Tag Archive for: drilling

Production in Utah's oil-rich Uinta Basin is at an all-time high. Texas oilman Jim Finley is credited with opening the floodgates.

A Bit Of A Ghost

The Utah’s oil boom: Jim Finley is a bit of a ghost. Outside of oil industry circles, few people have probably ever heard of the man. He rarely speaks in public.

Utah's oil boom

One exception was in October 2021. When Finley the CEO of Texas-based Finley Resources. Presented to a coalition of seven oil-producing counties in eastern Utah. Following his speech, coalition board members and staff applauded Finley for his investments in Utah’s oil-rich Uinta Basin, and thanked him for making time to speak. One person noted that he is a particularly difficult man to get hold of.

“Sometimes nobody knows where I am,” Finley said.

“On purpose,” someone else chimed in. Finley chuckled.

A Key Role

The Texas oilman has played a key role. In spearheading the kind of oil boom that has long evaded the remote basin. In just over a decade, he’s become one of the top producers in the Uinta. And is now playing an outsize role in shaping Utah’s energy future.

Finley has thrown his support behind a controversial rail line that would make it easier for him and the basin’s five other producers to export oil to out-of-state markets, while simultaneously boosting export capacity via trucking and existing rail. He has his fingers in every aspect of basin production, from drilling oil and mining sand for hydraulic fracturing to operating a transloading facility and a growing fleet of oil trains. Powerful political allies have helped him expand his empire, primarily by funneling public money toward infrastructure projects that benefit the oil sector.

Chris Kuveke, a researcher at BailoutWatch, a watchdog group that provided HuffPost with extensive research on Finley’s portfolio and operations, called Finley “the mastermind” of the basin’s current oil boom.

“He has a long history of using campaign finance and lobbying as influence to get his projects where he wants them to be,” Kuveke said. “And he knows what he’s doing. He has a serious track record of influencing the industry that he wants to grow, being a linchpin. And that’s what he’s doing in the Uinta.”

 

Click here to read the full article
Source: HUFFPOST

If you have any questions or thoughts about the Utah’s oil boom topic, feel free to contact us here or leave a comment below.

Merger and acquisition activity among exploration and production companies hit $144B in the fourth quarter alone and $190B for 2023.
  • The oil and gas industry is undergoing its biggest-ever consolidation, according to Enverus.
  • Upstream merger and acquisition activity hit $144 billion in the fourth quarter alone. And $190 billion for 2023, both setting records.
  • Bids from Exxon Mobil, Chevron, and Occidental Petroleum were among the key deals fueling the record.

The upstream oil and gas sector is consolidating at a record pace. As companies race to secure longevity in the market.

Merger and acquisition activity among exploration and production companies hit $144 billion in the fourth quarter alone. And $190 billion for 2023, both setting records, according to analytics firm Enverus.

“Oil and gas is undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s giving rise to the modern supermajors.” Senior Vice President Andrew Dittmar said in a press release. “After a decade of lowered investment in exploration and with the major US shale plays largely defined, M&A has become the preferred tool to replace declining reserves and secure longevity in these companies’ profitable upstream businesses.”

In the fourth quarter, bids from Exxon Mobil, Chevron, and Occidental Petroleum. Were among the key deals fueling the record-setting consolidation.

M&A activity was overwhelmingly focused on oil last year. Totaling $186 billion in deals, while $6 billion targeted gas, according to Enverus.

Interest in the latter will likely grow as the US industry is working on increasing its liquefied natural gas exports over the next three years.

Click here to read the full article
Source: yahoo!finance

If you have any questions or thoughts about the “Oil & Gas Industry” topic, feel free to contact us here or leave a comment below.

Last year was big for Texas oil companies as they jockeyed for access to petroleum-rich plots of the Permian Basin and branched into new territories.

The Spree of Oil and Gas Topic. Last year was big for Texas oil companies as they jockeyed for access to petroleum-rich plots of the Permian Basin and branched into new territories.

