Big Digital Energy

00;00;00;00 - 00;00;26;24
Unknown
Hey, Clyde. Welcome back. Guess who's back? Back again? The gang is back. We are so back. And we even got a studio one. We got studio one. Studio one. And, I mean, I've been gone for six plus months. Where the hell? Like, how much money did you guys raise? And throw into studios? This is freaking amazing. This is all Jacob team Jacob, man, this is all his decor.

00;00;26;26 - 00;00;53;24
Unknown
Although I'm bummed out that the, the Earl Campbell Willie Nelson photo I got. And Jacob, maybe you can throw that up, on the, so people can see it. It's in studio two, and it didn't make studio until my two my lifetime here. Yeah, but anyway, my bad. Away my original all time greatest wild. Our movie art when I saw Black Ghost.

00;00;53;26 - 00;01;20;27
Unknown
How can you not not have giant. Yeah. Good point. It made it into studio two. Or is it A and B? Oh, here it comes. Yeah, there it is. There it is. Harold? Harold! That's so cool. Is that. Now, what's so funny is I've seen Willie Nelson live at the first time I ever saw him in person. I was a kid at the Broken Spoke.

00;01;20;27 - 00;01;43;13
Unknown
Really high rise. Dude, I talk about, like, I could have touched him back. First time I ever saw Willie Nelson. Fort Bend County Fairgrounds playing the Fort Bend County Fair. I believe it was the year after George Strait played the Fort Bend County Fair. First time I saw Willie Nelson. I was a young adult. Amazingly, I'd listen to Willie Nelson growing up.

00;01;43;15 - 00;02;06;24
Unknown
Was that for his country store? And hello, this is man. Great venue, by the way. Awesome. In that patio dance floor went right up against the stage. And and the thing I love, he opened and closed with whiskey River, absolute whiskey River. Take my. So go ahead. Mark, where are you been? I mean whirlwind I've been in Nantucket fighting the good fight up there.

00;02;06;24 - 00;02;34;18
Unknown
We're losing the battle, by the way. Those. No way freaking. There's nothing worse than seeing offshore wind. And you can see it from the golf course. And when I'm surfing, it's behind my behind me usually. What a fucking nightmare. I mean, as energy guys. Not only is it so fucking expensive and will never pay for itself, but then you have the eyesore and then you're killing the whales and a big.

00;02;34;18 - 00;02;57;07
Unknown
And the birds. A big whale just rolled up on, on Nantucket shores. It was dragged out for about 35 grand to see, to be sunk. But the sea was angry that day. My friend, I see was angry, but actually trying to return is super deadly. Now I know why they call you snowbirds. People. Snowbirds? Because it gets cold up there.

00;02;57;10 - 00;03;17;01
Unknown
Yeah, I got it. It's good to be back in Texas. The accent is the accent coming, right? Can you park a cat? People in Nantucket don't really do that. I think they wear Ascot. And I think the Ascot must muffle the the. Yeah, good. It's not Boston. Does your Ascot do the same? It does. It's nice to say.

00;03;17;02 - 00;03;37;21
Unknown
So any update on how the update is? We're moving to Dallas. Big day. So city of hate. So when a city of dead. When a Longhorn. By the way, Earl Campbell, one of his famous photos as an oiler after he scored a touchdown. He's doing that. So I'm like, you don't have to do this. You definitely don't do this right.

00;03;37;24 - 00;04;00;08
Unknown
But you can do this. I'm married in SMU, girl. What do you do? She loves Dallas. So I think our bet was I'm, I'm wearing Aggie Suttle Aggie gear today, but I think my. At some point, I've got a put on the burnt orange. Oh, yeah. That's right, because we won. But I'm pulling for the Aggies in the in the tournament.

00;04;00;10 - 00;04;23;07
Unknown
In the playoffs I'm pulling for them. Well they got they got an unfortunate seed seven instead of 6 or 5. And they have an 11 a.m. slot. Hey hey let's just say and I know the Longhorns on please go ahead and text me your hate. But I like Elko because at least he has some fire in his belly.

00;04;23;10 - 00;04;43;11
Unknown
You know what Sark told his guys after the win and every loss. This is an A and what a belly it is he always talks about. Hey guys, I'm going to buy a snow cone. It's okay. It's hard playing in the SEC. I mean, no wonder we didn't make the playoffs. But you you had a good point and we were texting game day during the game.

00;04;43;11 - 00;05;22;26
Unknown
And you said when it was all done. And I trust this instinct because you just you just felt it coming. And I guess somewhat subconsciously I did too. Maybe you spent your burst of energy clawing back against South Carolina, but what a rivalry games mean. I mean, when you when when you have a team undefeated on a huge high and you go into your rival you haven't really seen and how long, how long has it been since they resumed what, last year?

00;05;22;26 - 00;05;52;07
Unknown
But yeah, but you haven't really seen in a long time. You know, it's like pre bonfires, a distant memory. And in most kids they don't even know what it is anymore. So you walk into Austin and everyone's telling you about these this rivalry that was famous. You don't really know anything about it. So your expectations totally change. They change from just a an okay SEC team to oh, it's a big rivalry.

00;05;52;07 - 00;06;12;17
Unknown
We gotta we probably could lose. I mean we just put down it just put down and the Aggies and then the Longhorns have nothing to lose. Arch is getting you know his his feet under him and coming back for another year and coming back for another year, making millions. You should as well. I will say this. I'm a Del Conte fan.

