Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Texas

From Hero to Zero: $2-Billion Private Equity Fund Goes Broke in Oil

This article appeared online at TheNewAmerican.com on Tuesday, July 18, 2017:

J. Paul Getty Trust

EnerVest Ltd., a Houston-based private equity firm run by John Walker, is being taken over by one of its largest lenders to satisfy its unpaid debts. The firm raised capital from large investors, foundations, and pension plans and bought existing oil wells, improved them, and sent the dividends back to the investors.

In 2011, it had come off a very successful year. It owned 19,000 onshore oil wells on four million acres of land in 12 states. Its previous investments delivered a compounded annual return of 36 percent, a track record that made it relatively easy for Walker to raise additional capital. In a classic understatement, Walker said, “We had an outstanding year.” He explained just how he and his company did it; he bought cheap and sold dear, without using borrowed funds:

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From Hero to Zero: $2-Billion Private Equity Fund Goes Broke in Oil

This article appeared online at TheNewAmerican.com on Monday, July 17, 2017:  

Wells Fargo

Wells Fargo

EnerVest Ltd., a Houston-based private equity firm run by John Walker, is being taken over by Wells Fargo, one of its largest lenders, to satisfy its unpaid debts. The firm raised capital from large investors, foundations, and pension plans and bought existing oil wells, improved them, and sent the dividends back to the investors.

In 2011, it had come off a very successful year. It owned 19,000 onshore oil wells on four million acres of land in 12 states. Its previous investments delivered a compounded annual return of 36 percent, a track record that made it relatively easy for Walker to raise additional capital. In a classic understatement, Walker said, “We had an outstanding year.” He explained just how he and his company did it; he bought cheap and sold dear, without using borrowed funds:

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Crude Oil to Climb to $60 a Barrel, Claim Aramco’s CEO, Citi, and Goldman

This article appeared online at TheNewAmerican.com on Monday, July 10, 2017:  

English: Flag of the Organization of Petroleum...

Claiming that the worldwide demand for crude oil will jump by 20 million barrels of oil per day over the next five years, Amin Nasser, the CEO of Saudi Aramco, said, “Investments in smaller increments such as [U.S.] shale oil will just not cut it.” Speaking at the World Petroleum Congress in Istanbul last week, Nasser said:

If we look at the long-term situation of oil supplies, for example, the picture is becoming increasingly worrying.

 

Financial investors are shying away from making much-needed large investments in oil exploration, long-term development and the related infrastructure….

 

New discoveries are also on a downtrend. The volume of conventional [non-shale] oil discovered around the world over the past four years has more than halved compared with the previous four.

Speaking to his own interest, Nasser is trying to talk up the value of his company, which remains on schedule to sell five percent of itself in what some are calling “the world’s largest IPO [initial public offering].” To stress the point, Nasser said

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Keystone XL Pipeline Granted Approval by State Department

This article appeared online at TheNewAmerican.com on Friday, March 24, 2017: 

Keystone XL demonstration, White House,8-23-20...

With the signing of the cross-border permit by the State Department on Friday, the real work on completing Phase IV of the Keystone Pipeline from Canada to refineries on the U.S. Gulf Coast begins. TransCanada, the owner and operator of the pipeline, still thinks the project is viable economically even though it has been stalled for 16 months by the previous administration. In a press release, TransCanada’s CEO Russ Girling said:

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More Evidence that OPEC’s Influence is Waning

This article was published by The McAlvany Intelligence Advisor on Wednesday, March 22, 2017:

A measure of the success – and failure – of OPEC’s agreement to limit crude oil production can be seen in the chart of NYMEX crude oil price behavior (Sources below) dating from last fall. When the agreement was inked back in November, crude was at $46.50 a barrel. The price soared and traders got excited, putting in long bets that set records.

By early January, reality began setting in as compliance among the cartel’s members and non-members (who agreed to go along for the ride) began to wane. The roof fell in a couple of weeks ago when inventory builds continued to set records, and the price dropped through support at $50.

