One question: how useful do you think are portfolio optimization concepts like efficient frontier in the E&P world for companies to optimize their portfolio of assets in a given basin (or all of upstream) in order to avoid over capitalization?
Excellent post as always Arjun. So often professional analysts and investors, people who spend all their time analyzing energy companies, get caught up in the price fluctuations (it's an occupational hazard as the price is always in the headlines and always changing, whereas the core principles aren't in the headlines and don't change); we should always keep those core five principles in mind.
Really great article and great history lesson. I remember thinking at the time the XTO transaction looked terrible but, hey, it was Exxon. Those guys always know what they are doing. Famous last words.
I find your posts thoroughly insightful.
One question: how useful do you think are portfolio optimization concepts like efficient frontier in the E&P world for companies to optimize their portfolio of assets in a given basin (or all of upstream) in order to avoid over capitalization?
Excellent post as always Arjun. So often professional analysts and investors, people who spend all their time analyzing energy companies, get caught up in the price fluctuations (it's an occupational hazard as the price is always in the headlines and always changing, whereas the core principles aren't in the headlines and don't change); we should always keep those core five principles in mind.
Another great piece - cutting through all the noise and focusing on what matters. Thanks a ton sir!
Really great article and great history lesson. I remember thinking at the time the XTO transaction looked terrible but, hey, it was Exxon. Those guys always know what they are doing. Famous last words.