Newsletter No. 41
Good morning,
I’m excited to be sending you the latest edition of The Upside, we’ll call it our Thanksgiving holiday edition. We are so thankful for all of you and want to help you stay informed as you dive into the highlights of the oil and gas industry and King Operating Corporation.
This Week’s Headlines
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Giving Thanks
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U.S. Sees Decline in Active Drilling
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Karoon Energy Expands into US with $720 Million Investment
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On a Personal Note …
Giving Thanks
We recently gathered at the office for a feast with our King family, sharing gratitude and good times. All of us at King wanted to take a moment to say how thankful we are for each one of you. Your loyalty as readers means the world to us.
As we gear up for the Thanksgiving holiday, I wanted to give you a heads-up: there will not be a newsletter next week. I hope you all enjoy meaningful time with your family. Take a moment to savor these precious moments, and The Upside will be back on the first weekend of December.
In the meantime, for this week, there are a few items to bring to you.
U.S. Sees Decline in Active Drilling
In the latest data released by Baker Hughes, the total number of active drilling rigs in the United States decreased by 2 this week, marking a total loss of 163 rigs so far in 2023. The current count of 616 is 459 rigs less than the beginning of 2019, reflecting the ongoing impact of the pandemic.
The number of active oil rigs fell by 2 to 494, hitting the lowest level since January 2022, while the count of gas rigs remained unchanged at 118, reflecting a loss of 38 gas rigs since the start of the year. The Permian Basin and Eagle Ford rig counts held steady, with both regions experiencing year-over-year declines.
Primary Vision’s Frac Spread Count, an estimate of crews completing unfinished work, decreased to 270, down from 275 the previous week but still 12 more than the count at the beginning of the year.
Even with the rig decreases, U.S. demand for oil doesn’t seem to be decreasing. According to the EIA, projections indicate an expected increase in U.S. total petroleum consumption, reaching 20.5 million bpd in 2023, with a further anticipated rise to 20.7 million bpd in 2024. I touch on this very topic, talking about our addiction to fossil fuels and what could be done in a recent blog. You can read it here.
Karoon Energy Expands into US with $720 Million Investment
Australian company, Karoon Energy, is making its U.S. debut with a $720 million investment, aiming to counter production decline at its Bauna asset in Brazil. The Australian company will acquire a 30% interest in LLOG’s Who Dat and Dome Patrol fields in the Gulf of Mexico, along with infrastructure and stakes in the Abilene field.
CEO Julian Fowles sees significant development and exploration opportunities, paralleling the successful Who Dat field. The move is expected to boost Karoon’s 2024 production by 4-4.5 million barrels of oil equivalent (BoE), contributing to a total proforma output of 12-14.5 million BoE.
On a Personal Note …
Michelle and I are bursting with pride and joy as we reflect on the incredible journey we’ve been on with our daughter, Mikala. These past few weeks have been nothing short of a whirlwind of emotions and excitement.
Senior Night at PCA was a bittersweet celebration of Mikala’s dedication and love for volleyball. The memories she has built with her teammates is something special.
Then signing day at PCA, where Mikala officially signed with TCU. To see her put pen to paper and commit to playing volleyball at the collegiate level was definitely a highlight. Go Frogs!
To finish these busy weeks off, Mikala was able to deliver the final kill to clinch the victory and PCA’s second straight Texas State Championship. The pride we felt in that moment is indescribable, knowing that her hard work and determination had brought her here.
Thank you for sharing in our joy and celebration. Your support means the world to us, and we look forward to keeping you updated on Mikala’s exciting journey ahead.
As always, 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.
Or, if you would like to listen to my book, “The Upside of Oil and Gas Investing,” go here. We would also be happy to send you a signed copy of my book. To receive that, send your name and address to info@kingoperating.com.
In the News
Interview with WWJ News Radio in Detroit about the potential uptick in gas prices as holiday season approaches.
Recommended Reads
Saudi Arabia’s Oil Exports Rose From a 28-Month Low in September
Ohio OKs accepting bids for fracking under state park, wildlife areas
Chinese Giant Sinopec Starts Production From Asia’s Deepest Oil and Gas Well
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