00;06;12;19 - 00;06;31;00
Unknown
You're athletic director. He's he spent some time over in your neck of the woods. He was he got his first aid job at rice. And my favorite Del Conti story that I probably already told on this, but. Oh, well, I'm rolling. Chris calls me one day and says, Chuck, man, I really need a big donation this year.

00;06;31;00 - 00;06;48;04
Unknown
Gosh, you know, fiscal year ends in five days. You know, the administration's going to come after the athletic department if we don't make our numbers. I'm way behind. I really need your help. And I went Christmas saw the sky go down. You're going to say a number and I'm going to say yes or no. Don't get too greedy because I will say no.

00;06;48;06 - 00;07;10;25
Unknown
So just bid accordingly. And to his credit Chris goes, all right. And it was a painful number. But I want all right, Chris, I'll do that. But I need one favor. And this is kind of pre the change in the rules. So the way you were able to go eat dinner and hang out with the players and it not and it be legit is if they had your scholarship then you were their sponsor.

00;07;10;25 - 00;07;29;14
Unknown
You could do okay. You could do a couple of dinners a year and that sort of stuff. I said, all right, I need Anthony Rendon to be my scholar athlete. And Dale can't take us. All right. I got I got you, Chuck. Great. So about two weeks later, I'm at dinner with Rendon and we're sitting there talking. And Rendon is a great guy.

00;07;29;15 - 00;07;49;03
Unknown
Love Rendon. And we're sitting there talking. How much gold? How much gold did you have on at that? At that dinner? At the dinner? How much bling? I'm not sure that that mean that may have been pre really blingy Chuck. Okay. But don't know. So anyway, I'm, I'm sitting there with Rendon and kind of in the middle of dinner.

00;07;49;09 - 00;08;15;26
Unknown
Rendon casually mentions, yeah, man, I'm pretty tired. This is the 12th dinner that, Duncan does have me do in the last two weeks. I called the God Day all the way up. I'm like, you son of a bitch. You said you didn't say exclusive, Chuck. And I said, well played, Chris. Dude, by the way, when I'm. I've been called a carpetbagger because I left Houston to go to the University of Texas and stayed in Austin until 2010.

00;08;15;27 - 00;08;49;16
Unknown
Came back. So fuck you'd all those people that call me carpetbagger, but whatever. I came back to Houston as a huge pro rice fan, I love rice. It's a great community, university here in Houston, but my allegiance is changed. And I want to shout out to Trey will continue out a knee replacement on Monday. Who is president of the alumni association for the University of Houston Cougars.

00;08;49;18 - 00;09;07;07
Unknown
And a buddy. But stab in the know. A buddy of mine went to Georgia Tech, so he lives in Houston. We grew up together. He has season tickets for the UAH basketball team. And damn it, dude, I he asked me, he's like, do you want to go? I was like, I have nothing better. Do it. Let's do it.

00;09;07;10 - 00;09;32;27
Unknown
What a fucking great time. Yeah, Sampson's done an amazing job, dude. What great time. Samsung Fertitta have done a really nice. I wasn't moving moving to and I. Then I checked season tickets for SMU. So now I'm an SMU fan. But I'm like you of age. I'm inspired by that team. Yeah, well, it harkens back to our being enamored with you of age.

00;09;33;03 - 00;09;51;28
Unknown
Back as a young man when five Slam and Jama was on its run. Well, yeah. I mean yeah. But to you. But there was nothing like that. In fact, I was at A&M. I think a lot of ones you Ralph Sansom, Olajuwon we would go to G Raleigh White Coliseum, which is just an absolute barn. Do you go see five five Slam.

00;09;51;29 - 00;10;18;10
Unknown
Oh yeah. Yeah. And, and and I said Ricky Pierce, who wound up being sixth man of the year a couple of times in the NBA and those were some duels at half finds and a do you remember the days though this is non-existent I had Trey. So Trey who used to keep score for the rockets and I mean he loves he has a he's a really successful business guy that loves being scorekeeper and being involved.

00;10;18;12 - 00;10;38;18
Unknown
He's like, that player is only going to be here for one year, and that player's probably going to leave after this year too. What's up with freshmen going and playing basketball and then leaving for the NBA? When did that start happening? That's been forever. That's the forever. That's the Calipari model that he was the one and done.

00;10;38;18 - 00;10;57;10
Unknown
Yeah. At Kentucky, he basically said, I'm just going to get the most talent I can, and each year will be a new adventure. Yeah. And it it it was a response to, okay, we're not NBA is not going to draft out of high school. Yeah. So it's just one year one is it used to be you know you so long as you're 18 you could get drafted.

00;10;57;10 - 00;11;17;28
Unknown
And you had Kevin Garnett and those type guys. There is no draft anymore. Yeah there was one. There was one, there was one. But then they changed the rule of you had to play it. You had to be, I think 19 or 20 and play at least one year in college. So that that kind of morphed that this is great at BD, where maybe an energy podcast will come out of it.

00;11;17;28 - 00;11;41;10
Unknown
But right now it's this is so much fun. Yeah. Good to see you boys. Good to see you as well. You want to kick us off about Ford or. Yeah. It's, I guess it's the auto industry version of BP. Yeah. Which Ford? Which we'll talk about here again in a minute, but pretty big splashy news, $19.5 billion impairment.

00;11;41;10 - 00;12;07;23
Unknown
You know, EV division, which we've been talking about. They were the only one of the, I believe the big three that would actually in their reporting break out their EV division. Well losses to date are 13 billion and counting. And so you know this is a big I think massive reality check that we have been talking about for some time.

