Chuck Yates Needs A Job

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1:08 Hey everybody, welcome to Chuck Yates needs a job, the podcast. Very honored to have my guests today, Will Franklin on because when you get kicked out of the private equity club, when someone

1:19 will actually be seen with you, that's pretty cool. So, Will, welcome on. Thank you. I questioned myself, but here I

1:28 am. So now a lot of people will question me because it's the company that you keep. Exactly. Exactly So, Will, welcome through your background, your Texas, your University of Texas guy. I

1:39 won't hold that again, Stu. Thank you. Where'd you get to work after that? Yeah, so graduated from UT and thought I would go to Wall Street and instead this little EMP company in Midland called

1:52 me by by the the name name of of Parker Parker and and Parsley Parsley.. And And

1:56 I'll I'll be be honest honest, I, I really really wanted wanted to to go go to to Harvard Harvard Business Business School School. and And that that was was like like my my goal goal.. I'd I'd

1:60 had had that that since since high high school school. And and I I thought thought,, you you know know what what?? There's a a lot lot of of people people who who apply apply to to HBS HBS from

2:05 from Wall Wall Street Street.. There's There's not not very very many many who who apply apply for for Midland Midland,, Texas Texas.. So So I I took took a a job job working working for for

2:12 Parker Parkland-Parsley and Parsley in and their their corporate corporate development development group group in in January January of of '95 '95 - - So So who who were were the the people people

2:17 there - So there - So Scott Scott Sheffield Sheffield was was running running it at it the at the time time. - Yep - Tim Tim Dunn Dunn,, who's who's our our partner partner at at Lime Lime Rock

2:24 Rock, was, was the the CFO CFO at at the the time time. And. And the the group group that that I I was was involved involved in in was was run run by by a a guy guy with with the the name name of

2:30 of Jay Jay McIntyre McIntyre, who's, who's kind kind of of gone gone on on to to do do things things primarily primarily outside outside of of the the industry industry, but. But he he was was

2:36 running running the the group group.. But But Tim Tim Leach Leach was was there there running running engineering engineering.. Tim Tim Dove Dove was was there there running running an an

2:42 international international strategy strategy.. So it's like, So it's it's one one of of those those great great places places to to be be from from. And And it Molly would would have have been

2:49 been a a great great place place to to stay stay. - Well, and And Boone Boone Pickens Pickens was was the the largest largest shareholder shareholder right, right? At at some some point point,

2:55 was. Was he he already already out out at at that that point point? Had had they they already already? - Well Well,, 'cause because part Parkland-Parsley was it was the was mace. It was the the

3:01 MACE mace. It was merger merger -. Well Well,, so so that's that's what what formed formed Pioneer Pioneer, was was the the mace Mesa of. Park and Parsley more comparsly merger merger.. And

3:08 And what so I you left did - What you left that happened happen?. I I should should know know, but, but I I don't don't.. So So I I left left in in 96 '96 and and that that happened happened

3:16 maybe maybe a a year year or or two two later later. Okay. after I I left left.. Okay, okay. And And yeah yeah, and. And so so I I left left., And and this this is is something something we

3:24 we should should all all remember remember about about early early in in our our careers careers. You. You get get really really frustrated frustrated about about things things not not going going

3:29 the the way way that that you you want want them them to to go go.. You You think think you're you're not not learning learning things things.. I I went went there there thinking thinking,, I'm

3:33 I'm going gonna to do do mergers mergers and and acquisitions acquisitions, but, but I'm I'm gonna going to do do it it from from the the buy buy side side.. And And this this is is gonna going to

3:37 be be great great because 'cause I'm I'm going gonna to be be doing doing deals deals.. And And instead instead,, commodity commodity prices prices rolled rolled.. We We became became the the

3:43 capital capital budgeting budgeting group group,, the the divestiture divestiture group group,, the the bank bank negotiating negotiating group group,, which which guess guess what what?? All

3:49 All of of that that stuff stuff is is stuff stuff that that I I use use every every day day in my career. You you don't don't do do an in an an ideal MA deal every every day day, but, but you're

3:54 you're always always working working on on those those other other items items.. And And,, you you know know,, but but I I didn't didn't fully fully appreciate appreciate that that at at the the

4:01 time time. but But it it turned turned out out to to be be a a great great experience experience,, but but I I was was like like, this This isn't isn't what what I I want wanna to do do.. By By

4:07 that that point point,, I I was was married married to to my my wife wife Liz Liz.. We We kind kind of of joke joke., I'm I'm in in Midland Midland from from start starting in January January,,

4:13 mid-February mid-February,. I I have have proposed proposed to to my my now now wife wife.. It It didn't didn't take take long long being being alone alone in in Midland Midland,, but but I I

4:21 made made sure sure that that her her outfit was made baby tips - Dating tips from from Chuck Chuck Gates Gates needs a needs a job job,. Send send your your hand man to to Midland Midland,.

4:26 you'll get You'll get your your ring ring. - So yeah, so So yeah, so we we got got married married.. But But where where I I was was going going with with that that was was,, you know, so so

4:34 as as I I was was thinking thinking about about leaving leaving and and, you know, things things work work funny funny.. So So nine nine months months into into the the job job,, the the guy guy

4:41 who who had had recruited recruited me me left left to to Enron Enron,, and and he he called called me me and and said said, Hey, hey, why, why don't don't you you come come to to Enron Enron??

4:47 And And so so I I started started entertaining entertaining this this,, Okay okay,, I'm I'm gonna gonna go go to to Enron Enron and and I I start start interviewing interviewing and and ultimately

4:52 ultimately get get an an offer offer and. And then then I I go go back back to to Park Park and and Parsley Parsley,. I'm I'm like like,, okay okay, this, this didn't didn't really really work

4:57 work out out.. I'm I'm gonna going to go go over over to to Enron Enron.. They're They're like like,, no no,, you you need need to to stay stay.. This This is is the the place place for for

5:01 you you. and And they they gave gave me me a a slight slight raise raise.. I mean, you you know, the know, the numbers numbers are are rounding rounding errors errors for for today today.. But

5:09 But they they gave gave me me it,. they They gave gave me a me raise in my state - It is a raise. Still still more more than than I I make make today today -. There There you go. you go. Okay

5:13 Okay,. Very very fair fair,. very Very fair fair.. Maybe Maybe not not more more than than you you spend spend,, but but more than you make - That's that's fair fair - So So I I stayed stayed

5:22 and and that's that's another another life life lesson lesson. It's. It's like like when when your your heart heart is is gone gone,, you you probably probably should should just just go go and

5:28 and be be careful careful that that you you don't don't let let,, you you know know,, kind kind of of money money talk talk too too much much.. And And so so we we stayed stayed in the in night.

5:32 We don't the night maybe - Maybe seal seal when when they they quit quit., they're They're allowed allowed whatever whatever five five or or 10 10 seconds seconds or or 15 15 seconds seconds to to

5:41 change change their their mind mind - To not do to that not - But know the, the that,. the But, the the, the the the I've I've heard heard one one of of the the trainers trainers say say,, I've

5:46 I've never never seen seen someone someone change change their their mind mind and and then then make make it it through through. That that,, you you know know,, once once the heart's gone on

5:52 it's, it's gone. Yeah gone, - Yeah, it, it it really really is is.. So So,, uh, uh, and and anyway anyway,, I I learned learned that that really really early early 'cause because I I

5:60 stayed stayed and and it it was was a a great great place place. Don't Don't get get me me wrong wrong,. It it was was just just my my, my My head head was was I I need need to to do do X X,, Y

6:06 Y and, and Z Z,. and And I I didn't didn't think think that that I I was was getting getting X X,, Y Y, and and Z Z,. and And as as I I said said,, I I, I learned learned a a lot lot more

6:12 more than than I I ever ever appreciated appreciated,, but but it it took took, took 10 10 years years to to look look back back on on that that period period and and say say,, that that was was

6:17 a a really really meaningful meaningful period period for for my my own own internal internal growth growth,. and And that's that's just just perspective perspective.. And And so so we I left in,

6:23 uh, so I left in 96. Um '96,, and and the the prospects prospects, and and the the whole whole reason reason I I brought brought up up getting getting married married was was the the prospects

6:29 prospects of are going going to to New New York York with with a a wife wife who who is is a a teacher teacher and and myself myself, I I was was like like,, okay okay,, well well,, I I don't

6:35 don't want want to to live live married married with with a a bunch bunch of of roommates roommates,, but but teachers teachers don't don't make make a a lot lot of of money money,. so So that

6:39 that isn't isn't going going to to contribute contribute a a lot lot to to rent rent in in New New York York City City.. Right And. So so I I had had had had an an offer offer from from Simmons

6:44 Simmons and and Company company coming coming out out of of undergrad undergrad and and called called Simmons Simmons back back up up and and said said,, um, you know would, would you you have

6:51 ever room in for for me me?? And And You know, thankfully thankfully they they did did.. I I was was one one of of the the last last analysts analysts at at Simmons Simmons to to work work

6:57 directly directly for for Matt Matt Simmons Simmons on on a a project project,, which which is is another another one one of of those those, just kind of -, you know, just kind of a a classic

7:02 classic individual individual in in the the industry industry who who brought brought a a ton ton of of wear wear with with all all high high class class individual individual and and somebody

7:09 somebody from from whom whom you you learn learn a a ton ton.. And And you yeah know,, I I kind kind of of looked looked out out getting getting to to work work on on a a project project where

7:14 where he he kind kind of of came came off off the the sidelines sidelines in in order order to to help help on on something something. and And I I worked worked directly directly for for Matt Matt at

7:19 at Simmons Simmons for for a a little little bit bit - Oh Wow wow., So so who who else else is is at at Simmons Simmons at at the the time time?? Barry Barry Donovan Donovan - is Barry Barry - was

