Chuck Yates Needs A Job

0:21 So, what's up, dude? Same old man. My kids are little bitty, so just kind of that, and then normal, normal work stuff. We're kind of done with our portfolio, which is nice, though. So walk

0:34 me through kind of your career, and I was trying to think of my career as a series of people just like taking silly risks on me and me trying to like get up the curve I mean, I had moments of that,

0:51 but how did I get here? How did I get here? What am I doing? I honestly hope it's like that for you. I'm Texas guy. Yeah. I went to UT. I got out December of

1:04 2008. So it was awful. I won it. So kid.

1:08 Yeah. Wow. You know, that was almost 20 years ago. Yeah Yeah,

1:16 it goes quick, it goes quick. No, I'll never forget. a couple of my friends went to work for Lehman. And I had just had hernia surgery, still lived in Austin. And it was Ike and the weekend

1:29 that Lehman was like going under. And so it was like six 22 year old guys sitting in an apartment, one of which was heavily medicated. And no one knew if they had like a home or a job, or it was

1:41 very, it was very strange. So I got out. 'Cause that was September, wouldn't it? I think September or October, it was, it was during ACL It was the weekend of ACL, so that's usually not over.

1:52 'Cause Ike was my birthday, and I had to cancel my birthday. And that was 2008. 2008, yeah. Yeah, 'cause that was my 40th. Oh, no. Yeah. What'd you do? Mine's coming up. I was supposed to

2:08 have a party that got rescheduled until February of 2009. Okay, and what'd you do? Wanda, so buddies of mine from Rice, had a band called Toy Subs and they went on Star Search. Remember Ed

2:25 McMahon's show? You're probably true. Oh, yeah, I do, yeah, I do, yeah. No, was that what it was called? I don't know, I don't know. I remember Ed McMahon and he had this little like band

2:35 show. I don't remember. Yeah, it's before my time. They finished second on Star Search way back in the day. And so, may or may not have consumed too many adult beverages when I called Hey guys,

2:48 get back together, come play by birthday party. Oh, and they did? Yeah, they did. Oh, that's incredible. That's cool, yeah. And where did you have it here? So, originally we were having it

2:57 at the Continental Club. Yeah. And then - In Austin? No, actually, here's that. Oh, the one on Main Street? The one on Main Street. But the Hurricane did that off. So, we wound up doing it

3:08 at the House of Blues. Oh, yeah, that's perfect. So, we have similar idea. I want to get, God, I'm

3:16 blanking on his name. I wanna get some sort of a musical act out to our farm and just invite like 40 or 50 people and do a whole night right out there. So my vision for this is I have a backyard and

3:30 the girlfriend really wants a swimming pool in the backyard and I'm just not a swimming pool guy. We're gonna do this debate, agree. So my plan actually for my backyard 'cause it's pretty big is I

3:43 wanna build a stage, speakers and have concerts in my backyard. Do I live in a small town? Yeah. Richmond, Texas, small town, invite the friends over. You know, maybe even turn it into the

3:59 artist shows up, kind of gets the walking tour of Richmond with me. We'll go to the wine bar, do stuff like that. Maybe they, maybe I can even talk 'em into trying to write a song there and then

4:10 they play the show. Well, and you should record it all. Yeah, absolutely Chuck, Chuck Yates needs a concert. Right. No, that. my full support,

4:20 tell her I'm all for it. Yeah, I keep telling Colin he's got to sell digital wildcatters for a big, huge number and make me rich because I need David Lee Roth playing my backyard before he dies.

4:33 Yeah. Yeah. Roth was always my data, so yeah. All right, so you're sitting there don't know if you're going to Lehman. Oh, no, no, so all my friends were at Lehman. I was an engineer. I

4:44 went to work for Energy Transfer and I wanted to go the commercial route and basically got the call. My, one of my good friends, uncles was an executive there. Okay. And he called me up and he

4:56 was like, Hey, we're laying all of the commercial people off. You're an engineer, you can go be a field engineer if you want. I go, I really don't want to do that. And then I sort of looked

5:06 around at my options and that's what I, that's what I went and did. Yeah, that's what I went and did. Yeah, it was, I mean, it was a good experience the world was ending the world was it was

5:17 done. Yeah. I mean, no one, no one knew what was going to happen. And honestly, I was really lucky. Looking back, I didn't see it like this at the time, but looking back, I was lucky to have

5:27 a job. I mean, I was lucky not to be living at home. Right. But so went from there, then I went to sell sort of the equipment that I was engineering at Energy Transfer. So I was selling these

5:41 big cryo plants. I mean, this was, this was sort of the uptick and all of the, the shale boom. So Chesapeake was going crazy. Energy Transfer and companies like it were tying people in and they

5:52 were selling these50 million processing plants. Like, I mean, just like, I mean, there was a waiting list. There's like a two year waiting list. So I went to go sell those and then, I mean,

6:03 the story of my life, like the person I was selling to, I thought what he was doing was cool. So I basically went to him and was like, hey, I'll work for you for free if you'll just show me

6:13 everything. I'll work for you for, you know, as long as you let me. And that was 12 years ago. I'm still with that partner. So that's great. Yeah, I went to work at Halcon. And then we left

6:25 there. I had to stop quickly in between and then we went to go manage these assets for Oaktree that were sort of going sideways in their infrastructure fund. So how do you like talk Oaktree into

6:39 letting you manage stuff? That's fascinating too. I mean, they're as big as anyone out there have been in the business forever Yeah, they can get real people. I didn't want to sound that douchey

6:50 word. Yeah, I kind of guess I came off that way. Why you? Yeah. I get why they wouldn't let me do it. Right, right. But you, yeah. So my girlfriend was having lunch or dinner with a very

7:05 prominent female member of the energy business. We'll just kind of leave it at that. And the lady said, you know, my husband's unemployed goats in our backyard. And Laura is like, you don't even

7:20 know the half of it. Mine claims he's a podcaster. And as fuck on every other t-shirt, I was

7:27 like, Oh, yeah, you win. These two bright women are like, right? How do we reminisce? And well, an instant bond. I long story short, my my partner worked at Enron with a partner at it was

