the #1 fastest-growing men’s health brand in America.
>> NEIL: A MAJOR ABOUT FACE BY health brand in America.
>> NEIL: A MAJOR ABOUT FACE BY
THE BIDEN ADMINISTRATION WHEN IT
COMES TO PRODUCING ON FEDERAL
LAND, THAT IS OIL PRODUCTION ON
FEDERAL LANDS, BUT IT DID INDEED
OPEN UP SOME LEASES JUST
YESTERDAY FOR ACTIVITY BEGINNING
NEXT WEEK.
THE FLIP SIDE OF THIS IS IT’S
NOT QUITE EVERYTHING THAT YOU
WOULD THINK.
FOR EXAMPLE, IT IS NOT OPENING
ALL FEDERAL LAND.
IT IS AN 80% REDUCTION IN
ACREAGE THAT WAS ORIGINALLY
SUPPOSED TO BE SLATED.
THAT’S NOT PART OF THIS PLAN.
AND THERE IS A BIT OF A TONY
SOPRANO ELEMENT TO THIS, IN THAT
THEY WILL EXTRACT SOME MORE
MONEY THEY WANT TO GET OUT OF
OIL COMPANIES THAT MIGHT TAKE
ADVANTAGE OF THIS.
IN OTHER WORDS, THE ROYALTIES
THAT OIL COMPANIES HAVE TO PAY
ON WHATEVER THEY EXTRACT FROM
THESE LANDS WILL MOVE UP TO
ABOUT 18 AND 3/4% OF THE VALUE
OF ALL THAT FROM ABOUT 12 1/2%,
ESSENTIAL TAX, THAT COULD BE
DEEMED SORT OF LIKE A WINDFALL
PROFIT TAX IN A BACK DOOR WAY.
AND THEN OF COURSE THERE’S THE
ISSUE OF HOW IT WILL BE RECEIVED
IN THE MARKETS ON MONDAY.
ALL OF THIS, REMEMBER, WAS
ANNOUNCED YESTERDAY, NOT ONLY
WHEN THE MARKETS ARE CLOSED, BUT
IT WAS LITERALLY DEEP INTO THE
HOLIDAY WEEKEND, WHEN NO ONE WAS
PAYING MUCH ATTENTION, BUT WE
ARE.
WE THOUGHT YOU SHOULD PAY
ATTENTION TO IT AS WELL.
U.S. OIL AND GAS ASSOCIATION
PRESIDENT, TIM, THIS IS WHAT
YOU’VE BEEN CALLING FOR, BUT
WHEN YOU LOOK AT THE FINE PRINT,
IT ISN’T REALLY ALL YOU’VE BEEN
CALLING FOR, SO IS THIS A GOOD
OR BAD THING?
>> WELL, YOU KNOW, I READ THAT
ANNOUNCEMENT YESTERDAY, AND I
REALIZED THAT THE SECRETARY OF
INTERIOR WAS VERY MUCH ON
MESSAGE WITH THE REST OF THE
BIDEN ADMINISTRATION, WHICH IS
WE ALL PAY 50% MORE FOR 80%
LESS, AND SHE WAS VERY CLEAR
THAT’S WHAT SHE WAS GOING TO DO
FOR THOSE OIL AND GAS OPERATORS
WHO WERE INTERESTED IN DOING
WORK ON FEDERAL LANDS, THAT WE
SHOULD BE PREPARED TO PAY ABOUT
50% MORE IN ROYALTIES AND OTHER
FEES THAT WE ALREADY PAY.
AT THE SAME TIME, WE’RE ONLY
GOING TO HAVE ACCESS TO ABOUT
20% OF THE CURRENT ACREAGE THAT
WE HAVE PUT FORTH TO THE
SECRETARY AS POTENTIAL OIL AND
GAS OPPORTUNITIES FOR US.
AND SO IT GOES TO THIS
FUNDAMENTAL QUESTION OF WHEN
WE’RE IN A CRISIS LIKE THIS, IS
THIS POLICY, WILL IT DO ANYTHING
TO INCREASE PRODUCTION?
AND THE ANSWER IS NO.