7:25 Barry Barry was was there there - Okay. - Joe Joe Bob Bob Edwards Edwards - Right - was Was there there., John John Griggs Griggs was was there there., Nick Nick Swica Swica,, the the senior

7:35 senior,, not not over at over at Select select energy Energy services Services, Ben Ben Guill Guill., was Well there - Guill,, that's was there right. Yeah - Yeah., So so again - pickering

7:43 Pickering is is a research band a research - Yes, picking it up - Dan and. I I started started, he he started started a a month month maybe maybe before before me me. So So yeah yeah,, we we

7:51 joined joined. very very similar similar timelines timelines.. Yeah, and you Yeah know,, and that's that's the the nature nature of of the the industry industry, a, really really small small

7:58 industry industry,, but but also also the the nature nature of of working working at at Good. good places places where where you you just just wind wind up up,, you you know know,, same same

8:04 thing thing,, you you go go back back to to parking Parkland parsley Parsley and and all all of of those those various various people people, and and then then you you wind wind up up at at Simmons

8:08 Simmons, and and where where all all those those various various people people have have kind kind of of turned turned up up.. It's, yeah it's, It's, yeah, it's just just an an amazing amazing

8:13 amount amount of of talent talent.. So So a a couple couple of of years years at at Parker Parker Parsley Parsley and, and then then a a couple couple of of years years, at a couple of years at

8:18 Simmons Simmons, and, uh, and and Simmons Simmons was was also also great great, uh, because because Matt Matt and and that that team team had had a a great great track track record record of of

8:25 getting getting people people in into HBS the HBS. So. So don't don't forget forget what what one one of of my my key drivers drivers was was So. So. I I really really wanted wanted to to go go to

8:30 to HBS HBS. And and, uh, so so I I did did apply apply to to two two business business schools schools,. Um, one one unnamed unnamed place place over over on on the the West West Coast Coast

8:38 that that would would have have nothing nothing to to do do with with a a person person like like me me. You're. You're probably probably a a much much better better Stanford Stanford applicant

8:43 applicant than than I I am am.. I I don't don't have have that that creative creative nature nature that that they they tend tend to to look look for for.. But But Harvard Harvard said said yes

8:49 yes., luckily Luckily by by the the flip flip of of a a coin coin and and. God's God's blessing blessing.. Uh, yeah Yeah,, I I got got into into HBS HBS. I. I remember remember Liz Liz

8:55 called called me me. The. The envelope envelope was was in in her her hand hands.. I I open open envelopes envelopes with with a a envelope envelope., a a letter letter opener opener.. My My

9:02 wife wife rips rips things things open open.. And And so so - And they they always always marries marries a a Z Z.. Exactly Exactly.. And And that that envelope envelope is is is ripped ripped

9:10 open open.. I I still still have have it it somewhere somewhere in in a a drawer drawer, but. But you know, she she was was excited excited for for me me. And and - So and. So let let me me

9:18 tell tell you you my my Harvard Harvard story story. Please. Please do do. So So everybody everybody in the in the AIDS AIDS family family's has always always gone gone to to rice rice.. My My

9:23 grandfather grandfather is is the the class class of of I, I believe believe, 1930. 1930. Great Great aunt aunt goes goes there there.. Mom Mom and and dad dad go go there there. Uncle Uncle

9:30 goes goes there there.. So So I'm I'm expected expected to to go get to a rice rice.. So So I I decide decide about about sophomore sophomore year year in in high high school school.. I'm I'm

9:38 going going to to Harvard Harvard.. And And this this of, of course course, just just scares scares the the heck heck out out of of my my mom momma.. My My poor poor young, young, sweet sweet

9:43 son's son's going going to to go go off off to to the the East East Coast Coast. Mary. Mary Amy Amy Carter Carter becomes becomes some some rabble rabble-rousing rousing liberal liberal.. Yeah

9:49 Yeah. And all all this this. So so dad dad comes comes to to me. me. Dad's Dad's a a smart smart guy guy.. Dad Dad comes comes to to me me and and says says, Hey, Hey,, I I know know you you

9:55 want want to to go go to to Harvard Harvard. You. You need need to to go go visit visit it it.. You You can't can't just just show show up up on on campus campus. I Okay got, that's that's fair

9:59 fair, dad, dad.. I'll go. I'll I'll go go next next summer summer. And and dad dad goes goes, Nah, Nah, you, you gotta ought to go go over over Christmas Christmas break break.. And And

10:05 I'm I'm like like,, Sure Sure.. Mom Mom says says,, The The hardest hardest thing thing I I ever ever did did is is your your mother mother.. I I allowed allowed you you to to get get on on

10:11 the the plane plane without without a a jacket jacket. 'Cause because it it was was 80 80 degrees degrees in in Houston Houston. I'm. I'm wearing wearing jeans jeans and a and a T-shirt t-shirt.

10:17 And and I I get get up up to to Boston Boston at at Snowy Snowy - And they let You you get get into into Harvard Harvard -? Fuck No, nah. - Okay Okay, - Well,

10:25 that's that's an an idiot idiot right right there there.. The The Texan Texan shows shows up up without without a a coat coat. But, but no no,, I I remember remember walking walking around

10:30 around campus campus and and I I went went and and bought bought a a coat coat -, Sure - But but I I remember remember walking walking around around campus campus and and here's here's our our newest

10:36 newest building building.. It It was was built built in in 1787 1787. And. yeah And, and so so I came I came back back and and told told my my parents parents I I was was going going to to Rice

10:42 Rice. - There There you you go go. - Harvard Harvard did did not not accept accept me me, though though.. Mom Mom brought brought the the envelope envelope down down to to school school when when

10:48 we we got got it it and and she she goes goes, here Here it it is is. And and I I go, It feel feels pretty pretty light light, Mom mom. And and she she goes goes yeah., Yeah, I I don't don't

10:53 think think that's that's an an admissions admissions packet packet.. So So, well I, I didn't didn't even even apply apply undergrad undergrad. I'm. I'm sure sure I I wouldn't wouldn't have have

10:58 gotten gotten any any there there. And Like like I I said said, it, it was was a a total total. flip of of the the coin coin. And. But but I I go go back back to to,, you you know know,, I I

11:03 mean mean,, Harvard Harvard builds builds their their business business school school classes classes,, really really looking looking at at,, you you know know,, before before we we started

11:09 started, all all started started talking talking about about diversity diversity,, they they were were looking looking for for a a diversity diversity of of experience experience in in the the

11:15 classroom classroom.. And And that that goes goes back back to to,, I I can't can't help help but but think think, a a stint stint in in Midland Midland was was probably probably meaningful

11:20 meaningful to to getting getting one one of of those those seats seats in in that that,, you you know know,, section section of of 80 80 people people and and being being a a very very different

11:26 different background background than than most most of of the the people people in in the the room room. Either. Either that that or or they they didn't didn't know know what what it it was was,,

11:31 probably probably more more likely likely. - So So where where do do you you go go after after you you graduate graduate from from business business school school -? So So the the,,

11:39 so so I I ultimately ultimately went went to to Riverstone Riverstone,, but but there there was was an an acceptance acceptance of of another another offer offer before before I I actually actually

11:46 wound wound up up at at Riverstone Riverstone So. So coming coming out out of of business business school school,, I I really really wanted wanted to to get get in into the private private. equity

11:52 equity.. And And this this was was before before there there were were tracks tracks into into private private equity equity. Honest Honest with with you you,, I I hardly hardly knew knew what.

11:58 what private equity was. I I sold sold one one company company at at Simmons Simmons to to a a private private equity equity firm firm.. And And I I was was like, Hmm, that seems like, that like

12:05 seems like where where I I want want to to be be.. And And so so that that kind kind of of put put it it on my track or on on my my track or on my list list.. And then And then you you get get to

12:12 to HBS HBS and and you you begin begin to to get get exposure exposure to to people people who've who've worked worked in in it it and and begin begin to to see see things things. And. You're you're

12:16 like like,, Okay okay,, yeah yeah,, that that seems seems right right for for me me. And And I I started started interviewing interviewing and and I I told told myself myself, I, I'm was like,

12:22 I'm not not going going to to be be in in the the energy energy business business.. My My father father was was in in the the energy energy business business.. I I watched watched him him struggle

12:27 struggle to to pay pay off off debt debt and And get get through through the the 80s '80s. And. And God God bless bless him him.. He He did did.. He He preserved preserved his his name name..

12:33 He He paid paid every every dollar dollar back back that that he he borrowed borrowed.. But But it it was was a a tough tough existence existence.. And And I was like I was like,, No no way way

12:38 am am I going I going to to do do that that.. But But the the problem problem of of being being in in Texas Texas is is once once it it oils oils in in your your blood blood,, it's it's kind kind

12:43 of of in in your your blood blood.. And And so so I'm I'm looking looking for for private private equity equity coming coming out out of of HBS HBS. And the. And the private private equity equity

12:49 that that wanted wanted to to talk talk to to me me was was a was an an energy energy group group within within a a firm firm that that no no longer longer exists exists,, the the beacon beacon

12:56 group group. Yeah. Yeah Oh yeah. Yeah.. Yeah Yeah. Rich, rich hobby obby.. Yes Yes, exactly, exactly.. So So again again,, a a few few people people.. And And so so I I -. Who Who

13:06 else else was was there there?? So So John John Lancaster Lancaster is the is the one one who who recruited recruited me me over over there there.. And And then then as as you you know know,, he

13:13 he went went to to Riverstone Riverstone. And. And so so that that kind kind of of pulls pulls that that full full circle circle together together. That's That's how how I I wound wound up up..

