Chuck Yates Needs A Job

0:00 Everybody welcome to Chuck Yates needs a job, the podcast. Little different twist on the episode today, sat down and did a thing with Max Gagliardi. We chatted, whether I'm on his podcast, he's

0:13 online. I don't know if we can really tell the difference, but we chatted, got a lot of industry stuff going on. Also talk a lot of the bowels of private equity, how management fees are paid,

0:25 truth behind smash codes and the like. Also talk podcasting So good episode. Give it a listen. Peace out

0:45 Yeah, I'm sitting here looking at this picture. I look fat, ladies and gentlemen, I'm not actually this large in real life. Yeah, it's, what does it say the camera adds? How many pounds? At

0:55 least 25. Yeah, there you go. 25, 30.

0:60 We're here. By the way, you're Ethiopian level skinny, just for the audience, just for the audience, yeah. Try and check, I'm fighting the good fight here in my 30s, it's not gotten as easy as

1:10 it used to be I did hit 52, man, it's brutal.

1:15 Yeah, it's one of those things I've noticed that I do the same stuff that I used to do, but the inputs are the same. If you do the same inputs, you're not getting the same output in terms of the

1:23 way you look. It's like, you used to be able to just crush a whole pizza or something, and you're like, okay with it, now you crush a whole pizza, and you gain a chin, like you see it the next

1:32 day, like in the mirror. I mean, just your metabolism, if you eat exactly the same thing every day for 30 years, and that is, you know, what would keep you at Zero right you know when you

1:45 started that 30 years later you put on 30 pounds. That's how that's how much your metabolism slows Yeah It's depressing Chuck. It means we're gonna have to eat a lot less things or get better

1:56 filters for the yeah We need those filters. I don't know how to do the airbrush thing. I'm just it's just only me cat

2:04 It's gonna be the most pathetic thing from our generation cat filters. Those are ridiculous I don't know man. Like you know, it's weird to me is like selfies growing up like we had basically I mean

2:15 you're even different than me But like even when I was younger like selfies weren't popular like if you got caught like we had like the little wind-up cameras right,? Yeah, you take it, you know

2:23 Well, maybe you take a picture yourself with that if your friends caught you doing that or found a selfie of you You would have been made fun of so hard. Oh my god Take a picture of yourself you

2:32 lose or now. It's just like everybody takes selfies It's like the most popular thing and I just it's hard to wrap my head around I just would have been And I came from a different time where you

2:41 would have been highly ridiculed. or taking pictures of yourself, but now this is like a very popular thing. Dude, I can hear like Bruce Springsteen's glory days going on in the back there, glory

2:49 days. You're not that old, man. Yeah, yeah. But with technology, I feel old sometimes, right? It's like things have changed quickly. And I mean, my daughter is older than the, or I think

3:02 all three of my daughters are older than the iPhone. That's wild. Which is kind of, yeah, it's crazy That is wild, so, Summernape, we're here. This, it's a little bit dead. I'm not gonna lie,

3:16 I was out on the one out today. I always regret like getting a ticket for the floor. I'm always like, I shouldn't do that again. And then I end up doing it. So I'm like, yeah, I wanna go and

3:25 see what's up. And man, this year it was like a little sad. I was down there, there's just not much going on. So if kind of baseline, what, a third of people there, a quarter, half, what

3:38 does sad mean? Well, what was sad to me was that not necessarily even just the lack of people, it was just the lack of booths and usually down that center corridor, uh-oh, we got. We got some,

3:49 whatever that means, hold on. Dude, you really shouldn't be watching porn while we're trying to record this podcast. But I would say that the main thing was that center corridors, usually where

4:00 some of the bigger companies or bigger names have their booths, you got some big booths. It's usually a lot of traffic down that corridor and there's a lot of empty real estate, like down that

4:09 center area, there's just no big booths. And then you had like even, I mean, I don't know that I saw any of the majors, even the large independents, I didn't see hardly any big booths. I mean,

4:18 it was just kind of dead. And then when you coupled that empty space on the middle with just nobody there, probably a third or 25 of the people, it just felt like we're not back yet. I feel like

4:29 we're back, but it doesn't feel like we're back yet when I go to that. Now, do you think that was, you know, we're not back yet? or is that just the COVID bounce? All right. it's probably both.

4:40 I mean, I got the COVID things freaking people out, you know,

4:44 I mean, if you are vaccinated, your chances are really low, but

4:50 people that are vaccinated are freaked out. There's a lot of media, like, just scared stuff that every time you get on the media, it's just like you click off of it feeling like less safe when you

4:59 look at stuff. Yeah. Well, I mean, we can't have that big a second wave here, because if you think about it, I mean, what have there been 35 million confirmed cases? Right. And let's just say

5:11 there's been two exact, because we all know people that never got tested, but clearly it had it. So that's 70 out of

5:20 330 million Americans. So, you know, let's say that's 10 and then 50 of us have gotten vaccinated.

5:30 At some point, I mean, they're just running out of people because I don't, I know everybody says, oh, you can get it twice. I know such and such as

5:39 friends, cousins, girlfriend, had it twice. I mean, at the end of the day, if we could get it twice, we'd see a lot more of it, you know? Well, it's something that is definitely going to

5:49 dominate the energy stuff. I mean, look at oil has been down again. Now, I think the Delta stuff is weighing on that. This conference has been down. I think that the Delta stuff's weighing on

5:59 that. But, you know, beyond that, to move away from the COVID topic a little bit, let's just go into what I want to talk to you about mainly is just about capital, private capital, and energy.

6:09 It's something that you have a lot of background in. We've raised private equity in the past with one of our companies. And so this is a short podcast. 'Cause there is

6:18 none. I mean, right, you know, unfortunately. There is none next, but what are you gonna talk about? Well, I mean, there's some, but like even with the capital that's out there, I don't

6:27 know what the objectives are of that capital. I mean, it's like, guys have to raise money and deploy money to be able to, you know, to survive in the private equity world and guys are having

6:40 problems raising it, but even the guys that have raised it, I think they're having problems deploying it. Just, yeah, no, I think you've got kind of two things and then we'll roll into a history

6:50 lesson on that. You obviously have a red problem. I mean, we just lost a ton of money over the last 10, 15 years, no question. Then the second thing you've got that I think is more real today

7:06 than even folks that acknowledge that it's real, but it's the green problem. I mean, you truly have institutions that have said, if anything is

7:19 a furtherance of a hydrocarbon, either making it cheaper or more efficient, whatever the case may be, or actually, God forbid, drilling for a hydrocarbon, they'll stop investing in it So, I

7:29 mean, you truly have pools of capital that are off-limits to oil and gas kind of for the first time. So we've got the red problem, we've got the green problem, and just to kind of put that in the

7:41 context of history, so folks appreciate this, you know, in the late '90s, when Ken Hirsch was fundraising for early natural gas partners' funds, and you had the NCAP guys doing mezzanine in the

7:59 late '90s and raising money for it, you walked into an institute institution, and you met with their private capital bucket, and that person did LBOs, buyouts, venture capital, anything private

8:14 capital related, so you had to go in and say this is energy, this is why it's an attractive area to invest in, etc, then call it 2005, 2010 in there, you got to the point where most of these

8:31 institutions had created an asset class called Real Assets, and generally in there you had energy, you had real estate, you had timber, stuff like that. And when you walked in to talk to that

8:43 person, what happened is not what is energy, is it good or bad? It was why Kaney Anderson versus natural gas partners are in cap. It was much more that discussion. What's your strategy in this

8:56 area and how do you compare and contrast to the other folks? And so for a good run there, 10, 10-ish, 15 years, it was just an asset class and institutions were dedicated there. I think that

9:12 that day's gone now. You've seen slowly people drawing back their allocations towards energy. And it's happening, I believe, today. But certainly, it's the future. When you walk back in,

9:26 you're talking to a private capital person who's comparing energy to buy out. venture and the like. So it's going to be tough sledding because generally these institutions look historically five

9:39 years, right, wrong or indifferent. That's just the way they do. So when you walk in there, here's my last five years of performance, it's going to be tough, particularly because bi-out and

9:49 venture and others have just been on fire. Yeah. Yeah, it's tough, but I mean, it's like, do we need a lot of capital in the energy space? And so I know that there's the green, you talked

9:60 about the red and the green, the red has been, you know, there's periods of the red throughout, right? It makes a cyclical business. So I'm sure there are other times, if you look at five of

10:09 your windows, maybe not as dramatic or as bad as the last five of your window, but there's times where it's cyclical. So you have that and it's always something you battle against, I'm sure in the

10:19 energy space, but then you couple that with the green problem. And now you really, for example, like you've got Larry Fink coming out last week with his letter and I've talked about this on the

10:28 pod and he's saying we have to just completely move away from oil and gas investment, everything has to be ESG and green. And like, let's just face it, like, you know, every Tesla has 800 pounds

10:40 of plastic in here, right? Like, and everything has oil and gas. So this idea that we can just starve capital from traditional energy and alcohol traditional energy, oil and gas, and then

10:52 that'll solve the problems. Like, I think that's gonna create some problems. But, and again, like, I mean, that's not like a hot take, right? Like, you starve capital, it's gonna make those

11:01 markets, the prices are gonna go up, guys are gonna struggle to get projects done. And this, I think, in some ways, may make it harder to transition the energy transition because I don't think

11:12 things are very efficient when you're just starving capital and that's your main goal. Yeah, no, I think if you look back, I mean, what was the problem with price, IA. why did prices fall solo?

