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Welcome to Big Digital Energy with Chuck Yates, Mark Meyer and Kirk Coburn. Weekly news in energy covering oil and gas and cleantech.
00;00;00;00 - 00;00;28;03
Unknown
All right. I have no idea. But welcome to BDD. I have no idea if this is appropriate, but Craig Kilborn used to be this on do this on the Daily Show. Meyer dead from the animal House thing. So with that. Rest in peace, Lee. Raymond. Mark, what do you think? Yeah, I, I wasn't aware until you had texted me.
00;00;28;06 - 00;00;53;16
Unknown
And he passed away on June 6th, and I think the news was out on, what, June 9th or something? So maybe seven years old. Probably the most transformative executive, certainly of my lifetime for this industry. I looked again today just to double check the ExxonMobil merger still stands as the largest ever in the industry's history.
00;00;53;18 - 00;01;24;16
Unknown
And we've seen a flurry of multi tens of billions of dollars merger, but it's still about $20 billion north of Exxon. Pioneer. PhD from South Dakota. He got his PhD at the University of Minnesota. But from South Dakota and had a wide ranging and rocketship career. He was number two in the corporation at the young age of 48.
00;01;24;19 - 00;01;56;14
Unknown
I had my first real exposure to Lee's leadership, and brilliance when I was on the Valdez project. He had direct command of that, and needless to say, we we ran a pretty tight ship. Later in my career, post retirement, he was an energy advisor for a large private equity firm. And we had, collaborated on an investment opportunity, for a large private company.
00;01;56;14 - 00;02;25;22
Unknown
And that's I got to spend a bit of time around him, you know, personally or one on one. One of the brightest human beings I've ever had the pleasure of interacting with. Intimidating, level of intellect and very matter of fact, very Midwestern and a hell of a funny guy, too. I mean, he was 48 years old, newly appointed as president of the corporation.
00;02;25;24 - 00;02;56;22
Unknown
And on day one of the job, the Valdez runs aground in Alaska, dumping 11 million gallons of crude into one of the most pristine marine environments on Earth. So most executives would have hidden behind lawyers and a PR firm. This dude scheduled a New York Times interview back when the New York Times was the place to go immediately, and said this on the record.
00;02;56;25 - 00;03;42;23
Unknown
We're chagrined. We're disappointed. We're even devastated. They rebuilt the entire safety culture of the company. No theater, no virtue signaling, actual systemic change. Now, if that happened today, the CEO would just post a black square on Instagram and announce a Dei initiative. Lee Raymond went to Alaska, and when I was in school, my buddy's father, Charles Matthews, who was general counsel not at the time he was a young attorney, was the first guy on the ground in Alaska and was like, deal with this.
00;03;42;25 - 00;04;18;11
Unknown
Then Lee Raymond showed up. So we're talking about a guy that was as big in life as he was in memory. Yeah. Did a story like that. I have a challenge to the claim of him being the first on the ground. I know for a fact that Frank took this, isn't it? This is an interesting story. Frank Tyrer, who was a Scotsman, literally was on the ground in Valdez that night in the middle of the night.
00;04;18;13 - 00;04;58;22
Unknown
The response barge. Alaska's response barge was in drydock undergoing repairs, and he was ordering boom and equipment from all over the world using his American Express card. Nice. So, so, so as almost everybody in the industry knows, Lee actually had triplets. Paul and Rob and John. Raymond, John and Rob are identical twins. Collins, fraternal and all had amazing careers and still have amazing careers in this business.
00;04;58;24 - 00;05;27;04
Unknown
My favorite story of Lee Raymond. And there are millions of them is not actually a business story. It's a father story. So the three triplets, when they turned 18, got handed a car. It was an old, as they describe it, piece of shit. Bonneville, you know, and they are sitting there discussing some of that greenish blue color that those barnacles had.
00;05;27;06 - 00;05;49;01
Unknown
I bet it one. Maybe so. But you know, they are our dad is big time at Exxon. We're prominent. We deserve a much better car than this. Why did we get this piece of shit? And they drove it. And after about seven months, one of the brothers totaled the car. When you asked John who did it, he says, Colin did it.