13:18 But But Jeff Jeff Bozzie Bozzie had had started started it it for for those those who who don't don't know know.. I I mean mean,, if if you you go go and and read read Barbarians Barbarians at at

13:25 the the Gate gate,, which which is is the the classic classic of of the the buyout buyout industry industry.. And And Jeff Jeff is is one one of of the the key key investment investment bankers

13:31 bankers involved involved in in that that transaction transaction in and a a former former Goldman Goldman person person. and And, you you know know,, line line rock rock as as Goldman Goldman

13:36 people people. And and Riverstone Riverstone as Goldman is Goldman. Yeah, because. The the Beacon beacon group group was was basically basically a a bunch bunch of of ex-Goldman ex-Goldman guys

13:40 guys. Exactly. Exactly.. And And so so it it is is the the whole whole Goldman Goldman club club amongst amongst all all of of these these organizations organizations that that I I was was talking

13:46 talking to to. So So why why they they talk talk to to me me?? I I have have no no idea idea because because that that was was not not me me.. But But so so I I accepted accepted the. the the

13:52 offer offer and And then then Beacon beacon, even, even before before I've I've graduated graduated,. Beacon beacon announces announces that that they're they're selling selling to to Chase Chase

13:59 and and they they couldn't couldn't guarantee guarantee me me I I was was going going to to wind wind up up in in the the private private equity equity group group.. So So I've I've got got a a

14:04 great great story story about about Beacon beacon.. So So I'm I'm the the oldest oldest four four boys boys, brother brother number number three three,, Kenny Kenny.. His His best best friend

14:11 friend is is a a fellow fellow by by the name the name of of Chris Chris Christenick Christenik.. So So Chris Chris goes goes to to Yale Yale and and Chris Chris is is a a rock rock star star. I I

14:18 mean mean, he played, played baseball baseball for for Yale Yale,, smart smart as as all all this this.. He He goes goes to to Beacon be in and and he's he's one one year year into into the the

14:28 analyst analyst program program when when that that sales sales announced announced.. And And what's what's great great is is you you look look back back at at Chris's Chris's career career,, he

14:35 he joined joined Tiger Tiger Management Management. and And one one year year later later,, Julian Julian shuts shuts down down the the fund fund and and he's he's got got about about four four or

14:43 or five five of of those those.. So So he's he's like like,, I'm I'm the the firm firm killer killer.. You You are are me me. You You are are me me and and we're we're out out.. That's That's

14:49 like like when when I I buy buy a a house house.. That's That's definitely definitely the the top top of of the the market market.. Yes - You've You've picked. peaked - I'm good I'm good at at

14:55 some some things things,, but but like buying buying a a house house is is not not my my thing thing - - I I got got you you.. So So, so, so, so, so, so, so, so, so,, so so - - Beaking

14:59 Beaking goes goes away away - - Beaking Beaking goes goes away away. And. And I I,, so so here's here's a a,, here's here's a a tip tip.. If If there's there's anybody anybody who's who's at

15:04 at,, who's who's an an analyst analyst at at an an investment investment bank bank who whoever ever interviews interviews with with Lime Lime Rock Rock.. So So,, my my question question,, I I

15:10 don't don't know know if if I I should should do do this this.. If If I I should should kind kind of of tell tell them them what what my my question question is is,, but but my my question

15:15 question to is - everybody Nobody - Nobody watches watches this this podcast podcast - Anyway anyway -, so - So So, let let my my mom mom,, my my mom mom will will be be ready ready to to

15:20 interview interview - - So So,, my my question question is is,, tell tell me me about about a a time time that that you you have have faced faced a a moral moral dilemma dilemma and and how how

15:25 you you dealt dealt with with it it.. And And my my,, the the moral moral dilemma dilemma that that I I think think of of when when I I ask ask that that question question is is,, I've I've

15:32 received received this this offer offer from from Beacon Beacon.. I I accept accept this this offer offer from from Beacon Beacon.. And And then then, Beacon Beacon sells sells,, Riverstone

15:40 Riverstone gets gets formed formed and and I I get get a a call call from from Riverstone Riverstone to to come come interview interview,, which which I I interviewed interviewed with with them them

15:46 and and I I get get an an offer offer.. And And so so then then I'm I'm like like,, can can I I do do this this?? and And this this was was,, this this was was,, that That was. was a a big

15:52 big moral moral dilemma dilemma for for me me because because I I, you know, believe believe being being a a man man of of your your word word and and what what you you say say is is what what

15:57 you're you're going going to to do do. And. I I remember remember my my,, I'm I'm a a different different place place in in my my faith faith journey journey today today.. So So today today I I

16:03 would would start start that that with with a a prayer prayer.. I mean, That's that's how how I I would would make make., But but back back then then, that that wasn't wasn't who who I I was was

16:08 and and how how I I approached approached decision decision making making and. My my wife wife and and I I jumped jumped in in a a car car and and we we headed headed up up into into Vermont Vermont

16:15 and and spent spent a a weekend weekend kind kind of of talking talking about about it it. And And we we came came back back and and I I don't don't know know if if it's it's the the right right

16:21 answer answer or or not not,, but but where where I I came came to to was was,, you you know know,, they they can't can't,, well well,, I I came came back back and and I I asked asked,,

16:26 can can you you guarantee guarantee I'm I'm going going to to wind wind up up in in private private equity equity?? Because Because I I had had seven seven other other investment investment banking

16:31 banking opportunities opportunities that that I I had had turned turned down down.. And And I I clearly clearly didn't didn't want want to to go go investment investment banking banking and and they

16:37 they could could not not guarantee guarantee me me that that I I was was going going to to wind wind up up and and wind wind up up on on the the private private equity equity side side,, whereas

16:41 whereas that that was was my my offer offer at at Beacon Beacon. So based Just on on that that,, I I said said, the the offer offer is is not not the the offer offer that that I I had had received

16:47 received and and therefore therefore it it is is fair fair for for me me to to move move out out of of that that And. so I I accepted accepted the the offer offer. from from Riverstone Riverstone

16:54 and and told told Beacon Beacon that that I I wouldn't wouldn't be be coming coming to to them them.. And And there there was was another another, there there was was a a woman woman in in my my

16:58 class class at at HBS HBS.. The The two two of of us us had had these these offers offers.. I I don't don't think think she she wound wound up up going going there there. It., So, you you know

17:02 know,, it they changed changed.. Yeah Yeah.. The Just just so so you you know know,, I I was on was on the the other other side side of of that that.. Goldman Goldman gave gave me me an an

17:07 offer offer and and I I quit quit my my job job at at Stevens Stevens,, moving moving to to New New York York.. They They called called back back, and and we were we were just just kidding

17:13 kidding.. I'm like, what? Oh I'm my like gosh. What, what??

17:17 What?

17:19 Anyway Anyway, wow But But I'll I'll tell tell that that story story one one day day on on the the podcast podcast when when we we do do a a major major wine wine flex flex.. OK Okay.. When When

17:25 I'm I'm drunk drunk,, all I'll go good through through that that.. But But yeah yeah,. they're They're lost lost.. The The executive executive committee committee at at Goldman Goldman Sachs

17:31 Sachs revoked revoked my my offer offer.. Okay OK., that's That's pretty pretty impressive impressive.. Yeah Yeah.. You know Because, 'cause in in the the command Comanche, she Indian,

17:37 Indian tribe tribe,, the the status status of of a a warrior warrior was was based based on on the the status status of of his his enemy enemy.. So So the the fact fact I I pissed pissed off off

17:45 somehow somehow the the executive executive committee committee,, five five people people at at Goldman Goldman Sachs Sachs is is pretty pretty impressive impressive.. OK Okay, So so your your

17:50 personality personality is is not not new new and and there's there's clearly clearly a a story story here here.. And And yeah yeah,, exactly. I I mean mean,, for for the the executive

17:56 executive committee committee to to even even know know who who you you are are,, that's that's what's what I so impressive mean, press. Yeah - Yeah,, it's it's like like,, okay okay,, what

18:01 what did did he he do do? - So So you you get get a a river river stone stone, - go Go to to river Riverstone stone. And and, you you know know,, I I mean mean,, they they barely barely had

18:07 had office office space space where where, when when I I was was interviewing interviewing with with them them,, they they didn't didn't have have office office space space.. I I mean mean,, it

18:11 it is is fresh fresh.. They They are are still still in in negotiations negotiations with with the the Carlisle Carlisle group group about about,, you you know know,, what what the the

18:16 partnerships partnerships going gonna to look look like like. And And I I, you know, I kind kind of of laugh laugh -. Who And are two of the the two two guys guys that that founded founded

18:23 Riverstone Riverstone. - So So David David Lucian Lucian and and Peter David - David Lucian Lucian. And and Pierre Peter., yeah - Yeah Yeah,. Yeah yeah.. And And so so I I,, Lucian Lucian

18:31 may may have have been been the the person person that that gave gave me me my my offer offer at at Goldman Goldman., But but anyway anyway,, I I have have a a plot plot thickens thickens here

18:35 here., But but anyway anyway,, keep keep going going. -

18:38 Yeah Yeah., And and so so I I wind wind up up over over there there and and ironically ironically,, going going back back to to HBS HBS and and wanting wanting to to be be in in private private

18:46 equity equity. And I had applied for an an interview interview with with the the Carlisle Carlisle group Group. And and I I couldn't couldn't even even get get an an interview interview with with

18:50 the the Carlisle Carlisle group Group.. And And so so., Join join Riverstone Riverstone.. We We become become the the energy energy group group for for River River for for the the Carlisle

18:57 Carlisle group Group at at that that point point. and And so So interestingly interestingly, whenever whenever we we would would take take something something to to investment investment committee

19:02 committee, Dan Dan Dan Dan yellow Yellow, one one of of the the founders founders of of Carlisle Carlisle, would would call call me me up up to to say say, okay Okay, So so what's what's the the

