Big Digital Energy

0:00 I, you know, I kind of miss the fact that I can't go. Hey, digital wildcatters, colliders just doesn't have the same buzz. I just say like the two power are a welcome collide. Welcome collide.

0:13 Yeah. There we go. I like that. Hey, Clyde. Hey, Clyde. All right. Hey, Clyde. Welcome to an emergency episode of BDE. Mark. There are a bunch of names that I'm not going to be able to

0:24 pronounce. Is it an emergency? Sure. Okay Like the edge to it, maybe. Emergency BDE. Well, no, it's timely news. Well, we got a live one coming up on Monday. So on Monday, what date is

0:40 Monday? Is that the 8th of the 11th? Okay. So on August 11th, 10 am. Central time on Clyde, we're going to do BDE live. We'll be able to take questions. This is going old school. That's how a

0:55 BDE actually started when Colin and I started doing it I used to sit up at like the news. the news desk, the TV news desk. Colin didn't like that, but I love that. So anyway, we will do that

1:07 next Monday, but real quick, story popped up. We need to talk about what happened in Brazil. Yeah, BP had its earnings call on Tuesday and it was like a throwback to late '90s, early 2000s to

1:24 hear BP talk like an oil and gas exploration company

1:30 In fact, going through the entire video of prepared remarks and presentation, which I don't typically do for the super majors anymore, but

1:43 the renewables have been shoved to the far back of the deck and there's very limited conversation or discussion of what's going on there. Clearly they want the focus to be on And it's been an

1:56 impressive year for them. think they've announced 10 discoveries worldwide. This one that was really in the spotlight on the call is about 400 kilometers offshore from Rio in the Santos Basin.

2:14 Pretty salt. I want to say it's in

2:20 doing the meters conversion. It's in about or maybe more than 8, 000 feet of water depth It's called the Boomerangay Prospector Structure.

2:34 Reports were 500 meters of gross hydrocarbon column and a structural aerial extent of 300 square kilometers. So this thing just on those metrics are massive No volumetric soil in place numbers,

2:51 nothing like that. But as with a lot of Love.

2:57 offshore South American exploration provinces, there's always the looming question of, you know, how much gas is there? And then in addition to that, how much CO2? And they did mention that

3:12 from Rig Fluid samples that they observed, quote unquote, elevated levels of CO2. 'Cause I went out on X this morning, kind of did my, hey, what are people hearing on it? And got a generally

3:27 reliable source who just paying back and said, problem is, in a previous life, he or she had

3:38 studied it. And the problem is the gas, because when you look at the infrastructure control, it's petrobras and the government, and just makes it almost dead on arrival. 'Cause if you don't have

3:50 a home for that gas. So you're talking about hydrocarbon gas in terms of infrastructure and control. Exactly. So because you're not going to be able to find the complication of CO2. Oh, yes. So

4:03 you have to do something with. Yeah. Right. Who knows? I read through the QA and the

4:12 response to questions about level of concern, are you worried, etc. You know, we're not particularly concerned. They've sent fluid samples from various depths and they're in their downhole

4:26 sampling off to independent third party labs, and it takes some time to get those results back. But in the meantime, there's kind of a CO2 cloud, a little bit of a cloud, maybe a Cirrus cloud,

4:39 the way they would characterize it. Right.

4:43 So BP, just so you know, we at Clyde know a lot about Bitcoin mining. So if you wind up with your natural gas out there, You don't want to flare it and you're not able to cut a deal Uh, the

4:56 natural gas markets in Brazil, we can bet coin mine, we can walk you through that. Yeah, and associated gas, particularly offshore anywhere, and certainly offshore South America, you see it up

5:09 in the Guyana Basin, you certainly see it in the Santos Basin.

5:16 The structural question is always, ultimately, what are you going to do, or what are you going to be able to do to develop the infrastructure? What is the the domestic market look like? But when

5:30 we're talking about CO2, if there are high CO2 concentrations, just from a technical standpoint, you're talking about equipment and tubulars and all of those things that are way, way more

5:41 expensive. So it ultimately puts. 400 kilometers is a long way It is a long way. And so it's 062 times, so it's 240 miles give or take. Houston to Austin. Yeah, it's a long way. And, you know,

5:58 water depths of not trivial distance was a lot of, you know, we've done it before, we've done, you know, we've done drilling exploration development and eight to 10, 000 feet of water. So,

6:13 it

6:15 was enough to allow BP to outperform on the day by a fairly wide margin, although, you know, the stock kind of held a gain of a little north of a percent when the group was fractionally down. It's

6:32 peer group was fractionally down. So, I think there's, you know, on this, there's going to be some wait and see, but just the basics of aerial extent of the structure and then the hydrocarbon

6:47 column itself, if it all comes together that it

6:53 can be commercial is commercial is. is I think going to be one of the biggest discoveries in the last five years, maybe 10.

