Exploration Anon

Silver, gold, natural gas, oil and potash will be the best performing assets of the 2020s.

@TimKoltek @ericnuttall What if the drilling targets are not there? What if...they were wasted at stupid prices?!

@ericnuttall @ericnuttall I'm interested in seeing whether higher prices will have any material effect on the rig count. I get the whole "shale discipline" argument, but I would expect the count to trend higher at least a little bit at some point.

You've been warned.

@biancoresearch Are you assuming the US can double export capacity to meet this demand? It can’t, it’s going to be exporting from storage and Cushing will be at functional minimum by the end of June.

Yes, it appears supertankers are heading to the US to get oil. The US exports 5 million barrels a day. So, the US has it. BUT.... The majority of Middle Eastern crude oil goes to Asia. That is a 21-day trip from the Persian Gulf versus a 50+ day trip from the United States. (A fully laden supertanker tops out at 14 to 17 MPH) So, if the world is going to get its crude from the US, it needs twice as many oil tankers. Expanding the fleet is a 3- to 5-year process.

@Aontacht_Media This man understands inflation better than 500 PhDs at the Fed. “If the price of diesel goes up, the price of everything goes up”.

Interview with Jason, a driver from Kinnegad who works for a transport company. #fuelprotests #europeanlackies

@ericnuttall 80 something years old in production-age I should say. It’s over 100m years old of course, a venerable Grandfather of the oil age. Such a shame to see it messed around like this.

I suspect that formation damage potential in Kuwait is even greater than Iraq. A 2-3 month restart means they have depressurised Burgan, an 80 year old siliciclastic reservoir. I don’t want to get into pore throat physics here but water cut is likely to have increased when they restart.

While we remain deeply skeptical, let's assume that today is "the day after." What does it mean for energy stocks??? 🛢️the glut narrative is dead as global oil inventories will continue to fall over the next several months, approaching "normalized" levels in the next 2 weeks and still likely all-time lows by ~ end of May (product rationing/shortages still imminent) = higher baseline for fundamental floor price ($70-$80WTI vs $60 before?) 🛢️what will prevent Iran from ever doing this again (halting flows through the most important energy chokepoint in the world with a $30,000 drone)? = political risk premium of $10-20/bbl ADDED onto the new floor price = ~$80WTI? 🛢️production shut-ins remain at ~11MM Bbl/d...for this to return we need tankers to leave the Strait, empty, and return (~2.5-3 months) = enduring impact even IF the Strait fully opens (500MM+ Bbls!)...the prospect for formation damage is not zero (especially in Iraq) and lead time to full restoration long even with adequate offtake (Kuwait said 3-4 months to normalize production) 🛢️still TBD extensive damage to refining capacity = expect higher-for-longer crack spreads and windfall for refiners/integrateds...product stocks were already low coming into the "excursion"...will take years to normalize 🛢️will the Saudis and Emirates allow Iran to "toll" the SofH and have a de facto chokehold on flows? Seems unlikely and new pipeline bypasses would take years 🛢️the ~400MM Bbl SPR release will be refilled = future demand for several years (~350k Bbl/d for 3 years?) 🛢️energy is once again relevant to large generalist US investors and many would have been hesitant to chase the recent rally = sector is now much more investable 🛢️net/net - we still believe $80WTI is reasonable for 2027, with many stocks trading at 15% FCF yields, and some even lower than when the war began Summary: we believe that oil remains in a multi-year bull market and stocks were never discounting the recent oil price spike. Production growth will remain muted, share buybacks will continue, and our favourite names at $80WTI will be able to retire 30%-50% of their outstanding shares over the next 5 years while retaining 30-50+ years of stay-flat inventory at a time when non-OPEC production is peaking and pre-conflict OPEC spare capacity is low.

@chigrl Exactly right. Tankers coming out is one thing. If tankers don’t go back IN, we are just drawing down the last floating storage around (which offsets production offline by… 2 weeks…). Game theory says a passenger doesn’t get back on a hijacked plane once they are let off.

Yes. 1. Safe passage for two weeks clears up a tiny fraction of the backlog 2. It does nothing to fix the production offline

Helium is not produced with all natural gas, it is quite rare in commercial quantities. You need specific conditions like an old sedimentary pile for radiogenic decay, carbonate reservoirs and evaporite seals. This rules out most of US natural gas production. Qatar supply is not replaceable.