19:08 deal deal? walk Walk me me through through the the deal deal, walk walk me me through through the the investment investment already committee? And He he probably probably doesn't doesn't remember

19:14 remember me me from from Adam Adam's, so I I don't don't mean mean to to oversell oversell it it,. but But when When he he retired retired, I I wrote wrote him him a a note note just just kind

19:20 kind of of saying saying, the The irony irony is is, I I couldn't couldn't get it Couldn't even even get get an an interview interview with with the the Carlisle Carlisle group Group. And And if if

19:25 I I had had worked worked at with the the Carlisle Carlisle group Group, probably probably never never would would have have met met you you and and probably probably you know never never would would

19:29 have it. But But I I wind wind up up at at Riverstone Riverstone and and I I talked talked to to you you with with some some level level of of frequency frequency Because because I'm I'm the the

19:34 person person that that kind kind of of walks walks you you through through what what the the deal deal is is before before we we went went into into investment investment committee committee. Oh Oh,

19:39 that's, that's awesome awesome. Yeah Yeah. And, and you know just just you know just one one of of those those right right time time, right right place place, but But the the opportunity

19:45 opportunity to to learn learn from from. you know a a well-known well-known investor investor who who had had an an operating operating background background and and how how he he thought thought

19:52 about about deals deals and and questions questions and and the the like like is is just just one one of of those those unique unique things things.. And And so so I I was was at at Riverstone

19:57 Riverstone for for almost almost three three years years and and I I get get a a call call from line from -. Did Did you you interact interact with with Glenn Glenn Youngkin Youngkin any any? - a I

20:06 I had had a governor governor elect elect. Well -, the Well, the now now governor governor. - The The now now governor governor. - And And you you went went, you - You know know him him from

20:13 from Rice Rice., right I - I went went to to Rice Rice with with him him. - Yeah Yeah., Glenn Glenn played played basketball basketball at at Rice Rice. He He didn't didn't actually actually go

20:17 go on on the the court court and and play play,, but but he he was was in in uniform uniform on on the the bench bench - Well Well,, there there you you go go.. At At least least he he got got

20:23 to to wear wear the the uniform uniform. - I I will will say say this this., Good good guy guy,, smart smart guy guy. I. I like like Glenn Glenn a a lot lot. - Totally Totally agree agree..

20:28 I I had had some some limited limited interactions interactions,, but but again again,, that's that's another another, I I had had much much less less interactions interactions with with him him

20:33 than than I I did did Dan Dan Yellow Yellow.. So So if if Dan Dan wouldn't wouldn't remember remember me me, which, which I I guess guess he he probably probably wouldn't wouldn't, like like

20:37 Glenn Glenn,, yeah yeah,, wouldn't wouldn't remember remember me me,, but but yes yes., And and the the same same. and And that's that's all that I've heard about him is really. all that

20:42 I've heard about him is really good. And the the And the pay pay seems seems to to be be good good when when you're you're employee employee number number 17 17. Yeah.

20:49 Yeah Yeah,. yeah. It doesn't Doesn't seem seem to to do do all all right. right. Not Not too too bad bad.. Yeah Yeah,, so so three three years years,, Riverstone Riverstone. And, a

21:00 an aside side story story on on that that.. So So when when I I was was at at,, so so my my son son was was born born in in 2001 2001,, a a couple couple of of weeks weeks before before

21:08 September September 11th. And 11th. And so so we we were were in in the the city city and and the the investor investor conference conference was was going going on on for for the the Carlisle

21:15 Carlisle group group.. And And so so

21:18 I I was was a a very very modern modern father father now now that that I I think think back back to to it it.. So So I I actually actually stayed stayed in in New New York York and and stayed

21:23 stayed with with my my wife wife and and didn't didn't go go to to the the to the conference conference because 'cause we we had had this this newborn newborn kid kid.. And and And

21:29 my my first first day day back back into into the the office office was was in in the the middle middle of of the the conference conference,, which which was was September September 11th 11th..

21:35 And And so so we we all all know know what what happened happened on on that that fateful fateful day day.. But But I I wound wound up up being being the the senior senior most most person person in

21:40 in the the office office that that day day.. And And, you you know know,, it it,, yeah yeah,, we we all all have have our our memories memories from from that that day day., But but I I

21:49 particularly particularly remember remember my my assistant assistant who who had I'd worked worked at at Kenner Kenner Fitzgerald Fitzgerald and and had had, just a you know, just gazillion like

21:55 gazillion colleagues colleagues who who were were in in that that building building as as you're you're kind kind of of watching watching everything everything happen happen.. I I had had a a dear

22:00 dear friend friend from from business business school school that that worked worked for for American American Express Express.. So So she she was was down down in in whatever whatever building

22:06 building number number six six or or,, but but for for whatever whatever reason reason, wasn't wasn't there there that that day day.. Oh, Wow wow.. Yeah Yeah. Yeah Yeah.. Yeah Oh, well.

22:14 Yeah,. yeah Yeah.. And And being being in in finance finance,, I I mean mean,, we we,, you you know know,, we we have have those those stories stories because because we we know know

22:18 people people and and the the like like and and I I mean mean, the, I mean Maynard, Maynard Holt Holt was was in in one one of of the the world world trades trades.. Was Was he he in in one one

22:23 of of the the towers towers?? Yeah. Yeah. He He emerged emerged from from a a subway subway tunnel tunnel covered covered in in white white dust dust,, you you know know,, two two hours hours

22:31 later later or or whatever whatever.. Yeah Yeah.. Oh Oh my my gosh gosh.. Yeah. Yeah. Anyway Anyway,, I I don't don't know know what what took took me me there there,, but but anyway

22:38 anyway,, that's that's a a,, that's that's a a story story. So So, uh, thankfully thankfully we got got through through, uh all, that we. got through all that with not nothing nothing at at

22:45 all all except except a a, uh, a story story and and just just very very thankful thankful. and And you you appreciate appreciate,, you you really really appreciate appreciate life life when when

22:52 you you when have you have a a kid kid and and I I know know you you have have three three and and those those sorts sorts of of things things really really frame frame what's what's important

22:58 important to to you you.. And And yeah yeah,, with with a a two two week week old old kid kid,, it it certainly certainly all all came came in in to to focus focus as as we we went went through

23:06 through that that.. But But anyway anyway,, good good experience experience with with Riverstone Riverstone. - So So you you know know Chris Chris Sorels Sorels,, right right? - I I do do. He

23:11 - was a banker Banker at at Bank Bank of of America America.. And And now now he's he's a at natural Natural Gas gas partner Partners, as. He he does does energy energy technology technology stuff

23:18 stuff for for him him.. Chris Chris literally literally on on September September 10th 10th was was racing racing to to the the airport airport., I I believe believe he he was was in in New New

23:30 York York to to a a meeting meeting.. He He gets gets to to the the gate gate and and the the gates gates already already shut shut for for his his flight flight. And and he's he's sitting sitting

23:40 there there arguing arguing,, you know, please Please,, please please, please., please. Somehow Somehow the the plane plane comes comes back back.. The The gate gate,, they they opened

23:47 open the the gate gate.. He's He's allowed allowed to to get get on on his his flight flight to to San San Francisco Francisco or. LA LA,, wherever wherever it it was was going going., In in

23:54 the the meantime meantime,, his his assistant assistant had had booked booked him him on on one one of of the the flights flights that that flew flew into into the the trade trade towers towers -.

24:01 No No -. Yeah Yeah.. So So he he would would have have been been on on that that flight flight the the next next morning morning -. I've I've never never heard heard that that story story from

24:06 from him him -. Yeah Yeah,. Yeah in. the - Holy cow - No, No, it's it's to to your your point point about about just just appreciating appreciating life life and and recognizing recognizing how

24:14 how fragile fragile it it is is -. Yeah Yeah,. I I mean mean, you, know, we we can't can't forget forget that that.. And And, you know, we'll we'll get get later later into into this this

24:20 conversation conversation and and talk talk about about some some stuff stuff I'm I'm doing doing now now, but, but our our values values, and and it it all all just just comes comes down down to

24:26 to interactions interactions. And. And that's that's one one of of the the downsides downsides of of COVID COVID.. And And I I feel feel it it in in our our office office today today.. It's It's

24:31 like like,, you you know know,, where where some some people people are are at at home home,, some some people people were are up up in in the the office office.. We We don't don't have have

24:36 those those interactions interactions. And and you you can can just just feel feel the the tension tension because because you you don't don't interact interact with with people people the the way

24:42 way - there's There's a a natural natural edge edge that that we we all all have have because because we've we've kind kind of of lost lost that that.. And And so so events events like like living

24:48 living through through these these last last two two years years of of COVID COVID or or something something like like September September 11th. And And maybe maybe,, I I don't don't really really

24:54 wanna wanna say say there's there's good good news news about about September September 11th 11th,, but but it it becomes becomes a a exclamation exclamation point point and and focus focus that

25:00 that helps helps you you come come to to that that.. These These prolonged prolonged periods periods like like we've we've gone gone through through with with COVID COVID are are kind kind of of

25:05 much much harder harder to to really really appreciate appreciate those those lessons lessons that that we're we're beginning beginning to to figure figure out out after after suffering suffering so

25:11 so long long of and being being remote remote or or communicating communicating through through our our phones phones and and an online online Zoom Zoom as as opposed opposed to to doing doing

25:19 business business the the way way we we used used to to do do things things I mean - I mean,, I I read read a a statistic statistic the the other other day day that that said said the the average

25:25 average high high school school or today has the or today has the amount amount of of anxiety anxiety as as a a institutionalized institutionalized person person back back in in the the 1920s 1920s,,

25:36 which which maybe maybe that that was was hyperbole hyperbole and and all all,, but but it it is is amazing amazing the the amount amount of sort of of sort of pressure pressure and and anxiety

25:43 anxiety that that comes comes with with all all these these things things.. 911 911,, you you know know,, social social media media. Yeah Yeah,, I I mean mean,, yeah, I I think think

25:51 you're you're my my kids kids are are relatively relatively the the same same age age.. I've I've got got a a sophomore sophomore in in college college and and a a senior senior in in high high

25:57 school school.. And And yeah yeah,, I I mean mean,, you know, my my senior senior in in high high school school has has effectively effectively not not had had a a normal normal high high

26:03 school school experience experience.. And And my my sophomore sophomore in in college college went went to to a a,, he he goes goes to to school school at at Boston Boston College College, didn't,

26:09 didn't know know anybody anybody up up there there.. And And so so graduated graduated in in 2020 2020 in in the the midst midst of of, you know, the the first first wave wave of of COVID COVID..

