American Oil and Gas Reporter - September 2020 - 57

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SpecialReport: Permian Powerhouse
and train them, or bringing back hands that haven't worked on
a rig for a long time.
As we all know, to make money at $40 oil, you have to be
pretty darn efficient, but $80-$100 oil can make up for a lot of
sins and inefficiencies. And so, the worm turns, and we continue
to ride this ocean wave up and down once more.

Q:

Let us not forget about President Trump's July 29
visit to Latshaw Rig Nos. 43 and 9, which were

drilling on adjacent pads for Double Eagle in Midland County,
Tx. That followed Vice President Pence's April 2019 tour of
Latshaw's Rig 45 on a Diamondback Energy location. What
prompted those visits, and if you don't mind sharing, what
do you hope Trump and Pence took from their experiences?
LATSHAW: I can't speak for President Trump or Vice
President Pence, but they are both very strong supporters of our
industry. It's one thing to talk about it, and another to show it. I
think their trips to the Permian Basin-the heart of this country's
oil field, and the most active area in the world-was to show

their support for our industry and to emphasize its importance
to our economy, our military and our national security. For
those that know some history, being entirely self-sufficient in
oil production is one of the things that helped us win World War
II. Neither Germany nor Japan had the domestic capacities to
fuel their war efforts.
Again, I am not able to speak for either of them, but I hope
what they learned from their trips was a better appreciation for
the technology that's involved in drilling these horizontal wells.
But more importantly, I hope they have a better appreciation of
the men and women who are out there, 24 hours a day, 365
days a year, working in the elements, drilling these wells that
provide the energy our nation runs on. Due to their work
schedules, they live on the rigs for six months out of the year
and are away from their families. I always strive to impress on
our employees that they are the tip of the spear in this industry.
They have to drill a well first before anything else can happen
and the oil and gas then can be turned into useful products. I
like to compare them with the Marines in that they are the first
ones to come ashore and establish a beachhead. Everyone else
then comes in behind them!

Connecting The Dots

KELCY WARREN
CEO and chairman of the board of
directors
Energy Transfer LP

Q:

The Lower-48 has undergone a massive midstream
build-out to connect the dots between supply basins

and market centers. COVID-19 has temporarily arrested production growth trends. How is this impacting system capacities
and planned projects in the Permian and Gulf Coast?
WARREN: I can tell you that we have seen our volumes out
of the Permian and Gulf Coast areas picking up over the past
month, resulting in our pipelines being at or above pre-COVID
volumes. However, the COVID-related slowdown has changed
market demand, leaving ample pipeline takeaway capacity to
cover existing and forecasted production levels. This has caused
many companies to re-evaluate planned projects that would
have added takeaway capacity. Given the available and projected
capacity, we would expect the pace of new construction to be
slowed as the industry recovers and pipeline companies maximize
their existing assets.

Q:

What will the next generation of Permian oil, gas
and NGL infrastructure projects look like? Will we

continue to see large-scale green-field capacity additions,
or will the order of the day be smaller-scale projects built off
existing systems?
WARREN: The big build-out in the Permian has already occurred, so we would expect to see fewer large-scale capacity
additions in the future. Instead, we are more likely to see
smaller projects that utilize existing assets and are more capital
efficient with higher investment returns.
Energy Transfer is already well positioned to do this with
more than 90,000 miles of pipeline and related infrastructure
in 38 states that connect all of the major supply basins to
major demand markets in the United States as well as exports
from both the East Coast and the Gulf Coast. Rig counts tend
to ebb and flow, and from time to time, rigs move from one
basin to the other, and we are naturally hedged against that.
Energy Transfer is unique in that, because of the connectivity
of our pipeline systems, we are more immunized than any
company I know.
Our recent completion of the Lone Star Express Pipeline expansion adds connectivity out of the Permian and Delaware
SEPTEMBER 2020 57



American Oil and Gas Reporter - September 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2020

Contents
American Oil and Gas Reporter - September 2020 - Intro
American Oil and Gas Reporter - September 2020 - 1
American Oil and Gas Reporter - September 2020 - 2
American Oil and Gas Reporter - September 2020 - 3
American Oil and Gas Reporter - September 2020 - 4
American Oil and Gas Reporter - September 2020 - Contents
American Oil and Gas Reporter - September 2020 - 6
American Oil and Gas Reporter - September 2020 - 7
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https://www.nxtbook.com/nxtbooks/aogr/202009
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