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Highlights of the Podcast

00:00 – Intro

01:59 – Swiss Voters Reject Emission Curbs Over Economic Concerns

04:29 – $300 Billion in Global Nuclear Energy Investment – is this in trouble because of DeepSeek

08:13 – Pushback Begins Against Trump’s Oil Agenda

12:51 – Trump says he has spoken to Putin about Ukraine – media

13:27 – Why Keith Kellogg’s Plan is DOA: Avoiding the Catastrophic Downside Risk of Russo-Ukraine Negotiations

17:34 – Markets Update

19:17 – Rig Counts Update

19:30 – Bayswater Enters Sale Agreement for DJ Basin Assets

25:37 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:09] What’s going on, everybody? Welcome into the Monday, February 10th, 2025, edition of the Daily Energy News. Beat Stand Up. Here are today’s top headlines. First up, Swiss voters reject emissions curb over economic concerns. Next up, 300 billion in global nuclear energy investment. Is this in trouble because of deepseek? I’ve got some thoughts on this one. Next up, pushback begins against Trump’s oil agenda. We’ll stick there in the United States. Trump says he has spoken to Putin about Ukraine. We’ll make sure to say what that means for the overall energy markets. And finally, why Keith Kellogg’s plan is dead on arrival, avoiding the catastrophic downside risk of Russian of Russia nuclear negotiations. Stool Then kick it over to me. I will quickly cover what’s going on in the oil and gas markets. We did see rig count have some have a surprising little jump. Prices finish down for the week slightly up on the day. And then we did see over the weekend on the seventh Bayswater and Prairie operating announced a transaction with Bayswater selling some BGA assets. So we will cover all that and a bag of chips. Guys, as always, I am Michael Tanner, joined by Stuart Turley. Man, it feels good to be back. Great. We get from NAPE back home, I’ll tell you that much. [00:01:30][80.9]

Stuart Turley: [00:01:30] We got a lot of work. We’ve we put out a bunch of podcast. Michael, great job to you and the team and our team. It was a lot of fun, you know? [00:01:38][7.7]

Michael Tanner: [00:01:38] You know, you were the one holding the four down from the podcast. So we will get we will get all that pumped out and you’ll be seeing content rolling out from us all over next week. We appreciate all of our sponsors W Energy Research, Energy consulting, energy Energy Consulting for for making us making what we did at Nate possible. So real big shout out to them. But without further ado, let’s kick it off. Stu. Where do you want to begin? [00:01:58][20.1]

Stuart Turley: [00:01:59] Hey, let’s start with a trend, Michael. As Swiss voters reject emission curb over economic concerns, the Swiss voters rejected as rigid emissions limit, dismissing a call for more climate protection over fears it would stymie the economy. Look at this. This is a yes was only about 30%. I mean, this is well, this is Switzerland, which is not a huge economy. It’s a bellwether, if you would, for people are tired of climate activism and shutting down economies. [00:02:35][36.6]

Michael Tanner: [00:02:36] Yeah, it’s well I mean it’s it’s it’s really difficult when the climate policies are really a way to just shut down energy use. Everybody wants a clean economy but they also we need to constantly everyone’s also aware that we need to constantly be growing our energy availability. And the problem is, I think a lot of these policies, specifically what they’re trying to do in Switzerland or this proposal in Switzerland, was trying to put the two at odds with each other. [00:03:05][28.9]

Stuart Turley: [00:03:06] Yeah. And so I think we’re going to see some of that with Lee Zeldin, with President Trump. I’m saying for every one new regulation, Lee, you must eliminate ten. [00:03:16][10.0]

Michael Tanner: [00:03:16] Yeah. So what exactly did this plan demand? Well, that greenhouse gases that was emitted through consumption, which is a vague term anyway. Exactly. Reduced to 10% of their 2018 levels within the next ten years, which is is pretty interesting. And again, a lot of this was was submitted by the younger crew over there in Switzerland, which is which is interesting. Well of it’s fascinating. And then this article points out to do about Switzerland was that they have a direct a system of what’s called quote unquote direct democracy in which citizens as often as four times a year vote on different policy issues, which gives, you know, the more junior politicians in their parliamentary system a lot more influence than they may have elsewhere, even though a lot of these proposals are kicked out at the ballot box. It is a is a very interesting, interesting quote. One quote here before we move on, Stu, from what’s this guy’s name, leg legged leg? Begay I forget what his full name is, but I apologize. He said it’s common in Switzerland. The different blood. [00:04:15][59.0]

