In an era where electricity demands continue to escalate, the importance of a reliable and efficient electrical grid cannot be overstated. Transmission lines form the backbone of the power grid, crucial for transmission and distribution of electricity from power generation sources to residential and commercial locations. As demand has increased in areas such as ERCOT, congestion on the network has become a significant challenge.

As grid modernization gains momentum through the integration of new technologies and updated infrastructure, we turn our attention to Hamilton – Maverick (Ham-Mav), a persistent bottleneck in ERCOT over the past several years. This line has experienced particularly intense congestion in 2023. The burning question: Could 2024 bring about a shift?

According to AEP, work has commenced on the Brackettville – Escondido 138kV line, which is projected to make a significant difference to the constraints along the Ham-Mav path by offering an alternative route into the Eagle Pass area, potentially changing grid dynamics.

Source: Enverus Power & Renewables Foundations & Project Tracking Analytics – Planned transmission lines in ERCOT

About the Hamilton Maverick Line

Over the past few years, the Ham-Mav line has increased congestion and price. According to ERCOT in July 2023, a maximum shadow price was set at $2,000/MWh for peak times. Enverus analysis shows a year over year growth in day ahead compared to real time prices – a prime opportunity for power traders. Below shows the total shadow price for all versions of Ham-Mav by year.  

Source: Enverus MUSE Congestion Analytics – Hamilton – Maverick Line 2020-2023, blue represents Day Ahead (DA), red represents Real-Time (RA) LMP prices, yellow line relates to right y-axis and is the rank by shadow price of the Hamilton congestion

About the Brackettville – Escondido Line Project

The Enverus Power & Renewables Research team successfully mapped out the intended route, with precise digitization by the Enverus GIS teams. The construction phase of the project officially commenced in January 2023, with an anticipated operational launch slated for February 2024. Interestingly, as of September 2023, there have been no significant reports from major sources regarding the initiation of construction for this pivotal transmission line. Upon closer examination of operating and planned projects within a 5-mile buffer, we can identify projects and substations located nearby the future operating line and the companies behind those projects:

Source: Enverus Power & Renewables Foundations & Project Tracking Analytics

Source: Enverus Project Tracking Analytics, Operating and planned projects on the Brackettville-Escondido Line by capacity

Source: Enverus Project Tracking Analytics, Planned capacity expected to come online by year around the Brackettville-Escondido Line

Source: Enverus Project Tracking Analytics, Planned capacity expected to come online in 2024

Impacts of the new line for congestion and planned assets

As mentioned, Ham-Mav has been one of the top constraints over the past several years in ERCOT. More generally, this region, whether around Uvalde or further south between Asherton – Catarina – Piloncillo, has experienced notable congestion issues.

Once completed, the new Brackettville-Escondido line is expected to greatly reduce the Ham-Mav congestion. This is because it will support the local load and essentially serve as a parallel path to the Eagle Pass area, having almost 4x the rating of Ham-Mav. This should also curtail congestion between Uvalde and Asherton.

However, it’s anticipated impact on congestion between Asherton and Piloncillo will be relatively modest. This underscores the importance of understanding the congestion patterns between the two points, as the direction of binding can flip. Asherton – Caterina congestion typically occurs when North Central and Far West regions generate strong power but lack counterbalance from the South. The image below shows the impact of the congestion, with shading based on the shift factors:

Source: Enverus MUSE Congestion Analytics – Green represents the source, red indicates the sink

How Enverus can help

Enverus Power and Renewables provides solutions for the entire power and renewables lifecycle to help maximize your returns and optimize your asset value.

We help you at every stage of your project’s lifecycle, from helping understand where you fit within the energy transition, finding the best project sites, engineering optimal project designs, optimizing asset operations and maximizing trading profits.

To learn more about the solutions shared in this analysis, please complete the form below.

The post Navigating power gridlock: How planned transmission lines will impact congestion first appeared on Enverus.

CALGARY, Alberta (Sept. 26, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that quantifies the remaining drilling inventory across key North American shale plays.

“We see the cost of supply continuing to increase for North American shale producers over the next five years as the industry moves from developing Tier 1 to Tier 2-4 locations,” said Dane Gregoris, managing director at EIR. “However, ample Tier 2-4 inventory should alleviate fears of a structural decline in North American production or activity levels over the next 15 years.”

Key takeaways from the report:

• EIR estimates six years of Tier 1 (sub-$45/bbl WTI breakeven) locations remaining across North America at today’s activity levels.
• Ample Tier 2-4 inventory should alleviate fears of a structural decline in U.S. production or activity levels over the next 15 years.
• EIR projects the North American inventory-weighted average breakeven will rise by $6/bbl WTI ($0.30/MMBtu HH) to $57/bbl WTI ($2.85/MMBtu HH) by 2028, assuming no changes to well costs.

EIR’s analysis pulls from a variety of Enverus products, including Placed Well Analytics.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

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About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Media Contact: Jon Haubert | 303.396.5996

The post Shale maturity driving increase in cost of supply first appeared on Enverus.

In a year that began with lackluster minerals-focused M&A activity, there were signs of life in Q2 with the first transaction exceeding $10 million as Kimbell Royalty Partners acquired MB Minerals for $143 million. Compared to operating company M&A, even this deal gets lost in the shadow of E&P mergers and acquisitions where there were six deals exceeding $1 billion in Q2 (five of which were Permian-specific). Relatively speaking, mineral and royalty deals have appeared diminutive – until now. Mineral deals rarely breach the $1 billion mark, but Viper Energy Partners deployed more than $1 billion, mostly in cash supplemented with stock to acquire mineral and royalty assets from affiliates of Warwick Capital Partners and GRP Energy Capital (GRP) in the third-largest mineral deal ever tracked by Enverus Intelligence Research. Following the completion of the transaction, Viper Energy gains 7,322 net royalty acres (at 100% or 58,580 normalized to 1/8 NRA). Not surprisingly the deal is heavily weighted with Permian acreage, significantly expanding Viper Energy’s Midland and Delaware positions.

This acquisition raised the question: Is this magnitude of minerals M&A a flash in the pan or is this a sign of things to come? Given the trainwreck caused by demand destruction and plunging commodity prices in 2020 and 2021, the minerals market began its road to recovery in 2022. Given continued growth in the oil and gas sector, the path forward will likely see minerals M&A continue to heat up. Mineral and royalty interests represent a very attractive asset class to own given that operators bear the cost of extracting hydrocarbons while interest owners collect revenue streams. Thus the fight is for prized Permian acreage.