00;05;49;01 - 00;06;10;06
Unknown
When you asked Rob, who did it, he said, Colin did it. When you asked Colin who did it, he said it was John or Rob. I wasn't there, but anyway, they totaled the car and the brothers were all relieved. We finally got rid of that piece of shit. Dad's going to go out and get us a nice new car, more befitting our, our status in life.
00;06;10;08 - 00;06;40;04
Unknown
Rob Raymond, I mean, Lee Raymond supposedly spent $45,000 way back then, fixing up the piece of ship Bonneville, and he handed it right back to him. And I love that. Well, I don't know. I don't think people today would appreciate this because it's so common now. And we've talked about it. We've talked about this almost as much as the IAEA because our friend over here has to talk about them.
00;06;40;06 - 00;07;11;10
Unknown
But back in the 1980s, this guy, Lee Raymond, moved the largest oil company in America from Manhattan to Las Colinas, Texas. And that was considered an act of corporate heresy. I mean, it's almost like he moved the Vatican to Waco. So let's put that in context. This isn't that. Yeah. Like, what was he doing? And in hindsight, he was brilliant.
00;07;11;13 - 00;07;35;13
Unknown
Closer to, I mean, closer to the West Texas oil fields. But I mean, let's just talk about that. In the 80s, we were all too young to really understand what was happening. But like, go figure, pick up and move from New York City and then leave Las Colinas and go to just south of the Woodlands to the mothership.
00;07;35;15 - 00;08;08;20
Unknown
Exactly. It's all coming to Houston. Rest in peace, Lee Raymond. Rest in peace. One final. I do need to say something on the record. It's kind of my Calvinist take on the obituary treatment. The man has. Like, no one will give this guy. I mean, of course, the leftists, they don't give him credit because they always called him like he was the Darth Vader of the climate movement.
00;08;08;23 - 00;08;41;28
Unknown
I mean, really was Lee Reagan a scientist and perusing all the mainstream reports, you know, the obituary it always had that that. Yeah. But. Climate denier, Darth Vader of climate, all of those things. But my favorite story and I want to this is we I mean, we got to talk about money, but did you know his retirement package was $357 million?
00;08;42;01 - 00;09;13;08
Unknown
Congress held hearings about it. Politicians called it obscene. Mean this is almost as big as one of Chuck's, you know, and fund checks that he gets in the mail. But what? This is what he did. He essentially said I delivered $29 billion in cash and a 14% annual returns. For 12 years. He outperformed the stock market 12 years in a row.
00;09;13;11 - 00;09;37;26
Unknown
And you want to have a hearing about my severance? I mean, he was like, I mean, he threw the mic down. So good for him. Rest in peace. Most successful, Exxon CEO ten year era, ever. And there have been a lot of those, think quadrupled or quintupled the size of the company in those 12 years, something like that, anyway.
00;09;37;26 - 00;10;13;23
Unknown
Oh, and, and and by the way, just just so we're not getting to unclear here, this is the most resource intensive business on the planet. So in times of high inflation, 80s, when you don't want heavy equipment, because you because you're financing costs, your cost of capital are way out of line. It's almost impossible to make money. This guy takes the hardest business in the world in high inflation era and freak and drops the mic.
00;10;13;23 - 00;10;39;17
Unknown
So it's it's almost unheard of. It's unheard of what he did. All right, Mark, do we have an Iranian deal? I need to go to Twitter or Truth Social right now to figure out where we are. Yeah. My my my response. I think John Arnold posted a timeline here a few hours ago of the various. You know, we've got a very good deal.
00;10;39;17 - 00;11;09;18
Unknown
It's coming. It's this it's that. And I respond, and I said, you forgot to capitalize random words. So, you know, leading into the afternoon yesterday, crude did it's predictable swoon when these were getting close and then when we put specific timing on it, you know, we're going to meet in Europe probably this weekend and sign the deal.
00;11;09;18 - 00;11;35;20
Unknown
Both parties have agreed. Of course, the Iranians were out. I saw a piece on UPI, saying, you know, hold the phone. We we haven't agreed to any of that, basically alluding to no capitulation on the red line. So I guess we'll see. Point is, it's not done until it's done. And then when it's done, what does it actually entail?
00;11;35;22 - 00;12;01;24
Unknown
Probably another 60 day extension of the cease fire. You know what it appears to be in terms of what we would agree to, meaning the US, is they have to perform in terms of all the nuclear, destroying all the nuclear material and removing their enrichment capability and, and other things open the strait immediately. And, and then we'll start releasing assets after they meet those conditions.