00;12;07;25 - 00;12;31;17
Unknown
Naturally there's a pivot pretty hard back to focus on what makes money, which is your ice vehicles. You know, the unit projections. You can go back to Toyota with the introduction of the Prius back in the mid 2000. And that projections of capture of, I don't know, 5 to 10% of total US auto market, you know, stalls out.

00;12;31;19 - 00;12;55;10
Unknown
This is even more I think more of a hurdle. So they gave it a fair chance on performance. It's like, hey, here's our truck. We're going to make an electric version of it. Market. Go decide. Yeah. And market was pretty significantly decided. My own personal opinion is what they miss for F-150 buyers, which is their flagship vehicle and has been for 40 years.

00;12;55;12 - 00;13;27;11
Unknown
That profile is, I think, somewhat disconnected from an EV aficionado, right? Absolutely. Especially if you're actually using the truck. I do believe that most f-150s, especially platinum's, are just let's just assume these up here. Didn't Colin want one of those or didn't you? Didn't you want to lightning early on. Yeah. But you know and he's he's been a he's been a an advocate for his his Tesla experience and full self-driving.

00;13;27;11 - 00;13;59;20
Unknown
Although he did tweet out the other day that he was complaining I think about version 14 of FSD had all kinds of problems. You know, why did why did we have to upgrade? I don't remember exactly the verbatim. Right language. But, you know, Colin has been nothing but positive on his Tesla experience. I think part of it is the is the, irony of an oil boy driving an EV, but yeah, it's it's been a good experience for him.

00;13;59;27 - 00;14;31;13
Unknown
And, you know, good on Ford for finally thrown in the towel. I don't know if they've thrown in the towel. I guess they'll still have, you know, some allocation of people and resources to. And it probably shifts more to focus on on hybrids. But you know, this whole rollback wave and ESG and climate, Europe eliminated its ice ban, like California recently, you know, by the way, Harvey Air boss was all over it this week.

00;14;31;18 - 00;15;03;25
Unknown
You know, we've we've set a new global record gasoline demand in the IEA. Oh, sorry. Snuck that. I read that stuff to Holly, and she spit tanked. It was so good. No. And the IEA is projecting an even higher number in 2026 when I was raising energy fund eight, call it circa, 2018. I mean, it was all the rage in the LP community that electric vehicles were just going to blow away the internal combustion engine and nobody would use oil.

00;15;03;25 - 00;15;33;24
Unknown
And in ten years. Right. And, they had a big conference and they asked me to come speak on it. And I got up there and I said, let's read some headlines from The New York Times. And I start reading, the electric vehicles are sexy electric vehicles performance electric vehicles are this and that and that. And then I just kind of methodically went through, hey, there's 300 million cars in America right now, and we sell about 7 or 8 million cars a year.

00;15;33;27 - 00;16;00;09
Unknown
And just because you sell your car, you trade it in, doesn't mean it leaves the road. It's still there. So if you kind of work through the math, even if electric vehicles take over 50% of the market. So there are 3.5 million of them a year, ten years from now, we'll be 35 million electric vehicles on the road and 335 million internal combustion engines still on the road.

00;16;00;09 - 00;16;21;18
Unknown
Because cars today last forever. I mean, whoever gets rid of their car because it doesn't work anymore, you want a new car. So anyway, I, I go through all that math and I go, you know, plus the electric vehicles are using plastics which comes from oil. I go, oh, demand still going up, blah, blah. But and I get this tepid response clapping.

00;16;21;23 - 00;16;42;18
Unknown
And I walked off and then I came back and I said, oh, by the way, those headlines I read you from the, New York Times. Those were from 1916, 1917 and 1918. Electric vehicles have been around for 100 years. Guys, this is nothing new, and I gotta I gotta look, I wonder what the batteries were like back then.

00;16;42;20 - 00;17;14;27
Unknown
Yeah. You know, my my my my Tesla nameplate was supposedly 250 miles, but on a good day, it was 200. Here's what I think. The bigger point that we're missing here and the Ford announcement, is that those damn climate people actually reverse climate change. I mean, we don't need electric vehicles anymore. That's what's the amazing piece. Second show's always tough on the face, I think like this.

00;17;14;27 - 00;17;50;27
Unknown
And I'll move the BP piece up, but like this. This is a this is a very expensive example of allowing stakeholders other than or stakeholder priorities other than your primary stakeholder, which is your shareholders in influence strategy and capital allocation to a significant degree. I mean, 90.5 billion isn't nothing. Yeah. Well, I think about, and we should I mean, I haven't someone else could probably, articulate this better.

00;17;50;27 - 00;18;26;28
Unknown
But if you look at how much money has gone into private equity, the Elliott management of the world, where a few people have a lot of cash, trillions of dollars, where they can control management teams, boards of these very large companies to impact their decision making, because that's really what has changed. What's changed is you had pension funds and so forth, but now you have all this LP money that that they're active, they have a lot of money and they're very controlling.

00;18;26;28 - 00;18;45;16
Unknown
And that's something that you we haven't seen in the past. I mean, you know, before Exxon is going to be Exxon is going to be Exxon. Now you're talking about this fire engine guys that can maybe impact some Exxon decision making. Now they've done a great job of saying, you know, this is what we do. We've always done it.

00;18;45;16 - 00;19;28;27
Unknown
We make generate returns, etc. they have good data, but you have these LPs that are super powerful. I think that's a well, I think the same is true on the public side that we saw in the years that were leading the crescendo. Here is you had a lot of index funds, passive, who were, you know, the decision makers from a proxy voting standpoint were certainly not the individuals that were invested in these funds, but it was you know, it was fund managers and CIOs and which we won't name, but, you know, had had an agenda that was dominated by all of these social issues.

