For my friend Tiny...

[eccieuser9500]

For my friends: Don't let money run your lives.

[Tiny]

Originally Posted by lustylad

Tiny - I think you're comparing apples and oranges. Private equity investments in the oil & gas industry are stock or portfolio investments. They merely reflect a change of ownership from public to private hands, whereas industry Capex is actual spending by energy firms to develop their oil & gas properties. PE investments are going up in part because "going private" usually allows management to spend less time dealing with ESG demands/climate activists. Despite the surge in global oil & gas prices since 2020, industry Capex is lagging behind pre-pandemic levels for a host of strategic and regulatory reasons unrelated to the broader ownership trends. But that could soon change, if the authors of this WSJ op-ed are correct.

Hey Lusty Lad, WTF's link was to an article about private equity investment in fossil fuel projects. I don't know how to quantify that, but it's easy to come up with capex for publicly listed companies, which is what I did.

Before 2020, private equity played a big part in production growth in the USA. At one end of the spectrum, a few well-respected professionals might leave a large oil company, and come to a private equity player like Encap or NGP with little more than an idea. With backing from one of their funds, they'd put together a lease block, drill a few wells to prove up the acreage, and then sell on to an end user, typically a large independent or major oil company that doesn't rely on private equity funding. At the other end of the spectrum, a larger private company with an existing lease block that had established production would take private equity money and drill more wells, then sell out.

There are two common denominators. One, private equity was supplying a lot of the money for drilling and other capex. And two, at some point there was a sale of the asset or the company, so that the private equity fund could crystallize a profit and exit. That's how PE funds operate -- they sell out after some period of years.

Now while it may have been different with pipeline investments and the like, the upstream PE funds weren't in the business with the goal of generating a stream of free cash flow to pay down debt and create a cash generative business. Rather, they were engaged in a game of musical chairs. Grow the production, by investing more than came out in cash flow, and then sell the asset.

While, again, I don't have the numbers to quantify the level of investment of private equity in deals like what I've described, I can guaran-damn-tee it's much lower now than it was before.

Why? I'd attribute it to three factors,

1. As WTF has correctly noted, investors got fed up with funding production growth for the sake of production growth. The history of upstream oil in the USA has consisted of cycles of lots of capex, in excess of free cash flow, to grow production, followed by collapses in the price of oil that wipe out value. There were a lot of investors that got caught holding the bag in 2020. And 2014 and 2008 and 1986.

2. The existential threat to the oil industry from the Democratic Party, which is concerned with greenhouse gas emissions. The world has changed a lot since 2020 or 2021 though. Biden, who was paranoid about a piddly ass increase in gasoline prices that might affect his party's prospects in the midterm elections, has temporarily pivoted from wanting to put the oil and gas companies out of business to threatening them if they don't increase production. And Europe is providing an example of what could go wrong here. I must reluctantly give credit to our friend WTF for shouting from the rooftops, going all the way back to 2020, that something like this would happen.

3. It's a lot harder to put together large lease blocks in places like the Permian Basin these days. This puts a crimp in the old model, of getting some acreage and then going to private equity to get the money to drill some wells to prove it up before selling out to a bigger company. The most prospective acreage is in the hands of the end users, being major oil companies, the larger publicly traded independents, and large privately owned companies like Hilcorp, Endeavor, Mewbourne and, soon, Continental, that don't use private equity money.

[Tiny]

Originally Posted by lustylad

Daayyumm, tiny. That's too much information! I'm beginning to wonder about you. Are you trying to curry favor with the OP by hinting you have gender-fluid fantasies about Ronnie? There's really no need for you to change your gender identity.

WTF has long had homo-erotic Reagan fantasies of his own, involving the stimulation of his elusive "sweet spot". He gets all hot and excited every time he gazes at a Laffer Curve. Its shape reminds him of his preferred sex organ. His kinky imagination even visualizes it as part of Ronnie's anatomy, if you catch my drift.

