Speaker 1: Do you want to be an American?
Speaker 2: Twenty here seven hundred WLW oil? Just a trader like
Speaker 2: fifteen percent in a matter of hours after the cease
Speaker 2: fire agreement yesterday between Iran and the United States. How
Speaker 2: long do these inflated prices stick around? You may ask
Speaker 2: you if you drive by the pump this morning, and
Speaker 2: do we ever go back to normal? What the hell
Speaker 2: does normal look like? He is the CEO of King
Speaker 2: Operating's oil gas man and his name is Jay Young,
Speaker 2: a real life landman on the show. If you watch
Speaker 2: the show with Billy Bob Thornton, you know what I'm
Speaker 2: talking about.
Speaker 1: Jay. How are you?
Speaker 2: How's everything in the Great State of Texas this morning?
Speaker 1: They we're doing great. All we're doing is trying to
Speaker 1: look at twenty dollars the less of barrel though he
Speaker 1: will got through yesterday. But other than that and everything's
Speaker 1: pretty good.
Speaker 2: How's your neck doing from all this whiplash?
Speaker 1: That's exactly right. But hey, if you're in the old business,
Speaker 1: you'll you'll go with the flow. They're siled, keep your
Speaker 1: head down, do what you can for your partners, and
Speaker 1: just keep keep drilling, keep grinding, good good prospect.
Speaker 2: Keep grinding put this in perspective, So fifteen percent, you
Speaker 2: go at fifteen percent, So that's a massive single session swing.
Speaker 2: But can you put that in some sort of a
Speaker 2: historical context, and is the market pricing in peace or
Speaker 2: are they pricing in hope?
Speaker 1: Yeah, well I think it's I think it's a lot
Speaker 1: of hope in my opinion. And you look at that,
Speaker 1: you look at the futures contracts for the next several months,
Speaker 1: and you're seeing prices that are that are not as
Speaker 1: high as as they are right now, which means that
Speaker 1: they're just this backwardation, if you will, of prices, meaning
Speaker 1: that there's just so much uncertainty that that's going into
Speaker 1: the markets right now. And and you know, so I
Speaker 1: asked the day they said, well, how's this faking your business?
Speaker 1: You know when when rolls at one hundred dollars a barrel?
Speaker 1: And I said, well, we produce, We bring about two
Speaker 1: million barrels a year, and you know, two million dollars
Speaker 1: at twenty dollars, two million barrels, I'm sorry, two million
Speaker 1: barrels at twenty five that's forty million dollars to hear
Speaker 1: more for our partners, that's a lot. That's a lot
Speaker 1: of money, you know, and it does it really affects
Speaker 1: job job growth here, it affects you know, non job growth,
Speaker 1: you know, layoffs and things that nature. So it's it's
Speaker 1: the uncertainty is not good. And but right now I
Speaker 1: think we're seeing the prices. Prices are going to come down,
Speaker 1: you know, as they have, and but I don't think
Speaker 1: they're going to go down a lot further and stay
Speaker 1: there for a long period of time. We've had a
Speaker 1: lot of disruption. Yeah, and they also apply around the world.
Speaker 2: Well, it's going to be a along with short two weeks,
Speaker 2: if that makes sense. The ceasefire, of course, is conditional.
Speaker 2: Ran still has to physically open the straight or four moves,
Speaker 2: if they stall, if they drag their feet, if it's
Speaker 2: a partial opening. What is happened to new to prices?
Speaker 2: Are we just going to see this whips of effect
Speaker 2: for the next two weeks?
