25 25 Sweet Crude Sour Opinions

Well, my hack collection continues to expand. But I know that's a nice Sinclair pipeline one right there. I know. It's cool. And my favorite part, it's got their phone number on the back. So, you know, here in California, if you see a Sinclair pipeline, you can give them a call. I got you. Just in case. Yeah. Just in case. You never know. We've got a Sinclair gas station just down the street. Promise. Yeah. Well, my son loves this hat because dinosaurs. I mean, that's he's dad's dino hat and that's all that matters to him. So, every boy goes through a phase like that whenever they're Dinosaurs and then Star Wars. Well, yep. Well, that's the next thing up. So, I had a nephew who watched the original three every night before he went to bed.

He would like not all three of them, but he would like part one of them and he's sitting there drinking his strawberry milk, you know what I mean? Then on the couch and would, take him in there into his bedroom. So in 1997, they re-released episode 4 and I'm going to go a little nerdy here for a second. In 97, I was 6 years old. So, I was a little older than my son, but my dad for the first first time, I think probably one of the only movies my dad ever took me to was the re-release. So, I still remember walking into the theater, getting popcorn, getting a you know, a little slushy thing, sitting down and watching that. And like the very first time you see Darth Vader go through that door. I mean, you're it pretty much like the cinema of the whole thing will ruin your life.

It was just epic. And so, a couple weeks ago, our son doesn't watch a ton of movies, but I was like, you know what? Like, he's old enough. I want to relive this experience with him as a father. Yeah. I did the same thing in our living room, made some popcorn. We went to 7-Eleven, got a slurpee, and then watched the movie. And just watching his eyes and his reaction on that was just, it was awesome. And now, of course, he's obsessed. So, what are you going to do? And now you're going to be watching it on Loop. But that's better than some of the other stuff. Speaking of Hollywood, have you ever watched Land Men or did you get into Land Men ever or No, I haven't. No. Yeah. I just I don't know.

I haven't had time, I guess, is what I would say. I don't know. It's a time thing for me, but then also people saying like you have, you're you're in oil and gas. You got to watch Lamman. It almost makes me say like not going to watch it. Like you can't tell me what to do. Like it's that weird half of the other thing anyway. Like it's all, like everybody's like, "Oh yeah, it's like genre defining, it's like, oh, and then you watching like it's not like that at all." Like from what I understand, from what I've heard of the commentary of it, like I think they've probably got some really good snippets. Like I've seen some stuff on Twitter where people chop up, one of Billy Bob's like 60-second monologues and I'm like, "Oh, that's amazing."

You know, he talks about the importance of oil and gas to everybody's everyday life and all those different things, but I've also heard from the other side it's like your lane man's like they're not out there on location like turning wrenches and doing all these different things and but you never know. I mean, it every company does it different. So, you know, maybe maybe Billy Bob is basing off of somebody out there in the Perian. You know, there's always a story. I mean, and the guy that wrote it, I mean, he wrote I think it's the same guy that wrote Yellowstone, right? Yellowstone that's almost more impressive than the stories. It's insane. Yeah, exactly. I'm like, how do you come up with all these amazing ideas?

He's, you know, he's I think he's in his 40s or something like that even. And it's like, cool story there. But anyways, I digress. Lastly, we did gamma ray logs last week. So, we had a comment last week. ESP and pump jacks are on the way out. Too expensive to operate. So, I said, "Hey, I'm curious on the economics." Right? So, WDE's always telling me, "Ask about the economics." So, this is his answer. Electricity costs, too many moving parts, lots of lots of operators with an infield structure have run the numbers. Gas lift or plunger lift unless you need oil and gas right now for cash flow. So obviously, basically the economics of the ESP and pump jacks are on the way out. Do you agree? Do you disagree?

Do you have maybe a different take on that? And then if so, like a little bit of background on on on why? And if he's right, I mean, he's right. Right. Economics is everything. Yeah. I mean, I think he's definitely hitting a little bit of a vein there. ESPs are extremely expensive. Essentially what you've got is you've got this pump down hole and you know you run electricity down to it and it's pumping water out of your wellbor. You know I think every artificial lift has its purpose, right? And so ESP's purpose is to get out tons and tons and tons of water. ESPs get out like thousands of barrels of water a day. And so there's a very specific case for that. They also ESPs are very sensitive to gas.