11:24 And it was the US going from peak production in 1970 1972 to call it

11:35 2007-2008 of reversing the trend and in effect doubling production. That's supply to man, more supply, prices went down. What was

11:47 interesting is that happened in the United States at the same time, there was beginning to be a belief that Saudi Arabia had certainly peaked. You had Matt Simmons book, Twilight in the desert.

12:01 You just look at the number of rigs the Saudis were running. Call it, you know, historically they ran 50 rigs a year during kind of 2015 to

12:11 2018 somewhere in there. They were running 150 rigs. So if they truly had all this excess capacity, they'd put it on. Then as well as a shit share, the Russians have been more resilient than I

12:24 thought we were then they were going to be able to be. But you truly are kind of running out

12:32 of economic oil and, you know, at the end of the day, you and I both know it's not that you run out of oil, you just run out of oil at that price. And so, yeah, no, it's, if we're gonna put a

12:43 stranglehold on the US business through, you know, regulations, not building pipelines, banning, grilling on federal leases and all, oil's gotta come from somewhere 'cause Leonardo's not

12:56 stopping flying his private plane, right? No way. No, he's not But we talk about this a lot and it's like, we can look at the ESG theme. You think about the, it's really, it's mainly E, I

13:07 think. And I've been, I've even tweeted one time. I think they're gonna drop the ESG at some point because it's not social and it's not governance to outsource your energy from countries like OPEC,

13:17 right? Like they don't, there's not basic human rights there. Women don't have the same rights. LGBTQ don't have the same rights. So when Gavin Newsom says, we're gonna stop fracking completely

13:25 in California and they're importing their oil from Saudi Arabia, Iraq. These other countries that don't have governance, they don't have social norms that we have here. Not the nicest folks on the

13:38 planet, are they? I mean, they're not, I would hate to say, I don't know that I could go as far as say, enemies, but they're at best for enemies, right? Yeah. At best for enemies. They're

13:48 not leading the cheerleading squad for Go America. No, and so when you say that we're gonna go green, and that means we're gonna stop, you know, the cleanest oil fields, probably in the world,

13:57 in California, they have some of the strictest regulations These oil fields are very clean. And then we're gonna outsource it from the dirty. That's just off-shoring carbon. And that's a theme

14:05 I've talked about. It just bothers me. And this is where I get a little cynical with ESG. It's like, if the goals, if we wanna meet the goals that we wanna meet, let's talk about realistic ways

14:13 to do those goals. And it just seems like the things that are gonna push forward, like going all EV, it sounds great. Well, where are those minerals and where are these rare earths and where are

14:23 these things gonna come from? We don't, you know, there's an irony there that we can't produce the mining materials. because they're too dirty to do that. But we gotta go green by going to all

14:33 these mining materials. We can't even make them here. We can't even mine them here because the permitting is too restrictive 'cause it's dirty, so. I've done back to the envelope math on it. I

14:41 probably ought to put real pen to paper and come up with it, but you know, you're not in the middle of these places mining these rare minerals by plugging into an electric socket, right? I mean,

14:52 it all runs off diesel. Right. And I think, very back to the envelope, what you lose in gasoline consumption on EV cars is made up for by the diesel you spend mining those rare, rare earth

15:11 minerals. And so, I mean, to think, you know, that's gonna cause a problem with oil demand in the future is just foolhardy, right? Right. Yeah, no, this is exactly right. And the other

15:24 thing is that, you know, What I like to say about electrification is that it's a it's convenient, but it's not efficient. So electrifying everything, it's hard to do. I mean, electricity to

15:39 generate power, to get it on the grid, you're losing a ton of that. I mean, I don't know, I've seen estimates and I don't hold me to this, but 60 to 70 of energy is lost just from the production

15:48 of it. Think about for gas, I'll pick on gas. That's what my background is in midstream. It's like, you got compressor fuel, you got line loss, you got to get it to a plant. There's emissions

15:57 at the plant. The plant has to process it And you've got to get it on a downstream pipeline. That goes to some - that's got fuel. That's got line loss. You get to a power plant. They got to

16:06 generate power. It gets on the grid. You're losing 15 to 30 of the energy's lost moving across the grid. You plug in the Tesla, I read the other day, that Tesla's lose about 5 of their charge

16:16 just idling. So you're losing - just when they're sitting there, they've got the century mode or whatever. They're losing power. So you start to look at the hill that we have to climb. Just it

16:24 gets back to the steam around efficiency. It's like, if you're starting, ask a good engineer. but ask a good engineer and say, here's a problem you gotta solve. And on this one side, you start

16:35 off at minus 70 efficiency to get to the same end result as carrying the fuel to the car. And just like you can store that energy in the fuel. Like there's some energy to get gasoline obviously

16:46 refined, but that engineer probably tell you that's a hard problem to solve, but we're glossing over, like it's just really easy to electrify everything. It's just kind of a

16:56 head scratcher to me. Yeah, now my pet peeve, and we were talking about this earlier are wind turbines, right? Because the amount of energy it takes to build a wind turbine, ship it over from

17:06 China to the United States and stall it, is about the same amount of energy it's gonna produce over its lifetime. And so if you think about that, what is powering the energy in China? It's a bunch

17:19 of coal. So we're basically exporting Chinese coal to the United States with tax subsidies. Yeah, you know, and the reason - You're selling a shitload of birds, dude. Right, birds, dude. Yeah,

17:30 for sure. Now, I mean, if you think about like, the other thing too is if you look at expensive energy, or just expensive things in general, why are things expensive? They're expensive, why

17:41 are EV cars more expensive? They're expensive because of the man hours it takes, or the labor that it takes to build that. Some people could argue that labor and man hours directly correlate to, I

17:52 don't know about emissions, but it correlates to impact, right? Like if something's more expensive, you probably had to have a bigger impact to create that thing than something that's less

17:59 expensive. So just intuitively, it's like if this thing's more expensive, it's probably less efficient 'cause it took more man hours to create it than this other thing that you could create. Or

18:08 the other thing, if you look at efficiency, think about the land use for wind and solar, so much land use versus a natural gas Christmas tree, it's the sixth out of the ground. You can look at

18:18 the land use involved there versus the land use for the same amount of energy for solar or wind, it's just like, gets back to efficiency, it's not all that efficient. And so I think there will be

18:27 a mix, and I've said this before, but this idea, getting back to the capital side, that we can just starve capital on one hand for oil and gas, and we can shove a bunch of capital to these other

18:38 technologies that in a lot of ways are less efficient. I think that's probably the right approach. And as it's impacting what I've done and what you've historically done, which is the energy

18:48 industry, oil and gas industry, I'm seeing private equity groups, and we're talking to them about what they're trying to target, what they're trying to do. And it feels a little rudderless right

18:57 now. Even the guys that have money, it's like they're getting a mandate to decarbonize on one hand, but then the same hand, like the on the other side, they, they're backgrounds, oil and gas.

19:05 I mean, how did it, I know you're out of it now, but how does it feel to be those guys right now? Well, I used to always joke with LPs. Hey, when you don't feel like giving me the money,

19:15 that's when you should give me the money. And when you feel like, oh man, I need way more oil exposure. Here's a big checkbook Yeah, that's always the time you shouldn't be. give money out

19:25 because I mean that's kind of the classic bubble. I did a talk for hearts. I want to say last January where I went through in shale and basically said it was a bubble and compared it to the

19:36 railroads in Great Britain in the 1850s and the tulips and these other bubbles in history will clean energies the next bubble. I mean right because it is a tidal wave. I had pickering, damn

19:50 pickering on the podcast and these are really his words as opposed to mine but you know pickering says it's a tidal wave, it's being driven not by government regulation but by consumers, investors,

20:04 companies that truly want less carbon. So the money is going to get invested and it's going to happen because of that but you can't tell me any money is going to be made off that. I mean, it's

20:16 going to be tough. I mean, there's just not a lot to chase really, like the end of the day, like what can you chase? I mean, the Cost of capital is getting pushed down so low on these renewables

20:25 projects. It's like a toll road type You know, let's go ahead and take the subsidies out of them. See what happens. Yeah, no joke Well, then you look at like carbon capture so I have a more

20:33 midstream background and it's all predicated on You know tax code right now with these 45 cues and it's like well that can change You know like how do I do a 30-year project off of credits that only

20:44 go for this time period and then we could get a new administration And I made that point to somebody and they were like Actually, I think it's pickering potentially that I brought that up to and he

20:52 said there is no He didn't see any political risk with those credits. He goes. Oh, hell you just go buy you another congressman Ain't hard. He basically just said that the it did the pages already

21:04 turned and that were past this point This inflection point to where we're not gonna go back to where the sentiment could change and I think that People paying more at the pump people paying more to

21:15 heat and cool their homes like that can change sentiment I mean, it can like when that becomes a bigger chunk of somebody's You know, every month if you have a thousand dollars of discretionary

21:25 income and you're now spending300 or400 of that on gasoline to fill your car up versus a couple hundred bucks, like that's material for people. And so I just don't know that pocketbooks, like we

21:38 can just say, look, it's not going to matter the impacts that this have in terms of fiscally on people that the sentiment's going to carry it. Like I think that there has to be efficiency because

21:46 if there's not efficiency and it rolls through to people's pocketbooks, I think sentiment could change potentially And it's a number you see calculated how often do you fill up your car once, twice

21:59 a week. You see literally it's been right in front of you, it is daily, it's whatever, 309, tomorrow it's312. So

22:11 I do think of all the things that potentially could have an impact, and I've talked a lot about them on the podcast, can we get the other side, the environmentalist. trust us because that seems to