Speaker 1: We will well, we'll just see. You know, everybody's probably
Speaker 1: got cameras. I heard the morning that they say, well,
Speaker 1: there's no big takers in the strait of Remoose right now,
Speaker 1: you know, there's there's you know, so they are they're
Speaker 1: going to look at it and they're going to find
Speaker 1: out what's what's going on with the markets, and they're
Speaker 1: going to see what's going on with with you know,
Speaker 1: opinions and what's going to happen. And you know, I
Speaker 1: don't I don't know if we'll if we'll ever know
Speaker 1: until it's already been done, you know, quite frankly. But
Speaker 1: I do know some facts, and uh, I think you
Speaker 1: called me about some facts. You wanted some facts. And
Speaker 1: I do know that there is a lot of oil
Speaker 1: that's been disrupted with a train of removese over the
Speaker 1: last you know, month, month and a half. And and
Speaker 1: what I mean by that is, you know, all the
Speaker 1: all the Persian golf countries have shut their wells in
Speaker 1: pretty much. They you can't produce you know, millions and
Speaker 1: millions of barrels a day and expect you know, to
Speaker 1: hold it. And so it's it's they've been shutting these
Speaker 1: wells in for a long period of time, and about
Speaker 1: about twelve to fifteen million barrels that they've had, you know,
Speaker 1: shut down right now because they don't have the storage capacity,
Speaker 1: So hundreds of millions of barrels have not been produced,
Speaker 1: which means it does not go into the oil supply,
Speaker 1: and when it doesn't go into the oil supply and
Speaker 1: it's disrupted, we're going to see problem for I means,
Speaker 1: I was listening to the baking American President last night.
Speaker 1: He was saying that this could be you know, throughout
Speaker 1: the whole year that we see eighty dollars ninety dollars oil.
Speaker 1: So not just for right now, but also this is
Speaker 1: a factor for you know, a long longer period of time. Yeah,
Speaker 1: Jay Young.
Speaker 2: Those wells don't just restart on command. What's the realistic
Speaker 2: production ramp up timeline you're talking about here to get everything.
Speaker 1: Back on line? It takes weeks months. As a matter
Speaker 1: of fact, a lot of the oels may not even
Speaker 1: come back on. I mean, we've had wales before that
Speaker 1: we've had to set in for unfortunate exist reasons and
Speaker 1: they just don't come back on. And if they do
Speaker 1: come back on, they may come in seventy percent of
Speaker 1: what they were before. So it does take It does
Speaker 1: take time. It's unfortunate that you have to shut down,
Speaker 1: especially oil wells, oil wells that are high pressure oil
Speaker 1: wells because of the liquids and because of the pressures
Speaker 1: down haul. It does take a lot and you know.
Speaker 1: The unfortunate thing is it may not come back around,
Speaker 1: which means we're going to see a shortage in oil
Speaker 1: for a long period of time. Uh. And if we
Speaker 1: see that, we're going to see higher prices. Yeah.
Speaker 2: Jay Young is a is a gas, gas and oil
Speaker 2: man out of Texas at King Operating, and our own
Speaker 2: government says Middle East to oil production.
Speaker 1: Uh.
Speaker 2: Because of what we're talking about, we're not going to
Speaker 2: see pre conflict levels return until late this year. So
Speaker 2: best case scenario deal done straight or moves open great
Speaker 2: or moving the containers through and ships through. But here
Speaker 2: in the Tri State families are still going to pay
Speaker 2: elevated prices for what the foreseeable future, at least to
Speaker 2: the rest of this year, right, I think so?
Speaker 1: I mean, I I've been talking about higher prices going
Speaker 1: in of the summertime when a lot of demand, you know,
Speaker 1: peace because of you know, people of the go vacations,
Speaker 1: and we shut rigged down. We shut rigged down for
Speaker 1: the last two three four years. I mean there's some
Speaker 1: there's some places that we've had forty declines, which means
Speaker 1: rigs aren't running, rigs aren't drilling for rolling gas number one,
Speaker 1: but number two is you know, the whales that are
Speaker 1: online decline rapidly in the first year two years, so
Speaker 1: we're going to see an effect of that as well.
Speaker 1: So we're going to have a lot less supply on
Speaker 1: the market and our demand continues to rise. So we're
Speaker 1: going to see higher prices anyway. And I wasn't even
Speaker 1: including the war in this, but you put this into
Speaker 1: effect with a lot of disruptions globally, I think we're
Speaker 1: going to see prices higher for a long period of time.
