Waha and Water Intro Note
"Hey ChatGPT, write me an article on the latest natural gas upstream & midstream environment and how they are impacting current price volatility"...
As an AI language model, I cannot predict the future, so I am unable to write an article on the "latest 2023" natural gas upstream and midstream environment. However, I can give you an overview of the factors that have influenced natural gas prices in the recent past.
While the world waits Bing & ChatGPT pro to take over the commodity blogging space and start using real time web data to help educate us on all things commodities (and provide breaking news, market trends, etc.), I guess for now I still have a purpose here at Hedge Resources...
My idea for this blog is to touch on a wide range of topics that may interest our readers, investors, and clients who may want to understand how we see the world of commodities moving over time. Topics that will get extra love include:
Stranded natural gas assets
Regional midstream takeaway constraints & their impact on regional pricing
Upstream oil & gas project efficiency gains & lease operating challenges
Emerging carbon credits & voluntary offset market space
Bitcoin mining operations as a hedge strategy during periods of volatility
Upstream produced water market
My name is Andrew Cooper and I am a trained geophysicist & data scientist, receiving my undergraduate degree from Colorado School of Mines and graduate degree from Regis University. I’ve spent my career bouncing from oil & gas to financial services and finally landing in investment research & asset management. Below are a few transition points in my career that you might find interesting:
My first job out of school was working for Schlumberger’s reservoir characterization group imaging complex onshore & offshore oil & gas targets… Here is where I learned about topics like “pressure bubble point”, “subsalt sediment structure”, “geological permeability & porosity”, "reverse time migration imaging", etc…
After spending the first few years of my career in Houston, TX helping our clients chase new oil discoveries, I decided to move to Denver, CO and make a pivot into the financial services & analytics sector. This is where I started working at S&P Global where my focus was driving new US shale market insights coverage and implementing our team’s proprietary integrated forecast tool, which was able to understand & predict supply trends across all major commodity groups (natural gas, crude oil, and NGLs as a multilayered output).
After deriving new oil & gas models and generating hopefully stimulating upstream equity research, I took a new opportunity to lead the Low Carbon Team (Energy Transition Group) and back to Houston I went! My role as lead analyst was to characterize what type of climate implications varying crude systems would have and I worked extensively on building bottoms-up engineering models to track emissions across various commodity supply chains. This carbon intensity model translated into the original low carbon crude pricing assessment which helped inform crude traders what type of emission profile was associated with every barrel of crude that was being bought & sold daily.
Now, I've settled in Los Angeles, CA and work for Capital Group, one of the largest asset management companies in the world. My main focus is helping our group's portfolio managers and investment professionals optimize their returns by better understanding various types of company-level alternative datasets.
Hopefully from my background you can tell I have a fascination for the oil & gas industry, and if I didn’t graduate from Colorado School of Mines with WTI crude below $30/bbl, I very well could still be working as a geoscientist somewhere in the world...
You may be confused on what my role at Hedge Resources is and why I’m writing this blog post? My hope is in the upcoming months I can share some of my industry knowledge and passion into this simple blog format. Here at Hedge Resources, we are focused on designing proprietary systems to help oil & gas operators better hedge their revenue during periods of commodity volatility through investing in alternative technology workflows.
When I joined this team in early 2022, offgrid Bitcoin mining was a hot topic and it seemed like every West Texas guy with a genset was trying to rig up their own mining operation. This perplexed me, as natural gas prices were trading well over $6/MMBtu and Bitcoin had crashed below $15k support levels... While I didn’t understand at the time why any sane individual or credible oil & gas company would be investing in this type of technology (as I thought the obvious strategy forward was just for companies to just focus on getting their gas on a pipeline or to a LNG cargo ship out out to Europe), we now sit in a completely new commodity environment and I’m starting to see the benefits of investing in future technologies. We now sit in a sub $2.30/MMBtu gas world at the time of this writing and over the past few months we have seen the Waha gas system show serious signs of takeaway constraints.
What if oil & gas operators could “pull” on different commodity levers each year and create systems that would go beyond a simple hedge book for their oil & gas sales… Also, what if they could tap into offgrid technology that could help improve their wellhead’s profit margins by lowering various LOE costs? That is what Hedge Resources is about and I’m hoping we can connect with each one of you individually to learn more about your specific situation and discuss solutions that our team has put together to help you navigate the murky waters of the new 21st century world of commodity trading...
Your oil & gas, carbon, & equity valuation guy,
