2025 Archives

Valor | Energy Connection – Mar. 17, 2025

Posted on March 17, 2025March 17, 2025 by Valor

March 17, 2025 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

Oil’s oversupply spiral: can prices stay above $60?
Summary: The IEA reports that global crude supply is exceeding demand by 600,000 bpd, pushing oil prices toward the $60-$80 per barrel range, with U.S. production expected to rise by 400,000 bpd to 13.6 million bpd in 2025. Overproduction by OPEC+ members, including Kazakhstan exceeding its quota by 299,000 bpd, and planned U.S. refinery shutdowns of 400,000 bpd are contributing to the surplus. While some analysts predict a prolonged price slump, others caution that demand surprises and inaccurate forecasts could trigger a market correction.
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U.S. natural gas hits 2-week low on record output
Summary: U.S. natural gas futures fell to a two-week low at $4.076 per mmBtu due to record production of 105.9 bcfd, negative Waha Hub prices caused by pipeline maintenance, and mild weather forecasts through April. Despite this, gas stockpiles remain 12% below normal after extreme winter demand, while LNG exports hit a new high of 15.7 bcfd in March. Gas prices at the Dutch TTF and Japan Korea Marker stand at $13 and $14 per mmBtu, respectively, as the U.S. remains the world’s top LNG supplier.
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Oil prices rise after U.S. vows ‘unrelenting’ attacks on Houthis
Summary: Oil prices rose on Monday as U.S. strikes on Yemen’s Houthi rebels heightened supply risks, with WTI crude gaining 1% to $67.84 per barrel and Brent crude rising 1% to $71.30 per barrel. The U.S. pledged continued attacks until Houthi aggression ceases, while China’s new economic stimulus plan further supported crude prices. However, gains were limited by expectations of a Russia-Ukraine ceasefire, which could bring more Russian oil back to the market.
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Goldman Sachs cuts oil price outlook amid oversupply fears
Summary: Goldman Sachs cut its Brent crude forecast for December 2025 by $5 to $71 per barrel, citing slower U.S. economic growth and increasing OPEC+ supply. Analysts warned that tariffs from President Trump’s trade policies could further weaken demand, while OPEC+ may reverse its planned 138,000 bpd supply increase if prices decline. The bank joins other major commodity traders and the IEA in predicting an oversupplied market, despite recent calls for more oil and gas investment.
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U.S. oil, gas rig count unchanged this week
Summary: The U.S. oil and gas rig count remained steady at 592 for the week ending March 14, down 37 rigs (6%) from a year ago, with oil rigs increasing by one to 487 and gas rigs decreasing by one to 100. Despite a projected 73% rise in gas prices in 2025, analysts expect crude prices to remain stable, while the EIA forecasts record-breaking U.S. oil and gas production through 2026. Industry executives at CERAWeek highlighted growing LNG and power demand but warned that infrastructure constraints could challenge future expansion.
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AI to fuel bumper year for M&A in US power sector
Summary: Mergers and acquisitions in the U.S. power sector have surged in 2025, with 27 deals worth $36.4 billion in the first two months, led by Constellation Energy’s $16.4 billion acquisition of Calpine. The boom is driven by soaring electricity demand from AI data centers, with power companies’ stocks rising between 82% and 220% since early 2024, enabling larger deals. Despite regulatory uncertainties, supply chain constraints, and potential labor shortages, institutional investors and private equity firms continue to invest heavily in power infrastructure, with $334 billion in undeployed capital at the end of 2024.
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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Mar. 10, 2025

