MARIA: WELCOME BACK, A NEW
GALLUP POLLS FIND 51% SAY U.S.
ENERGY SITUATION IS FAIRLY
SERIOUS COMPARED TO 34% THAT’S
VERY SERIOUS AND 14% THAT SAY
IT’S NOT AT ALL SERIOUS.
OIL PRICES THIS MORNING CONTINUE
AT ELEVATED LEVELS EVEN IF THEY
ARE PULLING BACK A FRACTION
RIGHT NOW.
THE PRICE OF BRENT IS AT 83.86
AND THE PRIDE OF CRUDE 79.50.
JOINING US THE CEO OF CANAR.
ONE TO HAVE LARGEST NATIONAL
PROVIDERS FOR OIL FIELD SERVICES
NEEDS.
DAN, GREAT TO HAVE YOU, THANKS
VERY MUCH FOR BEING HERE.
>> THANKS FOR HAVING ME BACK,
MARIA.
MARIA: HOW IS BUSINESS GOING AND
WHAT CAN YOU TELL US ABOUT THE
REGULATORY STRANGLED HOLD
HAPPENING FOR OIL COMPANIES
RIGHT NOW?
>> WELL, BUSINESS IS PRETTY
GOOD.
I THINK THERE’S STORM CLOUDS IN
THE HORIZON.
WHENEVER YOU SEE THE -- THE
EXXON BUYING PIONEER THAT SAYS
TO ME LESS DRILLING AND EASIER
TO DO M&A THAN TO GO DRILLING.
WE HAVE A GOOD ECONOMY, WE HAVE
HIGH OIL PRICE AND YET WE ARE
SEEING PRODUCTION LOWER THAN IT
WAS DURING THE TRUMP
ADMINISTRATION, LOWER THAN IT
WAS PRE-COVID AND THAT JUST
SHOWS YOU THAT THE REGULATORY
ENVIRONMENT IS VERY STIFF RIGHT
NOW.
I ALSO THINK IF I COULD TALK
ABOUT THE SPR FOR A MINUTE, I
THINK THE BIDEN ADMINISTRATION
HAS REALLY MISSED WINDOW TO
REPLENISH SPR AND THE TRAIN HAS
LEFT THE STATION WITH SAUDIS AND
OPEC CUTTING ON THE BIDEN
ADMINISTRATION ON GOLDEN WINDOW
TO REPLENISH THE SPR.
MARIA: I THINK IT’S VERY
IMPORTANT POINT.
WE ARE AT THE LOWEST LEVELS IN
THE SPR SINCE THE 1980’s.
YOU MENTIONED EXXON.
THE COMPANY HAS BEEN HAVING
TALKS TO ACQUIRE PIONEER
NATIONAL SERVICE.
BUT IT’S ALSO GIVING EXXON A
DOMINANT POSITION IN THE PERMIAN
BASIN.
I WANT TO GET YOUR TAKE AND
DOESN’T IT TRIGGER OTHER DEALS?
THE JOURNAL THIS MORNING WRITES
EXXON DEAL HUNT SIGNALS POSSIBLE
SHELL M&A WAVE, ARE YOU
EXPECTING A WAVE IN M&A IN THE
SHELL BUSINESS?
>> ABSOLUTELY.
I THINK IT DOES.
I THINK YOU’RE GOING SEE CHEVRON
IS PROBABLY RIGHT NOW AND CONOCO
FIGURING OUT WHAT THEY CAN BUY.
IT SHOWS OIL COMPANIES COMING
HOME.
THEY WANT TO BE PART OF U.S.
SHELL, IT ALSO CHANNELS -- THEY
THINK IT’S CHEAPER TO DRILL WALL
STREET THAN OIL PATCH.
I THINK THAT SHOWS WARNING CLOUD
FOR CONSUMERS AHEAD BECAUSE IF
THEY’RE BUYING ADDITIONAL
PRODUCTION INSTEAD OF DRILLING
FOR IT, THAT’S GOING LEAD TO
TIGHTER SUPPLY IN THE FUTURE AND
HIGHER PRICES FOR CONSUMERS
WHICH WILL OBVIOUSLY WEIGH IN
THE ECONOMY, RIGHT?