So if you get gas in there, like it'll absolutely ruin it. So these are like very fluid heavy kind of deals. You always hear with ESPs like gas locking and doing all this stuff. And so you know, as much as I want to agree and say yes, they're really expensive to run, they're almost a necessity because plunger lift isn't going to get you out thousands of barrels a day. Pump jacks and rod pump, I mean, that's not going to get you out thousands of barrels of water a day. Now, you know, gas lift certainly could, but you know, if you're getting out that volume of water, you're going to take really big compressors. It's going to take, big injection volumes. I mean, all these different things. And so as much as I want to say like, yeah, the economics of it probably don't work in some areas, I'm sure there's other areas where it's almost a necessity because nobody wants to put stuff that that's expensive or what I will also say is I don't want to say fails frequently, but you know, we always hear about it when an ESPN or breaks down because it's just so expensive to pull it, repair it, put it back in.

How much does an ESP cost like just for the you know, man? I'm out. I'm going to have to Google that one. I honestly don't know. I haven't run tons of ESPs because like we're not, like Oklahoma is extremely gas heavy. I mean, we've had to run them before. Yes. But mainly like that's in like your probably your mist limes and everything in northwestern Oklahoma where you're really kicking out tons of volumes of water. So, let me let me do a quick search here right here. And I don't know, maybe cut it up. Cost for ESP. It's definitely in the tens of thousands if not higher here. Yeah. Yeah. We're talking Okay, so typical range says low range. So low range of a ESP is probably in the 60 to 100k range, I think the average is probably somewhere 100 to 200k for an ESP.

Okay. Yeah, that would be aside from the cost for electricity and all those different Man, this is not a cheap game to play. No. No. I mean, when you, you know, by the time by the time that you've got your first you know, flow back coming out of your well, a lot of the time you've got on the low end, I'd probably say you've got 6 to7 million already invested. On the high end, you're probably talking 20 to 30 million. And that's from that's if you go from drilling all the way through, right? I mean, if you're going to do like a workover or a PDP, it's probably less, right? Yeah. Yeah. A lot of that stuff is is definitely a lot less. Now, the other side of that is that your reward is is usually a lot less as well.

The only reason why somebody's willing to put, anywhere from 7 to $20 million at risk is cuz you think you're going to get, you're trying to get a 30 or 40% rate of return on those wells. Now, they don't always do that. You know, you're really wanting your average to come out to be there, because it's there's tons of uncertainty and a lot of risk with that. Now, on the other things like you were just talking about like workovers, installing your artificial lifts, all these different things, less risk for that. Much higher rate of return. You know, as far as your actual cash made from that, it's nowhere in the range of if you get 30 or 40% on a $10 million investment, you're usually not getting three or four million back from your larger lift install.

Okay, makes sense. Interesting. The guys that are running those numbers, I mean, they've probably seen a lot of weird variations, too, on top of that. It's I'm sure it's different by region and it's probably different by project. And I mean, your risk goes up on on new drills, but still the payoff could be a lot bigger. And you see that I mean, the Granite Wash was a prime example. I mean, some some of the biggest wells I've ever seen were drilled out there, but then there were wells drilled, mile away that were essentially a dry hole. You know, it's just not the geology is extremely extremely complex and that just really increases your risk profile in a lot of different areas. There's other areas in the country where you could almost predict within probably 5 to 10% accuracy exactly what you're going to get out of this hole.

So, the economics are much less risky on some of those. Sour versus sweet gas. What's the difference? And I mean I've heard I was reading a book on this like you know that was written back in the 50s and they're talking about how they'd actually in order to figure out you know sour versus sweet they actually would taste the gas you know with you know and actually ingest it to kind of see what it was which I thought was crazy but they obviously learned a thing or two about it. So in today's standards like what are we talking about? Man that's a very high-risk activity right there. Like you you if it's really sour you only get to do it once. Yeah. Yeah. Well, really when we talk about sour, what they're talking about is H2S, which is hydrogen sulfide.

It's a gas. You've got these bacteria down hole that can kick it out. It's also sometimes it's present just naturally in your formation, like it's already been created down hole. And so, whenever you're drilling it or flowing it back, you'll get that coming up to surface. That's measured in parts per million. I've always been told, I've never actually had to work on on a H2S location, but when you go out there, I mean, everybody's clean shaven. They've got, respirators and PPE and everything ready so that if the stuff starts coming up, they can get they can shut the well in but also, kind of protect themselves. The issue with that is is a lot of times if you smell it, it's already too late.