IT ACTUALLY WILL COMPOUND THE
PROBLEM.
WE HAVE A SHORT-TERM PRODUCTION
SHORTFALL RIGHT NOW.
SECRETARY’S ACTIONS THAT SHE
ANNOUNCED YESTERDAY WILL PUSH
THIS PROBLEM OUT THREE, FIVE,
SEVEN, TEN YEARS --
>> NEIL: SO YOU DON’T THINK,
TIM, THAT THE INDUSTRY OR YOUR
COLLEAGUES WILL TAKE ADVANTAGE
OF THIS?
THEY WON’T TAP IT BECAUSE
WOULDN’T THE ADMINISTRATION GO
AROUND AND SAY WELL, I OPENED UP
PRODUCTION TO YOU GUYS, AND THAT
WASN’T GOOD ENOUGH?
>> LOOK, I THINK A LOT OF OUR
FEDERAL OPERATORS, THEY NEED
THAT FEDERAL ACREAGE TO PUT
TOGETHER THEIR ENTIRE LEASE
POSITIONS, SO YES, THEY WILL
TAKE EVERYTHING THAT WE CAN GET
OUT OF THE ADMINISTRATION.
BUT THIS 730,000 ACRES THAT IS
IN CURRENT QUESTION, THAT’S
ALREADY BEEN THOROUGHLY VETTED.
WE WORKED CLOSELY WITH LAND
MANAGEMENT TO RUN THESE ACRES
THROUGH TO THE POINT WHERE THEY
COULD BE CONSIDERED VERY MUCH
VIABLE LEASING OPPORTUNITIES.
AND THE SECRETARY LOOKED TO HER
CAREER STATS AND THE
PROFESSIONALS IN THE DEPARTMENT
SAID ESSENTIALLY I’M SORRY WHAT
YOU THINK, I’M GOING TO GO IN A
DIFFERENT DIRECTION.
I DON’T CARE IF YOU SAID 700
PLUS THOUSAND ACRES SHOULD BE
AVAILABLE.
I’M ONLY GOING TO GO WITH
150,000.
WE WILL TAKE EVERYTHING WE YET.
>> NEIL: IN OTHER WORDS, IT IS
NOT EVERYTHING YOU WANT, BUT YOU
WILL TAKE WHAT YOU CAN GET.
I GET THAT.
BUT DO YOU THINK THE
ADMINISTRATION IS MAYBE TRYING
TO CALL YOUR BLUFF, NOT LOOKING
AT IT AS A BLUFF, BUT TO SAY TO
ALL ITS CONSERVATIVE CRITICS AND
EVERYONE ELSE THAT SAYS THIS
DOESN’T MAKE A BIT OF DIFFERENCE
IN THE SCHEME OF THE OIL PRICES,
LET’S SAY MONDAY OIL AND GAS
FUTURES, YOU KNOW, DON’T REALLY
BUDGE OR IF ANYTHING, THEY GO
UP, AND THEY SAY WELL, ALL
RIGHT, WELL, SEE, WE DID YOUR
BIDDING, WE DID WHAT YOU SAID WE
SHOULD DO AND IT IS NOT WORKING,
THIS IS BOGUS SO YOU GUYS ARE
LIARS.
WHAT DO YOU SAY?
>> SO I DON’T THINK IT IS THAT
THEY ARE CALLING A BLUFF BUT
TRYING TO COMPLY WITH A COURT
ORDER THAT SAID YOU UNDER THE
MINERAL LEASING ACT NEED TO BE
CONDUCTING LEASES EVERY QUARTER.
WE’RE NOW SIX QUARTERS INTO THE
ADMINISTRATION THAT THEY HAVE
YET TO CONDUCT WHEN THE COURT
HAS TOLD THEM TO DO THAT.
NEIL, I THINK THIS IS THEM
TRYING TO THREAD THE NEEDLE SORT
OF SPLIT THE HAIR SAYING WE’RE
GOING TO GO AHEAD WITH A LEASING
PROGRAM.
WE’RE NOT GOING TO PUT MUCH OUT
THERE, BUT WE’RE GOING TO GO
AHEAD WITH IT SO WE CAN COMPLY
WITH THE COURT ORDER.