7:40 high star. Oak tree ended up buying it. So they knew each other. And we had, we had a team in place to manage these midstream assets. So it was 20, I think it was 2015. We went over there to do

7:53 that. And the plan was to raise another infrastructure fund under that high star flag. And long story short, I mean, the transportation arm of that fund took off and they raised the fund. The

8:06 energy fund didn't get off the ground. And those guys split. Some of them went to other funds with an oak tree, some of them are doing their own thing now, some of them are. Bitcoin mining, I

8:16 mean, they really. Yeah, I met with those guys at one point. There was, and I'm gonna get all these details wrong, but I think they wanted to actually just come in and buy the whole cane

8:26 portfolio. That sounds right. You know, they were like, they wanted to buy everything. And I flew out to LA and had dinner with them. Kind of talked to it. I think at the end of the day, they

8:38 wanted to buy something for two times, even DAW. And I was like, hey guys, I'm early stage acreage You can say my acreage sucks, but so it

8:47 never went anywhere, but. Yeah, so the name of the game was sort of AUM. So I think Oaktree, the mothership, was buying out funds like these and continuing to raise money around it. And for

8:59 whatever reason, the energy side of this didn't take off. So like I said, some of them scattered. That was kind of right there at the end. It sort of felt like the energy PE story sort of petered

9:12 out, call it somewhere between 2016. that was 19. Yeah. So this would have been, you know, the break up sort of happened probably 20. Yeah, it was 20 late 17, 18. That was getting tough.

9:27 Right. I mean, even kind of pre-COVID, that was still kind of. Hey, guys, we've been giving you money for 10 years and we haven't really gotten any back. And we're making any money. Right.

9:38 Right. Right. And it was a little bit before ESG, but that was starting to like from the. Yeah. I think like TPH hired Gibson to be kind of energy tech guy and it real quickly sort of went into

9:56 kind of ESG type stuff. So there were signs it was coming. Yeah, no, that's right. And so that, yeah, this was 2017. So this was sort of going on internally over there. And then my partner

10:07 and I, we, we signed a deal with Apollo to work concurrently with those guys to originate. their SPAC. And that, this was a fully SG story. I mean, whenever we started working with them, they

10:21 had just raised a SPAC. It was called Spartan Energy. Do you remember that? I don't know. Yeah. And that's all right. They wanted to put midstream and refining assets into it. And so this is

10:32 probably late 2017. We're about a year into it. And

10:37 the hurdles start ticking up a little bit. And we're like, oh, this is kind of weird. You know, it seems like the narrative is changing a little bit. They went to an LP meeting and they came

10:47 back and it was full ESG from then on out, you know, it was, it was sort of a transition time inside that firm, but they switched hard to ESG. That's back ended up buying an electric car company.

10:60 Okay. Fisker. Do you remember? Yeah. Yeah. Fisker automotive. Yeah. That's what they, that's what they bought it with. So we stopped working with them around 2019. We were still managing

11:11 some oak tree assets. I was trying to figure out what else to do. I, I did a little bit of work with Jeff's skilling on his security thing. I basically just consulted with him on structuring.

11:23 Yeah. Structuring and a little bit of, uh, VELD. VELD. Yeah, you know, Colin and Jake worked on that. Yeah. No, they said, uh, they, they set up the tent. Colin will even say he, he,

11:35 he came up with the idea and took

11:40 it to skilling. Oh, really interesting. I mean, I'm here with those two. I haven't heard, I haven't heard that. Those two egos in a room You know, it's a lot, Colin worked on that. Yeah, I

11:48 remember, I mean, they had a very cool office. It was this kind of like rundown building south of downtown. Yeah, right there by the bus, the bus station. Yeah, you didn't want it on the other

11:59 side of the pier. So you walked, you walked inside very quickly. Yeah, it was, it was tough, but, but the actual space was incredible. I mean, very techie. They had all sorts of like big

12:10 screens. Yeah, no, it's cool. I went down there That's so. 'Cause I went down to meet with Colin about my podcast. I had recorded three of them. I had no idea how to publish it. Didn't want to

12:23 mess with any of that. And I said, Hey, you want to have my podcast? And he's like, Hell yeah. And like 48 hours later, it was up. And I figured, Well, I should probably go downand meet

12:33 these guys who are these jokers. Oh, so you would record and send it into them and they would edit it closer? I recorded about the first 50, maybe like 75 podcasts I did, I recorded in Richmond,

12:47 Texas. Wow, you have a studio? No, this was kind of crazy. This guy named Chase West, good dude, always his dream to have a recording studio. He majored in

13:00 that at the University of Texas. Built, it was his passion project, took an old house in Richmond, Texas, built like literally a world-class studio in there I mean, I. I took Lindsay L, the

13:15 country music singer in there. We recorded a podcast and she recorded a song there. Really? It was legit, like any of my music friends, I would always tell them, come to Richmond, we got a

13:25 world class student and they're like, what are you talking about? Do they attract people down there? Do people go there and record? You know what the thing that wound up happening with Chase, and

13:33 I think he's cool with me telling this is,

13:38 basically it would be late night rap guys showing up. That's cool 'Cause he was60 an hour for the studio or 75, which is cheaper than any of the places in Houston. And so anyway, he may or may not

13:53 have sent a text periodically, Hey, somebody's gonna be maybe in the studio tonight. And it's five or six blocks from my house, so I'd kind of go wander down, check it out. But it was really

14:04 cool, 'cause who was the biggest name, any one you would know?

14:09 You know the biggest name, and I'm blanking on his name, Of course, it's not Drake or any more. Yeah, Drake never came in, and I'm so uncool. I don't know who any of the rappers are. I know

14:21 you're wearing like a beautiful shirt. I mean, that's a little bit of cred. The, but

14:28 actually the astronaut that the first black astronaut in space wrote his book and recorded his audio book there Oh, really? That was pretty cool. That was pretty cool. And that had happened kind

14:48 of before I started recording the podcast there. So I didn't actually get to meet that guy.

