Energy News Beat
Daily Standup Top Stories
Tesla battery material supplier tops list of human rights abuses for second year in a row
Tesla buys battery materials from the mining giant with the most allegations of human rights abuses against it in a database of abuses tied to clean energy. Mining company Glencore has racked up at least […]
AI could drive a natural gas boom as power companies face surging electricity demand
Natural gas producers are bullish on demand as they see significant upside from the immense energy needs of artificial intelligence and data centers. Electricity demand is forecast to grow 20% by 2030, according to Wells […]
G7 Agrees To End Coal Use But Can It?
The United States, the UK, Italy, France, Japan, Germany, and Canada this week struck an agreement to end the use of coal for power generation by 2035. Coal as a source of power generation across […]
Environmentalists ignore renewables’ waste
ENB Pub Note: This is a major topic, and the land reclamation and disposal of wind and solar components need to be addressed at the front end of the projects. Farmland and landowners are getting […]
Ban on Russian uranium helps US build nuclear fuel capacity, official says
WASHINGTON, May 3 (Reuters) – The U.S. has been preparing since 2022 for the possibility that Russian President Vladimir Putin would stop selling it nuclear power fuel, and a pending ban on Russian imports will […]
Exxon to Close Pioneer Deal as FTC Forces Out Sheffield
The US Federal Trade Commission declined to challenge Exxon Mobil Corp.’s $60 billion purchase of Pioneer Natural Resources Co. but asserted that Scott Sheffield, Pioneer’s co-founder, must not take a seat on the supermajor’s board. […]
Highlights of the Podcast
00:00 – Intro
01:45 -Tesla battery material supplier tops list of human rights abuses for second year in a row
07:15 – AI could drive a natural gas boom as power companies face surging electricity demand
11:18 – G7 Agrees To End Coal Use But Can It?
13:56 – Environmentalists ignore renewables’ waste
16:57 – Ban on Russian uranium helps US build nuclear fuel capacity, official says
21:02 – Markets Update
24:36 – Exxon to Close Pioneer Deal as FTC Forces Out Sheffield
39:09 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:15] What’s going on, everybody? Welcome into the Monday, May 6th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, Tesla battery materials supplier tops list of human rights abuses for second year in a row. Unbelievable. Next up energy. AI could drive a natural gas boom as power companies face surging electrical demand. We’ll go over to/We’ll find out from that one. Next up, environmentalist ignore renewables waste. And finally, in our news segment, a ban on Russian uranium could help us build nuclear fuel capacity, according to officials. I’d like to know who those officials are. We’ll then pop over and cover some stuff in the finance segment. Oil settles down on some weak U.S. job data. Actually about lowest it’s been in three weeks. Natural gas sees a little bit of a spike. We did see rig counts continue just to get hammered. I will then spend the majority of my segment talking about Exxon, closing the pioneer deal, mainly as the FTC forces out Sheffield. You know, as I’ll say, he got conned in this one. We’ll cover all of that. For many angles, and then we’ll finish quickly looking at EOG earnings, which again find some interesting nuggets there. We will cover all that in a bag of chips guys as always. I’m Michael Tanner joined by Stuart Turley. Where do you want to begin. [00:01:44][88.9]
Stuart Turley: [00:01:45] Hey let’s start with our buddies over there at Tesla. You know, Michael, when you’re, you’re a manufacturer and you’ve got some suppliers that are, like, using child labor in the Congo. I don’t think that’s a good list to be on. Tesla battery materials supplier tops list of human rights abuses for second year in a row. Here’s some quotes in here. The global push for, clean energy depends on materials used from solar panels, wind turbines, electric vehicles and batteries. Unless companies take us as stamp out to abuse, quote, we expect large companies like Tesla to use their leverage. This is one of the Congo mining companies saying this year we expect Tesla to do it. You’re the one hiring them. [00:02:32][47.2]
Michael Tanner: [00:02:33] I it’s it. I there’s so much that goes into this. I’ll let you I’ll let you read a little bit more than I’ll give my take. [00:02:39][6.9]
Stuart Turley: [00:02:41] I’ll tell you, there’s more than 500 allegations of abuse going back in 2010. Here’s another quote. We see the risk of abuse is increasing as pressure to mine for new materials is also intensifying, says Carolyn Avalon, the center for Natural Resources Research. Obviously, we expect large companies like Tesla to use their leverage to influence the sector as a whole, and not only, but as we require that their suppliers are not committing human rights abuses. There’s this brings up a whole can of worms, Michael. Is it because the world is being forced to go this way because they’re trying to kill Ice engines so that we abuse kids? I mean, which way do you think on this? [00:03:25][44.5]
