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It’s the first night of February, and you know what that means… Actually it probably means a lot of different things to a lot of different people. For Supreme Court Nominee Neil Gorsuch it means intensified media scrutiny. For Tom Brady, it means another day of talking about “How great it is to be back in The Super Bowl again again again.” For a guy named Hank whose birthday is in July… it doesn’t mean much. Hang in there, Hank! You are loved. For me and everyone else involved with The Program known as The Nightly Surge, February 1st is a time to take stock, it’s a time to take notice, it’s a time to take chances, it’s a time to take it easy with over done introductions. So, as “Captain” Kuegler has got you up to speed with all things oil and gas in The Morning Surge, it’s now time to live for the night. Here we go…

Former Exxon CEO Tillerson Confirmed As U.S. Secretary of State

It’s a proud day for The Exxon family… One of their own has left the nest and gone straight into the beehive. On a vote of 56-43, Rex Tillerson, the former Exxon Mobil Corp. chief, won Senate confirmation as Secretary of State.

There are worries as to whether Tillerson would be able to stand up to Russian President Vladimir Putin, who awarded him the country’s Order of Friendship in 2013. Tillerson and Putin negotiated a $1 billion exploration project that’s been frozen since the U.S. imposed sanctions on Russia after it seized Crimea the following year. I’m more worried about what the headlines will be announcing this confirmation… I have some; “Get Ready For Rex” – “Steady Hand At The Tillerson?”, “Everything You Want To Know About Rex But Were Afraid To Ask”, “Secretary Tiller-son Of A Bitch!” (That last one would be for shall we say a publication that leans a little to the left).

Democrats have their major concerns… Senator Edward Markey of Massachusetts said, “How can the American people be sure that Mr. Tillerson will be objective when he participates in matters relating to sanctions on Russia or in any matter relating to Exxon?” He went on to say, “Mr. Tillerson is looking at the world through oil-coated glasses. He may have gotten rid of Exxon’s stock, but he hasn’t gotten rid of Exxon’s mindset.” I don’t know about you, but just the thought of wearing “oil coated” glasses makes me feel warm and safe. Good luck, Rex! Make the oil and gas biz look good, brother.

EP Energy Accelerates Wolfcamp Drilling With $450 Million JV

EP Energy Corporation has just announced that they’ve entered a joint venture agreement with a subsidiary of Apollo Global Management to drill up to 150 Wolfcamp wells. Wolfcamp wells. Sounds more like a 3-point shooter for Kansas State to me, but I’ll take their word for it. It would be a lot better if Wolfgang Puck, got involved with Wolfcamp wells, but that’s just because it sounds right, and I may be clinically insane. (Two points which are independent of each other.)

Apollo will pony up 60% of drilling, completion and equipping bills with $450 million in capital. In exchange, subsidiary Wolfcamp Drillco Operating LP will earn working interest in the wells, which will be drilled in two 75-well tranches in Reagan and Crockett counties, Texas.

Apollo already owns about 45% of EP Energy’s common stock. Bottom line, this deal is just another reason not to mess with Texas!

This Oil Market Black Swan Is Emerging As Michael Flynn Puts Iran ‘on notice’

Oil prices sharply extended gains on Wednesday after U.S. National Security Advisor Michael Flynn said the White House is putting Iran “on notice.” That raised concerns President Donald Trump could take actions that would cripple Iran’s efforts to revive its oil and gas industry, spark conflicts along oil supply routes, and ultimately drive crude prices higher. Some think this could lead to a Black Swan surfacing in the oil industry. And contrary to some beliefs, this has nothing to do with private screenings or bootleg copies of Natalie Portman’s “Black Swan”.

What’s a “Black Swan”?A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict; the term was popularized by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader. Black swan events are typically random and are unexpected.

Flynn said the warning is a response to Iran carrying out a ballistic missile test this week and its support for Houthi rebels in Yemen’s civil war.

“As soon as those comments hit the wires, you saw a bit of a rally in crude oil,” said John Kilduff, founding partner at energy hedge fund Again Capital.

Barclays said: “We do not believe that the reimposition of sanctions would lead to an abrupt cut in Iranian exports, but the threat of new US sanctions will likely slow the pace of investment needed for Iran’s oil sector to mitigate the decline from existing oil fields.”

Everyone seems to agree… Fun times in Iran right now!

Well there you have it – February is off to a flying start!! Or a weak limp, depending on your frame of reference. Make sure to catch The Morning Surge tomorrow! Now, I’m not one to end pieces abruptly, and without warning so… Night Night!

About The Author Doug Krintzman

Doug Krintzman is a Key Art and Golden Trailer Award winning copywriter in the motion picture advertising industry. He’s helped re-launch Fuel TV and their new UFC content brand as writer/producer for the networks on air promo department. In addition to selling a comedy pitch to Columbia Pictures, he’s titled the films "Charlie’s Angels: Full Throttle", and “Pirates of The Caribbean: The Curse of The Black Pearl”. Born and raised in Massachusetts, Doug is an avid Boston sports fan, movie connoisseur, blues buff, and political junkie. Known for his quick wit, sharp comic sense and timing, Doug Krintzman offers a fresh take and brings unique and original thought to any and all topics.