Recent megadeals struck by Chevron and Exxon put pressure on others in the oil industry to catch the consolidation wave, potentially kicking off a new round of mergers and acquisitions that could have a profound impact on Houston for years to come. Additionally, milestone acquisitions made by Exxon and Occidental Petroleum in the carbon capture space also set the stage for Houston to be ground zero for the growing industry.

Exxon to buy Pioneer for $59.5 billion

Exxon said in October that it would buy Irving-based Pioneer Natural Resources for $59.5 billion in the oil giant’s largest deal since it merged with Mobil more than two decades ago. Expected to be settle in 2024, the deal would make Spring-based Exxon the largest operator in the Permian Basin of Texas and New Mexico and bring the company’s daily production to almost 4.5 million barrels of oil equivalent a day — 50% more than the next largest supermajor.

Source: Houston Chronicle

If you have any questions or thoughts about the Spree of Oil and Gas Topic, feel free to contact us here or leave a comment below.

Dive into the world of Overriding Royalty Interests (ORRIs) with our comprehensive guide. Explore the advantages, risks, and key considerations for investors eyeing the lucrative energy wealth, especially in regions like Texas.
DISCLAIMER: We are not financial advisors. The content on this website is for educational purposes only and merely cites our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!
The world of investments is vast, with opportunities spanning various industries. One lesser-known yet lucrative option for investors is putting money into Overriding Royalty Interests (ORRIs), particularly in regions with a robust history of energy production like Texas. In this comprehensive guide, we’ll delve into the intricacies of investing in ORRIs, exploring what they are, how they work, the potential advantages and risks, and crucial considerations for those eyeing a slice of the energy wealth.

Understanding Overriding Royalty Interests

Before delving into the investment potential, let’s establish a solid understanding of what Overriding Royalty Interests entail. An ORRI is essentially a share of the revenue generated from the extraction and production of minerals, such as oil and natural gas, from a specific piece of land. Unlike traditional royalties, ORRIs “override” the rights of the working interest owner, entitling the holder to a portion of the income generated, irrespective of property ownership.

Typically expressed as a percentage (e.g., 1% or 3%), the ORRI is calculated based on the gross proceeds from the sale of extracted minerals. This interest is often granted to individuals or entities other than the property owner, such as geologists, drilling companies, or industry professionals.

Mechanics of Overriding Royalty Interests

To grasp how ORRIs function, consider a scenario in the oil-rich landscapes of Texas:

  • A landowner leases their land to an oil and gas company for drilling and extraction.
  • The lease agreement outlines terms, including royalty rates shared between the landowner (lessor) and the company (lessee).
  • Suppose the landowner and company settle on a 20% royalty rate, meaning the landowner gets 20% of mineral revenue.
  • Now, assume an investor holds an overriding royalty interest of 3% on this property. This entitles them to 3% of the gross revenue, in addition to the landowner’s 20% royalty.
  • The remaining 77% of the revenue goes to the drilling company as the working interest.

Investors with ORRIs benefit from mineral extraction without dealing with operational costs or day-to-day activities, making it an enticing prospect for those seeking passive income.

Advantages of Overriding Royalty Interests

Investing in ORRIs offers several advantages for individuals looking to diversify their portfolios:

Passive Income Stream: ORRI holders enjoy a steady income stream without actively participating in operations, making it an attractive source of passive income.

Minimal Operational Responsibilities: Investors are not burdened with operational activities, expenses, or risks associated with drilling and production, minimizing involvement and risk exposure.

Potential for Profit: Regions like Texas, with a history of successful oil and gas production, offer potential for significant profits, attracting investors to the energy sector.

Challenges and Risks

While ORRIs present enticing advantages, investors should be aware of potential challenges and risks:

Market Volatility: The oil and gas industry is prone to price volatility, impacting ORRI profitability and income generation due to fluctuating energy prices.

Lease Terms and Royalty Rates: Unfavorable lease terms or royalty rates negotiated between the landowner and drilling company may reduce potential income for ORRI investors.

Environmental and Regulatory Concerns: Compliance with complex and evolving regulatory frameworks at federal, state, and local levels, along with addressing environmental concerns, poses challenges for ORRI owners.