No, no, no! The Laffer Curve looks like a perfectly-formed, succulent female breast. You can even draw it with a nipple-like protrusion right around the revenue maximizing tax rate, 20%. There's nothing homoerotic about any of that. Man breasts are ugly.

[eccieuser9500]

Originally Posted by Tiny

Hey Lusty Lad, WTF's link was to an article about private equity investment in fossil fuel projects. I don't know how to quantify that, but it's easy to come up with capex for publicly listed companies, which is what I did.

Before 2020, private equity played a big part in production growth in the USA. At one end of the spectrum, a few well-respected professionals might leave a large oil company, and come to a private equity player like Encap or NGP with little more than an idea. With backing from one of their funds, they'd put together a lease block, drill a few wells to prove up the acreage, and then sell on to an end user, typically a large independent or major oil company that doesn't rely on private equity funding. At the other end of the spectrum, a larger private company with an existing lease block that had established production would take private equity money and drill more wells, then sell out.

There are two common denominators. One, private equity was supplying a lot of the money for drilling and other capex. And two, at some point there was a sale of the asset or the company, so that the private equity fund could crystallize a profit and exit. That's how PE funds operate -- they sell out after some period of years.

Now while it may have been different with pipeline investments and the like, the upstream PE funds weren't in the business with the goal of generating a stream of free cash flow to pay down debt and create a cash generative business. Rather, they were engaged in a game of musical chairs. Grow the production, by investing more than came out in cash flow, and then sell the asset.

While, again, I don't have the numbers to quantify the level of investment of private equity in deals like what I've described, I can guaran-damn-tee it's much lower now than it was before.

Why? I'd attribute it to three factors,

1. As WTF has correctly noted, investors got fed up with funding production growth for the sake of production growth. The history of upstream oil in the USA has consisted of cycles of lots of capex, in excess of free cash flow, to grow production, followed by collapses in the price of oil that wipe out value. There were a lot of investors that got caught holding the bag in 2020. And 2014 and 2008 and 1986.

2. The existential threat to the oil industry from the Democratic Party, which is concerned with greenhouse gas emissions. The world has changed a lot since 2020 or 2021 though. Biden, who was paranoid about a piddly ass increase in gasoline prices that might affect his party's prospects in the midterm elections, has temporarily pivoted from wanting to put the oil and gas companies out of business to threatening them if they don't increase production. And Europe is providing an example of what could go wrong here. I must reluctantly give credit to our friend WTF for shouting from the rooftops, going all the way back to 2020, that something like this would happen.

3. It's a lot harder to put together large lease blocks in places like the Permian Basin these days. This puts a crimp in the old model, of getting some acreage and then going to private equity to get the money to drill some wells to prove it up before selling out to a bigger company. The most prospective acreage is in the hands of the end users, being major oil companies, the larger publicly traded independents, and large privately owned companies like Hilcorp, Endeavor, Mewbourne and, soon, Continental, that don't use private equity money.

Play.

Wait twenty seconds, then play.

[Tiny]

Originally Posted by eccieuser9500

Yeah, Lusty Lad's the only one who wouldn't have been put to sleep by that lengthy post, and now I see he's banned. Darn it!

About your video on Trump and COVID, I do wish he'd used the bully pulpit more to encourage people to voluntarily social distance and use good quality masks, instead of sponsoring super spreader events. But otherwise don't think I agree, especially about the economy. The USA in 2020 did as much as any country to help people and small businesses get through the hard times.

[eccieuser9500]

Originally Posted by Tiny

Yeah, Lusty Lad's the only one who wouldn't have been put to sleep by that lengthy post, and now I see he's banned. Darn it!

About your video on Trump and COVID, I do wish he'd used the bully pulpit more to encourage people to voluntarily social distance and use good quality masks, instead of sponsoring super spreader events. But otherwise don't think I agree, especially about the economy. The USA in 2020 did as much as any country to help people and small businesses get through the hard times.

If dumpster fire was a straight-up business man, like Ross Perot was supposed to be, then I could live with that. Sort of. You know what I mean.