You know, so it's extremely hazardous. The biggest I would say probably the most common place that people will see it is actually on producing wells. And that's because during your frack, you're putting a lot of water down there. You're introducing a lot of bacteria and everything through that process, especially if you're pumping out of a river or a pond for your frack water. And so that gets down there, it's it finds a energy source to eat on and it starts creating H2S down there in your formation. Once that comes up surface, you've got to treat it out because it's extremely corrosive. It's bad for your pipe. Pipelines will test for it and if you start getting above I can't remember what it is but you know if your parts per million gets too high then you've got to treat it with like an amine tower or there's tons of different ways you can get rid of it but all of them are expensive and so you couple that with the you couple that with the risk to personnel and everything and damage to the well itself and it's definitely not something that you want on your wells.

Gotcha. So, if you find it in a well, I mean, if they're testing for it, I'm guessing they're making sure that it doesn't have it. But if you find one that is is has high levels of H2S, then are you shutting that thing down and just not messing with it or like how do you work around that or is it not that common? No, it you know, I would say it's not that common like on the drilling side and even on the frack side is what I'd say. On the production side, I think it's more common and it's not something that's usually a big surprise to you. You know what I mean? They're usually aware it's it's more likely in certain areas or whatnot. And on the frack side too, they do things to try and minimize the amount of bacteria that they're introducing.

They're I think it's chlorine dioxide they can treat their frack water with and so it's killing those bugs and all that stuff before it's actually going downhole. So there's different things you can do to try and mitigate the issue if it's you know if it's induced by you know by the frack and all that. But there are some formations that it's actually formed down hole. You know they've drilled some wells. They know it's there and you've just got to be ready to treat it you know to produce that well. Like I said, when they know it's there, they know what it's going to cost to treat it out. They've got a good idea of exactly how concentrate it's going to be and what it's going to take to fix the problem before they can sell the gas.

The infamous debate that I've seen on Twitter frequently is square toe and round toe. Yeah. All right. Why does it matter? I don't think I own a square toe. I know I don't own a square toe shoe, boot, whatever. All my shoes are they're just shoes. In fact, I probably have more flip flops at this point in life than I do shoes. So, like, what is why is this why does it matter? I told you before we started this whole deal that the oil field is full of opinions, right? Like, you could say the most vanilla statement ever and you're going to make half of the people out there angry and they're going to call you an idiot or tell you you're stupid or all those different things. And square toe and round toes fits squarely in that bill.

Now, I am by no means like a cowboy. I don't, go out and rope and ride horses and do all this stuff, but I have, it's funny, I had this conversation a couple of months ago. I was looking at buying my first pair of square toes and I was talking to a guy I know and told him that, I said, "Man, I feel like I'm kind of like, I don't know, appropriating cowboy culture, kind of imposing on it." And he was like, "Hold on, hold on." He's like, he was he told me he was like I think he was in freshman or sophomore year of college, like when Square came out. And he was like, "We don't have much innovation in like cowboy apparel." And he was like, so whenever that first came out, he remembers thinking it looked like it was like the dumbest thing ever.

But then he put on his first pair and he like he remembers looking down thinking it was like the strangest looking thing. But at the same time, like his feet finally had room to be like comfortable in a pair of boots. So he's he'll definitely wear both pair. But, you know, it really it was really born out of a comfort deal, I think, is is where it came from. But, you know, now you just got more opt. So, that's the guy that I want to talk to. You know, he's doing the important work. Oh, I mean, he's a team roper, too. I mean, like this is the guy you go to for if you want to know real cowboy culture. So, there's a guy down the street from me and I I just learned this about him, but he he's a belt buckle guy.

Like, he sells belt buckles. Okay. I was like, "Mark, is that is that even like how do you make a living out of selling butt buckles?" And he's like, "You'd be surprised." He's like, "There's bellbuckles for everything." I mean, he's all over the country. You know, he's he has two daughters, good friends of ours, but they do barrel racing. And they're darn good at it, too. And I mean, they travel all over the world, competing and doing things like that, but so he's like, "I just just naturally kind of goes with the territory." He's like, "But, just it's a whole another piece of apparel." I don't think I definitely don't own a belt buckle. So, well, I mean, like it's cool. Yeah. I don't have, I don't have a big belt buckle, but I've been around, some of the companies I've been at, like they drill a big well or something like that, and they getting belt buckles made.