Posted on March 10, 2025March 10, 2025 by Valor

March 10, 2025 Edition

Oil prices dip as tariff uncertainty keeps investors on edge
Summary: Oil prices declined on Monday, with Brent crude falling 44 cents to $69.92 per barrel and WTI dropping 40 cents to $66.64, marking WTI’s seventh consecutive weekly loss—the longest streak since November 2023. Market uncertainty stems from U.S. tariff policies affecting major oil suppliers like Canada, Mexico, and China, while potential sanctions on Iranian and Russian oil add volatility. Investors await monthly reports from the International Energy Agency and OPEC for demand and supply forecasts amid ongoing geopolitical tensions.
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States ease laws, offer incentives to attract power plants
Summary: U.S. states are accelerating efforts to build new power plants amid surging electricity demand driven by AI data centers and manufacturing incentives, with some offering financial incentives and deregulating approval processes. Pennsylvania is considering leaving the PJM regional grid to expedite projects, while states like Indiana, Michigan, and Louisiana explore nuclear energy, and Missouri and Kansas compete to attract investments in natural gas plants. Lawmakers and consumer advocates warn that shifting financial risks to ratepayers and deregulating utilities could lead to higher costs and inefficiencies.
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U.S. oil, gas rig count falls
Summary: The US oil and gas rig count fell by 1 to 592 this week, down 30 from the same time last year, with oil rigs remaining at 486 (down 18) and gas rigs decreasing to 101 (down 14). In the Permian Basin, rig count declined by 1 to 304—9 fewer than last year—while Eagle Ford added 1 rig to reach 49, though that’s still 3 less than the previous year. Meanwhile, US crude production averaged 13.508 million barrels per day for the week ending February 28, 2025, with WTI trading at $67.17 per barrel (up 1.22%) and Brent at $70.41 per barrel (up 1.37%).
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“Drill, baby, drill”: natural gas producers eye a boom
Summary: Rising U.S. natural gas prices, up 160% in a year to $4.26 per MMBtu, are driving producers to increase output after months of curtailments in 2024. Depleted inventories—now 25% lower than last year and 11% below the five-year average—along with surging LNG exports and new export facilities like Venture Global’s Plaquemines LNG, are fueling demand. In response, U.S. dry gas production rose 2.1% to 106.2 Bcf/d, and the gas rig count increased by three to 102 rigs as producers capitalize on higher prices.
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U.S. energy chief to seek $20 billion to refill oil reserve, Bloomberg reports
Summary: U.S. Energy Secretary Chris Wright estimates it will take $20 billion and several years to refill the Strategic Petroleum Reserve (SPR) to near capacity, following the sale of nearly 300 million barrels under the Biden administration, which pushed reserves to a 40-year low of 395 million barrels. The SPR, created in 1975 and capable of storing 727 million barrels, would still fall short of full capacity even if the full amount were allocated, as current oil prices would only allow the purchase of about 301 million barrels. While no formal budget request has been made to Congress, the Energy Department acknowledges the challenge of securing such funding amid other priorities.
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New report shows U.S.A oil and gas wages by industry
Summary: TIPRO’s latest State of Energy report shows that in 2024, Crude Petroleum Extraction paid the highest average wage at $227,080—up $4,389 from 2023—while Natural Gas Extraction and Petroleum Refineries paid $176,800 and $172,191 respectively. The national average wage across the U.S. oil and gas industry reached $81,808 in 2024, and direct employment grew to 2,055,516 jobs, an increase of 10,694 from 2023. The report, now in its 10th edition, provides a detailed analysis of wage growth and employment trends across key sectors in the U.S. energy industry.
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Valor | Energy Connection – Feb. 24, 2025