22:23 me to be the big issue is just the two sides don't trust each other. I actually don't think the environmentalists think that burning hydrocarbons is necessarily that bad a thing. They recognize the

22:37 tangible benefit of it. It's just, hey, y'all are bad actors. We don't trust you. Hey, you're telling everybody the world's going to end in 10 years. We don't think you. But so I do think if

22:51 trust somehow got built, you could have a more fruitful discussion and do things like, hey, wind power, guys, it's just not going to happen unless we start building it off solar panels, you know,

23:02 and that may happen. But no, you're right. I mean, if somebody suddenly paying7, 8 a gallon for gasoline, then it becomes real Right. It can change behavior. For sure. And people just things

23:16 like this is the marketing battle has been one by the green side. I mean, just the fact that we're using the word clean and green. I mean, everything has an impact. And this is, again, things

23:24 I've talked about before. It's like, nothing's truly clean. Nothing's truly has no impact. And so when you talk to money on the capital side, we've had some interesting conversations because

23:37 we've looked at projects or things or investments where we were reducing impact and by impact a lot of times, that's emissions Scope one, particularly in the oil field, some different ideas or some

23:49 different investment themes. We also looked at some companies that were pitching and had some really cool technology around recycling or around cleaning things up in the oil field. And you socialize

23:60 some of these concepts with certain money groups that have historically been, and why buy money groups? I mean, private equity groups that have historically been very much in either midstream or

24:08 upstream. And they say, some of them are open to that. They like that because they could probably roll it into an existing fund that can still do oil and gas investments. others that have raised

24:18 new capital say no, that is perpetuating carbon and that is greenwashing. And it's like, but I can reduce more scope on emissions than Tesla if I switch everything to electric compression in the

24:30 Permian. And they're like, yeah, but that's perpetuating carbon. And it's like, well, that oil is going to get produced or here or somebody somewhere else in theory. So it's this, that's where

24:40 it breaks down for me. That's my line of there's not a peeing and non-peeing section of the pool, you know what I mean? If we produce, if we produce the oil in Saudi Arabia instead of here, guess

24:50 what? You still peed in the pool. Right. So it's like, that's where it starts to get for me. It's like, well, you're stepping, you're walking away from quick winds that could actually be

24:59 carbonized and get us further towards the goals. You're pushing those away and it's just not in my backyard deal, right? It's the, well, it's not, we won't have it here. We'll have it somewhere

25:08 else. And so that's a part that's difficult. And, you know, I just think that,

25:15 I don't know. I don't know what these private equity capital guys are going to do. They got to figure out a way to have a productive conversation where they can deploy capital into things that do

25:22 you have efficiency gains and aren't just these sweeping wholesale changes because I don't think the wholesale changes are easy to enact. Yeah, you know, I think the one thing that private equity

25:31 and we can even broadly say it energy investing kind of always had is you always had in your hip hop hip pocket, what I'll call the bad thing. So a bomb goes off somewhere, something uncertainty,

25:48 whatever that case may be, boom prices spike in one way, shape or form, and prices going up, the investment runs. If an investor is disciplined and sells those spikes, they could always make

26:00 money and you can almost make money despite yourself being an energy investor. And the one thing the Shell Revolution did, right wrong or indifferent, and we can all debate this going forward and

26:12 I've have a tendency to think this is not true, but the investing community believes it. You know, there's a60 cap on the price of oil forever. I mean, that, right, you look out at the future

26:26 strip, you got three or four years, it's under 60 bucks. You said the investment community believes that? Yeah, the investment community believes that. Community believes

26:39 that.

26:40 And so because of that,

26:43 that whole, we need to have some energy, just in case something bad happens in price spikes, they don't think they need that anymore, right? 'Cause oil, it's almost, we're a product of being

26:50 too good at producing energy for too cheap, so. If you were, we'll talk about some of the other aspects with the private equity, some of the other issues that's been going on in this space, but

27:02 if you're an entrepreneur right now, let's say you wind back the clock in your career, call it 20, 15 years ago, and let's say that you had great ideas or great prospects, I must say, you are

27:13 either. a geologist, or maybe you're a smart business development guy, or whatever you may be, and you have aspirations to go do entrepreneurial things in the oil field. Are you looking to

27:23 traditional private equity at this point? Are you trying to go family office? Are you trying to go friends? Are you trying to raise separate things on your own? I mean, what advice do you give to

27:31 somebody who is a savvy entrepreneur, has great ideas, but that historically has gone directly to like a private equity? You played the traditional route, like if it's you, like, well, how are

27:39 you thinking about the world? You know, because I kind of get that question every day. Somebody will DM messaged me through LinkedIn and want to have a chat about it. Should I stay in this

27:50 business? Right. And I always say, if you think things are going to revert back to the mean, like you're going to get a500 million commitment from NCAP and they're going to give you a5 million GA

27:60 budget to go look for deals, if you're thinking that's going to happen, get out because it's not And so, you know, the way to look at things today, I think, are can you bootstrap in some is that

28:13 you and a partner and, you know, you all buy cheap wells and you go find an overlooked area and buy it up and piece it together. And every dollar you get put back in the ground, whole host of

28:29 bootstrapping, if you want professional capital, yeah, one of the private equity guys, I truly think you have to, number one, have a deal. Two, you have to have a badass team, a really good

28:43 team that can demonstrate it's made money. And three, you have to have something that is different. I mean, you have to be able to say, and I think there's a real opportunity here with technology,

28:55 because, you know, where you start to use artificial intelligence to monitor pumps and other lifting type endeavors out in the oil field. I mean, I think if you walked into a private equity guy

29:08 and say, Hey, we've used artificial intelligence on these pumps. We've figured out that these are the correct algorithms to be using and look at the efficiency gains and where the only folks doing

29:19 this in XYZ Basin, I think that's something real that could attract capital but there's gotta be a differentiator like that and returns that you anticipate generating have to be higher than

29:32 historically they were. Yeah. That's why you haven't seen much in the way of MA activity except for kind of the merge and merge and take stock type stuff is because I think the folks financing the

29:46 buy side have said, Hey, we need greater returns. And oh, by the way, we're not gonna give you credit that a price spike might happen. And sellers are sitting there saying, No, no, no, you

29:56 should pay PDP, PB10 and then PUD, PB20 for my locations. And it's just not. Right. Yeah. What a, if you think about it, sometimes these, we have the conversations with private equity and the

30:10 narrative is what you've just said, which is. We don't want to do GA back deals. We don't want to back a team. You know, it's funny five years ago was like We care about people. We care about

30:20 good teams. You know, we were chasing all those same teams Right, right? So and that so that's that that was the narrative and then now the narrative has become We really don't want to fund teams

30:30 in fact You can see in private equity groups just buy assets and be like we're gonna manage it Like I've heard rumors of guys just saying we're just gonna buy stuff and

30:37 it's like and so then as a team You look at that and you say well, there are groups and we have relationships with groups that could get you know A pitch deck in front of 500 LPs like they say hey

30:47 look this is what we do or in boutique investment guys We can get your pitch in front of 500 LPs you talk to endowments or you talk to some of these groups Pinching funds and then they're even saying

30:57 hey if you have something bring it directly to us And so and I know that there's issues with that. That's why private equity has done a good job managing those relationships I'm not saying it's a

31:05 walk in the park, but What is the purpose then of private equity groups? They're not backing teams and they're not investing in ideas, and they're just doing direct invests into projects, doesn't

31:19 that kind of take away what the, I mean, I thought the point was to kind of try to find the right guys and to harvest these, you know, innovative people and to empower them with capital in terms

31:27 of the GNA capital. It just seems to me, I don't see a lot of differentiation between the pension fund now and the private equity group. It's like, well, the pension fund doesn't want to fund GNA

31:35 either. They just want to direct invest. You're saying the same thing that the pension fund's saying You guys both have the same pitch, right? And so if somebody's trying to raise money, you're

31:42 like, why do I? And by the way, the terms are worse with private equity than you could if you went directly to the LPs. So I just, it feels a little weird. I just don't understand where their

31:50 niche is at right now. Best thing that ever happened to the private equity funds for, you know, call it the last 20, 25 years is every time a really sophisticated, great management team went

32:02 straight to the LPs, straight to the pension fund. And so why are we, you know, let's cut out their management fee cut out there. you know, back in, carry on the funds and we'll just split it

32:14 and you'll give me better turns on. Every one of those went down in flames, you know? And so that was right, wrong or indifferent. And I think a lot of it just had to do with what I was saying

32:25 earlier in that, you know, when you feel like it's time to give me money, you probably shouldn't give me any money 'cause everybody else is doing it. And, you know, when you feel like you don't

32:37 want to give me money, that's when you should do it I think that's what happened historically is these really talented management teams went straight to pension funds, et cetera. And they just did

32:49 it in the wave of so much capital hitting that ultimately the returns were disappointing and it was money flow type stuff, not necessarily performance of the assets. So, yeah, no, you're right.

33:01 I mean, that's part of

33:03 having to

33:06 read, I don't even know what the right word is, remake yourself. if you will to figure out how to raise money. Another thing that's gonna pop up too, 'cause you have no idea what this is, but

33:17 let me educate you as the old guy. There's this thing called inflation. Yeah. And I know you've never seen it in your career. You have no idea what - We've seen it now. It's real. I mean, we

33:28 had it back in the '70s and

33:31 like historically the greatest inflation hedge has always been oil, it's nominated in dollars, global commodity, deep, deep liquid market. It's always performed very well as an inflation hedge.