26:16 And And you know, we we all all know know how how tough tough that that was was. And. And then then starts starts at at a a school school where where he he basically basically doesn't doesn't know

26:21 know anybody anybody and and no no means means to to media me to anybody anybody because because,, you you know know,, Massachusetts Massachusetts was was much much more more locked locked down

26:27 down than than we we were were here here.. So yeah, So, yeah, I I mean mean,, that's that's,, you you know know,, that's a that's a kiddo kiddo and and great great-bearing bearing ton tenet

26:32 of college college.. Okay Okay, same Same thing thing.. Yeah Yeah, just, just amazing amazing the little lockdown lock down.. So So yeah yeah.. So So so your your river Riverstone stone and

26:40 and the the phone phone call call comes comes in in from from Y Lime. Rock. Yeah Yeah., Phone phone call call comes comes in in from from Lime Lime Rock Rock. and And they they just just raised

26:46 raised their their second second fund fund. were We're in in the the first first fund fund, Just just to to show show you you how how in session. incestuous was all all this this turned turned out

26:53 out to to be be the the first first fund fund was was a a carve carve out out from from the the beacon beacon group group. Was Was it it really really? I I didn't didn't know know that it it was was

26:59 the the first first Lime Lime Rock Rock fund fund was was a a carve carve out out from from the the beacon beacon group group and and how how big big was was it it?? Do you remember? It It was was

27:05 the it it was was a a hundred hundred million million dollar dollar fund fund. So So just just sub sub hundred hundred million million just just a a shy shy of of a a hundred hundred was was from

27:11 from the the beacon beacon group group. and And then then there there were were a a few few friends friends and and family family who who came came into into it it as It's as Kane Kane Anderson

27:15 Anderson energy energy fund fund one one in and 98 98 was was 103 103 million million.. There There you you go go.. Yeah Yeah.. Yeah Yeah,. I I mean mean, Yeah at, a different different time

27:23 time different, different scale scale, so so many many different different things things. So So that that first one was 1998 first one was 1998. and And so so how how many many people people are

27:30 are at at Lime Lime Rock Rock at at the the time time? when When you you get get that that? yeah Yeah,, that's that's a a that's a really really good good question question.. So So you you had

27:35 had you you had had Farber Farburn and Reynolds Reynolds. they They had had just just, well well., they'd added They'd added a a Calgary Calgary office office after after like like a a year year..

27:43 So So we we had had John John Clarkson Clarkson as as one one person person up up in in Calgary Calgary. Okay.. Yep. And And then then as as they they raised raised the the second second fund fund,,

27:48 they they hired hired Lawrence Lawrence Ross Ross over over in in Aberdeen Aberdeen., 'cause we because we had had half half of of our our investments investments from from the the first first fund

27:55 fund were were really really North North Sea Sea oriented oriented. So. So Lawrence Lawrence had had come come from from 3i 3i and and ran ran that that office office. and And then then they they

28:03 hired hired Tom Tom Bates Bates, who who I I think think most most recently recently before before he he came came to to Lime Lime Rock Rock, would would have have been been the the CEO CEO at at

28:10 Weatherford Weatherford and and then then sold sold that that to to Intera Intera or or EVI EVI to to become become Weatherford Weatherford and and Terra Terra - Right So he - opened And the so he

28:19 opened the Houston Houston office office and and you you had had Pontus Pontus Wilf Wilf worse worse. and And so, and then then I I joined joined him him.. And yeah, So so pretty pretty small

28:26 small team team at at that that point point -. That's That's wild wild. - Yeah Yeah. - Yeah - So So what what was was the the thought thought and and joining joining Lime Lime Rock Rock? 'Cause

28:35 because I I joined joined Kane Kane just just because 'cause it's it's like like, wow Wow, I'm I'm in in the the private private equity equity club club., It you know, right, you know was, it

28:40 was like. like you you were were already already in in the the club club and and you you were were getting getting to to choose choose which which blazer blazer you you were were going gonna to wear

28:45 wear -. Yeah Yeah, no No,, you're you're right. you're right And and I I think think part part of of it it, well Well,, I I think think what what it it really really came came down down to to

28:54 was was,, so so Jay Jay McLean McLean,, who who was was at at Lime Lime Rock Rock,,

28:59 I I had had recruited recruited him him out out of of UT UT to to work work at at Parkland Parkland Parsley Parsley -. Really Really -? Yeah Yeah.. So So,, you you know know, if, if there's

29:07 there's power power in in your your coaching coaching tree tree,, then then I'm I'm going gonna to claim claim credit credit for for Jay Jay McLean McLean,, who who is is a a phenomenal phenomenal

29:12 energy energy investor investor. And. And,, you you know know,, I've I've got got a a lot lot to to be be thankful thankful for for by by being being partners partners with with Jay Jay McLean

29:17 McLean, but

29:19 But, yeah yeah., And and so so I'd I'd recruited recruited him him there there.. And And so so he he called called me me,, I I had had known known,, I'd I'd met met Reynolds Reynolds and and

29:27 known known Reynolds Reynolds,. and And so so,, and and then then I'd I'd actually actually worked worked on on the the weather weather for for Deal Deal when when I I was was at at Simmons

29:33 Simmons.. So So I I had had met met Tom Tom,, again again,, I I was was an an analyst analyst,, I I didn't didn't know know him him well well,, but but I I had had met married him man. And,

29:39 you you know know the the deal deal about about. private I mean, private equity equity. I, mean, private equity, it it can can be be tough tough. It can be tough to to leave leave when when

29:45 you've you've been been there there a a while while - Right - You know, the The vesting vesting terms terms are are onerous onerous and and the the like like.. And And so so. it It happens happens

29:52 really really quickly quickly when when they they show show you you the the door door -. Just Just to to gauge get your your curious curious -. Okay, well Not, not that that that's that's gonna

29:57 going to happen to you happen. I to you - I thankfully thankfully haven't haven't faced faced that that.. But But if if you you want wanna to leave leave on on your your own own volition volition,,

30:04 these these places places can can be be painful painful places places to to leave leave.. And And so so one one thing thing that that I I like like to to tell tell young young people people when

30:10 when, whether whether they're they're leaving leaving us us or or, if we're if we just just kind kind of of completing completing an an interview interview is is, when when you you think think

30:17 about about a a private private equity equity job job,, really really think think about about, is is it it the the people people,, the the culture culture,, the the strategy strategy,, like

30:25 like everything everything needs needs to to gel gel, because because you, these these are are much much more more like like marriages marriages as as opposed opposed to to jobs jobs given given the

30:31 the way way that that the the vesting vesting and and the the like like works works.. And And so so, for for me me,, I really liked what I I really liked what I saw saw at at. at Lime Lime Rock

30:39 Rock with with respect respect to to the the way way that that, you know, Farburn Reynolds are just a natural yin and yang to one another. And it was a little bit of a smaller strategy as opposed

30:42 to what Riverstone was ultimately pursuing. And, you know, that kind of Farburn Reynolds are just a natural yin and yang to one another And it was a little bit of a smaller strategy as opposed to

30:51 what. Riverstone was ultimately pursuing and that kind of fits fits more more of of my my own own personality personality of of kind of kind of getting getting involved involved with with,, as as

31:01 opposed opposed to to kind kind of of big big buyouts buyouts and and thinking thinking about about all all of of the the finance finance math math,, it's it's much much more more,, you know, I I

31:07 like like to to visit visit with with teams teams, I I like like to to,, you know, I I think think teams teams drive drive value value. And and that's that's what what we we focus focus on on at

31:12 at Lime Lime Rock Rock.. So So there's there's a a whole whole lot lot of of various various reasons reasons that that the move made sense for me. And I just remind young people that, the move

31:16 made sense for me and I just remind young people that, you you know know,, think think about about all all of of those those things things when when you're you're thinking thinking about about

31:23 where where you're you're going going -. Yeah Yeah,, we we used used to to have have a a joke joke back back at at Stevens Stevens where where John John Jacoby Jacoby used used to to say say,,

31:30 You You want want to to go go to to summer summer camp camp with with them them boys boys or or not not?? You You know know, and, it was it's kind of. kind of, because Because it's it's true

31:36 true.. I I mean mean,, yeah yeah, once, once you're you're in in bed bed with with the the vesting vesting stuff stuff, it, it just, it doesn't doesn't change change. Yeah Yeah.. The The

31:43 other other thing thing too too that that I I think think happened happened during during that that period period is is

31:48 we we went went from from being being,, well well. But, when when Farber Farburn and Reynolds Reynolds raised raised that that first first fund fund, they, they had had to to get get the the car

31:55 carve about out from from Beacon Beacon,, but but they're they're raising raising fund fund number number two two., They're they're going going into into the the private private capital capital

32:01 bucket bucket of of an an institution institution saying saying something something to to the the effect effect of of energy's energy's great great.. Here's Here's why why we're we're better better

32:07 than than buyout buyout or or venture venture or or technology technology.. And And at at some some point point though though, kind, kind of of 2005 2005,, somewhere somewhere around around