Yeah. To commemorate it and all that stuff. And so, that's I've always thought that's pretty cool. So, you do your belt buckle with your square toes and you're you're you definitely look the part, let's say that much. Yeah. Exactly. Not to talk about the hats. We can save the hats for another day. That Yeah. Yeah. Yeah. Okay. All right. Oh my goodness gracious. All right. Let's talk about So, we I was talking to two different underwriters in the last couple weeks and both of them said that they're not super keen on the areas that are I guess have more prolific waxy crude. So, like Utah didn't get a ton of detail from them and I have it kind of bookmarked to research it, but I figured we could talk about waxy crude, what it is and maybe some reasons why it might be more difficult to underwrite that risk.

All right. So, you know, I don't have much experience with waxy crude, but you know, from what I understand, it's really just essentially oil with a bunch of paraffin in it, and so paraffin is a challenge. You know, at higher temperatures, it it just kind of makes everything more viscous and doesn't flow as well. At low temperatures, that that paraffin that's flowing, whenever whenever it's good and melted is is going to become essentially a solid right there. And I could definitely see where it would where it could plug up a lot of equipment and cause issues. That'd require a lot more maintenance. I think, if in in some of these cold environments, that's probably a real problem. If you've got increased maintenance or increased failure due to that waxy crude, I could see how leaks and spills or replacement of your containment vessels and some of those things would probably be a more expensive and that could probably, kind of scare away or hurt the economics of the underwriter in that sense.

Curious if there's like a higher rate of like you know blowout or anything like that like from you know something failing or maybe a pre like a sharper pressure increase I so anyways I want to do some more research on it but as kind of an interest comment I could definitely see some you know overflow more overflows in tanks and some things like that I don't know if the pressure I mean you'd think a lot of times I mean anymore in the oil field we've got tons of monitoring out there on locations and so you know pressures get to a certain point and everything just essentially shuts down you know you just shut in your well and do all that different stuff. But as far as your you know causing some failures and leakage, I could definitely see that.

Okay. All right. Well, I'll keep digging on that one a bit then. Could be. In my mind, it kind of in my mind that would kind of be like we talked about a little bit last week, but like the electricity companies and being underwriting those and being responsible for wildfires and things like that, it's kind of a secondary issue, but pretty significant at the same time. Yeah. I mean, they're looking at how can anything go wrong, right? And then assuming I mean they live and die by Murphy's law so it's like it's pretty it's a high-risisk job for them high stress job for them so I'm sure there's the reasons but I should ask him and get in a little more detail I'll bet everything is yeah you definitely on a risk matrix you know what's the likelihood of it happening and if it does how bad is it well and even with like I mean the amount of data now that they're getting I mean just off of a wellhead right I mean and what I've kind of been gravitating towards more now is like how much data can we get from a particular well and how can that be used to even ensure things different, right?

So, I mean, insurance is a is crazy crazy bottom line expense for all these companies, right, that are either servicing the oil company or just the people that are maintaining it. I mean, it's like it's crazy expensive. So, but I think the more data you get, obviously, underwriters have tons of data, but the more actual real-time data we get on a month-to-month basis or even week overw week, I think it it brings down, the insurance cost for everything, too. So, I don't know. That's my personal dream would be to figure out how to insure a company with more data. Maybe even, offset it with different currencies like Bitcoin or something like that through a captive. I mean, there's so many cool things with the energy space, but I'll talk about that later because that's when people kind of start to look at me sideways.

I was going to say, man, you're really you're really getting out there, but you know, progress was never made without a big idea first. So, there's some cool stuff going on in the market. It's just you got to stay on top of it. So, right. And it all started with waxy crude. So here we go. Wade, watching prices last week. We had WTI was like mid75. I think we talked about gas was hitting $4 or something in there. And then most impressively, I guess kind of notably for everyone that was looking was, the crude inventories went down by 11.4 million barrels. So some of the things that I've kind of been thinking about is we went from kind of a theoretical price increase to now a fundamental economic price increase with the drop in the crude.