Speaker 2: Well, I mean, we we tapped into the spr the
Speaker 2: Strategic Patroling Reserve, we have Russian oil exemptions, We've got
Speaker 2: these backstops that were kind of helping us out through
Speaker 2: this crunch. But some might think this came just in time,
Speaker 2: but it sounds like we're still going to feel because
Speaker 2: all of those things and more that I can't and
Speaker 2: fathom at this point, are coming to gather confluence to
Speaker 2: put a further crunch on oil production.
Speaker 1: Yes, exactly. And Trump is doing anything and everything he can.
Speaker 1: He's got midterm elections coming up. He does not want
Speaker 1: a lot more Democrats in the office because they'll they'll
Speaker 1: try to impeach him, and we'll hear about that for
Speaker 1: the next two years. So he wants all prices lower.
Speaker 1: And I felt like that that oil prices at one hundred,
Speaker 1: one hundred and twelve thirteen are low compared to what
Speaker 1: they should be during the war like this. So he's
Speaker 1: done a great job keeping it down, you know. And
Speaker 1: now he's done a great job with with you know,
Speaker 1: his negotiations so far. We'll going to happen this afternoon
Speaker 1: or in the next couple of weeks.
Speaker 2: Like you said, we get something out of it, like
Speaker 2: you know, nuclear disarmament, there's got a piece. We got
Speaker 2: to get something out of this. Otherwise, Okay, well why
Speaker 2: did why did we go through this exercise and put
Speaker 2: the world on the break for a few days if
Speaker 2: you can call it that? And the threats of course
Speaker 2: that were made or one thing, but action is entirely different.
Speaker 2: I get that. I just you know, you hope that,
Speaker 2: you hope that there's an endgame here for us here
Speaker 2: in the United States. You know, I look at Saudi Arabia,
Speaker 2: they have actually benefited from their pipeline infrastructure during this crisis.
Speaker 2: Crude experts to Europe hit a two year high. Of course,
Speaker 2: you know, it feels like we're losing here. But who
Speaker 2: are the other winners of this what roughly six weeks
Speaker 2: of chaos in the straight of horror moves And is
Speaker 2: the American oil industry one of them?
Speaker 1: Yeah? Absolutely, Yeah. When you see higher prizes like this,
Speaker 1: revenues do go up. And is good. And there's a
Speaker 1: lot more drilling prospects. I mean, there's some prospects that
Speaker 1: look good at you know, twenty thirty where we drill,
Speaker 1: we drill for twenty thirty dollars a barrel. That A
Speaker 1: lot of the shale prospects that they have, you know,
Speaker 1: they look they look really good at seventy or eighty
Speaker 1: dollars a barrel, they break evens, maybe fifty sixty dollars.
Speaker 1: But but you know'll hire the prize, hire the revenues.
Speaker 1: It's not as important and it's not as important to
Speaker 1: drill wells that you are thirty forty dollars a barrel
Speaker 1: for their brake. Even so it puts a lot more
Speaker 1: rigs on the on the market when you have higher
Speaker 1: prices and that and that's good for It's good for Texas,
Speaker 1: I know that because we do a lot more drilling
Speaker 1: and we have a lot of old production here uh
Speaker 1: in Texas, and it does. You know, it's great for jobs,
Speaker 1: great for our taxes here in the in the in
Speaker 1: the state of Texas, and we don't pay income tax
Speaker 1: because of that. But it's it's really good for us
Speaker 1: here and it's just good for for anybody. But you're
Speaker 1: gonna see a lot of a lot of of them
Speaker 1: right now. I'm afraid with a lot of the oil
Speaker 1: that that's that's been conflicted east of its west coast
Speaker 1: is going to see higher prices. And let's see how
Speaker 1: fast these these prices do come down. I mean it's
Speaker 1: gonna take You're gonna take a few days or a
Speaker 1: week or what to bring these prices back down at
Speaker 1: the pump. Yeah, you know, Americans are paying eight hundred
Speaker 1: and thirty million more a day right now with with
Speaker 1: with gasoline prices being up, they're paying eight hundred and
Speaker 1: thirty million more dollars a day. Let's see how long
Speaker 1: it takes these prices to go down with the pupe.
