Oil and Gas Spending Spree Sets Stage for 2024
Newsletter No. 46
Good morning,
I want to start off by wishing all of you a Happy New Year! Cheers to a year well-lived and a new one on the horizon! Explore this newest edition of The Upside including some of the latest news in the oil and gas industry.
Change is in the air, and I'm excited to share some thrilling news with you. Starting in the upcoming year, you can look forward to reading The Upside every Thursday. Why Thursdays, you ask? Because I think it's the perfect day to kick back, learn about the latest happenings, and gear up for the weekend. Get ready as we continue to navigate the ever-evolving landscape of oil and gas together.
This Week's Headlines
The Rice Report: 2024 Forecast
O&G Industry's $250B Deal Spree Sets Stage for Permian Basin Surge
Ellipsis Expands U.S. Onshore Holdings with Significant Acquisition
"Ask Jay" on Ways to Invest in Oil and Gas
U.S. Oil Developments Resonate with Historical Saudi Concerns
Red Sea Ship Attack Propels Crude Oil Prices, Global Supply Impact Uncertain
The Rice Report: 2024 Forecast
King Operating Corporation's Chief Growth Officer Eric Rice gives his forecast for the economy, nationwide and globally, for the year ahead. Watch here.
O&G Industry's $250B Deal Spree Sets Stage for Permian Basin Surge
In a transformative year for the oil and gas sector, giants like Exxon Mobil, Chevron, and Occidental Petroleum led a $250 billion buying spree in 2023. This strategic move targeted lower-cost reserves and industry consolidation, with the Permian Basin emerging as the grand prize. These acquisitions position the companies to control 58% of future production in the region. Simultaneously, companies like Battalion Oil and Vital Energy made key acquisitions in the Permian, reflecting a broader trend of industry reshaping. As major players consolidate, service providers and pipeline operators brace for impact, navigating a landscape influenced by rising interest rates and global oil price stability.
Ellipsis Expands U.S. Onshore Holdings with Significant Acquisition
Speaking of that surge, Ellipsis U.S. Onshore Holdings LLC has secured additional assets in key U.S. basins, including the Permian Basin, Denver-Julesburg Basin, and Texas-Louisiana Salt Basin. The acquisition comprises non-operated oil and gas assets boasting a current production of 6,000 boed and substantial operational potential from 550 gross remaining locations.
With eyes on a robust 2024, Ellipsis anticipates an average production exceeding 13,000 boed and holds over 1,900 remaining gross locations. Managed by Matt Gentry and Adam Howard, Ellipsis emphasizes its commitment to non-operated asset strategy, welcoming potential partners to explore collaboration opportunities. Formed in 2023, Ellipsis focuses on acquiring large-scale, producing oil and gas assets, with significant backing from Houston-based investment firm Westlawn.
Ask Jay
In this week's "Ask Jay," I was asked about ways to invest in oil and gas. For my insight on that subject, watch the video here.
U.S. Oil Developments Resonate with Historical Saudi Concerns
Recent events in the Israel-Hamas War have stirred echoes of the past, particularly the 1973/74 Oil Crisis, prompting a revisit of U.S. policy towards Saudi Arabia. The crisis led to a shift in power dynamics favoring oil producers in the Middle East. Henry Kissinger's analysis of the situation at that time shaped key U.S. conclusions, including the need for energy self-sufficiency. The rise of the U.S. shale industry since 2014 has transformed global oil dynamics, contributing to Saudi Arabia's strategic challenges. While the Kingdom's attempt to undercut U.S. shale in a 2014 oil price war failed, the U.S. has become the leading global producer. The current trajectory suggests a continued diminishing reliance on Middle East hydrocarbons, impacting geopolitical alliances.
Red Sea Ship Attack Propels Crude Oil Prices, Global Supply Impact Uncertain
Crude oil prices surged in response to a recent Houthi attack on a container ship in the Red Sea. Despite heightened U.S. and UK military presence, oil prices, led by Brent topping $80 per barrel, maintained gains. The incident prompted MSC to reroute ships away from the Suez Canal. Analysts suggest the market's focus on supply and demand dynamics, with concerns about potential disruptions, while some cite the persistent Red Sea conflict and holiday season's thin market depth as contributing factors.
As always, 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 SVPs here and someone will reach out.
You can also get a signed copy of my book, "The Upside of Oil and Gas Investing" Just send your name and address to info@kingoperating.com. Also, please let us know how we are doing at King Operating Corporation. Leave a review here.
In the News
Interview with WAAV Wilmington, North Carolina on Fox News Radio discussing the impact of OPEC's decisions on oil prices and the United States' dependency on foreign oil.
Recommended Reads
Russia To Cut Oil Exports From Sea Ports in January
China and India Account for More Than 90% of Russian Oil and Fuel Exports
Three Member States Affirm Support for OPEC as Angola Exits
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
