Periodicals
The Rare Petro Periodical series is an ongoing deep dive into the macro-level events that have, currently are, and will continue to shape our industry, in a condensed research paper format.
Thirsty Thursday: An Inventory Report (6/10)
Welcome back to the second episode of Thirsty Thursday! The temps are high, and so is the price for a barrel of WTI. Regardless, we are here to see what commodity levels are at, so kick back, grab a brew, and let's get to analyzing! Starting with the API report,...
Oil and Gas M&A Summary – May 2021
After continued demand destruction as a result of the global pandemic following historic price declines as a result of the Russia-Saudi price war, the oil and gas industry has been forced to re-calibrate in response to shifting market conditions with capital discipline taking center stage. Although 2020 saw the fewest deals across the sector in more than a decade, consolidation through this price cycle seems to be the driving force of 2021 as companies push to boost margins, cut emissions, and prepare for the energy transition.
Energy Market Report Card – Oasis Petroleum (OAS)
Chevron Corporation is a publicly traded upstream and downstream integrated energy company with NYSE ticker CVX. Following the FY2020 earnings release and company 10-K, a financial ratio analysis was performed to evaluate the firm. Several performance metrics were benchmarked to competitors in the industry as well as Chevron’s prior years. Although CVX showed declines year-over-year in several of these areas, a major driver appeared to be lost revenue due to commodity prices and the results also outperformed competitors in several areas.
Thirsty Thursday: An Inventory Report (6/3)
Welcome to a new segment from RARE PETRO: Thirsty Thursday! Here we will see if we’ve been poured another tall glass...
Rising Chinese GHG Emissions
For the first time since national greenhouse gas emissions have been measured, China’s annual emissions in 2019 exceeded those of all developed countries combined. While their per-capita demand is still lower than the average of other OECD countries, China has been trending in the wrong direction in terms of emissions growth. With GHG emissions continuing to grow while the rest of the world commits to reductions, China appears to be focused on its own economic recovery over meeting global climate goals.
CVX Market Report Card
How does Chevron's balance sheet stand up to its competitors, along with its past couple years of performance? Find out through this short video! https://youtu.be/waf50F0wYXA https://soundcloud.com/user-32242361/chevrons-report-card Written Periodical Here Disclaimer:...
Hedging to Hemorrhaging
The implementation of an effective hedging program can be a tool that helps ensure certainty of cash flow and provide longer reaction time in the event of a market price collapse. On the flip side of the coin, if prices rebound as they did in the first quarter of 2021, producers are left behind while the market surges. With United States E&P Companies projecting $7 billion in hedging losses for the quarter, it will be important to keep a close eye on which companies choose to continue to hedge early for guaranteed revenue protection and those that hold out or hold off to risk the market volatility in hopes of even more revenue.
Energy Market Report Card – Chevron Corporation (CVX)
Chevron Corporation is a publicly traded upstream and downstream integrated energy company with NYSE ticker CVX. Following the FY2020 earnings release and company 10-K, a financial ratio analysis was performed to evaluate the firm. Several performance metrics were benchmarked to competitors in the industry as well as Chevron’s prior years. Although CVX showed declines year-over-year in several of these areas, a major driver appeared to be lost revenue due to commodity prices and the results also outperformed competitors in several areas.
Biden’s Earth Day Summit
United States President Joe Biden hosted a two-day virtual summit of world leaders coinciding with Earth Day to address the global climate crisis. With a commitment to cut greenhouse gas emissions 50-52% by 2030 relative to 2005 levels, Biden intends to cement his leadership in the global fight against climate change and develop credibility in his plea for other countries to join the cause.
California’s Battle Over Oil
California Senate Bill 467 set out to gradually phase out oil and gas extraction processes that account for most of the state’s petroleum industry but failed to muster the five necessary votes needed to advance in the state legislature. Key points on the bill were to ban enhanced oil recovery techniques, add a 2,500-foot setback clause, and encourage CalGEM to utilize displaced oil and gas workers for the abandonment of old oil and gas sites. But, California Governor Gavin Newsom took matters into his own hands after the bill did not move to the legislature. He has since tasked state agencies to move away from fossil fuels and combat climate change by halting the issuance of hydraulic fracturing permits by 2024 and planning to phase out oil and gas extraction two decades later.
Energy Sector Tax Credits
President Joe Biden’s recently unveiled a tax plan to accompany his $2 trillion infrastructure proposal that takes direct aim at fossil fuel subsidies in favor of clean energy incentives. The “Made in America Tax Plan” is set to raise the corporate income tax rate from 21% to 28% and replace fossil fuel subsidies with clean energy incentives. The plan outlines several clean energy tax credits, including a 10-year extension of wind, solar, and battery tax credits, but does not specify which fossil fuel subsidies could face the chopping block.