33:45 It's not gonna surprise me if you see, just like you were saying, Hey, private equity firm, let's get ridof the management teams, wouldn't surprise me if you see private equity popping up saying,

33:57 Hey, let's get rid of oil and gas all together. Let's just go out and give folks exposureto straight to the commodity Because why do you want to mess around with drilling these wells? Potentially

34:08 polluting, dumping oil here or there. all you really do is care about the price of oil when you're trying to hedge inflation. So yeah, there's gonna be a lot of struggle there. And at the end of

34:20 the day, I mean, all these folks are gonna morph to energy technology, clean technology, whatever we wanna call it, simply because they can raise money there. Who do you think the, I have a

34:31 bias, I think I have the answer to who I believe it is, but who's the winner in private capital right now from what everything this theme that's going on? Like in terms of on the oil and gas side,

34:40 and I'll give you my bias just to tell you what the way of framing this question is. I think like family officer, like people that don't have maybe the same mandates that can be opportunistic. Like

34:49 you think this could be their time to really like go after it and get after projects that maybe the traditional private equity guys are just going to turn their nose up on. I mean, that's

34:58 historically who, I mean, capital or what is a nature of poor is a vacuum. So, I mean, if you don't have capital and you have good projects there. The interesting thing though is

35:13 have assets not traded hands because there's a lack of capital or because we haven't really just priced out what should be the appropriate mechanisms for buyers and sellers to agree because, you know,

35:27 I mean, it's like you say that that, oh yeah, family offices will be right there, what are they going to back? Because we really haven't seen much in the way of transactions being done So yeah,

35:39 no, you would definitely, you know what's so funny, it's like Bloomberg, I mean, his family office does oil and gas stuff, they don't tell anybody that, but I mean, yeah, but yeah, I'll tell

35:49 you one the other day and I won't pick them out or call them out, but there's a private equity kind of a mid-size one that, and they would know who I'm talking about, they heard me say this, but

35:59 basically I was talking to them and they're like, oh yeah, our biggest, backers like Bill and Melinda Gates Foundation and I'm like, What? It's like yeah, that's the one the funding all the oil

36:08 and gas stuff that we do and I'm like, that's kind of wild that that's that's just headscratcher but you know if look if you're somebody that has to manage a large amount of money then in theory you

36:21 need to have exposure to all different kinds of things and the reality is is that oil and gas isn't going away and that's the biggest thing that I feel is one of the big benefits of this podcast or

36:30 you're doing a podcast the guys that are out here trying to have conversations is that we can talk through some of these topics and say look no matter what it doesn't matter if we start to switch

36:39 everything to solar and wind and do all these things today there's going to be a long tail on hydrocarbons I mean gas particularly like we need work if we can get rid of paper or plastic straws or

36:51 whatever even though paper straws are miserable but that's not going to make an impact it gets back to this whole Tesla thing right like they need plastic to make those cars like we need natural gas

37:01 and petrochemicals and ethylene and propylene and all these things. And that's just not going to go away because they make our lives better. This podcast gear is made out of it. That backpack that

37:08 I packed everything in, you know, the North Face, all these things. And so when you hear these sweeping kind of talking points and narratives of that we're oiling gases going away to dead industry,

37:18 it's like, that's just not even in the realm of factual possibility or accuracy. It's going to be there somewhat. Now, people will argue, well, we're going to get rid of it for transportation.

37:26 We're going to get rid of it for power generation So, you know, Boeing and Airbus don't even have patents on electric planes yet. So, I mean, it's not like it's sitting there back there. Oh,

37:36 next week we're going to launch the 737 electric. Yeah. So, I mean, that transportation's not going anywhere. And so it's when I hear these things, you know, I don't know if you've ever had

37:48 this, but I've had people like semi hostile stuff like on LinkedIn, I had a guy send me like a hostile message being like, you know, you need to really. get with the program, fossil fuels are

37:58 dying. Like it was something I made some posts that was like fairly benign. I basically said, I can't remember. It was like, I rarely take like political or like even outrage type stuff. Usually

38:07 it's like, I'm just trying to be funny with memes or whatever have conversations like this. Like, but one time I posted something about fossil fuels. It was like, I quoted Elon Musk and he, Elon

38:16 Musk put out a thing and he was like, people criticize space travel, but they don't realize is that space travel means hope to so many people. And I was like, people criticize fossil fuels,

38:25 people don't realize is fossil fuels mean hope to so many people. And some guy like messaged me and was just like, you guys are worse than the Slackler family or whoever are the ones that did heroin

38:34 or Oxycontin. And he was like, you know, all these things just basically calling me evil and saying all this stuff. And I'm like, you know, didn't really want to even argue or say anything

38:44 'cause it felt like this guy was more religious than he was like factual based arguments. But that's what there are a lot of people that just believe in their heart of hearts it. Oil and gas is

38:53 going away. It's going away. Oh, the greatest thing that the environmentalist did is they actually convinced people that it's evil oil companies not allowing wind and solar to do it all. I mean,

39:06 that's like the greatest thing they ever did. And so, yeah, now, I mean, we can use some of Alex Epstein's language on this. I mean, it really is morally wrong to deny people cheap energy. I

39:22 mean, you're burning shit and dung, and that sort of stuff, and you get a hydrocarbons. All of a sudden, you got two X life expectancy. Definitely the highest. So that said, though, I think

39:35 the one thing we do have to do is we, as an industry, have to acknowledge that burning of hydrocarbons led to more CO2 in the air. And we've taken the environment from, call it 300 parts per

39:49 million to call it 425 And we do know if we hit a. thousand parts per million in our atmosphere, we're all punch drunk. The astronauts on Apollo 13, when the CO2 levels went up, got on the verge

40:07 of punch drunk. So we do know that. So we do know we have to be doing something about it. The hope would be is that we could at least be constructive with the other side, and whether it's figuring

40:12 out ways to reduce consumption, but not necessarily limiting lifestyle if there are ways we could carbon capture whatever the case may be. We do need to take it seriously. Yeah. It's one of those

40:12 deals where I've read the book recently unsettled. Have you seen that one? It was pretty good. It's pretty good. What I thought was interesting was just the lack of cohesion between the models and

40:12 all these things. The other The other thing that I thought was interesting was just the

40:48 amount of.

40:55 It's just really hard to predict climate. Like it's really difficult. There's a ton of variables. And there's like fudge factors throughout. And so just a little tiny. So I think when you hear

41:03 about consensus, consensus is that humans are having an impact. Consensus is that the planet's getting warmer. Where you don't have consensus is among these models, what their predictions they

41:11 can't get. You take like historical data and plug it in. It doesn't equal what's happening today, but they want to project it out into the future. So it's like one of these things where you read

41:22 the articles and the headlines and it's like it is unequivocal It is we're 100 consensus that these things are happening. Like, look, humans are making an impact. CO2 is going up, but I just

41:34 don't know that it's just so hard to like weed through all of it and see like, what is the real timeline? You know, what are the actual consequences for this? You know, I grew up with, and I've

41:44 said this before, kind of the OG science, climate scientists, which is my dad was a geologist. So when I was little, I learned about, you know, all these ancient, you know, eons of dinosaurs

41:53 in all these different periods and when the. atmosphere had 25x, the CO2, and plant life was everywhere. It was a tropical rainforest planet, and, you know, animals grew to be like the size of

42:03 buildings 'cause there was so much food or that's what they think, right? And so it's like an insect for the size of cars. And so the planet's been through some pretty radical climate up and down

42:11 movements, and it didn't have to do with humans, right, 'cause we were around. So the planet is going, the climate's gonna change. It's been changing where, you know, I think a lot of it gets

42:20 down to what is our impact, how do we mitigate that impact? Can we get to realistic goals and some of this ESG stuff back to the carbon offshoring, that that's where I get frustrated. It's like,

42:30 okay, well, for example, let's go to a more natural gas-based system and I've said this a lot, I'm biased. So we need the byproducts, like we talked about for the plastic and rubber and all

42:39 these things. We could do potentially a couple with sequestration. That could get, you know, reduce a lot of carbon and we could make huge strides. Like if you look at like some of the models of

42:49 where we need to get to, we could kick the can or get way down the road, hundreds of years down the road quick wind things that we had the technology. The pipeline's already there. And then

42:57 there's like a report that came out this last week that said natural gas basically has no place in the energy transition. And they were, the report was blaming it on. They talked about blue

43:05 hydrogen, but then they also talked about just methane leaks was their, that was the thesis. At the end of the day, it was like pipelines are leaky. And because of those leaky pipelines, we'll

43:14 never be able to use natural gas energy transition. And I get back to, well, did you hear anything in the infrastructure bill about, you know, helping pipelines, giving incentives for pipeline

43:22 companies to find methane leaks? Like, I didn't hear anything about that. So it's like, again, can we do something practical that can meet the goals? But like, I just see things getting pushed

43:30 forward that I'm like, this is unrealistic. Yeah, no, I mean, I think the big one, and I talked about this at some point, somewhere is, I mean, the big one is if the United States, China and

43:41 India could sit down at a table in the United States and some of our Western allies in Europe, could just say, all right, China, all right, India, fairs, fair, we got here first, we built our

43:54 society is based on cheap energy. Here's what we're going to do. We're going to finance natural gas infrastructure in your two countries. Just stop with the coal. Just please stop with the coal.