32:15 there there,, we we became became an an allocation allocation.. Right Right. And And that that really really changed changed the the world world and and the the dollar dollar amounts amounts just

32:21 just got got a a lot lot bigger bigger.. So So it it became became hard hard to to leave leave too too because because of of that that dynamic dynamic. 'Cause because people people have have always

32:26 always said said,, you you look look at at Silicon Silicon Valley Valley,, people people leave leave Kleiner Kleiner, Perkins Perkins,, start start their their own own firm firm,, tick tick

32:32 on on down down the the list list and and you you just just didn't didn't see see it. it that much much in in energy energy.. Because Because if if you you really really think think about about it

32:38 it,, I I mean mean,, back back late late 90s nineties,, it it was was NGP, NGP NCAP, NCAP,, Lime Lime Rock Rock,, Quantum Quantum was was already already around around,, Kane Kane was

32:44 was around around. And And on on the the services services side side, SCF, SCF was was there there.. SCF SCF was was there there.. First First Reserve reserve was was there there. And. you

32:51 know, you you get get pretty pretty, pretty far far down down the the path path before before you you start start seeing seeing the the spinoffs spin-offs, like like the the carneal carneal ends

32:57 ends or or the the edges edges or or the the pearls pearls and And no like that's right.. So So you've you've been been there there almost almost 20 20 years years.? Yeah Yeah,, it'll it'll be

33:06 be 19 19 in in February February.. Wow Wow.. I I think they give you know a. I'm watch, a a gold gold watch watcher. There's or something something like like that that.. We We don't don't

33:13 have have any any of of those those traditions traditions now now.. You see, you see Sometimes sometimes I I send send far Farber burn and rentals Reynolds an and email email.. I I haven't

33:18 haven't done done it it in in a a few few years years. I I remember remember doing doing it it at at the the 10th and 10th and I I just just said said, I'm I'm a a note note and and I I was was like

33:22 like,, it's it's been been amazing amazing 10 10 years years.. Thanks Thanks for for the the opportunity opportunity.

33:28 That's That's great great.. And And you, you you mainly mainly did did service service stuff stuff.. I I was was on on the the peace P side side.. You're You're on on the the service service

33:34 side side.. This This is is going gonna to be be an an impossible impossible ask ask though -, but Okay - go Go ahead ahead and and say say it it is is.. Is Is there there any any way way to to

33:39 summarize summarize kind kind of of that that 20 20 years years, the or the last last 19 19 years years in in two two or or three three minutes minutes?? What What was was the the market market

33:45 like like?? Was Was the the opportunity opportunity set set?? Would Would you you see see change change -? Yeah Yeah. Yeah Yeah,, you're you're right right,. it's It's impossible impossible

33:51 - because I want to 'Cause I wanna more more talk talk about about where where we we are are today today in in the the future future - Sure,. of Of course course -. I I think think setting setting

33:55 that that backdrop backdrop's center interest. - Well Well,, and and just just to to clarify clarify,, I I probably probably spent spent the the first first half half of of my my time time at at

34:01 Lime Lime Rock Rock doing doing EMP EMP and and services services. And And then then the the second second half half of of my my career career has has been been almost almost exclusively exclusively

34:09 services services -. Nobody Nobody else else wanted wanted to to do do it it.. You drew the You drew the short short straw - Well, maybe straw a. Well, maybe a little little bit bit of of that

34:14 that,. maybe Maybe some some of of the the things things that that I'd I've worked worked on on.. And And then then, you know, and then we we had had people people join join the the team team

34:19 and and leave leave the the team team and and we we had had a a number number of of service service deals deals that that needed needed to to be be managed managed.. And And I I had had the the

34:25 experience experience to to manage manage them them.. And And so so, you know, I I inherited inherited a a few few things that things that I've I've kind kind of of managed managed as as well well..

34:31 So So there there are are a a number number of of reasons reasons that that that that kind kind of of came came to to fruition fruition.. But I I think think to to answer answer your your question

34:35 question,, you it's know, it's maybe maybe a a little little bit bit of of

34:40 just just, you know, how how everything everything is is cyclical cyclical.. The sick, you know, They they rhyme rhyme,, of of course course.. They're They're never never exactly exactly the

34:46 the same same. But But like, my my first first period period at at Lime Lime Rock Rock, you know, felt felt a a little little bit. bit that like like things things do do now now,, maybe maybe

34:54 not not quite quite as as bad bad.. But But what what I I mean mean by by that that is is, capital was capital was short short in in supply supply.. I mean It, it was was still still tough tough

34:59 to to raise raise those those funds funds.. And And then then as as you you addressed addressed,, as as you you moved moved on on in in time time,, those those funds funds kind came of came

35:04 together together.. But But the the first first fund fund that that I I wasn't wasn't part part of of,, that that was was difficult difficult to to get get started started.. And And fund fund

35:09 two two took took a a good good while while for for Farburn Farburn Reynolds Reynolds to to raise raise.. And And that's that's as as I I joined joined them them.. So So money money wasn't wasn't

35:15 easy easy to to raise raise.. And And to to your your point point,, there there weren't weren't a a whole whole lot lot of of us us.. And And the the world world was was just just a a very very

35:21 different different world world with with respect respect to to all all we we talked talked about about was was optimizing optimizing this this declining declining production production base base in

35:27 in North North America America. And And so so, you know, the the last last 10 10 years years of of this this shale shale extravaganza extravaganza and and kind kind of. of growing growing

35:34 production production was was not not in in anybody's anybody's purview purview.. I I mean mean,, you'll you'll recall recall, you know, Matt Matt Simmons Simmons was was writing riding Twilight

35:40 Twilight in in the the desert desert. And and you know, it it was was just just like like, the The world world was was coming coming to to an an end end. And and what what we we had had to to do

35:45 do was was we we had had to to become become really really good good at how how we we eat eat that that incremental incremental barrel barrel of of oil oil or or MCF MCF of of gas gas. out out. and

35:53 And that that meant meant that that services services were were really really important important because because those those services services were were what what allowed allowed you you and and

35:59 engineering engineering expertise expertise in in order order to to do do that that. And And if if you you think think about about, you know, some some of of the the revolutionary revolutionary

36:05 things things that that have have occurred occurred with with respect respect to to our our ability ability to to

36:09 kind of pull pull hydrocarbons hydrocarbons out out of of the the ground ground,, you I mean, you know, you can't can't overlook overlook the the importance importance from from a a service

36:15 service perspective perspective of of what what we we did did with with seismic seismic. And And so so seismic seismic really really opened opened up up the the world world.. And And so so that

36:22 that,, you you know know,, and so, you know, Mark Mark Meyer Meyer and and I, he's he's the the podcast podcast that's that's out out currently currently.. So So the the one one we we did did

36:28 it it about about a a week week,, week week and and a a half half ago ago,, I I think think with with 3D 3D seismic seismic, at at least least in in my my career career., that That was was the

36:34 the first first time time there there might might have have been been any any semblance semblance of of sort sort of of alpha alpha in in the the business business versus versus before before that

36:42 that you you were were just just the the inflation inflation hedge hedge.. You know That's, I mean right., You all know, I mean, all the the,, I I mean mean,, we we talked talked about

36:47 about this this. You're You're younger younger than than I I am am, so so you you may may not not remember remember, but but Louie Louis Dreyfus dryfasts,, the the EMP EP company company, during

36:54 the during 90s the 90s, came came out out and and said said,, We've we've got got this this great great trading trading organization organization.. We're We're going going to to hedge hedge out

36:60 out natural natural gas gas prices prices and. We're we're going going to to walk walk in in and and rate rate a a return return on on the the well Well sweetheel Sweet. Dreld and They they traded

37:04 traded less less than than one one times times EBITDA E. But Dodger during in that that period period,, because because the the market market wanted wanted exposure exposure to to the the commodity

37:08 commodity price price.. And so I I think think you're you're right right.. I mean, 3D 3D seismic seismic was was the the first first time time where where you you went went,, Holy holy cow cow,,

37:14 the the industry industry missed missed this this.. We We can can go go ahead hit of a a gusher gusher here here. Right Right.. Yeah. I mean, it just It gave gave us us a a new new perception

37:21 perception of of, you know, what what we we're were all all ultimately ultimately after after. And. so, you know, Technology technology is is just just amazing amazing. you know, Then, and

37:30 then ultimately ultimately, we we all all know know what what, you know. fracking tracking developments developments ultimately ultimately allowed allowed us us to to do do.. So So there there

37:37 again again,, that's that's the the combination combination of of smart smart upstream upstream engineers engineers working working with with service service companies companies to to get get more

37:45 more hydrocarbons hydrocarbons out out of of the the ground ground. And. so Sorry sorry,, we we got got off off track track on on what what my my first first couple couple of years years looked

37:51 looked like like -. This This is is interesting interesting 'cause because was was the the point point of of your your investing investing back back then then, more more VC VC technology technology

37:58 type type stuff stuff?? As 'Cause I recall, because as I I was recall, 'cause I was never never a a service service guy guy, I first, first reserve reserve an and SCF SCF for were more more

38:05 buyout buyout.. That That was was more more financially financially,, let's let's pick pick a a platform platform company company,, bolt bolt on on acquisitions acquisitions and and then then

38:12 sell sell it it to to somebody somebody.. What What were were y'all y'all doing doing at at Lime Lime Rock Rock? - Yeah, so there There was was,, we we had had a a mix mix of of VC VC., We we

38:20 tried tried to to,, it's this never never works works by by the the way way., We we tried to

38:26 tried to get get into into technologies technologies just just as as they they were were commercial commercial.. You And you know know what what,, in in the the oil oil field field, nothing

38:31 nothing is is commercial commercial until until it's it's truly truly commercial commercial and and it it always always takes takes longer longer than than you you think think.. And so So there