Michael Tanner: [00:03:26] Well, I think the I mean, this article does an interesting job of trying to shift blame from Tesla, who is the one buying the cobalt to Glencore, who’s kind of the main and the main company who they’re targeting in this article talking about those 500 individual abuses. Glencore, as we know, is one of the world’s largest kind of energy trading companies. They’ve shifted really away from that energy trading side and are really a producer. They have huge, huge coal manufacturing and coal plants where they actually go mined coal. We know they’re they’re thinking about in London. They’re they’re considering spinning that off and trying to see if they could maybe take that coal business and make it part of the United States stock exchange. We’ll see where that goes. I think this brings up an interesting question is who is liable? Obviously, Glencore needs to be providing the requisite work. You know, they’re talking mainly that there’s no water there in Zambia here or what it it’s. Sorry. Give me a second. Where’s the, what country is this in? This is in some country where they’re basically saying, hey, we’re not even. They’re not even giving us water. You’re they’re forcing us to work 12 hour days and we don’t even have water, which is pretty interesting. This is in Congo, Peru and Colombia. Specifically in the Democratic Republic of Congo. Workers there. And I’m reading now in the article workers, they’re reported to have little water or food while working long hours in sweltering heat, according to a Glencore, spokesperson. The workers had access to as much water as they need from water stations, communal areas and emphasized the company’s commitment to worker health and safety. Again, whose job is it? It’s everybody’s job, and I think that’s where people swing it. Miss. They try to say Tesla will say, well, it’s Glencore job. Glencore would say, well it’s the job of the people who are on. We’re a little bit removed. We’re maybe a passive investor. The answer is. Everybody is is responsible to make sure that if you’re going to if you’re going to hire workers and you’re going to use workers, you’re going to make sure that they have a, a decent working environment. I think the if I had to put my finger on, I blame Tesla a little bit more than I blame Glencore, because Tesla is incentivized to have Glencore give them cobalt, which is known as the blood diamonds of batteries, as cheap as possible. The cheaper they can get cobalt, the cheaper they can sell their batteries and their cars, and the more they’ll be able to compete with some of the Chinese companies who we know don’t care about human rights. So if if you’ve got to peg it one way or the other, I feel like Tesla pushing it off to Glencore is a little bit of, let’s just say convenient for them so they don’t have to necessarily. It’s like Apple. We know Apple is is involved with human rights abuses up and down their value chain. But what do they continue to do. Just push it off. Just push it off. Tim Cook. Elon Musk they’re never going to Congo to look at this stuff. They’re going to read a report and say oh we need to do better. But it’s Glencore. It’s like, okay, maybe it is Glencore fault, but Glencore is only responding to the incentives that you put in place. Remember, in a free market society, incentives matter. [00:06:26][179.8]
Stuart Turley: [00:06:27] I agree, and here’s where I think it’s despicable is because our law, makers and our congresspeople are going after the, scope one, scope two, scope three emissions for oil and gas companies, but yet they won’t go to the, go the other way for human rights and child abuse. I think it’s despicable. So. [00:06:48][21.6]
Michael Tanner: [00:06:49] Yeah. Now, you know, while Glencore hasn’t necessarily been charged with human rights abuses, we do know that they agreed to pay 1.1 billion in fines in 2022, mainly on the fact of foreign bribery and market manipulation charges. So clearly, there’s something, you know, where there’s smoke, there’s fire. [00:07:08][18.5]
Stuart Turley: [00:07:08] Yeah. And where there is, a politician in Ukraine, there is kickback. So let’s go to the next one here. AI could drive a natural gas boom as power companies face surging electrical demand. This article was actually from CNBC and I thought it was an outstanding article. There is a 3.5 minute video in there, where they’re interviewing Toby over it. He cute. He is an animal. I absolutely love Toby. He is, a really, really cool cat. Here’s where I think he brought up some fantastic, points. That is, this in order for she was asked by he was asked by one of the, people interviewing and they said, well, what is driving next year’s growth in natural gas? He said the strip pricing for 20, 25 is going to be a dollar more than it is right now. Why? Because the amount of electricity that I think campuses and data centers are going to need is natural gas. Guess how much, Michael? 15 BCF a day is what they’re going to be needing. That’s this pain. Excuse me. That’s 13 New York City the size of those cities. Amount of power. Wow. That’s a lot of natural gas demand just in data center. [00:08:41][92.6]