Post-COVID Global Oil Demand Update – Vaccinations and the Summer Travel Bug
Hopes were high as the world entered a new year that 2021 was going to be the year that things went back to “normal,” but the first few months made those hopes seem like a far fetched idea. Improved economic activity and global mobility in the first quarter of 2021 was stalled by slow vaccine rollouts around the world and a stubborn third wave of lockdowns imposed throughout Europe. Luckily the second quarter has seen an explosion in global crude oil demand as vaccination campaigns have picked up the pace and travelers worldwide seem to have caught the summer travel bug. While the timeline to pre-crisis demand has been delayed, people around the world will still need plastics for their daily activities, roads and vehicles to travel from place to place, goods and services created and shipped with hydrocarbons, and other consumables derived from crude oil which will continue to boost demand through 2021.
Thirsty Thursday: An Inventory Report (6/10)
Welcome back to the second episode of Thirsty Thursday! The temps are high, and so is the price for a barrel of WTI....
Oil and Gas M&A Summary – May 2021
After continued demand destruction as a result of the global pandemic following historic price declines as a result of the Russia-Saudi price war, the oil and gas industry has been forced to re-calibrate in response to shifting market conditions with capital discipline taking center stage. Although 2020 saw the fewest deals across the sector in more than a decade, consolidation through this price cycle seems to be the driving force of 2021 as companies push to boost margins, cut emissions, and prepare for the energy transition.
Energy Market Report Card – Oasis Petroleum (OAS)
Chevron Corporation is a publicly traded upstream and downstream integrated energy company with NYSE ticker CVX. Following the FY2020 earnings release and company 10-K, a financial ratio analysis was performed to evaluate the firm. Several performance metrics were benchmarked to competitors in the industry as well as Chevron’s prior years. Although CVX showed declines year-over-year in several of these areas, a major driver appeared to be lost revenue due to commodity prices and the results also outperformed competitors in several areas.
Thirsty Thursday: An Inventory Report (6/3)
Welcome to a new segment from RARE PETRO: Thirsty Thursday! Here we will see if we’ve been poured another tall glass...
Rising Chinese GHG Emissions
For the first time since national greenhouse gas emissions have been measured, China’s annual emissions in 2019 exceeded those of all developed countries combined. While their per-capita demand is still lower than the average of other OECD countries, China has been trending in the wrong direction in terms of emissions growth. With GHG emissions continuing to grow while the rest of the world commits to reductions, China appears to be focused on its own economic recovery over meeting global climate goals.
CVX Market Report Card
How does Chevron's balance sheet stand up to its competitors, along with its past couple years of performance? Find...
Hedging to Hemorrhaging
The implementation of an effective hedging program can be a tool that helps ensure certainty of cash flow and provide longer reaction time in the event of a market price collapse. On the flip side of the coin, if prices rebound as they did in the first quarter of 2021, producers are left behind while the market surges. With United States E&P Companies projecting $7 billion in hedging losses for the quarter, it will be important to keep a close eye on which companies choose to continue to hedge early for guaranteed revenue protection and those that hold out or hold off to risk the market volatility in hopes of even more revenue.
Energy Market Report Card – Chevron Corporation (CVX)
Chevron Corporation is a publicly traded upstream and downstream integrated energy company with NYSE ticker CVX. Following the FY2020 earnings release and company 10-K, a financial ratio analysis was performed to evaluate the firm. Several performance metrics were benchmarked to competitors in the industry as well as Chevron’s prior years. Although CVX showed declines year-over-year in several of these areas, a major driver appeared to be lost revenue due to commodity prices and the results also outperformed competitors in several areas.
Biden’s Earth Day Summit
United States President Joe Biden hosted a two-day virtual summit of world leaders coinciding with Earth Day to address the global climate crisis. With a commitment to cut greenhouse gas emissions 50-52% by 2030 relative to 2005 levels, Biden intends to cement his leadership in the global fight against climate change and develop credibility in his plea for other countries to join the cause.
California’s Battle Over Oil
California Senate Bill 467 set out to gradually phase out oil and gas extraction processes that account for most of the state’s petroleum industry but failed to muster the five necessary votes needed to advance in the state legislature. Key points on the bill were to ban enhanced oil recovery techniques, add a 2,500-foot setback clause, and encourage CalGEM to utilize displaced oil and gas workers for the abandonment of old oil and gas sites. But, California Governor Gavin Newsom took matters into his own hands after the bill did not move to the legislature. He has since tasked state agencies to move away from fossil fuels and combat climate change by halting the issuance of hydraulic fracturing permits by 2024 and planning to phase out oil and gas extraction two decades later.
Energy Sector Tax Credits
President Joe Biden’s recently unveiled a tax plan to accompany his $2 trillion infrastructure proposal that takes direct aim at fossil fuel subsidies in favor of clean energy incentives. The “Made in America Tax Plan” is set to raise the corporate income tax rate from 21% to 28% and replace fossil fuel subsidies with clean energy incentives. The plan outlines several clean energy tax credits, including a 10-year extension of wind, solar, and battery tax credits, but does not specify which fossil fuel subsidies could face the chopping block.
