I combined the Space I started with Sohaib’s continuation Space and felt it was easier to annotate a single file that everyone could access on the Substack. Thanks for your patience and your participation, and extra thanks to @sohaibab9 for running the vast majority of yesterday’s discussion with his trademark MC excellence.
00:05:00 @EnergyInvest0r and @WhiteTundraSG begin a discussion of $VET earnings.
00:08:30 Crypto’s mad at Shubham as he discusses how the Corrib acquisition was sandbagged prior to the earnings release.
11:15 @Michael71718318 joins the stage, and is enthusiastic about $BIR earnings. He wrote about them in his Substack, and thinks the firm should be part of every portfolio.
Michael also likes $PEY, despite its hedge book.
00:15:00 Michael and Shubham discuss $SDE earnings. Shubham likes companies that are making acquisitions and growing in this environment.
00:18:00 Michael discusses $BIR, its ability to increase production, and discusses inflation and a potential downturn — which will help firms with clean balance sheets — and provide buying opportunities for investors.
00:20:00 @HectOracle and Michael discuss the war, potential downturns and climate policy driving what we’re seeing today.
00:25:30 Michael is a “buy-stander” not a “sell-stander.” He is not selling his $PEY or $BIR or $WCP.
00:27:00 Michael mentions some other small-cap holdings and discusses how many holdings he has/what might be optimal.
Michael thinks $RBY and $HWX are undervalued. Sohaib is interested in asking Michael about this thesis in a future Space.
“The best way to get wealthy is find something that has legs and keep it.”
“I always bet on people.”
00:31:30 The Ukraine war ending might create a buying opportunity. Keep some cash on hand. One of Michael’s son did excellent work buying U.S. property in the last recession.
00:35:30 Michael discusses psychology, and closing out his $ARX position. The company has great assets, but didn’t even address their hedging in their conference call. Contrast with $CVE.
00:38:40 Blair-Tundra-COM could fix $ARX.
00:41:00 Telegraphing a potential pro-con discussion of $ARX and $PEY with @NachoTrust and @NachoTrust
00:42:30 @RazorOil meditates on the trade, MEG, FOMO and supply chains.
00:48:30 @EnergyInvest0r with more thoughts on $VET — any reason we shouldn’t own it? @IlliniProgrammr discusses NG and coal as alternatives.
00:51:30 @Zeal1203 discusses why E&P companies might be treated like legacy companies.
00:55:00 @BurggrabenH talks $TAL. At this point, I was kicked out of the room, and there is no host! Luckily, #COM doesn’t need a host most of the time, great questions are asked, great answers are given.
1:00:00 Alex discusses China, demand, dynamic lockdowns.
1:04:00 @IlliniProgrammr asks Alex what’s different this time? Oil stocks are treated like stranded assets. That will remain until people accept that oil is part of the energy mix for the long term.
1:09:00 Alex is becoming bearish and expecting a meaningful recession. But in 2023, it’s Groundhog Day.
1:12:00 Illini discusses how he’s dealing with volatility.
1:22:30 @JoeBeattie11 joins from the golf course to discusses puts and gamma dragging us down. He expects a pop next week.
1:24:30 @BurggrabenH shout-out to Joe for explaining refiners and the positive environment they are currently experiencing. More discussion of $TAL, FCF, and up to 24,000 BOE/D but are constrained by takeaway capacity. Alex talks oil doing a brief plunge in 2H2022, led by problems in China.
1:37:30 Alex talks about getting out of miners and keeping that money on the sidelines. Right now, Alex thinks shorting Glencore could be a thing.
1:42:00 Alex asks Sohaib about where he thinks oil is going.
1:50:00 @thebiglong9 No margin, taken a position, done discounted cashflows. He feels he has a big margin of safety. He has taken the bet and will let it run. We have major problems, but nobody knows if we’re going to have a session, and when everyone’s a bear, Big considers taking the other side.
1:55:00 @HollandStanley looked up the Euro Climate Laws, and says they’re trying to legislate dreams vs. energy reality. Alex discusses the bottlenecks that will keep this law from being successful.
All European carmakers want to be fully electric, and Alex thinks 2024-25 is when things will be reconsidered. Additional mining is extremely hard in N.A. and Europe.
2:02:00 Oil stocks will go up worldwide when the reconsideration is made, and the world realizes that going from 100M barrels to 90M is never going to happen. Oil equities will explode in 2025.
@davidtheG_13 asks about refiners. Alex likes them.
2:06:00 @BJamz2022 likes midstreams.
@ReserveList on the diesel shortage and issues with distillate production.
2:11:00 Alex discusses how Europe being built pre-oil makes it more efficient than N.A. because of electrification and public transportation.
2:18:00 @anasalhajji takes the stage.
Green policies, Ukraine, COVID, stimulus got us to the current situation.
2:24:00 Higher interest rates will kill green policies. Dr. Anas discusses the Sherman Anti-Trust Act, Standard Oil, and U.S. attempts to sue OPEC.
2:32:00 Problems U.S. will face in this lawsuit.
2:37:00 OPEC is not a cartel, but markets need management.
OPEC is an American idea!
2:44:30 If the U.S. is successful, Dr. Anas says likely scenario is that Saudis and other countries will abandon OPEC and maximize production to crash the market and bring Biden to the table.
2:48:30 If recession hits, summer driving season might not happen. The only bright spot will be oil demand in oil-producing countries.
Dr. Anas thinks this could turn a +1.5M demand increase into a -0.5M demand decrease by year’s end.
Alex doesn’t anticipate 1M barrel growth demand in 2023.
2:56:00 Saudi economy can withstand production increases. Rig counts are meaningless because there are way more active in KSA (and internationally, overall) than Baker-Hughes is tracking/reporting.
@4E93C4B107FEA2 says Russia makes money as long as oil prices are over $40.
2:59:30 @WallisMarsh talks about how 7” casing is $86/foot. Skyrocketing costs causing postponed drilling. If you’re not an established player, you can’t get rigs.
3:02:00 @Lava_Flow2 takes the stage. He said six months ago that it wouldn’t take much to pop the confidence bubble. Not one Twitter Space dedicated to meme stocks these days.
3:09:00 O’Hare reminds us that he was talking about refiners six months ago, and the sector has done well.
DINO (former Holly Frontier combined with Sinclair) has done well for O’Hare. He also mentions BPT (BP Prodhoe Bay Royalty Trust), though it generates a K-1 for U.S. residents.
3:13:00 Sohaib tries to diss $TAL. O’Hare recommends that the #COM diversifies into Canadian gold and silver. Ninepoint has some funds in this space.
3:16:30 @arnoldcklee Why do U.S. firms have a premium to #COM stocks? Why isn’t there more M&A?
3:23:00 Most fund managers have mandates to invest in U.S. firms or ADRs, so 99% of these guys can’t buy them. Liquidity is also an issue. Again, this gives #COM retail investors an edge!
3:28:30 @trentkelp on balancing supply and demand.
3:31:30 When is Germany going to stop using Russian energy? They cannot.
@timber001 engages with Dr. Anas.
3:42:30 With so many bears, is OK to be more bullish?
O’Hare has 25 stocks in his portfolio and is currently 11% cash. If a crash occurs, O’Hare will get hit — but his holdings are designed to avoid getting hit as hard as the broader market.
3:46:00 O’Hare expects a reflex upside move. That’s a good time to sell. You don’t want to sell into a panic. He also thinks the real selling has not begun, and we will be much lower at the end of the year.
4:00:00 @jeffchandler55 is skeptical of $VET earnings report. @InvestInOnG provides a spirited defense!
High-Energy Weekday