Among public buyers, the bid for GRP’s assets was a two-horse race between Viper Energy and Sitio Royalties who likely saw the mineral interests as an excellent fit for their own footprint in the Permian. Asset diversification was also at play here with about 20% of the deal including assets in the DJ Basin, which would also have complemented Sitio Royalties’ existing holdings in the Rockies.

A niche within the oil and gas sector, mineral holding companies must increase investor exposure and drive down G&A costs per BOE. This deal accomplishes both for Viper Energy along with increasing free cash flow at the cost of diluting its focused asset exposure to the Permian. While Permian assets may be prized for resource expansion, diversifying mineral holdings is a good strategy for any buyer given the battle and cost of securing Permian acreage.

Increasing interest from large mineral funds and institutional buyers for limited minerals and royalty ownership opportunities is leading to a fierce competitive landscape. The tools of the past are no longer enough to keep pace, underscoring the need for asset buyers to embrace a data-driven and analytics-intensive approach to quickly identify, valuate and seize mineral M&A opportunities. Those who do it well will thrive, build a strong portfolio and extract maximum ROI from their assets.

Want to dive deeper into how you can stay on top in a competitive M&A market? Learn more about Enverus solutions, designed specifically to solve these challenges, and more. Fill out the form below to download our Intelligence solutions overview and speak with our experts.

About Enverus Intelligence Publications

Enverus Intelligence Publications presents the news as it happens with impactful, concise articles, cutting through the clutter to deliver timely perspectives and insights on various topics from writers who provide deep context to the energy sector.

About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

The post Viper Energy acquires GRP assets in third largest ever minerals transaction first appeared on Enverus.

Over the last few quarters, executives at U.S. upstream operators have grown accustomed to analysts asking about cost inflation. It’s an inevitable part of every conference call. During the late July to mid-August earnings season for Q2, the question shifted to possible deflation, with companies across America’s shale patch making small note of an improved cost environment. Falling H2 costs were broadly predicted, but companies don’t seem to be making significant changes to their 2023 plans as a result.

The consensus is that there will be lower costs in some specific categories such as sand, steel, tubulars, chemicals and services. Some companies have reaped savings; Eagle Ford pure-play SilverBow Resources, for example, says it has realized 5-10% in drilling and completion savings this year. Others haven’t, because of specific needs or because they locked in pricing at the end of 2022 or early this year. A deflationary environment looks to benefit their 2024 outlook more than 2023.

Callon Petroleum CEO Joseph Gatto said spot market items like steel casing and sand are down 15-20% and chemicals and service equipment costs have softened. “We recently re-contracted two drilling rigs at rates that were below our previous rates. Overall, we expect to realize an incremental $15 million in savings in the second half both from service costs and the early impacts of structural design modifications,” Gatto said.

Pioneer Natural Resources COO Richard Dealy also noted declines in steel, casing, tubular goods and chemicals, but says the rigs that have seen price declines so far aren’t for Pioneer. “We’ve heard commentary about rig rates and frac fleet rates coming down. From what we have seen, those are mainly on spot rates, and they’re on, what I’d call, less efficient rigs and Tier 2 equipment on the frac side. And when we look at our contracts, just given our size and scale, our contracts today are still below where those spot prices are being quoted,” Dealy said.

Similarly, EOG Resources COO Lloyd Helms said his company is also picky about its equipment. “As a company, we focused on sustainable cost reductions through our operational efficiency gains. As a result, we do seek out the highest-performing equipment in crews, super-spec rigs, electric frac fleets, etc., that’s really less exposed to some of these headline inflation numbers that we’re seeing on the more marginal-end equipment on the spot market,” Helms said.

If Permian player APA Corp. saves any money in H2, it’s going to count its cash. CEO John Christmann said that despite deflation in service costs, the company is operating at a “good cadence,” so any benefits from lower costs “would come to free cash flow and the [D&C] program will be pretty stable.” He noted that lower costs at this point in the year are more actionable in 2024 depending on the commodity price outlook.

“We do try to go in every year with a pretty set framework on the capital side,” Christmann said. “And so, a lot of what’s going on this fall will dictate what our service costs will look like for the portions that we will try to lock down for next year… And clearly, you’ve had a little bit of softening in some areas right now, but I think everybody is waiting to kind of see what prices do in the back half of the year to really steer next year’s capital.”

Multi-basin operator Coterra Energy is also looking toward the future. CEO Thomas Jorden lamented that while costs have moderated, they have not come down as “significantly as we hoped.” He expects 2024 wells costs to fall 5% with some “big ticket items” potentially dropping as much as 10-15%.

Appalachian and Haynesville driller Southwestern Energy is also making a 10-15% deflationary call on 2024. Gas-producing peer Chesapeake Energy anticipates a 5-7% drop in D&C costs next year. However, oil-weighted Occidental Petroleum’s CEO Vicki Hollub isn’t ready to say 2024 costs will come down or acknowledge much softening YTD.

“We’re seeing some things start to plateau in terms of cost. We’re seeing labor being still a bit tight,” Hollub said. “But we’re not seeing as many people wanting to change jobs. It’s just a matter of getting the skills that we need in the field, and that’s where the big challenge is to get truckers to drive trucks and people to do the welding and those kinds of fill jobs are so important to us. While we’re not seeing much reduction in service company costs, we don’t expect that. But I don’t think we’ve settled on expecting any kind of increase next year.”

About Enverus Intelligence Publications 
Enverus Intelligence Publications presents the news as it happens with impactful, concise articles, cutting through the clutter to deliver timely perspectives and insights on various topics from writers who provide deep context to the energy sector. 

The post Some costs falling, but don’t expect a 2023 response from E&Ps first appeared on Enverus.

CALGARY, Alberta (Sept. 19, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a report that analyzes the U.S. Environmental Protection Agency’s (EPA) latest proposed changes to Subpart W of the Greenhouse Gas Reporting Program (GHGRP), quantifying the impacts on total reported methane, CO2e emissions levels and IRA methane fee liabilities across U.S. sectors and basins. EIR has pinpointed the most material new source categories and calculations and assess their potential to significantly alter the current emissions landscape among upstream and gathering entities in the U.S.

“The EPA’s latest proposal would drastically change reported methane from the oil and gas industry in the U.S.,” said John Gutentag, product owner with EIR.

“We model that the new regulations would more than double 2021 reported methane if implemented and increase overall CO2e emissions by 41%. This has huge implications for exposure to the IRA’s methane fee that kicks in next year, a year before this proposal is projected to take effect and will cause PR headaches as companies will inevitably reset emission reduction targets and baselines.”