Stuart Turley: [00:04:15] Defines. [00:04:15][0.0]

Michael Tanner: [00:04:16] Launch vote campaigns for extreme demands because even if they fail in a vote, this is a way you get a topic on the agenda. So again, it’s interesting, but this definitely got shot down quick. [00:04:26][10.1]

Stuart Turley: [00:04:27] And I think we’re going to see more of that around the world. Let’s go to the next one here. I’ll be curious to hear what you want on this one. That is 300 billion in global nuclear energy and investment. Is this in trouble because of deep seek? This is from Anna Nice. And I really liked it. Even though this was almost an advertisement for investing in uranium. I thought it was a good article. When you take a look at the vast energy potential and clean energy of generating power for nuclear reactors is caused a surge in global demand. With every region increasing nuclear investments at least 50% over the next five years. Look at this. Europe. Hundred and 32 billion. A lot of that Europe money is maintenance on the old friend of friends and numbers Asia 106. North America 35 billion year. Asia 17 billion. Middle East. 12 billion. Central and South America. 8 billion. And Africa. 2 billion. So I think that it’s deep sea is not going to impact this at all from a standpoint of people still need to go to nuclear. I think that we will see more natural gas like you would never believe before because of we’re still going to need data centers. So I don’t think we need all the above. We need more energy. [00:05:52][85.0]

Michael Tanner: [00:05:52] Well, you know, here’s here’s where I disagree with the premise of this article, because I don’t think that deep sea is going to cancel all of these entered all this energy stuff. Because I think as we’ve gotten farther and farther away from deep sea ice announcement and people have dug more into it, I mean, what there’s a big difference between training and inference. And by mean training, I mean setting up a model and allow and basically being able to like train the models so that it says accurate information. Then there’s inference and inference is simply still you make a request, the chatbot you type in on me about why you on Musk is the greatest person of all time, and then it spits out the answer. That’s inference. Inference is only going to skyrocket in the amount of in the amount of use that all these data centers are going to need. And it’s where the majority of the compute power goes. Yes, training is big, but inference is huge. So go back to what Elon Musk did with his mega cluster in Memphis, that the reason why 200,000 GPUs is such a crazy, you know, but that’s not the most amount of GPUs that are available. I mean, there are larger clusters in. Think about Virginia. Think about what Amazon has the data set. There are larger data centers, but those data centers are fragmented into doing multiple different things, whereas that 200,000 GPU cluster that mega clusters they’re calling it is specifically for training, meaning you could maybe generate a powerful model. What Deep Seek did is just train to model for an extremely low price. Now, what’s happened? Everyone who tried to log on to Deep Sea two, three, four days later couldn’t because they had to limit access to it, not because they wanted to limit access to it, but because they didn’t have the capacity to serve that model in user a.k.a inference. So I think what Deep Sea really showed is that you can train models a lot cheaper, but it also exposed the fact that you need masses of massive amounts of compute in order to do all the inference and actually make products that people will be able to use. So I do not think any of this will be canceled. I think even post Deep Sea Org, you’ve been seeing people come out and say we still are going to spend this much money on spinning up data centers are going to still be spending this much money on compute. You know, if Deep Sea had really come out and really changed the inference game, then I would agree. But but I really don’t think so. So, yes, I do think there was some interesting stuff that Deep Sea did. But no, I slightly disagree with the premise of this article. [00:08:12][139.4]