Speaker 1: I just drove by a gas station. I didn't see
Speaker 1: I didn't see two dollars or three dollars on that
Speaker 1: on that side. So it may take a little a
Speaker 1: little bit because they have bought all that higher prices,
Speaker 1: but hopefully it'll come down soon.
Speaker 2: Yeah, we're, howevering just I think below four here in
Speaker 2: the Tri State in Cincinnati, Jay, and you're in Texas.
Speaker 2: You know, the one thing we didn't mention adds the
Speaker 2: cost here is the shipping insurance premiums. Those have gone
Speaker 2: through the roof for you guys and analysts expecting a
Speaker 2: I think they call it a security search charge, which,
Speaker 2: of course you know anytime you get a search charge,
Speaker 2: they put it in and never goes away, never goes away.
Speaker 2: So that also helps keep prices artificially elevated even after
Speaker 2: the straight opens, right exactly.
Speaker 1: Yeah, and you're seeing a lot of the Saudi Arabia
Speaker 1: is charging nineteen fifty. It just reminded me that Saudi
Speaker 1: Arabia was charge in nineteen fifty because they can't getting
Speaker 1: all out of that persion golf or the trader removed.
Speaker 1: So you're seeing a lot of taxes, but you're seeing
Speaker 1: a lot of taxes everywhere on California has a lot
Speaker 1: of taxes. That's why they're they're paying six seven dollars
Speaker 1: of a gallon over there. You're seeing a lot of
Speaker 1: other states that are having to pay taxes right now,
Speaker 1: and and you know, hopefully, hopefully we can keep these
Speaker 1: prices down and get back to normal, whatever normal looks like.
Speaker 1: I think it looks like. You know, seventy eighty dollars
Speaker 1: a barrel is great for us as a producer. Yep,
Speaker 1: it's we don't we don't need. We don't need one hundred,
Speaker 1: we don't need. That's if you watch lamb Man. You know,
Speaker 1: Billy ball Carton says we need about seventy five dollars
Speaker 1: a barrel. So I would definitely, you know, right after you,
Speaker 1: right after you watch Lambman, just go look at my
Speaker 1: book The Upside of Only Gas Investing, and you can
Speaker 1: learn how to how to make money out of all
Speaker 1: the things that Billion Bob talks about. Because it's a
Speaker 1: it's a great show, and it does. That's that's how
Speaker 1: I grew up. Yeah, I grew up. You watch it?
Speaker 1: Is it? Is it fairly accurate?
Speaker 2: I mean, obviously you know what happens in one day,
Speaker 2: It's that's not reality. There's probably, like anything, a lot
Speaker 2: of sitting around and then you have a crisis of
Speaker 2: what you can't have that much drama in one day?
Speaker 2: Go out in your life, otherwise you die from sheer stress.
Speaker 2: I get that, but how accurate overall is it?
Speaker 1: It is accurate, but it's for Hollywood. It reminds me
Speaker 1: when Cooper goes out and he drills like five old
Speaker 1: wells in an afternoon. I mean he's like two hours late.
Speaker 1: He's like two hours late from getting back to his
Speaker 1: I think his girlfriend at the time. Yeah, and he said, yeah,
Speaker 1: he said, you know what, we hit every well we drill,
Speaker 1: we hit like five wells. And I'm like, it takes
Speaker 1: you five months to drill five wells. You're not You're
Speaker 1: not going to just go around and drill five wells
Speaker 1: in the afternoon or something. But it was made for Hollywood.
Speaker 1: It's a great show show.
Speaker 2: It's one of the best shows on streaming, that's for sure.
Speaker 2: Jay Young, so the too long, didn't read version of
Speaker 2: this thing. If you're just joined the Scotsland Shore Show
Speaker 2: here with a Jay Young who's an oil and gas
Speaker 2: man and his book is Upside of Oil and Gas Investing.
