Message From The Chair

Holiday Season, 2025 oil surge?, Sable Offshore acquires Exxon Santa Ynez Units, POPCO, and the pipeline to Las Flores Canyon

Dear Colleagues,

As we look forward to the upcoming holiday season, I hope that everyone is able to take some time off to relax, be thankful, and spend time with loved ones.

With recent developments in the political climate, there are sure to be some interesting news regarding our industry.

Though some expect the US Oil production to surge under the upcoming Trump Administration, Standard Chartered Bank expects that to not likely be the case. An all-time high, U.S. crude oil supply was 13.401 million barrels per day in August 2024, but there are many factors that could limit the continued growth and potential surge within Trump’s term. This includes the duration from licensing to production of new acreage, the hyperbolic decline of shale well production, and indirect impacts of possible tariffs on trade with high demand countries. Considering these limitations Standard Chartered expects growth to continue to slow over the next few years.

Reuters reports that the number oil and gas rigs operating remained unchanged for a second week in a row, as of November 1st. The current count is 479 oil rigs and 102 gas rigs. This is a decrease of 5% from this time last year.

On a more local note, as of last February, Sable Offshore Corporation has closed a sale and purchase agreement to take ownership of the Santa Ynez Units, POPCO, and the pipeline to Las Flores Canyon. Sable’s limit to restart production is January 1st, 2026. If they are unable to meet this production deadline, Exxon would be able to exercise a reassignment option and retake ownership of the facilities without compensation. A potential risk for Sable Offshore is being able to meet all permit requirements in a timely manner, though the ownership transfer has not been expected to affect existing applications. In October, The Santa Barbara County Planning Commission voted to approve ownership & permit transfers.

Thank you for your continued dedication to the LA Basin Section of SPE. Please keep an eye out for future updates on our Technology Luncheons and our long anticipated 2025 Western Regional Meeting.


Sincerely,
Ian Johnecheck
SPE LA Basin Section Chair 2024-2025
ijohnecheck@cordobacorp.com