Posted on February 24, 2025February 24, 2025 by Valor

February 24, 2025 Edition

Oil dips on pending Kurdistan supply resumption
Summary: Oil prices declined on Monday, extending last week’s losses, as markets anticipated the resumption of crude exports from Iraq’s Kurdistan region. Brent crude fell 20 cents to $74.23 per barrel, while WTI dropped 28 cents to $70.12 per barrel, following a $2 decline on Friday. Meanwhile, global supply concerns persist as the U.S. and Russia prepare for peace talks on Ukraine, with potential impacts on oil sanctions and seaborne shipments.
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BP to abandon green energy target and ramp up oil
Summary: BP will abandon its plan to expand renewable energy generation 20-fold by 2030, scrapping its target of reaching 50 gigawatts (GW) and maintaining its current 8.2 GW capacity. Under pressure from activist investor Elliott Management, which holds a 5% stake, BP is shifting focus back to fossil fuels, selling 10 U.S. onshore wind farms and spinning off offshore wind assets. The company’s profits fell to $8.2 billion in 2024 from $13.4 billion in 2023, prompting cost-cutting measures, a 5% staff reduction, and slashed executive bonuses.
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US oil and gas rig count hits highest since June, says Baker Hughes
Summary: U.S. oil and gas rigs rose by four to 592 this week, the highest since June, with oil rigs increasing by seven to 488, while gas rigs fell by two to 99, according to Baker Hughes. Despite the rise, the total rig count remains 34 rigs (5%) below last year’s level. The EIA forecasts U.S. crude output to grow from 13.2 million barrels per day (bpd) in 2024 to 13.6 million bpd in 2025, while gas production is expected to rise to 104.6 billion cubic feet per day (bcfd) in 2025.
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25% royalty rate cap on prime oil and gas land heads to the House
Summary: The New Mexico Senate passed Senate Bill 23 in a 21-15 vote, advancing legislation to raise the maximum royalty rate on prime oil and gas land in the Permian Basin from 20% to 25%. Supporters argue the increase aligns with industry standards for high-value resources, while opponents claim it could harm an industry crucial to New Mexico’s economy. The State Land Office halted leasing top-tier tracts last year in anticipation of the rate hike, and the bill now moves to the House for further debate.
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Feds approve another deepwater oil export terminal off Texas coast
Summary: The U.S. government has approved the GulfLink deepwater oil export terminal off the Texas coast, marking another step in expanding American crude export infrastructure. The terminal will load up to 1 million barrels per day onto the world’s largest tankers, boosting U.S. energy exports. It is part of a broader buildout, including two new pipelines and a 319-acre tank farm. Supporters argue it enhances energy security and economic growth, while critics warn of increased greenhouse gas emissions—estimated at 355,000 to 710,000 tons annually—and potential environmental risks to coastal communities.
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U.S. crude oil inventories increase by 4.6 million barrels
Summary: U.S. crude oil inventories rose by 4.6 million barrels to 432.5 million barrels as of February 14, 2025, 3% below the five-year average, according to EIA data. Refinery inputs averaged 15.4 million barrels per day (bpd) at 84.9% capacity, while gasoline and distillate fuel production stood at 9.2 million bpd and 4.7 million bpd, respectively. Total petroleum inventories increased by 0.2 million barrels, with motor gasoline inventories down by 0.2 million barrels and distillate fuel inventories up by 2.1 million barrels, 12% below the five-year average.
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Understanding Texas House Bill 838: Enhancing Grid Reliability

Posted on February 17, 2025February 18, 2025 by Valor

At Valor, we believe in sharing relevant and timely information that impacts those living in Texas, helping our community stay informed about important legislative updates and industry developments. Texas House Bill 838, introduced on November 12, 2024, by Representative Ron Reynolds, addresses the interconnection of the Electric Reliability Council of Texas (ERCOT) power grid with external grids.

Background

ERCOT manages the electric grid for most of Texas, operating largely in isolation from other regional grids. This independence has advantages, such as reduced regulatory oversight, but also poses challenges, especially during extreme weather events that can strain the grid’s capacity.

Purpose of HB 838

The bill aims to facilitate the interconnection of ERCOT with neighboring power grids. Such interconnections could enhance grid reliability by allowing the import and export of electricity during peak demand periods or emergencies. This would provide access to a broader energy supply, potentially reducing the risk of blackouts and improving overall grid stability.

Potential Benefits

Enhanced Reliability: Connecting with external grids can provide additional power sources during emergencies, reducing the likelihood of blackouts.
Economic Efficiency: Access to a larger energy market may lead to more competitive pricing and cost savings for consumers.
Renewable Energy Integration: Interconnections can facilitate the sharing of renewable energy resources, promoting alternative energy usage.

Considerations and Challenges

While there are several benefits, there are also considerations that must be addressed:

Regulatory and Legal Framework: Establishing interconnections requires navigating complex regulatory environments and agreements between states and grid operators.
Infrastructure Investment: Significant investment in infrastructure is necessary to build and maintain interconnection facilities.
Grid Management: Coordinating operations between different grid systems requires advanced technology and management practices to ensure seamless integration.

Current Status

As of now, HB 838 has been filed and is under consideration. The bill’s progress will depend on legislative priorities, stakeholder input, and further analysis of the potential impacts on Texas’s energy landscape.