But that motherfucker was the evil incarnation of your belovéd. That, I could not stand. More than just business. Pure evil that led to the violence we live with today. As much as the GOP denies the anti-Nancy rhetoric they know was their fault.

My friend.

[Tiny]

Originally Posted by eccieuser9500

If dumpster fire was a straight-up business man, like Ross Perot was supposed to be, then I could live with that. Sort of. You know what I mean.

But that motherfucker was the evil incarnation of your belovéd. That, I could not stand. More than just business. Pure evil that led to the violence we live with today. As much as the GOP denies the anti-Nancy rhetoric they know was their fault.

My friend.

Given his history screwing his investors, customers, banks, suppliers, and bondholders, I knew he didn't have the character to be president back in 2016. The attempt to steal the election in 2020 was the icing on the cake.

As to attempts on politicians' lives, there are nut cases on both sides. Look at the attempts on the lives of Steve Scalise and Lee Zeldin for example. They've mostly been lone wolves. But yeah when you marry some kind of cult like religion to politics like with Qanon, you do have the potential for organized mayhem.

Fortunately however, regardless of politics, the hard working men and women in the American oil and gas industry will keep trying to supply gasoline to our cars and natural gas to our homes, as long as we let them. (Attempt to stay on topic.)

[eccieuser9500]

Originally Posted by Tiny

Given his history screwing his investors, customers, banks, suppliers, and bondholders, I knew he didn't have the character to be president back in 2016. The attempt to steal the election in 2020 was the icing on the cake.

As to attempts on politicians' lives, there are nut cases on both sides. Look at the attempts on the lives of Steve Scalise and Lee Zeldin for example. They've mostly been lone wolves. But yeah when you marry some kind of cult like religion to politics like with Qanon, you do have the potential for organized mayhem.

Fortunately however, regardless of politics, the hard working men and women in the American oil and gas industry will keep trying to supply gasoline to our cars and natural gas to our homes, as long as we let them. (Attempt to stay on topic.)

Some of us knew the inevitable. Dumpster fire was not the one to lead to great things. Just the opposite. The destruction of the potential of this country.

I can recall Dumpster just licking the boots of the Energy industry quite literally saying to them on the campaign: "you guys are gonna love me."


Unfettered, unscrupulous and unethical piece of shit.


Why anyone would give him another chance is beyond the pale.

Just five months into the Trump era, the energy developers who make up the Independent Petroleum Association of America, or IPAA, already had watched the new president order a sweeping overhaul of environmental regulations that were cutting into their bottom lines – rules concerning smog, hydraulic fracturing and endangered species protection.

Dan Naatz, the association’s political director, told the audience of about 100 executives that Bernhardt’s new role meant their priorities would be heard at the highest levels of the department.

“We know him very well, and we have direct access to him, have conversations with him about issues ranging from federal land access to endangered species, to a lot of issues,” Naatz said, according to an hourlong recording of the June 2017 event in Laguna Niguel provided to Reveal from The Center for Investigative Reporting.

The recording gives a rare look behind the curtain of an influential oil industry lobbying group that spends more than $1 million per year to push its agenda in Congress and federal regulatory agencies. The previous eight years had been dispiriting for the industry: As IPAA vice president Jeff Eshelman told the group, it had seemed as though the Obama administration and environmental groups had put together “their target list of everything that they wanted done to shut down the oil and gas industry.”

But now, the oil executives were almost giddy at the prospect of high-level executive branch access of the sort they hadn’t enjoyed since Dick Cheney, a fellow oilman, was vice president.

https://revealnews.org/article/oil-e...or-department/

[Tiny]

Originally Posted by eccieuser9500

Just five months into the Trump era, the energy developers who make up the Independent Petroleum Association of America, or IPAA, already had watched the new president order a sweeping overhaul of environmental regulations that were cutting into their bottom lines – rules concerning smog, hydraulic fracturing and endangered species protection.

Dan Naatz, the association’s political director, told the audience of about 100 executives that Bernhardt’s new role meant their priorities would be heard at the highest levels of the department.