So just kind of curious, what your thoughts are on it. I it's tough to even say what we might expect next week or even tomorrow, but at the same time, do you think that we really have kind of moved into a real economic shift in pricing or is it still something that could, move up and down just based on on a news headline? You know, I think the price of oil moves a lot based on sentiment. It's kind of what everybody feels about it and I think this week you may have seen some of that because like you said it it was a completely unexpected like 10 I think they even revised it up to like 11 million barrel draw something like that and 11 and what did price like you know there was no huge spike there was no you know $5 increase or anything along those lines and so I think you know right now I think the you know the conflict between Israel and Iran and kind of the US is will they won't they get involved I think that definitely pulled up the oil price from where we were bottoming out the fees and then kind of getting there into the mid60s or so.

So, I think that's definitely helped pull it up. But, you know, I also think one headline could headline could either pull it up further or drag it down more. I think it's just so dependent upon what everybody feels like the future usage is going to be. Well, and I think more importantly, what point are these companies comfortable to say, okay, we're going to start drilling again or we're going to bring back employees, right? I think that's a bigger tell is is the overall, comfort of getting back to work on things, right? So, there's obviously been a ton of layoffs in in the industry over the past couple weeks and months, but at what point do companies say, "Hey, look, we're comfortable again.

Let's get back to it." Right? I'll tell you, I don't think that's anytime in the next few weeks. I think what we've seen in the industry is we've seen so many ups and downs, so many cycles over the past decade that, like we will see those temporary price spikes, but nobody's going to respond to it over a period of days. You know, it's really going to take what I would say is heightened prices for months before before people are comfortable to start deploying capital again and really getting activity back up to where it was. Now, we're not taking a huge plunge right now, but I mean, you continue to see in the headlines, Chevron laying off 10% like you know, all that's happening in the offices, it's happening in the field as well, in terms of that, that decrease in activity.

And the bad news is is that, the cycles are getting faster. It's nothing that's going to I just don't see anything that's going to turn around the next couple weeks and put everybody back to work. Gotcha. Do we know I'm curious to and this is probably something I'll probably won't include this in the thing, but I mean when these companies are figuring out like where it is economic to drill something, is it have they been putting that at $50 a barrel? Are they putting $65 a barrel? Is that number it probably changes again, but I mean is there is there a number like in Oklahoma or Texas for example that it's like hey we're going to you're going to use this number as kind of our break even. Do you know what that might look like?

Yeah, the challenge is is that every basin's different and honestly that's kind of different for every operator because some people operate at a much lower cost than others. A lot of your bigger companies and your majors like you get some synergies and things like that. But then there's also so many requirements that they have, in terms of like the spec of rig that they're running and the size of casing that they have to run and all these different things that that it changes the economics for everybody and even just take Oklahoma for example. I mean, we're very much a natural gas heavy basin, but the Cherokee Shale out in western Oklahoma is is kicking out tons and tons of oil right now. And so even just across the state, even across just the western half of the state, you've got really big differences between what's economic and what's not.

I mean, yeah, if you look at just look at the price of steel going up, right? Or cement for gosh, I mean, some the cost of cement, right? I mean, you just look at everything kind of going up and I don't know what was the there was a recent merger. It was there was a the steel company with US Steel and was it Nipon or something like that? I forget how to say it but yeah there yeah there was one that was trying to you know kind of get more of a footprint in the United States right because monopoly yeah well the tariffs and all these different things really affected I mean during the first time that the there was the steel tariffs and all that I mean we saw a 40% increase in steel prices and the challenge for us on especially on the drilling side is that you know casing is something that's essentially a non-negotiable you know you cannot engineer around it you cannot you know become more efficient you can do some things like maybe instead of running deep 9 and 58s with a 5 and 1/2 in long string, you figure out, hey, we can run a 7 in intermediate and four and a half inch liners.

You know, we can get cheaper by changing up our casing sizes, but you can't get cheaper in your steel pricing. So, a lot of that stuff, those tangibles that we would run in our wells, you're spending, used to you're spending a million dollars on your casing strings. Now, all of a sudden, you're hitting 1.4 1.5 million. And so, that's just hard to work around it really. The long and short of it. I could see that. I mean, it's going to be an interesting couple months, I think, no matter what happens. Yep. Anyways, all right. So, that was that was not as much fun as last week for the WTI, right? Oil companies don't run a nonprofit business, right? So, I mean, at the end of the day, if you think it's $20 a barrel is your break even, I mean, that's not realistic because there's plenty of things that have to go into it to make it have it make sense.

