Newsletter No. 39
Good morning,
Welcome to the latest edition of The Upside. We’re excited to bring you the most up-to-date information and engaging content every week. Stay informed as you delve into the news and highlights of the oil and gas industry and King Operating Corporation.
This Week’s Headlines
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Texas on Top
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M&A Market Energized by Recent Deals in the Permian
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Fed Announcement Results in Higher Oil Prices
Texas on Top
The Texas Rangers have finally achieved what we’ve been dreaming of for decades: a World Series championship. Our beloved team overcame adversity, injuries, and setbacks throughout the season and playoffs, but they never lost sight of their goal, winning in five games over the Arizona Diamondbacks.
The fact that the Rangers finished the postseason with an unprecedented 11-0 record on the road only adds to the sense of accomplishment. It’s a testament to the unwavering support of Rangers fans, both in Dallas and beyond, who have stuck by the team through thick and thin.
We’ve waited for this moment for so long, and it’s finally here. This championship is for every Rangers fan who has cheered, suffered, and believed throughout the years. It’s a special, unforgettable moment that we will never forget. Go Rangers!
M&A Market Energized by Recent Deals in the Permian
Two major deals in the US energy sector, Chevron’s $53 billion takeover of Hess and ExxonMobil’s $60 billion acquisition of Pioneer, have injected life into the M&A market. These deals have driven a 52% increase in M&A activity in the oil and gas sector, while other industries saw a 21% drop.
Goldman Sachs and Morgan Stanley have been the biggest beneficiaries of this surge, working on energy deals worth approximately $165 billion each. Industry experts expect further consolidation as big oil producers seek to enhance their competitiveness.
The shale industry’s consolidation is driven by dwindling prime drilling locations, a shift from organic growth to acquisitions, and rising oil prices. Regulatory intervention is unlikely, and more deals are expected, with big players in the Permian Basin and smaller specialists being potential targets. Other banks, such as Citibank and JPMorgan, are also actively involved in energy deals.
I touch on these recent deals on my blog. You can read more about my take on that and much more in the oil and gas industry at kingoperating.com/blog.
Fed Announcement Results in Higher Oil Prices
Oil prices rebounded by 1% on Thursday, ending a three-day decline, following the U.S. Federal Reserve’s decision to keep benchmark interest rates unchanged. Brent crude futures rose by $1.03 (1.22%) to $85.66 per barrel, while U.S. West Texas Intermediate crude futures gained $1.02 (1.27%) to reach $81.46 per barrel.
Geopolitical tensions in the Middle East continue to pose a risk to oil supply, but their impact remains limited so far. Supply disruption concerns center on Iran and Venezuela, with the U.S. threatening further sanctions on Iran if it becomes more involved in the Israel-Hamas conflict. In Venezuela, recent developments may lead the U.S. to reconsider sanctions relief granted in exchange for cooperation in holding elections.
If you’d like to talk to someone about King and are an accredited investor, you can fill out your information here or schedule a Zoom conversation with one of our SVPs here and someone will reach out.
If you would like to listen to my book, “The Upside of Oil and Gas Investing,” go here. Or, if you’d like for us to send you a signed copy of my book, send your name and address to info@kingoperating.com.
In the News
Interview with Talk Radio WIBC Indianapolis about the state of energy production and its influence on gas prices.
Recommended Reads
US targets Myanmar’s state oil and gas enterprise with form of sanctions
China, top Russian energy firms discuss developing oil and gas fields -CNPC
GlobalData Lists Top Oil and Gas M&A Financial Advisers
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