14:55 But the engineer, Andy Angelo, had worked at Sugar Hill in Houston. Oh, okay. So

15:04 he knew all the rappers. He's like, you're like ghetto boys. He's like, yeah, I engineered this song for him Yeah, so he had all the great stories. I don't know. Is it still up and still up

15:15 and going? No, this was a crazy thing. So this was an office park, how they do them in Richmond. It was five old small houses. One was a dog grooming, a pet grooming thing. Another was an

15:30 insurance agency and it was

15:34 this

15:37 recording studio. And one of the members of the Joseph family owned it and sold all the land and there's now gonna be a Starbucks there But they tore down the studio, I tried. You know, and the

15:46 problem was is Chase had embedded so much like wiring and sound pre-ending. Yeah, it's not cheap, yeah. Yeah, into that house. And we were, and the guy said, for five grand, I'll give you the

15:58 house, but we couldn't figure out where to go put it. It was gonna cost - Well, you're backyard, Chuck. We thought about that. It actually wouldn't fit.

16:10 And Chase still wants to run business. And I'm not sure I need rappers at two in the morning. No, that's fair. That's fair. But yeah, so so anyway, it's, it's kind of sad. But you know, I

16:22 mean, all the podcasts I did early days, Pickering, Mark Mills, just think of all these guys, they all came to Richmond and recorded in that studio. Wow. And this was all during COVID. You

16:32 started during COVID, right? That was our October of 20. So everyone was kind of at home. Everybody's kind of how much to do. Yeah, we would do that. Energy credit one. Jeff Davies came out

16:43 and recorded. I got smashed during that podcast. Oh, really? Because we're doing wine flexing. Well, Phil Brando came out, spent the weekend with me. We got it. Got it. Yeah. So that was

16:55 fun. But anyway, I totally changed the subject. No. So we were I while we were just about to hit COVID. So COVID hit. My family and I, we went to Santa Fe and sort of our left. what skilling

17:10 was doing behind and didn't have. I didn't really know what I was gonna do next, but I was - I was actually texting with skilling during that. He's

17:20 great. Yeah. Jeff's great. Yeah, wicked, smart, and, and -

17:25 Well, that was my whole thing. I was like, I just want to be around someone who has these set of life experiences. And Jeff is super charismatic. He's very, he was very nice. He was always very

17:38 humble I mean, plenty of - Also very religious. Confident. Yeah, very religious. I don't think people realize that. He led his little like groups Bible study in prison and still does that. I

17:52 mean, yeah. I would always meet him after Bible study during the week. Yeah. And I think he still does that. Yeah, I mean, I think, and I don't know this 'cause he and I have never talked

18:02 about this. We don't know each other that well

18:05 But, but I still, what I've heard from people. and you may correct this is he still feels like he had did nothing wrong. And at the end of the day, yeah, you may have followed the rules to a tee.

18:20 At the end of the day, a lot of people lost a lot of money and it was really bad. And you kind of do have to step back and go, Hey, you know, I played some role in that. Yeah, that's I think

18:32 that's fair. And he, I mean, whether or not he would agree with that or disagree with it. He paid his, he paid his penance. And that was, you know, I got a lot of pushback from people saying

18:42 like, Oh, why would you even want to be around that? I'm like, well, unique brain. I mean, you're never, you're never really going to get the chance to be around someone like that. And

18:52 whether he did or didn't. And I mean, I was in Houston, I grew up in Houston. I was around during that time. I grew up in Kingwood. A lot of people were affected.

19:02 But we live in a society where you pay your penance. Yeah. And then you're in theory,

19:10 another shot. So, you know,

19:14 I always say America's the most forgiving country on the planet. We really are. Well, look, I always, I was like, you need to go on the Michael Milken to her. I mean, Michael Milken is a great,

19:24 great example. I mean, financial crime, right? Sort of spawned an industry, which is, I didn't, I mean, distress credit, junk bonds, all that kind of stuff. The corollary with Enron would

19:36 be energy futures, financial trading, all that kind of stuff. I mean, truly started the way these things are traded.

19:46 Got in trouble, served their time. One of them has taken the sort of like, oh, you know, kind of leave me alone. I did it, you know, I did my time. And the other one is, you know, rebranded

20:00 himself. And now everyone goes to LA for the Milken Conference every year. And he's a philanthropist and all that kind of stuff. So this was great. Forget what year it is, but let's call it

20:14 2016. Just 17, somewhere in there. Bob Sinoc calls me and goes, what are you doing tomorrow? I don't know, Bob, typical day in the office. And he goes, you wanna fly to LA? And I go, not

20:24 particularly. And he goes, you wanna fly to LA and have a meeting with Michael Milken. And I was like, absolutely, absolutely. I said, absolutely. So I flew out there, Bob and I, I think Bob

20:37 and I grabbed dinner the night before And then we have this meeting with Michael Milken. And this is,

20:45 so Milken's deal was, you go into a heavily levered publicly traded company at where the bonds are trading at 50 cents on the dollar. You buy the bonds up at 50 cents and then you get with

21:02 management and you just trade as much equity, sell as much equity, whatever to. to make it more credit worthy, like go buy a big PDP asset and use all stock, you know, issue a bunch of shares to

21:18 the debt holder, whatever you do. And you know, you make your, you make your, you know, two X on the debt and you lever it nine to one at the, at the fund level. So he laid all this out on how

21:33 to do it. Bob Sinat goes, Michael, the problem with that is in oil and gas, you can't negotiate with the rock.

