ResNet Review is the Energy Newsletter for the Shalennial Generation

Here’s our top Energy Headlines for February:

1. Oil Booms

2. Gas Busts

3. BP, world’s 8th largest oil company worth $120B, announces plans to continue to produce oil

4. Rice-a-$RONI Hat Trick

5. CHK and INEOS - a $1.4B Chemical Romance

Thank You China

• According to the IEA, Oil demand is supposed to hit records highs this year due to China’s reopening. Asian countries will account for 1.4 million barrels per day of the expected 2 million barrel per day growth this year.

• Wanna get away? Demand for aviation fuels is expected to surge by 1.1 million barrels per day globally this year, with January showing an uptick in air travel around China's Lunar New Year holiday.

  • Sadly, still no Spirit Airlines flights to Hong Kong (HOU-HKG is $1,400 round-trip on United)

• Still not convinced it’s a good time to be an oil producer? US President Joe Biden himself declared in his State of the Union, “we’re still going to need oil and gas for a while.”

  • Thank God. Everyone can finally get some sleep.

• A word of caution for the bulls out there, though. More demand does not necessarily correlate to higher prices. The IEA also raised its supply forecast due to the resilience of Russian crude production despite Western sanctions.

  • “We will not let our war crimes against the Ukrainian people get in the way of producing more oil.” - Vladimir Putin, probably

Natural Gas Prices Confirm Once And For All That Global Warming Exists

• Thanks to a warm winter, natural gas prices have fallen to their lowest level since September 2020, with US prices dropping by 10% to $2.06 per million BTUs.

  • Like volatility? S&P GSCI Natural Gas index is down 48% YTD. Last year it went from 178 to 450 to 200 in the same calendar year. Natural gas traders are the guys the crypto trader’s girlfriend says not to worry about.

• But wait, can’t the US leverage its abundant natural gas resources to profitably export US LNG to not only benefit the US economy but also enhance global energy security? All while lowering net carbon emissions substantially? Creating more jobs for Americans?

  • Theoretically yes, but let’s not put the cart before the horse. First, we need to address the real existential threat to our existence as a species: Hotel Resort Fees

Drill Baby Drill...Still ?

• BP has dialed back its green energy transition as the company faced a tough financial position and mounting shareholder concerns. Make sure you’re sitting down before reading about their plan to turn around the company below.

  • Produce more oil.

• Recent financial struggles, coupled with its commitment to maintain a strong dividend, have forced the oil giant to focus more on immediate returns rather than long-term investments.

  • Solution? Produce more oil.

• The company planned to spend $70 billion on low-carbon initiatives over the next decade, but it has now cut its investment to $50 billion.

• The company's decision to scale back its green energy transition has drawn criticism from some investors and activists who accuse the company of not doing enough to address climate change.

  • Yaaaas queen. Preach, activists. Gotta keep these for-profit oil companies with fiduciary duties to shareholders in-line when they start reallocating capital into investments with the highest returns. Am I doing this right?

Oil & Gas Powering Up to Save the Planet

TLDR: Rice-a-$RONI = Zero-emission, fossil fuel powered power gen. Waste (super-critical CO2) = moar O&G with EOR. Liberal eco-terrorists rekt.

• Power generation is the largest source of global emissions, around 14 billion tonnes annually, primarily from coal and natural gas-fired power plants.

• NET Power’s (NPWR) proprietary process combines oxy-combustion with a supercritical CO2 power generation cycle to generate near zero-emission electricity. Then, the CO2 can be sequestered, or used as a tertiary agent for enhanced oil recovery (EOR) applications.

• IRA boosted 45Q federal tax credits for carbon that is captured and stored from $50 per tonne to $85, underpinning NPWR's ability to compete with renewable power gen in zero-to-negative power price conditions.

• Every NET Power plant will generate roughly ~300MWe of power gen and ~800,000 tonnes per year of super-critical CO2 for permanent sequestration or tertiary recovery applications.

  • Equivalent to ~150 wind turbines or ~2,300 acres solar farm (when the sun is shining)

The British are Coming!

• Chesapeake has found a chemical romance with INEOS, a British Chemical Maker, which will be acquiring one of its Eagle Ford packages for $1.4B.

• Deal is U.K firm’s first deal in US oil and gas production, as CHK rebalances its asset mix back to natural gas.

  • This deal gives INEOS, run by billionaire businessman Jim Ratcliffe, access to the petroleum products and natural gas that is key to its core business at a time of significant disruption in global gas markets caused by Russia's invasion of Ukraine.

Best of EFT

In cased you missed them, we’ve curated a shortlist of the best of the best Energy FinTwit (EFT) tweets from the past month. Cheers 🍻

Speaking of which, if this resonates for you, and you still have spacing, landing zone, or any other science you or your reservoir department may be pondering - we’ve got just the solution - Intelligent Flow Control #ShamelessPlug

Coming to an Event Near You!

March 8 - Digital Wildcatters, Empower 2023 - Houston, TX

April 3 - SAGA Wisdom, Sokkvabekkr 2023 - Nashville, TN

April 5 - Digital Wildcatters, Energy Tech Night - Denver, CO

April 11 - SPE Technology Showcase - Scottsdale, AZ

April 26 - World Oilman's Poker Tournament 2023 - Las Vegas, NV

June 13th - June 15th - URTeC 2023- Denver, CO

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