Oil and Gas Investor February 2024 cover featuring Petrie Partners CEO Jon Hughes, COO Andy Rapp and CFO Mick Bock

Oil and Gas Investor Magazine - February 2024

The OGInterview
Small Wonder
Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.

Features
Moving the Drilling Cabin to Move the Needle on Rig Safety
NOV's tests of how removing the driller's cabin from the rig floor impacts operations suggests a critical step in industry safety is close.

The Pioneer-Exxon Deal from A to XOM
Behind the scenes, the machinations included years of "preliminary discussions."

Natural Gas Outlook: An LNG Wait in 2024
Natural gas production increased over the last decade, but 2024 will test the market's patience.

In Permian, More M&A Means Fewer Rigs
E&Ps are radically cutting drilling activity on their new assets.

California Regs Derail Restart; Result is Rancor, Write-Offs
Chevron and Exxon Mobil are set to write off billions on California assets because of strict environmental rules.

Financing and the Quest for Net Zero
McKinsey Partner Kassia Yanosek details private equity's unique role in climate transition, despite corporate uneasiness.

Cover Story

Petrie Partners: A Small Wonder

Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.

Feature

Analysts: Permian Basin Rigs Plummeted on Record Upstream M&A

A land grab for top-quality drilling locations fueled record Permian Basin M&A activity in 2023. To preserve inventory, E&Ps are radically slashing drilling activity on their new assets, East Daley Analytics reports.

Behind The Scenes: The Pioneer Exxon Deal from A to XOM

Pioneer was a potential buyer of a mystery E&P before deciding to sell to Exxon Mobil. Between June 22 and Oct. 10, terms of 2023’s largest U.S. oil and gas merger were debated.

California Reaming: Laws Spark Rancor, $6B in Chevron, Exxon Write Offs

Chevron and Exxon are set to write off billions of dollars worth of California assets because of strict laws and regulations that the companies say won’t change oil consumption but will shift profits to foreign producers such as Saudi Arabia.

Natural Gas Producers’ Game Plan for LNG: Wait Out 2024

Natural gas production has risen over the past decade with the potential to keep growing, but 2024 will test the market’s patience as E&Ps await LNG export capacity to come online.

Personless Rig Floor Could Be Coming Soon

NOV’s CTO David Reid talks with Hart Energy's Jennifer Pallanich on the safety implications of removing the driller’s cabin from the rig floor.

Quadrupling Energy Transition Financing and the Quest for Net Zero

McKinsey Partner Kassia Yanosek details private equity’s unique role in the climate transition, despite corporate uneasiness at partnering with firms, and the need to quadruple funding while government ramps up support.

A&D Watch

Analysis: Will $2.7B Tokyo Gas-Rockcliff Deal Reopen Natgas M&A?

The Lower 48 has seen a whirlwind of oil and gas M&A this year, including a historic volume of transactions across the Permian Basin. After Tokyo Gas Co.’s $2.7 billion bid to acquire Haynesville E&P Rockcliff Energy II, could the window for natural gas deals be reopening?

Analysts: APA Takes Callon Off Board as Permian M&A Wave Hits ‘24

APA and its subsidiary Apache Corp. are plucking Callon Petroleum off the board for $4.5 billion in stock as a historic wave of Permian consolidation enters a new year.

Fury Road: Will $450MM Battalion M&A Fuel More Go-private Deals?

Delaware Basin E&P Battalion Oil is being acquired in a go-private transaction by a newly formed E&P Fury Resources. Could go-private sales become more common for small E&Ps with limited runway in the public markets?

Shell Sells Nigerian Onshore Business for Up to $2.4 Billion

Shell is selling its Nigerian onshore oil and gas business to a Nigerian-led energy consortium for $1.3 billion and will receive additional payments of up to $1.1 billion from the European group.

Talos Energy to Acquire QuarterNorth for $1.29 Billion

Talos Energy estimates QuarterNorth’s average daily production — largely from its interests in the Katmai discovery in the Green Canyon region— will be approximately 30,000 boe/d.

At Closing

Darbonne: ESG, ‘Oh So 2022,’ Reduced to Table Stakes?

ESG champion BlackRock is paring, while Exxon Mobil’s growing. Today, ESG is just table stakes.

Commentary

Belcher: Guaranteed Policy and Regulatory Uncertainty

With an expectedly close presidential election and small margins of control in both houses of Congress, more policy and regulatory unpredictability is certain for the U.S. oil and gas industry.

Column: There’s Methane to Our Madness

The EPA’s methane rule will likely face resistance—but it shouldn’t.