21:45 Negotiate all you want with management. And it was like, oh, okay, but it was cool. I mean, he is just wicked smart. Yeah, yeah. And it's unique to be around people like that. So when you

21:56 get the opportunity. Oh yeah. Flight LA. Yeah, Bob, Bob said I couldn't ask for an autograph, but so I didn't get it. I didn't get an autograph. Do you regret that? I regret that, and the

22:07 first time in my life, been two times in my life when I haven't gotten an autograph or a selfie that I totally regret. The first time I was in an FBO in Houston, and I was back in college and a

22:22 trial lawyer that I'd run his campaign for State Rep had just called one day and said, Hey, I got a private plane. I'm flying over to San Antonio. You want to come. And my girlfriend at the time,

22:34 who ended up being my wife of 25 years, was in San Antonio visit her mom. So I said, Yeah, I'd love to do that. I'll just ride my free ride. I'm free ride. Plus, it's on a private plane. It's

22:45 great. So I'm in the bathroom peeing and literally at the urinal next to me, Ted Turner comes in. Oh, wow. Yeah. So anyway, we kind of sat there. And I just froze. And I think it's because I

22:52 had

22:56 my wiener in my hand, but I froze, so I didn't get the autograph or the selfie and I'm bummed out with milk and I didn't get a selfie with him. I've got a story like that We were playing golf in

23:08 New York. And I was late, we played late. We played late and it took longer. So I'm in the locker room and I'm kind of like hustling. And this guy, he has the locker right below me. And he just

23:19 has his stuff everywhere. There's bags and clothes and everything. I'm like, Hey guy, I gotta get to my locker. Can you just kind of like move your stuff? I'm late for a flight. And he's just

23:29 profusely moving everything. Like, Oh, I'm so sorry, so sorry, let me move this over. He looks up and I mean, it's like me to you It's Justin Timberlake, I was like, Oh my God. We had

23:42 literally just gone to his concert. And I mean, he puts on a fantastic show. Yeah, great. Started eight o'clock, eight, zero, zero, and played to 11, zero, zero, and didn't stop the whole

23:51 time. And it was fantastic. So we're in a locker room. I mean, we're all fully clothed. But I had this like, Aha, no one's ever going to believe this. I mean, this is totally like a Bill

24:02 Murray story, like where he takes a French fry or whatever is like no one's ever gonna believe you. I was like, I have to get a picture. So I asked, Hey, I know this is weird, but can I get a

24:13 picture with you? And he kind of like begrudgingly did it. So like in the picture, I'm smiling really big. And he's got this like

24:20 mean muck thing, but that's okay. I have the picture and the story. And yeah, exactly. So I'm that guy. Like if I see this first off, my best friend, Fish, says I have the most amazing

24:34 celebrity radar on the planet. Like I can walk into - You're a magnet. Well, not so much that I'm a magnet, but I can walk into a crowded hotel and go, ah, B-level actress in the reality show.

24:45 She's right over there, we'll go get it. So I walk up to all of them. I get pictures of all of them. I wanna, another one I didn't get the selfie on, but at least got a great line. I saw OJ

24:56 Simpson in the San Jose airport, and I went up to him. I go, Hey OJ, OJ, I got something for you. I got a line on the real killers Oh my God. OJ. kinda looked at me, freaked out, ran off,

25:09 so I didn't get that something. But my Facebook page is just me with tons of celebrities. And

25:19 you won't get this answer, but one of the best pictures I have, me and the dude look like we're best friends and forever was the biggest dick on the planet. I'll give you one guess on who that was,

25:32 just 'cause you'll never get it, but. For me, brother Actually, not a bad one, I can see that. No, Dan Aykroyd. Oh, I walk up to Aykroyd and I'm like, man, huge blues, brothers, fan, all

25:45 that. And he goes, what the fuck do you want? And I go, you mind if I get a picture with you? And he goes, yes, you have 30 seconds. And I go, oh man, this is so cool. And he's like, 28 or

25:54 seven. So anyway, I do this, click. I'll get Jacob to embed the picture. Yeah, dude. I mean, we look like we're best friends. And the second I go click, he says, Get the fuck out of here,

26:06 no. Yes, sir. Yes, sir. Yes, sir. Absolutely. I met Tom Arnold. He was lovely. I think he had just gotten divorced from Roseanne. He was like, I'm proud of money. Yeah, exactly. But I

26:17 was young as at Planet Hollywood. And my dad was like, do you know who that is? Like, no, not really. He's like, well, it's Tom Arnold. Let's go. And so what I want people always ask, what

26:28 do I want to do when I grow up? My best friend, Fish for years has always said, you know, yeah, he just wants to be a game show host That's what he's always wanted to do. But actually, I think

26:39 I've refined the answer. I want to have a role like Tom Arnold had in True Lies. Yes. He was. Yes. He made a career out of it. God, that was so, he was so good in that. So your wife's banging

26:52 a car salesman.

26:55 Right. No, he was lovely. I could see, I could see him being cool. Yeah, he was cool. I mean, Justin Timberlake was cool. I haven't really I really had any bad experiences with those guys.

27:06 Now my host at the golf course was mortified. Yeah, I was like, Jared, you'll never guess who I saw. And this is a club there, you know, they're all over the place. He's like, Oh, I don't,

27:16 I don't even want to know. I was like Justin Timberlake and I got a picture with him. And he's just like, Oh my God, I can never, I can never invite you back. Okay. So we'll, uh, we'll go,

27:27 we'll go one or two more on those. And then we'll get back to the task again to energy, but, uh, probably, uh, probably one of my favorite cause a huge man crush, Brett Michael. Yeah, I just

27:41 love Brett. And so I got back the beauty of a Brett Michael concert. Like if you go see the Brett Michael band instead of poison, everything's for sale. Like, Hey, I like that shirt Brett had

27:54 that he was wearing on stage. All right. How much? I mean, they auction Brett's all about the dollars. Right. So I go to the tour manager guy. I'm like, man, I just want to go back stage,

28:04 hang out and have a beer with Brett. like how much and I go, you tell me. So we negotiated a price. What was that price? It was actually five grand. But to Brett's credit, it went to Wounded

28:16 Warriors. Okay. Which I thought was really cool. But dudes like, give me a check to Wounded Warriors. So I go backstage and I rarely getting nervous around people, I mean, it's just kind of -

28:29 But yeah, you had butterflies. I had butterflies. And anyway, I kind of walk up to Brett and I'm like, Hey, I know this is kind of gay, but can I have a hug? I don't even know where that came

28:41 from. But I just did that and Brett goes, Dude, that's totally gay, but bring it on. Bring it on. Yeah, come on. He was a great guy, so I've now hung out with him. So he was kind to you? He

28:51 was kind, he was just cool. I've hung out with him now backstage, probably five times. Has he charged you five grand each time? There have been various prices all over the way. But again, every

29:03 time to wounded Warriors. which I think is cool of him to do.

