Jack McClendon on Why It's So Hard to Create a New American Oil Boom

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Joe Weisenthal** (0:18)
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

**Tracy Alloway** (0:24)
And I'm Tracy Alloway.

**Joe Weisenthal** (0:25)
Tracy, recording this April 17th. Big drop in the price of oil today on the headlines, the growing optimism that I think a ceasefire will endure. Anything could happen. But at least for now, it appears the extreme left-tail scenario, like $200 oil, maybe off the table.

**Tracy Alloway** (0:43)
Right, so I'm looking at a chart of WTI at the moment, which might be a little hint as to our guest that we're about to introduce, but it's currently at around $83 a barrel down.

**Joe Weisenthal** (0:55)
The hint was that you didn't say Brent.

**Tracy Alloway** (0:56)
Right.

**Joe Weisenthal** (0:57)
Yeah, good hint.

**SPEAKER_2** (0:57)
Yeah, come on.

**Tracy Alloway** (0:59)
It's a good hint.

**Joe Weisenthal** (0:59)
Yeah, it's a good hint.

**Tracy Alloway** (1:00)
Although everyone can already see the headline on this episode if they clicked into it, but anyway, it was at $112 per barrel in March, or actually in early April. God, time flies when you're talking energy crisis and war in the Gulf.

**Joe Weisenthal** (1:15)
Even setting aside the war, however, there's a lot that I've been very curious about, the future of the US oil industry. We were in Alaska last summer, and I think one of my favorite parts of that trip was talking to that company that made the steel tubing for oil companies up on the North Shore, the North Slope.

**Tracy Alloway** (1:33)
Oh, yes.

**Joe Weisenthal** (1:33)
For the companies up there. The North Shore of Alaska, like it's Long Island.
The way steel prices were going to affect the breakeven costs of American oil producers, etc., and the interaction of tariffs and higher services costs, etc. And we know that the US produces a lot of oil and it's an exporter, but prices went up. And Chris Wright, he went down to Sear Week a few weeks ago, said, please produce more. But as you've been writing about, the ring counts have been going the other direction.

**Tracy Alloway** (1:59)
Yeah, that's right. So, I mean, this was also part of the Iran story, this idea that, well, if we get a huge hike in the price, if oil is going to be above $100 per barrel, then maybe we'll see some sort of supply response in the US., right? But if you look at the Baker Hughes oil and gas rig count, it's basically been trending sideways. In fact, the last available data, it fell by three. And then if you go out even further, it's been going sideways and slightly down since basically 2023 So we haven't seen a big supply side push, and that's despite a lot of noise coming out from the administration about unleashing US energy and letting everyone, including your grandma, drill.

**Joe Weisenthal** (2:46)
Getting it right, it's tricky for all administrations, right? In theory, it's like, oh yeah, let's produce more. There was a lot of production actually under Biden, but the administration didn't want to brag about it. It's kind of weird, and then you have an administration that does want to brag about it, but they're like, oh, and now there's a bunch of Venezuelan oil on the market, unsanctioned, so what does that mean? Anyway, here's the other thing.
I'm really into the show Landman, and I really just want to talk about it.

**Tracy Alloway** (3:09)
This is just an excuse for you to talk about Landman.

**Joe Weisenthal** (3:10)
That's correct, and so I've like, I gotta talk to someone who's just out there, independent, small oil and gas company, because I have a million questions about how realistic that is.

**Tracy Alloway** (3:20)
I like it every time we get to talk about Christmas trees of like valves and spools and casings and things.

**Joe Weisenthal** (3:25)
There you go. Well, we really do.

**Tracy Alloway** (3:27)
This is an episode for both of us.

**Joe Weisenthal** (3:28)
You really have written a lot about the technology of oil production for a long time.

**Tracy Alloway** (3:33)
Well, I wrote one article, and then I think I revisited it, but it had one of my favorite headlines of all time, and one of my favorite ever leads, but the headline was how actual nuts and bolts are bringing down oil prices.

**Joe Weisenthal** (3:43)
There you go.

**Tracy Alloway** (3:44)
It was about standardization of oil drilling parts.

**Joe Weisenthal** (3:47)
Well, we really do have the perfect guest, someone who's in the game, actually got skin in the game in this space. We're going to be speaking with Jack McClendon, CEO of the small oil and gas company called Siena Natural Resources. Jack, I've wanted to have you on the podcast a long time. So thrilled you're here. Why don't you tell us what's Siena Natural Resources? What's your business?