoding the Delaware, OGI analysts continue its deep dive with an exploration of the Delaware Basin. The play is catching up to its Midland Basin neighbor, both in value and consolidation.
Additionally, in this month's OGInterview, OGI Editor-in-Chief Deon Daugherty speaks with EIV Capital's Patricia Melcher and Claire Harvey who, together, lead energy private equity investing throughout the energy value chain with focuses on midstream infrastructure and non-operated assets, projects added to their portfolio as a sign of the times.
OGI Special Report: Permian Plays - Rebuilding the Most Prolific Paradigm in the U.S.
Decoding the Delaware
The basin is deeper, gassier, more geologically complex and more remote than the Midland Basin to the east. But the Delaware’s too sweet a prize to pass up for many of the nation’s top oil and gas producers.
OGInterview
Moving from the Middle
Midstream-focused EIV Capital has added non-operated assets and transition projects to its portfolio as a sign of the times.
Features
E&Ps Find Some Financial Tailwinds
Relatively stable WTI prices in the $80s/bbl provide some breathing room as companies allocate cash for operations.
Permian Gas Finds Another Way to Asia
A crop of Mexican LNG facilities in development will connect U.S. producers to high-demand markets while avoiding the Panama Canal.
In Memoriam: Herbert Hunt, Wildcatter
The industry leader was instrumental in dual-lateral development, opening the North Sea to oil and gas development and discovering Libya’s Sarir Field.
Cover Story
Decoding the Delaware: How E&Ps Are Unlocking the Future
The basin is deeper, gassier, more geologically complex and more remote than the Midland Basin to the east. But the Delaware is too sweet of a prize to pass up for many of the nation’s top oil and gas producers.
Feature
73-year Wildcatter Herbert Hunt, 95, Passes Away
Industry leader Herbert Hunt was instrumental in dual-lateral development, opening the North Sea to oil and gas development and discovering Libya’s Sarir Field.
Permian Gas Finds Another Way to Asia
A crop of Mexican LNG facilities in development will connect U.S. producers to high-demand markets while avoiding the Panama Canal.
The OGInterview: Building EIV Capital’s Midstream Investment Strategy
Midstream-focused EIV Capital has added non-operated assets and transition projects to its portfolio as a sign of the times.
A&D Watch
An Untapped Haynesville Block: Chevron Asset Attracts High Interest
Chevron’s 72,000-net-acre property in Panola County, Texas is lightly developed for the underlying Haynesville formation — and the supermajor may cut it loose.
Brett: Oil M&A Outlook is Strong, Even With Bifurcation in Valuations
Valuations across major basins are experiencing a very divergent bifurcation as value rushes back toward high-quality undeveloped properties.
Mesa III Reloads in Haynesville with Mineral, Royalty Acquisition
After Mesa II sold its Haynesville Shale portfolio to Franco-Nevada for $125 million late last year, Mesa Royalties III is jumping back into Louisiana and East Texas, as well as the Permian Basin.
Sunoco’s $7B Acquisition of NuStar Evades Further FTC Scrutiny
The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for Sunoco’s pending acquisition of NuStar Energy has expired, bringing the deal one step closer to completion.
Commentary
Darbonne: The ESG Sword: BlackRock's Life, Death by ESG
BlackRock, the $10 trillion investment manager, is getting heat for too much ESG investing, while shareholders are complaining it’s doing too little.
Markman: Want CO2 Gone Now? Well, You Don’t Always Get What You Want
A slew of scenarios shows that climate goals can be achieved with the use of fossil fuels and CCUS.
Segrist: The LNG Pause and a Big, Dumb Question
In trying to understand the White House’s decision to pause LNG export permits and wondering if it’s just a red herring, one big, dumb question must be asked.
Energy Transition
From Satellites to Regulators, Everyone is Snooping on Oil, Gas
From methane taxes to an environmental group’s satellite trained on oil and gas emissions, producers face intense scrutiny, even if the watchers aren’t necessarily interested in solving the problem.
Hirs: Aspirations Meet Reality—The Undisclosed High Cost of the Energy Transition
The nation is trying to keep up with the growth of renewable power resources, but before transmission lines can be built, the power plants must first have interconnects with the grid.
Keeping it Tight: Diversified Energy Clamps Down on Methane Emissions
Diversified Energy wants to educate on emission reduction successes while debunking junk science.
Romito: Net Zero’s Costly Consequences, and Industry’s ‘Silver Bullet’
Decarbonization is generally considered a reasonable goal when presented within the context of a trend, as opposed to a regulatory absolute.
Tangled Up in Blue: Few Developers Take FID on Hydrogen Projects
SLB, Linde and Energy Impact Partners discuss hydrogen’s future and the role natural gas will play in producing it.
Finance & Investment
Exxon, Vitol Execs: Marrying Upstream Assets with Global Trading Prowess
Global commodities trading house Vitol likes exposure to the U.S. upstream space—while supermajor producer Exxon Mobil is digging deeper into its trading business, executives said at CERAWeek by S&P Global.
It’s Complicated: E&Ps Find Some Financial Tailwinds, But It’s Not All Smooth Sailing
Relatively stable WTI prices in the $80s/bbl provide some breathing room as companies allocate cash for operations, and pragmatism is seeping into the energy transition movement.
Kissler: Mideast Tension Elevates Crude Prices—But for How Long?
Producers should be aggressive in locking in desirable crude oil prices on an abnormal market strength.
Global Energy
CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply
Stuart Young, Trinidad and Tobago’s Minister of Energy, discussed with Hart Energy at CERAWeek by S&P Global, the restructuring of Atlantic LNG, the geopolitical noise around inking deals with U.S.-sanctioned Venezuela and plans to source gas from Venezuela and Suriname.
Paisie: Crude Prices Rising Faster Than Expected
Supply cuts by OPEC+, tensions in Ukraine and Gaza drive the increases.
Midstream
Bakshani: Midstream Exhibiting M&A Fever Symptoms
East Daley Analytics identified several market factors in the midstream sector that point to further consolidation ahead.
Gas Executives: US Pipe Dreams ‘Not Dead,’ but Challenging
Regulators could pivot as “market signals that may come may be worse than regulators are looking for,” Sempra Infrastructure’s president of LNG said.
Gas Prices in a Summer of Discontent
In February, natural gas prices dropped below $2/MMBtu and stayed there. How is the market handling it, and when will the price pick back up?
Kinder Morgan Exec: Don’t Count Out Midstream in M&A Frenzy
Kinder Morgan’s Allen Fore said 2024 should be an ‘interesting’ year in M&A during a discussion at DUG GAS+ Conference and Expo.
Technology
Haynesville’s Harsh Drilling Conditions Forge Tougher Tech
The Haynesville Shale’s high temperatures and tough rock have caused drillers to evolve, advancing technology that benefits the rest of the industry, experts said.
Plus 16 Bcf/d: Power Hungry AI Chips to Amp US NatGas Draw
Top U.S. natural gas producers, including Chesapeake Energy and EQT Corp., anticipate up to 16 Bcf/d more U.S. demand for powering AI-chipped data centers in the coming half-dozen years.
Technology Report
Fear Not, the Robots Have Reached Oil and Gas
Wood’s Iris Edge and ENVision software provide a new and more accurate way to not only discover emissions leaks, but also manage them.
Trends & Analysis
Blankenship, Regens: More Demand, More M&A, More Regs
In 2024, the oil and gas industry is dealing with higher interest rates, armed conflicts in Europe and the Middle East, rising material costs, a decrease in Tier 1 acreage and new policies and laws.