38:37 there was was some some of of that that in in the the portfolio portfolio,, but but we we really really described described ourselves ourselves as as growth growth capital capital. So You've you've

38:42 got got a a service service company company that's that's now now secured secured a a contract contract with with a a larger larger EMP EMP and and therefore therefore you you kind kind of of see see

38:50 the the work work,, you've you've seen seen the the relationship relationship come come to. together and and a a management management teams teams outgrown outgrown their their bank bank.. And at

38:56 And at that that point point,, they they need needed a growth growth capital capital. But And I I know know this this is is kind kind of of mind mind-blowing blowing 'cause because that's that's

39:01 not not the the world world we're we're in in today today, but, but that that was was the the world world we we were were in in back back then then,, right right?? And And so so the the assets

39:04 assets were were all all old old by by that that point point.. There There was was a a new new generation generation of of investment investment that that needed needed to to occur occur and and

39:10 that's that's what what we we were were providing providing.. And And then then we we were were also also,, and and this this is is where where I I spent spent a a bunch bunch of of my my time

39:14 time,, we we were were deep deep value value people people.. And And so so how how did did you you play play hard hard assets assets into into a a growing growing service service intensive

39:22 intensive business business?? And And so so my my first first day day at at Lime Lime Rock Rock was was on on a a plane plane up up to to Wyoming Wyoming to to start start. due diligence diligence

39:31 on on a a land rig Landrigged driller driller that that we we wound wound up up investing investing in in. We. We kind of closed closed it it, I guess, a a month month plus plus into into my my

39:40 employment employment.. And Then we wound up then it was being, and then we were like, it wound up being a a good good deal deal.. We We got got proactively proactively approached approached on

39:48 on it it to to sell sell we. We weren't weren't even even at at the the one one-year year hold hold period period.. So, We we do do care care about about taxes taxes and and the the like like

39:55 Thankfully, by. And thankfully, by the the time time you you got got everything everything ironed ironed out out,, we we did did get get beyond beyond the the one one-year year whole hold period

40:01 period.. But But we we put put together together a a land land drilling drilling company company by by taking taking a a bunch bunch of of 80s '80s rigs rigs,, providing providing the the capital

40:09 capital in in order order to to update update the the pumps pumps on on them them and and retrofit retrofit. This this rig rig fleet fleet focused focused on on the the Rockies Rockies because

40:16 because the the Rockies Rockies were were gas gas short short at at that that time time period period. So, again Again, these, these are are just just kind of mind-blowing mind-blowing ideas ideas,

40:24 but. California California actually actually wanted wanted gas gas back back then then.. And And remember remember, you you had had the the Ruby Ruby pipeline pipeline that that was was being

40:29 being developed developed and and you you wanted wanted to to get get gas gas over over there there.. And And we we kind kind of of saw saw the the Rockies Rockies growing growing and and thought

40:36 thought,, and and we we had had a a management management team team approach approach us us with with this this concept concept of of they they had had this this company company,, they they needed

40:41 needed the the capital capital to to expand expand their their fleet fleet.. And And we're we're like like,, this this makes makes sense sense.. All All of of the the factors factors are are

40:45 coming coming together together and and put put it it together together. And within within a a year year had had sold sold it it to to Gray Gray Wolf Wolf. And And so so we we did did that. that

40:52 that, we we did did Hercules Hercules offshore offshore, where where we're we're buying buying old old rigs rigs from from Parker Parker and and we're we're buying buying some some lift lift boats

40:59 boats and and we're we're creating creating this this new new company company with with a a former former company's company's name name. and And which which was was pretty pretty,, it it wasn't

41:08 wasn't a a buyout buyout, but but it it was was pretty pretty sophisticated sophisticated finance finance stuff stuff, particularly particularly back back at at that that time time in in terms terms

41:15 of of doing doing two two reasonably reasonably sized sized deals deals and and starting starting up up a a company company from from scratch scratch that that by by the the time time we we added

41:21 added the the lift lift boats boats were were. you know, there's there's some some international international context context going going into into that that business business as as well well. But

41:27 but it it was was really really focused focused on on the the Gulf Gulf of of Mexico Mexico and and, you know, Parker Parker had had a a failed failed sale sale process process on on these these

41:34 rigs rigs., we We hung hung around around the the hoop hoop and, um, and and then then we we started started, we started making making diligence diligence calls calls amongst amongst our our

41:42 upstream upstream friends friends to to kind kind of of say say, what what is is the the outlook outlook for for the the Gulf Gulf of of Mexico Mexico?, What's what's going going to to happen

41:46 happen? And and you you probably probably know know that that we we are are partners partners with with the the guys guys over over at at Arena arena energy Energy And and so so So that that was was

41:52 one one of of the the calls calls that that we we made made was was over over to to that that team team to to try try to to get get a a sense sense as as to to what what are are the the opportunities

41:57 opportunities and and, um, the, the, the the quote quote that that always always gets gets thrown thrown around around,. I I think think it's it's true true,, but but maybe maybe it's it's

42:04 just just legend legend at at this this point point, but. But it it was was like like,, you you know know,, there's there's not not a a lot lot of of great great opportunities opportunities out

42:10 out there there for for others others,, but but we've we've got got phenomenal phenomenal backlog and backlog and opportunity opportunity.. And And, uh, you you know know,, that that turn,

42:16 and and we we heard heard that that from from a a few few different different parties parties And And so so that that really really convinced convinced us us that that. the The activity activity is

42:21 is going going to to be be there there.. Let's Let's buy buy these these rigs rigs and and, you know we, we bought bought them them. We bought them right right.. The The cycle cycle worked

42:27 worked for for us us really really well well.. We went to take that thing public. And You know, took that. We went to take that thing public. And I I remember remember we we were were kind kind

42:35 of of struggling struggling with with,,

42:37 you know, what what do do we we have have anything anything that that actually actually qualifies qualifies us us to to go go public public and and how how do do we we get get around around?? We We

42:43 don't don't have have three three years years of of financials financials. And And so so, you know what, what was was the the original original organization organization and and working working

42:49 with with some some smart smart lawyers lawyers to to ensure ensure that that we we could could, you know, actually actually. meet meet the the regulatory regulatory requirements requirements to to

42:53 get get that that thing thing public public and and took took it it public public quickly quickly.. And thankfully, didn't overstay our welcome, but had a really good deal embedded in there as

42:57 well. And I remember, another thing you have to know as an investor is, which Lime Rocks done a really good job of walking this line, but don't believe your stuff so much that you never get rid of

42:58 it. Thankfully, it didn't overstay our welcome, but had a really good deal embedded in there as well. I remember another thing you have to know as an investor is, which Lime Rock's done a really

43:13 good job of walking this line, but don't believe your stuff so much that you never get rid of it. But but also also, don't don't go go too too soon soon.. But But I I remember remember, again

43:24 again,, 'cause because I'm I'm services services and and Reynolds Reynolds kind kind of of is is the the head head of of our our services services arm arm..

43:30 I I remember remember kind kind of of saying saying,, ah ah,, I I really, really really, really like like what what we've we've got got here here in in Hercules Hercules.. And And he he had

43:37 had learned learned some some tough tough lessons lessons with with their their first first fund fund.. I I mean mean,, it it turned turned out out to to be be a a very very good good fund fund,,

43:42 but but there there were were,, it's it's a a portfolio portfolio.. So So you're you're always always learning learning something something in in there there.. And And then then he he was was

43:47 like like,, well well,, let's let's not not overstay overstay our our welcome welcome in in this this one one.. And And you know that, that turned out out to to ultimately ultimately be be the

43:53 the right right thing thing.. And And so so we we had had a a good good deal deal and. And unfortunately unfortunately, nobody nobody is is gonna going to get get through through what what all all

43:59 ultimately occurred in ultimately 2014 occurred in 2014 and and the the like like,. but But tough tough.. Yeah Yeah -. Well Well,, you you know know what I what? I think think we we

44:04 fundamentally fundamentally did did wrong wrong, with with some some hindsight hindsight now now and and getting getting to to be be critical critical since since I'm I'm out out of of the the club

44:11 club.. But But one one of of the the things things I I think think we we did did fundamentally fundamentally wrong wrong is is we we were were so so hard hardcore. on on GNA GNA of of you you got

44:21 got to to have have lower lower salaries salaries and and we we were were all all about about these these waterfalls waterfalls that that would would give give us us,, you you know know, Get get us

44:28 us our our money money back back, get get us us a a return return and and then then we'd we'd give give bigger bigger and and bigger bigger hurdles hurdles.. I I think think it it created created a

44:35 a weird weird dynamic dynamic in in that that if If you you had had a a home home run run, management Management realizes realizes when when they're they're in in the the high high splits splits..

