Jay Young - CEO, King Operating Corporation Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
My seventy three now here in Houston's boring News. Jay
Young joins us the CEO of King Operating Company up
in North Texas. Jay, how you been, buddy? Very good, Jimmy,
are you doing doing well? Are you happy about the
election results.

Speaker 2 (00:15):
I've still got mixed emotions about it. You know, it's
a crazy thing because you know, obviously Trump's a drill
baby drill guy, and he's he's pro oil, which you know,
anybody the only gas do this would love that. What
I'm not I'm not too thrilled about is, you know,

(00:36):
is that with drill baby drill, it's going to bring
prices down. And if you're a producer and if you're
drilling for oil and gas today at seventy dollars a
barrel or eighty dollars a barrel, then you know, if
to get the returns that we need to put ourselves
at risk, and if all prices go way down, you know,

(00:59):
we're gonna be stuck with with with producing a product
at a higher price. And and you know, our returns
are going to be at fifty dollars, which is not
you know, in our in our internal rate of return,
so category then we're not going to want to drill
as much.

Speaker 1 (01:14):
So you're worry is that there will be a glood
of oil on the market and it will drive the
price down too low for you to make a profit.

Speaker 2 (01:22):
Right exactly, And that's not going to be good for
I mean, I understand what's going on in jobs and
everything else, which is awesome, that's great. The United States
needs more jobs. The old industry needs to go back
to work one hundred percent. But but with with the
prices going down, there will be layoffs. And I talked
to a lot of different people, and you know, and

(01:43):
I was, you know, my social media channels and going
back and forth with a lot of people. I was
asking them, hey, are you voting this year for your
with your heart or your pocketbook? You know, you know,
because you're in the old industry. What happened last time
when when prices went down?

Speaker 3 (02:00):
And they said, well I got laid off, you know.
I you know, though, one guy said, you would think, Jay,
I mean, let's take a look at fracking. For example,
if the other side had won, they were probably going
to ban fracking. I mean, think how many jobs would
have been lost as a result of that.

Speaker 2 (02:15):
Yeah, Well that's true. But old prices would have gone up,
which they did under Biden. So therefore, you know, it
was good. It was good for the old industry. A
lot of people went back to work, you know, the
fracking part of it. In different parts of the country. Yes,
I mean, if you want to get in the old business,
don't move to Colorado, California, you know, Wyoming and places

(02:39):
like that. That's not a good place. But if you're
if you're in Texas, which you know obviously, we are
good place here. Let me we were, we were doing great.
Everybody's everybody's everybody's happy, everybody's going to work.

Speaker 1 (02:53):
Let me ask you about what's going on with the
price of gas right now. I filled up yesterday for
two three six a gallon, and I watched the gasoline price,
you know, just kind of drop and drop and drop
week by week by week. Clearly we have a bigger
supply than we have demand right now.

Speaker 2 (03:07):
Why is that, Well, we are producing a lot of
oil and gas in the United States. There are when
prices of you as you've seen, you know, we're higher.
You know, they were eighty dollars ninety dollars a barrel
for a long time under Biden. Everybody's going to work,
everybody's franking. We're producing more oil in the United States

(03:27):
right now than we were during when when Trump was in.
You know, we're at thirteen point four thirteen point five
million barrels. Trump was up to thirteen million barrels oil
before before COVID, and all of a sudden, you know,
COVID happened, a lot of the money went out of
the markets. So therefore people quit drilling as much. But
then it's coming back now and we are producing more oil.

(03:49):
So the more oil you have on the markets, that's
the only reason why price goes up and down is
because of supply, Deman, right, I mean, you know, if
there's more supply on the market, we've talked about that before, sure,
you know. So therefore, right now we're seeing a lot
of oil in the markets. And as you have oil
and it's being you know, we are exporting a lot

(04:11):
of oil now because of our refineries, which is another
story in itself. But ideally, you know, oil and gas
companies need to see higher prices, and especially for companies
that frack, because it costs so much money. It costs
ten twelve million dollars to go drill well, you know,
we put ourselves out there for that, either by you know,

(04:32):
with our production or or revenues, or we borrow money.
If we borrow money at you know, ten twelve million
bucks and the price goes way down, we'll see it.
We'll see, you know, not not good for the oil
gas companies.

Speaker 1 (04:46):
We got drill, I got you. We'll see what happens
with all this. Thanks for coming on the show. Good
to hear it from you, as always, Jay Jay Young, CEO,
King Operating Corporation's five fifty seven