Michael Tanner: [00:08:42] It is. And I mean we know for the past ten or so years we’ve had fairly flat power growth in the United States. Wells Fargo according to this article, has come out and said electricity demand forecast is expected to grow by up to 20% by 2030, mainly due to the fact that these data centers need AI. [00:08:59][17.3]
Stuart Turley: [00:09:00] Absolutely. And so I thought, Toby was very well articulated in there, and I was very pleased to see that it didn’t come out on CNBC. [00:09:08][8.6]
Michael Tanner: [00:09:10] So question for you. Yeah. So your your Amazon, your Google, your Microsoft. You’re meta you’re you’re in those strategy meeting. At what point do you get into the natural gas business yourself. [00:09:20][10.3]
Stuart Turley: [00:09:22] that is an outstanding question. And I am now trying to articulate a point because we, we just saw that Japan has been buying all the way through the value chain. We see that, Total Energy is buying all the way through the, value chain. So countries, through their, companies that they own and are going through are buying all the way back through. Why wouldn’t it make sense? Well, we do see Amazon buying nuclear reactors. It would make sense. Total Energy bought all those natural gas power plants in Texas. It does make sense to do that. And I think you bring up an a fantastic point from the standpoint, Michael, they’re going to have to protect their low cost power otherwise data sets. Aren’t going to be able to grow. [00:10:16][53.8]
Michael Tanner: [00:10:16] Especially if you think prices are going to be drastically higher for natural gas in 3 to 5 years. Does it make sense to go out now as we’re going to cover in a little bit? The FTC might have something to say about that, but I wouldn’t be surprised if a company specifically like Amazon decided to maybe go scoop up a small natural gas producer that allows them to have unlimited access, quote unquote, to cheaper power, because now they’re only paying for transportation costs. I think it’s interesting. And and I wouldn’t be shocked if there’s if we hear some rumblings of some possible M&A activity, specifically between some of these big data center players Amazon, Google, Microsoft, Facebook and some specific natural gas players, you know, depending on location. So I think it’s super interesting. But the shift of where of the balance of power is happening. [00:11:07][50.6]
Stuart Turley: [00:11:08] I couldn’t agree more with you. And people have to protect their supply lines because supply line, link breaking has happened and will continue. Hey, let’s go to the next one. G7 agrees to go to coal in coal, but cannot. This is from Irina Slav,, the great Irina Slav. And it was on oil price, if I remember right. Yes. This was on Irina Slav at oil price. Big thing here. The United States, UK, Italy, France, Japan, Germany and Canada struck the deal to end use of coal for power generation by 2035. Holy smokes. Here’s some big numbers. Michael. Coal as a power source in the G7 is 15% of the energy mix. Wow, this. Now listen to this. When we come in here, the G7, the bottom line. So let me read the just flat out read her last, paragraph here. So it’s uncertain whether the G7 would give up coal completely. Even the UK, which only generates a small portion of its electricity from coal and to reopen a plant during a period of low wind power generation. But even if they do, however high in the cost, this leaves the rest of the world, which would start using more coal, not least because it would become cheaper. The net effect of the G7 coal phaseout, if it ever materializes, may and truly add to global emissions. Wow, what a great point to make on this. There is no realistic way that wind, solar, and nuclear could ever completely replace oil and gas and coal. [00:12:56][107.9]
Michael Tanner: [00:12:56] And China will always purchase the cheapest form of energy, whether it’s natural gas, whether it’s wind, whether it’s solar or whether it’s cold, they’re going to produce and buy the cheapest energy. So if we phase coal out to move to higher cost stuff, driving down the cost of coal, India, China, there’s going to buy more of it because they understand that cheap energy means great things for their for their people, specifically in India. We know they’re we know they’ve been we they’ve been called out a bunch for continuing to buy Russian. They’re just doing exactly what they should be doing for their people. [00:13:28][31.8]
Stuart Turley: [00:13:29] Exactly. And and let me ask you this. Do you think that if the price is there and, you think coal mining is, clean from the standpoint of, no emissions, I have a feeling that they will still take Pennsylvania coal all over the world. I bet they’ll still be exporting. [00:13:48][19.4]
Michael Tanner: [00:13:49] No. Absolutely. [00:13:49][0.3]