00;19;29;00 - 00;19;51;19
Unknown
Yeah. Or or dominating a position that they can control. Let's just take climate change, for example. If you stand to benefit from it and you can kind of control the narrative and get a position on it, like they're they're not going to get a huge position in Ice vehicles or, and oil and gas because there's there's so much money all over the world.

00;19;51;19 - 00;20;14;07
Unknown
But if you're like, wait, this is a relatively I mean, climate change bit around you used to be called pollution, blah, blah blah. We've talked about it, but climate change is an issue that a few people could get a massive stake in. So they've put a big investment behind this issue called climate change. Then they can control it, then they can benefit the most from it because they have so much capital tied up in it.

00;20;14;07 - 00;20;37;09
Unknown
So I think a lot of it is well, sure, they care about I don't know if they really care about the social issue, they care about the fact that they're profiting from it. And that's that's what we have to. That's why we've been diligent in calling those issues out, because, you know, the people on the street just don't have the bandwidth nor the capability to to do what we are doing here.

00;20;37;09 - 00;21;07;00
Unknown
So give yourselves a pat on the back. Good job guys. You know, the virtuous is that pat myself on the back twice in a day, right? Yeah. The virtue signaling benefit provided ample cover for them to pursue that. Yeah. That agenda. Yeah. So BP Maria Klaus, who has been combined interim and permanent permanent CEO a little less than two years, is was announced yesterday is stepping down effective today.

00;21;07;03 - 00;21;12;29
Unknown
He will remain an advisor through, I think the end of next year.

00;21;13;02 - 00;22;02;24
Unknown
This is I think symptomatic. You know, he came in laid out for their investor day that there was a much more aggressive pivot back to, you know, the the the core legacy business of oil and gas and pulling back hard on portfolio allocation to all the renewables. And BP had gone out way over its skis. If you remember, committing hundreds of millions to offshore wind leases in the North Sea, etc. and, you know, this has been BP's M.O. for as long as I've been aware as an adult is, you know, being a bit more, risk taking on on the newer progressive things, this latest round of, you know, renewables push.

00;22;02;24 - 00;22;34;28
Unknown
And we think back to, you know, them deliberately saying we're going to, we're going to target a pretty significant contraction in our oil production between now and 20, 30. I do think there's a new, new chairman, last name manifold. I forget his first name from outside the industry. And then you've got, you know, the persistence of Elliott, I think.

00;22;34;28 - 00;23;00;09
Unknown
And this to me is, look, it's not happening fast enough. It may be fast for the culture of the super major. I guess I can still put them in that category over there. You know, again, it always, always do a double take when I see that kind of a Phillips is much larger than BP, but that's. So, you're bringing in Meg O'Neill from Woodside.

00;23;00;09 - 00;23;28;22
Unknown
Say that again. ConocoPhillips is bigger than BP market cap. Yeah. Oh my goodness that's ridiculous. Surprise. Somebody with that. He's from Dallas meaning. That's right I mean I think it's been for a while, but Meg O'Neill from Woodside who's in Exxon Legacy will take over in April. And I forget who they appointed as interim. So we you know, Murray's gone.

00;23;28;22 - 00;23;49;21
Unknown
We've got, what, four months now until the new CEO shows up. I think that tells you about a little bit about the tone and the temperature. Yeah. In that in that boardroom. And there's in the article that we attached, there's a relative performance graph for, you know, all the majors. There's a clear line of separation between Exxon and everyone else.

00;23;49;24 - 00;24;08;17
Unknown
And BP is only better than total. You know, at current the index line and the one dragging along the bottom is Woodside. I know which ironically. So what do we know about Meg? I know nothing.

00;24;08;19 - 00;24;37;17
Unknown
Maybe she'll come on, I think. Come on BD is Exxon DNA. That's what I know. Which is probably a good thing for BP. Yeah I mean the GE model, the Exxon model, you grow from within, you teach people, and then you throw someone that sort of drinks the Kool-Aid into CEO. And it works for a giant company in which you don't want the strategy to change that much.

00;24;37;20 - 00;25;10;03
Unknown
You want to just continue to execute, continue to operate at excellence. But BP is a company that exemplifies, if you don't stand for any for something, you stand for anything. And it's been blowing in the wind just being whipsawed. And so I find it interesting because I've, of course, hung out with a bunch of these senior executives from oil majors, and they're impressive because they've been able to fight sort of the corporate game.

00;25;10;05 - 00;25;31;14
Unknown
They're very unimpressive because they don't have a lot of their own ideas, and they don't have any real leadership experience to lead a company. They have experience. If I've been an executive and I've been staying in my lane, because if I go out of my lane, I get fired and I'm afraid to. So you keep putting. I'm not losers.

00;25;31;19 - 00;25;57;02
Unknown
As CEO, they have no business being there because they don't know how to lead BP out of it. Well, and you know what the damnedest thing is? Like every former BP employee I've met or done business with wildly impressed by Jane Doe, Jane Stricker, there's great people there. I'm not saying the Treadstone management team was amazing. This. I was about to cue that comment.

00;25;57;08 - 00;26;23;12
Unknown
You and I didn't even have to. Yeah, I'm a you know, I search you greatest the greatest hits. But, you know, the Cavallo, the stallion management team, all BP and just amazing. They execute ideas way different than BP. Or do they execute what they did? And that's the whole thing is, is you look at when it's all together and it's the Borg and stuff, and BP is just a cluster mess.

