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

• U.S. Oil: Shareholder Payouts Top Investments for First Time Ever

• Billionaire of the Week: Kelcy Warren Part 1: A Self-Made Texan

• Upcoming Oil and Gas Events

• Tweet of the Day

U.S. Oil: Shareholder Payouts Top Investments for First Time Ever

Public oil and gas companies in the U.S. paid more to shareholders last year than they spent on new production.

This was the first time ever investors trumped new production, Ernst & Young said in a new report.

Rearranging priorities

The industry has signaled repeatedly that investor returns are taking precedence over investments in new production.

Higher prices last year made that reprioritization easier.

So, in 2022, the top 50 oil and gas producers in the country paid $58.8 billion to shareholders.

This includes both dividends and share buybacks.

The annual increase in payouts was a whopping 214%.

Spending on new oil and gas fields, meanwhile, totaled $55.1 billion.

But with combined profits of $333 billion, these companies had plenty to go around.

So, why spend so little on new production?

It’s complicated

Actually, spending on new oil and gas production also rose on the year in 2022.

But the rate of growth was a lot smaller than that of payouts.

Because oil and gas companies are operating in a complicated environment.

Pressure to reduce emissions is one reason.

Uncertainty about long-term demand is another.

A growing shortage of exploration opportunities is a third reason.

It makes sense to bet on something certain such as shareholder benefits.

Got to keep those share prices perky.

Which is exactly what oil and gas companies are going to continue doing, per EY.

Another thing they’ll be doing is more M&As as a lower-risk growth option.

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Billionaire of the Week: Kelcy Warren Part 1: A Self-Made Texan

The chairman of Energy Transfer has a net worth of $5 billion.

Yet like many of the top figures in oil and gas, he had humble beginnings.

Between the oilfield and the church

The youngest of four sons, Warren grew up in a small east Texas town.

His father was an oilfield clerk, and when Warren turned 12 and started doing odd jobs, these jobs were in the same industry.

He worked first at a gas station, then in the field.

The future billionaire fixed field leaks helped welders, and built pipelines.

When he wasn’t working, he went to church with his family.

"If the church doors were open, we went in," Warren said later.

The family could hardly make ends meet, but Warren’s mother was adamant her sons were going to get a college education.

Getting a degree on your teen savings

Despite the Warren family’s chronic financial troubles, their youngest son managed to save money.

And that money helped him pay for an engineering degree at the University of Texas.

In his first year, the small-town boy felt freedom for the first time.

He promptly flunked his exam and had to go home for a year.

When he returned, he was a lot more motivated.

And thanks to one of his professors, he got a scholarship for a project.

The project was about methane gas production.

In 1978, after he graduated, Warren got his first job.

It was as a pipeline design engineer.

Upcoming Oil & Gas Events

• August 23-25: Rockies Petroleum Conference, Marian H Rochelle Gateway Center, Laramie WY PAW

• August 28: SOOGA Fall Golf Outing, Oxbow Gold Course, Belpre OH

• August 28-September 1: International Meeting for Applied Geoscience and Energy Houston TX

• August 31: ND Oil PAC Golf Tournament Bully Pulpit Golf Course, Medora ND

Around the Global Patch

🇮🇷 Iran's oil exports cross the 2 million bpd mark.
🇿🇦 Africa's oil boom: prosperity or debt dilemma?"
🇳🇴 Odfjell's revenues soar amid a positive outlook.

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