On a disappointing note, Argentina’s September 2025 natural gas production plummeted. Ministry of Economy data shows the country pumped 4.9 billion cubic feet of natural gas for the month, which was 6% less than a month prior and 12% lower year on year. This was primarily driven by a sharp decline in shale gas production, which for September 2025 was 3.1 billion cubic feet per day, a 7.5% decrease month on month and a 15.6% drop compared to the same period a year earlier.Those numbers confirm Argentina’s pl ...

It is interesting to note at this point the circularity of history here, albeit with a twist. Prior to 1973/74, the global oil industry had effectively been run by a small group of Western oil firms known as the ‘Seven Sisters’, as detailed in my latest book on the new global oil market order . These firms – comprised of the Anglo-Persian Oil Company (which changed its name in 1935 to the Anglo-Iranian Oil Company, and is now BP), Royal Dutch Shell, three iterations of Standard Oil (Standard Oil of Californ ...

Sales Revenues and Profitability - The energy market faced challenges in Q3 2025, with sales revenue declining to EUR 282.7 million, a 27% decrease year-on-year. EBITDA fell to EUR 27.9 million (-31% year-on-year), and the reported net loss for the quarter was EUR 66.0 million [1][2] - Adjusted EBITDA, excluding temporary fair-value changes, was EUR 32.5 million, down 25% year-on-year. The adjusted net loss was EUR 61.4 million, which included impairments of EUR 39 million for shale oil production assets [1][2] Market Conditions - Lower profitability was attributed to declining electricity prices in the Baltics and reduced shale-oil sales volumes due to maintenance shutdowns. However, the distribution segment showed strong performance [2] - The CFO highlighted significant developments in the Baltic energy sector, including desynchronization from the Russian grid, which enhances energy independence and creates opportunities for Eesti Energia [3] Strategic Developments - The company plans to focus on completing ongoing developments and improving efficiency throughout 2025, with structural changes set to take effect in 2026, introducing three business lines: Distribution, Electricity, and Industry [4] - The strategic direction aims to establish a balanced portfolio of renewable generation, dispatchable power, and flexibility services to ensure reliable service and long-term value creation [5] Renewable Generation and Electricity Sales - Sales revenue from renewable generation and electricity sales decreased to EUR 152.6 million, a 31% decline year-on-year, primarily due to lower market prices despite stable sales volumes [5] - Renewable electricity output increased by 5% to 369 GWh, driven by new wind farms, while retail electricity sales volumes decreased by 6% [6] Non-Renewable Electricity Production - Revenue from non-renewable electricity production dropped by 60% year-on-year to EUR 15.4 million, with production from oil-shale-based units down 83% due to maintenance and low market prices [7] - The segment EBITDA was EUR -6.6 million, marking a decline compared to the previous year [8] Distribution Segment - Distribution service revenue increased by 12% year-on-year to EUR 73.1 million, supported by a 4% increase in sales volume [11] - Distribution EBITDA improved significantly to EUR 27.4 million (+55% year-on-year), driven by higher margins and increased sales volume [11] Shale Oil Segment - The shale-oil segment experienced a 69% decrease in sales revenue to EUR 11.6 million, with sales volume down 60% to 37 thousand tonnes [12] - Segment EBITDA was EUR -6.2 million, reflecting lower margins and significantly reduced sales volumes [13] Other Products and Services - Revenue from other products and services increased by 11% year-on-year to EUR 30.0 million, driven by growth in flexibility and frequency-reserve services [14] - EBITDA for this segment rose to EUR 4.3 million, with notable increases in flexibility services [15] Investments - The Group's investments in Q3 2025 totaled EUR 104.4 million, a 37% decrease year-on-year, as large renewable projects near completion [16] - Distribution-network investments reached EUR 40.7 million, supporting upgrades and reliability improvements [17] Financing and Liquidity - The Group's borrowings at the end of Q3 2025 amounted to EUR 1.637 billion, with a strong liquidity buffer of EUR 644 million [18] - Key financing developments included the acquisition of the remaining 2.8% stake in Enefit Green, leading to its delisting [19] Future Outlook - The Group is preparing for a transformation starting in 2026, which will enhance profitability and competitiveness through a simplified structure [22] - Strategic changes are expected to drive earnings growth and strengthen cash flows while supporting the transition to a carbon-neutral energy system [23]

