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Energy
Iran decision not expected to shake up Wyoming oilmen

Oil prices fluttered after President Donald Trump announced the U.S. would pull out of the Iran nuclear deal and gradually reimpose sanctions on the Middle Eastern country’s oil, energy, shipping and insurance sectors. Some industry experts predict the price of crude will rise as Iranian oil is drained from the market.

In Wyoming, operators have barely looked up from their drilling plans. The recent increase in oil prices has already inspired an influx of applications to drill in the Powder River Basin and a battle for control, parcel-by-parcel. When the news about Iran broke, the national spot price of oil had just hit a three-year high, eclipsing the $70 benchmark for the first time since 2014.

While more price improvements would certainly be welcome news in the Cowboy State, Iran is unlikely to do much in the short term to change what’s already happening.

For some, the reduction in Iranian crude could be partially met by increased production from the U.S. shale plays. There’s reason to believe that won’t happen.

Mark Papa, chief executive of U.S. shale heavyweight Centennial Resource Development Inc., told Reuters Thursday that the Iran news isn’t “going to change what US producers do at all.”

The U.S. oil picture, from Texas to the Powder River Basin, is interesting enough without geopolitical wrenches thrown into the matrix.

Stepping in

Vahid Salemi, AP 

A worker repairs part of a unit of the Tehran oil refinery, in Tehran, Iran in 2007. President Donald Trump's decision to pull out of the Iran nuclear deal and reimpose sanctions on the country's energy sector is not expected to have a big effect on drilling plans in Wyoming.

Trump’s decision to reimpose sanctions on Iran arrives at a dynamic time for the oil market. Production cuts from OPEC helped boost the price out of the doldrums of two years ago. Recent projections of an unanticipated increase in global demand provided traction for the price to hold. The crisis in Venezuela that’s put a tourniquet on the country’s oil output looks hopeless. In the U.S., production continues to break records.

The implications of renewed sanctions on this market are hard to pinpoint.

At most, 1.5 million barrels of crude could be taken off the market from Iran. But countries like Saudi Arabia are much more likely to step up to fill the gap than the U.S., said Frederick Lawrence, vice president of economics and international affairs for the Independent Petroleum Association of America.

U.S. shale players are already chugging away in a market full of complications.

“We are exporting more. We are more of a global player. We are increasing production like rarely seen before,” he said. “We are stepping in. But my footnote would be, can we really do much specifically pertaining to this deal? Probably not.”

Discipline and restraint

There are a number of restraints holding back producers at the moment. Big plays like the Permian in west Texas face a lack of takeaway capacity, or the inability to actually move crude and gas. Labor shortages, rising equipment and service costs and the steel tariffs announced in March are all playing a role.

With that friction guiding immediate choices, it’s unlikely that sanctions are going to inspire any new spending, said Lawrence from IPAA.

U.S. producers, at least the majors, are focused on discipline and cash flow right now, he said.

Phil Flynn, a senior energy analyst at the PRICE Futures Group, said producers already have their budgets set and are having trouble finding investments.

“It’s going to be difficult to react to this quickly, even if they wanted to,” he said of U.S. shale. “It takes time to drill the wells.”

The reality is that the short-term price reactions to the Iran news aren’t a price shock, he said.

When crude jumps $5 to $10 overnight, then you have negative implications for the economy. Gas prices rise, business slows, he said.

That’s not what we are seeing right now, he said.

“I honestly believe that oil prices were going to get here anyway because of the supply and demand situation,” Flynn said. “What this has done is speed up the process a little bit.”

At best, this should be a wake-up call for energy investors that it’s time to lay money down, he said.

The Cowboy State

Josh Galemore, Star-Tribune 

A Wold Energy Partners oil well beneath a drilling rig outside of Rolling Hills as viewed from an opening in the storage room in October.

Of course, Wyoming is far away from some of the issues clogging west Texas and its producers are not the main ones to watch to fill a potential global deficit.

On the other hand, improvements in price mean more attention for developing plays, said Lawrence.

