Good morning; here's what the Oilman has for you today:

• Biden Admin Cancels Offer for SPR Refill

• Billionaire of the Week: Jeffery Hildebrand, Part 2

• Upcoming Gas and Oil Events

• Tweet of the Day

Biden Admin Cancels Offer for SPR Refill

Less than a month after it said it would buy 6 million barrels for the strategic petroleum reserve, the DoE has canceled the offer.

In that time, oil prices have gained over $10 per barrel.

A very uncooperative oil market

When the DoE first started talking about refilling the SPR after last year’s massive 180-million-barrel draw, it set a price range.

The price range was $67 to $72 per barrel of WTI.

For much of this year, WTI has been trading within the range.

Yet the DoE has not bought a single barrel.

It took the department months to even launch a purchase offer.

Now it’s pulling it back because of “market conditions”.

Perhaps they were hoping for $60 per barrel.

And while they were hoping, prices started to rise.

It’s like no one in the DoE has ever heard how the oil market works.

All this raises the question

Will the SPR ever be refilled?

Nobody knows.

The DoE says it will continue pursuing direct purchases and cancellations of planned sales.

The chances don’t look good with direct purchases.

It’s both prices and a tight supply of sour crude, which is what is held in the SPR.

There’s plenty of sweet crude but not enough sour.

And what’s available is expensive.

The DoE clearly doesn’t like expensive.

Yet it might seem like a chronically depleted SPR even less.

Especially at a time when global prices are rushing up amid tightening total supply.

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Billionaire of the Week: Jeffery Hildebrand

Part 2: Squeezing out the last barrel

Collecting other people’s junk wells

Most oil companies explore for oil, celebrate when they find it, and start producing.

Hilcorp is not like most companies.

Instead of dealing with E&P, it buys aging wells from other companies and then makes them produce as long as possible.

And it’s getting s bargain because E&Ps pressured to reduce their methane footprint are eager to get rid of the old wells, which emit a lot of it.

In Just 4 years, between 2017 and 2021, Hilcorp bought $90 billion worth of old, leaky wells.

And he made them work while reducing their methane emissions.

The largest private oil company

This is what buying other companies’ old, unwanted wells has led to.

Hilcorp is now the largest privately held oil production company in the U.S. in terms of volume.

And because it is a private company, it doesn’t have to kowtow to climate activists and elect them to its board.

Despite that, Hilcorp has, according to Hildebrand, reduced its methane emissions by 35% since 2019.

It’s a reputation thing, probably, and being in the trend.

Trends aside, Hilcorp remains a somewhat unique company: it got big and rich thanks to assets their owners no longer wanted.

Thanks to the vision of its founder, who is rumored to be a huge fan of efficiency.

Big plans for the future

While already the biggest private producer of oil, Hilcorp is aiming even higher.

Per its CEO Greg Lalicker, the company should see a 40% rise in output by 2026.

And it might just do that.

Hildebrand has promised bonuses of $75,000 for each of Hilcorp’s 3,000 employees.

Upcoming Oil & Gas Events

• August 3-4: OOGA Summer Meeting, Belmont Hills Country Club, St Clairsville, OH

• August 9: Petroleum Alliance of Oklahoma Wildcatters, Petroleum Club of Oklahoma City

• August 13-15: GO-WV Summer meeting, The Greenbrier, White Suplhur Springs WV

Around the Global Patch

🇮🇷 Iran holds ground on disputed gas.
🇨🇳 Georgia's China pact: strategic shift analyzed.
🇷🇺 Russia's oil products defy the price cap.

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