Conclusion

HB 838 represents a significant step toward modernizing Texas’s energy infrastructure by exploring the benefits of interconnecting ERCOT with neighboring grids. If enacted, it could enhance grid reliability, economic efficiency, and support the integration of renewable energy sources. However, careful consideration of the associated challenges and thorough planning will be essential to ensure the successful implementation of such interconnections.

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Valor | Energy Connection – Feb. 17, 2025

Posted on February 17, 2025February 17, 2025 by Valor

February 17, 2025 Edition

WTI holds above $70 amid Russia-Ukraine peace talks
Summary: WTI crude oil remains cautiously above $70 as investors await further developments in the Russia-Ukraine peace talks, which could potentially flood the market with more Russian oil and negatively affect prices. Despite President Trump’s efforts to mediate, analysts foresee a decline in prices if the conflict resolves. Additionally, OPEC is reportedly delaying its planned supply increase, offering temporary relief to the market.
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Diamondback nears Permian deal to buy shale producer Double Eagle
Summary: Diamondback Energy is in advanced discussions to acquire Double Eagle Energy IV, a private West Texas oil producer, in a deal potentially exceeding $5 billion. Double Eagle controls over 95,000 net acres in the Midland Basin portion of the Permian Basin, making it one of the largest private equity holdings in the region. This move follows Diamondback’s recent $26 billion acquisition of Endeavor Energy Resources, reflecting its strategy to expand its presence in the Permian Basin.
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US rig count inches up but still trails last year
Summary: U.S. oil rigs have increased by 1, totaling 768 rigs for the week ending February 16, 2025, yet this figure is still lower than the 785 rigs recorded at the same time last year. The Permian Basin shows continued growth, but companies are exercising caution due to economic uncertainties. This slight uptick in rig count comes amid an ongoing recovery effort within the industry, facing challenges in meeting the output seen in the previous years.
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Texas House Bill 838 aims to make power grid interconnections easier
Summary: Texas House Bill 838 aims to facilitate power grid interconnections by requiring facilities under ERCOT to connect with grids in neighboring states. This bill, which follows the power grid failures of February 2021, would allow Texas power generation facilities to purchase wholesale power outside ERCOT, addressing grid reliability issues. However, critics argue that even with these interconnections, extreme weather may still lead to load shedding, as neighboring grids could face their own power shortages.
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Chevron to lay off 20% of workforce as it boosts crude output with fewer rigs
Summary: Chevron is set to lay off up to 20% of its workforce as part of cost-cutting measures to reduce $2-3 billion in expenses by 2026. Despite the cuts, U.S. oil production continues to rise, with a 55% increase since 2014, and Chevron’s Permian Basin output hitting new highs through efficiency improvements. New technologies, like optimized drilling and electric pumps, enable higher output with fewer rigs, while Chevron expects a 9-10% production increase in 2025.
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Trump forms energy council, expands LNG exports, and lifts offshore drilling ban
Summary: President Trump signed an executive order creating the National Energy Dominance Council to boost domestic oil and gas production. The administration also approved a major LNG export project in Louisiana, the first such approval under his administration. Additionally, Trump directed the reversal of Biden’s offshore drilling ban and vowed to revive a canceled pipeline to reduce Northeast energy prices by up to 70%.
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Valor | Energy Connection – Feb. 11, 2025