Production Highlights - Total production reached 127 Mboe/d, a 74% year-over-year increase and a 7% quarter-over-quarter increase[12] - Oil production specifically hit 110 Mbbl/d, showing a 73% year-over-year increase and a 7% quarter-over-quarter increase[12] - Strong productivity from new well tie-ins boosted Q3 2025 production growth by 7% quarter-over-quarter[14] Financial Performance - Revenues increased to $706 million, a 53% year-over-year increase and a 16% quarter-over-quarter increase[13] - Adjusted EBITDA reached $472 million, a 52% year-over-year increase and a 17% quarter-over-quarter increase[12] - Net income was $319 million, while adjusted net income was $155 million[12] - Earnings per share (EPS) was $30, while adjusted EPS was $15[12] Costs and Pricing - Lifting cost decreased to $44 per barrel of oil equivalent (boe), a 6% year-over-year decrease and a 5% quarter-over-quarter decrease[12] - Average realized oil price was $646 per barrel[20] Cash Flow and Leverage - Pro forma net leverage ratio was 15x Adjusted EBITDA[12] - Operating activities cash flow reflects income tax payments of $179 million, partially offset by a decrease in working capital of $43 million[31]

Core Insights - Argentina's federal government has focused on the Vaca Muerta shale formation for over a decade, which has become a key driver for the country's hydrocarbon production [1] - The nationalization of YPF in 2011 was a pivotal moment that allowed the company to lead the development of Vaca Muerta, despite initial backlash from financial markets [1] Production Growth - Shale oil and gas production in Argentina has reached record highs, with August 2025 data showing crude oil production at 816,144 barrels per day, 65% of which was shale oil [2] - Natural gas production for the same month was 5.5 billion cubic feet, with 67% attributed to shale gas [2] - Year-over-year, oil output increased by nearly 15%, while natural gas production saw a modest 3% rise [2] Shale Oil and Gas Performance - Shale oil production surged by 30% year-over-year to 530,057 barrels per day, marking a new record and comprising 65% of all crude oil lifted in Argentina [3] - Shale gas production, however, declined by 1.6% month-over-month to 3.7 billion cubic feet per day, although it was still 3% higher year-over-year [3] Comparison with U.S. Shale Plays - Vaca Muerta's characteristics are more similar to the Permian Basin than the Eagle Ford Shale, with well productivity believed to surpass that of major U.S. shale plays [4] - A typical well in Vaca Muerta yields around 30 barrels per foot drilled, which is double the production of the Permian and other U.S. shales [4] - The average breakeven price in Vaca Muerta is estimated at $36 per barrel, comparable to U.S. shale basins despite higher drilling costs [4]

Core Insights - Chevron Corporation aims to increase its oil output in Argentina's Vaca Muerta shale formation to 30,000 barrels per day (bpd) by the end of 2025, reflecting confidence in this significant energy resource [1][2] Company Expansion - Chevron has been investing in Vaca Muerta for years, currently producing approximately 25,000 bpd and planning to ramp up to 30,000 bpd by year-end 2025 [2] - The company’s Argentina country manager highlights the growth potential of Vaca Muerta, emphasizing its strong unconventional resource base and the ability to scale quickly under favorable conditions [2][8] Industry Impacts - Vaca Muerta is recognized as the world's second-largest shale gas reserve and fourth-largest for shale oil, playing a crucial role in Argentina's energy strategy to reduce reliance on imports amid an economic crisis [3][4] - Increased production from Vaca Muerta is expected to enhance Argentina's energy independence and economic prospects, with analysts estimating crude production could reach 1 million bpd by 2030 [4] Market Pressures - Despite its potential, Vaca Muerta faces challenges from global oil market pressures, including lower oil prices and reduced spending, which have led to a slowdown in drilling activities [5] - Other companies, such as TotalEnergies and GeoPark, have scaled back their involvement in the region, indicating a cautious approach to investment in Vaca Muerta [6][7] Regulatory Environment - Chevron emphasizes the need for a stable investment climate in Argentina, calling for competitive costs and predictable regulatory frameworks to support its expansion plans [8][9] - The company’s executives stress that uncertainties in capital movement and government policy could hinder the formation's potential [9] Future Outlook - Chevron's plans for increased output come amid mixed signals for shale development globally, but Vaca Muerta continues to show momentum with ongoing investments [10] - The anticipated Vaca Muerta South pipeline, expected to be operational by 2027, will further support production and export capabilities [10][11]

