Newsletter No. 32
Good evening,
Hope everyone had a great week. There’s a lot to talk about, so let’s get to it.
Today’s Headlines
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King Team-Building in Full Effect
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News From the Field
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Hosting John Mauldin
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Ask Jay
King Team-Building in Full Effect
The team here at King Operating loves a challenge. Let’s just say, there are quite a few competitive people in the bunch.
We put that to the test with a company-wide Game Night at Game Show Battle Rooms. Unfortunately, the team I was on didn’t win. The win came right down to the last few minutes, when Michelle and her team won 14-13 after being down 8-3 early in the game.
Regardless of who won or lost, the most important thing is that everyone had a great time. This is definitely on the list of team events to do again.
News From the Field
And now to the oilfield. This week, our VP of Operations, Kelly Duncan, embarked on a field expedition due to heightened activity in the Believer’s Project wells.
Believers #1: The vertical Wolfcamp well, following a substantial frac operation by our Completions Engineer, Garrett Stacey, is experiencing significant flowback. Although we haven’t yet struck oil, we’re persistently flowing it back, hopeful for hydrocarbons. Next week, we’ll commence drilling out plugs between stages 1 and 2, continuing the flowback. This well also holds potential in the productive Spraberry formation behind the pipe for future production.
Believers #2: The Ellenberger well continues to produce oil as we await electricity installation, aiming to boost production with a pumping unit.
Believers #3: In this well, we’ve increased the number of perforations tenfold. An acid job to clean out the perforations is in the works, and we’ll soon resume production.
Believers #4: On Monday, we’ll begin fracture stimulation on the Limey Spraberry, anticipating flowback next week. This well also holds the Upper Spraberry formation behind pipe for future production.
Believers #5: Exciting news! We’re gearing up for the frac operation on the Wolfcamp B section of this 5,000-foot lateral next week. This bodes well for our partners and future drilling activity in the area.
Cotton Valley #1 and #2: We’re preparing for frac operations on both of these Harrison County, Texas wells as soon as we wrap up in Borden County, Texas. We anticipate an increase in production and more significant monthly passive income for our investors.
Stay tuned, as we have several new drilling locations slated for completion by year-end.
I was on site a couple of weeks ago and explain the plan for the #4 and #5 wells. Watch here.
Oil and Gas Industry Update
This week’s noteworthy industry story revolves around Midland-based CrownRock, a sister company of CrownQuest, led by billionaire Timothy Dunn.
Mr. Dunn’s remarkable journey, starting from a humble background and working his way up through banks and major oil companies, has culminated in CrownQuest’s success. They are currently pumping 140,000 barrels of oil per day from the Permian Basin in West Texas.
CrownRock LP is considering selling itself for a value of over $10 billion, which would make it one of the biggest deals in the U.S. oil and gas sector in the last three years. This company is in talks with investment banks to start the selling process in early 2024.
They might approach big oil companies like Exxon Mobil and Chevron to see if they’re interested in buying CrownRock.
Keep in mind that this sale is not guaranteed to happen, and the information is confidential. CrownRock hasn’t commented on it, and Exxon declined to comment as well.
The potential sale of CrownRock would be significant in the oil and gas industry, possibly the largest since ConocoPhillips bought Concho Resources in 2020 for $13.3 billion.
CrownRock’s decision to explore a sale comes after the rise in oil prices this year, driven by a tighter supply of oil and optimism about energy demand. They own a substantial amount of land in the Permian Basin.
CrownRock’s strategic focus on drilling horizontal wells from various benches, targeting Wolfcamp and Spraberry formations, aligns with our approach at King to accumulate acreage in the lucrative part of the Permian Basin for acquisition, development, and divestment.
We wish Mr. Dunn and his family the best in their potential 2024 sale.
Hosting John Mauldin
We were delighted to host John Mauldin, our Partner and Chief Economist, this week. John continues to provide invaluable insights into the markets, and has been a great friend for many years. I was thrilled to be able to present him with a signed, Nolan Ryan, Texas Rangers jersey. He has always been a big fan of the Rangers and Nolan Ryan. We actually met, years ago, at his office in the outfield at Ranger Stadium.
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 SVP’s here and someone will reach out.
Recommended Reads
Why oil is back to $90 a barrel
House Dems cross party lines, demand Biden admin expand oil drilling
Will Hurricane Lee Affect USA Oil and Gas?
All the best,
Jay
