Jul
20
2020
Between Amazon increasing in value by $116 billion yesterday (more than 66% of all of Chevron's market cap) and President Trump posing in a mask, you may have missed the announcement that Chevron was buying Noble in an all stock deal with for ~$13 billion in what worked out to be a roughly 6% premium to Noble's closing stock price. This acquisition ends a long drought of deals and puts Chevron back in the news almost 2 years after...
Jul
20
2020
‘The Last Dance’, whether you are a basketball fan or not, is a reminder of why we love sports. To watch humans perform at levels that 7 billion other people can’t, is amazing. To witness the war that is sport, the focus and the commitment to the craft, the anguish and pain of loss, and the joy and relief in triumph, to me, there is no higher level of honesty and reality. No games. No politics. Simply performance.
In sport,...
Jul
20
2020
I am so freaking excited! Like breaking the seal at the bar after a few hours of drinking, Chevron has broken the seal on M&A with Noble! Tomorrow, in #technicaltuesday we will dig in but today, some qualitative comments.
1) Noble was highly levered, had disparate and scattered assets around the world (DJ to Israel and West Africa) and needed to do something.
2) All stock deal - as we have talked about at length, 100% of oil and gas companies in the...
Jul
19
2020
Today we go offshore to talk to Tim Duncan, the President and CEO of Talos Energy. We start in 2018 with their takeover of Stone, fly back in time to the beginning of Private Equity, to learning as part of a group before leading a team, and end in 2020 with a talk on the opportunities for Talos, Mexico, North America, the Gulf, and what advice he’d give himself in 2003.
#hottakeoftheday podcast #57 w/Tim Duncan, Talos Energy
https://youtu.be/vsXGdhLujkY
Audio Podcast
About Tim...
Jul
17
2020
I got asked a very valid question yesterday: if drilling isn’t economic at $40 and $1.80, why are there any rigs standing up at all?
The reason: a mix of debt, hope and boredom.
Debt:
Base declines of U.S producers are 40%. Many have LTM D/EBITA of 2.5+. With hedges rolling off, declines abound and lower prices, without capex, that ratio would exceed 4x next year and when the debt forgiveness ends, it’s straight to Chapter 11. It’s likely inevitable, but simply...
Jul
16
2020
Earlier this month, DRW was the featured webinar presenter for the Denver Association of Petroleum Landmen (DAPL), a non-profit organization of professional Landmen and other land-related persons that gather to increase their professional development. The webinar - MBA 101 - discussed the four things you would learn in an MBA: Strategy, Finance, Teamwork and Business Plans.
DRW on the DAPL Webinar
https://youtu.be/Dzxu7OWW-yw
Audio Podcast
Jul
16
2020
You know the start of the song: “duhn duhn duhn... another one bites the dust”.
In a world NOT supported by the federal reserve, debt is a real thing, and CRC was brought down by the mountain of debt it took in the spin out from from Oxy in April 2014, a time which happened to coincide with the start of the bear market in oil and gas.
As we have discussed in the past, Chapter 11 is a good thing....
Jul
15
2020
Journalism is dead. Or at least the kind we were taught to believe and respect. The freedom of the press was meant to be able to hold government to task, report the truth and in that, allow the freedom of speech and ideas to keep moving this country forward.
No longer. The Twitter mob, the progressive narrative and the ‘woke’ crowd are the editors, judge and jury. They select what is appropriate to talk about, and in a business run...
Jul
14
2020
Prime Minister Neville Chamberlain is most famous for his inaction during the late 1930s as Hitler re-militarized, repatriated the Rhineland in contravention of the treaty of Versailles, reunited the Fatherland by marching into Austria and Czechoslovakia and only lifted a finger when Poland was invaded on September 1, 1939.
Appeasement as a strategy has a long history of failure. Appeasement is yielding, inactive and not a solution. Whether it’s a response to environmental extremism, BLM, lawlessness causing $500 mm of...
Jul
13
2020
Every time I start writing this post, Tesla jumps to my mind. As does the year 2000, which coincided with the start of my career and my growing up. I knew I was grown up because at the convenience store I would reach for “The Economist” instead of “Playboy”. Big step. I also started to watch the stock market.
I didn’t understand the nuances but it seemed if you bought anything, it went up. Pets.com was a concept website for...