“If you can’t explain it simply, you don’t understand it.” Having a character limit helps focus the mind and today, we have a big topic. SMOG. The YE19 SEC WTI price is $55.85. Remember it is calculated on the 1st day of each mo and Jan 1 2019 it was $42.25. The PV10(0) threshold for most inventory in the US requires a higher price. This means that there will be writedowns on a large portion of undeveloped oil reserves. Notably, CVX didn’t mention...

In 2012, when I was ‘involuntarily separated’, I remember feeling hopeful that the asset would fail; the company would fail and everyone I worked with would cry for AT LEAST 6 hours a day to lament my departure. Turns out: it didn’t; it didn’t; and they didn’t. When you have a pre-existing narrative to fill, facts are pliable. No surprise! As I recount the story to my children: “nobody gives a f@&k it’s your birthday, so get over yourself, already.” And so it is with...

If I was doing two-a-days in the gym instead of on LinkedIn, I'd be thinner. But, I wanted to tee up the afternoon technical discussion for next week by closing the Midland series looking at completions. In the "Beatings" series over the summer, we spent a little time on the completion engineers, but not nearly enough. Next week, we will spend a lot more time looking at what larger fracs have ACTUALLY accomplished (as opposed to what people...

Does anyone else find it ironic that some of Ray Dalio’s biggest ‘fans’ are the least biggest followers of his core philosophy? Radical transparency. Well, it amuses me, so let’s take the actual principle and talk Compensation ahead of year end reviews. If compensation is truly linked to performance, why is it a social norm not to talk about your comp with your co-workers? Shouldn’t they be able to look at your comp and say “yeah, I agree with it”. Think...

I got into a discussion on Twitter about what discipline should be in the CEO role at an E&P. 280 characters isn’t a lot to work with so I’m taking it to LinkedIn. Before we decide on who should be CEO, we need to get the ‘G’ in ESG right. Boards want to focus on the E and S but those letters aren’t the problem: Governance is! But it’s hard to look in the mirror. Boards and MGMT that have been in place for...

Not surprisingly, the question I get asked the most is “Are you crazy posting on social media? What if...They don’t like what you say?! What if...They blackball you?!” Well. ‘They’ might. But truth be told, this is who I am, faults and all. So whether I post on social media or not- I’ve always called it like I see it and I won’t back down from a respectful discussion. I wear my heart on my sleeve, defend the principles I believe in and the...

ESG: The mother of politically correct topics. Even I’ve avoided it for months. Not anymore. The alphabet soup of buzz words: ESG now exceeds FCF. So much so IR is rushing to put a slide on it in the deck. Really?! Investors aren’t coming back for ESG-it’s just a really convenient way of saying “it’s not you, it’s me”. So let’s dive in: E. This is what our industry is! Safety.1st.Always. We are tackling emissions; we are amongst the most regulated and we happily exceed...

The OPEC+ meetings this week come at the tail end of the Saudi Aramco IPO road show and pricing Dec 5th. And yes, with 2.1 mmbo/d spare capacity, Saudi Arabia drives the macro supply picture. It’s why the market is on pins and needles but their patience and willingness to support price hinges totally on non OPEC growth projections: Norway, Canada, Guyana and the US for 2020. As I project US oil will decline from...

Sticking with the supply side of the equation, it’s worth looking more closely at the Haynesville. While it produces only 10 BCF/d, it’s one of the two plays in the US that hasn’t seen it’s rig count decline (the Bakken is the other one). Even more so than the Marcellus (which has seen rigs drop 30% since Sept 30), Haynesville well performance since 2016 has DRAMATICALLY improved in EURs, driven by higher IPs and lower decline percentages....

I know we were talking about natural gas supply but today, I want to shift gears and talk about political correctness. You might be surprised... I actually know quite a lot about it. I just don’t care.