29:09 He doesn't know my name. I don't have his cell phone number. We don't text, but if I walked in backstage, he would recognize me. It may be like, where's that restraining order? Yeah, yeah,

29:22 yeah, yeah. Well, he could see the yellow shirt with the I'm a ray of fire. I'm a ray of

29:28 fire. Yeah, that checks. Nice, nice. I'm still jealous on Timberlake 'cause I've never met. Timberlake was good. That was the biggest, I mean, he's like, you know, top 10 probably, I mean,

29:40 he's huge. At one point, if you said Justin Timberlake school a scout on the planet, people may disagree, but nobody could argue. Yeah, no, I would say he didn't have a spot in the discussion.

29:49 Yeah, exactly. I mean, now we've all, we've all aged. This is probably seven years ago, but back then, he was, he was that guy. He was playing with OBJ. Yeah, totally. Who was also cool He

30:02 was just kind of like laughing at the whole thing. Oh, so did you? You didn't go get a picture with it. No, I was even mortified after I got this one. Yeah, I was like, all right, come on,

30:13 we got to go. That catchy made against Cowboys. Oh, it was. Yeah, it was. And it was all right around that. I mean, the Cowboys still won the game. This is back. Giants, but those guys.

30:22 Yeah, he was awesome. All right, we'll go back to energy. So, yeah, we're worried. So give me some, give me some cool lessons learned, energy stories, whatever, for working out a bond fund

30:34 Uh, well, I was about to, during, during your milk in conversation. I mean, that's basically what, what we did. I mean, we would, well, first off, we were managing almost a hundred

30:45 different names at one point. So like, really, we were just a risk warehouse for banks who didn't want the volatility or okay, they didn't want the risk of loss or they didn't want sort of the

30:56 reputational damage of having to go through a workout or even being in oil and gas. So that was sort of like the array of people who sold. us. And within that portfolio, say, I think our high

31:10 watermark was 92 names.

31:13 75 of those were just trading paper. We either sold them right off to another bank, or we were just refinanced out, you know, over over the term. What is this is always so I've only been an

31:27 equity guy. I've only been a private equity guy. So I've only dealt in at least what I perceive as a hundred percent transparent information, right? I want to see that log. I want to see this

31:38 before we invest, right? What information do you have when you're buying a piece of paper? What you give the bank? So okay, a reserve report and financials, basically. And are you do you have

31:52 engineers that are going and looking through the reserve report and stuff? Yeah, a lot of times we were buying at such a discount that it not to say that it didn't matter, but it wasn't, you know,

32:08 it wasn't marginal, right? I mean, we were gonna do the deal.

32:12 And then there were some times that sort of like a redetermination got a little cuspy. And so we would have our engineer talk to other banks engineers, but yeah, we had an engineer. But we were,

32:24 I mean, we were kind of lending how, I mean, I hate to say should, but we were thinking about it how the bank should have been thinking about it, which is we're only lending on known PDP and

32:37 giving you an advance rate to that. So, you know, we weren't arguing about pods or locations or anything like that. And, okay, so I have a theory, one beat up the theory, but I think this is

32:50 potentially why you guys did well. You know, back in the day when I started my career, you in effect learned, call it 60 of PDP, 50 of PDP something like that, and a little bit of credit for the

33:03 PUDs.

33:05 Back before the Shell Revolution, the PUDs were generally speaking, kind of defined isolated things. Okay, we're on this structure. I can drill one or two more wells on this structure, right?

33:21 And where I'm going with that is, and the decline rate of the reserves was of the production was called 10 or 15. So you had a PDP profile that's declining 10 to 15 You're lying in 50 of that. And

33:36 the CAPX spend was literally kind of isolated too. Okay, we're going to get a rig over here. Yeah, it was chunky. It was discreet. It was discreet. Yeah, exactly, better word. Look at you.

33:48 I know how to read. Yeah, exactly. Shell revolution comes along. You know, your decline rate's much more dramatic, particularly early stage of drilling those wells. And then number two, You

34:02 had three rig contract signed and you're just trolling. Mm-hmm. You're going. And so I always thought bank should have readjusted to, oh, and you 60 of PDP from your three on, or something.

34:16 Yeah, yeah. And then potentially - I thought that's where you were going, because you can argue a lot about type curves. I mean, type curves are sort of a voodoo science, you know? It's like,

34:25 oh, what's, yeah. I mean, people argue about de-factors all the time. Yeah, yeah, so something like that and some way to potentially stop the rig, like don't let a rig contract be longer than

34:39 six months or something just so the CapEx would potentially stop. 'Cause I think the banks, I mean, the banks got in trouble 'cause all went to minus 37, but at the end of the day - Well, they

34:49 were in trouble before that, but yeah. You know, but it was just the game fundamentally changed. And so I don't see how their rules didn't change, you know? Well, because they're at 60 of PDP

35:02 fifty percent i agree and i think of the underwriters ruled the world. That's what it would be. But you have to remember when they got into this, call it early 2010s. It was hugely competitive.

35:14 And there wasn't an ESG factor there, right? It was, we need to get into this. I mean, it was the big, people discount this. This was the biggest technological kind of revolution in the last

35:26 definitely 25 years. I mean, since the

35:31 internet, yeah, since the 2000s, for sure. And so you had these, these banks sort of clamoring to who's going to serve that, right? And so they would knock on the PE firms and all these, these

35:44 other guys who were doing it, the Chesapeake's of the world, and they say, Hey, we want to be your banker, you know, and how do you compete? I mean, it's a fungible asset. So you compete on

35:55 terms. That's what I got told by one of the premier bankers at the time. I always said, why didn't y'all change and said, I couldn't. Yeah. I'd have had a book of zero. Right. No, that's

36:03 right. And. You know, the balance sheet is sort of a loss leader for a lot of these guys. They want the IPO, they want the MA, they want all of your capital markets, your treasury work. So

36:16 happy to lend the balance sheet to let you do sort of what you need to do. And then we'll get all this ancillary work. I mean, the contentious parts of our portfolio was exactly that. We didn't

36:27 have any ancillary work. We didn't look at this credit as a portfolio of fees that we could get It was like, here's the piece of paper. This piece of paper is worth this. And this is what the

36:39 agreement says. So I'm not going to extend you covenant relief. I'm not going to let you do x, y, z. Gotcha. Yeah, no, that was interesting times. But things have changed now. It's not like

36:54 a bunch of new people have come in to take our portfolio. We didn't get anyone knocking at the door to say, hey, we'll take the whole thing 'cause we really want to get into the space that that

37:03 money's just gone. So had you eventually had you eventually sell stuff off, kind of a lot of the facilities got right sized, okay, so the facility shrunk, things got securitized, there's been a

37:18 bunch of MA. So our our piece like Verdun was a great example, you know, all the smash codes. We were in several of the companies that ultimately got combined and then they would go forward with a

37:30 new facility Got you. And then just and then when you had, I mean, kind of post initial rush of COVID and you had prices race and you had no cap expense. You had cash to I know it. We had we had.