In other words, in OPEC’s attempt to birth an elephant, it succeeded in birthing a gnat.

Saudi Arabia maintained a stiff upper lip during the Houston oil conference, stating flat out that

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Saudi Arabia Losing Influence in Global Oil Markets

This article appeared online at TheNewAmerican.com on Tuesday, March 21, 2017:

As it continues to wrestle with declining oil prices worldwide, Saudi Arabia, the de facto head of the OPEC oil cartel, is giving up ground. It said a week ago that it would not allow any “free riders” to enjoy higher oil prices if they rose due to Saudi’s singular attempt to keep them up. A week later it was reported that the kingdom cut its production by 800,000 barrels per day, 60 percent below its agreement. So much for disclaimers against those “free riders” who continue to violate the agreement by exceeding their quotas.

Now comes news that the kingdom’s exports to the United States for the week ended March 10

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New Hampshire the 12th State to Allow Constitutional Carry

This article appeared online at TheNewAmerican.com on Thursday, February 23, 2017:

OpenCarry.org open carry gun laws

OpenCarry.org open carry gun laws

Residents of New Hampshire are enjoying a long-awaited expansion of their Second Amendment rights with the signing into law on Wednesday of a bill allowing them to carry a firearm without first obtaining government permission. The third time “is a charm,” it is said, and this bill passed on the third attempt. The previous two attempts passed both state houses but were vetoed by previous Democrat governors.

Said Republican Governor Chris Sununu:

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Number of Former Sanctuary Cities Reversing Policy

This article appeared online at TheNewAmerican.com on Monday, February 13, 2017:

US Immigration and Customs Enforcement arrest

In response to President Donald Trump’s executive order issued on January 25 — “Enhancing Public Safety in the Interior of the United States” — a number of cities that formerly considered themselves as “sanctuary cities” for illegal immigrants are reversing their policies. The first to do so was Miami-Dade County in Florida the day after Trump issued his order.

Miami-Dade was followed by

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OPEC Agreement to Limit Production Boosts Crude Price 11 Percent

This article appeared online at TheNewAmerican.com on Thursday, December 1, 2016:

Coat of Arms of Saudi Arabia

Coat of Arms of Saudi Arabia

The global price of crude oil jumped more than 11 percent since OPEC announced on Wednesday its first agreement to limit production by the cartel since 2008. There are many moving parts to the agreement — perhaps too many.

First, the cartel’s de facto leader, Saudi Arabia, has promised to

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OPEC to Meet in Vienna Wednesday to Plan Production Cuts

This article appeared online at TheNewAmerican.com on Friday, November 25, 2016: 

Oil ministers from the 14 oil producing countries that make up the OPEC cartel are arriving in Vienna to prepare for their formal gathering there next Wednesday. The meeting is supposed to finalize a tentative agreement reached in September that would put a cap on the cartel’s production in an effort to raise the price of a barrel of crude oil. A sufficient rise would reduce the pain currently being inflicted on those members as the decision to keep pumping in November 2014 has bitten them — some of them badly.

Saudi Arabia was forced last month to

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Dallas to Declare Bankruptcy?

This article appeared online at TheNewAmerican.com on Monday, November 21, 2016:  

The New York Times just reported that the Dallas police and firefighters pension plan is $7 billion short of meeting its obligations and needs an immediate bailout of $1 billion just to stay afloat. The problem is that Dallas’ annual budget is $3 billion.

Three years ago Dallas wasn’t on anyone’s “watch” list.

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OPEC Continues to lose its game of Chicken with US Energy Producers

This article was published by The McAlvany Intelligence Advisor on Monday, October 31, 2016:

It is said that, in a game of chicken, the one who flinches first loses. Last week Saudi Arabia flinched.