44:05 I mean, that actually would be constructive. That would be real. I'm generally speaking a free trader. Even I could live with kind of that in terms of doing something because, yeah, coal's the

44:19 big enemy in China. They're building a lot of it. I mean, go like you said, go start putting LNG import terminals in other countries for these other countries. Hey, we're going to go make an

44:27 investment in an LNG import terminal here. We're going to go make an investment in a pipeline over here. And we're going to help ship, again, we're talking our book, but we're going to ship

44:34 American gas that's cleaner and that we can have standards that other countries don't have. It's a difficult problem. I mean, 51 or something percent of the, it didn't, it's trying to just

44:44 surpass the Western world in terms of emissions. They're like at 50 or something like that. I saw a stat. I want to explode it, but they're basically equaled all the other western countries. just

44:53 China in terms of what they're admitting. So it's like, we can do whatever we want here, but unless you have other people on board, I mean. Well, and I didn't see that stat, but

45:03 the one I know is just trajectory. I mean, we've at least done a decent job in the United States kind of flattening the curve. We're still huge polluter, but at the same time, we've flattened it.

45:13 China's, you know, skyrocking like this, so. Well, they want Chinese people to have cheap energy. They want their people to prosper They're trying to, China has a lot of restrictions around,

45:24 you know, being a communist country. So they put their people under a lot of strain in terms of the restrictions over there, but the flip side is what they're trying to do is deliver on a quality

45:32 of life thing. And it's like, look, I'm gonna control you through all these other things 'cause they're a very restrictive country, but they also want prosperity. 'Cause if you have restrictions

45:40 in non-prosperity, then you have revolt, right? So they want it to be, yeah, we're gonna be this communist, lockdown type country where we control everybody's lives, but they also want them to

45:47 have prosperity. That way people are happy So they're going to do what they think is the best thing to get. prosperity, which is probably cheap energy, and they're going to push that forward. So

45:57 then we could talk on that topic for a long time, but just circling back to private equity, because I know that's your background, and it's something that fascinates me, like, you know, guys

46:06 that are in these teams right now, I think there's a lot of just the sentiments not real great. You're hearing about things like smash codes, and this last year has been brutal in 2020, and you

46:16 know, you'll hear stories like a company doing really well, they got, you know, got good cash flow, they don't have a lot of debt, the sponsors says they're happy with them. That sponsors, oh,

46:27 by the way, we're going to buy a deal from this other sponsor down here in a different basin. But as part of that deal, we're going to have to smash code you with one of their companies because we

46:34 got to get this other bigger deal done. And the management team's like, wait, what? I'm getting smashed code with our arrival over here. And so there's just, that's just an anecdotal story of

46:41 something I heard without naming names, but it's like a lot of stuff goes on. And I feel like people are walking away and not having a great taste in their mouth with some of these. that they did

46:52 over the last five years. Yeah, and this is a little bit of a set box for me because, you know, generally speaking, they're usually ulterior motives to these smash codes happening and let me peel

47:07 back the onion and let me make a differentiator If you're. a private equity fund and you have 20 teams and so there are 20 different buckets, right? If you go to 10 teams managing those 20 buckets,

47:24 okay, you've saved money on GNA, you're potentially more efficient. So that, I think, is actually a worthy endeavor that private equity firms should do every day in terms of just dollars or

47:36 precious. Let's make sure we're not overspending on management teams. I hate that from the humanity side of it, but equally, is the fireman whose pension plan you're investing needs to have money

47:51 when he or she retires. So let's make a difference between management teams, managing buckets, and then let's talk about actually merging the buckets together. So you have these 20 different

48:05 buckets, you go to 10 teams and then you merge the buckets together. So you only have 10 buckets. That's actually bad because there's no reason to merge two buckets because if you merge two buckets,

48:18 number one, you're paying lawyers to do that. So you have leakage from the fund of doing that. And I think the reason that most of these buckets get merged is so that private equity firms can clean

48:34 up their track records. So if you have a fund with 15 companies in it And five of them are 4x, five of them are 2x. five of them are zero. And then you have a fund that's 10

48:54 companies and all 10 of them are two X. And you can achieve that by merging the zero X into the four X, right? Turns into a two X. That's perceived as a less volatile fund. So you're more likely

49:07 to

49:09 attract investors. It's the same freaking fund. You just spend a lot of legal dollars merging those buckets together So I would always, I would sit there and when you watch these private equity

49:21 funds merge the buckets together. If I'm an investor, I'm like, okay, why? 'Cause at the end of the day, we sell assets, right? So it's not like you got to merge buckets to be able to sell it.

49:31 So I'd always be very skeptical on why are we merging? 'Cause the whole reason, like I said, is you're cleaning up track record. The other reason you're doing it too is just to make it sound like

49:44 you're doing something. You know, a lot of, a lot of life is when you got and talked to me, well, we've got this strategy here. We're doing this, we're merging, we're saving all this G and A.

49:53 It's like, no, you're just doing it to do something. Right. Kick the can down the road. So yeah, I was never, I was never a fan of merging, but every once in a while, it makes sense. Like if

50:04 you had, if you had two different buckets managed by the same management team and they had a rig running and you were using the balance sheets of the two, buckets and you would drill three wells

50:18 here because you had the money and then you'd move the rig over here and drill three wells because you had the money. If you had an inefficient drilling schedule because you had two separate balance

50:26 sheets, okay, that makes sense to merge the buckets, but generally speaking, it's very rare when that does it's, it's private equity folks playing games. Yeah. See that kick you out of the club.

50:37 You have no more reason to

50:40 hide the facts. Well, for sure. And I mean, you see a lot of it too, just around. the whole time. So one thing that I've bothered me is like with midstream. So I've been more focused again on

50:50 midstream. And what I've looked at is that a lot of guys, there was a playbook and that playbook was get acres dedicated, build a plant, you know, try to then flip out of that to somebody that

51:00 needed a plant or that you got the deal and they didn't. So a strategic would buy you. And the problem with the, that's the field of dreams model, right? A lot of times you, you build it and

51:09 they will come, the volume will come, you'll be the first mover, etc The problem with that is it plants and a lot of these mission facilities have high fixed costs. Like to keep a plant running,

51:18 you got to have four crews, 247 people out there. These plant operators aren't, they're highly skilled, highly paid people. You know, to you build hundreds of miles of pipe, that's hundreds of

51:28 miles of right away. You got to upkeep and do one calls for forever. I mean, the system is there forever. You have to maintain that right away. That's a high fixed cost. And so we had this, you

51:39 know, banana midstream deals getting done loading up on not just capital being but continual fixed costs are gonna go out into the future to keep these assets running. Problem with that is when you

51:49 have high fixed costs and you have low volumes that are going down, the runways can get short. A couple of that with some debt, the runways can get really short. And you look at these companies

51:57 and you're like, why aren't they exiting these investments? Why aren't they selling these plants or shutting the plants down? 'Cause you look at it, you say today, it's gonna be worth the most

52:06 it's ever gonna be worth probably, unless drilling in a big way comes back to some area that is now out of favor. But if that happens, cool, maybe they can salvage this But if that doesn't happen,

52:15 this is probably the most this assets ever gonna be worth. Exit, pull the rip court on that asset. They're not doing it. Last year was the least amount of mid-stream deals done since like 1996.

52:25 This year, there's been very few deals done. And some deals with the downstream component are getting done 'cause people want downstream, but mid-stream deals aren't getting done and you're like,

52:32 why aren't they doing it? These things, the noose is getting tighter and tighter and tighter, these incentives back to the private equity side. It's like, no one wants to take a mark. No one

52:39 wants to show the - No one wants to take a right now I know where he wants to stop the management fee on it, right? If I've got200 million invested there and I'm getting a one percent or one and a

52:49 half percent management fee, that's two to three percent. I mean, that's two to three million dollars a year. Can you talk yourself into some things break right? It's gonna be worth one and a

53:01 half, one and a half percent more next year. So let's just go ahead and hold it, you know? And so yeah, I think it's Charlie Munger. Show me your incentives and I'll show you your behavior So of

53:12 course they're not, yeah, of course they're not selling that. But that's where you get frustrated because you look at it as someone who, for a while, we were still trying to be opportunistic

53:21 around potentially buying midstream assets and you're like, we can't buy these things because they're worth less than their cost basis, their equity cost basis. No one's gonna sell it for that,

53:29 but then you look at it and you can make very real compelling arguments on paper that this is the best time for you guys to get out of this investment because it's losing money and it's gonna be worth

53:37 less and then you just watch everybody cling on and then you start to see a bunch of non-cash deals and mergers and Again, maybe there's some synergy there cutting GNA, but like you kind of kick the

53:47 can. It didn't really. I mean, I don't know. I just, I've been seeing to your point, what are the incentives in its driving behaviors? And to me, it seems like there's a lot of inefficiencies

53:56 there can be in. Yeah. In a bomber and I talked about that on a podcast call it, you know, three or four or five months ago, it's how can you force someone to do a deal? I mean, because clearly,

54:10 if you went into, drew a big enough circle and you consolidated all the assets in there, one plus one would equal three. Sure. And we had the wonder is, if you're the consolidator, could you

54:22 walk in with a contract, hey, we will give you X amount of cash flow per year for that

54:32 and all you have to do is exactly what we ask on that asset. Right Yeah. Yeah. Yeah. Yeah. And I was wondering if that would do it because in effect. If you had this contract of cash flow,

54:45 private equity firm doesn't have to sell that. So they still charge their management fees, right?