Key takeaways:

• EIR calculates that the EPA’s revisions lead to an estimated 130% increase in 2021 reported methane emissions and a 41% increase in overall CO2e emissions from the upstream and gathering sectors.
• EIR sees four categories driving the increase in reported methane: super-emitter events, higher emission factors for equipment leaks, updates to combustion slip from engines and lowered flaring efficiencies, contributing an additional 2.3 million metric tonnes (Mt). Total reported methane emissions in 2021 amounted to 1.9 Mt.
• The proposal could expose more than half of upstream assets and all gathering assets to the IRA’s future methane tax, disproportionately impacting lower-producing, higher-emitting assets that may be forced to shut in production when faced with higher taxes and monitoring costs.

Additional resources:

• Starting the Descent to Net Zero (Jan. 17, 2023)
• Say Goodbye to Flaring Uncertainty (Dec. 30, 2022)

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research, and Enverus ESG® Analytics.

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View all Enverus news releases at Envers.com/newsroom.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Media Contact: Jon Haubert | 303.396.5996

The post EPA’s emission revision: More rules, double the methane, triple the tax first appeared on Enverus.

Behind the meter (BTM) solar is a key factor in decreasing load in CAISO, especially in California where it has the most impact on annual demand. The state’s potential for nearly 195 GW of rooftop solar capacity exists, although its full realization is unlikely. The implementation of new building codes mandating rooftop solar installations is set to contribute around 1.5 GW per year to this growing trend. With an existing 9 GW of residential rooftop solar and annual growth of 15%-17%, the recent introduction of the Net Energy Metering (NEM) 3.0 policy is expected to shift the landscape, causing a temporary slowdown in BTM solar installations and a corresponding rise in BTM storage installations. This is due to the policy’s financial disincentives for excessive solar deployment in residential systems. 

Nevertheless, the synergy of increasing power prices and diminishing solar costs is poised to enhance the viability of BTM solar installations. By adhering to this trajectory, the prospect of reclaiming pre-NEM 3.0 levels by 2034 emerges, with a projected stable annual growth rate of 5%, leading to over 52 GW total BTM solar capacity by 2050 (Figure 1). 

Highlights from Energy Transition Research

1. EPA’s Emissions Revisions – More Rules, Double the Methane, Triple the Tax – EIR quantifies the impact of the EPA’s proposed changes to Subpart W of the Greenhouse Gas Reporting Program, estimating the increase in total reported methane, overall CO2e emissions levels and IRA methane fee liabilities across U.S. sectors and basins. EIR analyzes the new emission source categories and modified calculations, focusing on the most material revisions and their potential to significantly alter the current emissions landscape in the U.S. 

2. The Ways to Play – Energy Transition Opportunities for Upstream Participants – This report establishes a framework for how E&Ps can view and eventually participate in the energy transition. Upstream operators are increasingly exploring the energy transition, but many remain hesitant to deploy capital. Any decision, including inaction, must be well-informed and deliberate in response to growing stakeholder demands. An operator’s energy transition strategy is strongly shaped by the context of its current business, the capabilities of its assets and workforce, and most importantly its conviction in the necessity to participate in the first place. 

3. CAISO Load Forecast – EVs Pave Way for Growth – This report assesses the impact of upcoming policy and technological advancements on power demand in California. EIR’s findings are represented in an hourly demand forecast that extends to 2050. 

Energy is changing. Connect weekly with the ideas that are leading the way. 

About Enverus Intelligence^®| Research 
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more. 

The post Navigating California’s Behind the Meter Revolution first appeared on Enverus.

Seismic surveys are a vital tool in the oil and gas industry. Effective use of seismic surveys allows industry professionals to identify prospects, assess potential resources, reduce risk and even quantify reserves – in short, to make well-informed decisions that drive successful exploration efforts. 
 
Enverus Global Scout Network provides real-time insights into seismic survey activity across the globe.  
In mid-September 2023, the PGS “Ramform Titan” vessel was continuing with MC3D seismic acquisition operations in Egypt’s western Mediterranean waters. The vessel mobilized to Egypt’s ultra-deepwater (~2,500 m WD) in late July 2023, to commence the 5,900 sq km Merneith & Luxor GeoStreamer project. The campaign, being carried out in partnership with the NOC EGAS, aims to improve the imaging and understanding of the area between the Herodotus and Nile Delta basins, where pre-salt Oligo-Miocene clastic prospectivity has been identified. The acquisition area covers Block 11 and Block 12 open areas, as well as infilling coverage between three Shell-operated licenses, namely North Cleopatra Offshore, North Marina Offshore and North El Fanar Offshore.  

For more information on the Global Scout Solution Click here. 

Understanding seismic surveys 

Seismic surveys result in detailed images of and can provide crucial information on subsurface rock layers. This process involves emitting acoustic waves, recording their reflections and measuring their characteristics. Through this technology, oil and gas companies gain valuable insights into potential reserves. 

Seismic surveys in the oil and gas industry 

The oil and gas industry heavily relies on seismic surveys to find offshore oil and gas reserves. Globally, seismic survey usage has been a trusted practice for nearly 100 years, a testament to its effectiveness. The International Association of Geophysical Contractors attests to the cost efficiency and efficacy of seismic surveys, making them an essential component of exploration strategies. 

Contributions to energy supplies 

Seismic plays a critical role in meeting the growing global and domestic energy demand. With advancements in seismic imaging technology and data processing, the industry’s ability to locate offshore resources in particular has significantly improved.  

Ongoing innovation and the adoption of sustainable practices will further reduce the impact of seismic surveys, helping ensure a responsible and prosperous future for the oil and gas industry. With seismic surveys as their guide, industry professionals will continue to make confident, well-informed decisions that shape the future of energy exploration. 

Fill out the form to get more information on Enverus global scouting.

The post Unlocking the depths: How seismic surveys drive oil and gas exploration first appeared on Enverus.

CALGARY, Alberta (Sept. 13, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its latest FundamentalEdge report focused on global drivers for oil and gas prices to 2030, the five-year oil and gas supply and demand outlook, and price forecasts. For several months, EIR has maintained that Brent prices will reach $100/bbl by the end of this year.

“Fundamental data released prior to our deadline of Aug. 31 has been mixed; however, we are reaffirming our call that Brent prices will reach $100/bbl by the end of this year,” said Al Salazar, senior vice president of EIR.

“We expect U.S. gas storage to continue to align with our 10% hotter-than-normal forecast, reaching 3.7 Tcf by the end of the injection season.”