7:04 And so they are working really hard at messaging,

7:10 I would say leaning into an aggressiveness on the exploration and production side, which

7:19 comes on the heels of all

7:23 the board in activist turmoil that they've had and clearly the stock has underperformed in its peer group for a meaningfully long period of time. So, you know, are they

7:39 kind of back to the future here? And hopefully this one for them turns out to be, CO2 is not problematic. We can develop it with FPSO, et cetera. We don't have to spend a bunch of extra capital

7:53 on dealing with. problem gas and CO2, but it's going to be a while. And as you know, investors and analysts and Twitter mavens are going to be out there speculating on all kinds of things around

8:10 this as it relates to

8:13 BP. But you know, the market's not in a mood for most oil and gas stocks to give any kind of advanced credit in the form of a multiple expansion. And I don't think even something this headline

8:25 grabbing is any different. Yeah, you know, at the end of the day, what I always say about BP is that I've never met anyone that worked for BP previously that

8:39 I wasn't incredibly impressed with. One of the best that was more people. Yeah, the one of the one of the best management teams, if not the best management team I ever worked with, former BP,

8:51 Jane Stricker over at the Houston Partnership, former BP, incredibly impressive. Just tick on down the list. Every former BP employee I met at meet is always impressive. Never understood why as a

9:07 company, it's been the shit show that it's been, but you know. Well, I think it's largely in the

9:16 realm of equity investors and their followers And you look at all the strategic flip flops or pivots that they've made got way out over their skis on really what I think it was Domburg that came up

9:35 with the term virtue stepping, which means you're actually taking actions and in BP's case they spent a bunch on offshore wind leases exiting, uh, in selling US. onshore when they're peeling back

9:53 a lot of those things that, you know, we're certainly drags on their return on capital employed and performance and metrics and the way people looked at it. And so, and that's, that's the holy

10:07 grail for the super majors, is sustained high levels of return on capital employed. And so, you know, the optics of the BP story and the messaging that they're doing now is we are, we are flat

10:23 out on our global exploration story. And, you know, we're, I think the term they used was appraisal will be done at pace. But, you know, something like this, getting back to Boomerangi,

10:41 that's what are we August of 2025. I don't know how long the appraisal program will be, of course, we could get. results on the on the fluid analysis that say it's an on starter. Hopefully that's

10:56 not the case. But, you know, we're looking at being really hard pressed, I think, to get first oil before the end of the decade. Yeah, no, Ted Lee. One last thing. So Monday, August 11th,

11:12 10 am Central. We're doing it live. We'll take questions and all that. We'll have a full run of show. So expect an hour, I bet. Yeah. Real quick. I think I saw the best concert I've ever seen

11:29 in my life last weekend. My buddy German and I drove to Dallas to go see my chemical romance. And just to frame us, they're doing a stadium tour. So we are in a globe live field where the Rangers

11:46 play. So 45, 000, 50, 000 people.

11:51 When I went and saw my chemical romance at the House of Blues that seats 2, 200 here in Houston during the Black Parade album and tour, they didn't even sell out. So kind of amazing what going away

12:05 for 10 years can do for you, but that might have been the greatest show I've ever seen in my life. And I will tell you, at least half to two thirds of it is just the Black Parade album for those of

12:19 you that don't know the Black Parade album is the story, it's a concept album, story of a young man getting cancer and passing into the afterlife. And that really hit home given the struggles I've

12:33 had in my life with friends that get brain cancer. And so anyway, it

12:40 had heavy. It didn't hurt that I'd had so much vodka. But if you get to go see my chemical romance on the stadium tour. Totally worth it.

12:52 And what these bands are finding out is,

12:56 it's been a long evolution, although it felt like when it was occurring as a revolution, the only way to really generate revenue is through live tours.

13:13 Yeah. And so. Which is crazy 'cause the Beatles stopped touring in the '60s because it was more profitable to go make albums. Not true anymore Not true anymore. Although you can make a record at

13:23 least. My record was a dozen years ago. I think it was all of16, 000 for everything. In

13:32 fact, I got the invoices for our session work. So the back line drums and bass were session guys. And one of them, Glenn Worf, the

13:46 bassist was like, He's

13:50 legendary. So I get this invoice. So it's got all the union stuff on it, the cartage. And we had, I forget what they call the segments of recording time and recording the studio, but we got all

14:01 that done across the three segments in one day. And my bill for each one of those session musicians was300. That's crazy.

14:11 You know, daughter Charlie, my, one of my favorite songs she's done isDrab Ab is the

14:21 name of the band. It's a song calledCurb and they literally recorded it on the iPhone. And it's out there on Apple Music, Spotify, everywhere. So, all right. Well, look forward to

14:36 Monday. Our latest live session will harken back to the old days of. Glory days, they'll pass you by So, you and Colin with his fresh haircut, sitting up there at the. Digital Wildcatters news

14:52 desk. Oh yeah, no, we had - With the cliche Houston backdrop. I noticed, yesterday sitting in here, I did a couple of sessions. The Wildcatters movie or black gold movie poster, that's really

15:05 cool. That is cool. Need one of giant. We do need one of giant. All right, Clyde, we will see you guys on Monday.