Posted on February 11, 2025February 17, 2025 by Valor

February 11, 2025 Edition

Oil nears 3-day winning streak as traders assess tariffs and sanctions
Summary: Oil prices are on track for a third consecutive daily gain, with U.S. crude futures poised to settle at their highest level in two weeks. This upward trend comes as traders assess the implications of President Trump’s tariff policies and the impact of sanctions on Iran and Russia. Analysts suggest that the market may have overreacted to tariff concerns, noting that the actual effect on oil demand could be limited.
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Europe’s oil demand may rise as gas hits $100 per barrel
Summary: Europe’s oil demand may increase as natural gas prices surge to an oil-equivalent of $100 per barrel, making oil a more cost-effective alternative. The spike in gas prices is driven by supply constraints and higher demand, especially in winter. As industries and power generators seek cheaper fuel options, oil consumption in Europe could see significant growth.
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ConocoPhillips Q4 earnings surpass expectations, driven by the Permian
Summary: ConocoPhillips reported fourth-quarter 2024 adjusted earnings per share of $1.98, surpassing analysts’ expectations of $1.89, though down from $2.40 the previous year. The company’s revenue for the quarter was $14.74 billion, a slight decrease from $15.31 billion in the same period last year. The improved earnings were primarily due to increased oil equivalent production volumes, which averaged 2,183 thousand barrels of oil equivalent per day, up from 1,902 MBoe/d in the prior year.
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House passes bill restricting presidential oil drilling bans
Summary: The U.S. House passed a bill requiring congressional approval before any president can ban oil and gas leasing on federal lands and waters. The bill, which passed with a 225-204 vote, aims to prevent future executive actions like those taken by the Biden administration to limit drilling. Supporters argue it ensures energy security, while opponents claim it undermines environmental protections and presidential authority.
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U.S. drillers add oil and gas rigs for second week in a row
Summary: U.S. drillers increased oil and gas rig counts by 4, reaching a total of 630 rigs, marking the second consecutive week of growth, according to Baker Hughes. The Permian Basin saw the largest increase, adding four rigs, highlighting the resilience of U.S. shale producers. Despite ongoing oil price fluctuations, the uptick reflects sustained investments in exploration and production capacity, with drillers continuing to expand operations in key shale regions like the Permian.
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BP vows ‘fundamental reset’ in strategy as profit plunges
Summary: BP CEO Murray Auchincloss announced a “fundamental reset” in the company’s strategy, likely shifting focus from renewable energy to increased investment in oil and natural gas production. BP’s 2024 earnings showed a significant drop, with adjusted profit falling by 60% in Q4 and annual profit dropping to $8.9 billion. Analysts believe BP’s previous green strategy, initiated under former CEO Bernard Looney, led to underperformance, and the company is now under pressure from investors, including Elliott Investment Management.
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Valor | Energy Connection – Jan. 20, 2025

Posted on January 20, 2025 by Valor

January 20, 2025 Edition

Global review of 2024 oil and gas discoveries
Summary: In 2024, global oil and gas discoveries were reviewed, detailing key findings by region, resource type, operators, and terrain, compared to 2023. The report highlights significant discoveries and trends in the industry, providing insights into exploration activities worldwide. This analysis offers a comprehensive overview of the state of global oil and gas exploration and production as of 2024.
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Early economic win with gas prices expected to drop in 2025
Summary: President-elect Donald Trump is poised to benefit from an anticipated decline in oil prices in 2025, which is expected to lead to a third consecutive annual drop in gasoline prices. This trend is attributed to a growing global oil supply, which could serve as an economic advantage for the incoming administration. Lower fuel costs may bolster consumer spending and contribute to economic growth during Trump’s presidency.
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Republican states sue Biden over drilling limits
Summary: Several Republican-led states, including Mississippi, Alaska, Louisiana, Alabama, and Georgia, along with the American Petroleum Institute, have filed a lawsuit against the Biden administration challenging its restrictions on offshore oil and gas drilling. The plaintiffs argue that the administration’s actions exceed its authority and negatively impact the economies of the involved states. This legal action reflects ongoing tensions between state interests and federal environmental policies.
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US drillers cut oil and gas rigs to lowest since Dec 2021
Summary: U.S. energy firms reduced the number of oil and natural gas rigs for the second consecutive week, bringing the total count to 580, the lowest since December 2021. This decline is attributed to companies prioritizing debt reduction and shareholder returns over increasing production. Despite the reduced rig count, the U.S. Energy Information Administration projects an increase in crude oil and natural gas production in 2025.
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Venture Global aims for $100B IPO valuation
Summary: Venture Global, a U.S. LNG exporter, is set for an IPO with a target market cap of over $100 billion, aiming to raise $2.2 billion by offering 50 million shares. The IPO is priced between $40 and $46 per share, with a projected market cap of $115 billion at the midpoint. Venture Global operates LNG facilities and plans additional projects in Louisiana.
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Chevron explores Greek offshore oil and gas
Summary: Chevron has expressed interest in exploring hydrocarbon resources southwest of Greece’s Peloponnese peninsula and west of Crete. The Greek energy ministry plans to announce the specific exploration area and initiate an international tender soon. This initiative aligns with Greece’s strategy to enhance energy independence and reduce costs amid the ongoing conflict in Ukraine.
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Valor | Energy Connection – Jan. 13, 2025