37:44 Oh, yeah, everyone's like, Oh, why don't you just keep doing that? It's like the window. Yeah, the window opened and that window just slammed shut. I mean, we bought this in May of 2020. So,

37:56 you know, oil was like 20, 30 bucks on strip. We're buying things at PDP. And then sort of by the middle of 2021. prices that are covered to sort of like50, 60 range. And the Fed came out and

38:10 said, There's no distress credit, we've got it. So,

38:17 I got fired late April of 2020. Okay. So right before you bought what Heinz and I did, you know, COVID kind of hit prices collapse. We went through and just rationalized the portfolio in terms of,

38:35 okay,

38:37 who should we have shut down anyway? We kind of did that. We started looking at GNA save to, things combine to ways

38:45 .

38:47 And Mike and I, we didn't really talk to the group about it. We hadn't talked to LA about it, but we had a couple bottles of wine and talked through, Okay, what's gonna happen? And Mike's like,

38:59 This is gonna bethe greatest buying opportunity of all the time And I said, yeah, but nobody's going to sell us anything. 'cause the equity holders will just take it to bankruptcy before they give

39:11 it to you if they're not getting anything. How are we gonna do that? And we spent a lot of time in the thought we had was, let's just go out and buy a bank portfolio. Let's go buy debt,

39:23 maybe

39:25 even we even had the discussion one night of maybe we had just our fees and we just go buy publicly traded companies. Well, that was the play I mean, looking back, if I could have done something

39:36 different, it would be more aggressive on the equity side. I mean, Ontario traded to 40 cents. Yeah. Yeah. That was just insane. And there were several things like that. I mean, we had the

39:47 discussion of, what is the right management fee, but maybe we just adjust management fee or we suspend them for a year. 'Cause the way the deal work with Caine It's kind of like me and Mike owned

40:03 half and pain kind of in their house And then all the employees and everything kind of dilutes you both, you know, so it was kind of this awkward marriage type thing. But, you know, we were

40:15 thinking maybe the pitch is just, hey, I'm a new fund. We're going to deploy it all this year over the next three to six months. And we'll for go management fees for a year. And then then we'll

40:28 turn them back on. And we were thinking that maybe LPs would would go for that. Hey, we signed up for private equity and all those And we're just, we were going to be, we can't get your exposure

40:38 there. Because nobody's going to sell an asset. Well, and no one was willing to take a view on pride. I've talked to so many people. They were like, well, we told our LPs, we want to take a

40:47 view on commodities. And you're kind of going, well, wait, I mean, come on, we're, we're obviously on a tail, right? Just like, just like oil goes to 300. I mean, you're, you're on the

40:58 other side of the tail. You should sell that. And you know, when oil is at 20, the world doesn't work. I mean, like. if it keeps going like that, we're all eating out of cans. So like maybe

41:07 now is the time to take a view. But a lot of people didn't. Some people did. I mean, the inside deal was huge for those guys that did take a view. Yeah, yeah, it was good for us, I mean. And

41:22 our whole book pre-COVID

41:26 kind of, let's call it 2017 to 2019,

41:34 our whole view of the world was, it's gonna be incredibly volatile, but it can't go below 40 for that one. 'Cause the US is the marginal producer, nothing's making money at less than 40. 'Cause

41:49 when we did the Silver Hill 2 deal, which was,

41:57 which was basically 2000,

41:60 I had to have been 2016,

42:04 I think. when we did Silver Hill 2, the investor memo for Silver Hill 2 was if we just duplicate what we're doing on Silver Hill 1 acreage, and these acreage blocks were right on top of each other,

42:18 if we just duplicate that, we make 20 rate of return. The Silver Hill 2 acreage was actually blocked up so you could draw long laterals. If our 13 CapEx for a

42:30 long lateral versus a shorter lateral, and we get, you know, 2X the reserves, 'cause we're going twice the length. If that works out, we got a 30 rate of return. And then the other thing was if

42:44 we could find one more zone, or actually that was a 35 return, if we could find one more zone that looked like the Wolf Camp, we would get a

42:56 50 rate of return and Concho had drilled a long lateral, I'm blanking on the other zone. But we were gonna get to go frack that within the first 30 days of owning it all that investor memo like

43:10 lined up perfectly It was great. It was all predicated on forty dollar oil and when we signed the PSA to buy that from Kancho The price oil was thirty one ninety six

43:23 But that's a great that's an opportunity you can't get in otherwise right now everything is we wanted that asset more than Kancho did Yes, they wound up we wound up drilling a few wells flipping it

43:33 to RSP and Kancho went and bought RSP So they can get the ass beautiful. Yeah, beautiful I mean now now it's sort of going the other way like it's just a cost capital game and scale and everyone's

43:45 getting Consolidated. Yeah, so how do you make how do you make money now? Because like, you know, I don't know in energy. I'm not sure I get the fun I get the you know, I get everybody's like

43:54 when you can go raise your own fun as well. What would you do? Having fuck on my t-shirt like misspelling masturbate on Twitter, but But I don't know what, I always say Rice University is 'cause

44:07 Allison and I have been Thacker this year, I have been friends since Rice. I've known John Lawrence for a really long time. They were always my biggest and most supportive, limited. And I'm

44:18 always like, what am I gonna go tell those guys that I'm gonna do to make money? And I don't know what I would do to make money in EMP. The only thing I'm doing in energy is buying things offshore.

