Videos Of The Week
Three Different Views On The Oil Industry & The Weekend Update On Sable
I listened to a bunch of good podcasts this week, but I wanted to share three that were interesting. All three are focused on the oil sector from different perspectives. The first is focused on the Permian Basin with the CEO of Diamondback FANG 0.00%↑, the second is focused on M&A in Canada with the CEO of Strathcona, and the last is focused on the oil macro with Anas Alhajji. There has also been a lot of FUD on Sable Offshore SOC 0.00%↑ with 237 passing, and with the number of questions I have received, I wanted to hit on that at the end. I figured I would give a little teaser up front, but if the LA Times is trotting out an environmentalist lawyer that has been working for half a century in California to say this on 237, you know we are close.
The bill, which would take effect in January, reasserts the authority of the commission to oversee pipeline repair projects and requires the “best available technology” for any pipe transporting petroleum from offshore. That could add lengthy governmental reviews for Sable if the operation isn’t running by January….
Mary Nichols, an attorney at UCLA Law’s Emmett Institute on Climate Change and the Environment, said the bill probably wouldn’t affect the ongoing project off Santa Barbara County’s coast — which remains tied up in litigation — but makes clear that there’s no easy path for any other company looking to take advantage of offshore oil in federal waters under the oil-friendly Trump administration.
“This was designed to send a message to anybody else who might be thinking about doing the same thing,” said Nichols, a former chair of the California Air Resources Board.
- California legislators strike last-minute deal to help oil industry but limit offshore drilling
Oilfield 360 w/ Kaes Van’t Hof
A friend sent me this podcast last week, and for anyone interested in the US oil industry, it’s worth a listen. Van’t Hof tells the story of how he got to be CEO of Diamondback, and the story of growing the company to one of the main players in the Permian Basin. He talked about his experience on the contract drilling side of things, and why geologic headwinds outweigh productivity and cost tailwinds for US production. They get into questions for the future of the company over the next several decades, and the challenges of balancing the quarterly focus with the long term goals.
“I think these peak demand charts are going to just keep getting pushed out and to the right. The great stat I heard was in 2024 we burned the most coal in history, most burned the most natural gas in history, we had the highest oil demand in history, and we also burned the most wood for energy in history in 2024.”
- Kaes Van’t Hof
In The Money w/ Adam Waterous
If you’re interested in Canadian oil sands and the bidding war for MEG Energy, this one will be interesting. Waterous is the CEO of Strathcona (so he might be a little bit biased), but he talked about their increased bid for MEG. He also shared his thoughts on the MEG board, their poor corporate governance, and the competing Cenovus offer. They got into how a larger SAGD business would benefit from the MEG assets along with his thoughts on future M&A. He shared his view on the regulatory issues in Canada and what he sees for the future of Canadian energy. Again, he has a dog in the fight so to speak, so feel free to take what he is saying with a grain of salt, but I thought it was interesting to hear his perspective on the deal.
MacroVoices w/ Anas Alhajji
If you want the high level view of the macro environment for oil, this is the one for you. They talked about the OPEC group of 8 unwinding the production cut, and what was the trigger for the unwinding. Alhajji points out that there are only four countries that can increase production: the Saudis, UAE, Iraq and Kuwait. He also goes into why the ability to increase production for Iraq and Kuwait is limited. The EIA and IEA forecasts and adjustments were another topic, which shows the circular nature of the news cycle when it comes to oil. They also discussed the crosscurrents between tariffs, sanctions, and trade wars for LNG. For investors interested in energy, you might take away a couple things to think about.