“We know him very well, and we have direct access to him, have conversations with him about issues ranging from federal land access to endangered species, to a lot of issues,” Naatz said, according to an hourlong recording of the June 2017 event in Laguna Niguel provided to Reveal from The Center for Investigative Reporting.

The recording gives a rare look behind the curtain of an influential oil industry lobbying group that spends more than $1 million per year to push its agenda in Congress and federal regulatory agencies. The previous eight years had been dispiriting for the industry: As IPAA vice president Jeff Eshelman told the group, it had seemed as though the Obama administration and environmental groups had put together “their target list of everything that they wanted done to shut down the oil and gas industry.”

But now, the oil executives were almost giddy at the prospect of high-level executive branch access of the sort they hadn’t enjoyed since Dick Cheney, a fellow oilman, was vice president.

A majority in the county where I live are people of color. Hispanics, mostly first, second, third or fourth generation Mexican Americans, outnumber whites. And they voted overwhelmingly for Trump in 2020. I don't remember the exact number, but Trump carried the county by 55 to 60 percentage points.

Now why would that happen, when Trump said the following, back in 2015, and reiterated the part about rape again in 2018,

When Mexico sends its people, they're not sending their best. They're sending people that have a lot of problems, and they're bringing those problems with us. They're bringing drugs. They're bringing crime. They're rapists. And some, I assume, are good people.

Well, it's because the oil and gas industry is a big employer. Almost everyone has at least a family member or good friend who works in oil and gas. And their jobs were at stake. Sanders and Warren would have made many redundant in short order, if they followed through on their campaign promise to ban fracking. Biden said he intended to do away with the industry too, only take longer.

As to the environment, the only significant issue I'm aware of that the Trump administration let slip by were methane emissions. They should have tightened up on that. Otherwise, regulation is and should be in the hands of the states. It's the purview of the Texas Railroad Commission where we live.

[WTF]

Originally Posted by Tiny

...the oil and gas industry is a big employer. Almost everyone has at least a family member or good friend who works in oil and gas. And their jobs were at stake.

Sanders and Warren would have made many redundant in short order, if they followed through on their campaign promise to ban fracking. Biden said he intended to do away with the industry too, only take longer.

I keep telling you not to invest on campaign promises but in reality! Trump promised to eliminate the national debt!
Did you believe that nonsense?



I think 2nd , 3rd generation Mexicans didn't want freshly dried Mexicans taking their jobs! Thus the vote for Trump.

[Tiny]

Originally Posted by WTF

I keep telling you not to invest on campaign promises but in reality! Trump promised to eliminate the national debt!
Did you believe that nonsense?



I think 2nd , 3rd generation Mexicans didn't want freshly dried Mexicans taking their jobs! Thus the vote for Trump.

I said you were right WTF. You need to learn how to win gracefully:

Originally Posted by Tiny

2. The existential threat to the oil industry from the Democratic Party, which is concerned with greenhouse gas emissions. The world has changed a lot since 2020 or 2021 though. Biden, who was paranoid about a piddly ass increase in gasoline prices that might affect his party's prospects in the midterm elections, has temporarily pivoted from wanting to put the oil and gas companies out of business to threatening them if they don't increase production. And Europe is providing an example of what could go wrong here. I must reluctantly give credit to our friend WTF for shouting from the rooftops, going all the way back to 2020, that something like this would happen.

Seriously, I've been heavily invested in fossil fuels too, even though I am very concerned about the long term viability of the industries, given the way the world is going. I've cut back a bit, by selling about 15% of my position over the last couple of months.

[WTF]

Originally Posted by Tiny

I said you were right WTF. You need to learn how to win gracefully:



Seriously, I've been heavily invested in fossil fuels too, even though I am very concerned about the long term viability of the industries, given the way the world is going. I've cut back a bit, by selling about 15% of my position over the last couple of months.

My apologies Dear Sir.

Now if you'd just listen to me on exactly how Ronnie got you hooked on debt being good.