MARIA: YEAH, LOOK, WE HAD MIKE
WORTH ON, THE CEO OF CHEVRON
RECENTLY WHO TALKED ABOUT THE
PERMITTING PROCESS AND I KNOW
THE WHITE HOUSE HAS BEEN TRYING
TO BLAME OIL COMPANIES FOR THE
ELEVATED PRICE OF -- OF OIL AND
GAS AND SAYING THAT THE INDUSTRY
IS NOT DOING ENOUGH IN TERMS OF
WHAT’S AVAILABLE OUT THERE.
MIKE WORTH SAID HE DOESN’T KNOW
WHAT THEY ARE TALKING ABOUT IN
TERMS OF THE 7,000 LEASES
BECAUSE THE REAL ISSUE IS THE
PERMITTING PROCESS.
CAN YOU EXPLAIN TO US ABOUT THE
PERMITTING PROCESS?
>> YEAH, I ABSOLUTELY AGREE
200%, MARIA.
LOOK, THE PROBLEM IS -- THE
PROBLEM IS NOT THE NUMBER OF
LEASES.
IT’S VERY EASY TO GET LEASES.
THE PROBLEM IS PERMITS IN THE
BIDEN ADMINISTRATION ARE RUNNING
45 DAYS LONGER AND MORE
EXPENSIVE THAN THE TRUMP
ADMINISTRATION.
THE TRANSPORTATION KEEPS
THROWING WET BLANKETS AT THE
INDUSTRY HERE.
THE PROOF IS IN THE PUDDING.
LOOK, THE ECONOMY IS BETTER, THE
OIL PRICE IS HIGHER AND YET THE
DOMESTIC OIL PRODUCTION IS LOWER
THAN IT WAS DURING THE TRUMP
ADMINISTRATION.
THAT’S BECAUSE THE REGULATORY
THROWN OUT BY DC.
BIDEN HAS SLOWED DOWN PIPELINES
AND CANCELED THE KEYSTONE
PIPELINE AND OTHERS, HAS
CANCELED THE OFFSHORE LEASE
PROGRAM FOR NEW -- NEW DRILLING
SITES AND IT’S JUST MADE IT VERY
DIFFICULT TO DRILL AND THROWN --
CONTINUE TO THROW WRENCHES AND
THE RIG COUNT IS ALSO LOWER AND
THIS IS ALL JUST CONSTRAINING
SUPPLY AND IT’S SILENTLY SOWING
THE SEEDS FOR THE NEXT OIL PRICE
SPIKE WHICH ULTIMATELY WILL BE
BAD FOR THE ECONOMY.
MARIA: HOW LONG DOES THE CYCLE
TAKE, WHAT ARE YOU EXPECTING IN
TERMS OF THE NEXT PRICE SPIKE?
>> WELL, LOOK, SEEMS TO ME WE
DEFINITELY HAVE A GOLDILOCKSES
SCENARIO FOR OIL EXITING 2023 AT
$100 OR HIGHER.
I THINK THAT’S INEVITABLE AT
THIS POINT.
I THINK THE BIDEN ADMINISTRATION
SEEMS TO, YOU KNOW, I CAN’T
STRESS ENOUGH MISSING THE WINDOW
TO REPLACE THE STRATEGIC
PETROLEUM RESERVE IS BAD FOR
NATIONAL SECURITY AND REALLY BAD
FOR CONSUMERS.
I WISHED THE ADMINISTRATION HAS
LEFT US COMPLETELY UNPREPARED
AND I THINK THAT, YOU KNOW,
THERE’S AN OIL PRICE SPIKE IS
INEVITABLE AT THIS POINT.
MARIA: YEAH, THEY WON’T ADMIT
THE IMPACT THAT THIS CLIMATE
CHANGE AGENDA IS HAVING.
HERE IS A BIT OF THAT INTERVIEW
I REFER TODAY WITH MIKE WORTH,
CEO OF CHEVRON.
WATCH.
>> I DON’T KNOW ANYTHING ABOUT
THIS 9,000 LEASE NUMBER.