Key Considerations for Investors

For those eyeing ORRIs as an investment opportunity, careful consideration is paramount:

Lease Negotiations: Thoroughly review and negotiate lease agreements to ensure favorable terms, royalty rates, and protection of investor interests. Professional guidance is invaluable in this process.

Legal and Tax Implications: Navigate the complex legal and tax aspects associated with ORRI ownership by seeking professional guidance. Understand the unique implications and potential tax benefits.

Due Diligence: Conduct comprehensive due diligence before investing. Evaluate profitability potential, stability of the drilling company, and environmental and regulatory factors impacting the investment.

ORRIs vs. Working Interests: Distinguish between overriding royalty interests (ORRIs) and working interests (WIs). While ORRIs offer passive income, WIs involve active participation in operations, bearing operational costs and risks.

 

Investing in Overriding Royalty Interests proves to be a compelling option for those seeking a slice of the lucrative energy sector. While it offers passive income and profit potential, investors must navigate market volatility, lease terms, and regulatory complexities. With careful consideration, thorough due diligence, and professional guidance, investors can unlock the wealth potential of ORRIs and contribute to the dynamic landscape of the energy industry.

 

If you have further questions related to the topic, feel free to reach out to us here.

North Dakota Mineral Resource Director, Lynn Helms said 2023 was a good year for the state's oil and gas industry.

North Dakota Mineral Resource Director said 2023 was a good year for the state’s oil and gas industry.

“Prices were good,” said Lynn Helms. “And the companies were able to attract enough frack crews, to get into the mid to upper teens.”

Helms said the companies weren’t as successful with drilling crews.

“There are still workforce issues,” Helms said.

Helms said the year began with North Dakota producing just over a million barrels of oil per day. He said the hope was to get to the 1.3 million barrel mark by the end of the year. He said those final production numbers aren’t in yet.

As for next year?

“2024 looks to be slower growth,” Helms said. “But people are pretty optimistic.”

North Dakota Pipeline Authority Director Justin Kringstad echoed Helms’ comments.

“In 2023, what stands out is the month we got down to 4 percent flaring,” Kringstad said. “We’re continuing to see dedication by all sides — producers, mid-stream companies — to stay on top of this.”

Click here to read the full article
Source: Prarie Public NewsRoom

If you have further questions related to the “Oil and Gas in North Dakota” topic, feel free to reach out to us here.

The biding agreements worth $720M will enable Karoon Energy to get its hands on stakes in oil & gas fields offshore Louisiana.

Expanding its Asset Portfolio

Australian player entering Gulf of Mexico with new oil & gas acquisition. Australian oil and gas company Karoon Energy is in the process of diversifying and expanding its asset portfolio. Thanks to biding agreements worth $720 million. Which will enable it to get its hands on stakes in oil and gas fields offshore Louisiana. These Gulf of Mexico assets are being acquired from LLOG Exploration.

New oil & gas acquisition: Australian player entering Gulf of Mexico

Deals for the Acquisition

Karoon deemed the deals for the acquisition of a 30% interest in the Who Dat and Dome Patrol oil and gas fields. Along with related infrastructure, including the Who Dat floating production system (FPS) and a 16% stake in the Abilene field, from LLOG Exploration Offshore and LLOG Omega Holdings. In addition, the Australian firm is getting interests in adjacent acreage in the U.S. Gulf of Mexico, which contains Who Dat East (40%), Who Dat West (35%), and Who Dat South (30%).

Dr. Julian Fowles, Karoon’s Managing Director and CEO, commented: “This transformation meets our strategic objectives to acquire a material, value and earnings accretive, producing asset with expansion opportunities in each of Brazil or the Gulf of Mexico (GoM). The GoM is a Tier 1 jurisdiction with a stable and well-understood regulatory and fiscal regime. The Who Dat assets provide Karoon with both geographical and asset diversification. Complementing our existing Brazilian business with a second high-quality operation.

