Welcome to Part One of The Upside Newsletter

Hello everyone!


Welcome to the new edition of my weekly newsletter.


So, what can you expect?


First, you will get a front-row seat to interesting things that only happen in the oil field, some of which will come from the written word here.


Much more of that will come from the podcast reboot of the Jay Young Show focused on all things ENERGY. You will hear stories from fascinating people, inside and outside of the ENERGY industry…stories of triumph and challenge that will inspire and challenge routine thinking.


Second, gain insights to global economic news and trends through an OG (Oil and Gas) lens so you can be more informed about investing in ENERGY and specifically OG.


It’s going to be a great ride! If you like what you heard so far, let’s go!


Authored by Jay (James) R. Young


So what’s unique in domestic OG production right now?


Rig count is actually declining and big companies are still prioritizing profits. Oil rig activity, despite rising demand, has not reached pre-pandemic levels.  Public companies especially, are not increasing rig count because Wall Street isn’t rewarding them with their stock price.  Since oil companies are not seeing OG production-based increase in stock price, they continue to buy back stock and send dividends to their investors and pay down their debt. 


While the current administration has routinely implemented anti-OG policy since inauguration, geo-political issues and sustained high prices at the pump have forced them to become more “flexible” in recent months.


Need proof?


They just green-lit the Willow Project, a high profile OG production project in Alaska created by ConocoPhillips. For the record, the BLM already approved the permitting in 2018. But a lawsuit was filed and the judge intervened. Anyway, it’s back on with no expectation for disruption from Biden this time.


Also, it’s noteworthy to consider that the BLM approved 4% more permits under Biden’s first 2 years than Trump’s first 2 years in office. There are a lot of things that go into that beyond approvals, like approval rate, which we aren’t covering here. But the total is still the total.


We’re not taking political sides here. We just like OG, and we like being informed on things that impact how to generate profits from OG production. For independent operators like King, there has been tremendous upside opportunity the last 2 years.


So what’s new in the OG capital world?


Borrowing has become more difficult in the last 6 months. Rate hikes, fewer lenders in the space, and cratering prices in Natural Gas all contribute to headwinds in securing debt capital. 


Why does that matter?

It certainly makes it harder to meet production demands, which may help bolster oil prices. For those that produce oil using equity rather than debt, they will have an advantage in achieving profitability via both volume and favorable pricing. 


I don’t have a crystal ball, but there is some niche value creation opportunity here for independent operators and their investor partners.


For more information on the geo-political landscape and the impact to OG, check out Eric Rice, CGO here at King, and his perspective below. 


But before you jump there, check out my podcast for special guest and major league pitcher Logan Verrett…he has a compelling story about change and finding success in a new field! 

The Jay Young Show RE-LAUNCH!!

 Watch Now

In this new episode, Jay sits down with Logan Verrett, a former pitcher in the Major Leagues for the Texas Rangers, the New York Mets, and others before he was confronted suddenly with Tommy John surgery in 2019. His journey as a professional athlete prepared him for his next phase as an All-Star Realtor in the North Texas Real Estate Market. 

  • Transitioning into real-estate post athlete

  • Balancing an athletic and professional career with family life

  • Investing in startups and syndication markets