I mean, let's go ahead and put tens of millions of dollars into something and not have it out. And here's the thing is I remember one of the very first comments we got was like, "Hey, don't post. Ain't worth your time. You know, we only follow these people." And it's like look, hey, all respect to everyone that talks about it and all that. We're not trying to be those people. And let's just be friends, right? And now, here we are commenting and have some great people that are now kind of engaging in more of educational conversations. It's been fun. But no, there's a couple folks it's just like I don't even know how to respond to that, but it is what it is. Sometimes it's best not to. Yeah, I don't know.

I like to make friends out of those people because you maybe you learn something, but I don't know. I wanted to talk about E-Riggs. E-rigs. Okay. Yeah, I know. Like, that is way more fun than interviewing me. I don't know about that. I don't know about that. E-Rigs. What do you want to know about E-Riggs? I've never used one, but All right. Here's the fir the first thing I want to know about an E-Rigg is I understand wanting to drill and be more green and all that, but we're drilling for oil and we don't want to use a machine that's burning diesel. Like I don't understand where why this is even a thing, you know? Like I don't understand like we're going to use electricity to drill for the thing that we're not using.

I just think it's kind of like like taking money out of a wallet to buy a wallet, you know? I mean, you already had below it. So, yeah, maybe a little bit. So, okay. So, as far as E-Rigs, I don't know the whole there's a lot of stuff in terms of being green and all that that I think is and this is a personal belief, but I believe a lot of it's just what I'd like to say is intellectually dishonest, right? Because like, okay, so let's talk about an E-Rig, right? Like an E-Rigg comes out to location, I mean, how is it powered? It's powered by electricity, right? And so, you're getting electricity. I mean, it's not, it's definitely not solar power. You don't have solar panels out there on location that are able to do all this stuff, right?

So, you know, you have to think like on that pad, like maybe you could say that the E-Rigg is carbon neutral, like we're not using diesel. We're not doing all that different stuff. But at the same time, like they're getting electricity from somewhere. Where are they getting electricity from? It's probably from either a natural gas or coal fired power plant, right? That's where you're getting your electricity from. And so I've always thought it's a little bit dishonest to kind of say, "Hey, well, we're we're carbon neutral right here just because you're using electricity." That electricity comes from somewhere. And it does cost you know, some kind of an energy source, usually something that's burning a fossil fuel or coal.

And so that's part of it. You know, the other deal with the E-rigs, I mean, I think there's some places where maybe you you have to use them. You know, an E-Rigg is a lot quieter. I mean, I'll tell you, like being on location for years, I mean, I had to have my fifth wheel trailer right next to those diesel cat generators, and those things aren't necessarily quiet, you know. So, if you're drilling in the middle of town, if you're you're right next to a residential area or some of those places, they're becoming more and more stringent on your requirements. And so, noise pollution is also one of those things that we've had to monitor at times when we're working in and around communities. And so, I could see, an electric rig really helping out in some of those areas, but really far and away I don't see widespread adoption of that because the other thing I'd say too is a lot of times we're drilling in really really remote areas.

You know, places that maybe don't have the power you know, the power draw that something like an E-Rigg would require. And so, I don't see it being one of those things that that you know, replaces what we got going. I see it being more of a niche in some places and maybe a really good headline for somebody in another place, but at the same time, I don't think it's the answer. And I don't think it's really that honest to say it's, I think e-riggs work in those niche cases or niche states like you think California, right? So like the EPA and the state have everything so tightened down and you know they're looking at you know what are the emissions per you know barrel of oil that it's like okay well that's got to be factored into to what that is right so if you start using e- rigs maybe you're getting a cleaner barrel in some of these more stringent states but again I agree with you I think it's going to be in more of those niche cases where it's you know hey we don't want to have noise pollution or you got a state mandate that you got to kind of meet or in the case of California Hey, we'd like to get back to drilling.

If we use an e-rig, would you guys maybe make this a little easier for us to get a permit, right? Cuz I mean permits in California are they're not being awarded. You can plug in abandoned all day long, but you're not drilling anything new. So, we're just trying to find workarounds where maybe our government will say, "Hey, let's open this thing up." But, I agree. I think it's be more niche for sure. How does the community kind of feel about that? I mean, if you're not drilling for oil and gas, you're not doing some of those things, in terms of power generation and all that, what's the I I've I think that so I talked to a lot of operators across the country, California is the most frustrated, right?