00;12;01;27 - 00;12;30;06
Unknown
So who the hell knows? You know, the the optimistic view of this is f. Yeah, f a f, though, right? I mean, Trump went in there, dropped bombs the rest of the Middle East called Trump said, please stop. We can talk to Iran. Hey, I ran he's serious. This time. They capitulated. The flip side, the pessimistic view is almost what Pickering said.
00;12;30;08 - 00;12;53;07
Unknown
All right. We're or what The Onion said Trump has won the Iranian war 37 times this year, you know, and, Pickering made a similar, similar joke out on Twitter. The one thing I will say, kind of from the history of the Middle East, hell, go back, read the New Testament. It's always been kind of darkest, right before the dawn.
00;12;53;07 - 00;13;26;00
Unknown
Any time a breakthrough happens, an agreement gets signed. They're never linear. They're never oh my gosh, we're spending time together. We're getting better. Both sides happy. It almost always feels like it's kicking and screaming, dragging. It's dark. It's going to blow up. And that's when something happens. So maybe for the first time in a while on this Iranian deal, I'm slightly optimistic that maybe, maybe this is actually going to happen.
00;13;26;02 - 00;13;59;24
Unknown
It wasn't clear to me that, most of the spokespeople are at least my take is this is the Iranian civil government, if you can distinguish that from the, IRGC, which ultimately is going to be the one that makes the decision of agree or not. So I'm not quite sure where we are in that internal struggle to get to an agreement that represents.
00;13;59;27 - 00;14;39;05
Unknown
Actual resolution. You know what what what is the IRGC really doing and thinking here? And and how many levers are they pulling? You know, based on past behavior, I don't know that there's, you know, kind of an all clear even if we do get a piece of paper signed. Now, the, you know, the the more hawkish and the warmongering voices that are out there like Mike Pompeo and said, piece of paper is not going to really amount to anything because they've always, you know, they've always, violated whatever agreement that they've made.
00;14;39;09 - 00;15;04;20
Unknown
And so we've got to go in and finish the job by hitting them hard. So this weekend ought to be interesting. I want to take a different tactic. But first, the fact that Chuck quoted Bret Michaels as maybe a first on this channel. So thank you, Chuck. Every rose has its thorn for sure. But here's sort of my brain.
00;15;04;21 - 00;15;32;26
Unknown
Hold on real quick, real quick. While we're here on every Rose Has Its Thorn, the genius of that song. And yes, I agree, Dee Schneider said that killed, rock and roll and made way for grunge, which is probably true every single line of that song is a cliche, and I challenge anybody to string together that many cliches in a row and make it coherent.
00;15;32;26 - 00;16;01;23
Unknown
Message. We both lie silent, sleeping in the dead of the night. I mean, it is literally line after line of cliches, almost like he was sitting in a bathroom and taking writing off the toilet wall and stringing it together. It's pure genius. But go ahead. Well, if you're saying he was on heroin, that's not too surprising. So I'm not going to, you might be right.
00;16;01;26 - 00;16;27;14
Unknown
There's a there's a country song, all sound, but this was the first, so we can't I'm not going to try to to beat it. But this is where my mind has gone. I feel like thread does. It's Pavlovian swoon every time Trump says deal. I mean, the oil market is just a true social notification tracker with the futures contract on it.
00;16;27;16 - 00;16;56;21
Unknown
Okay, I'm like, is there some sort of like Trump's buddies around on this thing? The traders are all waiting. I, I, I'm just wondering like this seems almost like it's a get rich quick scheme because every time he says deal, look at the oil markets. I mean it's crazy. I've got my tracker to watch it. Deal. I mean, just it's too correlated.
00;16;56;24 - 00;17;22;04
Unknown
It was a really cool element to the story that we were smuggling out 100 million barrels of oil in the dead of the night. You know, for all the the naysayers of Iran, has the strait locked down. And I thought we won the war. Well, all right, we smuggle out 100 million barrels of, of oil. But yeah, no, I kind of like your, conspiracy theory.