00;26;23;15 - 00;26;46;01
Unknown
But when you meet these people individually outside of the Borg, do great things. So I have the same view. And so it's kind of a it's my point is it's a culture thing. It's not a people thing. I have the, I also have the unhelpful anchor of Exxon DNA bias, but I have the same impression on all the BP people that I've encountered in my career.

00;26;46;01 - 00;27;21;15
Unknown
So I'm not talking about people. I'm talking about one person. Right? The CEO and it's a very different role than another executive VP that my job is exploration, my job is downstream, my job is. And clearly with the new chairman, there's a much more, blunt and broader perspective that's been brought to bear. And in making this abrupt decision, it's the second abrupt CEO succession with Looney.

00;27;21;15 - 00;27;43;11
Unknown
And and you know when I can close took over Looney leaves amid scandal and then now this I do think it's illuminating maybe does Looney know the head coach former head coach of Michigan. How did you get in that somehow? Wow. There's a little stretch to do it, but I, I got there, I did get there. It was on my mind.

00;27;43;14 - 00;28;07;02
Unknown
I think it's ten minute 29 and 45 seconds, my boy. Got it. If you're going to do this, I think it's telling that, you know. Okay. It's what December the 18th. You've got your successor coming in in April. You're going into your in, but you announce now and you've got an interim for that short 3 or 4 months period.

00;28;07;04 - 00;28;34;29
Unknown
Yeah. Be interesting to see what the interim does. Is there a clearing you know, house clearing or is it literally just keeping the seat warm until Meg shows up? So to close this round out, given all the structural. Problems that are in the market, I had Mark Viviano on for a session earlier this week. We're talking about public markets and started off a new direction in the number.

00;28;34;29 - 00;28;48;16
Unknown
But where is energy weighting relative to the S&P? It's a 2.8%. And the notion that, you know, look, we're.

00;28;48;19 - 00;29;11;26
Unknown
When fund managers are looking to increase exposure to energy. So if there is this rotation opportunity they're kind of sticking with the top five. But in terms of size I wouldn't call it a and I would just avoid it. I mean why don't why don't we do the grandma to us and ask, grandma where do you want your dividends to come from?

00;29;11;26 - 00;29;43;14
Unknown
Right. So I guess I'd close it out by asking, you know, do they have a snowball's chance in hell in closing this gap? Well, I find it the huge irony of being a European, and I. Okay, Londoners or Brits, you've you've exited out of Europe. Okay. But the Europe is bored. Bored lead not CEO lead. And American companies are CEO lead.

00;29;43;16 - 00;30;07;25
Unknown
I find this super interesting that BP is kind of acting American or they keep firing a CEO and no accountability across I mean most of these board most of these are just like as CEO, I don't have very limited powers. I can't do very much. But BP keeps acting like an American company. Is that because of Elliott? And it's it's LP base has turned.

00;30;07;28 - 00;30;36;17
Unknown
I'm just it's just I it's very ironic how BP is is once again beyond petroleum. They keep acting so strange. They go all in on climate. They go all in on these CEOs that are terrible. I mean, Meg is walking into a shit show. I bet she's getting paid well. But I mean, maybe someone's telling her you're going to do a great job, but Woodside's not something to brag about.

00;30;36;17 - 00;31;00;12
Unknown
I mean, what is is this a hire based on. We need someone that knows BP culture and can maybe get back to its roots. Or what is it you got 1 or 2 choices. You can go just in effect, gussy the, company up for sale and go get buried and, to one of the other super majors or ConocoPhillips for that matter.

00;31;00;14 - 00;31;21;13
Unknown
You do that. Or if you're going to be serious, the headquarters moves to Houston, Texas. Hamm. Dude, don't say it. And, and there's, you know, we talked about shell. There's a guy sitting in, sitting in Santa Fe, New Mexico, Scott Sheffield, that might be available to join the board. A real live oil and gas guy.

00;31;21;14 - 00;31;42;01
Unknown
A lot of expertise there. See a board shake up, see, headquarters move. Then we'll know she means. Well. The reason I'm in, I'm in Houston for the month is. I mean, BP has called, okay, but I'm in Dallas. I'm moving to Dallas, so it's going to be maybe we'll move, you know, with next to the Exxon executives.

00;31;42;04 - 00;32;06;20
Unknown
But Sheffield call me the you you're available. I'm available. So if BP does make this extreme move, will you commit here to moving back to Houston? I mean, I mean, you send the jet, in private jets changed a lot. Like, dude, who are you and asking? Holly, would you move if Kirk say sorry? Holly able to run BP the.

00;32;06;20 - 00;32;46;05
Unknown
And I think the answer would be a hell no. That's probably a hard no, but all right, you're probably land. Yes. Fire away. So I was just researching on my phone, and I saw this oil price article on a Cambridge bid for ascent. Yep. 6 billion. What's that all about? Right. Well, embedded in that is, you know, the spark of this was, EMG, which is a 30% holder of the sun is, approved a transfer of its ownership to a new continuation fund.

00;32;46;07 - 00;33;08;28
Unknown
And I've, you know, I've heard and seen bits and pieces of that in private equity land. But Abu Dhabi is, is suing EMG as a result of, you know, what they claim. They claim self-dealing and, you know, all the typical stuff. And so Cambridge coming in over the top as an outsider, putting a $6 billion number on the table.

00;33;08;28 - 00;33;31;20
Unknown
And I believe the transfer valuation values the company at like five and a half. I think that's directionally what was was in the article. So just curious, you know, Mason capital is one of the investors in a sense. So they're they're jumping on board with Abu Dhabi. I don't think they're party to the the plaintiffs side of the suit.