Speaker 2: He's a brainer in Texas is that gas prices higher
Speaker 2: gas versu whose inflative gas prices are here for the
Speaker 2: foreseeable future. At least through quarter four of this year
Speaker 2: because of all the uncertainty that's going on, the fact
Speaker 2: that these strategic PATROLLERU miserve needs to be rebuilt. We've
Speaker 2: got rushes issues in there as well with their needs.
Speaker 2: We have the insurance cost of shipping, and the uncertainty
Speaker 2: of when Iran says enough enough and they close the
Speaker 2: straight again, if indeed that happens, And it seems like
Speaker 2: that's the biggest issue is how can Iran control something
Speaker 2: that they really have no oversight on that would be
Speaker 2: the straight of our moves. That's the troubling part of
Speaker 2: this that there's no work around.
Speaker 1: For exactly and there's gonna be a lot more pipelines there.
Speaker 1: They're gonna be you know, built really soon because you know,
Speaker 1: I think that twenty percent of all oil in the
Speaker 1: world goes through the Straight of removement to thirty thirty
Speaker 1: three miles wide is just absolutely crazy in regards to
Speaker 1: you know, and relying on that and Iran trying to
Speaker 1: get as much control as they can and hopefully just
Speaker 1: the thing is gonna go to play out where we
Speaker 1: can all play knives and we can do what we
Speaker 1: when we grew up, all of us grew up, you know,
Speaker 1: on our knees right beside the bed, saying you know,
Speaker 1: all we want, you know, got his world peace. So
Speaker 1: that's what we're trying to do right now as well.
Speaker 2: So yeah, yeah, from an engineering standpoint, we would kick
Speaker 2: this or us a play if you could do something
Speaker 2: about the straight off our moves to take that. You know,
Speaker 2: it's it's obviously what you're talking about. There's moving mountains literally,
Speaker 2: I mean that in order to do like a canal.
Speaker 2: But you know, you think about here in the States,
Speaker 2: back to where I grew up in the Great Lakes. Uh,
Speaker 2: you know, it was the Erie Canal was a huge
Speaker 2: thing right the ear cannoticing it and then they said,
Speaker 2: well we're gonna make a seaway now. And then that
Speaker 2: of course killed the towns. Will help kill the towns
Speaker 2: around the Great Lakes because engineering came along and literally
Speaker 2: could move mountains. I don't know if that's in the
Speaker 2: foreseeable future, but at some point maybe there's a way
Speaker 2: to do that where you can bypass the straight offour
Speaker 2: moves and take a round completely other picture. Of course,
Speaker 2: that means that the nation or nations that you do
Speaker 2: something like that around are gonna win him. Go hey,
Speaker 2: wait a minute, now we hold all the cards and
Speaker 2: Iran does it anymore, and we have a new form
Speaker 2: of totalitarianism. And it's all driven by money and oil,
Speaker 2: which we need to live our modern lives.
Speaker 1: For sure.
Speaker 2: He is Jay Young, CEO of King Operating. It's oil
Speaker 2: and gas. He's a real landman here. It's not Billy
Speaker 2: Bob Thornton. It's Jay Young. The upside of oil and
Speaker 2: gas investing is the book. And thanks your time, sir.
Speaker 2: I appreciate it.
Speaker 1: Thanks a lot. You guys, have a great day, and
Speaker 1: and check back with me maybe maybe in a couple
Speaker 1: of hours.
Speaker 2: Because you never know what could happen, but right we
Speaker 2: could do it. Dare daily update and it changed minutes
Speaker 2: and minute. Take care Jay, thanks, he absolutely thank you.
Speaker 2: Sure we got to get news update in uh very
Speaker 2: late so uh travesty averted here so the world a
Speaker 2: dot end last night in case you just in case
Speaker 2: you were like me or watching Red's baseball going hey, yeah,
Speaker 2: weren't we supposed to blow up her? Perhaps too into
Speaker 2: the Reds game. Let's get the care. It's a good
Speaker 2: problem to have. Sarah least the Snart report. She is
Speaker 2: going to celebrate the big dub last night. A milestone
Speaker 2: win very early in the season for the Reds, a
Speaker 2: milestone wind. We'll get into that next on seven hundred
Speaker 2: Wlwright