00;17;22;04 - 00;17;52;22
Unknown
I want in on it. I wonder how much that is. Double counting of things like the East-West pipeline. We got oil out of the out of the strait, so fair enough. So typical. Typical Trump. Yeah, I guess we'll continue to flirt with, take bottoms as we approach the deeper part of the summer where many are still saying we're, you know, we're going to run into problems and in certain crude and product, inventory areas.
00;17;52;22 - 00;18;34;14
Unknown
But, you know, we'll see. Are we on to LNG? Well, it's not just LNG. This is more about, A relatively new entrant into the domestic natural gas game that's in the form of commodities house gun. More. They apparently have backed an Oklahoma City based, executive team that calls themselves Western Natural Resources. They've done some things in the past with KKR, and apparently there's been an initial $300 million put behind them to go find assets in the Haynesville.
00;18;34;16 - 00;19;02;21
Unknown
They're very constructive. They, Gunvor very constructive on, you know, the long term horizon for natural gas, not the least of which is related to both LNG and power demand, particularly from data centers. And I was wondering, is this, you know, is this a year delayed response for what, Citadel has established, with the former Paloma now apex in the Haynesville?
00;19;02;23 - 00;19;29;11
Unknown
And I didn't realize until somebody pointed out that I think as much as 25% of the rig count is operated in. The Haynesville is operated by apex. So you've got a you've got a hedge fund making the economic and, and activity decisions and doing so very strategically. So does the whole complexion and landscape of, of different basins.
00;19;29;11 - 00;19;58;06
Unknown
Responding to price signals and bringing on supply. Is that is that undergoing a transformation? I guess we'll see. There were some there were some other things that that popped up as well along the lines of, okay, there's a real emerging push to get your hands on natural gas assets. Sixth Street. Yesterday it was announced that they had paid $1 billion for a Maine coast shale out in the San Juan Basin.
00;19;58;06 - 00;20;25;01
Unknown
Producer called logos. I mean, I'd like to get Chuck's opinion on this because gun laws going, doing upstream. All I've been thinking about, and this is why it's interesting to me, is trading houses don't traditionally own rock. I mean, they own logistics pipes, the ships, the terminals, the arbitration. I mean, they look for the arbitration opportunities. That's usually the business model.
00;20;25;04 - 00;20;55;28
Unknown
But molecule control through infrastructure, not through production is traditionally the model. So Gunvor buying these Oklahoma gas wells tells me that they believe the spread between the wellhead gas prices and delivered LNG is not only wide but potentially going to get wider. And that owning that is really where the opportunity is. You don't see that very often.
00;20;56;05 - 00;21;22;24
Unknown
I mean, you know, in oil and gas, you talk about oilfield services. They can't operate let operators, they can't really service. But now you've got the traders sort of jumping in. And I understand Tim Griffin bought a tax and that's kind of a Citadel playbook. But Chuck. So go back. Back in the day, what did Enron do. Enron owned these pipes.
00;21;22;27 - 00;21;55;14
Unknown
They did. Yeah. They cheated. No. But they owned these pipes. And they basically had a command of the physical market. And they traded on top of it. Right. And they kept pushing back from that. Okay. We own these pipes. Let's go get the source. So they kind of created the we'll give you 100% of your balance sheet capital in exchange for you drilling these oil wells so that they had control of the physical.
00;21;55;14 - 00;22;24;09
Unknown
That was part of the trade. We've got to control, where these volumes go to what pipe and all. And everybody jumped in and did it right. El Paso check on down the list and it imploded. I think this is just the sequel of this. The interesting dynamics going to be with, these trading houses is they're short term and focus.
00;22;24;11 - 00;23;01;27
Unknown
And to get a drilling program going, it takes 3 to 6 months to stand up the rigs, get permits, locations. And these guys are literally trading hour to hour. So I think that's whether they wind up being successful or not. Is going to come down to the trading house, understanding the restraints of being able to turn on and off a drilling program, and at least in the relationships I've seen so far between the trading houses and EMP management teams running, that's the fight in the board meeting.
00;23;01;27 - 00;23;20;01
Unknown
We'll just turn on more. Oil's up. Well, we told you six months ago we wanted to pick up a rig and you said no. So we haven't permitted we haven't drilled anything, but they'll figure it out. And if they can make money trading around it because they've secured physical supply, they'll do it. And I'll do it really well.