54:53 They could somehow, 'cause if they're generating 10 million of cash flow a year, they're not gonna do it unless you give them 11. So they are sharing somewhat in the synergies. And I don't know,

55:05 I wonder if that would work any better than, hey, let me buy you, 'cause you're right, they're not gonna take a cash mark and walk away from the asset. But I don't know. Yeah, it's a head

55:18 scratcher. Let me ask you some just mechanical stuff around private equity that I personally am anger on, but maybe you can shed some light on me. And these may be dumb questions that anybody in

55:28 the private equity world knows the answer to. I've just never worked at it. I'm gonna be as pompous as I can to try to answer 'em, how's that sound? So like when it comes to the management fees,

55:37 how does it, like if you've got all the capital deployed and it's in these. vehicles, where's that fee coming at it? Where are you getting the money physically? Where's that cash flow coming from?

55:47 Do you keep a reserve that's left over to charge your fees out of? Or like if you've raised X amount, I'm just, I don't understand how it works. So, yeah, so we go out and raise a billion dollar

55:55 fund, let's say, Chuck Maxco won. And we raise a billion dollars. You don't actually have a billion dollars in the bank. You have a partnership and you have the right to send each one of the

56:08 investors a cash call that are saying, so if we're going to do a deal and we need100 million, we're going to do a 10 cash call, right? So we will send a letter out and generally speaking,

56:15 investors have, call it 10 business days to wire in their money, right?

56:23 Similar like if you're a team and you get a cap call, we have a project we want to invest on it. You cap call your PE guy and then everybody has to put their contribution. And they're cap call back.

56:31 So as part of those regular calls, you're calling your management fees as well. Got you. That makes sense at a billion dollar fund.

56:41 we're not getting two percent, we may be getting one and a half percent or so. So let's call it that15 million a year. We're calling it, generally you prefer to call it around the deal, as

56:52 opposed to just sending a letter saying, Hey, by the way, I need that, you know, 4 million this quarter for my management fees. Yeah, that's interesting. Okay, that makes a lot of sense.

57:03 'Cause those are just like the mechanic stuff that I just scratched at my wonder about. What about like the management fees and of themselves, like is there a mandate of what they can be spent on?

57:12 Like let's just say that like you had20 million a year in management fees, right? And your staff costs you5 million a year. Your other operating expenses was3 million a year. So you've got13

57:24 million left over. Is that just go to bonuses? Is that just go to whatever you want? Do you have to, is there some mandate on what you have to use it for? Does just like Chuck get to keep it all

57:32 and Max and Chuck go, like how does that work? So back in the day,

57:38 particularly around venture capital funds, 'cause they were much smaller. Right. Really what the management fee was designed to do was staff, rent, travel, due diligence fees, due diligence

57:53 expenses, but then no, they're just a profit center. So in your example, you know, if we had20 million worth of management fees and we had our staff of, you know, call it five million and we

58:06 had rent and travel and other deal expenses of, you know, an additional three, eight million. And so we've 12 million. You and I are rolling at six piece there, big guy. Yeah, dude, that's a

58:18 pretty sweet deal. And here's the cool thing. So you charge management, generally speaking, you charge management fees for five years on the commitment amount to the fund. So in our case, that

58:30 was a billion dollars, right? So we've got, and let's say we got 2, even though at a billion, you probably wouldn't, but we got20 million a year. We got20 million a year for five years. And so

58:42 that's kind of cool. Let's say we roll into year two or three, and

58:48 this is wild. Generally speaking, the fund documents say when we've committed 75 of the money. That didn't mean we actually invested in anything. It means we told XYZ management team, you have

59:01 a100 million commitment or a200 million commitment, right? When we've committed 75, we can go raise the next fund. And so when we do that, we're in year two to three of that first fund, we get

59:15 another billion dollar fund, we got another 20 million a year coming in, right? And then what happens is after year five, it's no longer paid on commitments, it's paid, management fees are paid

59:29 on the lesser of fair market value. or the cost basis of that investment. So generally speaking, fees get after year five, they get smaller. So you have large fees for five years, small fees.

59:45 So the key is if you can always have two funds and large fees, and then all your remaining funds are kind of in the smaller fees, that's when Chuck and Max are like rolling big time. Sounds like a

59:58 heck of a deal, Chuck, sounds like a good structure for the private equity That's a bit, you know, hey, I didn't invent it. Yeah, no, hey, look, don't hit the player, hit the game. That's

1:00:09 really interesting around that stuff. That's the stuff that like it's, I don't, they don't broadcast, like it's like you, no one in your private equity backers telling you these things, like

1:00:17 you're some team. Like you're not like, I can't ask those questions. The drug dealer's not going on TV. Hey man, here's how we sell this stuff, you know? Yeah, that's interesting to me. I

1:00:26 just, there is a lot of that, the whole,

1:00:31 And the other thing is that you look at behaviors too, and it's like, why am I always getting a bill for, like if you're a Portco and your private equity sponsor is like, hey, let's, you know

1:00:41 what? We're gonna do our board meeting, or we're gonna do this thing. Like let's go to a baseball game, or let's go to this nice steakhouse, or do this thing, and you're like, oh, okay, cool.

1:00:48 And it's like your first six months being funded, and you're like, having fun, doing all this stuff, and then you get like this150, 000 bill for the travel, and all these things, and all this

1:00:56 allocated expense, and you're like, don't you guys charge management fees? Why is this? But I guess like if they bill it back to the Portco, it comes out of that, those dollars, it doesn't come

1:01:04 out of the management fee bucket, so that 12 million that you've said earlier doesn't be kind of 11 million. No, we don't wanna, yeah, we don't wanna cut into our six apiece, right? Right, you

1:01:12 don't wanna cut into your six apiece, you wanna bill the Portco's. And that's actually where the SEC is spending some time these days, 'cause if

1:01:21 we charge a 2 management fee, and you and I go and buy an 82 Muton raw child for dinner, and we use the management fee dollars.

1:01:32 The SEC comes in and says, Hey, investor, you knew they were charging 2

1:01:38 tough. If we have the portfolio company pay for dinner, the investors are going, Well, we didn't know y'all were going to drink Muton Rothschild at dinner. That's uncool. The SEC's come back and

1:01:54 shut down some private equity billbacks, if you will, on Super Bowl tickets and the things of the like, because it's like, Hey, investors didn't know they were stepping up for that. Well, on

1:02:08 the management team, they got a clear hurdle on that now, right? It's got to flood through. That's got to flow through their waterfall, which sucks for them. It's like, You guys are making good

1:02:16 management fees. Why don't you just pay it out of that, instead of me having to now borrow that money, basically. That would be my money, exactly. Yeah, exactly. For sure. Well, this has hit

1:02:25 on a bunch of the private equity stuff, and we're getting into an hour, I wanted to real quickly and this is a theme that I usually bring up at the beginning. when I talk to other content creators,

1:02:33 and I'm sure listeners make it tired of me bringing it up, 'cause I just wanna hear about your journey and how things have been going and all that stuff, 'cause it's interesting to me personally,

1:02:39 'cause I've been doing it too. And I talk about that a lot of times at the beginning, so I try to talk more shop this time at the beginning, and then maybe if people are interested in hearing about

1:02:47 this, they can tune in as back half, but just how's the Chuck Gates needs a job podcast been going there? Yeah, well we're still on there. Yeah, they go. So we do that, nobody likes to hear

1:02:58 themselves speak more than me So yeah, I don't know, I like to hear myself talk too, so I think. No way, dude, love this voice, me, me, me, me. So, yeah, no, it's been a lot, it's been

1:03:09 fun. The, I really thought

1:03:14 starting the podcast, it was gonna devolve into Howard Stern of the oil and gas business. I mean, I have a potty mouth, you know. I peaked in sense of humor when I was a 13 year old boy and so

1:03:27 poopy jokes and doody jokes I really thought I was going to - be done. But, you know, we've had some folks on that have gone through some real stuff, you know, and I mean, just a couple of weeks

1:03:42 ago, David Hayes is coming on talking about having testicular cancer. And, you know, Jeff Davies came on and talked about the hedge fund he ran at Tudor Pickering Hole and it didn't turn out the

1:03:53 way he wanted. And, you know, my priest came on and we talked about a lot of stuff. So it's turned out more serious than I thought it would do. And the other thing that I think similar along that,

1:04:10 that I didn't appreciate what's going to happen is, you know, you figure out that when you come on a podcast and you talk about getting fired, and all just the number of people that kind of reach

1:04:21 out and go, dude, I really appreciate you saying it. You know, I'm struggling with it. You figure out Every one of us on the planet is struggling with some - And you got to be really careful what

1:04:34 you say because somebody somewhere is struggling with that issue. And I never actually thought I would grow up and quote unquote be an adult. But I've had to be an adult about a lot of stuff out

1:04:49 there that normally I would have made a crude, insensitive joke about. Now, before I hit send on a tweet, I'm like, Okay, do I really want to say that? So, yeah, it's been interesting. It's,

1:05:01 yeah, I feel that. I mean, for me, it's different in a lot of ways, doing the content stuff. It's been positive, I think, overall. I like that you've had those more serious conversations. I

1:05:12 don't know that I've done as much of that with me. I feel like I'm evolving with it. I've tried to be very industry focused, like kind of, at first I was nervous about doing this stuff, right?