I DON’T KNOW WHERE IT COMES
FROM.
WE DON’T HAVE ANYTHING EVEN
APPROACHING A FRACTION OF THAT.
WHEN WE GET A LEASE, IT JUST
BEGINS A PROCESS.
WE HAVE TO ACQUIRE A NUMBER OF
PERMITS.
MARIA: AND THAT’S THE ISSUE, THE
PERMITS. DAN, WHAT ABOUT YOUR BUSINESS,
DAN, WHAT ABOUT YOUR BUSINESS,
DO YOU HAVE THE SCALE OR DO YOU
TOO PERHAPS DOWN THE ROAD SEE A
COMPANY ACQUISITION, A LARGER
COMPANY MERGER CAN CANARY?
>> WELL, I MEAN, LOOK, I THINK
THAT’S POSSIBLE AND WE ARE
OBVIOUSLY ALWAYS TALKING TO
PEOPLE AND, YOU KNOW, SCALE
DEFINITELY MAKES THINGS EASIER.
WE HAVE DONE A SERIES OF
ACQUISITIONS, MORE THAN A DOZEN
ACQUISITIONS IN THE LAST TEN
YEARS IN CANARY AND ALWAYS
LOOKING TO ACQUIRE.
I WILL TELL YOU, MARIA, YOU
CONTINUE OFFICIALLY NEED MORE
SCALE TO OPERATE IN U.S. OIL
FIELD AND I THINK THE MARKET
DYNAMICS POINT TO THAT BUT I
WILL SAY THIS, I THINK THAT, YOU
KNOW, I THINK THAT WE ARE A
SURVIVOR AND WE ARE GOING TO
CONTINUE TO GROW OUT THERE BUT
IT’S DEFINITELY HARD TO OPERATE
AND THE REGULATORY BURDEN MAKES
YOU HAVE TO GET INCREASINGLY
BIGGER TO GET THE SAME KIND OF
RETURNS ON EQUITY AND RETURNS ON
ASSETS IN YOUR INTERNAL
PORTFOLIO AT A COMPANY IN THE
U.S. OIL.
MARIA: OKAY.
AND DAN, REAL QUICK, JUST TO PUT
A --
>> SURE.
MARIA: PUT A CLOSURE ON THAT.
YOU SAID THE ADMINISTRATION
MISSED THE WINDOW.
IN OTHER WORDS WHAT YOU’RE
SAYING, THEY MISSED A WINDOW TO
BUY BACK OIL TO IMPROVE AND LIFT
THE NUMBERS IN THAT STRATEGIC
RESERVE BECAUSE PRICES ARE GOING
TO GET AWAY FROM THEM, THEY WILL
KEEP GOING HIGHER?
>> WELL, ABSOLUTELY.
LOOK, IF YOU GO BACK AND GOOGLE
WHAT THEY SAID A YEAR AGO,
MARIA, IF YOUR VIEWERS DO THAT,
THEY WILL SEE THE BIDEN
ADMINISTRATION SAID WHEN OIL
GOES BELOW 80, IN THE 70’s WE
WILL REPLENISH IN 2023.
OIL IS AS LOW AS THE 60’s AND
THE ADMINISTRATION DID NOTHING
AND HERE YOU HAVE OPEC CUTTING
1.66 MILLION-BARRELS A DAY AND
OIL SPIKING TO 80 OR JUST ABOUT
80 THIS MORNING AND THEY HAVEN’T
DONE IT YET.
I THINK THEY’VE COMPLETELY
MISSED THE WINDOW AND THEY WERE
ESSENTIALLY LYING WHEN THEY SAID
DURING THE 2022 MIDTERMS THEY
WERE GOING TO REPLENISH IN 2023.
THEY HAD AN EXCELLENT
OPPORTUNITY WHEN THE PRICE WAS
SOMEWHAT LOW AND THEY DID
NOTHING.
MARIA: YEAH, WELL, WE ARE GOING
THE KEEP A SPOTLIGHT ON IT.
WE HAVE ALREADY AND, OF COURSE,
THIS POTENTIAL WAVE OF SHELL