00;33;31;20 - 00;33;54;16
Unknown
But it was just intriguing to me because this is we haven't seen this in a while or maybe we haven't seen it in the public domain in a while. Kind of how common is this? And yeah, let me, let me give let me give some color there. And I've got actually a great Chuck Yates Needs a Job podcast with the guys from Stevens where we talked a lot of continuation.

00;33;54;19 - 00;34;29;03
Unknown
We put that up and that was a maybe that was maybe a year, year and a half ago now it was in the it was in the spring because, Warren Stevens had already been named ambassador to, England. Let, let me step back. So basically what a continuation vehicle is. You have a GP such as EMG, natural gas partners, whoever, and they raise energy fund a, for example, an energy fund a will will own a company like, cent.

00;34;29;05 - 00;34;50;23
Unknown
And at some point, historically, you invested, you grew the company, then you sold the company. At times you weren't able to sell companies. And so what happened in this happened in all of private equity. This isn't just an energy phenomenon. You'd have a company that it's not the ideal time to sell. But the fund was long in the tooth.

00;34;50;23 - 00;35;34;03
Unknown
Maybe it's eight, eight years old, ten years old, something like that. So you would go out and find new investors, create a new vehicle, and that new vehicle would buy the, the old investment from Energy Fund eight. And in this example, in this example, EMG is serving as GP of both of these. And and so the way you kept that fair that the market was kind of like, okay, is the offer was we'll pay you X for this or LP, if you don't like that offer, you can just roll as equity into the new vehicle.

00;35;34;06 - 00;35;58;17
Unknown
And so that was always kind of the way it was perceived as fair. What happened over time was LPs got suspicious. And I want to be really clear here. I know nothing about EMG and ascent in terms of this situation. So I'm talking in general. In fact, I will say this I've only had nothing but positive experiences with all three Raymond brothers.

00;35;58;17 - 00;36;17;00
Unknown
I'm a big fan. I like all those guys. John was always good to me. Rob was on my advisory board back at Kane. Great, dude. I did a deal with Colin on a handshake. We literally bought an asset, and Colin and I just looked at each other and said, dude, this is going to cost too much, too long to do a PSA.

00;36;17;00 - 00;36;41;05
Unknown
Can we shake hands and just we're not going to screw each other. So I'm a big fan there. I love the folks at ascent. Serena Bucks, one of my favorite people, the head of land there anyway, so not having to do with them. But what happened over time was LP's got suspicious. They kept saying, are you truly maximizing the value of my assets because you're really just selling to yourself so you can keep management fees going, you know?

00;36;41;05 - 00;37;12;16
Unknown
And at the end of the day, as a GP, if the management fee is 1 or 1.5% or maybe even 2%, it's pretty easy to talk yourself into, well, it'll be worth 2% more that next year, sort of hold it for another year. And so kind of that permanent management fee is why some LPs have pushed back. And so we just we vote no to every continuation vehicle because you should be out there maximizing my asset and running a full out auction for it.

00;37;12;19 - 00;37;43;16
Unknown
Yeah. So and you know, this gives the Legacy Fund LPs an opportunity. It's an optional liquidity. They can participate in the new fund at that valuation. But you know I guess the spark for the, for Abu Dhabi is saying, you know, if if I take liquidity here then I've got, you know, marked down. Yeah. Relative to what I think the value is.

00;37;43;16 - 00;38;12;19
Unknown
Right. But the point is the continuation fund is really to create an off ramp for maybe some of those LPs feel like this is long in the tooth. I need liquidity and you're inherently going to get a discount when there's not a natural oxide market transaction. Yeah. And the and the the the the LP have gotten kind of jaded and sour on these continuation vehicles of.

00;38;12;21 - 00;38;40;15
Unknown
Yeah. But you didn't try to maximize the value for me, you know. So why is it five and a half versus rolling. It should be seven versus rolling. And now you have a higher marker out there in the form of the Cambridge bid for 6 billion. And the more I thought about it, the more it makes sense. Just given what Cambridge is, private equity side has been about for a number of years, which is building a legacy levered business.

00;38;40;15 - 00;39;01;21
Unknown
You know, they're the ones out there doing the 20 year Spa is for LNG. They've opened an office and in the in the Emirates, Cambridge, Texas Gas, etc., etc.. So from an asset profile standpoint, as a makes makes sense. And so I think the you know and.

00;39;01;24 - 00;39;29;14
Unknown
Not having a view into how the internal valuation marks period over period. Look you do have this half billion dollar separation between this $5.5 billion implied value on the transfer to 6 billion in a bid which is an A, you know, it's it's not a real thing yet. It's just, a bid. And then you get into perhaps an auction situation.

00;39;29;16 - 00;39;57;01
Unknown
So I just really thinking about maybe can over this today, just giving people a window into the mechanics that are, that are not always publicly. Yeah. Transparent. Yeah. Definitely. Definitely. Go back and listen to the the Chuck Yates needs a job with Keith Burns. From, from Stevens because we went through a lot of this kind of the history of continuation vehicles.

00;39;57;03 - 00;40;21;04
Unknown
All right, well, let's, hit one real quick. Trump blockaded Venezuela and true social post on, I believe is on Tuesday, quote unquote, the largest armada in South America's history like nobody has ever seen, of course, which is always, always the that on to any kind of statement basically targets us or, the tanker fleet that has been sanctioned by the US.

00;40;21;04 - 00;40;51;27
Unknown
And Bobby McNally was commenting, look, this is on a macro basis, global supply and demand. It's about 300,000 barrels a day. It doesn't move the needle. But from a revenue and income standpoint for the for Venezuela, it's it's it's going to bite. And so there's a whole host of issues as it relates to Venezuela. We had the election previously and Maduro sticking in his heels were, you know, were taken out drug boats.