00;23;20;01 - 00;23;49;20
Unknown
And then they'll bankrupt companies and, be on the verge and do the things traders do. Yeah, I mean, it's if you think about just the risk tolerances, I mean, trading houses are super risky. Obviously they're there and operators are risky, and service companies are not. That's interesting. But but something Mark said about about sixth Street, they're primarily a credit job.
00;23;49;23 - 00;24;21;02
Unknown
And when credit capital buys upstream gas production, it kind of says that the cash flow durability has gotten good enough to look like a bond with leverage upside. That to me is like, wow, that's a that's an interesting concept. Now, the way to think about it is the cash flow from the gas. Stayed at a Holiday Inn Express last night and can masquerade as a bond I think is maybe the way to put it today.
00;24;21;02 - 00;25;04;00
Unknown
That look today it looks like a bond. Well, we did see you know, things like what was it a couple of weeks ago, the premiere of Stoneridge putting in what? I can't recall. Well, there's a 6 to $8 billion ABS type bid for, Devon's Marcellus, I think. I think what all these newer kind of moves are a signal from the demand side of the equation that because of power, because of LNG, and because of maybe some of the shifting of of, market share in LNG in particular, given what's happened over the last 3 or 4 months.
00;25;04;02 - 00;25;56;02
Unknown
And, in the Middle East, is that structurally something has changed and we want we may be maybe seeing a rerating of the value long term. North American US produce natural gas molecules. I think the other thing that is bringing to bear on this is you had a whole pile of money within these insurance companies that needed a home, and so, you know, that's the ABS market that's developed, and that people have been tapping and you know, I always took the position of I thought Wells Fargo did about as good a job as anybody of understanding the risk to oil and gas assets.
00;25;56;05 - 00;26;19;22
Unknown
And if you're telling me there's a source of capital out there that'll advance you more money than Wells Fargo at a cheaper rate. They just don't understand the true risk there. But, you know, at the at the end of the day, we we've only had 1 or 2 of these abs blow up thus far. They've been, successful.
00;26;19;22 - 00;26;49;02
Unknown
Generally, what happens is you're advance more money, but you're also locking in hedges for 8 to 10 years. And so there's some comfort in the repayment there. But the big deal in the innovation, there was just you had a you had a pot full of money that needed things like a rating by, or a one of the rating agencies, and you needed kind of that securitization around it to look like what they were used to.
00;26;49;08 - 00;27;20;04
Unknown
And that unlocked, a flood of new money and oil and gas. So another one that was announced yesterday and this theme was, Comstock and Jericho getting together and contributing assets and, explicitly this is, you know, they're going to they're going to connect all those to, mega campus, or mega campuses, or as Russ used to say, can't buy in Oklahoma, multi multi gigawatts.
00;27;20;04 - 00;27;50;02
Unknown
So a lot of, you know, at least a lot of headline examples of what we've been talking about for a while is that the upstream needs to go talk to Silicon Valley, and the pieces and parts are starting to fall into place. So my question is when do we see a large swath of the leading public MPs get more aggressive on this front because we've been into this now and been talking about it for at least a couple of years?
00;27;50;04 - 00;28;21;25
Unknown
Yeah. Well, you know, diamond, back when I interviewed, God, there's such a good joke to make there. And I've lost my fastball. Either that, or maybe I'm just not up to, actually saying it on TV, but, they, you know, diamond back when I talked, did the interview with case at, TCU a couple of months ago, he talked about they were, they were, looking at powering a data center out there, didn't have details on what the transaction was going to look like.
00;28;21;25 - 00;29;03;01
Unknown
So, you know, I, I think the the public markets are actually going to be really receptive to that. And if you can spin a story that, you know, I'm not selling, molecules anymore, I'm selling electrons, I think that's going to go over really well. Yeah, I, I just I just thought there would be more of it. Particularly in, in an area that we're going to talk about next where you have such undervalued molecules and the opportunity to sell those undervalued molecules as premium power in the basin is I just thought we'd see more, more kind of step up to the plate.
00;29;03;03 - 00;29;31;06
Unknown
You know, what I think is there was an element of once bitten, twice shy, you know, I mean, we basically got rid of half the industry through Covid. So big initiatives, big CapEx expenditures, just weren't happening. So that was kind of number one. And number two, for all the, you know, bravado we throw around here at BD of just go sell some electrons, actually pretty hard to set up.