“Production from Who Dat will help offset the natural decline from Baúna and, with a unit operating cost of less than $6 per boe in FY23, will add a high margin, long-term cash flow stream to Karoon. There are significant development and exploration opportunities in our view analogous to Who Dat within the associated acreage. These provide the potential for future infrastructure-led developments, to increase production and extend Who Dat field life. Importantly, sustaining capital requirements are low. And development and exploration activities are expected to be funded from Who Dat cash flows.”

 

Click here to read the full article
Source: Offshore Energy

If you have any questions or thoughts about the topic, feel free to contact us here or leave a comment below.

ranger-ftd-111423-1
DISCLAIMER: We are not financial advisors. The content or topic (Oil and Gas Leasing) on this website is for educational purposes only and merely cites our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!

Oil and Gas Leasing

In today’s economic landscape, many individuals and investors are seeking ways to generate passive income. Leasing oil and gas rights is a unique and potentially lucrative avenue for achieving this financial goal. With the increasing demand for energy resources, oil and gas leasing can offer a steady stream of income without the need for active involvement in day-to-day operations.

In this comprehensive guide, we will explore the world of leasing oil and gas for passive income. We will cover the basics, the benefits, the risks, and provide valuable tips and strategies to help you make informed decisions and maximize your earning potential in this dynamic industry.

Oil and Gas Leasing: Understanding

Leasing Oil and Gas involves landowners granting exploration and drilling rights to energy companies in exchange for royalties, lease payments, and bonus payments. These agreements allow energy companies to access and extract oil and gas resources from the landowner’s property.

The process typically starts with negotiation, followed by the signing of a lease agreement. The lease agreement outlines the terms, including the duration of the lease, royalty rates, bonus payments, and operational details.

Oil and Gas Leasing: Benefits

Leasing oil and gas rights can offer several compelling benefits, making it an attractive option for generating passive income:

Steady Income Stream:

It often provide consistent royalty payments, which can serve as a reliable source of passive income. This income stream can be particularly valuable for landowners who may not have other revenue sources from their property.

Portfolio Diversification:

Investors can diversify their portfolios by adding oil and gas leases, reducing their reliance on traditional investments like stocks and bonds. Diversification can help spread risk and enhance financial stability.

Capital Appreciation:

As energy resources are extracted from the leased property, the value of the land may appreciate over time, potentially leading to increased property value and profits upon selling or re-leasing.

Low Active Involvement of Oil and Gas Leasing:

It typically requires minimal day-to-day involvement, making it an ideal source of passive income. Landowners and investors can enjoy financial benefits without actively managing operations.

Inherent Demand:

The global demand for energy resources, particularly oil and natural gas, remains consistently high. This demand ensures a continued market for oil and gas leases, creating opportunities for long-term income generation.

Oil and Gas Leasing: Risks and Challenges

While leasing oil and gas rights offers various benefits, it’s important to be aware of the potential risks and challenges associated with this investment:

Market Volatility:

The oil and gas industry is known for its price volatility. Fluctuations in energy prices can affect the profitability of oil and gas leases and the income generated.

Environmental Concerns:

It can impact the environment, leading to potential regulatory changes and increased costs related to environmental compliance and remediation.

Regulatory Complexities:

Oil and gas leasing is subject to complex and evolving regulatory frameworks at the federal, state, and local levels. Staying compliant with these regulations can be a challenge.

Geopolitical Risks:

Global political events, trade tensions, and conflicts can influence the energy market, affecting the value and profitability of oil and gas leases.

Lease Performance Variability:

The actual performance of oil and gas leases can vary based on the property’s reserves, the technology used, and the energy company’s expertise.

Oil and Gas Leasing: Tips for Passive Income

To successfully lease oil and gas rights for passive income, consider these valuable tips:

Conduct Thorough Research

Before entering into any lease agreement, conduct comprehensive research. Assess the geological potential of the property, review historical production data, and identify any existing or potential environmental and regulatory challenges.

Seek Legal and Financial Guidance

Engage legal and financial professionals with expertise in oil and gas leasing. These experts can help you understand lease agreements, evaluate lease terms, and navigate the complex legal and tax aspects of the industry.