Kind of like being in a very depressed environment for a number of years and you know, people are just looking for options. They're looking for ways to really either stay in business or maybe change something over like, hey, we used to be a drilling company, but we're really good at contracting. We're going to do some GC work now and kind of do that. Or we're going to start doing trucking. We're going to broaden what our trucking scope is. And so it's they're just I think being a lot more creative because they have to be, right? I mean, they want to survive and they want to see this thing through. But I'd say they're definitely definitely more challenges in California. And you know, going to some of these industry events.

I was at SIPA a couple weeks ago and you know, I had a couple of great conversations there and honestly in years past there was definitely more of a sense of hey, we don't like what's going on. But this year it was very interesting because in California it really can't get any worse for the oil industry, right? I mean, we've pretty much hit the wall. And I think anytime society hits a wall is when they have to go like, "Oh, hey, hang on. We hit something. We got to figure out what's going on, right? They don't stop before they hit it. They wait until they hit it." And so this year there was a sense of like calm and like almost hope, right? Like, okay, we we've hit that wall. Now it's time for us to figure out how to get through it, right?

So, yeah. I mean it's it was definitely interesting but no the California community at large is working very hard to you know you know stay up on top of things and I think represent themselves and educate people too like there's a whole movement right now to educate people in California on what energy really is where it comes from how we get it you know how much oil are we importing the oil that we are importing is that really the cleanest barrel of oil you can get why is it $2 cheaper over the state line between California, Arizona, even though it comes off the same truck, right? There's a lot of different things that go into that. The interesting thing is is like what you're talking about is it seems like the environment's been like this for a while.

You know, what I've kind of seen continually is either on a personal level, a community or even a state is like there has to be some kind of a pain point that is finally pushed for there to be change going back in the opposite direction, to adjust that. And so yeah, maybe maybe a lot of the stuff that you're talking about is finally building up enough to where there's some some real change made that's kind of helps it out a little bit. Part of the reason why I wanted to even start talking about the oil and gas industry and having these conversations with you and other people that are in this space is because I think that there's a real push to educate right now, right? So we start with just the fundamentals, which is I put gas in my car, okay?

Or you know there's propane coming from my tank into my house to heat my house right there's all these things that you kind of think about and then ultimately I mean if you're not educated on that or you just want to listen to one side of the conversation or the other without data to actually back it up it becomes challenging right cuz one thing in California that they don't talk about is you know you go to Huntington Beach my wife's a surfer right we go to Huntington Beach we surf well there's tar balls that are on the shore right I mean it's just natural seeps that are happening and I used to you know wonder what the heck's on my foot well it's coming up from the ocean, right? I mean, it just naturally flows.

So, we have such a great opportunity in California to actually produce oil and gas and every operator works so hard to follow the mandates that are put put on by the state. They try to follow every regulation. They know more about it than than I feel like some of our representation here in our state even. And so, fast forward, if we could just get some permits and we could get things moving again, I mean, that changes the whole direction for even the employment in our state, too, right? It's economic. I mean, go out to Taft, go out to Bakersfield, talk with those people, shake their hand, go out to their field, see what they're doing. These are some of the best people that I've ever met. California to me is it's special because I think we have such a great untapped resource and we've got people that are eager to do it.

We just need to figure out how we can educate and then get through to the government, too. And there's real history there. Massive history. I that's probably one of my favorite things is is the history of it. I mean, you had the gold rush, right? And then shortly after it's like, oh my gosh, like let's start drilling for oil and gas, right? Cuz I mean, like the wigs all along the shore and all that. And there's some Yeah. Great companies out here, too. And just like small mom and pops, too, that have been around for years and just grown. And anyways, yeah, love the love the community and like I'm lucky that that I get to be here in California cuz I think it's special. And then blast up to Alaska.

It's like the same thing, right? They've got very similar, kind of environmental regulations up there, too. I mean, they got some unique things to deal with. And now New Mexico and Colorado, right? I mean, those are other other two states that are in in kind of in a unique position, too. Anyways, not every place is Texas. As much as we want to think that, oil and gas is Texas and Oklahoma and all other core states, I think it's like there's some very real risk factors and political things that have to be contended with that have to be addressed as well. And that's a whole another part of it besides just the drilling and getting out of the ground is like the political side and the environmental side, which I respect all of it.

It's got to happen, right? It's got to be there for various reasons, but it's got to be done the right way. Hopefully, I didn't soapbox on that too much. O no, man. I enjoyed that. Yeah.