Newsletter No. 83
Good afternoon,
It is Thursday, September 19, 2024 and here is another edition of The Upside where I bring you the latest updates on the oil and gas industry, including what’s happening here at King.
This Week’s Headlines
- Petrobras Puts Focus on Oil and Gas Production in New Plan
- U.S. Low on Funds to Refill Reserves
- Wyoming Oil and Gas Companies Get Temporary Break from Methane Rule
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U.S. Oil and Gas Inventories Rise
- Viper Energy to Buy Oil Rights in Permian Basin for $1.1 Billion
- Breaking Barriers in Energy with Sarah Magruder on The Jay Young Show
- The Rice Report: Global Conflicts, Cultural Shifts, and Societal Remoralization
Global Oil & Gas News
Petrobras Puts Focus on Oil and Gas Production in New Plan
Petrobras is shifting its focus to oil and gas production in its new 2025-29 plan. The company wants to increase its oil reserves without taking on more debt or making big purchases. CFO Fernando Melgarejo said the goal is to keep oil production profitable while preparing for a potential drop in reserves by 2030. Recent leadership changes, including a new CEO, Magda Chambriard, reflect this new direction. Petrobras is also exploring new oil areas in Brazil and working on natural gas projects in Colombia, while still considering future energy transitions.
U.S. Low on Funds to Refill Oil Reserves
The U.S. government only has $841 million left to buy oil for the Strategic Petroleum Reserve (SPR), enough for just 12 million barrels if purchased at $70/barrel. The SPR is currently holding 375 million barrels, far below its capacity of 700 million barrels. While the Biden Administration had hoped to refill the reserve when prices were below $79 a barrel, they’re now limited by funds. The SPR played a key role in stabilizing gas prices by releasing oil during shortages, but it’s still far from full. More refills are planned for 2025.
Wyoming Oil and Gas Companies Get Temporary Break from Methane Rule
Wyoming’s oil and gas producers have won a temporary court ruling that blocks new rules from the Bureau of Land Management. These rules would have required companies to reduce methane emissions, which could have cost them millions and put small operators at risk. The court said the rule conflicts with other laws and gave the companies a break for now. However, the fight isn’t over, as the government is still pushing to reduce methane, which is harmful to the environment and public health. Wyoming officials are celebrating the win but say more battles are ahead.
U.S. Oil and Gas Inventories Rise
U.S. crude oil supplies increased by nearly 2 million barrels last week, surprising analysts who expected a small drop. Oil prices rose slightly before the inventory data was released, with Brent crude at $73.62 and U.S. WTI at $71.16. The government’s oil reserve also saw a small boost, though it remains much lower than when President Biden took office. You can see the up-to-the-minute numbers here.
Move to Watch
Viper Energy to Buy Oil Rights in Permian Basin for $1.1 Billion
Viper Energy is buying oil and royalty rights in the Permian Basin for $1.1 billion. The deal includes $461 million in cash and shares, with a possible extra $41 million depending on future oil prices. This purchase will help increase Viper’s daily oil production from 30,000 to 33,000 barrels. The new assets add valuable land in the Permian Basin, supporting the company’s future oil growth.
HAPPENING AT KING
Breaking Barriers in Energy with Sarah Magruder on The Jay Young Show
The Jay Young Show co-host Jordan Soto and I were thrilled to sit down with Sarah Magruder, Founder and CEO of Savvy Oil & Gas Consulting, yesterday for the podcast. Sarah shared her incredible journey of building a women-led firm in the energy industry, offering insights on severance tax, royalties, and her leadership roles in the Texas Energy Council and Women’s Energy Network. If you missed our live episode with her, you can catch the replay on YouTube, Rumble, or directly on our website.
macro-economic look
The Rice Report: Global Conflicts, Cultural Shifts, and Societal Remoralization
In a recent special episode of The Rice Report, Eric Rice explores escalating global conflicts and cultural shifts affecting local communities, including Springfield, Ohio. You can watch this and more episodes of The Rice Report on YouTube and Rumble.
Also, please let us know how we are doing at King Operating Corporation. Leave a review here.
Recommended Reads
California lawmakers to debate Newsom’s oil and gas proposal
New Production to help Gulf of Mexico oil output avoid dip
Hurricane Francine made dent in Gulf Coast oil-and-gas production
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