00;29;31;06 - 00;30;05;20
Unknown
In effect a private utility was spinning machinery and balancing load and doing all that, even though the oil and gas engineers are the best on the planet, that is a different world. So it's just taking longer than we thought. And especially when we're seeing things like the the load sheds and ramp ups that are inherent in training and inference facilities as well, and that that pushes all the way back upstream to how you manage your your gas supply.
00;30;05;22 - 00;30;39;23
Unknown
Never mind all of the the power farming and and and power balancing that you have to do in that type of, behind the meter off grid operation. And it's still very early days of understanding, what kind of what the best model is, for all the reasons that you just alluded to, Chuck, it's it's not easy. There's there's a lot of subtle complexity and some of it very evident once you get started that you've you've got to manage around as well.
00;30;39;23 - 00;31;08;25
Unknown
It's it's not straightforward, but but it, it but it but it is fundamentally I think a pretty compelling arbitrage particularly when you talk about structurally where waha gas is was obviously dominated by associated gas. It is not a primary objective, except for those that have very high geo or production. That we'll talk about next. We'll help roll out to West Texas.
00;31;08;28 - 00;31;41;11
Unknown
So we're 128 days into, trading below zero, and it's getting more and more painful. You had some pretty notable large producers, namely Devon and Permian Resources, talking about having to curtail or, having to curtail or shut in high hydro or production. Elevation CEO Steve Pruitt, who I'm sure we all know have run into a heck of a guy, said, look, you know, we're losing money hand over fist on the gas side.
00;31;41;15 - 00;32;13;02
Unknown
And so as a result, elevation is forced to flare due to the crude flowing targets. You know, they're saying as much as their estimation is as much as 2 to 400 million a day of gas shut in on any given day. I'd probably take the over on that. But I'm not out there actually moving in and touching the molecules, so sounds like a big number, but there's more of it coming every day with rising jaws and just gas.
00;32;13;02 - 00;32;46;26
Unknown
So your, lower tier acreage ultimately being brought online. And if we, if we do see, a full scale development of something like the wood for Barnett out there, we're talking about significantly higher jaws here. A there is a lot of anticipation and hope for the the new pipes like GCA, GCS, expansion and and others that are coming online before the end of the year, I think to the tune of three and a half BCF a day or thereabouts, going to ten in the next three years.
00;32;46;29 - 00;33;10;23
Unknown
So egress is coming, but will it be enough? This is a byproduct for most that most of these guys I mean, at $100 oil, they're going to pump the oil. They have to burn off the associated gas. It's they have to pay people to take their gas. It just reduces their margin on the oil. Now that's that's the math.
00;33;10;23 - 00;33;39;10
Unknown
But they do have to find a pipe willing to take it. You know. So there's probably, you know, all these guys are doing portfolio optimization of, you know, do I really want to make X on this or should I shut it in and wait for six months? There's somewhere a midstream CEO is having his best year ever. I mean, Chuck, I'm sure you know, most of these guys are give him a call and ask them.
00;33;39;12 - 00;33;55;16
Unknown
All I can think of is Dan Aykroyd and Eddie, Murphy in Trading Places when they were when it was announced that the the oil for, the orange juice futures would be fine. Okay, I'll take you. I'll take you.
00;33;55;18 - 00;34;19;25
Unknown
Yeah. No, exactly. I'm not, I'm not. I'm actually surprised, given Texas. And you don't have to give Ferc approval. I'm surprised. And the fact we have no problems with condemning land for for a pipeline, I, I'm actually surprised we haven't built more pipe or seeing more pipe being looped to get that stuff in to the to the Gulf Coast.
00;34;19;25 - 00;34;46;01
Unknown
But I've never been a midstream guy. You know, there's there's more things that you have to deal with and think about when we're talking about LA gas as well. And that is high BTU pretty rich gas. You know, if you're an ethane rejection, do you get into certain periods where maybe you've got to back off on on the richness of your gas to get it into the pipeline?
00;34;46;03 - 00;35;07;22
Unknown
You know, I know of one operator who's having to bring some uneconomic dry gas online to dilute their residue gas, particularly during ethane rejection, so they can get it within BTU spec to put it in the pipeline. And so there's, there is that to deal with. It's it's not just the long haul capacity from the Permian to the Gulf Coast.