Stuart Turley: [00:08:12] I agree. All right. Let’s go to the next story here. Push back begins against Trump’s oil agenda. Michael, I believe that. I think drill, baby, drill is a great campaign speech, but the industry is not ready for just unleashing. Before let me give you this one quote out of here from Run against from Liberty Energy. I love him. He is absolutely a cool cat. It’s all about the price, Of course. It’s always about the price. This goes for OPEC and the US shale drillers alike. What you’re seeing is a huge amount of positivity. The president of Liberty Energy told the New York Times late January, commenting on Trump’s entry into office. But it’s too early to say that it’s going to translate into change in the actual activity levels in here in North America, Ron Gas told The New York Times. I agree with Ron. This article came out of oil price from Irina Slav. I think the discipline is there and it’s not drill, baby, drill anymore. It’s drill, baby, drill. When fiscally responsible. I think that the only way that President Trump is really going to have a huge impact on increasing oil production is if he can lower the costs and that lowering the cost is going to be through supply chain savings, as well as reduction in regulatory demands on E&P operators. R.T. Trevino, a great NPR operator, said, Yes, get rid of the regulatory issues and we can save a lot of money so you can get by with less than $70 a barrel and make more money. You’ll see more drilling. Make sense? [00:09:55][102.5]

Michael Tanner: [00:09:55] Yeah, I was we we we we were having a conversation with Anne Bradbury, who’s the the CEO and president of the American Exploration Petroleum Council, and she stole this quote from the former CEO of Liberty. Secretary of Energy Chris Wright, where he he said in his confirmation hearing that drill, baby, drill is really build, baby, build. And that’s where I think that sentiment is going towards is I agree structure to hold that. Do I think Trump is going to be able to lower oil prices? It’s possible. I don’t think you’re going to see much lower than 65, $60 a barrel, if only because that’s equivalent to $45 a barrel. You know, 4 or 5 years ago when Trump was back in office because of price inflation that we’ve seen. You know, I tell everybody who will listen to this now, listen to me on this, that, you know, specifically in the United States, people have got went through the wave of growth production at all costs. And, you know, they learned the lesson. Maybe, you know, maybe they were too late to the party to learn the lesson. But everybody learned the lesson. We’ve seen bankruptcies through the roof over the last, you know, kind of back end of the 20 tens. So what does that mean for right now? Well, people you know, you talk to empty companies, they’re not drilling not because of regulations. They’re not drilling because of a focus on profitability and a focus that we need to make sure that the wells we drill actually give us a payout and give our downstream partners a payout and not just worry about where that stock price is relative to where production growth. So I don’t think you’re I do think Trump is going to have a really, really hard time lowering prices. As you recall, when last time prices were $45 a barrel is because Saudi Arabia declared war on the United States shale business. Well, they don’t they can’t afford their their economy is based on profits from oil and gas. They can’t afford $45 of oil over in Saudi Arabia. They maybe, you know, maybe ten years ago they were able to do that because of where they were situated from, from a sovereign income standpoint. But now they can’t all these investments that they’re making to try to diversify away from oil requires them to need a high profit margin on their oil. So I disagree that we’re going to see super low oil, you know, 40, $45 a barrel. I don’t think that’s going to happen. And specifically, you know, Trump’s reengaged the sanctions on Iran. There’s 2 million there’s 2 million barrels a day depending on what happens in the Russia Ukraine area. Obviously, Trump wants to end that and you might see more exports out of Russia. But I think the market is also realizing that Russia is just exporting oil anyway. It’s just going to it’s going you know, it’s just going to places it may not normally have went. Or you’ve got countries like China and India buying so much and just storing it. So maybe even when the sanctions come away, they actually stop buying that much. So I think there’s some very interesting stuff going on. I don’t think we’re going to see a huge price in oil. And if I had to put my number on it, I would say the floor is, you know, somewhere in that 60 to $62 range. [00:12:44][168.8]