Bombing the infrastructure off the Iranian portion of this field will probably increase production on the Qatari side. There is no geological boundary where the political boundary is drawn, and the reservoir pressure will increase where it is in communication across the border.

@LynAldenContact @LordGrimdark Thanks Lyn, from a fellow scientist who wants to write more attractively!

@ExplorationAnon I studied dozens of authors’ prose directly, and several academic guides on the subject. My favorite prose of all is by @LordGrimdark.

The truth behind this is that I studied fiction prose quite extensively, since I knew that was my weakness ahead of time (relative to story, characters, etc). I'm an engineer/financier, not an English major. So I focused heavily to turn that weakness into a strength. 🧵

@SheDrills They might come out in dribs and drabs Christine, but game theory says they’re not going back in for another load … for any money. Hostages don’t voluntarily get back on a still hijacked airplane. This is the f supply problem that I haven’t heard discussed yet.

Vessels must navigate a 6 mile wide channel that is essentially a 2 lane marine highway. How much would you require to man that ship?

Can I stop you there at "STEP 1" please. Oil &gas companies need fiscal stability over 20+ years to invest, it's the first and most important screening metric. The windfall tax your government implemented wrecked every economic model running in the basin. The companies damaged by this won't come back, and won't drill. You'll get a a few fly by night outfits with no capital to builld anything, milking fools on the AIM. That's it. It's being run down for cash. Look to Norway for stable taxes resulting in consistent investment. We cannot spend billions on infrastructure and drilling if there is a chance the money we have been promised we can keep, to repay that investment, is going to be taken on a whim.

Yes it will. Here’s how: STEP 1: Drill oil & gas in the North Sea🛢️ STEP 2: Oil companies pay tax as usual (~£2.5bn/yr) STEP 3: Use that revenue to cut household bills RESULT: Lower energy bills ⚡️ Miliband pretending not to know this is deliberate stupidity to avoid a u-turn.

@cm_energyintel Credit for that diagram: @ExnerPirot

@cm_energyintel A crucial point on export market Casey that I often forget, thank you. So 20% of global oil exports are shut in. The 1st/2nd/3rd order consequences of this are not knowable. But I think exponentially serious with every passing day.

Total’s Pouyanne on Hormuz: 1) reminds that #oil export mkt is ~50mn b/d not 100mn b/d so 1/2 of global exports at stake 2) products disruption way worse; Asian buyers very worried; “unsustainable”; diesel, jet $ have room to run if conflict extends #ceraweek

@nequalonetrader @TheFlowHorse The Treasury will just ask JP Morgan/Goldman to do it they won’t do it directly.

@TheFlowHorse The obvious answer seems to be the treasury but i personally know 2 ppl there who said they’re not doing this. Ofc the fintwit audiences here who all seem to be experts on everything will tell u otherwise

Who is the huge $CL seller above 100? Is this the work of the treasury possibly? It’s annoying because the volume would have you thinking it is some leading indicator..

@FurkanGozukara @VictorTheClean3 Journalists, just ask him for his Crime Reference Number. If he doesn’t have it, he’s lying. Simple.

You literally cannot make this up. The Prime Minister's Chief of Staff had his phone "stolen" with all his messages to Lord Mandelson, and conveniently there is ZERO backup. They are treating the public like absolute fools.

@RobertJenrick Because your old mate Jeremy Hunt landed us with the "windfall" tax. Did you vote against it?

Britain has paid Norway over £100 billion for gas since 2021. For gas they’re drilling in the North Sea, the same sea Ed Miliband has banned new drilling in on the British side. Madness.

@JamesMelville @MerrynSW Stop the hyperbole it undermines your valid argument. Rosebank is not Britain’s largest oilfield and it will never produce millions of barrels a day, check your facts please.

Britain's largest oil field, Rosebank, could be producing millions of barrels a day by the autumn if Ed Miliband gives a green light to its plans. It’s time for Miliband to ditch his net zero claptrap and end his counterproductive ban on new North Sea oil and gas licenses.

@CWeston_Indo @BerryCathal Build one nuclear plant and Ireland is energy independent.

Electricity bills could rise by €800 as Government scrambles for solutions – but no return of energy credits independent.ie/business/money…

@Rory_Johnston Inflation adjusted please. 2008 WTI was $220 a barrel in today’s money.

Cash Dubai crude (balance of the month) just broke above $170 per barrel. To my knowledge, no crude has ever commanded more than $170/bbl before.