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

• Investors Flock Back to Oil and Gas

• Billionaire of the Week: John D. Arnold

• Upcoming Oil and Gas Events

• Tweet of the Day

Investors Flock Back to Oil and Gas

Fundraising in the U.S. oil and gas sector is on the mend, with IPOs picking up as well.

Investors are returning to the industry thanks to its stricter fiscal discipline.

Talk about lessons learned.

From cash burners to capital control masters

The shale boom was a great time for American energy.

It was also a risky time, with hundreds of companies trying to get rich at the same time.

It didn’t work out for all, to put it mildly.

And investors grew annoyed by the drill-at-all-costs policy most followed.

So they started leaving.

Now, they’re back because the industry learned its lesson.

No more drill-at-all-costs.

It’s the capital discipline era.

And the era of fat dividends for the public players.

Also, oil is trading nicely higher than a year ago, with prospects quite bullish.

The new normal

The last year or so has proven that capital discipline and caution are the new normal for oil and gas.

Oil prices have rallied, but this has not spurred another drilling activity surge.

Quite the contrary, the rig count has been on the decline for most of the year.

Production is still rising but at a much slower rate.

And that’s why equity and debt investors are returning.

They like caution, and they like capital discipline.

Here’s the gist of it from an energy analyst:

“Companies are really keeping their focus on shareholder returns.

They’re very disciplined; they’re making the right decisions by paying out dividends and buying back shares.

This is winning the investors back to the sector.”

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Billionaire of the Week: John D. Arnold

The King of Gas Who Retired at 38

Dallas native John D. Arnold is not your usual oil billionaire.

He made his money in oil and gas trading, for starters.

Also, he made that money at Enron, at least initially.

Arnold was so good at his job that he got the nickname the King of Gas.

Reportedly, he earned $750 million for Enron in just one year—the year the mammoth company collapsed.

Rising from the Ashes

Enron collapsed, and deservedly so, but Arnold did not.

Instead, he set up a hedge fund dubbed Centaurus Advisors.

This is where he went from a millionaire to a billionaire.

Fun fact: Arnold hired his mum as an accountant for his fund.

The venture made billions, and then Arnold shocked the financial world by retiring.

At the ripe old age of 38.

What he wanted was to dedicate 100% of his time to philanthropy.

And that’s exactly what he did.

Lessons Learned

In an interview with Reuters in 2018, Arnold shared some of the lessons he had learned during his meteoric career.

From the collapse of Enron, for instance, Arnold learned “to always think about the downside of things.”

Another thing the billionaire learned before becoming a billionaire was that “wealth is very fleeting” and that one can lose it as quickly as they make it.

Why did he leave trading?

Because of his personal life.

“That business requires 100 percent focus,” he told Reuters in 2018.

“So giving anything less than 100 percent is a guarantee for failure.”

Upcoming Oil & Gas Events

• October 17-19: Permian Basin International Oil Show, Odessa TX

• October 19: PIOGA Annual Membership Meeting & Reception, Canonsburg, PA

• November 1: Oil and Gas Electrification Symposium, Longmont, CO

• November 2: LOGA State Industry Series, Benedict’s Plantation, Mandeville, LA

Around the Global Patch

🇮🇷 Iran proposes oil embargo against Israel amid rising Middle East tensions.
🇿🇦 South Africa expands climate fund membership.
🇷🇺 China and Russia compete in escalating Middle East crisis.

Tweet of the Day

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