In the Cowboy State, particularly in the Powder River Basin, there is enough going on at $70 a barrel right now that the Iran shock to the system isn’t expected to have material impact in the short-term.

“You don’t react overnight to this type of price volatility,” said Bill Miller, senior vice president of energy and land resources at the Anschutz Corporation. “Over time, if we see stability and you see support at a certain price that will impact long-term plans. It will affect deployment of rigs from basin to basin or even new rigs coming online.”

And Wyoming’s Powder River, where Anschutz is one of the most active companies of late, has a good deal of momentum even without the price boost from instability over Iran.

It’s been said before, but the Powder River Basin is the next big play in many minds.

“Its time has come,” Miller said. “I think the basin is going to start taking its own place in the overall ranking.”

Others are noticing the result in Wyoming’s Powder River Basin, too, said Lawrence, from the Independent Petroleum Association of America.

Impressive initial production rates and declining costs per well are attracting attention. The price stability recently has encouraged more interest from some drilling in focusing on plays like the Powder, where there is a foundation of local knowledge and less competition for acreage, he said.

On the ground, stable oil prices over the last six months, pushing from $65 a barrel to $70, have increased confidence from Wyoming producers, said Bruce Hinchey, president of the Petroleum Association of Wyoming.

The state has seen a record volume of applications for permits to drill, particularly in Converse and Campbell County.

A number of majors have noted that they are looking at the Powder River Basin in terms of a $50 price. That’s the tipping point today.

“I think there’s people that can even do it at $40,” Hinchey said. “We saw that happening in the past when the drilling prices went down.”

Higher prices mean more revenue for every barrel of oil produced in Wyoming right now, a boon for the revenue-dry state climbing out of a bust. Higher prices also mean that producers are getting a faster return on their wells and are free to redeploy that capital, Hinchey said.

But the influence of price jumps on drilling plans in the near term is less impressive.

“The industry is pretty used to up and down prices,” Hinchey said. “It’s the long term that they look for.”

Miller of Anschutz said producers are still wary of the overall impact of these geopolitical disruptions. Certainly the news alone has affected oil markets, but everyone is cautious, he said.

“We have pulled out of the Iran nuclear deal. Well, at the end of the day you can get four people together with six different opinions on what that means,” Miller said. “Nobody knows. We as the guy on the street, we don’t know.”


Casper
A Casper mother and her daughters found a new bond through a shared calling as nurses

For 14 weeks, Carol Gallup took care of Sam and the IV that was almost always buried in his arm.Sam was her foster son. The boy had been homeless and living with two siblings in the mountains of Tooele Valley outside of Salt Lake City before Carol and her family took them in. Sam had eczema, and an infection had burrowed its way through his cracked skin and buried itself in his pelvis.

It wasn’t the flu, as doctors had previously told the family. Sam was very sick and might die. He spent a week at a children’s hospital in the city, and Carol and her husband sat with him in shifts. As the doctors fought to keep Sam’s white cell count down, one physician told Carol that Sam would need round-the-clock antibiotics, via an IV, for 14 weeks after he left the hospital.

“It just didn’t dawn on me ‘til the day that we were going to be discharged that I was the one that was going to be giving the antibiotics by IV,” she said.

She begged for one more day at the hospital, for a crash-course on how to administer IVs and care for them, how to flush the remaining medicine out of the tubes and into the little boy’s veins.

She learned, and she cared for Sam. And then came the realization:

“I thought, ‘Hmm, maybe I could be a nurse,’” Carol said.

It was a moment of deep internal understanding that led Carol to become a nurse, to her and daughter Lori Gosman dancing in a Bar Nunn street with Lori’s acceptance letter in their hands, to younger sister Lydia Neal following them both to Wyoming Medical Center, to working all together on the same floor, to laughing about lunch-break Snapchats and to catching the warning signs of a stroke in a patient.

Carol waited for her children — all eight of them — to go to school, and then she became a certified nursing assistant and began working her way through nursing school in Utah.

But “life happened,” she said. Her husband was hired for a job in Casper, and none of Carol’s credits from Utah would transfer to Casper College.