Stuart Turley: [00:12:44] Wow. Cool. All right. Let’s roll to the next one here. The next two stories are pretty much written into the same topic, and that is Ukraine and President Trump ending the war. President Trump says he’s spoken to Putin about Ukraine and he’s basically saying that he’s talked to him. When asked how many times he’s been in contact with Putin, he noted, I’d rather not say. The U.S. president told the paper he believed his counterpart wanted a cessation of hostilities. He wants to see people stop dying, Trump said. All those dead people, young, beautiful people, they’re like your kids, 2 million of them in for no reason. So I think President Putin and President Trump want to end the war. And I couldn’t be more happy about this. But his President Trump has got Keith Kellogg, General Kellogg, who has a cool cat eye, really. They do not truly understand because the Biden administration ripped out a bunch of material that they needed to know. And that is basically if Putin does nothing because the if Putin does nothing, he keeps the Crimea bridge and the land bridge there. He’s now got the sub bases. He’s got the extra ports. He is moving all of his natural gas pipelines and all of his oil to India and China. He is pumping everything he can. Michael, their GDP in Russia increased a 4% growth in GDP last year. A lot of countries would like to have a 4% growth in GDP. He is now at about 39% of his exports are his GDP and energy exports. Sanctions have not hurt him. So the bottom line is President Trump needs to look at other ways of negotiating because Putin is really President Trump is not negotiating from a position of strength. Makes sense. [00:14:35][110.4]

Michael Tanner: [00:14:35] Now it does make sense. Yeah, I again did kind of try to put my quote unquote wisdom on all this. You know, from an energy fallout standpoint, I don’t think the ending of the war or the the increase of of the wars is going to do anything to oil price. I think people have figured out where prices are. People understand that exports are still happening. So if if Trump is hoping that there is an end to the war, he is going to lower prices, I do think he’ll be sadly mistaken. [00:15:03][27.6]

Stuart Turley: [00:15:04] Know And OPEC and OPEC plus. Really do not have a good control on what people are buying or producing. No, they’ve done a pretty good job in the past, but they’ve lost control, in my opinion. [00:15:16][12.6]

Michael Tanner: [00:15:17] Yeah, absolutely. Well. All right. Well, let’s jump over to finance guys before we do that. As always, let’s go ahead and pay the bills. Thank you for checking us out here on the world’s greatest website. Energy has become the best place for all your energy and oil and gas news. Doing the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. You should also hit that description below. All links at the time stamps links to the articles or they are the best way to support the show is subscribing to us on Substack the energy news be.substack.com. If you are so inclined, go ahead and sign up for a paid subscription. You get some very interesting content that you can’t see even on the free one and you get a direct line of contact between myself and Stu for any questions you might need answered. Again, that’s energy news Beat substack.com. And we’d also like to shout out the sponsor of the show Reese Energy Consulting guys, you’re leaving money on the table, not calling Reese Energy Consulting. If you’re an NPR operator who is not having a you do not have a marketing department. And I don’t mean social media, I mean oil and gas marketing, making sure that the contracts and your first purchasers and your gas contracts are as profitable for you as possible. I promise you, if you’re not working with the marketing team, you are leaving money on the table and the folks at risk consulting are the best at that. They also are geared up to help you soup to nuts on any LNG project, whether it’s a small just getting your permits off the ground all the way through the construction phase. Highly highly recommend call Reese Energy consulting.com. We love them over there. And finally, guys, if you want to become Billy Bob Thornton from Land Man, we have all the info that you need to get off the ground to begin your oil and gas investing journey. Check out invest in Oil.Energy News Beat.com sign up. Tell us a little bit about yourself and we will get you all of the information on what investing in oil and gas looks like. Got you a great e-book, especially if it’s your first time investing in energy. We give you kind of a little breakdown of all of the different types and then we will point you in the direction of where we’re making all of our investments as energy news beat. It’s a great, great resource. Again, if you are interested in getting a little bit of tax savings, getting some monthly distributions and finally being Billy Bob Thornton from Landman Guy. So that’s the key there. Invest in oil that energy news beat.com. [00:17:33][136.5]