Key takeaways:

• EIR maintains the call that Brent prices will reach $100/bbl by the end of the year despite mixed fundamental data.
• Our price call is contingent on three conditions: 1) Improving global economic sentiment, 2) OPEC adherence to stated cuts, and 3) Consistent OECD crude and product stock draws at or above 1.0 MMbbl/d or more.
• Gas fired generation is driving gas demand, up ~ 4 Bcf/d Y/Y, offsetting weaker coal, hydro and wind generation.
• EIR forecasts gas prices to remain rangebound between $2.50-$3.00/MMBtu for the remainder of the summer. As for winter, we expect prices to trade between $3.00-$3.50/MMBtu. 

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

View all Enverus news releases at Envers.com/newsroom.

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About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

The post Maintaining our bullish call past the deadline first appeared on Enverus.

While we are still waiting for guidelines from the IRS regarding hydrogen incentives released with the Inflation Reduction Act (IRA) last year, it is clear that supportive policy must be in place for green hydrogen to compete in existing hydrogen markets. Enverus Intelligence Research’s (EIR) analysis suggests that unsubsidized green hydrogen projects must secure power purchase agreements (PPAs) below $10-$15/MWh and achieve capacity factors of at least 40%-60% to compete with gray hydrogen, which EIR estimate sells around $1.50/kg (Figure 1). However, meeting these conditions is extremely challenging, underscoring the need for tax incentives such as the 45V hydrogen production tax credit (PTC) to provide competitive returns for green hydrogen. 

This point is further emphasized when considering that the average capacity factor for U.S. windfarms built since 2015 is 38%, which is insufficient considering that proton exchange membrane (PEM) and alkaline (ALK) hydrogen electrolyzer projects break even at 53% and 31% capacity factors at $40/MWh PPAs. Increasing the capacity factor from 55%-90%, which simulates an oversized windfarm and grid electricity paired with renewable energy certificates, respectively, raises the PEM NPV by a factor of 24 and the ALK NPV by around 2.5 times. Ensuring tax incentives like the 45V PTC allow projects to use grid electricity paired with renewable energy credits would provide flexibility for projects to meet carbon intensity requirements and support higher capacity factors, in EIR’s view. 

Highlights from Energy Transition Research 

1. Energy transition – Expanding energy deal opportunities – This is the inaugural energy transition and power quarterly M&A review. It utilizes EIR’s energy transition M&A platform, which has captured more than 5,000 deals across 100 countries spanning power (generation, distribution, storage and integrated assets) plus alternative fuels, CCUS, equipment manufacturing, EVs and mining of energy transition metals. 

2. The ways to play – Energy transition opportunities for upstream participants – This report establishes a framework for how E&Ps can view and eventually participate in the energy transition. Upstream operators are increasingly exploring the energy transition, but many remain hesitant to deploy capital. Any decision, including inaction, must be well informed and deliberate in response to growing stakeholder demands. An operator’s energy transition strategy is strongly shaped by the context of its current business, the capabilities of its assets and workforce, and, most importantly, its conviction in the necessity to participate in the first place. 

3. EPA’s emissions revisions – More rules, double the methane, triple the tax – EIR quantifies the impact of the EPA’s proposed changes to Subpart W of the Greenhouse Gas Reporting Program, estimating the increase in total reported methane, overall CO2 emissions levels and IRA methane fee liabilities across U.S. sectors and basins. EIR analyzes the new emission source categories and modified calculations, focusing on the most material revisions and their potential to significantly alter the current emissions landscape in the U.S. 

Energy is changing. Connect weekly with the ideas that are leading the way.

About Enverus Intelligence^®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more.

The post Green hydrogen | Could do with a little help from the IRS first appeared on Enverus.

Panel discussion with CCUS experts from Enverus EVOLVE Conference

Introduction

CCUS offers a promising solution to curb greenhouse gas emissions by capturing CO₂ from industrial sources and power plants and storing it underground. CCUS has gained significant attention in recent years, and the business potential of CCUS has sparked interest in various industries and in governments, resulting in a wave of project announcements across the United States. As of May 2023, Enverus is tracking more than 250 million tons per year of announced projects. For perspective, today we have about 25 million tonnes per annum of capture capacity that is operational.

We recently hosted a panel discussion about the key opportunities and challenges in CCUS at the Enverus EVOLVE conference, featuring insights from CCUS experts:

The discussion focused on the opportunities and challenges in commercializing large-scale CCUS projects, including:

1. The most underappreciated risks in CCUS
2. The role of financial viability to create successful CCUS projects
3. The importance of the carbon value chain
4. The potential for future innovation in the CCUS sector.

Fill out the form below to watch the full panel discussion.

The most underappreciated risks in CCUS

The panelists suggested that evaluating the technical considerations, the economics and the long-term liability of projects are priority.

Basak: “There is a need to evaluate various technical considerations before moving forward with a project. These considerations include the quality of storage space, subsurface risk, proximity to transportation partners and regulatory and policy support. Not all opportunities are equal, and successful CCUS projects require careful assessment of multiple factors.”

Ash: “The economics of CCUS projects, particularly the cost of capture is an important underappreciated risk. Different facilities emit various types of CO₂, and retrofitting existing facilities with capture technology can be expensive and challenging due to the lack of standardized capture methods. Additionally, a well-connected midstream infrastructure to ensure the continuous and reliable transport of captured CO₂ is an important factor.”

Fred: “Long-term liability is a major risk factor. Over the last decade, the risks associated with CCUS have decreased considerably. The industry has made significant progress in geologic evaluation, risk valuation, and the availability of risk management instruments. The development of risk management pools and the increasing interest from insurance markets indicate a positive trend in risk reduction for CCUS projects.”

The role of financial viability to create successful CCUS projects

The financial viability of CCUS projects is a crucial factor that determines their long-term success.

Basak: “Regulatory support will be significant, such as the 45Q tax credit in the United States, which provides certainty for project developers. However, it is essential to look beyond short-term incentives and focus on creating a sustainable market for CCUS beyond the 12-year period covered by 45Q. The emergence of voluntary carbon markets and the potential for blue ammonia or blue hydrogen products to command premium prices provide additional avenues for financial viability.”

Ash: “There will be important for carbon markets to incentivize emitters to participate in CCUS projects. There is also a need to address discrimination against CCUS in carbon markets, as CCUS plays a crucial role in reducing emissions and should be encouraged. Proximity to customers and balancing capture costs with transportation and storage expenses will play a key role in the financial success of CCUS projects.”

The importance of the full carbon value chain

The CCUS value chain encompasses multiple stakeholders, including emitters, transportation and storage providers, and regulators.

Ash: “Emitters seek secure transportation networks and redundancy in storage to ensure uninterrupted CCUS operations. Conversely, transportation and storage providers must demonstrate their capability to handle CO₂ volumes consistently and reliably. Additionally, emitters seek partnerships with reputable brands and balance sheets to mitigate their financial liability in case of any adverse events.”