Posted on January 13, 2025January 13, 2025 by Valor

January 13, 2025 Edition

Why Russian oil sanctions are a big deal
Summary: In his final days in office, President Joe Biden has implemented comprehensive sanctions targeting Russia’s oil industry, aiming to curtail the nation’s primary revenue source. These measures are designed to limit Russia’s economic capabilities and reduce its influence in global energy markets. The sanctions include targeting major producers, tankers, traders, and insurance companies involved in Russia’s oil trade.
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Russia to continue oil and gas projects despite US sanctions
Summary: Russia has announced its intention to continue oil and gas projects despite recent U.S. sanctions. The Russian Foreign Ministry condemned the sanctions, describing them as attempts to harm Russia’s economy at the risk of destabilizing global markets. Russia asserts it will continue with large oil and gas projects and plans to respond to Washington’s “hostile” actions while formulating its foreign policy strategy.
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Supreme Court rejects oil firms’ bid in Honolulu climate case
Summary: The U.S. Supreme Court rejected an appeal by major oil companies, allowing Honolulu’s climate change lawsuit to move forward in state court. The city accuses these companies of contributing to climate change and seeks compensation for damages like rising sea levels and severe weather. This decision marks a significant step in holding corporations accountable for their environmental impact.
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Digital transformation in oil and gas set to grow by $56.4B
Summary: The digital transformation market in the oil and gas sector is projected to grow by USD 56.4 billion, with a compound annual growth rate (CAGR) of 14.5% during the forecast period. This growth is driven by increased investments and partnerships aimed at enhancing operational efficiency and reducing costs. Key technologies contributing to this transformation include digital twins, which can lower operating costs and improve maintenance routines.
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Natural gas prices rise on cold weather, supply concerns
Summary: Natural gas markets have experienced a significant uptick, with prices gapping higher at the start of the trading week. This surge is attributed to colder-than-expected weather in the United States and supply challenges in Europe, leading to increased demand for U.S. natural gas exports. The market is also influenced by geopolitical factors, including disruptions in Russian gas supplies to Europe.
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U.S. drillers cut rigs for first time in six weeks
Summary: U.S. energy firms reduced the number of oil and natural gas rigs by five to 584 in the week ending January 10, 2025, marking the first decline in six weeks. This decrease brings the rig count 6% below the same period last year. The reduction is attributed to energy companies prioritizing debt reduction and shareholder returns over increasing production.
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How Do I Find Out If I Own Mineral Rights?

Posted on January 8, 2025January 8, 2025 by Valor

If you’re curious whether you own mineral rights to a property, the journey to discovery can feel overwhelming. Understanding and confirming mineral rights ownership involves research, legal documentation, and sometimes professional assistance. This guide will help you navigate the process step by step.

What Are Mineral Rights?

Mineral rights are the ownership rights related to natural resources beneath the surface of a property, such as oil, gas, coal, or other minerals. Ownership can be distinct from the surface rights of the property. This means it’s possible for someone else to hold mineral rights to a piece of land you own.

Steps to Determine Mineral Rights Ownership

Review Your Property Deed– Check the title and deed to your property. These documents often indicate whether mineral rights were included or severed when the land was purchased. If you’re unsure how to interpret the language, a mineral management advisor can assist.
Search County Records– Visit the county courthouse or use online databases to research historical deeds and transactions related to your property. A thorough search can reveal whether the mineral rights were transferred or retained by previous owners.
Consult a Professional– Determining mineral ownership can be complex, especially if rights have changed hands multiple times. This is where a mineral management company such as Valor can be a trusted partner in mineral management. Our team offers personalized services to help clients uncover and understand their mineral rights. From conducting title research to assisting with legal documentation, we ensure you have clarity and confidence in your mineral ownership.

What If You Do Own Mineral Rights?

Owning mineral rights can be a valuable asset, but managing them effectively requires expertise. At Valor, we specialize in helping mineral owners maximize the value of their assets. Whether it’s through lease negotiation, royalty management, or division order processing, our trusted mineral managers are here to provide custom solutions tailored to your needs.

