OPEC predicts 110MMbbl per day increase in demand by 2045

Newsletter No. 21

Good morning!

Hope everyone had a great week last week. 


Today’s Headlines

  • Happy 4th of July Weekend

  • Hitting Your Goals in 2023

  • Joining Board of Nancy Lieberman Charities

  • Deal of the Week: Earthstone closes joint acquisition

  • OPEC Forecast for Peak Demand for Oil


Happy 4th of July Weekend 

Hope everyone has had a great week and is looking forward to July 4th week.  We are fortunate to live in the United States (if you do) and have the freedom bestowed on us by the people that fought for our freedom.  Be sure and hug or text someone that fought for our freedom. 


Hitting Your Goals in 2023

Also, this week is the end of the 2nd Quarter of 2023. I hope everyone is achieving their goals. 


This reminds me of my first introduction to “setting goals.” My junior year, I moved to San Angelo and attended Angelo State University. I needed a job, and I answered an ad in the newspaper (yes, this was in 1984 when the only way to find a job was to look in the Classifieds section) for a sales position. 


It sounded too good to be true because it said you can work part-time and make $1,000 per week. I wanted to work part-time and make $1,000 per week so I went to the interview. The sales manager, Eddy Hamby, was extremely positive and asked me if I wanted to go on some appointments so I could make BIG money (especially for a little country guy like me that probably made a $1,000 for the whole summer hauling hay at 4 cents per bale). 


We listened to motivational tapes from Zig Ziglar and went out to knock on doors.  I failed miserably.  I didn’t like the idea of knocking on people’s doors but that was overcome with the idea of making $1,000 per week. I knocked on many doors that day and had them slammed in my face. I wish I had a video of my first couple of doors when someone finally answered. This was definitely Blooper reel material.


Eddy would laugh and say that knocking on doors was a “numbers game.” I will never forget listening to him saying this was a “numbers game.” Of course, I wasn’t getting paid for each door I knocked on. I would only get paid if I sold the fire alarms. But I had to get my foot in the door and show them a film about how an undetected fire could burn the house down and potentially harm their family. That part wasn’t easy. 

It took me several weeks to find a qualified family to show the film to and sell the fire alarms. It was the hardest job I had ever had. It taught me a different trade but most importantly, it got me listening to motivational tapes and setting goals. 

I became the #2 salesperson in the company, and it was hard work, but I was making good money and saving families’ lives. This opened up my mind to setting goals. 

My advice to the younger generation (ages 16-22) is to begin listening to motivational tapes and start setting some goals for yourself.   


Joining the Board of Nancy Lieberman Charities

I am fortunate this year to join the board for Nancy Lieberman Charities. Nancy is an incredible person and had an incredible basketball career, nicknamed “Lady Magic.” 

I would argue that she is the GOAT of women’s basketball, being a member of the Naismith Memorial Basketball Hall of Fame and the Women’s Basketball Hall of Fame, among others. 

She spends every waking moment making the world a better place. The Nancy Lieberman Charities is dedicated to establishing and expanding educational and sports opportunities for disadvantaged youth.

She speaks at multiple events throughout the year, conducts mentor programs, basketball camps and has built and rebuilt basketball courts across the country to help lift up the younger generation. 


Deal of the Week: Earthstone closes joint acquisition with Northern O&G

In a joint acquisition, Earthstone Energy acquired privately held Delaware Basin E&P company Novo Oil & Gas for $1.5B in cash and credit, while Northern Oil and Gas paid $500M in cash for a 33% working interest.

Analysts consider this a very good deal for Earthstone. The price tag is actually on the low end of recent transactions in the Permian.

This acquisition means 38,000 barrels of oil/day of production, 11,300 net acres, 21 drilled uncompleted wells and 200 gross drilling spots for Earthstone. The bulk of the assets are located in Texas and New Mexico.

This one was a fairly straightforward transaction compared to others recently. Cash flow from operations looks like it could be about $180 million over the next year. This amount is based on recent strip prices.

This transaction should wrap up in the third quarter of this year.


OPEC Forecast for Peak Demand for Oil

OPEC’s forecast is for the demand for oil to increase to 110 million barrels of oil per day by 2045 and for overall energy demand to increase by 23%.


But what about electric vehicles?  What about the Energy Information Administration (EIA) predicting demand increases will cool, and oil production will rise faster this year? 


I asked my podcast guest, David Blackmon, his thoughts on peak demand. David is an energy-related public policy analyst and consultant. He feels like we are several decades away before we will see peak demand. 


There are many different opinions about peak demand. We feel we are several years away from seeing this peak demand. This does not mean oil will not go in cycles, as has been proven in previous years. 

Recommended Reads

Oil and gas will continue to power the world for decades to come, big oil firms say

Chevron puts US oil and gas assets on market

Natural Gas Is Down and Will Stay Down This Summer

There are some outstanding results developing in the current program… KOPX Program 4. If you are not in it, and you are accredited, it’s a good time to have a conversation! You can schedule a Zoom here.

 All the best,