“I would love to hear your take on the Drillco route for PE PortCos stuck in a holding pattern, hoping to land before they run out of fuel. The backers are pushing them, and PortCos lining up (willingly?) to commit to them.  So should you do it? Does it ever make sense?” #hqotw I recruited some help from my partner who is much smarter on this stuff than I (congrats on the baby, BW!). Here’s an example of how our “teach in seminars” go: Me: what do...

Dear Oil and Gas Investors.  Since is has become abundantly clear that all the IR presentations and press releases in the world won’t make you interested in investing in energy, I have taken the liberty of trying a different approach.  Confession: I love musicals.  Queue music. You say:  The price of my stock’s not a price that you’re willing to pay.   You cry: in the press about the c-suite when you see the S&P go by.   Why so sad?  Remember we made an arrangement when we drilled astray....

Like that quote from Ferris Bueller’s Day Off, “Life moves pretty fast.  If you don’t stop to look around once in a while, you might miss it.”  AKA. The last 36 hours in oil price. Not surprisingly- there is CURRENTLY enough oil to go around and 0 chance the Saudi’s weren’t going to tap reserves to stabilize price and maintain market share. Add huge short positions in an industry that is universally hated by investors and the head fake turned into a dead cat bounce. Humorously (because I’m...

2 days have passed, and a ‘relative’ calm has re-emerged. OF COURSE Saudi was going to tap their strategic inventories to stabilize supply.  But what should emerge from this weekend is awareness: Awareness that when Saudi oil infrastructure is attacked, they can source their inventories knowing that when capacity is restored they can literally “open the taps”, re-fill them and global supply won’t miss a beat. After all, they have 3 mmbo/d of spare capacity. In the US (and Canada), we do not have a tap and THAT makes...

I’m a cynical guy but in the last week I’ve been in the rabbit hole with some dudes that scare even me and for the first time in my 50 times watching ‘The Big Short’ - I felt the need to watch it because I wasn’t sure I was cynical enough!  What a week! The oil disruption drove some E&Ps up as much as 50%. Ironically, the companies with a balance sheet worth owning were up much, much less. Why?  Because a lot of investors were...

Yesterday brought the energy industry a new headline: “US $hitcos Bailed Out by Houthi Rebels” In a dramatic and unexpected turn for the oil markets (at least one that didn’t include Greenpeace activists suspending themselves off a bridge using nylon rope, polyester vests, plastic hard hats and causing cars to idle waiting), a major Saudi facility that processes sour crude was attacked with 10 drones and damaged and impacted 5% of global supply. While it’s too early to project damage or long term estimates, as a non-journalist, it’s...

It’s been a heavy couple weeks!  Between the ‘Beatings’ series and a call that we have hit peak oil in the US, we haven’t had a chance to discuss how it is even possible that the mission statement of a co-working space could be “elevate the world’s consciousness”.  Remember when slack IPO’d using the ticker WORK and I (may have) suggested that it was the same as Brazzers going public using the symbol LOVE?  Don’t even get me started on WeWork.   The business model is to take out...

In the final segment of the series- allow me to present the ‘piece de resistance’. Before continuing- you may wish to review the “Dear Reservoir Engineers” beating to remind yourself that when wells are drilled too closely, they steal reserves from each other. I get it- parent-child; parent-cousin- that’s a lot of family dynamics but stay with me. ‘Stealing’ happens in two ways: lower b factors than the parent well and a higher terminal decline rate. So what?! Let’s do an exercise: Step 1....

I bet you’ve been just itching to see this post! EIA inventory data?! Be still my beating heart! Mr. Hot take, you are too much! Arcane. Yes. But like the DUCs, telling. Yesterday, we saw another 6.9 mmbo crude oil draw which surprised analysts. But it shouldn’t. Since June 7, the US has dropped oil inventory by almost 900 mbo/d. Per day! Seasonality be damned - 65 mmbo draw in 3 months is a lot. The last time we were at this absolute inventory level...

To read any investor presentation (that reminds me, I need a “Dear IR” beating)- you would think every Q is better than the last and any mistake is a non recurring charge (like high H2S charges being “non recurring”- that is true- you do only process that mcf once). But things don’t get better forever. The rock is the rock and eventually, you reach the limit of technology. I know- a lot of you just yelled at me: things about human ingenuity; you can’t predict...