Post-COVID Global Oil Demand Update – Vaccinations and the Summer Travel Bug
Hopes were high as the world entered a new year that 2021 was going to be the year that things went back to “normal,” but the first few months made those hopes seem like a far fetched idea. Improved economic activity and global mobility in the first quarter of 2021 was stalled by slow vaccine rollouts around the world and a stubborn third wave of lockdowns imposed throughout Europe. Luckily the second quarter has seen an explosion in global crude oil demand as vaccination campaigns have picked up the pace and travelers worldwide seem to have caught the summer travel bug. While the timeline to pre-crisis demand has been delayed, people around the world will still need plastics for their daily activities, roads and vehicles to travel from place to place, goods and services created and shipped with hydrocarbons, and other consumables derived from crude oil which will continue to boost demand through 2021.
The Folly of Corn
With fuel demand returning as individuals emerge from lockdowns to enjoy the fresh spring air and a new national focus on the climate crisis, the folly of corn-based ethanol gasoline must be addressed. Historically, scientists viewed biofuels as inherently carbon-neutral but new studies performed over the past decade suggest that once all the emissions associated with growing feedstock crops and manufacturing biofuel are factored in, biofuels actually increase carbon dioxide emissions rather than reduce them. While renewable fuels are important to America’s clean energy future, growing corn for fuel instead of food never has been an environmental or economic solution.
Bringing The Law
Like many of their fossil fuel producing counterparts, the Bakken states of North and South Dakota are fighting new federal regulations from the Biden Administration threatening fossil fuel development. As President Biden attempts to lead the country towards a carbon-neutral future, leaders in the Dakota’s are rallying support in their attempt to lead the states towards sustained revenue and prosperity through the development of the area’s natural fossil fuel resources. State leaders have realized that halting new oil and gas leasing on federal lands as well as the revoked permit for the Keystone XL Pipeline project will slash investment, cut jobs, drop wages, and pummel tax revenues throughout the region. As their fight continues, they are working to evaluate the impact of the climate related executive orders and enact legislation for the state to decide how their state’s resources should be developed.
Energy Producers Ramp Up ESG Initiatives
As the world continues to battle climate change, energy companies have begun to release environmental, social, and corporate governance (ESG) policies and implement carbon capture, utilization, and storage (CCUS) techniques in order to lower their carbon footprint. While renewables, nuclear, and energy efficiency will all be critical tools in the armory for lasting change, the fact remains: fossil fuels are not going anywhere soon. This means the world must find effective new ways to manage emissions in order to balance increased regulatory oversight with the globe’s growing energy demand. Major oil and gas companies have taken various routes to accomplish this goal, and time will tell which of the initiatives provide best results.
Wyoming’s Battle For Economic Survival
For hundreds of Wyoming workers and companies involved in oil and gas exploration and development, the ripple effect of pausing new federal leases generates an enormous amount of fear and uncertainty. The lost jobs and revenue caused by Biden’s actions inhibit Wyoming’s ability to invest in new energy projects and generate revenue from future lease sales. In the longer run, Wyoming may find itself with no choice but to increase the costs of doing business with other energy sources in order to balance their budget.
Frozen Texas Power Grid
A major winter weather system characterized by extreme cold spread across much of the central United States, disrupting energy systems and causing serious health and safety issues, particularly in Texas. As the storm blew in, the cold weather increased energy demand as consumers and businesses turned up the heat and stayed inside to avoid the weather. It also affected energy supply, causing intense and widespread energy market disruptions. Since this is not the first time an arctic blast has plunged Texas into darkness, it has left many people wondering: why did this happen and could energy producers and regulators have done more to prepare for this cold spell?
Revenue or Political View: How New Mexico is Navigating the Federal Moratorium
President Joe Biden’s executive order halting all leasing of Federal land for oil and gas activities indefinitely will be felt nationwide but nowhere else more so than New Mexico. Since energy production is the backbone of New Mexico’s economy, much of which sits on Federal land, no bigger impact of halting Federal oil and gas leasing would be felt than in New Mexico. The state has worked to reduce greenhouse gas emissions in the sector long before Biden took office and now only time will tell the full impact of Joe Biden’s Federal lease ban and temporary drilling moratorium.
Oklahoma’s Battle For Federal Lands
Shortly after being sworn into office, President Joe Biden signed an executive order to indefinitely ban lease sales for oil and gas development on all federal lands and offshore waters. Since energy production, namely oil and gas, is the backbone of Oklahoma’s economy, Oklahoma Governor Kevin Stitt went to bat with an executive order of his own in an attempt to overrule the order. While there is no certainty Oklahoma will be able to ignore or become exempt from Biden’s executive order, they can certainly let policy makers in Washington, D.C. know the problems that the new restrictions will cause.
Dr. Copper – An Oil Price Indicator
In the modern age, copper is so essential across multiple industries that its price is widely seen as a proxy for modern development and economic vitality. Similarly, oil has long been the lifeblood of current economies by generating energy to make development possible. Since copper can be considered a barometer of global economic health, it is no surprise a correlation to oil and gas demand exists as a healthy, growing economy requires more and more energy. Unfortunately, an unexpected divergence has occurred since the beginning of the global pandemic. Luckily, there appears to be market energy building for a large commodity price upcycle in which crude closes the gap and corrects upward to its industrial cousin, copper.