Corporate Strategy & Assets - Questerre holds strategic interests in Red Leaf for patented oil shale technology and a large oil resource in Utah[2] - The company is assessing a significant oil shale deposit in the Kingdom of Jordan for commercial development[2, 22] - Questerre is seeking value for a giant natural gas discovery in the St Lawrence Lowlands, Quebec[2, 27] - The company has a condensate-rich Montney resource play in Western Alberta with attractive economics and proven tight oil production in SE Saskatchewan/SW Manitoba[2] Financial & Operational Performance (Q2 2025) - Funds Flow from Operations reached $5 million[4] - Capital Expenditures amounted to $1 million[4] - The company reported a Working Capital Surplus of $13.2 million[4] - Production averaged 3,091 boe/d, with 55% weighting towards oil and liquids[4] - Revenue per boe was $48.62, with an Operating Netback of $21.90 per boe[4] Market Capitalization & Share Structure (Aug 31, 2025) - The Market Capitalization stood at $146 million[6] - Insiders held 24,099,804 shares, representing 6% of the total[6] - The Free Float was 404,416,032 shares, accounting for 94% of the total[6] - Daily Trading Volume averaged 1.6 million shares[6] Quebec Legal & Political Challenges - The company is seeking leave to appeal to the Supreme Court of Canada regarding the Quebec Court of Appeal decision on Bill 21[38] - Economic losses related to the Quebec situation are estimated to range between $700 million and $4.8 billion[38]

Core Viewpoint - Questerre Energy Corporation has entered into a definitive agreement to acquire 100% of PX Energy, a privately held shale oil production and refining company in Brazil, which is expected to enhance Questerre's operational capacity and expertise in oil shale resources [1][2]. Acquisition Details - The acquisition involves the purchase of PX Energy for 65 million common shares of Questerre, with a plan to spin out Quebec-based assets into a separate subsidiary to protect existing shareholders [3]. - PX Energy currently produces approximately 4,500 barrels of oil equivalent (boe) per day, with a target to increase production to 6,000 boe per day by August 31, 2026 [3][7]. Financial Aspects - The acquisition includes a performance-based share release structure, with 15 million shares issued upon closing and 50 million shares released in two tranches based on achieving specific Free Cash Flow milestones [6]. - The company has retained Clarksons Securities AS as a financial advisor to manage PX Energy's existing debt, which includes US$80 million in senior secured bonds [5]. Operational Synergies - PX Energy has over thirty years of operational experience using technology developed by Petrobras, which is expected to provide Questerre with a strong operational base and expertise to advance its oil shale and biofuel technology [2][8]. - The acquisition is anticipated to strengthen Questerre's oil shale footprint and support its commitment to environmentally responsible hydrocarbon technologies [8]. Closing Conditions - The completion of the acquisition is subject to several conditions, including satisfactory due diligence, board approval, and regulatory approvals from the Toronto and Oslo Stock Exchanges [4].

Group 1 - OPEC+ aims to increase production not only to punish overproducing allies but also to compete for market share with U.S. shale oil producers, indicating a clear strategy to drive oil prices below $60 [1] - OPEC's market share has decreased from 40% a decade ago to below 25% this year, while the U.S. share has risen from 14% to 20% [1] - U.S. shale oil producers are in a more vulnerable position now compared to a decade ago, with rising costs and production concerns due to the depletion of prime drilling areas [2] Group 2 - U.S. shale oil producers now require an oil price of $65 per barrel to achieve profitable drilling, while Saudi Arabia's production cost is only $3-5 per barrel [2] - Companies like Diamondback Energy have lowered their 2025 production forecasts due to global economic uncertainty and increased OPEC+ supply [2] - The price war initiated by OPEC+ could harm all participants, leading to reduced capital expenditures, layoffs, and dividend cuts for oil companies [3] Group 3 - Countries reliant on oil revenues face fiscal pressures, with Russia needing oil prices above $77 per barrel to balance its budget, and Saudi Arabia requiring over $90 per barrel [3] - Despite the fiscal challenges, Saudi officials believe they can endure a price level of $60 per barrel, even if it means borrowing more to balance the budget [3] - The competition for market share may just be beginning as Brent crude oil prices have fallen from the $70-80 per barrel range last year to nearly $58 per barrel this year [3]

Core Viewpoint - The IEA monthly report indicates that the decline in oil prices is prompting some shale oil producers to cut back on spending and production activity levels [1] Group 1 - The report highlights that lower oil prices are leading to reduced capital expenditures among shale oil companies [1] - It notes that production levels are being adjusted downward in response to the current market conditions [1] - The overall impact of these changes may affect the supply dynamics in the oil market [1]