1:05:22 So I felt like I need to be really professional and really, you know, and then it's gotten, you know, less. More, less stuffy and more kind of relaxes I've gone on. I've definitely felt the

1:05:33 itch to explore a lot of different topics, like the energy stuff. I find that I keep saying the same stuff. Maybe that's just 'cause I hear, you know, I know what I'm gonna say, but I feel bad

1:05:44 for like guests. I'm like, are they or for listeners? I'm like, are they just hearing me ramble about the same crap over and over again? So there's a part of me that's been wanting to do more,

1:05:54 maybe outside of energy or just tackle different topics and energy, but it's been rewarding. And I think the networking has been the biggest thing. Like the force networking, just like forcing me

1:06:03 to have a conversation and be like, hey, Chuck, like let's hang out, like let's get together. Like I just, I wouldn't have had an opera, I wouldn't have done that, right? Like, I mean, I'm

1:06:10 sure there's people you're interacting with that are just your friends that are coming on. So I've done a lot of that too, 'cause it's fun to have your friends come on. But at the same time, has

1:06:18 it forced you to like, get outside of your comfort zone at all? Has it forced you to do force networking? Like, what about the growth aspects

1:06:26 I think the thing I've been drawn to is, you know, if you think about it, I mean, there are 50 people, right? That'll go on every energy podcast, right? True. And what, you know, they have

1:06:41 their whole stick that kind of work through and all. And so trying to create something outside that box and find what I'm finding is finding new stories to tell is actually pretty tough, but it's

1:06:57 pretty rewarding. Yeah. You know, it's been, I think, Kevin Ashley wad on and talking about what's going on on her antenna ranch with Chevron. And look, I really am pro-energy, I mean, energy

1:07:10 loud, energy proud, but at the same time, I think if we don't police ourselves, no one else is gonna believe us, trust us. And ultimately, I really think that's kind of the core of the problem

1:07:24 Look.

1:07:25 there's always gonna be extremists on both sides and you're not gonna be able to get along with those folks, but we just have to kind of capture the middle. Right. And I don't think we can do that

1:07:37 if we're bad actors and we cover things up. That just never seems to work out. Yeah, that's a good point. Well, it's one of those deals that the other thing I've found with the podcast stuff is

1:07:49 that it's grindy, man. It is a grind like every single week Did you realize the amount of commitment that you're getting into when you first started it? Yeah, we'll see. I'm fundamentally the

1:08:00 laziest person on the planet. I mean, I act really lazy. So yeah, no, I mean, finding a guest, I actually try to research up on stuff just to make sure we get some content and we cover some

1:08:15 ground that other folks may not have, and then promoting it Yeah. I mean, you know, I'm joking that I've got.

1:08:25 undergrad from Rice, magna cum laude graduate, an MBA from Rice and the like, and I'm out making Colin his short memes to generate traffic for the podcast. So there's a whole business side of

1:08:39 trying to permit the thing that's just crazy. What's interesting is like what we talked about it before, this we talked about it before is like what catches on, what doesn't catch on. And I talked

1:08:49 to my brother has a podcast and he's very much just like his thing is like just trying to get sucked into the gimmicky stuff that you think will be like he's basically like just do good content,

1:08:60 create good content, good things will happen. Whereas like I'll get cynical because I'll see and this is I'm going to pick on I won't call the person out but there's somebody that started an energy

1:09:08 Twitter like around the time I started my Twitter and my stuff's all just either my content or just me saying whatever or maybe some memes. This other person started one. and all they do is cross

1:09:18 post stuff that they see from like LinkedIn, they'll see like a cool video or something that they follow on Reddit and they'll just post other people's stuff and be like, look, this is a drilling

1:09:26 rig in Dakota or this is a, whatever, like they just take other stuff that's gone viral and they post it on their feet and this guy is like blown up to whatever 10K followers in the same period of

1:09:36 time and like nothing he's put out is his. Nothing's original. It's all just ripping other people's content off. And I'm like, he's crushing. I mean, his numbers have got to be crushing anything

1:09:45 I've done So it's like you get kind of jaded. You're like, that's a hack, right? He's hacked it. He's hacked the system. He's figured out if I just take other people's stuff that's really

1:09:54 popular and posted on my thing, I can get a lot of views. And so it's just hard to stay the course and like not get jaded. And it's like, and I've talked to the wild catter guys a little bit about

1:10:03 some of the things they've done in the past where they were really passionate about a project and they put a lot of time and effort into it and put it out and it like bombed. Like it didn't get any

1:10:10 of the oil football. Yeah, right. I mean, yeah, I hear about that every day at the office around to draw out guys.

1:10:19 I mean, that's one of the things Jake and Colin have always preached is make the content you're proud to make and let the cards kind of follow what they make. I will say this, I think the carbon

1:10:31 capture gate episode that we did, I mean, we were in the studio for 24 hours on that. I mean, the whole setup on that, I don't know if you listened to that one, was basically a Russian scientist

1:10:47 had come up with carbon capture. It worked on all the hydrocarbons in the world except Russian oil, because there was this element of, I think it was called centinium or something that's not a

1:10:59 naturally occurring element, but it's a byproduct of nuclear waste, and so the Soviets had set off bombs everywhere in Russia, so their oil was infected with it, so the carbon capture wouldn't

1:11:12 work on Russian oil, therefore the Russian oil in the new world was going to be. In effect worthless. Yeah, and anyway, so Putin had the scientists killed. I mean we cut in we cut in a board

1:11:26 member of slumber jay giving a speech we had a CNN report because there actually was a a Bomb explosion and a munitions plant in Russia. We had Putin speaking I mean we went and googled. What does a

1:11:40 dial tone actually sound like in Russia and used that? I mean it was it was This incredible episode. I thought the science behind it was decent as I like to say I wrote the greatest X files episode

1:11:53 ever created. We dropped it on April first. I mean, you know April fools It's one of my lowest downloaded Podcast and I mean it's 20 minutes. I didn't even make it a long painful painful thing So

1:12:06 yeah, you just you just never know you put your time into it and so there's this part I don't know if this is a good analogy, but if some reason it popped into my head I've seen that movie, Chef

1:12:14 with John. You know what I'm talking about? Where he does like the, John, what's his last name? I'm gonna get it wrong. But he's the movie where there's a chef and he falls from grace. He does

1:12:23 like, he thinks he's direct messaging somebody and he accidentally tweets him and he blows up and he gets canceled. And so he just goes back to being like a, having a food truck. Anyways, if you

1:12:33 haven't seen it. And so there's this part in the movie where his son is helping him and he's divorced, I think. And so he's spending time with his son and he's helping him in the food truck. And

1:12:40 it starts to blow up and go viral and this food truck's getting really popular. And so he's kind of getting his reputation back And he's doing what he loves. And his son is making like a melt, like

1:12:50 a sandwich melt. And he like messes it up, kind of burns it. And anyways, goes back and hands it to the client. Like before he's gonna hand it to the customer, the dad grabs me, he's like,

1:12:58 what are you doing? He's like, this sandwich is, you know, it's messed up. And he's like, well, I'm just trying to get it out. We're just trying to get all these people. And I'm just trying

1:13:04 to do what I need to do to keep going. And he goes, look, this is all you have. Like this is everything. This sandwich is your world. This is all we have. And you have to give it that care and

1:13:14 attention. And so it's like with the content stuff, again, I don't know if I can tie this together, but it popped into my head. It's like sometimes you just want to put out the easy, like the

1:13:21 easy low effort meme thing that, you know, is going to get 20 likes or the outrage post that, you know, is going to route up the base. But at the end of the day, like your content's all you have,

1:13:30 like put the love into that sandwich, put the, you know, the effort into that. And if it doesn't hit, like you want it to hit, like it's still your content. It's like your art, like you cared

1:13:38 about it. Like you obviously are passionate about that episode. So it gets back to like, yeah, that other guy may have like blown me away and has way more followers, but he's not, he's not

1:13:47 creating anything. He's just ripping other people's stuff off and he's put zero effort or any type of the soulless basically He's. just like copying other people's stuff and posting it. So it's

1:13:54 like, I might be spending all that time on that sandwich and making it perfect. And it may only get 10 likes or five likes or one like, but that was my baby and that's all I have. So you just got

1:14:04 to do what you got to do. It's kind of how I try to view it. Yeah, no. So I had country music singer Lindsey L on the podcast and we talked. Oh, we had fun.

1:14:14 first. But then we got pretty serious. She's a survivor. We talked about that. She had done, she had come out being a survivor in People Magazine August of 2020. So it had been a story, but we

1:14:28 did it from the framework of, I'm a father, and she didn't tell her dad for seven. And years

1:14:35 great relationship with her parents, great parents. But it was, my question is, okay, what do I need to do so my daughters will tell me if something like that happens. And she walked through it

1:14:48 and it was ground, she'd never been asked that before by any of the media. And I think it was really good content, really constructive content. If you're a father. And the other thing we did on

1:14:60 that podcast is, you know, Bobby Bones in playing her music and Bobby is her ex-boyfriend And Bobby Bones is the most influential person in country music, right? And, you know, in my mind,

1:15:14 You shouldn't lose your career because your relationship broke up. And so I asked the question, and I've said it and I threw an F-bomb on it, you know, why the fuck is Bobby not playing your music?