Stuart Turley: [00:13:50] So now, all right, let’s wander into the next one. A shout out to, Irina. And she did a great job on that one. Here’s this one’s near and dear to my heart, Michael. Environmentalists ignore renewables. Waste this one that drives me nuts. The farmland and landowners are getting it in the drive through all the time. And this is just making it nuts. This was actually out of, Midland Odessa newspaper. And here’s a couple really good quotes in here. It’s noteworthy that so many environmental activists failed to account for the waste streams associated with wind and solar power generation, overlooking the whole listicle and environmental impact of their overall technology, said Landgraf, Odessa Republican who chairs that Texas House Environmental Regulation Committee in Austin. Hey, I’d love to visit with you on the podcast there. They fail to recognize embracing renewable energy also necessitates confronting, accompanying waste challenges ahead on a however, from a hindrance, these challenges can offer a fertile ground for innovation. I couldn’t agree more. Let’s figure out how to get these things renewable. But it’s the reclamation land reclamation that nobody is talking about. And the landowners are getting screwed. [00:15:16][85.6]
Michael Tanner: [00:15:17] Yeah. In in the mining business in the United States, I’m not going to speak for a broad in the mining business. We figured out reclamation, and it’s one of the reasons why permitting and getting in and getting mines approved in the United States takes a lot of money and a lot of time, because a lot of that money goes towards reclamation. A lot of the permitting required is, how are you going to clean this site up when it’s done? If there’s only a ten year mine life cycle, what are you going to do for the next that’s missing? [00:15:41][24.7]
Stuart Turley: [00:15:42] You’re in the wind industry, Michael. What that is missing in the wind industry. [00:15:46][4.2]
Michael Tanner: [00:15:47] Oh, it’s missing everywhere. So what I’m saying is this needs to come. Ever. We figured it out in the mining business. Why can’t we figure it out elsewhere? [00:15:53][6.8]
Stuart Turley: [00:15:55] I agree, because now these all this farmland that we’re going to need ain’t going to be farming. [00:16:00][5.2]
Michael Tanner: [00:16:01] No. Well, and, you know, I love the the the the pic, the cover art here. You’ve got a drilling rig in a wind farm right next to each other. Again, we figured out a lot of this stuff with mining and oil and gas. It’s going to be interesting how it works. I love this quote. Here in the article, the oil and gas industry’s adaptability serves as evidence of this potential, as it has effectively converted waste into a profitable income stream to fulfill market needs. That’s according to, our friend. What’s his name? Doo doo doo doo doo. State Representative Brooks Land, who is kind of spearheading, as you said, this discharge again, it’s clear wind and solar are being backed by people who don’t necessarily care about the environment. What they care about is the taking back. What they see is control from the greedy oil and gas companies. [00:16:48][47.8]
Stuart Turley: [00:16:49] Exactly. And I, I personally, it’s all about electrification and, everything else. So I hey, let’s run on to ban on Russian uranium. Helps build nuclear fuel capacity. Official says when do you what do you think my my official opinion of our U.S. officials ability to get anything done correctly is mile slim to none. Absolutely. The US passed legislation on Tuesday that bans the import from Russia, the latest move to disrupt Putin’s ability to pay for the full scale invasion. They are dopes. The reality is, the last few years have been a threat to the real and present possibility that Russia could stop abruptly sending enriched uranium to the United States. We get, I believe, 20%, of our, enriched uranium from them. Whole tech got 1.5 billion d.o.e. alone in March. We’ll have to refurbish their plan and get approval from us. Related, regulators, Huff says. I fully expect it will operate better than new operating once they get completed on those refurbishment, Haltech spokesperson Patrick O’Brien said, which still needs a Re-authorization will undergo thorough inspections before any restart. I have absolutely zero confidence in this getting done. [00:18:21][91.8]
Michael Tanner: [00:18:22] Well and it shows you how interconnected the world is. Even in the midst of this war with Ukraine, we’re still importing, you know, 24% of our enriched uranium used by reactors in the United States from Russia. So. [00:18:35][13.0]
Stuart Turley: [00:18:36] Absolutely. And I, I, it is absolutely despicable, Michael, because it’s, LNG Russia has figured out how to get around the US sanctions on oil. What is happening now is they are arranging for new, there is a glut or a, a opening. Michael, you’re you’re going to flip out when you hear this one. I know you’re about to yawn because you’re, like, going, oh, no, this is terrible. The Dart fleet for LNG tankers is now started. You’re going, oh, no, another dark fleet for Stuart to talk about. Guess what? LNG is now going to be available to be bypassing sanctions. What else is going to be able to be bypassed and sanctions. [00:19:24][48.0]