00;35;07;24 - 00;35;50;06
Unknown
It's cryogenic. It's moving gas around and getting into the on ramps from far flung places like the Delaware Basin, etc., etc.. And it it lurches along in fits and starts. And as we saw with the last new long haul pipeline to come on matter or express, that relief valve lasted about two weeks. I don't think Waha gas is out of the woods, at least for the remainder of 2026, and I would probably take the under on 2027 as well, thus thus pointing out the obvious opportunity for those who can move fast, secure cheap Waha gas and start turning it into electrons.
00;35;50;08 - 00;36;16;05
Unknown
Hey, Kirk, let's go get some pipe. And me and you and a and an F-150, and we'll just, we'll just build our pipe down to corpus or wherever or Beaumont. I've been talking about this forever. I mean, when I was, when I was started to invest in energy deals, everybody and their brother pitched me on the water hauling business.
00;36;16;07 - 00;36;42;21
Unknown
And just hauling shit. And it was all like guys and pickup trucks. I'm like, well, maybe I should have gone out and did it. And if we could just figure out how to compress and chill gas and transport it, because you can't unless Chinese did, that's Chinese blues. There we go. You heard it here first. You heard it here first.
00;36;42;21 - 00;37;04;10
Unknown
No wonder that Sam service, the air missile thing, is saying they're they're trying to stop us. Exactly. We're going to show up with our Sanford and Son truck throwing our balloons in the back and driving it to Beaumont. Do you believe all this snow you hear? It's all the way back to the 70s. For a pop culture reference, we might need a an explainer bumper.
00;37;04;10 - 00;37;36;03
Unknown
Oh, oh, everybody knows who saved Sonny's, you big dummy. Red Fox was the best. All right, close. It blows this out on speed power. Because I do have one, one closing thought story I have to share with the group. Yeah, this caught my eye. You know, we're we've been talking about the demand side of it changing, being a driver for maybe why these new entrants are coming in based on the structural opportunity presented by gas to power.
00;37;36;03 - 00;38;09;27
Unknown
But this this has to do with transmission. This is a, data center developer out of Kansas City who is, building a facility in Cedar Rapids, Iowa. And they, I guess I don't know what technically the the term is, but they notified Ferc that they had committed with the transmission, this new transmission line. So, 345 TV, it's called the Morgan Valley Twinkle line.
00;38;10;00 - 00;38;40;11
Unknown
And what they want is to get it to their nearest substation four months earlier. And so what that means is the constructor of that transmission line needs more labor, needs more material, just needs all of the stuff that they would have to add to the process to accelerate the in-service date for that transmission line at that substation. So you can bring up its data center four months faster.
00;38;40;13 - 00;39;14;21
Unknown
They've committed to paying $55 million to make that four month acceleration happen. Well, I mean, we we saw the Space-X IPO and how much Google's paying, Elon for compute power. So that makes perfect sense to me. I mean, it's 10 million. It's at least worth 10 million in revenue or competitive competitive positioning per month. Or at least I mean, oh yeah, they're not going to I mean, it's it's quite big.
00;39;14;24 - 00;39;54;00
Unknown
Yeah. It just gives you I think this is a fascinating. Kind of insight into how urgently motivated the whole get more compute capacity online faster. I mean, if you realize it that the customer is paying the utility to build faster, I don't think we've ever has that ever existed and regulated electricity history ever? Probably not. The, I hadn't I hadn't seen anything like this, particularly it as it relates to transmission.
00;39;54;02 - 00;40;26;06
Unknown
The, I do like the dichotomy between the energy companies and the tech companies, because what energy company would call anything having to do, with their project, the twinkle Line that's got to be tech driven and not energy. Right? Maybe a utility would be stupid enough to call something the twinkle line, but, yeah, I'm thinking that big tech all the way.
00;40;26;08 - 00;40;55;18
Unknown
All right, so here's my story. I mean, obviously this this 55 million is a rounding, if not less than that in the overall economics of the data center. That four months is worth a lot. Well, and and quite frankly, you know, if you paid me $55 million, I'd name it the Twinkle Line two, you know, so all right, my closeout story is here is the trade I made this weekend.