Kissler: Red Sea Conflict Could Trigger Oil Shortage

Escalating tensions in the Red Sea heighten the potential for shipment disruptions and major impact on energy markets.

Oscars Season? Meet Guidance Season … and the Winner is?

Like movies under the Marvel and “Star Wars” banners—that have recently bombed—growth stocks are continuing a good run, but the appeal of the niche midstream sector could take center stage in 2024. 

Romito: Time to Evaluate Carbon Price

The industry must evaluate its price of carbon to prepare for the impact of a possible border tax.

West: Oil Service Industry 2024: A Tale of Two Markets

North America's oil service industry will decline while the international and offshore markets will drive growth.

E&P Momentum

Drilling Automation Systems Provide Consistency Across Wells, Fields, Personnel

Automated drilling systems don’t get tired, forgetful or concerned about the type of rig or formation.

Drilling Tech Rides a Wave

Can new designs, automation and aerospace inspiration boost drilling results?

Energy Transition

Lithium Alternative: Natron Energy Scaling Up Sodium-ion Batteries

The sodium-ion battery does not rely on critical materials, as its main ingredient sodium is abundant, cheap and safe, experts say.

The Risks and Benefits of the IRA’s 45Q, 45Z

The Inflation Reduction Act sections 45Q and 45Z are incentives to invest in energy transition and renewable energy projects, but they involve legal considerations to account for.

US Releases Proposed Route to Hydrogen Production Tax Credit

The U.S. Treasury Department's proposed rules aim to help jumpstart the hydrogen market in the U.S., but some say the proposal lacks flexibility.

Finance & Investment

As Chesapeake, Southwestern Ink $7.4B Deal, D.C. Gasses Up for More Scrutiny

Natural gas mergers can bring more federal attention, and Chesapeake and Southwestern’s dominant positions in the Haynesville Shale and Appalachian Basin are likely to raise eyebrows.

Dallas Fed Survey: More M&A? Sure, but 2024 Remains Uncertain

As 2024 approaches, how E&Ps are planning out operations depends largely on the size of the company, an economist said.

Paisie: Economics Edge Out Geopolitics

Weakening economic outlooks overpower geopolitical risks in oil pricing.

From the Editor-in-Chief

Daugherty: Feds Take Aggressive Posture on Oil, Gas Mergers

Newly released guidelines by the Department of Justice and Federal Trade Commission suggest that a post-deal, combined market share of more than 30% is potentially problematic.

Global Energy

Why Investors Should Keep an Eye on Vietnam

Vietnam has become a partner with the U.S., but as a manufacturing hub and the home to one of the world’s largest cache of critical minerals, it needs power—and investment—to move forward, Energy Capital Vietnam (ECV) founder, chairman and CEO David Lewis says.

International Highlights

Vietnam Seeks Delicate Balance Among US, China, Russia

Ongoing U.S. tensions with China and Russia offer Vietnam an opportunity to boost economic ties with the former if American investors can steer past geopolitical smokescreens and destine funds for infrastructure, power and LNG projects all somewhat tied to Vietnam’s manufacturing sector.

Midstream

FERC: Closure of LNG Import Plant Threatens New England’s Grid

Despite record U.S. natural gas production, parts of the U.S., including New England, face difficulties finding adequate supplies for power generation.

Warm Winters and the Freezing of Natural Gas Prices

Analysts break down how the cost of gas fell in 2023 and where it may go in 2024.

Williams’ $1.95B Deal for Gas Storage Sign of Tightening Market

Analyst: More deals like Williams’ $1.95 billion acquisition of natural gas storage in Louisiana and Mississippi could be on the horizon as limited capacity becomes a challenge.

Technology

Excelling Past Spreadsheets: Validere’s Solution for More Efficient Emissions Detection

Validere’s Carbon Hub emissions management software looks to push the industry past Microsoft Excel spreadsheets and into the world of machine learning.

‘A Single Source of Truth:’ Rethinking Data Systems

Starting from the desired outcome, or right to left thinking, drives the lifecycle information management approach for planning data strategies that achieve specific goals.

Technology Report

Wolf in Sheep's Clothing: Cryptocurrency's Effect on Energy, Society

Cryptocurrency miners and their ravenous appetite for electricity are creating widespread problems for electricity grids that are already short of capacity.

Trends & Analysis

EY: What to Watch for in 2024: Emissions, Ops, M&A

Expect E&Ps to engage in more strategic consolidation, place more emphasis on carbon markets and attempt to get ahead of the SEC’s guidance on emissions reporting.