Newsletter No. 31
Good evening,
Hope everyone had a great week. There’s a lot to talk about, so let’s get to it.
Today’s Headlines
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Narrowly Avoiding Blackouts in Texas
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Oil and Gas News
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Ask Jay
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A Little Motivation
Narrowly Avoiding Blackouts in Texas
This week was interesting. Our Electric Reliability Council of Texas (ERCOT) grid in Texas briefly entered emergency Level 2 for the first time since 2021. Level 3 means there are controlled outages in progress. The Council has asked Texans to voluntarily conserve energy in their homes to avoid blackouts. We were close, but it looks like we narrowly avoided them.
So, how does something like this happen? Well, it has been hot. It’s been hot for many days in a row. During such high temperatures, the wind doesn’t blow at the necessary speed to sustain the approximately 15,000-plus wind turbines throughout the state, resulting in reduced energy production for residents. Prolonged lower wind speeds lead to a significant reduction in Texas’ installed wind capacity output. This meant that Texas’ gas and coal power plants had to operate at full capacity for weeks. This begins to affect their performance, which in turn contributes to the risk of outages. The good news is it seems cooler days seem to be on the horizon in the weather forecast.
I was interviewed on WBAP (Dallas radio) Thursday evening. I mentioned that I believe it is time for politicians to start telling the truth regarding monitoring and preparing for hot summers.
It could be ‘El Niño’ and other factors beyond our control. But, this speaks to the importance of oil and gas production. Currently, we are contending with policies like President Biden’s cancellation of the remaining oil and gas leases in Alaska’s Arctic National Wildlife Refuge, which he did on Wednesday. The Trump Administration had authorized drilling on nearly 430,000 acres in Alaska during his presidency. Senator Joe Manchin (D-WV) trashed the Biden Administration’s decision to pull oil and gas leases from Alaska, claiming the move was the latest example of the administration “caving to the radical left.”
Manchin was quoted as saying, “I can’t explain to the American people why we would willingly become more dependent on foreign oil imports, eliminate good paying American jobs and drive up the cost of our electric bills and gas prices across the country. This is yet another example of this administration caving to the radical left with no regard for clear direction from Congress or American energy scrutiny.” He even called it “embarrassing.”
Oil and Gas News
It seems most companies are flush with cash but are not exercising their right to drill for oil and gas, indicated by the rig count being down approximately 25% since the start of the pandemic. More and more companies are choosing to pay down debt, buy shares, or make acquisitions of already producing properties.
This week, Magnolia Oil and Gas acquired leasehold and mineral interests in Giddings, TX for $300 million. This increases Magnolia’s presence in Giddings to more than 500,000 net acres. Magnolia reported that Giddings’ production was at 57,500 boe/d during the second quarter of this year. The area was previously best known for the Austin Chalk formation, but in the last decade, the Eagle Ford formation has become a prolific development with horizontal drilling.
Ask Jay …
This week, I discuss How to Frac a Well. Watch the video here.
A Little Motivation
I enjoy listening to motivational guru, Tony Robbins, on YouTube as he discusses dealing with obstacles on the road to success. He explains that success is 80% psychological and 20% skill. You have to have ambition and drive to succeed by staying positive.
The smaller percentage of 20% skill surprised me. We are in the business of drilling for oil and gas, so I thought it would require more skill than just 20%. As I listened to Robbins, I realized our team at King Operating has drilled 100s, maybe even 1,000s of wells, but I think the hard part is maintaining the drive and the mindset to focus on finding the right property to drill on.
Our goal in finding just the right land is to give our clients a monthly return while they enjoy incredible tax benefits. We look to scale the investment for a satisfactory return for them. The skill set is obviously important but the drive every day to get better at drilling wells, finding properties, motivating the team to look for great opportunities are all part of a mindset that is necessary to be successful.
I believe my drive and mindset to accomplish things and work toward success began years ago when I was still in college. I have told my newsletter readers in the past how I started selling fire alarms door-to-door in West Texas. At that time, I also began listening to motivational tapes. My mother would purchase the different authors including Zig Ziglar, Brian Tracy, Tony Robbins and more. What I learned from those authors was that you have to listen to how others have become successful, and apply those principles to get better every day.
As I conclude this week’s newsletter, do yourself a favor, start inspiring children and young adults to be their best. We all have choices to make in this life and working together on a team, with people who carry different skill sets can be a game changer for everyone.
Have a great week and forward this clip to someone who could use some motivation in their life. I believe they will thank you immensely.
MORNING MOTIVATION – Motivational Video for Success in Life – Tony Robbins Motivation – YouTube
If you’d like to learn more about King Operating and are an accredited investor, or if you have something specific you’d like to discuss, you can reply to this email or fill out your information here and someone will reach out.
Recommended Reads
Marathon Shuts Gasoline Unit At Texas Refinery After Fire
Biden cancels Trump-era oil and gas leases in Alaska
Biden admin hit with lawsuit for restricting production: ‘Put American jobs at risk’
All the best,
Jay
