Newsletter No. 34
Good morning,
Hope everyone had a great week. I’m excited to share with you the latest updates, insights, and news from King Operating Corporation and the broader oil and gas industry.
This Week’s Headlines
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Unbelievable Progress at Believer’s Project
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Rising Oil Prices and Energy Policy
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Oil and Gas Pricing Sensitivities Unveiled
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Pursuing Scale: The Path to Success
Unbelievable Progress at Believer’s Project
Our Borden County assets are making remarkable progress, with plans to have all five wells operational by Friday, October 6, 2023. The dedicated King Operating Team is diligently working on various aspects, including gas production flowlines, frac water setup, and oil storage tanks. We’ll keep you updated on the progress next week. Our production engineer Gabe Tatman was in Borden County this week and got some great footage of the work that’s happening with the Believer’s Project. You can watch his video on the ESP here.
Rising Oil Prices and Energy Policy
Oil industry veteran Harold Hamm, with over five decades of experience, likened the energy policy changes to a roller coaster ride, highlighting the need for a lasting energy policy that remains consistent across administrations. Hamm explained, “It’s so important that we have an energy policy that’s lasting and somebody can’t tinker with it from one administration to the next.”
Hamm also emphasized the consequences of recent federal lease withdrawals, noting that it took a full year to adjust drilling plans. He vividly captured the predicament faced by companies when permits are elusive, forcing them to resort to less desirable contingency plans.
During the American Energy Security Summit, Hamm humorously underlined the industry’s preference for stability, stating, “All of us in this room, we don’t need $100 oil; high $80s, that’s fine.” His remarks drew laughter from attendees, including Devon Energy Corp. Chief Executive Officer Rick Muncrief and former Attorney General Bill Barr.
Oil and Gas Pricing Sensitivities Unveiled
I recently recorded a video discussing the critical factors influencing oil and gas pricing, which carry significant implications for the industry. Key metrics include production volume and oil prices.
The profitability of these operations not only depends on having quality production, but on the oil prices of the day. This underlines the importance of higher oil prices for better returns. Watch the video here to learn more and see what the higher oil prices could mean for returns.
Pursuing Scale: The Path to Success
Public companies are inclined to invest in larger scale operations. If track records hold true, these companies generally want to see that 50 to 100 of an oil and gas companies’ drilling projects can work before they decide to invest.
A prime example is Double Eagle III Midco 2 LLC, which amassed 100,000 acres, produced 100,000 barrels of oil per day, and sold for an impressive $6.4 billion.
Our motivation remains to assemble a top-notch team, assets, and capital to embark on a similar path to success. We are deeply passionate about this industry and remain committed to delivering results around the clock.
We extend our heartfelt appreciation to our valued partners, who continue to stand by us as we work to meet our shared goals. Thank you for your continued support. We are excited about the future of oil and gas.
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
Oil headed for $150 without U.S. support for more drilling, shale executives say
Oil Is Near $100. Shale Isn’t Coming to the Rescue
Gas Production From Giant Groningen Field To Halt Completely
All the best,
Jay
