Kym Bolado: So, I want to jump into the big announcement that happened: Chevron announced it was acquiring Noble Energy. We’ve had a couple of experts on the show that have discussed that time is changing, meaning we’re going to see mergers, we’re going to see acquisitions and this low oil price. So how significant was this announcement? Where do you think we’re going? Will we see more of these as well?
David Blackmon: Yeah, that’s a big announcement for Chevron, I think it’s really interesting because they finished second, last year in the race to acquire Anadarko Petroleum, which was a bigger Permian producer, but just a little bigger company. Overall, the normal energy Oxy ended up winning that bidding war for $55 billion. Chevron ends up buying Noble a year later for really $5 billion for their assets, and then they’re assuming a billion dollars in outstanding debt. So it’s a $13 billion acquisition that last year would have cost them over $30 billion. It shows you how quick they really change, and you never know what’s going to happen going forward. So this was easily the biggest deal so far in 2020.
Kym Bolado: That leads me to my next question. We’ve had a lot of experts on, and a lot of them have been having a discussion for quite some time that the retraction going on in shale plays we are going to see a lot of mergers and acquisitions. A lot of them even went as far as to make guesstimates that we were going to really see a consolidation of shales. Are we seeing that now? Do you think that’s what’s happening? Are we on the cusp of this happening?
David Blackmon: You know people have been saying that for over a year, and everybody likes to predict those things. So far, obviously it’s not happened. I think coming into this year, it was reasonable to expect we would have fairly significant consolidation in the shale business, but COVID-19 had erupted all of that. And now, you know, I think that the thing Chevron with buying off Noble they had a lot of synergies in their operation, not just here in the United States, but in the Eastern Mediterranean and Africa
That merger makes a great deal of sense from a lot of perspectives, and I think that other companies like ExxonMobil and BP and Shell want to do some acquisitions of smaller companies, but it has to make financial sense. Just like last year, the acquisition of Anadarko needed to make financial sense to Chevron. So it just depends.
Kym Bolado: Our guest today is Dan Haley, CEO of Colorado Oil and Gas Association. Dan, before the break, you were telling us about how effective your messaging was to really get the point to the voters how important oil and gas was to them. What do you think was the magic bullet, if you will, that helps you guys get over the hump that you needed to against the activist in your area?
Dan Haley: Well, I’ll say a couple of things. One, probably 10 years ago, we were not doing a good job of this. We were not doing a good job of going into communities and explaining what we’re doing, why we’re doing it, why it’s important, why it’s good for our community, our state, and our country, and why it’s safe. And when we weren’t doing that, we created a vacuum that activists filled with horror stories and scare tactics. So we had to spend a lot of money and a lot of time on education getting the right information out there. During the 2018 campaign, there was a lot about jobs. It was about introducing our industry employees to the rest of the state. These are your neighbors. They have good paying jobs in the oil field, which support your jobs throughout the economy. And we really hit that message home.
We can always talk about jobs. We can always talk about the taxes that we pay. We’ve got to tell our good stories about what we’re doing to protect the environment, how we are controlling emissions, how we’re reducing emissions and methane, how we’re protecting the groundwater in our state and across the country. We’ve got a good story to tell. We have to begin to tell that and really hit to the heart of what people are concerned about. People want to talk about environmental issues. They want to talk about climate. We’ve got good stories to tell. We need to be comfortable in telling them and understanding the facts and science that’s on our side in this case. And we really need to get that message out to Colorado and to the rest of the country.