Fred: “Individual states need to take on primacy in administering the Class VI program to expedite the permitting process for CCUS projects. State involvement will provide the necessary expertise and resources to handle the expected increase in project applications. The successful deployment of CCUS projects will require collaboration between governments, industries and local communities to ensure public support and overcome any public perception issues.”

Ash: “Aligning the value chain and building redundancy are essential to ensure that emitters find the CCUS projects economically viable.”

The potential for future innovation

CCUS projects, like any other technology-driven sector, will benefit from ongoing innovation.

Ash: “The potential for blue ammonia or blue hydrogen products to command premiums in the market. The success of these products will rely on making strategic bets on the emergence of a blue economy and the willingness of customers to pay a premium for a low-carbon product.”

Conclusion

While CCUS presents a promising solution for achieving emission reduction goals, it requires a comprehensive evaluation of technical, economic and regulatory aspects. The financial viability of projects, driven by supportive policies and growing carbon markets, will be crucial in attracting investment and ensuring their long-term success.

The CCUS value chain plays a pivotal role in securing partnerships and ensuring the reliable transport and storage of captured CO₂. Collaboration between stakeholders and public support will be essential in overcoming challenges and driving the expansion of CCUS projects.

As the CCUS industry evolves, continuous innovation in capture technologies and market strategies will be instrumental in maximizing the potential of CCUS and accelerating the transition to a low-carbon future. With concerted efforts from governments, industries and communities, CCUS can play a crucial role in curbing greenhouse gas emissions and shaping a sustainable and cleaner world for future generations.

Want to discuss CCUS projects with our team of experts? Fill out the form below.

The post The future of CCUS: Key opportunities and challenges in commercializing large-scale projects first appeared on Enverus.

As we usher in the month of August, it’s an ideal moment for retrospection on the past month’s shifts and trends in the energy sector. Our proficient Enverus Intelligence® | Research (EIR) team has delved into critical trends and innovations, offering clear, insightful analyst perspectives that act as a compass for your informed business choices. Being informed means being prepared to poise yourself to leverage impending energy opportunities in 2023. Continue reading to uncover the latest revelations and stay abreast of the progress in the energy market.

Tracking the increasing cost of north american oil and gas supply (Aug. 29, 2023)

EIR sees the cost of supply continuing to increase for North American shale producers over the next five years as the industry moves from Tier 1 to Tier 2-4 locations. Ample Tier 2-4 inventory should alleviate fears of a structural decline in North American production or activity levels over the next 15 years.

ETL achieves first lithium (Aug. 24, 2023)

E3 Lithium (ETL), a Canadian direct lithium extraction darling, has announced its first successful production of lithium carbonate from brine water. The production from ETL’s Clearwater Project Area, located in Alberta, Canada, taps into the vast Leduc reef which can flow as much as 14,000 bbl/d, helping to reduce project capital costs. EIR estimates that ETL has delineated more than 50% of its 520,000 acres, with ~30% of its acreage estimated to be above 75 ppm lithium concentration, greater than its peers High Wood Asset Management and Lithium Bank. ETL traded up as high as 8% on the announcement but closed even on the day, with its stock up 45% in the last month.

PR’s ESTE buy highlights the value advantage of corporate M&A (Aug. 23, 2023)

Relative to recent buyouts of private equity sponsored E&Ps, PR’s corporate acquisition of ESTE presents a more attractive value proposition for buying quality inventory. Despite having around 500 locations between the Delaware and Midland basins that break even at $50/bbl or less, ESTE was trading below the value of its existing production before the deal. Even after factoring in the premium – 15% on the prior day closing price – offered by PR, the company is paying just one-third the cost of what comparable quality inventory has traded at in private seller deals. The deal is financially accretive to PR and improves inventory quality without materially diluting inventory life. Other buyers are likely to take a close look at the remaining SMID-cap E&Ps with Permian exposure to find financially accretive deals that add quality inventory at a minimal cost. Meanwhile smaller public E&Ps will likely continue to target private opportunities that extend inventory to make themselves more attractive to both investors and strategic buyers.

OXY boosts bet on emerging carbon capture tech with latest buy (Aug. 22, 2023)

With its $1.1 billion purchase of Canada-based Carbon Engineering, OXY is increasing its investment in direct air capture (DAC) of CO2 to meet its own aggressive emission reduction targets and build a revenue generating business. Unlike point source capture, DAC pulls CO2 from the air, which requires more power and is therefore more expensive. Modeling based on smaller operational projects, EIR calculates a cost of capture of $240 per tCO2 for DAC or about 10x the most economic point source capture projects. DAC does garner a higher credit at $180 per tCO2 permanently sequestered versus $85 per tCO2 for point source capture. OXY, which had already partnered with Carbon Engineering to build two of the world’s largest DAC plants, is a recipient of a DOE grant aiming to drive DAC cost below $100 tCO2. Besides lower costs from economies of scale, OXY should have synergies with its prior Net Power investment to supply carbon neutral energy to the plants. However, we will likely have to wait until 2025 when the first project comes online to determine whether this was a well-placed bet.

2Q23 SMID earnings | Rewarding positive revisions (Aug. 9, 2023)

Similar to large-cap peers, positive revisions were needed to outperform the market during earnings for SMID companies. Early sentiment from the SMID’s alluded to 5%-10% capital savings Y/Y in 2024, driven by alleviation in steel and moderating service costs. VTLE, MGY and NOG were notable outperformers during earnings season, all guiding to positive capital efficiency revisions for the remainder of the year. PR and CPE underperformed the XOP as 2023 production capital guidance was left unchanged. Continuing to look for efficiency gains, operators are driving lateral lengths longer. CHRD, one of EIR’s long picks, reported a slight oil beat, showing early signs of success with its 3-mile drilling program. At the same time, CIVI also highlighted early 3-mile drilling success with Watkins results coming in above expectations and beating oil production by 10%.

2Q23 Large-cap oil earnings | Capital beats baked in (Aug. 9, 2023)

Meeting consensus estimates for 2Q23 and holding FY23 guidance intact has led to underperformance among large-cap oil operators, including DVN, EOG and MRO, suggesting the market anticipated downward revisions to capex as inflationary pressure subsides. 2Q23 capital efficiency beats and/or improved annual guidance were required to outperform, with OVV, HES, APA and PXD meeting the mark. The largest gainers post-release were OVV (+3% versus the XOP), driven in part by a rebound in Midland oil productivity, and PXD (+3%) on improved oil capital efficiency and APA (+5%) on a partial resolution to its Egypt receivables build, positive Suriname appraisal commentary and downward revisions to FY23 capex and opex. DVN lagged peers (-6%) on declining Q/Q Delaware oil volumes, weaker than expected 3Q22 volume guidance (EIR is bullish on DVN’s 2H23 Delaware oil productivity), poorly timed buybacks and its continued focus on Eagle Ford infills and refracs.