00;40;52;00 - 00;41;14;25
Unknown
We got the whole immigration wrap around. But one of the things that that Trump did reference was, you know, the oil and land and other assets that were quote unquote, stolen from the US. And that hearkens back all the way to the nationalization, waves that took place when Chavez came to power back in. Was it 98, 99.

00;41;14;25 - 00;41;37;25
Unknown
And then prior to that, we had, you know, pretty high profile nationalization and in the 70s, I got I got kind of two thoughts on this one. I don't think Trump has done a good job of making the case to the American people. Now, I need to go and watch the speech from last night because I didn't I didn't see it, and I haven't really seen highlights.

00;41;37;27 - 00;42;02;19
Unknown
But of making the case why we're doing all this. So I think it's incumbent any time you're going to put the military in harm's way. The American president needs to thoroughly that the case with the American people. I think that your obligation as commander in chief. Second thing, though, that I will say, and I hate to be defending Trump, the dude really hates drugs.

00;42;02;22 - 00;42;26;03
Unknown
I mean, we've talked about that on here. I mean, that is a real thing. His brother died. His brother hero died of alcoholism. He has been anti-drug and I'm willing to give him a little bit of the benefit of the doubt that he wants to get rid of the drugs, that that's a real thing for him. And so, I mean, I think send in the National Guard in, to these places.

00;42;26;03 - 00;42;51;04
Unknown
Part of it is I want people to stop dying from fentanyl deaths, you know. Well, I think also, when you travel abroad and you run into embassies and talk to people that the State Department, their job is to help you as an American be successful outside of the US. Now, here in the US, you don't. It's like, how can I be give you special treatment versus someone else?

00;42;51;04 - 00;43;15;21
Unknown
But I actually think we should say, look, when when a country does bad to our citizens, we need to make good on that. I'm totally good with him saying, look, you nationalized and screwed a bunch of our companies and people. We're going to take it back. I have no problem with that. I think there's something that, as we need to be a little bit more nationalist.

00;43;15;23 - 00;43;43;00
Unknown
I mean, Putin's doing it. I mean, a Roman citizen could walk freely anywhere in the world because the fury of the Roman government, when a citizen was hurt, everyone knew that would be imparted upon them, and they left the Roman citizens alone. I don't know if you really operate like that as a superpower these days without having more benevolence and grace, but there was something to that.

00;43;43;02 - 00;44;14;06
Unknown
We we've we've alluded to it before. I think it still hasn't gotten, the airing out in the profile that it deserves. But if you think about what's kind of filling the vacuum in Venezuela is China and Russia. And so, yes, this is a Western hemisphere, formerly one of the richest countries in the world. But, you know, rushing into the void and this isolation.

00;44;14;06 - 00;44;41;16
Unknown
So is there, is there an indirect force with these sanctions, with the embargoes, with the, you know, with the drug interdiction that, you know, you're you're you're causing more pain for the Venezuelan citizenry? Does this, you know, ultimately result in an organically driven regime change? And I do think that there is like the arm twisting with OPEC.

00;44;41;16 - 00;45;05;04
Unknown
I still believe that happened earlier in the year right after inauguration on the investment swing. You know, is this more drill baby, drill by proxy using Venezuela as a lever this time because Chevron's the only one of the US multinationals that's in operate. And it got it's it's it got its license restored. Trump. That was one of the things that he did.

00;45;05;04 - 00;45;27;25
Unknown
So and as we know, Venezuela is sitting on the largest reserve in the world of any country. So yeah, there's that part of it. Good thought. All right. It is holiday season. So I would be remiss if we didn't close up talking about Chris prediction perspectives. I don't want to get into predictions. Thank you. It's coming soon enough.

00;45;27;25 - 00;45;50;07
Unknown
On Saturday. So we'll we'll get there. No need to predict real quick. I'll go. I'll go first. In this age of cynicism and all the negativity and all the infighting and and disputes, I want to give a shout out to Colonel Harry Shoup. And do you know who Colonel Harry Shoup was, was or is was. Oh, no.

00;45;50;07 - 00;46;38;16
Unknown
Yeah. Him. So he was the head of the Continental Air Defense Command back in 1955, which is Prince ad and there was a Sears ad printed in 1955 that said, children call Santa Claus and tell them, tell Santa what you want for Christmas. There was a typo in the phone number. So the Continental Air Defense Command started. The phone started ringing with kids calling, wanting to tell Santa Claus what they wanted for Christmas, and Colonel Shoup could have hung up the phone, done whatever he instructed his team to tell everybody where Santa's sleigh was.

00;46;38;16 - 00;47;01;00
Unknown
And that is the genesis of the Nora ad publishing Santa's Sleigh Ride. What a great story. So fantastic in this day and age. Shout out to, to Colonel Ship. Awesome. Fantastic. I love the positive note. I'm feeling chipper and cheery. Glad to be here. Good to see you guys. Taxes for Christmas are back up in Antioch, Texas.

00;47;01;00 - 00;47;26;28
Unknown
Man, this is, families leaving taxes. You know, it's it's fun when it's 100 degrees. Coming back is great. Spending most of my time outside of Texas over the last year. It is such a wonderful thing to walk into an H-e-b. Walked in when I got back last Saturday, and the first thing you see outside is the tamales.