Michael Tanner: [00:19:25] Well everything I mean hey, I, you would be proud. On one of my solo shows last week, I talked about it was a Pacific article covering the dark. There’s about 500 vessels out there that are floating around. So you you’d be proud. I mean, you you’ve beaten me down on that. Enough. It all comes back to the world is so much more interconnected than we think. We say one thing over here with our hands, and then we have our other hand up here saying something different. So I’m with you. I have little to no faith that this execution will be good. The only good thing that could come out of this is investment into the nuclear business. They in the U.S., you regular business, they say, would unlock about 10.2. [00:19:58][33.3]
Stuart Turley: [00:19:58] Absolutely. [00:19:58][0.0]
Michael Tanner: [00:19:59] Billion in nuclear funding. If this happens that I’m for I’m. [00:20:04][4.4]
Stuart Turley: [00:20:04] All in on that. But you know what the regulatory process for holding up, nuclear facilities and everything else is still. Burrow can. [00:20:15][11.3]
Michael Tanner: [00:20:16] Absolutely, absolutely. [00:20:17][0.7]
Stuart Turley: [00:20:18] Cool off to you now, man. [00:20:19][1.0]
Michael Tanner: [00:20:20] All right, well, before we jump to the finance segment, guys will pay the bills here. As always, thanks for checking out the world’s greatest website energy news beat.com. All the news and analysis you heard and are about to hear is brought to you by that website. You can also check us out, in the description below for all the links to the articles, timestamps, everything you need to know. To keep up to speed with the oil and gas business, you can check us out. Dashboard.energynewsbeat.com Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be at the tip of the spear when it comes to the energy and the oil and gas business again. www,energynewsbeat.com. [00:20:59][39.7]
[00:21:02] You know pretty pretty interesting. You know I would take it on Friday. I think everybody saw oil was down to about $78. We’re currently sitting at at 78. 11 is markets are about to open here. Well and we’ll probably open down. It looks like we’ll open down a little bit below 77 or a little bit below $78 at 7790. So you’ll hear that as you guys are listening to this, on your commute Monday morning. We did see overall markets though on Friday. Jump 1.26 percentage points Nasdaq up 1.9 percentage points. It very interesting. You know week job numbers. Market goes up because maybe they expect maybe a rate cut coming up. The problem is we had bad we had higher than expected inflation which means rates may not go anywhere. A little bit interesting to see where the market is kind of pegging all this. But we do know that specifically when we look at where, the, you know, with this slowdown in what the U. In what this data is showing is a possible slowdown in the U.S. economy, which means rate cuts either are in women or not. But what that does mean is that demand for energy products could slightly be lower than expected. That’s mainly what’s causing oil to settle here. I mean, we’re down now, you know, our steepest weekly loss in three months. Again, mainly off that U.S. jobs data, as I said, 7811 for crude oil. Brant oil’s 8317. We also see natural gas up about 5.26 percentage point $2 and 40 and $0.14, which is actually, the first time it’s been above $2 in, you know, at it’s been above $2 for a couple days now, but really it has we haven’t seen $2 really this year, which is absolutely great. Natural gas spiked mainly due to the fact that, we saw, a reduction in storage surplus based upon the five year average, which we saw come out on Thursday. And we also, you know, weather as things get hotter this summer, we will see an increase in oil and gas prices as we move from, injection to drawing another another thing we saw. And we can go ahead and throw this graphic up here. U.S. rig counts drop eight rigs week over week. Canada increased to internationally. We increased seven US, though still down 143 rigs relative to where we were last year. This is pretty unbelievable. I mean, I I’ve been of the mindset that as oil prices, I mean, where we fallen over the past three weeks. But as we hover around that 75 to $85 mark, rigs are going to die. It was my assumption that rigs were going to eventually go up. People are going to respond to incentives. Higher oil prices means rig counts should go up. We haven’t seen that. This is four straight weeks of rig count lot losses. And I’m having a hard time, you know, hedging the reason for that. I think a lot of it is the pessimism among the long term cyclical cycle, the oil field. And, you know, not to say that this is a forecasting of, you know, there’s no there’s no there’s no oil left to drill. That’s that’s a lie. The problem is it’s a question of where do investors and where do companies see growth coming from? Do they see growth from coming from new investments in drilling, or do they see investments in mergers and acquisitions as a way to grow their company? And that’s a little bit of a tip to what Exxon and Pioneer, happened. But I it’s it’s a little confusing. And I don’t want to pretend, you know, I just want to sit up here and blow about why I think, you know, why I think this is the case again. Rig counts being down. There’s only a