GOM infrastructure: Mapping connectivity (Aug. 3, 2023)

EIR estimate total oil takeaway capacity of 3 MMbbl/d from nine main lines in the GOM, implying ~1 MMbbl/d spare capacity relative to GOM’s current supply of ~1.9 Mbbl/d. The Hoover Offshore Oil Pipeline System faces a bottleneck, but EIR expects XOM will expand the capacity by at least 50% to accommodate SHEL’s Whale startup in late 2024 and additional growth in the Alaminos Canyon area. GEL’s Cameron highway oil pipeline and Poseidon systems have the most exposure to near-term growth. The Rocky Mountain asset brings the remaining carbon storage site, 21,300 boe/d of EOR production and almost 400 miles of additional CO2 pipeline. XOM adds 46 miles of pipeline infrastructure to its 160-mile Shute Creek CO2 pipeline in Wyoming via the DEN Beavercreek system. Northeast of this operation, XOM will also absorb 340 miles of pipe between the Greencore and CCA in-service CO2 pipeline systems, adding Cedar Creek Anticline EOR production to their portfolio. Within a 30-mile buffer of the Rocky Mountain pipeline system, XOM is increasing their producing well count from 200 to more than 1200 wells, while adding more than 600 DEN injector wells.

At EIR, we recognize the importance of staying on top of the latest trends to make informed business choices in the fast-paced energy industry. We encourage you to follow us on LinkedIn, where we share valuable foresight into the energy outlook not only for August but also for the future. Rely on EIR for the leadership necessary to adeptly maneuver the consistently changing terrain of the energy sector.

*About Enverus Intelligence^®| Research

Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. See additional disclosures here.

The post Analyst takes: August’s key energy sector developments to watch first appeared on Enverus.

CALGARY, Alberta (Sept. 6, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that outlines the untapped opportunities in Alberta’s lithium brines, focusing on the potential for direct lithium extraction and prospects in wastewater processing. The report reviews the competitive landscape and offers insights into strategic considerations for operators. 

“Rising demand for lithium, a key metal in the transition of energy sources to lower-carbon alternatives, is sparking a land grab in Alberta and a renaissance in prospecting, this time for lithium rather than oil,” said Graham Bain, report author and a vice president at EIR.

“In the current scenario, extracting lithium during wastewater processing can become a goldmine of opportunity,” Bain added. “In one case study, we found lithium produced from a single company’s water could potentially generate a staggering yearly revenue of C$583 million. This could be a revolutionary shift in how we view wastewater processing.”

Key takeaways from the report:

• Alberta’s lithium brine concentration averages 42 parts per million (ppm.) The concentration is highest in the Woodbend Group, with an average concentration of 59 ppm.
• Nine operators in Alberta identified for direct lithium extraction hold nearly 5 million hectares of land.
• Extracting lithium during wastewater processing represents a massive opportunity from a services perspective. One identified company produces 22 million barrels of water a month. At a lithium concentration averaging 50 ppm and at a C$55,000 LCE spot price, the company could produce 10,600 tonnes of LCE/year and yearly revenue of C$583 million.
• As of Jan. 1, 2023, all industrial and metallic minerals have been placed under the jurisdiction of the Alberta Energy Regulator. New brine-hosted mineral licenses and lease bonus payments are expected to bring an additional C$152 million to the province in the first six years.

EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research, and Enverus Fusion® Connect.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Media Contact: Jon Haubert | 303.396.5996

The post Tapping Alberta’s overlooked brines first appeared on Enverus.

The Vogtle Unit 3 nuclear reactor began its commercial operations at the end of July. Based in Georgia, the facility will provide clean electricity to the southeast U.S. for likely longer than the next half-century. This marks the first U.S. deployment of Westinghouse’s AP1000 Generation III+ reactor. Its completion represents a significant milestone in the U.S. nuclear industry, being the first reactor to be built from scratch in more than a decade. Detractors will point to the massively over-budget and over-time project completion, though the next generation of nuclear technology is leaps ahead regarding safety and project standup time. If a resurgence is to occur, the ability of new advanced nuclear reactors to provide low-emissions baseload power with a fraction of the footprint of renewables (Figure 1) positions them well for the grid of the future.

Are we on the brink of a potential resurgence of nuclear deployments? Microsoft and Nucor are among the major U.S. companies to have initiated equity partnerships with advanced reactor companies, signaling an interest and commitment to exploring the potential of utilizing nuclear energy in their operations. Additionally, representatives of eastern European nations have committed to the deployment of dozens of advanced reactors before the end of the decade. Suppliers in the U.S. and abroad look to Europe’s favorable regulatory frameworks and approval processes to lead the adoption of new reactor technologies, expecting that once ground is broken on initial facility sites the North American market will change its tune.

Highlights from Energy Transition Research

1. Broad reach crystallizes more than $1 billion in 4 years, Engie gets meaningful upside – French multinational utility company Engie has agreed to acquire the battery storage assets of Houston-based Broad Reach Power.
2. Occidental buys direct air capture partner carbon engineering for $1.1 billion – Furthering its bet on direct air capture, Occidental Petroleum is buying Canada-based Carbon Engineering for $1.1 billion cash consisting of three equal payments with the first due at closing.
3. Unpacking EPA emissions proposal – Forced coal retirements and rising power costs – The U.S. Environmental Protection Agency has proposed new emission standards for power plants. This Prism Signal examines the cost implications of its enactment for the sector and for particular companies that would be most impacted by the regulation.

Energy is changing. Connect weekly with the ideas that are leading the way.

About Enverus Intelligence^®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more.

The post Was Vogtle 3 the beginning of a nuclear resurgence? first appeared on Enverus.

Navigating dynamic commodity markets and managing large volumes of data is no small task. That’s why we’ve built a powerful CTRM solution to help aggregate and leverage more than 500 data sources alongside your own proprietary data, providing an unsurpassed breadth and depth of market insights to help our customers make confident decisions and minimize risk.

As the leading aggregator of energy market data, we know that accurate, real-time commodity data is the foundation for your analysis and critical business decisions. Using MarketView, our customers leverage these top 10 most popular data sources daily for their advanced analysis, optimization, forecasting and settlements. Here is your most valuable data in no particular order, as they are used for a variety of analysis and sometimes alongside each other:

Aggregate, analyze, trade and settle with MarketView

The ability to easily access and visualize these diverse data sources equips analysts to become nimble navigators, streamlines efficiency and act on insights. MarketView provides a single source of truth, connecting the front, middle and back offices so you can analyze, act, trade, and settle.