44:29 And we bought into a couple overrides, which have worked out very nice. But the whole premise, and it doesn't really work for PE, is that, look, I'm gonna buy PV high teens, and I have a

44:42 reservoir that's going to produce for another 10 or 15 years. And I get exposure on hedge to the back end of the curve. And that's not very exciting. And I don't think you could raise a fund around

44:55 it. I mean, I don't think you'd get enough velocity around it, but that's the only thing that I see. done. I mean, that's kind of Brian's Brian's fund that he raised and and the Silver Hill guys

45:07 who are kind of doing it now. I mean, people are buying PDP getting getting access to that curve and trying to optimize it. But the whole drill bit or the the land flip thing I, mean, that that's

45:21 over. I don't we scale. Yeah, we hit every piece of rock with a bigger hammer. Right. And so, I mean, I think we know what every bit of rock on in the United States will do within boundaries,

45:35 you know. Yeah. Now you're starting to see more finesse people going, okay, I hit it with a sledgehammer, would, you know, would the 10 pound hammer versus the 20 pound hammer work better in my

45:45 economics improve? I mean, you're getting into really fine tuning of things, which is hard for PE to get into. Yeah, I mean, it's, it's, and I've always been literally my whole career been a,

45:60 guy. And so, you know, the things you do today, I call it, you know, you need to be a plumber and worry about nickels and dons. I was never very good at that. Yeah, I have a hard time with it

46:12 too. This was interesting because we talked about this this week on BDE. But, you know, if you looked at the improvement of oil wells in the United States, let's go. So 2010 to 2016,

46:32 every year, they were going up 30. The average well was 30 better, IPs, all that, right?

46:40 And then in 17 and 18, they were up like 20 and 15. So they were still getting better internal. Raymond James did an interesting analysis. They, in 17 and 18, took every well in America drilled

46:58 in the database. took out Chevron and Exxon. Okay. And the thesis was there is, those guys historically had not been drilling. They're late to the game, so they start drilling horizontal,

47:11 modern completions on the best rock in the Permian. So why should we count their wells, kind of coming late to the game? 'Cause that's not really technology, that's just putting some great rock

47:23 into the mix. Right. And when you took that out, actually, well performance was like, up one percent, down three percent. So it kind of flattened out then. Yeah, there's a thing is

47:36 diminishing returns. I mean, I'm like, yeah. Yeah, totally. And it's worse rock, right? I mean, you drill all the good stuff first, typically. Yeah. And there's only so much you can do. I

47:46 mean, it's a - And we got a goal. We tried everything. Yeah. And we got really good at it, really quickly. Right. And then you had to get to work.

47:58 I didn't get to real work. Yeah, so yeah, and it kind of felt like, to your point, what you were talking about earlier, at Cane during kind of call it 17 to 19, it was let's dial this back.

48:14 Maybe we're changing sand type types. Okay, let's try some 100 mesh, you know, just to see, but it was about optimizing and how do we save? Oh, we lost 3 of our EUR, but we saved 15 on the

48:28 front end. Great, let's do that. Yeah, and even financial optimize, you know, the securitizations have sort of changed the way people think about themselves. You sort of have a

48:39 manufacturing company and then, you know, like a REIT almost inside a lot of these things. So you're starting to see people break those up to match cost of capital, but there's not a big obvious

48:53 thing to go get, you know the low hanging fruit is gone. it's kind of blocking and tackling. And now I'm like sitting here going, we're gonna listen to this podcast and call us buzz kills. That's

49:07 fine. Yeah, that's okay. It's okay. I've been calling it - I've been calling it the worst, the grumpy old man. But let's close on this. We'll redo this podcast in five years. Okay. What will

49:21 we talk about on the podcast five years from now that no one's talking about today? That's a good question. That's a good question. If you want a moment to think, I'll go with one of them.

49:38 Yeah, you start, you start. You start and I'll ignore what you say while I think about what I'm gonna say. Yeah, exactly, 'cause I hit that with you. And it's kind of unfair to say we're not

49:49 talking about it today 'cause there was just an article on it But I really do think that micro new. is what's going to run data centers and oil field operations that literally we're going to detach

50:06 from the grid for for those that need baseline power, reliable power, cheap power, not intermittent stuff, that we are going to see the disaggregation of the grid. We're not we're not going to

50:21 bulk up or caught to handle all this power we're going to need over the next 25 years. Well, yeah, and that's the answer, right? I mean, I mean, if you really wanted to fix all of the energy

50:35 problems specifically, you would look towards nuclear and we always say that, God, if we invented this today, we'd be gone. We solved it. Yeah, we solved it. Yeah. Well, it's first off,

50:46 it's hard and it's it's scary for people. It's a lot like the offshore stuff. No one really wants to do it because the the images ingrained in your head are just so awful. you know, and they make

50:57 movies about it. And it's, you know, no one, no one wants to take the time to get comfortable with it, but yeah, I agree. I mean, I was going much more macro, but - Well, here's, and let me,

51:10 let me kind of finish this one point, and then a, then, then a chair turn is, and I think the reason it's gonna happen is because nuclear is not widespread, 'cause you're right, people have

51:20 scared people, which has led to a regulatory, just morass of shit that you can't get nuclear done without all this pain. Tech is realizing they need the power. Tech is studying this, and why us

51:36 energy companies aren't providing the solution to tech, and we're letting tech do it themselves. It's kind of a soapbox I get on, but tech's figuring out that nuclear is it. Tech is gonna go use

51:48 its regulatory gravitas pull with the government to get nuclear approved. That's kind of my I mean, when Oracle and Google and Facebook walk in to a democratic controlled Congress saying we want

51:60 these rules in place, and oh, by the way, we'll keep running your algorithm that gets rid of

52:11 misinformation, that's going to be the right. That's it. Yeah. That's a whole other podcast. Very good. Yeah. All right. I don't know. I guess I'll take the Luddite view on that

52:23 We'll change and if you look, if you sort of look how COVID has played out with the various sort of like political goings-ons with the wars and everything, we've actually regressed in our energy use.

