C.O.B. Tuesday

Today we welcomed an old friend, Adam Waterous, to COBT and had a sweeping energy conversation reflective of his 30+ years in energy transactions, financings, investing, and strategy. Adam founded Waterous in 1991, stayed through 2017, and then began Waterous Energy Fund. As you will hear in the discussion, Adam has phenomenal historical perspective, a unique framework for the world from here, and is direct in his candor about what's working and what's not in today's world. It was a fantastic session and we can't thank Adam enough for joining us.Colin Fenton's inflation commentary added meat to the topic that is the front and center macro driver of current commodity, equity and debt markets... and drives home the point that the current inflation issues are not a post-Ukraine event. Mike Bradley kicked us off with comments leading into Q1 earnings season and observations on energy stocks' relative and absolute performance.

Today’s discussion with Ryan Panchadsaram (senior technical advisor to John Doerr, Chair of Kleiner Perkins) explored a range of topics spanning from VC investing, the tech VC world partnering with the existing energy community to achieve scaled energy solutions, and the climate action plan that was the focus of "Speed and Scale" (which Ryan co-authored).  Ryan's technical background and his perspective expressed in the book hit a number of themes that resonate with us – including the topic of a “green” premium and those solutions needing a path to compete on a cost basis, how difficult scaled solutions are to achieve, the innovation opportunities availed by the energy transition movement, and the need for collaboration to arrive at impactful energy market solutions. We have a hope of building more bridges between the tech community and energy industry and were excited to converse with this powerful Silicon Valley investor. Thanks for joining, Ryan!  Mike Bradley kicked us off with observations on both energy equity prices and domestic natural gas prices followed by views on the announced SPR release and potential re-fill (or not) of the inventories. Colin Fenton opened our horizons to the volatility and price action in a number of non-oil and gas commodity markets and drives home the point that extreme price movements are not just captive to our energy markets.

Today we took on the challenge of unpacking the SEC's proposed climate disclosure rules and their potential implications. To help us do so, we had a panel of experienced leaders in the space join for a lively discussion that we hope will provide clarity and understanding. Our panel today includes Travis Wofford, Chair of the Corporate Department in Houston and Vice Chair of the Global M&A Practice and Scott Janoe, Chair of the Environmental, Safety & Incident Response Section from Baker Botts, and Dan Romito, Consulting Partner with Pickering Energy Partners.The framework of our discussion included an overview of the proposed requirements and background on the buildup to the SEC's new proposals, the key SEC players involved (with some particular focus on the dissenting view from Commissioner Peirce), the likelihood of the proposed rules becoming final, what the disclosures would cost and the potential liabilities for public companies, the potential unintended consequences of these new regulations, whether the SEC should be the governing body addressing these disclosures, implications for small to large companies, the importance of materiality, and the "climate industrial complex," just to hit a few. We greatly appreciate Travis, Scott, and Dan sharing their perspectives and are hopeful these proposed SEC changes can be improved before they are ultimately implemented.For further reading, Baker Botts has published a thought leadership piece. Statements are also available from SEC Chair Gary Gensler, Commissioner Allison Herren Lee, Commissioner Hester Peirce, and Commissioner Caroline Crenshaw.Mike Bradley kicked us off with a look at equity and commodity performance for the week, noting US natural gas and Euro natural gas and commodity curves for natural gas vs. WTI crude oil. Colin Fenton helped us all make sense of the complex inflation situation with the Fed and talked about the recent inversion of the yield curve and how to interpret it.