Michael Tanner: [00:17:34] But market skew overall on Friday fairly muted S&P was down about 9/10 of a percentage point. Nasdaq down about 1.3 percentage points. Two and ten year yields were up, though two year yields up 1.8. Ten year yields are 1.2 percentage points, Dollar index up about 3/10 of a percentage point. Bitcoin still at $96,000. It’s basically flat over the weekend. Crude oil finished the week at $71, even up about a half a percentage point. Brant Oil fell about 2/10 of a percentage point, 7471. Natural gas was down to $3.30 or shaved off about three percentage points and about I ten $0.10 on that index mark Sloppy Ian AMP Securities contract was down about a half a percentage point down to one 3325. You know, this was the third week over week drop for oil prices. You know, mainly things held steady from new sanctions that we’ve been in and more tougher sanctions that were imposed on most of Iran’s crude oil exports. But, you know, any any potential trade war with China and, you know, tariffs on countries that we import energy from is going to, you know, is going to hurt from a from a pricing standpoint. You know, I think, you know, this is a quote from John killed off he’s over there at again Capital Partners and we’re just trying to make our way through the sanctions, not sanctions tariff talk from the White House. He says I don’t know if prices are low enough for the president, but we will see. You know, that $70 a barrel has been that lower band of the trading range. So, you know, while again, while Trump may may want to see it lower, it’s going to be I think it’s he’s going to and I would personally find you know, find it difficult for that price to be able to get much lower than that. We also did see rig counts drop on Friday. We did see an increase in four rigs in the United States, up to 586, still down about 37 rigs from where we were a year ago. But nice to see a couple more rigs coming on. You know, the other thing that we saw us do on Friday was a nice little deejay basin up there in Colorado. Nothing like a transaction happening there. Bayswater, which is a Denver based oil and gas development company, entered into an agreement to sell D.J. Or Denver Joules bird base. And for those of you not familiar with it, up there on a prairie operating company, which is actually a public company. So Bayswater being private, prairie operating, being public. It’s a combination stack, a cash and stock transaction, which we valued about $603 million. Quote here from Steve Strood. He’s the president and CEO of Bayswater. Today’s agreement represents the. Culmination of years of work by our talented and dedicated DJ base and Team Bayswater has been operating in the DG since 2008. We are proud of the high quality asset. We have built a reputation as a responsible operator and positive impact where we have surrounding and we have in the surrounding Weld County communities. Give you guys an idea. The sale included about 24,000 leased acres, 300 producing horizontal wells on over 30 pads, 2500 barrels of oil equivalent per day. That also includes nine drilled but uncompleted wells and a operated horizontal or an operated saltwater disposal system. To give you guys an idea, Bayswater is is a privately capitalized company which raises money from endowments and the other end to end other what I would call not high net worth individuals. They’re a little bit bigger than that, but other, what I would call semi institutional capital, not necessarily private equity backed. They have more of kind of an endowment kind of family office style model. They do the fund model. So all of these assets were specifically in a in a specific fund. You know, people ask, well, why? Why make that. Why only sell a portion? Because, remember, this is only a portion of their Colorado asset. They still have about 70 operating, 70 horizontal wells and about 18,000 BOE from those wells. And so the question is why? Why not sell everything? Well, when you look at the fund model, you know, there’s a lifecycle to every fund. And if you’re beer, you’re a 5 to 10 year up your five year life cycle or a ten year life cycle towards the as you get closer to those dates, you have to begin to think about a divestiture to monetize those assets to, you know, close out the fund and return whatever remaining capital back to your partners. And that that’s what’s going on here. You know, this 24,000 acres and 25,000 BOE per day was was part of a fund that was closing in on their lifestyle. This other remaining acreage or 20 and 18,000 BOE is in a different fund. So yeah, quick note there. That’s the press release from the Bayswater side, you know, going to look at, you know, from the prairie operating side, the convenient part is they’re public. So we do get a little bit more. You know, we do get a little bit more info from then to the total purchase price was a $602.75 million. It’s going to consist of cash and up to 5.2 million shares of common stock. So we don’t quite know the split yet until it closes, but we can do a rough calculation based upon the share price of prairie operating cash looks to be about a 5050 split. They obviously throw the an up to in there in the press release to kind of give them some leeway depending on what had happened. It’s 69% liquid. So that 28,000 BOE per day is about 69% oil. It’s about basically 54,000 net acres, which includes about an extra 600 highly economic drilling locations, which they claim add about ten years of inventory. You know, they also in response to that, they were able to increase and expand its borrowing base to 475 million at the close of this. So, you know, it’s it’s you know for for them it’s it’s great. Basically an APB 20 the PDP was valued at about 23,000 per flowing BOE. I love seeing that number only because that gives us a great window into what things are selling for. And then we can also kind of do the breakdown of from a drilling location standpoint. But you know, overall, Colorado actually does remain to be a fairly high margin, high cash flow asset for multiple, mainly because of the oil weighted nature of the you just get a lot more oil than you do gas, which is great. Now operating in Colorado has become tougher, but I do think as as as we’ve seen, I wouldn’t consider this a consolidation move, mainly because there’s water still operating in Colorado. Again, they’re just closing out one of their funds, but there’s value that remains to be seen. And I think there’s a few, a few you know, there’s probably really 1 or 2 larger pieces. I mean, really, you think about, you know, who’s left in Colorado, you know, you’ve got Civitas and the other one that that is still out there is oxy. And mainly because of their ability and the amount of acreage that they have down in in Texas specifically with obviously the acquisition of Anadarko. But then more recently their acquisition of Crown Quest in Crown Rock. You know, it remains to be seen what they decide to do with Colorado. I’m not saying I know anything specific, but I but I do I do have a feeling that there are there’s there’s going to be some sniffs. And I wouldn’t be shocked to see that if in 2025 Oxy decides to exit the DOJ, the question is who’s willing to scoop all that up at the price? That makes sense. Obviously no new operator is going to move in and buy it. So is this all one transaction? Do they piece it out to, you know, companies like Prairie, Do Civitas? Are there other companies that come in? I think that and, you know, my prediction for 2025 is Oxy is going to do something with that Colorado asset, not only just to get it off the books, but monetize it. And you need to pay down that debt debt and mainly focus on some of their core assets specifically in Texas. So nice. Always see M&A action, guys. I’m speaking of that. And we do have a new Deal spotlight that’s going to launch this week. And the first time we’ve done a private fund that you guys as accredited investors. Can invest in. A good, good friend of mine, Eric Rice, former colleague, and you could call him a boss of mine, but he was on a he was on a different team. But it’s an awesome, awesome, a very interesting investment opportunity that, you know I. Knowing not much about the crypto and bitcoin space was great to learn at and the the thread between how energy and bitcoin play off each other is awesome. So I highly recommend go check it out a little. Probably a Thursday Friday release, but very much looking forward to that. What did I miss? What are people what should people be worried about? [00:25:38][483.6]