It went to the global bond market, hat in hand, hoping to raise $10 billion to slow down its liquidation of its foreign reserves. Last year those reserves dropped by $100 billion. With the market stronger than anticipated (or perhaps because they knew it was the most they could raise for quite a while) they raised $18 billion.

That $18 billion will be gone in two months, leaving investors holding a piece of paper that might not be redeemable for face value at maturity. What will be left is the increasingly irrelevant cartel that Saudi Arabia has led for the last 55 years.

For proof,

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New North American Oil Discoveries Continue to Frustrate OPEC

This article appeared online at TheNewAmerican.com on Wednesday, September 7, 2016:  

Apache Corporation, the sixth-largest independent oil and gas producer in the United States, announced this week that it has found a new gargantuan reserve of oil and natural gas in West Texas that could be one of the largest energy finds in the last decade. At the low end, the new “Alpine High” field could contain two billion barrels of oil plus massive natural gas reserves. More importantly, especially to OPEC members gearing up to find ways to raise prices, the company’s estimated profit margin is 30 percent after taking in account all expected development costs, even with crude selling at below $50 a barrel.

Apache isn’t waiting around for higher prices but instead has already drilled 19 wells into the new field and has committed one-fourth of its capital budget this year to develop the field further. The profit potential for natural gas is nearly off the charts. So abundant is that energy source from the new field that the company’s breakeven point is just 10 cents per million British thermal units (BTUs) while the market price for natural gas closed Tuesday at $2.72. This is going to turn Apache, currently a $20 billion company, into a major player.

The discovery is also going to turn OPEC’s plans to cap production in order to drive prices higher upside down. It is planning to meet informally later this month in Algiers to plot ways that it can drive the price of crude higher in response to increasing pleas from members such as Venezuela and Algeria for higher prices.

As recently as a month ago, OPEC was hoping to drive prices back to $70 a barrel in order to reduce the financial pressures low crude oil prices have imposed on all of the cartel’s members. Now, however, it is hoping to drive prices up to $60. Last month Venezuela’s President Nicolas Maduro, under mounting pressure to solve his country’s self-imposed problems resulting in inflation and food riots, said last month that the “fair, balanced oil price must be set at $70 a barrel.” On Monday the head of Algeria’s state-owned oil company, Noureddine Boutarfa, exclaimed that oil prices “below $50 a barrel is not acceptable.”

Acceptable or not, oil prices are headed lower according to both Morgan Stanley and Bank of America. Earlier this year Morgan Stanley estimated that the price of crude would move higher, but just cut its third-quarter forecast from $50 a barrel to $45. On August 25, Bank of America estimated that demand for crude would decline further than expected.

What befuddled prognosticators was the failure of the oil market to “rebalance” during the summer when American drivers set a record, burning through nearly 10 million barrels of gasoline every day. Even though American drivers drove a record three trillion miles over the last 12 months, that failed to soak up much of the surplus overhanging the market. Now, with demand slackening after Labor Day, and an economy essentially flat-lined, there is little reason to believe that prices will move higher.

Catching OPEC by surprise was the news that U.S. frackers restarted eight oil rigs every week this summer despite the lower prices. This puts the cartel in a pickle of its own creation: If it cuts production in order to drive prices higher, this will only further encourage U.S. producers to bring more rigs online. If they continue to flood the market, their budget deficits will get even larger while still losing precious market share to the Americans.

One unnamed OPEC official told the Wall Street Journal that all of this has caught the cartel by surprise: “[The U.S. shale industry has] surprised us, and can surprise us again.”

Oil Now in a Bull Market?

This article appeared online at TheNewAmerican.com on Friday, August 19, 2016:  

English: Logo of the U.S. Energy Information A...

Energy traders looking for any sort of news that would push crude oil prices higher have found two slender reeds: a falling dollar (making American oil more expensive overseas), and a surprise report from the U.S. Energy Information Administration (EIA) showing shrinkage in the vast oversupply of crude and gasoline that has weighed on the market.

