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H.L. Hunt’s Wives 🍍

@h_wives

Feb 12, 2021

Ok it’s time for the $BP thread. I will demonstrate that BP is a terrible company to interact with in any way, whether you work there, doing business with BP, or (heaven forbid) are a shareholder. I’ll try to organize this in a logical faction.

From an employee perspective, your first concern should be safety. Between 2007-2010, BP refineries in TX and OH accounted for 97% of “egregious, willful” violations issued by OSHA. This is while BP operated only ~8% of total US capacity. In other words, BP facilities were

371x more likely to earn OSHA violations than refineries operated by all other companies in the US. Just a brief timeline of BP worker accidents:

-1965 Sea Gem: North Sea is opened up, and BP rushes the job. Capsized the rig and killed 11.

Read 27 tweets

H.L. Hunt’s Wives 🍍

@h_wives

Sep 29, 2020

As promised, a thread on renewables and why they can’t work (as is). First of all, it’s important to understand there are 2 types of power production: base load & peak load. Base load is the min power demand throughout the day, & peak load take the fluctuations thru the day

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Natural gas power plants can adjust to fluctuations in demand, and gas peaker units are able to kick on and produce incremental power for just a few hours a month when prices make them economical. The problem with renewables (wind and solar) is there is no way to increase.

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Daily power demand follows a sine curve, with peak around 3-4PM and trough around 3-4AM. This requires some variability in production to avoid blackouts. The opposite of a blackout (oversupply) is negative prices. Someone has to take the power, so producers may have to pay.

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H.L. Hunt’s Wives 🍍

@h_wives

Aug 19, 2020

https://twitter.com/h_wives/status/1296173118789169152

Why Katie is everything wrong with the world: a thread.

https://twitter.com/h_wives/status/1296173118789169152

1. Katie’s prevalence include EFT stemmed from her blind support of Vicki Hollub. She framed all criticism as gender-based (try selling that one to Holly, Suttles, HammBone, Gallagher, Sheffield, etc). In the end, EFT was right. It was an awful deal and resulted in huge

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@HHPumpco_BCE_II

pay cuts, layoffs, etc. When confronted, she took to personal attacks (telling @HHPumpco_BCE_II to make her a sandwich) and flouting her “7 figure revenue company.” Immediately after she blocked everyone. Fast forward through silence on sexual harassment issues at &

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Read 7 tweets

H.L. Hunt’s Wives 🍍

@h_wives

Aug 16, 2020

For all the new #EFT members:
A primer on E&P investing:

1. A long only strategy in E&P companies IS a commodity bet. Long term shale co-WTI return correlations sit 35-60%. A long shale strategy requires a bullish oil thesis.

2. The basis of this is the business model.

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There is no sustainable advantage in E&P. The companies are price takers in a volatile, capital-intensive market.

3. The companies are simply an aggregation of assets. Each well has a type curve. Model type curve, find your required discount rate, and you get the value of

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a well. If you want to come up with a company value, you don’t use any ratios (EV/EBITDAX). You aggregate ALL wells and create a firm-wide type curve, then pull out your G&A and you arrive at net asset value. This is the only way to get a true value number.

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H.L. Hunt’s Wives 🍍

@h_wives

May 2, 2020

Thread 1/n

What happened in energy private equity is pretty simple. It started out with solid returns and providing needed capital to people too small for public markets. These were the “good guys.” They helped small-time oilmen de-risk their wealth and grow

2/n

But the fee structure is such that moar = better. So endowments/pensions/other inst. money see this nice return, and they develop a “private equity natural resources” allocation. Now all the energy PE guys aren’t competing against all other capital destinations,

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at least in the short term. They’re competing against other energy PE. Now relative performance is what you can market on, and you can sell cyclicality to your advantage. “We caught a bad market, so you should average down by committing more capital to fund II.

Read 7 tweets

H.L. Hunt’s Wives 🍍

@h_wives

Feb 5, 2020

While I largely believe E&P’s deserve to be where they’re at, I think there are decent cases for why $50 WTI can’t work. Particularly with cap markets largely closed off to shale, you either live within CF or die. Anonymous surveys of shale co’s show
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that all the $30 and $40 oil has been pulled out, albeit at $65 breakeven when oil was at $90. There is a huge inventory build coming from Coronavirus effects, but all in all, I see a lot of upside for oil. With decline curves steeper than ever, industry should be becoming
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less cyclical, i.e. broadly cutting capex today effects oil prices in 18 months, not 5 years. The only thing holding all this back is acreage. Companies need to go bankrupt, flood the market with both developed and undeveloped acreage, driving lease prices down and creating
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H.L. Hunt’s Wives 🍍

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H.L. Hunt’s Wives 🍍

H.L. Hunt’s Wives 🍍

H.L. Hunt’s Wives 🍍

H.L. Hunt’s Wives 🍍

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