00;40;55;20 - 00;41;30;28
Unknown
So, Sam Texas, who runs data security for Callide, he used to run data security for the game Candy crush. So mom's beside herself. You got the Candy crush guy? I have told Sam Texas that we are going to go to Battle Creek, Michigan this weekend and we are going to go to an Indian casino, and we are going to see David Lee Roth in concert, because 13 year old Chuck would have killed 57 year old Chuck for not going.
00;41;31;05 - 00;41;56;25
Unknown
Even though the reviews of the tour are horrible. He's up there bumbling stuff and thank God he's got eight background singers to make the song legible, but in the moments we are not eating a Detroit style pizza tonight in Detroit drinking beer, and I'm sure there will be copious amounts of that. And watching David Lee Roth in the moments were not doing that.
00;41;56;27 - 00;42;23;23
Unknown
He is going to teach me to Claude code. So I am going to be a an official software developer come Monday morning. Fantastic. Chuck, you could not have picked a better. Personal consultant to travel travel with you to get that done. Exactly. And neither could he. David Lee Roth I mean, I mean, there's I have a few requests.
00;42;23;23 - 00;42;56;01
Unknown
Number one, we need proof. And proof means a selfie with DL three. Okay, dealer whatever. We will try that I there was there was a thought of having Jacob come along and blogged the whole buddy. Trip. You know, there hadn't been a good buddy movie since Bob Hope used to make them, but keep going back to, I hope for sure you're drinking a bunch of whiskey.
00;42;56;03 - 00;43;18;26
Unknown
Because if you're talking beer, I mean, you're going to see Dirty Wrath. Like, or alcohol is the only way to do that. Who? Brown water. Brown water. Tough on on this 57. Okay, fine. Firewater. But you have to you have to original Van Halen. You got to pay homage to the to the original Jack Daniels bass, right?
00;43;18;27 - 00;43;52;28
Unknown
Yeah. Michael, it's got to be it's got to be Jack Daniels. Yeah, I almost said Jack Daniels. But the point you got my point. Yeah. Fair enough. And then. And then third, if you have the balls, Jack, if you have the balls, your question to deal are, is this who's Van Halen's greatest singer of all time? I thought you were going to say I was going to have to make out with a 67 year old groupie on the front row, but, I'd much rather ask David Lee Roth that question.
00;43;53;01 - 00;44;25;25
Unknown
Who's the best singer of frontmen for Van Halen? You know, who who were, who were replacements that were truly contemplated? Patti Smith Eddie Van Halen supposedly had a conversation with her, had a conversation with Daryl Hall. Love it, by the way. Love that which which if you if you talk to Eddie Van Halen about jump, he actually listened to kiss on my list by Daryl Hall and John Oates, and he stole the melody he claims.
00;44;25;25 - 00;44;53;07
Unknown
Go listen to those two songs. John Van Halen song, John Dun dun dun dun dun dun really. And then that and that is Your kiss is. Anyway, Daryl Hall was I actually talked to, but Sammy Hagar was actually set up by their shared mechanic. Eddie had the, Lamborghini and or the Ferrari, whatever he was driving.
00;44;53;10 - 00;45;17;22
Unknown
And the mechanic was like, man, you ought to talk to Sammy. He's bringing his car in later. And they he put them together and they jammed. And the rest is history. But Sammy was in the picture from the earliest days after they got signed to Warner, because Ted Templeman wanted to replace him, because he was struggling so mightily with David Lee Ross vocals.
00;45;17;25 - 00;45;48;16
Unknown
And Sammy was was the choice. And unfortunately, it didn't happen. But it's ironic how things come back around. So you didn't answer the question, who's your pet? Oh, I'm a David Lee Roth guy. I I'd, I'd rather have Sammy Hagar as my next door neighbor. I think the question was singer. Well, that's fair. I don't know that you can categorize, David Lee Roth as a as a singer, but.
00;45;48;17 - 00;46;13;07
Unknown
Bingo. Yeah. Although arguably as good a showman as we've had as a, as a lead singer. Best man by far. Yeah, yeah. So anyway, that's what I'll be doing this weekend. Hope you boys have a, good week as well. Thanks, everybody, for tuning in. Drop us comments. Remember, my ego's very fragile, so don't say mean.
00;46;13;07 - 00;46;20;14
Unknown
Thanks and look forward to seeing you boys next week.