What other data sources do we have available? We are always onboarding new sources. See our full data catalog and get started today!

Gain access to more than 500 data sources and harness the potential of your proprietary data to make informed decisions with MarketView.

The post Top 10 commodity data sources powering your pricing forecasting and analysis first appeared on Enverus.

CALGARY, Alberta (Aug. 30, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a report analyzing midstream operators’ exposure to low breakeven emissions and significant CO2 storage capacity in southern Louisiana. The report also covers operators with CCUS project partnerships and those located near CCUS projects without disclosed midstream partners.

“Securing reliable transportation of captured CO2 from emission sources to storage sites will be a critical component to the success of CCUS projects, and the recent purchase of DEN by XOM highlights the importance of transportation in the CCUS value chain,” said Brad Johnston, report author and senior geology associate with EIR.

“In southern Louisiana, with world-class storage reservoirs and abundant low capture cost CO2 emissions, there are many large-scale CCUS projects still in need of a midstream partner,” said Johnston.

Key takeaways from the report:

• Ten CCUS projects in southern Louisiana lack a disclosed midstream partner, representing at least 18 mtpa of announced capacity.
• Repurposing existing hydrocarbon pipelines and rights of way for CO2 transportation will likely be favored over new builds because of cost savings and avoidance of legal and regulatory delays.
• Southern Louisiana emits 104 mtpa of CO2, with 47% estimated to have a capture breakeven below $45/tonne. Six midstream operators have at least 40 mtpa of sub-$45/tonne emissions within five miles of their pipelines.

Additional Resources:

• Introducing CCUS Play Fundamentals
• Breaking down the CCUS basins
• CCUS Inventory Unlocks Hidden Potential
• Is Louisiana CO2 Storage Risky?

EIR’s analysis pulls from a variety of Enverus products including Enverus ESG® Analytics, Geosciences Analytics, Subsurface Studio, Enverus FUSION® Connect and P&R Exclusion Layers.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

The post Who’s making the connection in southern Louisiana? first appeared on Enverus.

Historical factors and trends are becoming less descriptive of future power demand. The growing pace of electrification and electric vehicle (EV) adoption are changing the power demand dynamics. At the same time, more customers are installing behind-the-meter (BTM) generation to take control of their energy destiny, which lowers net demand for the grid. One must also consider the long-term impact of climate change, where higher levels of weather variability are changing the energy demand from heating and cooling systems. Things have gotten a lot more complicated.

How can one build a reliable power demand forecast? Enverus Intelligence® | Research (EIR) recently published a long-term demand forecast for the California Independent System Operator (CAISO). They built an hourly demand outlook from the ground up based on key factors like EV adoption, electrification, BTM generation, climate change and changing tariffs. Figure 1 summarizes these load drivers and categorizes them based on their impact on total demand and daily load profile. BTM solar and EV adoption, driven by new building codes and state mandates on new vehicle sales, have the biggest impact on future demand in California and are vastly different than historical trends. This type of bottom-up analysis is critical when forming views on future demand in power markets. Because of these future load drivers, EIR expects to not only see an increase in demand of 10% by 2050, but also a big change in the shape of the intraday and seasonal load profiles.

Highlights from Energy Transition Research

1. CAISO load forecast – EVs pave way for growth – This report explores the key drivers behind green hydrogen production costs and demonstrates how inputs impact project returns when paired with U.S. incentives.
2. CCUS midstream – Who’s making the connection in southern Louisiana? – This report examines which midstream operators are most exposed to low-breakeven emissions and high-capacity CO2 storage in southern Louisiana, which operators have announced partnerships in CCUS projects and which are strategically located near CCS projects without disclosed midstream partners.
3. The economic reality of long-duration energy storage – A bird without wings? – In this report we analyze the economics of long-duration energy storage under current power market designs.

Energy is changing. Connect weekly with the ideas that are leading the way.

About Enverus Intelligence^®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more.

The post Forecasting long-term power demand | Where do we go from here? first appeared on Enverus.

CALGARY, Alberta (Aug. 29, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a new report that quantifies the geologically viable but not yet economically proven inventory in the Permian Basin and investigates the associated impact this undeveloped resource has at the operator level and the supply outlook of the basin.

“Geologically viable but relatively unproven inventory across the Permian Basin will be at the forefront as high-quality drilling locations breaking even below $50 WTI become scarce over the next decade for many operators,” said Stephen Pratt, report author and Permian analyst with EIR.

“The incremental ~80,000 geologically viable locations across the Permian primarily breaks even between $50 and $70 WTI and will be sufficient to sustain production levels until ~2040 and extend the years of inventory remaining from 17 to 32,” Pratt said.

Key takeaways from the report:

• Geologically viable (GV) inventory is undeveloped resource ascribed to locations that fall outside the economically proven extents across the Permian Basin but are within geologically viable fairways. This inventory adds 15 years of inventory at current drilling levels.
• EIR has increased its long-term Permian Basin oil production forecast to sustain production levels until 2040.
• EIR forecasts dry gas production from GV inventory will add an additional ~2.7 Bcf/d in the Permian in 2030.

EIR’s analysis pulls from a variety of Enverus products including Activity Analytics, Enverus Core®, Enverus Foundations® and Placed Well Analytics.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

The post Quantifying unproven inventory in the Permian first appeared on Enverus.

Texas summers aren’t the only thing breaking heat records right now – the M&A market saw some big deals in 2Q23. According to the Enverus Intelligence Upstream M&A Review, more than $24 billion transacted from about 20 deals for an average deal size of over $1 billion through the quarter. This peak was driven by a few strategic deals with significant production value, as investors are continuing to ascribe value to duration of inventory.

The M&A market is bracing for change, bringing challenges for small and mid-sized operators including:

1. Prioritizing the right deals to negotiate
2. Lean teams needing management and board alignment
3. Technical due diligence across several smaller deals 

In this post, we’ll drill into these challenges in more detail with tips on how to navigate and stay ahead in the active M&A environment.

Change is coming to the M&A market

This marks a shift from the land-centric shale deals we’ve been seeing in the market as companies were prioritizing blocking up acreage. Enverus analysts suggest that a round of public company consolidation could be coming, driven by increasing costs of Tier 1 private Permian assets, while there is a distinct lack of remaining private opportunities.

In the most recent edition of Weekly Market Pulse, Enverus analysts remark that the list of available targets is significantly shorter than it once was. There has been more than $60 billion in private equity sales since the beginning of 2021. The next logical step would be for the market to turn to public company mergers, which makes strategic sense from a scale and G&A savings perspective, while also possibly providing more favorable valuations than private markets.

