1. Congratulations on picking up the pace in getting in rounds of golf.
2. Glad to hear your “unretirement” is enjoyable and worth the travel. Especially when you can combine fun and work.
3. Would whole heartedly applaud the oil & gas companies either taking themselves private or merging. Merging the right companies would allow them to gain synergies and extend the runway of proven reserves. Should enable the right companies merge it would lower their break even cost per barrel even further e.g XOM buys PXD.
I don’t see as big a reduction in cost related to going private, but for some it would allow them to increase their dividends by shedding certain costs.
4. What about the right majors buying companies who are in involved in carbon capture e.g. AMTX or others. The majority don’t have major market caps and would benefit under the umbrella of a larger company. AMTX needs to either sell its major profit source or gain larger carbon credits to grow.
Fully agree with James Robertson that the majority of these companies will not move unless an event causes this to occur or you talk them into it.
So I guess we have to wait for that "narrative-changing transaction" you postulate in your last Q&A. My personal guess is that something bad has to happen first to get oil companies willing to take the necessary risks you describe, so they can justify doing a deal that changes the current status quo. When I say bad, I mean something perceived as changing the beliefs supporting the current narrative. In my experience that can often take a long time and has to be really painful to get someone to change their belief system. What worries me is that these days, many people just "double down" on their beliefs, rather than contemplate changing them, even when things go badly. That's why I applaud your "unretirement", as somebody has to try to talk some sense into decision makers about energy.
Very interesting point of view. What about #4, pivoting to alternate complimentary business? e.g. BHP , a mining company, got into oil and gas. Oil companies getting into lithium
Arjun. What are your thoughts about a go private deal as an Option 3. Stock buy back on steroids as a strategy. This allows risk taking without the pressure of shareholders looking for dividend yield. The big question is where to get the capital and the cost of that capital. Is it time to find new sovereign investors?
Arjun,
1. Congratulations on picking up the pace in getting in rounds of golf.
2. Glad to hear your “unretirement” is enjoyable and worth the travel. Especially when you can combine fun and work.
3. Would whole heartedly applaud the oil & gas companies either taking themselves private or merging. Merging the right companies would allow them to gain synergies and extend the runway of proven reserves. Should enable the right companies merge it would lower their break even cost per barrel even further e.g XOM buys PXD.
I don’t see as big a reduction in cost related to going private, but for some it would allow them to increase their dividends by shedding certain costs.
4. What about the right majors buying companies who are in involved in carbon capture e.g. AMTX or others. The majority don’t have major market caps and would benefit under the umbrella of a larger company. AMTX needs to either sell its major profit source or gain larger carbon credits to grow.
Fully agree with James Robertson that the majority of these companies will not move unless an event causes this to occur or you talk them into it.
So I guess we have to wait for that "narrative-changing transaction" you postulate in your last Q&A. My personal guess is that something bad has to happen first to get oil companies willing to take the necessary risks you describe, so they can justify doing a deal that changes the current status quo. When I say bad, I mean something perceived as changing the beliefs supporting the current narrative. In my experience that can often take a long time and has to be really painful to get someone to change their belief system. What worries me is that these days, many people just "double down" on their beliefs, rather than contemplate changing them, even when things go badly. That's why I applaud your "unretirement", as somebody has to try to talk some sense into decision makers about energy.
Very interesting point of view. What about #4, pivoting to alternate complimentary business? e.g. BHP , a mining company, got into oil and gas. Oil companies getting into lithium
Arjun. What are your thoughts about a go private deal as an Option 3. Stock buy back on steroids as a strategy. This allows risk taking without the pressure of shareholders looking for dividend yield. The big question is where to get the capital and the cost of that capital. Is it time to find new sovereign investors?
Thank you Arjun. As always, your perspective is valued.
EXCELLENT