Newsletter No. 55
Hello,
It is Thursday, February 29, 2024. There is a lot of oil and gas news to talk about. So, I am going to jump right into some of the highlights.
This Week’s Headlines
- Texas Wildfires Threaten Oil Operations
- U.S. Natural Gas Prices Bounce Back 3% Amid Stronger European Demand and Warm Weather
- Exxon Challenges Chevron’s $53 Billion Deal Over Guyana Oil Reserves
- Analysts Debunk Notion of Imminent Peak Oil Demand
- The Next Jay Young Show: Navigating Oil & Gas Contracts with 40-Year Industry Expert Steve Reese
- Moelis Expands Energy Team with Notable Hires for Oil and Gas M&A
Global Oil & Gas News
Texas Wildfires Threaten Oil Operations
The Smokehouse Creek Fire, one of Texas’ largest wildfires, puts oil refineries and ranches at risk, consuming over 500,000 acres. Governor Abbott declared a disaster for 60 counties, leading to evacuations, including the Pantex nuclear weapons plant. Phillips 66’s Borger refinery, with a daily crude throughput of 75,000 barrels, faces potential impact. The fire, fueled by strong winds and dry conditions, has caused power outages for thousands. The cause remains unknown, posing a significant threat to both oil operations and local communities.
After hitting a low in 1997, on February 20 U.S. natural gas prices rose over 3% due to increased European demand and warmer temperatures boosting cooling needs. The recovery followed a 30% drop this year, driven by factors like high production and low consumption. While European demand might ease, the global liquefied natural gas (LNG) market sees potential growth. Challenges include warm weather and rising U.S. stockpiles. Chesapeake Energy’s recent announcement of a 30% reduction in gas output also contributed to the mid-week rebound.
Exxon Challenges Chevron’s $53 Billion Deal Over Guyana Oil Reserves
Exxon and Chevron are in a battle over Hess’s stake in Guyana’s lucrative oil fields, putting Chevron’s $53 billion acquisition in jeopardy. The dispute centers around Exxon’s claim to pre-emption rights due to its significant role in developing Guyana’s oil. If unresolved, the disagreement may impact the merger, leaving Hess to operate independently and highlighting the strategic importance of Guyana’s growing oil industry.
Analysts Debunk Notion of Imminent Peak Oil Demand
Experts, including Ellen R. Wald, the President of Transversal Consulting, and Alex Stevens, the Manager of Policy and Communications at the Institute for Energy Research, reject the idea of imminent peak oil demand. They highlight the ongoing growth in global energy demand, challenges in renewable energy feasibility, and the persistent development in oil-consuming nations. Despite hurdles in electric vehicle adoption and uncertainties in assessing the impact of plastic restrictions, analysts foresee a prolonged timeline for any substantial decline in oil demand, estimating a peak around 2030 or beyond.
The Jay Young Show
The Next Jay Young Show: Navigating Oil & Gas Contracts with 40-Year Industry Expert Steve Reese
I had a great talk with Steve Reese, an industry veteran with over 40 years of experience, on the latest episode of The Jay Young Show. Steve, the founder of Reese Energy Consulting, shared insights into the energy industry, discussing topics such as oil and gas contracts and auditing, among others.
We explored various topics, including strategies for producers, challenges in the industry, and Steve’s personal journey overcoming health issues. Steve’s positive outlook and commitment to sharing knowledge left me feeling optimistic about collaborating for a better future.
Check it out for an inspiring and diverse discussion. You can watch the episode below. You can also subscribe to The Jay Young Show on Apple or Spotify, and you can watch many of the episodes on YouTube.
MOVE to Watch
Moelis Expands Energy Team with Notable Hires for Oil and Gas M&A
Investment bank Moelis ramps up its energy business by appointing Stephen Trauber, a seasoned dealmaker and former Citigroup executive, as the global head of energy and clean technology. The move aligns with Moelis’ strategy to capitalize on the surging consolidation trend in the U.S. oil and gas industry, marked by record acquisition activity. The expansion also includes the recruitment of Muhammad Laghari and Alexander Burpee from Guggenheim Securities. The trio’s extensive experience positions Moelis to navigate and advise on energy transactions in the middle of the ongoing merger boom, complementing the firm’s existing expertise in the Middle East and Europe.
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Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don’t hesitate to reach out.
All the best,
Jay
