WTI Crude Price Prediction for 2024: Nearing $80 Average
Newsletter No. 47
Good morning,
Here we are with the first issue of The Upside for 2024. As you read this newsletter on Thursday morning, rest assured it's strategically timed to equip you with comprehensive industry insights as you approach the weekend. There's a lot of oil and gas news to discuss, so let's get started.
This Week's Headlines
Kinder Morgan Wraps Up $1.82 Billion Acquisition of South Texas Pipeline
Another Upside Story: Civitas Resources Seals Successful $2.1 Billion Acquisition Deal
EU Takes Stronger Stance, Limits Russian Energy Imports
"Ask Jay" on the ABCs of Oil and Gas
Oil and Gas Executives Predict WTI Crude Oil to Average $77.68 per Barrel by End of 2024
Kinder Morgan Wraps Up $1.82 Billion Acquisition of South Texas Pipeline
Kinder Morgan has successfully bought NextEra Energy Partners' South Texas natural gas pipeline for $1.82 billion. The acquired pipeline, South Texas Midstream LLC, connects the Eagle Ford basin to the Gulf Coast and Mexico, complementing Kinder Morgan's existing pipelines. This move aims to meet the growing demand for LNG, industrial, Mexico export, and power generation along the U.S. Gulf Coast. About 75% of the new pipeline's business is secured by contracts lasting over 8 years.
The acquisition aligns with Kinder Morgan's South Texas plans, offering enhanced connectivity in the Eagle Ford Basin. The five Gulf of Mexico states consumed a significant amount of natural gas in the first 10 months of 2023. Proceeds from the sale will help NextEra Energy Partners address debt and equity buyouts. Kinder Morgan expects this acquisition to positively impact its 2024 budget, with the purchase price reflecting favorable financial ratios. The completion of this deal strengthens Kinder Morgan's presence in the energy logistics sector, positioning it well to meet the changing demands of the natural gas market.
Another Upside Story: Civitas Resources Seals Successful $2.1 Billion Acquisition Deal
Civitas Resources has finalized its acquisition of oil and gas assets from Vencer Energy in a cash and stock deal worth $2.1 billion, expanding its presence in the prolific Midland Basin of West Texas. The transaction includes 44,000 net acres and boosts Civitas' production capacity to approximately 62,000 barrels of oil equivalent per day. Civitas plans to further enhance its position in the Permian and DJ basins, solidifying its commitment to long-term shareholder returns.
This deal, as other recent ones like Exxon-Pioneer, resonates with many of the principles I've discussed in my book, "The Upside of Oil and Gas Investing," and closely aligns with the strategies we implement here at King Operating Corporation. This deal demonstrates the opportunities for growth within the oil and gas sector, something we whole-heartedly believe at King. If you are interested in learning more about our strategy, you can get a signed copy of my book, "The Upside of Oil and Gas Investing." Just send your name and address to info@kingoperating.com.
Oil and Gas Executives Predict WTI Crude Oil to Average $77.68 per Barrel by End of 2024
According to the fourth quarter Dallas Fed Energy Survey, executives from 143 oil and gas firms anticipate the West Texas Intermediate (WTI) crude oil price to average $77.68 per barrel by the end of 2024. The survey, a first-time inquiry about end-2024 prices, revealed a range of forecasts from $51 to $110 per barrel. The U.S. Energy Information Administration (EIA) and various industry reports provide varying projections, with the EIA estimating an average of $76.50 per barrel in the fourth quarter of 2024. The survey also highlighted that oil and gas sector activity remained relatively stable in the fourth quarter of 2023.
Ask Jay
In this week's "Ask Jay," I wanted to give some thoughts on the ABCs of oil and gas. For my insight on that subject, watch the video here.
EU Takes Stronger Stance, Limits Russian Energy Imports
In response to global pressures, the European Union (EU) is tightening restrictions on Russian oil and gas imports. Recent agreements at both G7 and EU levels aim to curb Russia's financial support for conflicts. The EU Council's provisional agreement focuses on reducing Russian gas and LNG imports, signaling a shift from historical dependency. EU nations, though still importing Russian LNG in 2023, are moving towards diversifying energy sources and reducing reliance on Russia.
These measures align with efforts by the U.S. and allies to limit Russia's revenue streams. The EU is actively seeking alternatives, including agreements for LNG supplies from Qatar. The actions indicate a strategic move to lessen dependence on Russian energy sources, addressing both geopolitical concerns and the desire for energy security.
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.
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In the News
Interview with KTRH in Houston discussing United States buying three million barrels of oil for dry strategic reserve.
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Chevron Recognizes Up To $4B in Impairments, Losses
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