Stuart Turley: [00:25:38] Well, I’ll tell you what, let’s keep an eye on Doge. You can’t buy that kind of entertainment like we had on the podcast last week. Turns out that Doge was actually created by an Obama legal entity. So the reason Trump is rolling around all through all of the agencies and we’re finding out about how bad things are. It was started by Obama with all these back doors. You got to love it now. [00:26:06][28.1]

Michael Tanner: [00:26:07] You do got to love it. And it’s it’s super, super interesting. And then we know you’ll be keeping us up to speed, guys. But with that, we’re going to let you get out of here, get back to work. Start your day. First off, Stu, we’re recording this before the Super Bowl. So as you guys listen to this, the Super Bowl will be done. Who’s your vote on Who’s winning? [00:26:22][15.5]

Stuart Turley: [00:26:23] It’ll be 42 to 38. [00:26:24][1.1]

Michael Tanner: [00:26:25] Who’s winning? [00:26:25][0.3]

Stuart Turley: [00:26:26] The chiefs and the refs. [00:26:27][1.2]

Michael Tanner: [00:26:28] The chiefs in the refs are winning. I have a feeling the chiefs will win. My heart is obviously with the Eagles longtime Broncos fan here. So it’s going to just pay me if the if the chiefs win again, I have a feeling they will win. But my heart is with the Eagles and I hope they end up pulling it out, guys. But we will. Let’s get out of here after. Stuart Turley, I’m Michael Tanner. Thanks for checking us out to start your week. We’ll see you tomorrow. [00:26:28][0.0][1565.8]