Global business news twenty four hours a day at Bloomberg dot com, the Radio plus Mobile Act and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Pellett. Stocks lower and this update is brought to you by e t F Exchange b n Y Melons et F Symposium September to one in Dana Point, California. The conference is complementary for r I A S. Space
is limited. Register at b n y melon dot com slash e t F. Now let's head right over to the first Word Breaking news desk for today's afternoon call. Here he is Bill Maloney. Good afternoon, Charlie. Stocks are under pressure today, with the Dow currently down eighty nine points, s if he s dropped ten in NASDAC is also lower by ten, small cap six hundreds down two points, and the US ten yield at one point seven percent. Over In Europe, Italy closed lower by two point four percent.
Germany fell one point five percent. In the US, nine out of tennesse B sectors are lower, led by declines and energy, Financials and telecom only utilities gained down. Transports fault utilities rise three. As a Biotext climb eleven and the vix is down by three percent, leaders to a downside.
The down included United Technology, Chevron, and Cisco, and in deal news jan jdd by Abbott's eye surgery unit for four point three billion in cash find the Oracle drop four point seven percent after its earnings, while Intel jumped as much as four point one percent to the hyacinths
two thousand one after it raised its forecast. Live on the First Breaking News to ask on Bill Maloney, Charltte all right, thank you very much, Bill Maloney, and to hear live breaking news over your Bloomberg type squawk squ a w K on your terminal. I'm Charlie Pelletan. That's a Bloomberg business flash. This is taking stock with bim Box and Kathleen Mays on Bloomberg Radio. Investing in oil and energy of One of the people you want to
speak with is Kate Richard. She is the founder and the chief executive of Warwick Energy Group based in Oklahoma City, and they have interest in over four thousand wells across eight US states and over a billion dollars in managed assets. Kate Richard joins us now, Thanks very much for being with us. Tell us a little bit about Warwick Energy Group and what sets it apart. I know that you began your career at Goldman Sachs, but tell us about Warwick.
No problem, Nice to talk to you this afternoon. Um So Warwick UM was started in two thousand and ten. We are in Oklahoma City based UM private equity entity, and we consolidate non operated assets in the core of the core of the lowest cost basins in the US and UM SO what we do is we buy minority interests in oil and gas wells and in oil and gas leases or acreage UM right in the core of a or so after exploration and after proof of concept
and UM non operated assets are interesting for people. They are also a little bit confusing because the typical investor thinks normally, if a well is operated by Chevron or Xxon, it's owned by Chevron or Axon. In reality, UM we have fractional interests in oil and gas wells. So you can think of it like a pizza and UM we buy the pieces of the pizza to buy as much
as we can in the well. Typically you have the operator which will own fifty and UM drill the well and then drill subsequent wells on the acreage, and then you have multiple non operators. So are you getting those pizza pieces at a big discount right now? Yeah? We are. I mean, that's one of the reasons that you go to the trouble to consolidate non operated assets because you
can buy in at interesting valuations. But the more important reason that go to the trouble to buy non operated assets is that once these very very high quality, low commodity price break even plays like the Scoop which is the south central Oklahoma oil province, or the Stack which is the Sooner trend in the Anadarko Basin of Canadian and Kingfisher Counties, which is a terrible acronym, or um
the Permian Basin in West Texas. So once you have plays like the Scoop in Oklahoma, the Stack in Oklahoma, or the Midland Basin or the Delaware Basin in West Texas proven So once people know where the core of the core is, which is um in real estate terms like Fifth Avenue real estate, the once that's identified and you really have proof of concepts from wells that have been drilled, oftentimes at that point, the big chunky operated positions in those plays will not exist anymore. They will
have already been leased. And so at that point, the only way to get into the core of the core, or to get into that Fifth Avenue real estate is to buy the non operated interest. And there's an interesting precedent for this in the market UM. Devon actually bought a company called Geo Southern, which was a Blackstone backed entity UM for six billion, and that was in the Eagleford. Devon had kind of missed building a big operated position in the Eagleford, and that was a non operated position.
At that point, it was the only way to really get into the core of the core of the Eagleford, and so they bought this non operated position and their operator was b HP. So that actually also is a very interesting thing about US oil and gas UM. Oftentimes the non operated owners, or the fractional minority owners who own pieces of the pizza, so to speak, will actually be oil and gas companies. So you will have Devon in BHP Bilton Wells, or you have Continental in Newfield Wells,
or Newfield in Continental Wells and UM. And so there's a very big part of the US oil and gas industry that is non operated even for the big operators. So when you say non operated, obviously someone else is doing the operation. You're taking that pass of interest in the investment. Correct. Yeah, and so another word for non operator is operated by other, or another term for non
operator is operated by other, which we call OBO. Right, let me let me ask you about the price of oil right now, back down to a level we haven't seen since the beginning of August. You think investors pay too much attention to the short term supply and demand factors. What should we be looking at? Well, we look very closely at the movement of the S and T, We look very very closely at the euro dollar exchange rate,
and we look very closely at the cop the copper price. Um. So what we actually see is that short term supply demand fundamentals may drive the stock on a daily basis or for front month contracts, but for the longer term crude contracts, so for you know, December crude or for the strip, we don't see those forward contracts or the
overall price of oil on a five year basis. Really move on, you know, a Department of Energy inventory number for crude or on an i e. A International Energy Agency report on a short term demand for crude, and in fact what we see is that it moves more fundamentally in line with some of the bigger financial factors like copper pricing, SMP pricing, or the US dollar exchange rate. And I would tell you, in terms of um the currency, that is probably what's most important right now. Thank you
very much for spending time with us. Kate Richard is the chief executive of Warwick Energy Group speaking about investing in energy assets based in Oklahoma. This this bloomberg coming up taking stock of luxury is brought to you by your Try State BMW centers. Visit them online of try State BMW dot com. At BMW they only make one thing, the ultimate driving machine.