Negotiate Favorable Lease Terms 

Negotiate lease terms that align with your financial goals. Ensure that royalty rates, bonus payments, and lease duration are favorable and competitive within the industry.

Diversify Your Portfolio

Diversification can help spread risk. Consider including a mix of oil and gas leases in different regions or with different energy companies to reduce reliance on a single lease.

Monitor Market Trends

Stay informed about market trends, energy prices, and geopolitical events that could impact the industry. This information will help you make strategic decisions regarding your oil and gas leases.

Assess Environmental and Regulatory Factors

Be proactive in addressing environmental and regulatory challenges. Implement environmentally responsible practices, and stay compliant with evolving regulations to mitigate risks and potential liabilities.

Strategies for Maximizing Passive Income

To maximize passive income from oil and gas leasing, consider the following strategies:

Lease Structuring 

Work with experienced professionals to structure your lease agreements in a way that optimizes income potential and minimizes risks.

Royalty Interest vs. Working Interest

Determine whether you prefer a royalty interest, where you receive a percentage of production revenue without operational responsibilities, or a working interest, where you have an ownership stake in the operations but also assume associated costs and risks.

Active vs. Passive Investment 

Decide whether you want to actively manage your oil and gas leases or take a more passive approach. Passive investors may choose to work with reputable energy companies that handle day-to-day operations.

Tax Planning 

Implement tax planning strategies to optimize your financial outcomes. Consult with tax professionals who understand the unique tax implications of oil and gas leasing.

Leasing-oil-and-gas

Oil and Gas Leasing rights for passive income is a compelling financial opportunity for landowners and investors. With the potential for steady income streams, capital appreciation, and portfolio diversification, oil and gas leases can be a valuable addition to your investment strategy.

However, it’s essential to approach this industry with careful consideration, thorough research, and the guidance of legal and financial experts. By staying informed about market trends, understanding the challenges and risks, and employing strategic leasing and investment approaches, you can harness the passive income potential of oil and gas leasing while mitigating potential pitfalls. Remember that the world of oil and gas leasing is dynamic, and proactive management is key to long-term success in this field.

 

If you have further questions related to the topic, feel free to reach out to us here.

US crude oil production hit a monthly record in Aug 2023, with an average output of 13.05 million bpd, breaking previous month's record.

Falling and Flatlining Rig Count

US is Pumping More Oil despite the falling and flatlining rig count, U.S. crude oil production managed to hit a monthly record-high in August 2023, boosted by productivity gains and more efficient operations.

U.S. exploration and production companies are drilling longer laterals and deploying rigs to the most promising areas to get more bang for their buck.

U.S. field production of crude oil reached 404.6 million barrels during the month of August, new EIA data showed this week, for an average of 13.05 million barrels per day—squarely breaking the previous record U.S. drillers set in July of 401.73 million barrels.

US is pumping more oil and it Increases in production catch sight in PADDs 1, 2, 3, and 4, with the largest percentage increase in production seen in PADD 4, which comprises Colorado, Idaho, Montana, Utah, and Wyoming. The largest actual increase is distinguish in PADD 2, which includes North Dakota, Illinois, and Kentucky, among other states.

Crude Oil Production Reached a Record High

In Texas, the top oil-producing state, crude oil production reached a record high of 5.7 million barrels per day (bpd) in August, per the most recent monthly energy economic analysis by Texas Oil & Gas Association (TXOGA) Chief Economist Dean Foreman.

“Texas’ production of oil and natural gas has achieved records despite relatively modest drilling activity. Productivity gains and leveraging wells that have been drilled but not yet completed have provided a tailwind,” Foreman wrote at the end of September.

Producers in the Permian in Texas and New Mexico and the other shale plays have boosted production of crude oil despite a loss of 117 rigs so far this year, per Baker Hughes data as of October 27.

U.S. crude oil producers have been shedding rigs for most of the year, while the rig count largely stabilized in October.

Click here to read the full article
Source: Oil Price

If you have any questions or thoughts about the topic, feel free to contact us here or leave a comment below.