We are amped up for this week's feature session on power with ERCOT. With us today is Brad Jones, Interim President and Chief Executive Officer, and our good friend and former COBT guest Bill Flores, Vice-Chair and Independent Board Member. As a brief introduction, Brad has a 30+ year career in the electricity industry optimizing electricity businesses as well as designing electricity markets and operating electricity grids across North America. Bill previously served as a U.S. Congressman for ten years and has also served in board governance and senior leadership positions for public and private entities. Our conversation had massive scope and depth and it was a pleasure to host them both.As you may or may not know, Brad stepped up to serve as Interim CEO in 2021 and has since helped to make significant strides in several initiatives for ERCOT. In our discussion, we touch on the changes Brad and the team have made in the past year, background on ERCOT and correlated legislation, the challenge of managing multiple power sources, transitioning priorities from "C.A.R.E" to "R.A.C.E.," transmission planning, the benefits of running a business in Texas, managing electricity in Texas versus other states or countries (today we learned "Dunkelflaute" is the German word for dark and calm, meaning no sun and no wind), and what the next ten years might look like for power. You can find ERCOT's current 60-step road map to improving grid reliability. The Veriten team had a brief lead-in to start the show: Mike Bradley pointed out a few OFS announcements regarding Russia over the weekend and shared tidbits from Aramco's year-end presentation and conference call. Colin Fenton touched on a few regulatory news items including the SEC's climate disclosure proposal and letters from Congress to the CEOs of energy companies. Todd Scruggs presented background data on ERCOT (courtesy of Orennia) to prepare us for our power discussion.It was fantastic to visit with Brad and Bill. We hope you enjoy the conversation as much as we did! Thanks to you all.

We have a stellar dynamic duo for this week's session. Our good friends Mark Viviano, Head of Public Equities, and Megan Hays, Managing Director, with Kimmeridge Energy visited us for an engaging and insightful discussion. Mark's investing career has spanned over 17+ years in portfolio management and research analysis on companies in the energy sector, primarily focused on E&Ps and natural resources. Megan has 15+ years of experience in investor relations, strategic communications, M&A, capital markets and ESG. With such a deep wealth of knowledge and expertise, we had lots to cover.As you will hear in the discussion, our topics ranged from background on Kimmeridge and their strategies and approach to the portfolio, what differentiates good and bad M&A, ESG, E&P performance in the next few years, the global oil and gas markets, and more. We also discussed some of Mark's white papers and touched on the overarching themes including resource transparency, executive compensation, and the potential for a carbon offset price to name a few. Mike Bradley started us off with an overview of equity and commodity performance over the past week and his thoughts on traditional and clean energy current events. He also touched on key highlights from CERAWeek. Colin Fenton joined us from sunny California (where gas prices are currently nearing $6/gallon) with three items about perception including an update on the energy inverse bubble.

This was undoubtedly a big week for us in Houston with CERAWeek in full force. The conference brought many friends (old and new) to town and that allowed us to really get caught up on so many things.This morning, Nancy Jacobson (CEO) and Margaret White (Senior Advisor) came to our offices and we had a fabulous discussion. If you aren't familiar with NO LABELS, they are a nonprofit organization based in Washington, D.C. with a mission to combat partisan dysfunction in politics and build a bi-partisan governing coalition to tackle common challenges and push forward the best policies for the American people. That's a mission we can all get behind!We were so pleased to have the opportunity to visit with them both. Our discussion started with background on NO LABELS, their achievements since inception in 2010, their future goals (starting with the 2024 election and the potential for a NO LABELS-sponsored Presidential Candidate), and the challenges they tackle. You can sign up for updates here and, as mentioned, you can also reach Margaret at Margaret@nolabels.org.Thanks to you all! We hope you have a fantastic weekend

In addition to a jam-packed CERAWeek full of content, news flow and interesting perspectives, EQT, led by Toby Rice, released its impactful plan of “Unleashing US LNG – The Largest Green Initiative on the Planet.”  The 56-page slide deck outlines the ambition to quadruple US LNG capacity by 2030 (what it would take on the upstream, midstream and downstream side) and importantly the global environmental impact (reduces CO2 emission equal to that of electrifying every US passenger vehicle, powering every US home with rooftop solar and adding 54k industrial scales windmills).  The conversation first touched on several themes resonating with the group from time spent navigating the CERA crowd then moved to a discussion of EQT’s US LNG expansion plan and the punchy slides that captured the essence of the messaging.  Timing is of the essence for the world to move the needle on its emissions profile (global coal consumption increases last year unwound years of emissions improvement from renewables expansion). From there, we discussed what the US government could do to help this LNG expansion plan be achievable.  Toby did a great job of encapsulating the race among energy providers to be 1) cheap, 2) reliable and 3) not just clean…but zero emissions over the next decade.  It’s been an awesome week in Houston exploring the dynamic energy issues. Thank you all for the support and it has been great to see so many of you in person this week. 