1:15:25 And we had a discussion about it. That's something that the national media, the Nashville media has not said. They have not asked that question and some unemployed podcast host down in Houston did

1:15:37 it. But again, not huge downloads. Never broke a story on that, but something I can be really proud of is piece of content. Well, it was a content and you put your effort into it and it's

1:15:49 something that I've found, I've always tried to be a bit of a creative when I was younger, I liked music, I liked writing a little bit in terms of writing music, not writing, I'm not a good

1:16:00 technical writer, but I just have enjoyed in my life trying to create and then as I got older, I didn't do a lot of it anymore, you know, you should work all the time. And so what I found with

1:16:10 this stuff is that There is an element of creation to this and. That is, there's something in my in me that feels really good about it. And whether, you know, to continue to do that, and I have

1:16:22 that in me, and I think you obviously have it in you, but there's something there, like you like creating, you're creating with this. And so, it's cool, and I think I'm growing personally from

1:16:30 it, I bet you are too, whether you see it or not, I'm sure you are, like you're growing. Well, 95, I didn't have this perspective until I call it 48 hours after Kane fired me 95 to 97, 98 of

1:16:45 my day at Kane was stuff, I'll call it this way, stuff I inherited, right? I mean, we were doing it this way 'cause natural gas partners did it that way. We were doing it this way 'cause that

1:16:58 was the Kane way. I mean, in terms of actually having a creative new twist on something, it was incredibly rare. So it is nice to have kind of a clean palette to do that every week with a podcast

1:17:13 as opposed to Yeah, same old, same old mundane. That's the way we do it, 'cause that's the way we do it. I bet it works different parts of your brain. You know, they talk about getting older

1:17:22 and you get into these routines. And one thing that I've read, I don't know that I can't explain it to you scientifically, but I read this deal that said that the reason why, in some ways, time

1:17:32 seems to get faster and faster and faster as you get older is because your brain has different modes and when you're learning new things and when like when you're a child or a kid, everything's brand

1:17:40 new. So you're like having to absorb it all. And so that's why time seems slower because you're constantly in this mode in your brain where you're having to take in information, you're having to

1:17:48 evolve, you're having to learn. It's all new. And then when you get older, you're just on the freeway every day at your office every day doing the same thing every day and your brain switches to

1:17:56 this other mode where it just kind of cruise controls. And so I think that this having this thing where you always have to think up a new topic or come up with a new guest or figure out a way to

1:18:06 enhance the content, it's forcing you in ways to get outside of what you just described where you're just in that monotony of the normal stuff has to be good for you, I think. I mean, creation has

1:18:15 to be good for you. Yeah, I think that. And the other thing too is just a whole lot of fun to get to talk to really smart, interesting people. It is fun. Every week, you know what I mean?

1:18:25 That's really fun. I mean, I had on Pete Stahl, the lead singer of the punk band Scream, and you know, one of the interesting aspect of Scream is their second drummer was 18 year old Dave Grohl.

1:18:39 Yeah So, I mean, the Foo Fighters songMy Hero was written about Pete. And to get him to come on the podcast, I mean, we had to edit the podcast. That's probably the most editing we did because

1:18:53 every other line was like, Oh, dude, that's so cool. I just fanned Boyd on him the whole time. But, you know, it's fascinating here in his stories. So yeah, it's a lot of fun to be able to

1:19:03 sit around and just talk to really interesting people. It is fun. And that's the part that I enjoy it. And I said, I was wanting to do more and you've just done it within your, I think the cool

1:19:12 thing you did. was have your podcast title be broad enough to reconute whatever you want. I know we talked about it and you've said that the wildcatters gave you the advice that you're an energy

1:19:20 expert and that that's always probably gonna get the most views. Maybe, I mean, why can't you just be an expert in interviewing people and having great conversations? That's something you could

1:19:27 become an expert in if you flex that muscle enough. And so the fact that you've been able to switch in and bring these other topics in is something I'm jealous about because I just find that having

1:19:39 great conversations with interesting people is just fun, it's just fun to do Well, you know, what was pretty wild is, is David Hayes of natural gas partners came on and we talked energy, but the

1:19:50 thing I got the most response by of people picking up is they loved our baseball discussion because he grew up with Jose Cruz Jr. who's the new baseball coach at Rice, David played baseball at Rice.

1:20:05 And so kind of two aspects of talking about baseball, I got millions of DMs about, terms of people going holy cow that was really cool.

1:20:14 is one thing they did a study, and what they found is that great hitters in baseball generally came from the South, and the explanation there was you can play baseball year-round, so they're

1:20:28 hitting more, so they do it. Great pitchers generally came from the North, and the thought there was, you know, the guys played hockey in the winter, and then they played baseball in the summer,

1:20:40 so they didn't over pitch their arms. And that's actually been adopted now, because you see all the pitch counts and the like, but that was something that a study just popped up, so people loved

1:20:51 that talk. And then the other thing I think that was really interesting that David Hayes talked about when we were talking baseball is Wayne Graham was the legendary historic coach at Rice. You know,

1:21:03 we won the College World Series in 2003, we made the College World Series multiple times. I mean, arguably as great a college baseball coach as theirs. There's been, and one of the things he

1:21:14 always preached is you maximize the effort of your superstars. 'Cause your scrub, they're working as hard as they can 'cause they know they can get cut. Your superstars are the ones that coast,

1:21:28 and that's a lesson for life. That can go broad beyond baseball. And so trying to pull stuff like that out of conversations, I think is pretty interesting When you, I always, I always learn

1:21:45 something every podcast, and it's going back and reflecting on that stuff. That's pretty cool. Yeah. All right, well, I think we got this nape here. We got things, I got to run the things.

1:21:55 You got to run the things. Last topic, favorite nape story, any nape story that you can share that's safe enough for work, or you'd rather have to be safe enough for work, or whatever. Yeah,

1:22:05 exactly. What do you got? All right, so one of my favorite, I got two favorite nape stories one. I mean, it started it. the Weston Oaks Hotel in the Galleria, and it started in a conference

1:22:17 room, and you literally had 15 geologists actually pitching prospects. Yeah. And anyway, so early days in that I went, and there was a guy who had mapped a prospect up, and anyway, he was able

1:22:34 to sell it. It's a dry hole, comes back the next year, actually redrew the high point, and said, here's where we need to drill, basically an offset to the right. He sold the prospect again,

1:22:50 and it was a dry hole. He came back the next year, I swear to God, and drew, no, here's the structural high, we've got two down dip, where we had oil shows. Now we have control. Now we have

1:23:01 control. And he sold the same prospect four years, and it became comical 'cause I talked to him each year And I was like, dude, I saw this and he goes, yeah, yeah, yeah, you just don't tell

1:23:11 anyone. So that was a great story and I love watching that over the year 'cause it was almost like you had the same map and he was erasing the pencil though. And then one year and it was the crazy

1:23:22 year. It was probably, I don't know, it was maybe, maybe it was winner of 2007. I don't know if you know who John Linker is, but he was a long time energy investor and he comes walking out and I

1:23:34 go, Hey, John, how's it going? 'Cause I was about to walk in tonight. And he goes, Man, it's so freaking great in therethat even the bankrupt companies have two booths. All right, John. Yeah,

1:23:46 that's good. That's good. I only have one and I tweeted about it. I mean, I've got others, but the one that sticks out to me in the nape that is in my mind or that I've always thought about is

1:23:55 one year I had, it was like when we first started in Kova, our company, and I had a lot of pressure on trying to grow the business and just do outreach and networking. And it was in 2016, so the

1:24:05 industry wasn't doing great. Really, it's been one downturn. We started in '14, so it's been downturn after downturn. I just was trying to network and had meetings set up and had been focused on

1:24:14 Nate and had had just like, you know, it wasn't even the conference, it was the meetings and it was the people I was trying to interact with, right? And so I'd done a lot of work to set up all

1:24:21 these meetings and I think I had it pretty packed schedule. It was like every day for two days and then you had the happy hours and dinner. So it was like cramming in as much as I could and it was

1:24:30 two nights before Nate and I just was like this terrible stomach ache and just could not shake it, could not shake it and was just really sick and my wife was like, either go to the hospital or just

1:24:42 shut up, 'cause I'm tired of hearing about it. You know, and I was in the other room just like, you know, balled up, like. So I ended up, made it through that night and then got to the day

1:24:50 before Nate and I had to have my, we had kids and had to have my mom drive me to the doctor in there. Like, your appendix is gonna burst. So you need to go and get this taken out. So my mom drove

1:24:60 me to the hospital and got my appendix removed. And I think I got it removed at like 11 am. that next day. And then so I got it. It's real quick surgery. And I got out at like, I was back home

1:25:09 by like two o'clock or something. They just take it out through your belly button, basically. And I asked the doctor, I was like, well, how long am I out? And he's like, usually like a couple

1:25:16 of days, and you can be pretty much back to what you're doing. And I was like, man, I got this conference. I got this thing I got to go to and all this stuff set up. And I ended up just like

1:25:25 getting on the flight the day after and just coming down here and like had an opinion. It was like all swollen. And I was like, you know, pain pills. But like I just felt this pressure, you know,

1:25:34 when you're an entrepreneur and you have like nobody else is going to do it for you type of thing. And so if I don't, if I cancel all these and we ended up one of the guys that we met with, uh, we

1:25:42 ended up getting that business and it was a client that was a great client for us and it worked out. But people were looking at me when I told them, I just got my opinions out the day before and

1:25:49 they're like, you're psycho. And

1:25:53 I'm not trying to say that story to be hard. Like I was scared to come down here, but I just felt the pressure of, uh, having to make something happen. And, uh, and you know, some Here's a

1:26:01 more fruitful than others. Sometimes you just come down here and you drink too much in partying. I don't get a lot out of it. That would know anything about that. Well, this is fun and I'm glad

1:26:10 we got to do it. This is a cool little mobile setup here. We made it happen. I know, I'm impressed. You got an audience, if you're listening to this, as opposed to looking at the video, man,

1:26:20 there's all sorts of bright light, equipment, cameras, everything, this is cool stuff. You gotta be able to, you gotta be able to figure it out and make these pods happen. I mean, like the

1:26:29 interesting about podcasts is like, this is overkill, like we have great mics here. We're making it sound good, but you can just have a cell phone sitting up and get it recorded, but why not try

1:26:37 hard? Why not try hard? There we go, I like it, particularly since I didn't have to set it up. Chuck, thank you, sir. Absolutely, sir, we'll do something else again.