there’s only a couple answers, though. And you know what? What that is. Who knows? Let’s let’s let’s talk about Exxon closing its pioneer deal. But but mainly it’s the FTC forcing Sheffield not to be on the board. So let’s go ahead and read the top headline here. I’m reading from the article. The US Federal Trade Commission declined to challenge Exxon Mobil $60 billion purchase of Pioneer natural Resources. But in allowing that to go through, asserted that Scott Sheffield, pioneer CEO and co-founder, must not take a seat on the super majors board. Interesting the issue. The decision, which was announced Thursday, quote unquote, will ease concern that the Biden administration will seek to block a series of oil and gas mega mergers, but it came at a hefty price. Here’s the. Quote from Deputy Director of the FTC Bureau of Competition Kyle Mok. He said Mr. Sheffield has conducted makes it crystal clear that he should be nowhere near Exxon’s boardroom. American consumers. Should it pay unfair prices at the pump simply to pad corporate executives pocketbooks? Unbelievable. So what’s the FTC claiming here and blocking scotch if we’re going to get into this in a little bit? Because this has got me fired. [00:25:37][275.3]
Stuart Turley: [00:25:38] Up about this one, I said. [00:25:39][1.1]
Michael Tanner: [00:25:40] The FTC says it will, or the order will prevent Sheffield from engaging in, quote, collusive activity that could drive up crude oil prices and force US consumers to pay higher fuel prices. The agency said he exchanged hundreds of text messages with OPEC representatives and officials about the oil markets. Wait a second. The CEO of a major oil company is exchanging text messages with other CEOs and heads of major oil and gas companies. Color me shocked. Yeah. Absolutely unbelievable. We’re going to move over here to, you know, Linda Connor. Unbelievable. She’s the head of the FTC here. She has a Twitter thread that I want to read a little bit about. So she she’s got six points here. We’ll list this in the in the description below. But but she says the FTC’s investigation into the Exxon pioneer deal revealed an elaborate campaign by pioneer CEO Scott Sheffield to collude with OPEC officials and inflate oil prices. The same guy who was saying the same guy who was in charge when oil prices were negative, $37. Just just remember that. Just remember that. Tweet number two. Global oil production has long been dominated by the cartel still dominated by the OPEC cartel. If OPEC cuts production, America’s can get hit with high gas prices. Just a fundamental misunderstanding of how gas prices work. But that’s okay. U.S. production in the Permian Basin has emerged as a potential check on OPEC, but Sheffield has been trying to collude with OPEC rather than compete. Now this is where it gets interesting okay. They’re going to they’re going to pop up some of these images of Sheffield has routinely made public comments public which I love find that hilarious. But we’re not holding public comments against him, signaling to rival that they should, quote, stay in line and reduce output over text messages and private dinners. And now we’re looking at text messages in terms of mergers and acquisitions, but over text messages and private dinners. He is also staying in close contact with top officials from OPEC to coordinate on cutting back production. Ftx’s orders bans Sheffield from serving on the Exxon board or serving in any advisory capacity. Listen to this. This is what I think the absolute motion is. The order also prohibits Exxon for five years from nominating or designating any pioneer employees or directors, to the Exxon board, with limited exceptions. And this all goes back to, again, some private text messages that Sheffield sent a temp, you know, in which they’re trying to garner the idea that he is trying to lower oil and gas production in order to raise prices at the pump. Wait, wait, lowering oil and gas production actually does lower profits a little bit. How do you make money? You make money by selling oil and gas. This completely swings it. Miss, this is. This is a lawyer attempting to spin what the underlying is assumption. And let’s go back. Why was Scott Sheffield from 2016 early 2017 through his purchase the his selling to pioneer? Why was he screaming at the top of his lungs, both publicly and privately. So you can’t say he’s he’s talking in one mouth and saying something over here. He’s saying everything in the same period over. He’s saying everything in public and private. Why is it why is he talking about lowering oil production? It’s all about investors. Go back to what we talk about the incentives okay. So you know, they have like over 40 different points they put in this FTC thing. Point number 27 gave one move in Sheffield’s playbook has involved publicly threatening U.S. shale producers who might deviate from a coordinated reduction scheme, for example, in 2021. Okay, this is when oil was like, what, 30 bucks, 40 bucks, Sheffield said. Everyone’s going to be disciplined regardless of whether it’s 75, 80 or 180. All shareholders that I’ve talked to say that if anybody goes back to growth, they will punish those companies. Is that threatening, stew? Is that a threat? [00:29:34][234.0]