It's CERAWeek in Houston and we are thrilled to be back in person visiting with great minds in the energy universe. We have a special guest and good friend joining us for this week's session: Arjun Murti, Author of Super-Spiked, Board Member and PE Senior Advisor. Arjun is a seasoned energy expert and has spent his 30-year career researching and analyzing global energy markets. We had much to discuss!First, we touched on Arjun's recent piece, "Energy Security and the Case for Canada." Arjun provided background on his inspiration to launch his platform, Super-Spiked, and what he is doing to help change the energy dialogue. From there, we segued into energy policies over the last 20 years, why we should be arguing for both energy security and climate, fuel economy and the concept of decoupling economic growth from oil and gas demand growth, the quest for the US and Canada to be the low-cost carbon provider to the world, and his 10-year outlook on energy. It was fascinating to note the many connections between our discussion and the sessions taking place at CERA.Mike Bradley kicked off today's lead-in with an energy market performance update and key observations from CERAWeek. Colin Fenton shared reflections from his CERA panel that looked at the economic outlook for 2022-2023 and noted a few market numbers to keep an eye on. As you may remember, Colin previously made the connection between box office receipts and economic outlook and to our delight he has updated data from The Batman's recent release.

We are thrilled to have Martin Lovegrove, Co-Founder and Executive Chairman of Kirk Lovegrove & Company join us today. Martin has a wealth of knowledge and experience around strategic advisory, acquisitions, and divestitures with 50 years in the global oil and gas business. In his career, he has advised 120+ clients on over 500 mandates and has developed four independent successful advisory companies along the way. It was wonderful to visit with Martin and get his perspective on all the issues swirling around in today's world. Undeniably, a great deal has happened since last week's episode with Dr. Angela Stent and Dr. Dan Yergin. As we all watch the harrowing humanitarian crisis in Ukraine develop, we wanted to provide a list of organizations that are offering relief support to the country including a few charities specifically focused on children. In our discussion with Martin, we discussed the current European energy and security mindset, how we got here, the future of oil and gas, his thoughts on key players, the outlook for classic energy companies, the energy transition going forward, the great opportunities the oil and gas industry offers to the next generation, and generally his reflections on a half century of working with the industry. It was incredibly insightful; we very much enjoyed our time with him and know you will enjoy the conversation.The Veriten team did a fantastic job of summarizing key news items for today's lead-in. Mike Bradley examined equity and commodity performance, noting the past week has been one of the most volatile weeks in energy markets in the past decade. He also presented fascinating data on both the classic and clean energy complexes. You will see a very interesting chart comparing the XLE and the ICLN. Colin Fenton explored where Russia's gas flows are now going in light of recent events, with flows through Ukraine down 50%. Also in Veriten news, today marks Todd Scruggs' official first day and we couldn't be happier to have him join the team. Todd serves as Partner/Investment Opportunities and is already hard at work thinking about investing for the next energy decade.

On this special "Twosday," we had the fortune of welcoming back two special guests for a discussion centered on Russia and the Ukraine and all the potential reverberations from the current conflict. Our first guest is Dr. Angela Stent, Senior Fellow at Brookings and one of the world's leading specialists on the Former Soviet Union, Russia, and Russia's relations with the West. In our discussion, we reference her most recent book, "Putin's World: Russia Against the West and With the Rest." Our second guest is our longtime friend, Dr. Dan Yergin, Vice Chairman at IHS Markit and Chairman of CERAWeek. Dan is the author of a number of seminal books on energy and in our discussion we also touch on Dan's latest book, "The New Map."Angela provided an excellent synopsis of how and why we got here to launch our conversation. My own personal summary would be an aggressive leader and an aggressive country sensed the time was now to press their agenda. We covered a whole range of important topics with Angela and Dan including Putin's potential master plan, what influenced Putin to start this, how Russia and China are increasingly working together, how this all effects the plans for energy transition, the impact of a potential Iran deal, why energy security is now firmly back on the table, and many other issues. In sum, Dan and Angela tag-teamed everything we threw their way and we came away much more informed. We are so grateful to visit with them both and appreciate them sharing their knowledge and expertise with us all!As always, our Veriten team kicked off the show: Mike Bradley shared an update on weekly energy performance, upcoming earnings, and his observations on Iranian sanctions vs. OPEC spare capacity vs. crude oil price. Colin Fenton chimed in with a satellite-based count of current global crude oil stocks and freight rates, a snapshot of Chinese-Russian oil flows, and an overview of the current Chinese market economy to prepare us for our global conversation.