00;47;27;00 - 00;47;51;16
Unknown
So good dude, even though the weather may not put you in, you know, conventional wisdom, Christmas spirit, how can you not like the is, I think, part of your holiday vibe? We always had housekeepers that made them for us. Isn't it amazing how we suspend all sorts of belief and anything because we all buy tamales from out of the back of someone's car by the side of the road.

00;47;51;16 - 00;48;16;28
Unknown
I mean, without even hesitation. No thought on sanitation or whatever. It's just like, heck yeah, dude, everybody's got a tamales lady that drops them off. Yes, you buy them in the back of a car and if they are sanitized, they probably don't taste good. So what's Christmas in Yates world? So, Sunday night will be Robert Earl keen, which the greatest, Christmas song of all time is Merry Christmas to the family?

00;48;17;00 - 00;48;38;12
Unknown
Absolutely, absolutely. So we'll do that. And the way it works in the Yates house is Charlie and Sally Yates have always been. You better be at my house for Thanksgiving and on Christmas and whatever. And so probably what will happen is the kids will be with their mom because their mom loves Christmas. So they'll go do that and do it upright.

00;48;38;12 - 00;48;59;00
Unknown
And I will be at Hunan Gardens Chinese Restaurant. What's this order and what's the order at Hunan? I am a hella pino shrimp with black bean sauce, Mark said. The, chicken wings there. I still think those are the best chicken wings I've had. The other two? Yeah, yeah, a couple of the best chicken wings in Richmond, for sure.

00;48;59;02 - 00;49;13;11
Unknown
Technically, it's in Rosenberg and Rosenberg. Oh. But yeah. So even though you didn't ask, I'll be back out in Arizona for a few days. I was about to ask you, my,

00;49;13;13 - 00;49;27;27
Unknown
Recently turned 21 year old son who also had UCL surgery, who would be otherwise engaged in intensive strength and conditioning training. But we're going to spend a few nights at a casino.

00;49;27;29 - 00;49;53;09
Unknown
Now that he can. And if you see Santa, will you tell him to get busy? Yeah, we have a good time out there. So we kind of we kind of take care of two things. My mother in law's out there and then we can do some, do some 21 and up. Here's the big question. Where are you this Saturday and found town Watch party at my usual tailgate group said, you know, their early time slot.

00;49;53;09 - 00;50;13;26
Unknown
They're not going to tailgate now. I could probably find some others. I bet there's a huge Carlton Woods contingency of Aggies. Maybe I'll be at collide watching it on those big screens. Yeah, fantastic. Well good luck to you Aggies. Thanks, man. Absolutely I'm going to be here enjoying the weather. Remind me of of the bet. Pay off. You have to wear burnt orange man.

00;50;13;27 - 00;50;33;14
Unknown
Yes. And since you're, you know, you're hopefully we're going to see more frequently in the studio. I guess the same could be said, I'll be honest. Like the color burnt orange is not great. So it sucks for everybody, so you're going to have to wear it now. I was about to say, as the blue and gray person sitting here, maroon and burnt orange, I got you on now.

00;50;33;14 - 00;50;57;12
Unknown
So my wife maybe not on the field. I acknowledge that my wife and my oldest daughter, UT grads and my middle and youngest daughter are Clemson grads, and I often said I proudly and willingly wear Clemson orange, but I will never wear burnt orange. Hey, wait a minute. Best. Besides, maybe the Aggie Band, the the Rice Owls have the best fucking band on the planet.

00;50;57;12 - 00;51;19;23
Unknown
The mob, the mobs. Great. Nothing better. Yeah. The mob and and over over many years ago, the the tricks that the mob was pulling on the Aggie band, are legendary. They're just incredible. Well, you know, in 1972 and, the, reveille had just died. So the rice band came out and formed a fire hydrant and started playing where?

00;51;19;23 - 00;51;43;20
Unknown
Oh, where's my little dog gone? And then they fake goose stepped like they were the Nazis. The corps got so mad, they surrounded Rice Stadium and drew their swords and would not let the rice band out of there. And, you know what was a little known fact about that halftime show? You're in it. No, I was there, though I don't remember it because I was like four.

00;51;43;20 - 00;52;07;15
Unknown
But Mom and Dad took me to the game. Marvin Sandler was a world class twirler, and he twirled with the rice band. What? During that show? Who else? Who else? In Houston? Lower is a world class twin. Murph. Calvin Murphy. Yeah. One more saber story. Yeah. Jet move into the early 80s. I believe it was 1981. I was there at Cal Field.

00;52;07;17 - 00;52;42;03
Unknown
You should oh, you should remember that story. So I remember this. The SMU cheerleaders went out and did their in to midfield and did their SMU diamond them or whatever you call the the well the field itself is a war memorial. And so one of the Ross volunteers, a guy named Greg Hood, who ended up on The Tonight Show, talked about it, draws his saber and runs out in a very threatening way.

00;52;42;05 - 00;53;08;07
Unknown
And there there's still some famous pictures of that. The other one on the Aggie Band being being goofed by the the mob. And I don't recall exactly when it was, but if you've ever watched the Aggie Band, the the timing and precision and spacing and distance, that's all absolutely critical to them. It's amazing. Not screw, not screw. Incredible.

00;53;08;07 - 00;53;29;26
Unknown
Yeah. Not screwing up. Well, I think there was one time in the middle of the performance where it's like animal House, you know, they go out and move some of the the markers in the whole thing. Just broke down in the middle of worms. Can't remember what that was, but yeah. That's fantastic. Gotta love the mob. Go rise.

00;53;29;28 - 00;53;44;18
Unknown
Merry Christmas, happy Hanukkah, boys. Beat the hell out of Miami. You can see. All right.