>> NEIL: I AGREE WITH YOU.
I THINK IT IS A DELICATE BALANCE
TO YOUR POINT.
THEY ARE TRYING TO KEEP
ENVIRONMENTALISTS HAPPY BY
LOCKING OFF THIS OTHER LAND YOU
HAVE BEEN LOOKING AT AND BY
TAKING IT OFF THE TABLE, BUT THE
FACT IS THEY DID BLINK ON THIS,
AND I’M WONDERING, THAT WAS
SUPPOSED TO BE A NEVER NEVER
NEVER THING.
DO YOU THINK ALL THESE OTHER
HUNDREDS OF THOUSANDS OF ACRES
ARE ALSO FAIR GAME, THAT THEY’RE
RETREATING ON THIS STUFF, SO
MAYBE THIS IS THE FIRST RETREAT?
>> I WOULD HOPE SO BECAUSE
AGAIN, THESE ACRES HAVE BEEN
ALREADY THOROUGHLY VETTED, AND
THEY HAVE BEEN DETERMINED TO BE
ENVIRONMENTALLY SOUND AND THE
ABILITY TO COMPLY BOTH WITH
ENVIRONMENTAL REGULATIONS AND
LEASING.
SO I WOULD HOPE THAT AS THE
ADMINISTRATION REALIZES THAT
THIS NEEDS TO BE DONE, THAT THEY
WILL CONTINUE TO ROLL OUT MORE
ACTIVE LEASING PROGRAMS.
THE QUESTION I THINK, THOUGH, IS
HOW QUICKLY CAN THEY DO THAT IF
THEY TAKE TOO LONG, THEN IT
WON’T GET THEM THROUGH THIS
POLITICAL SHORT-TERM PROBLEM
THAT THEY HAVE.
AGAIN, I THINK THEY ARE TRYING
TO SPLIT THAT HAIR BETWEEN
SHOWING THAT THEY ARE TRYING TO
DO SOMETHING AND COMPLY WITH THE
COURT ORDER YET KEEPING THEIR
LEFT HAPPY.
>> NEIL: GAS PRICES HAVE BEEN
EASING A LITTLE BIT I GUESS IN
IT’S A LOT MORE TO DO WITH
WHAT’S GOING ON IN CHINA,
SHUTDOWN IN SHANGHAI, REDUCING
MANUFACTURING, I GET THAT, BUT
IT’S BEEN A CONSISTENT TREND OF
LATE.
I DON’T WANT TO GET AHEAD OF
OURSELVES HERE.
WHAT DO YOU MAKE OF THAT IN THE
BACKDROP THAT THIS COULD BE
OCCURRING AT A TIME PRICES ARE
GOING DOWN?
>> WELL, TO OUR CREDIT, YOU
KNOW, INDUSTRY HAS DONE
EVERYTHING WE POSSIBLY CAN
DESPITE THE FEDERAL OBSTACLES TO
GET AS MANY RIGS BACK UP IN THE
AIR, AND WE HAVE SEEN THE RIG
COUNT INCREASE STEADILY WEEK
OVER WEEK.
OUR PRODUCTION IS UP 60% OVER
WHERE IT WAS LAST YEAR AT THIS
TIME.
THAT’S ENCOURAGING.
I WOULD GIVE THE CHINA SITUATION
SOME IMPACT, BUT FRANKLY I GOT
TO GIVE OURSELVES SOME IMPACT AS
WELL AND SOME CREDIT BECAUSE WE
HAVE BEEN DOING EVERYTHING WE
CAN TO GET PRODUCTION UP.
THE ISSUE IS, AGAIN, WE WELCOME
LEASING COMING FORWARD, AND
ANYTHING THAT WE CAN DO TO
SPREAD THE PORTFOLIO BETWEEN
STATE AND FEDERAL AND PRIVATE
LANDS, WE NEED TO DO THAT.
THE FEDERAL COMPONENT IS STILL
10%.
AND YOU CAN’T TAKE 10% OF
PRODUCTION OFFLINE AND NOT HAVE
IT HAVE AN IMPACT.