Using proprietary mineral management software like mineral.tech® and our deep expertise in oil and gas accounting, we simplify the complexities of mineral management. If you’re located in Texas or key oil and gas regions like the Permian Basin, Valor is positioned to deliver both local expertise and personalized service. Let us take the stress out of managing your mineral rights so you can focus on what matters most.

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Ready to uncover the full potential of your mineral rights? Contact Valor today to learn how we can support and simplify your mineral management needs.

Proposed Texas Brine Bill: Council Draft 89R 4450

Posted on January 6, 2025January 6, 2025 by Valor

The Texas Legislature is considering Council Draft 89R 4450, a bill that aims to regulate the production, ownership, and transportation of brine within the state. This legislation, if passed, could reshape how brine is handled in Texas across the oil and gas industry, impacting pipeline operators, mineral rights owners, and midstream businesses.

As part of our commitment to keeping industry stakeholders informed, we aim to distill this complex legislative development into a digestible format. Our goal is to ensure that everyone—from field operators to land owners—has a clear understanding of the bill’s content and its potential ramifications. Here, we’ll break down the core aspects of the bill and explore its potential implications.

Key Highlights of the Bill The bill proposes amendments to Section 111.002 of the Texas Natural Resources Code, expanding the definition of “common carriers” and specifying rules for brine pipelines.

Key aspects of the bill include:
1. Definition of Common Carriers The bill emphasizes that any entity owning, operating, or managing pipelines for the transportation of brine or crude petroleum for hire qualifies as a common carrier. This applies if the pipeline:
- – Serves the public for hire
– Operates on, over, or under public roads or highways
– Is associated with an entity granted the right of eminent domain
2. Pipeline Transportation and Ownership of Brine By focusing explicitly on brine, the bill provides clarity on the ownership and operational rights associated with its transportation. This is particularly relevant for businesses that treat or reuse brine in oilfield operations or other applications, ensuring fair and consistent access to pipeline networks.
3. Operational Compliance Entities classified as common carriers must comply with stringent regulatory standards for safety, environmental impact, and fair service. These standards aim to enhance transparency and minimize disputes between operators and the communities impacted by pipeline operations.

Implications for the oil and gas industry If passed, the bill could introduce significant changes to the midstream sector, with the following potential effects:
1. Expanded Use of Eminent Domain The inclusion of brine pipelines under the common carrier definition ensures operators can leverage eminent domain in cases where pipeline construction is in the public’s interest. However, this may also heighten scrutiny from landowners and advocacy groups.
2. Increased Investment Opportunities Clearer regulations surrounding brine transportation could attract new investments in infrastructure. Midstream companies might see opportunities to expand their services, particularly in regions with extensive oilfield operations.
3. Operational Accountability With expanded regulations, companies managing brine pipelines must enhance their reporting and operational standards. This could lead to improved industry transparency but may also require additional resources for compliance.
4. Environmental Considerations Brine is often associated with produced water from oil and gas extraction. Enhanced regulation could encourage more environmentally responsible handling and re-use practices, promoting sustainability within the industry.

Preparing for potenital change, industry stakeholders should proactively prepare for the potential enactment of this legislation by:

1. Assessing Current Practices: Review existing brine transportation and ownership agreements to ensure alignment with the proposed regulations.
2. Engaging Legal Experts: Consult legal professionals to understand the implications for contracts, eminent domain rights, and compliance requirements.
3. Investing in Infrastructure: Explore opportunities to develop or upgrade brine transportation facilities to meet the expected standards.
4. Advocating for Industry Interests: Participate in public discussions or industry forums to shape the final version of the legislation.

In conclusion, Council Draft 89R 4450 represents a significant step toward regulating an often-overlooked aspect of oil and gas operations. By defining and standardizing the transportation and ownership of brine, the bill has the potential to bring both challenges and opportunities for the industry. Staying informed and proactive will be essential for businesses seeking to adapt successfully to these changes.

We’ll continue to monitor the progress of this bill and provide updates as they become available. For further insights or support in navigating these developments, don’t hesitate to reach out to our team.

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