“The magnitude of shareholder value destruction at Ovintiv demands a sense of urgency we have yet to witness from the Board and management team. Kimmeridge is prepared to help drive the change the company desperately needs by nominating directors to the Ovintiv Board at the upcoming annual meeting.” – Mark Viviano, Managing Partner and Head of Public Equities at Kimmeridge As we know with the #hottakeoftheday, anyone can start a website and send a letter to management, but Kimmeridge does it...

In #technicaltuesday, we are going to do a warmup for the YE20 reports that are coming in February and there will be A LOT to talk about so today we tackle a nuanced and complicated deal that was announced in November but will see all the fireworks this month.  Of course, I’m talking about the DJ roll up of Bonanza Creek and Highpoint Energy. What’s happening: Bonanza made an offer to purchase HighPoint.... but with a twist. Option 1: The HPR bondholders...

Deep in the SEC rules on oil and gas company reporting requirements and standards is the section that talks about disclosing "the standardized measure of oil and gas" (aka SMOG).  It's a simple, if not more controversial topic than I ever would have expected, but it's important when it comes to relative valuation and the ability for investors to assess the merits of the announced and soon to be announced deals. Those who push back on my "simple approach"...

American Express earned their spot on my Wall of Shame (and thus, never ever ever use again list) when in 2002, I paid my corporate credit card online 2 days before the bill was due, but was told to allow 5 days for electronic delivery.  I was charged a late fee and, upon discussion with customer support (service would be too generous), they refused to reverse the charges.  In typical DRW fashion (as you know from the book, I...

It's #technicaltuesday and this week, we do a quick look at a former Dow component Exxon. It's a behemoth but financial reports are really helpful. H1 '20 Cash flow from Operations: $6.3 B Cash flow used in Investing: $11.5 B Dividends paid: $7.5 B Additions to Debt: $22.5 B Summary: In the first 6 months of the year, they used $18 billion and generated $6.3 billion of cash flow. How did they plug that hole? Debt. Is oil price better than the average from H1? No (that...

With oil recovering $70/bbl, the glory days are back! OK, that’s not exactly true, but $30/bbl feels a lot better. What’s going on? At the trough of the lockdown, it is estimated that worldwide demand for oil was down 35 mmbo/d. That’s a whopping 35%! And while production cuts in May by OPEC+ of 9.7 mmbo/d, plus an estimated 3 mmbo/d from the U.S and Canada shut ins has helped, and as mobility data shows that driving is returning, we...

Buy low, sell high. Seems like a really easy concept.  The problem?  Emotions.  Emotion always seem to get in the way of sound decision making.  Last week, Shell reached an agreement to sell it's Appalachia shale gas assets to National Fuel for $541 million (and... if National Fuel wishes, it can pay $150 million of the proceeds in common stock).  Said Shell "The transaction is part of divesting non-core assets and in line with Shell's Shale strategy which focuses...

No company has both led the charge or benefited more from the oil shale revolution than EOG. Spun out from Enron in 1999, the love affair with EOG through the boom years of 2006-2014 was pretty intense. And why wouldn't it be, when you look at their history, they did pretty much everything right! In 2007, as Aubrey McClendon was funding the Clean Sky Coalition to prevent the expansion of dirty coal plants (yes, and reduce emissions, but...

Founded in 2002, Cimarex was born as the E&P spin out of Helmerich & Payne. It was the land before shale and the conventional oil and gas business was in decline in the United States. It was the time before horizontal Wolfcamp wells, before STACK cubes and before casual Friday's became "If you bring your brain to work, you can wear pajamas." Flash forward, tie on, to 18 years later and the founding principles (and principals)...

349 pages in a 10K is a lot to get through. But THESE 349 pages were a real page turner. Set primarily in West Virginia, our story begins on a dark and stormy night. Ante Ro, the first gender non specific hero to be featured in a DRW murder mystery, was depressed and lonely. Despite their wit, charm and incredible penetration rates (while drilling), they are unmarriable because of their spoiled children, named Debt, Leaseob...