She waited. Lori didn’t. The summer the family moved here, it must’ve been 2009, Lori applied to the college’s nursing program. She’d learned, as her mom had learned, how to care for Sam and his IV. Lori is a mother now but couldn’t have been older than 16 when she sat at that kitchen table with the IV. She didn’t have the same nursing-as-calling realization that her mother did, but she knew she wanted to help people.

Maybe beauty school? Those people are like therapists, she said earnestly. Maybe a veterinarian? No, the hours were too long — she wanted a family, an awesome family, like the one she grew up with. Her parents had taught her and her siblings to put all others before themselves, and her mom was a nurse.

Carol pushed her to go for it. She helped Lori fill out the application.

“I remember writing ‘nursing’ on the paperwork,” Lori said.

She applied to start at Casper College as early as possible, in the 2010 spring semester.

Lori — who has bouncy brown hair and says “oh my heck,” instead of the many alternatives — started to describe the day she received a letter from the college.

“Oh, I remember this,” her younger sister said, laughing, as the trio sat together at Wyoming Medical Center last week.

“We drove down to the mailbox ‘cause we lived in Bar Nunn at the time, and mom opened the mailbox, and she’s like, ‘It’s here, it’s here!’” Lori said. “And I held it in my hand and I said, ‘I can’t open it, mom.’ I was just so nervous, my heart was pounding.”

Carol grabbed the letter and took off down the street, continuing to yell “it’s here! It’s here!”

“I said, ‘Get back here, do not open it!” Lori laughed.

Carol opened it, and the two of them danced in the street.

Teenager Lydia, who was waiting in the car, rolled her eyes.

“I’m like, ‘Oh Gosh, I’m not related to these people,’” she recalled. She was laughing, too, an identical laugh to Lori’s, an identical laugh to Carol’s.

Mother followed older daughter to Casper College and graduated in 2014, two years after Lori. Again Carol worked as a nursing assistant as she made her way through school. (“And keep in mind that she had eight kids to take care of,” Lydia added.)

Lori was at Wyoming Medical already, working on the fourth and fifth medical floors. Carol had worked in the surgical unit and had a job waiting for her when she graduated.

Now they were nurses together. Sometimes, Lori was Carol’s charge nurse. In other words: Daughter was in charge.

“It was a nice role reversal,” Lori said, laughing again. Giggles come easy with these three.

“I thought, ‘I better teach her to respect your elders, you don’t tell your elders what to do,’” Carol said, her smile stretching up to her eyes. “But in that case, it would’ve been insubordination.”

In 2015, Lydia became a certified nursing assistant out of high school and, with Lori’s urging, followed her mom and sister to WMC. Now they are three.

It’s fun, they said, and their bonds grow stronger, leaning on each other for advice. Mom loves to play with Snapchat on her lunch break and will ask everyone if they’ve seen Snapchat today.

Now that Lori’s a mother, she sees less of her own mom outside of the hospital. When they get to work together, it’s special.

“I think we read each other,” Carol said.

But it’s deeper than fun, deeper than the Snapchats and the realization made years ago at a kitchen table in Utah.

“Nursing makes us feel beautiful, you know, inside and out,” Carol said. “It just makes us feel like – it gives us a beautiful feeling inside to know we’re helping someone.”

“It’s who we are,” she continued.

“Growing up, too — mom and dad always taught us to put other people before yourself,” Lydia said.

“Especially in a big family. Ten people,” her older sister agreed.

“So when you say it’s deeper — it is deeper. It’s everything we were told to aspire to be,” Lydia said. “So it’s the perfect way to learn how to put other people before yourself.”

The sisters and mother walked together into the elevator, upstairs, to have their picture taken. They smiled and chatted. Lydia is pregnant, and her baby’s due next month. When life calms down for her and her family, she plans to follow Lori and Carol into nursing school at Casper College.

They posed together, Carol sitting in a chair and her daughters, her coworkers, on either side.

After the photos were finished and the camera hung near the photographer’s hip again, the three huddled and wrapped each other in a hug, hair and smiles and laughs blending together.