52:37 I mean, we're using coal hasn't peaked, right? I mean, everyone talks about peak oil. Coal hasn't peaked.

52:44 I think it's going to look a lot like it is until we go through something that forces us to really look at these new technologies, which are really old. 70, 80 years old at this point. Yeah,

52:60 empowering our submarines in the Navy forever. Right, right, but

53:05 I think there's two, I think there's gonna be two competing forces. One is the Andreessen view that like technology fixes all. Right. And then there's sort of this pragmatic view that I think is

53:20 playing out right now is that that's too big of a leap and we're trying to get too far out in front of ourselves that we're actually going backwards. And maybe that's a temporary, who knows the

53:34 timelines on these things, but you're seeing it play out that we're going backwards in terms of what we're using. And I think that the problem of, I think poverty is a bigger issue than

53:49 environmental. I think that people in Africa and India don't really care about. the West ESG movements, like they wanna get off of burning wood. Yeah. You know, burning wood and trash. And dumb.

54:05 And dumb, yeah, no, it's disgusting. It's really just, it's disgusting. You would never wanna live like that. And so the lowest hanging fruit for them to transfer over is propane. It's easy,

54:16 it's cheap, it's portable. You can send it all over the place. So I think that is gonna be the problem that solved first and it's not really talked about Poverty is a bigger issue than, I think,

54:30 than the environment and so we're gonna kind of solve that and that kind of gives us time to think strategically about. I think it's nuclear or there will be some new, I mean, if we can solve the

54:43 fusion issue, that would be a game changer, but it's hard. Yeah, no, I mean, Arjun, Martry always likes to make the point that A billion of us in the West average, what is it, 13 barrels a

55:02 year? Yeah, that's right. Of oil consumption. And then the remaining 7 billion of people on the planet use one or less. It's less than one. Or three or less, I think is what it is. And so the

55:14 answer to the poor growing population cannot be let them eat cake. Right. Yeah, but that's kind of the direction we're going, I'm on a board with Chris Wright and he's sort of taking it upon

55:26 himself to evangelize all of this. Yeah. I've got his little book, but

55:33 I mean, I kind of thought this intuitively, but seeing the data he put together, I'll give you the book. Oh, cool. I like Chris. Chris is good. Yeah, Chris, he's got a lot of energy and he

55:43 thinks. He's good.

55:46 Yeah, I think from a humanitarian view, that's a much weightier and bigger issue to solve fine-tuning our carbon emissions in the richest three countries in the world. Yeah. No, I think that's

56:03 absolutely right. And I think the only way you can actually afford to get rid of your carbon emissions is to become rich. And the only way you can become rich is through energy. No, that's right.

56:15 No,

56:17 that's exactly right. I mean, the healthiest and highest standard of living countries in the world are the biggest consumers of hydrocarbons. And that's there's no political view on that. That's

56:29 just that's just a statement of fact, you know, it's actually the tightest correlation

56:37 in the world. Right. Right. And there's there's even an argument that you could make that you really want a lot of the you want all of those populations to go on to some form of hydrocarbon because

56:44 right now they're deforesting areas in order to fuel their lives. Right. You know, you can see there's aerial views of countries and I'm

56:55 not remember the country, but basically one is one is on a hydrocarbon based system and one still burns wood and one is what you would imagine. I mean, it's Mad Max kind of pastures and one is

57:08 densely forested area. I mean, there's a lot of ways you can go on all this and I think the narrative isn't it's just going to be incapable of playing out that we can just go completely renewable

57:21 and that the world will follow. There's just not a there's not a pathway for that. Well, I mean, this is Mark Mills's stat and I may be misquoting it, but the spirit of it's right today. Three

57:36 times the amount of energy used is burning wood versus renewables on the planet So this whole thing of we have energy transitions is BS. We have additions. Yeah, that's right. That's right. And

57:51 then in the transition you really want is a way from wood and trash and dung to propane. Yeah, totally. And the biggest issue on that is that propane is a sizable capex investment to the end user.

58:07 If you're on a dollar a day for your energy consumption, you can go buy wood or charcoal or whatever for that dollar and you take it back to your hut or whatever, and you burn it and you consume it

58:20 and that gets your water and your food cooked To buy propane, say it's also a dollar a day, but you have to buy a 30-day supply of it, right? And people don't have

58:34 that30. So that's the real friction to getting people converted over to that, right? I've said for the last three years on the podcast that if we truly wanted to make things incrementally better

58:46 and I'm still not convinced, I'm still not convinced that CO2 levels rise. and then temperature goes up versus, if you look at the data over the last 150 years, temperature went up first, and

59:02 then CO2 rises, and yeah, it's amazing. Well, and there's a self-correcting mechanism that the earth, I mean, the earth can sort of like protect itself from these swings, via forest and the

59:14 oceans and things like that. And it's been doing it way before we're here. It's been doing it way before us. I noticed that when I get a Diet Coke, and I let it sit here and it warms up, it

59:23 becomes less fizzy.

59:26 But so, you know, who knows, but we ignore that at our own peril, but

59:33 yeah, no, I mean, I forget where I was even going, I thought, but. Yeah, no, well, I think we're at Echo Chamber here, but yeah, we'll talk in five years and see how it's going. Travis,

59:45 cool of you to come on, dude. Yeah, this was fun. Thanks for having me. Absolutely. Maybe we'll do it before five years. How do people want to reach out? I'm I'm I'm on LinkedIn. I guess

59:56 LinkedIn. That's probably the easiest value last name. Yeah. It's B O E K E R. Got it. Yeah. Or they can call you you can vet. You can be my gatekeeper. Travis is off. Yeah.

1:00:10 I need that. Yeah. I lost most of my contacts and my cell phone a year ago, because when they suck it up to the cloud, you have to have contacts turned on. Yeah So anyway, I didn't, I didn't do

1:00:22 that. It's made my life so much easier. I just get these texts and I don't respond anymore, because I don't know who it is. So it's refreshing. It's great. Yeah. It's like cleaning out your

1:00:30 closet. Yeah, exactly. That's good. We'll get to see you, man. Likewise, dude. Yeah. That things are good.