Accordingly, the price of Brent crude (priced in London) and West Texas Intermediate (priced in Oklahoma) jumped by more than 20 percent over the last week, putting it into “bull market” territory. It has led observers to conclude that

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Comeuppance in the Oil Patch

This article was published by The McAlvany Intelligence Advisor on Wednesday, August 3, 2016:  

Looking down from Heaven, George Mitchell must be pleased with what’s going on below: oil inventories are growing to the point where offshore tankers and railroad tank cars are having to be used for storage, oil and gas prices are dropping along with the costs of all the other 6,000 consumer products made from petroleum, rig counts are increasing, production costs are dropping, and, best of all, OPEC’s influence is waning daily.

The Economist called Mitchell the father of fracking in its eulogy following his death in July, 2013. They referred to him as

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U.S. Oil Shale Producers Putting OPEC Into Financial Bind

This article appeared online at TheNewAmerican.com on Tuesday, August 2, 2016:  

This wasn’t supposed to happen. When OPEC decided in November 2014 to keep producing crude oil at or near maximum rates, it was following an unspoken strategy to force the U.S. oil shale industry to back off. That would allow prices to rise back to levels needed to fund the cartel’s military adventures and their welfare states.

Marginal producers in the United States did declare bankruptcy, while other producers stacked most of their oil rigs, cutting daily production in the country from 9.7 million barrels per day (mpd) to 8.5 mpd. This caused crude oil prices to rise from the low 30s to the mid 50s.

But then oil prices levelled off and began to decline,

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A Tipping Point in Texas? It’s Building Its Texas Bullion Depository Bank

This article was published by The McAlvany Intelligence Advisor on Friday, May 6, 2016:  

Description: Newspaper clipping USA, Woodrow W...

Description: Newspaper clipping USA, Woodrow Wilson signs creation of the Federal Reserve. Source: Date: 24 December 1913 (Photo credit: Wikipedia)

A modest bill, getting little press and clothed in innocuous terms, could spell the end of the Federal Reserve’s monopoly on its “federal reserve note” currency. When Texas Governor Greg Abbot signed it into law almost a year ago, he said:

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Texas Contracts to Build Nation’s First State Gold Bullion Depository

This article appeared online at TheNewAmerican.com on Thursday, May 5, 2016:  

The Texas Comptroller’s Office has begun to receive bids from private contractors interested in building the country’s first state gold storage facility, the Texas Bullion Depository (TBD). When Texas Governor Greg Abbott signed into law the bill providing for it last July, he said it was all about saving fees being paid to store the state’s gold in New York banks:

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Freedom to Choose Includes the Freedom to Move

This article was published by The McAlvany Intelligence Advisor on Friday, September 11, 2015: 

Free to Choose

Milton and Rose Friedman published their work Free to Choose – A Personal Statement 35 years ago when it became a best seller, topping best seller lists for five weeks. Ten years later PBS created a telecast with Dr. Friedman interviewing, and often debating, experts from across the political spectrum, including Walter Williams on the right and Frances Fox Piven on the left.

In the video chapter “The Power of the Market” Friedman makes the point that the free market’s greatest benefit is the power of options: where to live, where to work, whom to marry, how to worship, and on and on.

Walter Wriston, considered by many to be the single most influential commercial banker of his time, serving as chief executive of Citibank from 1967 to 1984, condensed Friedman’s chapter into one pithy quote that reverberates today:

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Study: Businesses, Taxpayers Fleeing High-tax States

This article appeared online at TheNewAmerican.com on Thursday, September 10, 2015: 

Based on the latest data from the Internal Revenue Service, Americans for Tax Reform (ATR) concluded that, given the opportunity, taxpayers as well as businesses move from high-tax states to lower-tax states. In 2013, more than 200,000 people moved from New York, Illinois, California, Connecticut, and Massachusetts to Texas, Florida, South Carolina, North Carolina, and Arizona.

And they took with them more than

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.