Stuart Turley: [00:29:35] No. He was leading the cartel back in charge for following up and saying, I’m going to give money back to the shareholders. He’s being a great CEO. [00:29:47][11.9]
Michael Tanner: [00:29:48] Well, again, what is the what is the 30,000 foot overhang from this from his comment, he was part of the 22,008 to 2016 mode, where there was no regard for oil prices. There was that drill, baby drill, invest capital produces much oil as possible to what raised oil prices was was that what he was doing in those eight years prior to this? No. What happened? Was there was an absolute value destruction of oil and gas valuations because of that. Nobody made money in the oil and gas prices investors pulled out. So what is he saying? Pioneer is going to be okay regardless. And he said this multiple times. That pioneer is going to be okay regardless of whether or not oil prices go. What he’s saying is if you run an oil company and you are not focused on and you’re shareholders, which the whims of shareholders change all the time. It used to be growth. Now it’s cash flow. Which business? Amazon was able to run negative profit margins for years and get rewarded by that. Why? Because it’s what the shareholders wanted. Then all of a sudden they move to profit. And guess what? Shareholders realized they wanted profit. So it’s unbelievable okay. It’s unbelievable. He again he also says you know they say quote 30. In fact, as recently as April 16th, 2024, Mr. Sheffield said in a conference even if oil goes to 200 a bell, independent producers are going to be dismal. Yeah, because they like they need access to capital markets. They need access to capital markets. They also go on to say that he had these secret dinners with OPEC where they were, you know, attempting to collude. It’s unbelievable. This is this is a way and a political. I’m throwing my pens because I’m so mad. This is a political witch hunt. In order to hey, we know we can’t find legal grounds to block this merger, but all we can do is signal to our base that we are attempting to help with oil prices. Wait. I thought the U.S. government couldn’t do anything about gas prices. I thought the government couldn’t do any. I thought, hey, I thought, no. [00:31:48][119.5]
Stuart Turley: [00:31:48] Can’t do things with this price. So why they can raise the PR? They raid the PR. [00:31:53][4.8]
Michael Tanner: [00:31:54] Oh, this gets me fired up. This is unbelievable. And you know who gets hurt or hurts the worst on this. And this is more inside baseball pioneer employees get hurt by this. They only want this. They only had one person looking out for them on the Exxon board. And that was going to be Scott Sheffield. Now all of a sudden they’re going to be integrated to the Exxon machine. And you know what? They’re going to be seen as disposable in a few years. And that’s just there’s no one to back them up on the board because guess what. You the FTC blocked any representation for five years of pioneer employees or original pioneer employees on the board. This is unbelievable. Sheffield has got con shame on the FTC, shame on Linda con in order for making this happen, for being motivated by political points rather than actual public and not public, but actual strong facts. It’s unbelievable. What do you think? [00:32:44][49.9]
Stuart Turley: [00:32:44] Do I want an attorney to reach out and get a hold of the Sheffield and go after this person? Legally, this is defamation at the highest level as far as I’m concerned. This is despicable. Yeah, it I have other things, but I don’t want to get thrown off of Google for something like that. [00:33:10][25.2]
Michael Tanner: [00:33:11] Well, I think you should take a vote again. I think what they, what they, what they gambled was that Scott Sheffield’s made his money. Scott Sheffield is independently wealthy that if this this theoretical you know this not proxy move but this this signaling that we’re going to stop this, we’re going to stop somebody who’s colluding for low oil prices and keep him off. The Exxon board is somehow going to, you know, satisfy our political base. But actually allowing these mergers to go through, which is it’s it’s it’s like what they did for Obama. Oh, well, you know, it’s the sleight of hand where I remember the Obamacare debate when Chief Justice Roberts eventually okayed it by saying, well, it’s technically a tax and Congress has a right to tax. So sure, it’s through. Well, that’s just a hand waving, an attempt to satisfy both parties. And again, this is what this is where politicians get themselves in trouble. They try to thread the needle so that everybody likes them. And guess what? Nobody likes them. Democrats on the other side said, why would you let this go through? You know, Republicans and people in the oil and gas business are like, you’re an absolute idiot if you actually believe that. You think, Scott Sheffield, what if he was in control of hundred dollar oil? He was also in control of -$37 oil. So you’re going to thank him then? Are you going to thank him for that? Unbelievable. I, I mean, you got any more on this do I. Like I said we’re going to you know, we’re going to. [00:34:33][82.9]
