Energy Exec to Testify Before Senate Committee

(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)

U.S. senators re-convene Monday after their Memorial Day recess, and an oil and gas industry executive is scheduled to testify before a Senate panel this week. Find out who will be in the spotlight, along with other developing trends, in this preview of what to watch this week in the oil and gas markets.

Phil Kangas, Energy Advisory, Partner in Charge for Natural Resources & Mining, Grant Thornton LLP: The Senate will return from recess this week with substantive budget and policy considerations affecting the oil and gas market.  Among the activities to watch will be the June 8 testimony from Colonial Pipeline CEO before the Senate Homeland Security and Governmental Affairs Committee on the recent cyber-attack on critical infrastructure. And while the President and Republicans remain far apart on agreeing to an infrastructure package, we’ll be watching what ultimately finds its way into consensus legislation. Conventional wisdom suggests that Congress will move some elements of an infrastructure bill forward on a bipartisan basis, though the rest would have to pass under reconciliation, a budget maneuver that doesn’t require a full 60 votes in the Senate. Among these areas are funding priority investments like decommissioning orphan wells and infrastructure, supporting the advancement of renewable energy, and enhancing research activities. Such provisions related to the energy sector, especially those impacting the oil and gas industry, are areas to watch during these ongoing negotiations on Capitol Hill.

Tom McNulty, Houston-based Principal and Energy Practice leader with Valuescope, Inc.: The Energy Complex will continue to be seen as a solution rather than an obstacle to the Energy Transition. Just look at BlackRock (NYSE: BLK) CEO Larry Fink’s recent comment. He indicated that his firm will not abandon the oil and gas business but, rather, be engaged with it to make the Energy Transition more effective. And the value impact will continue to be a growing topic. Energy companies are uniquely positioned to create value with ESG (environmental, social, and corporate governance) and sustainability efforts: real, positive net present value. Notice that the SASB (Sustainability Accounting Standards Board) and IIRC (International Integrated Reporting Council) are merging and will be called the “Value Reporting Foundation.”

Mark Le Dain, vice president of strategy with the oil and gas data firm Validere: Liquids pricing this summer is fantastic but still underappreciated. We saw in Q1 that improved natural gas liquids pricing was a source of some cash flow beats, and it looks to be an even bigger force in Q2. With fewer eyes on the space post the recent downturn, the impact of positive liquids pricing on cash flows for some of these names seems to not yet be showing up in estimates or share prices.

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