Challenge 1: Prioritizing the right deals to negotiate

We hear from our clients over and over that one of the biggest challenges to staying competitive in the M&A market is figuring out which opportunities to say “no” to faster.

Continuously keeping tabs on market activity, whether within a single basin or comparing activity across plays through time is important to benchmark upcoming deals. Similarly, understanding who is driving the deals can impact your strategy in finding and evaluating opportunities for your portfolio. For example, Enverus analysts using M&A Analytics found that public buyers accounted for 85% of acquisitions in 2Q23. Most of those dollars came from buying private companies. Additionally, we see remaining inventory driving deals and can track the average dollar paid per location in each deal.

Solution: High grade the best deals with access to industry’s only source of public and private deals for sale alongside analytics-ready, consistent energy data sets.

*Enverus M&A Analytics & Foundations

Challenge 2: Lean teams need to move fast and be aligned

Smaller operating companies often have lean teams with each person wearing multiple hats. This smaller team structure can be an advantage for moving quickly, but only if each person isn’t bogged down by managing multiple analytics platforms and data sources, and instead is able to jump between geological, engineering and land datasets to quickly evaluate the next deal and easily share their interpretations with management.

Benchmarking opportunities based on better rock quality or whether the deal falls into a Tier 1 acreage position, for example, can provide better insights into the market trends. Enverus Analysts can assess who the players are that will be expecting a higher multiple or where to expect a higher rate of consolidation by leveraging geological and engineering data alongside deals and current production, all within PRISM.

Solution: Assess deals faster, in a single platform, and share analysis easily. Lean on the Intelligence Team of analysts as an extension of your team.

*Enverus PRISM® and Fusion Connect

Challenge 3: Don’t trade on technical due diligence to evaluate several smaller deals

PDP and inventory are driving deals in the market, so being able to get to the production forecasts and remaining locations faster is imperative. When compiling several smaller deals rather than spending more time on one big evaluation, having detailed technical analysis at your fingertips is the only way to succeed.

One takeaway the team noticed in the last quarter of deals was that private companies have largely ramped up production before marketing assets, as cost inflation moves breakevens up and opportunities dwindle. To be able to see what buyers in recent deals may be underwriting in less proven benches, having access to data rooms, working in outdated platforms and using acreage math won’t cut it. Find out why we think so in this blog.

Solution: Need to evaluate the deals quickly, but can’t forgo on technical details.

*Enverus Spacing and Forecasting Solutions

Want to dive deeper into how you can stay on top in a competitive M&A market? Learn more about Enverus solutions, designed specifically to solve these challenges, and more. Fill out the form below to access the videos.

Set up a meeting with one of our Business Development experts to learn more about Enverus solutions for operators who are looking to evaluate, acquire and divest assets.

The post How to stay on top in a hot M&A market – Tips for small & mid-sized operators first appeared on Enverus.

CALGARY, Alberta (August 23, 2023) — As Tropical Storm Hilary downgrades from a hurricane but continues to flood parts of Mexico, California and the Southwest U.S., Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a report assessing the impact of Atlantic hurricanes on the U.S. Gulf of Mexico (GOM) and its oil and gas production.

The National Oceanic and Atmospheric Administration has increased its prediction for the 2023 Atlantic hurricane season from a near-normal level to an above-normal level of activity, partially due to record high sea surface temperatures. EIR’s report analyzes the potential for production shut-ins, loss of assets and oil-price upside under potential storm strength scenarios.

“Should a hurricane disrupt oil and gas production in the GOM, EIR’s mid-impact case estimates 40% of total GOM production would be shut in and take seven days to recover; and a high-impact case estimates 90% shut-in and 16 days to recover,” said Marvin Ma, report author and vice president at EIR.

Absent a direct hit on energy infrastructure, EIR points out that hurricane-related shut-ins historically have not led to material and durable changes to oil prices. In the past, the U.S. Strategic Petroleum Reserve (SRP) has responded to the GOM shut-ins with releases to offset supply losses. But depressed SPR stocks could weaken its ability to respond to any supply disruptions this season. 

Key takeaways from the report:

• EIR estimates an average hurricane season impacts GOM production by 3% during the third quarter.
• In the past, the U.S. SPR has responded to GOM shut-ins with releases to offset supply losses. But recent draws from the SPR limits the ability for a similar response if it was needed this season.
• EIR expect U.S. natural gas prices to continue to be more sensitive to hurricanes given the 15 Bcf/d of growth in Gulf Coast export capacity we expect by the end of the decade.

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing; and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Media Contact: Jon Haubert | 303.396.5996

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Energy storage is gaining traction as an essential component for maintaining load-generation balance in the modern electricity market. Viewed as a promising solution to a widespread challenge, long-duration energy storage (LDES) may be the key to counteracting the pitfalls of variable renewable power generation, especially as we look toward the industry’s aspiration of a zero-emission world. However, these technologies are enduring their own challenges to mass adoption compared to some of the more traditional lithium-ion storage technologies. These include a lack of a revenue-generating framework to drive capital deployment, an undefined long-duration reserve framework forcing competition with short-duration project markets and a lack of commercial-scale development on which to lean to prove successful implementation.

If dependent on a pure energy arbitrage business model, the major needle movers on a project’s balance sheet become capital cost, average spread per cycle and the yearly cycle frequency. Assuming a $72,000/MWh capital cost for a 10 MW/1,000 MWh iron-air project, Enverus Intelligence® | Research (EIR) can derive the required breakeven arbitrage spread required for a 10% return on equity (at various cycle counts per year) and the maximum spread achievable in each market over the past five years. Figure 1 reveals that even with low capital costs, the energy arbitrage model fails to produce a financially promising project across all ISOs, irrespective of cycle count. Thus, EIR looks to a significant widening of seasonal location market pricing spreads or the addition of alternate revenue streams to justify confident investment in these 100+ hour LDES projects.

Click here to read more about how concrete could be used to store energy.

Highlights from Energy Transition Research

1. Green hydrogen – Pathways to paradise – This report explores the key drivers behind green hydrogen production costs and demonstrates how inputs impact project returns when paired with U.S. incentives.
2. CCUS project tracker – Make it (CO2) go away – The Energy Transition Research team illustrates the use cases of project trackers in following CCUS activity around the world.
3. Advancing Canada’s green future – Emissions reductions, CCUS and DLE – This slide deck explores the three frontiers particularly relevant to Canada’s energy transition: the current state of GHG emissions, CCUS and direct lithium extraction.

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About Enverus Intelligence^®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more.

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