German Oil

“Alles hat ein Ende, nur die Wurst hat zwei” - German Proverb (we’ll explain later)


It’s not well know that there’s Oil - onshore - in Germany.

It’s even lesser known that there’s a Royalty Trust comprised of Overrides on German Oil & Gas Fields (that’s not taxed by Germany OR the US), trading on the NYSE.

As alluring as double-tax-free publicly traded overrides may sound - it’s not worth your time.

[once upon a time, two of the editors of this newsletter went way down that rabbit hole]

HOWEVER - that was not our first look at Germany.

And German Oil is relevant today because Bloomberg is reporting that Exxon is about to start a sale process for its upstream assets in the UK + Germany.

The UK assets will sell fast.

The German ones won’t.

Germany produces ~50k bopd.

The largest field - Mittelplate - produces ~60% of that.

And onshore, next to Mittelplate is the Dieksand - probably the most surefire place to drill for conventional oil in the western world…

…but it won’t happen.

Greenpeace, long ago, won the battle for the German head-space.

So what’s next?

Wintershall - the other big player in Germany - has been making moves.

Exxon & Wintershall should just combine their German assets into a single legal vehicle & IPO it.

That’d easily be a >$1Bn listing…

And, if push-came-to-shove, it’d be easier to negotiate w/ the Bundestag as a local company -


Kuwait is planning to restart oil production in March at the Wafra field that it shares with Saudi Arabia in the “Neutral Zone”.

Back in December, Kuwait & Saudi settled a ~5x yr dispute over the Neutral Zone - which can produce >500k bopd.

All the while, both Kuwait & Saudi remain committed to their OPEC production quotas…


We’ll leave it at this:


Oh, almost forgot - that German proverb - it means:

“all things have an end - except for sausages, they have two”

Which sums up Exxon’s exit plans - they’re leaving, and sometimes the Germans make sausage, not sense -

That’s it for this week - the Superbowl can’t get here fast enough -