Stuart Turley: [00:34:34] We’re going to go ahead and and curtail this. But I guarantee you I hope it comes out and I hope that person loses their job as a political hack. [00:34:43][9.1]
Michael Tanner: [00:34:44] Yeah. It’s it’s this this was tough. This was tough. I, you know, it’s well, we’ll move on. But, you know, Sheffield, he got conned for sure. Let’s just finish up with with EOG. We had a lot of earnings that happened last week, a lot of earnings. They’re going to come up this week. You know again we’re only going to and you know you can go to energy use beat.com. We’ll have all of the earnings releases I just like to pick out 1 or 2 that I think show some interesting stuff. And you know to go back to our rig count recounts. Are down year over year, even though we’ve seen oil prices increase year over year. While things I like to look at are large companies, CapEx versus crude oil production increase because theoretically, if capital is being spent, we should see production increases, right? Okay. So it’s one of the things I like to look at. But but but let’s first look at the first quarter highlights. EOG earned an adjusted net income of about $1.6 billion, or about $2.82 per share, generated about $1.2 billion of free cash flow. Declared a regular quarterly dividend of about $0.91 a share if paid now in 2020. On the first quarter, they paid about 525 million in regular dividends and repurchased about 750 million shares during the first quarter. volumes and total cash operating costs better than guidance midpoints wellhead volumes. in Q1 of 2024 was about 487,000 barrels of crude oil per day. Natural gas liquids were up about we’re up about 4000 barrels per day and natural gas up about 50. But for that for a 1000 barrels a day increase. Okay. Or, excuse me, a 2000 barrel increase per day. Still CapEx expenditures of $1.7 billion. Oh oh. Okay. Go back to wire rig count slower. If anything is a signal of why rig counts are lower, in my opinion, this is an example of 2000 barrels a day and you get 1.7 billion. Still, I’d like that, but I know we said this last quarter about EOG. I would like that budget. I would really like that budget. Going back to 2023, they’ve only increased it. You know, what is it, four, five, 5000 barrels a day. They spent like four ish billion dollars on CapEx. Now, a lot of that is long tail. A lot of that is doesn’t necessarily wrap itself up, but it goes to show you that we’re going to continue to spend CapEx dollars. And the amount of oil we’re making per dollar invested is actually going down. And that could be the signal within the noise of what’s going on with oil prices or, excuse me, rig count specifically. And there’s just not enough efficient barrels to go get. And unless we see 100, 150, $200 oil, then we see those big explosions of production. But pretty, pretty fascinating. From EOG, they, you know, of course, they’re going to have a great quote, Ezra Yacob, who’s the chairman and CEO. You know, EOG is off to a great start this year, delivering strong first quarter results. Production exceeded targets and total per unit operating costs were lower than planned. You know, again, they’re doing a lot of exploration specifically in the Utica. You know, they’re one of the better oil and gas companies when it comes to exploration. They’re one of the few companies that actually do old school traditional exploration. But it goes to show you $1.7 billion of CapEx gives you about 2000 barrels a day if you’re EOG. Pretty crazy stew. Yeah. So, what else? What do we forget to do? [00:38:26][221.9]
Stuart Turley: [00:38:26] Well, the earnings, one of the earnings, on news B is from vest is share fall after posting earnings loss revenues decline. This is another one just manufacturers all through the world. Vestas first quarter, adjusted EBITDA came in at a negative €68 million, their 5.2 below the 2.3 billion reported. So you sit back and take a look. All them wind farm folks and solar panel folks are just taking a in the drive through because subsidies are running out. [00:39:05][39.2]
Michael Tanner: [00:39:06] Yeah, we know we could have figured that, which we’ll be worried about this week. [00:39:10][3.9]
Stuart Turley: [00:39:12] Don’t go to college. Yeah. [00:39:17][5.6]
Michael Tanner: [00:39:17] I just I want to erase that. Columbia. If you got Columbia on your resume, you might want to. [00:39:22][4.4]
Stuart Turley: [00:39:22] Scratch that off. Oh, no. What a bunch of chatter heads. I do have to give a shout out. I. I thoroughly enjoyed this free, podcasters walk into a bar. We had, doctor, Stanley Ridgely on there, and it was, we talked about it. You got to have a fun podcast. [00:39:40][17.9]
Michael Tanner: [00:39:41] Yeah, absolutely. Well, with that, guys, we’ll let you get out of here. Start your day. Appreciate you guys checking us out. World greatest podcast energy news beat check us out online again www.energynewsbeat.com For Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:39:41][0.0][2323.8]
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