44:42 They're They're like like, man man. I'm, I'm spending spending 50 50 cents cents of of every every dollar dollar here here. You You know know,, we're we're gonna going to sell sell. I I don't

44:47 don't need need, you you know know,, I I don't don't need need a a 50 50 50 50 partner partner, right.? And so we we would would wind wind up up, I I think think, selling selling the the home

44:54 home runs runs too too early early and and then then Conversely conversely, the the other other thing thing we we did did that that was was so so bad bad is is there there was was this this mystical

45:01 mystical two two times times our our money money. and And we we would would hang hang on on at at 187 187 times times our our money money to to try try to to get get to to the the two two and and

45:09 wipe wipe stuff stuff out out. right And and And so so I I I think think kind kind of of, and and we we got got better better about about that that over over time time. But But I I think think that

45:17 that was was kind kind of of the the the to to Reynolds's Reynolds's point point,. let's Let's not not over over say say our our welcome welcome here here.. Or Or sometimes sometimes if if you you

45:25 run run a a market market test test and and the the answer answer is is 187 187 times times your your money money -. That's That's the the answer answer -. I I think think I've I've heard heard you

45:30 you make make that that point point on on a a podcast podcast before -. Oh Oh, right, yeah, yeah. - No, it's It's deeply deeply ingrained ingrained. here Well - Well,, yeah yeah,. I I mean

45:35 mean,, sometimes sometimes it's it's the the answer answer. and And if if it's it's not not the the answer answer,, you you need need to to have have a a real real investment investment case case

45:40 for for why why it's it's not not because because you you were are re re-underwriting underwriting at at that that point point.. And And I I kind kind of of make make that that point point because

45:46 because,, I I mean mean,, we've done that. We've we've done done that. We've done on a GP a GP led led buyout buyouts. of of two two of of our our funds funds,,

45:55 funds funds four four and and six six.. And And there there are are times times when when we've we've held held deep deep conviction conviction and and that's that's worked worked really really well

46:05 well.. And And I I would would go go back back to to fund fund one one,, again again,, predating predating myself myself,. but But we we had had an a oil oil sands sands deal deal that that we

46:13 we could could have have sold sold

46:16 at nice Nice multiple Multiple. II and Nice Multiple IV And you know, I think Kane was in

46:22 that deal with you. If I were in that one? We were in. I didn't do any of the oil sand stuff. We had the joke is my territory was outside the loop Houston and the lower 48. And then we had other

46:38 folks that would work inside the loop Houston and Calgary. Okay. So I never, I never really did a did anything with the oil sands. But yeah, I remember the same thing of just going. we've got

46:50 this huge win and you realize in hindsight, that's just a proxy for oil price. That is what oil sands definitely were. So yeah, I mean, but yeah, I don't mean to disagree with your lesson, but

47:07 I do think it's been a differentiator for us in terms of a lot of strategic deals where we've - I never decided to - Crown Rock either.

47:18 So I think of - That's like - Yeah, there's that one. Yeah, that's like Bill Belichick's that they're going, yeah, yeah, I kind of got this braided guy over here that's not too bad. So yeah.

47:27 Here was my experience with oil field service 'cause we bought a company that had, I don't know, work over rigs or something in Appalachia and I went to my first board meeting. I really wasn't part

47:40 of that deal, but I was the old guy at Caine that had to go sit in the board meeting. And we walked into the board meeting, the CEO walks in and said, well, I've got the results back of our drug

47:51 test. We lost half our crews. And I was like, what? Yeah. And I was sitting there going, I don't think there's any value I can add here. You know, I'm not a rehab specialist. I don't know how

48:03 to go recruit from prisons or whatever I need to do. So I kind of came back and said, can we not do service deals again? I just, I just don't get it. Um, yeah I mean, services is it's people

48:16 intensive. It's a real management experience. And you want to take like the opposite end, which you know, I mean, we've, we've put a decent chunk of our funds in the minerals. Um, minerals is

48:29 super efficient from a personnel perspective as it goes to. Yeah. I mean, you know, those of us who work in services spend a lot of time thinking about employee issues. And the other thing is

48:39 funny, because you mentioned the waterfalls I never really understood why the market is so different, but like EMP management teams. Historically, and I'm really, I'm not really talking about the

48:50 last five years. I'm talking, there hasn't been many service investments in the last five years, but if you were to go back to like first 10 years of my time at Lime Rock, maybe first 15, it's

48:60 like EMP management teams were really good at getting these waterfalls. Now they may have created these perverse incentives and I'm, man, oil field services, it's like half the promote and there's

49:11 more people and yeah, the services, was not good at getting maybe their fair share from that perspective. You know, and I'm clearly a services person 'cause you're gonna see it all right here.

49:26 And it's like the same thing we do today. It's like we subsidize our customers and EMPs have really good people that they can hedge with called banks and then there's these contracts that may or may

49:38 not hold up that you have as a service company with an EMP, but we'll be seeing those sides of that about it

49:44 if you're a service company looking for money, call it, you know, in the early 2000s, you can go talk to Ellie Simmons. Yep. You can go talk to Lime Rock. Yep. First reserve, I think at that

49:59 point was already off the reservation doing bigger and, you know, trying to morph into KKR at that point. Had a little more power over management teams in terms of terms That's a very fair

50:11 observation. Because, you know, in fairness, I mean, Kane, Incap, natural gas partners, quantum, there was just a lot more money chasing the same management teams. Now, I think we all kind

50:23 of wound up later in life figuring out our different niches, but, I mean, you'd walk into a management team's office and blah, blah, blah, blah, blah, all the term sheets were right there,

50:32 you know. Yes. And so an extra 5 on the back end would win it. And guess what? The next team would get an extra 5 on the back end and just keep going. Yes. So, yeah. And. Yeah, and so that's

50:45 back to my comment about, does history rhyme or repeat or what does it exactly do? But today, I mean, we are sticking to hydrocarbons. We have Lime Rock New Energy, which is run by a separate

50:60 team that's investing in

51:03 the new energy economy, but we at Lime Rock Partners continue to look at both upstream and services deals and services There's a couple more names that are out there now in addition to ourselves in

51:16 SCF, but there's not many that, and there were a lot, and our competition was probably more at one point, was more generalist funds that were all deciding that, okay, we can just underwrite this

51:28 as a general industrial play. When you saw these big leverage checks come in, and that's when GE was playing hard and oil-filled services and the like and kind of changing the multiples But yeah,

51:41 all that kind of competition's gone away. I think a low-field service investment bankers, the list that they have to call, if they want to look for a financial party, is pretty short. Yeah. So

51:52 what are investors saying today? Because I get some feedback, because I still talk to LPs these days. And it just seems dreary. I mean, we've had the red problem that we as an industry outside of

52:08 Lime Rock. This was really funny. I was talking to Farber the other day, and I was going on my rant about how it's all just beta. You can't create alpha. And he goes, no checklist for free

52:17 phrase that. You can't create alpha in the energy business fair enough. Of course I did my default. I did the Silver Hill deal. But here we go. But we had the red problem as an industry, lost a

52:30 lot of money. We've got the green problem in terms of that. And I always hate to say this time it's different, because it never is This time it just feels different. that it's more pessimistic

52:45 when it comes to the capital. What are you kind of hearing out there from LP world - Yeah, I mean, look, my general sense is doesn't really differentiate from what you basically said. It's a

52:58 challenge.

53:01 I mean, amongst the endowment and foundation crowd, the ESG, but in particular, the E is a big issue And to me, it's like, right now, I'm not sure if there's anything that we could do, absent

53:19 being a net zero industry, which seems all but impossible to me, that you could attract those dollars today.

53:30 We have not been a big pension group, but I think that there is a more open eye from those maybe. individual or groups who will write maybe some of those larger checks to at least entertain it, but

53:47 we'll see and I Don't know I remain confident that and I think it'll be healthy But you know my prognosis is this is gonna sort itself out naturally and the way that's gonna happen I mean, you know

54:00 energy was the outperformer today I think energy was up 4 and I I really don't pay attention on a daily basis, but as I was driving over here I had CNBC on and they were talking about the

54:12 outperformer and you know energy was strong last year and You know and it's a little bit of what I wonder about green energy is ultimately Returns do matter and we were in that shale period and we got

54:25 over allocated and But really what did we do and you know, I'll talk about this later too probably but like the free markets worked so Capital allocators decided they wanted exposure to energy. They

54:38 liked what they were seeing from shale They pumped a lot into it, they pumped too much into it. And the capital markets, the energy capital markets subsidized the US economy with respect to super

54:51 low cost energy that, you know, because we had too much capital chasing these opportunities. And I can't help but ask myself, when you look at what's occurring with green energy is there also kind

55:02 of this similar just kind of rush to anything that's labeled as green and therefore it attracts the capital effectively valuation be damned from my perspective. And, you know, I probably don't

55:05 spend enough time looking at that stuff to really say that, but like that would be my high level observation. And of course there are winners as that market is moving up, but what does it look like

55:05 after

55:26 a decade? Because you and I both know there were also a lot of winners in the early phase of shale as people were flipping these investments and moving them. And is that really any different than

55:36 what you saw with a some green companies winding up into SPACs and kind of just walking up the capital ladder. And so I remain somewhat optimistic. I don't think we'll ever get the allocation that

55:49 we used to get, but nor do I think we need the allocation that we used to get. And so I think there will be fewer players playing in the market, and that will be a result of two things. We don't

56:03 need as much and not as many people are going to be interested, but fundamentally returns do attract capital. Feels like this industry has really understood that lesson. We'll see. But I think the

56:16 perspective that I bring that I mentioned earlier is like the service companies are still struggling for that return. And the EMPs have gotten it, and those who have balance sheets that are workable

56:29 are now very focused on reducing debt and making distributions to shareholders as opposed to on the growth wheel And that's a, I think a healthy disability. that I don't see going away

56:43 absent what you and I always have to deal with is what the heck happens with OPEC. And then, you know, the other thing that I know is going, yeah, I can just read it on your on your face is, but

56:54 what about demand will like where does demand ultimately go if consumers are really thinking about, you know, they don't want hydrocarbons.

57:03 And I just think we're too early in the energy transition to get away from hydrocarbons as quickly as people think they can get to get away from them. Yeah, I haven't done the math yet on this. I

57:17 know I've mentioned this at time or two on a podcast on the big digital energy show. I haven't done it either. So don't ask me because I won't have a great answer for you. Ballpark it with me

57:30 though is I think the amount of Precious metals it takes. truly for all of us to drive Teslas and for all of us to electrify everything. Let's set aside for a second that we're burning natural gas

57:46 to generate that power. I think to mine all of that, the amount of diesel you need to do that is probably more than the cars on the road. And the reason I say that is in the middle of a Congo, you

58:00 can't just go plug into a socket. You're in the middle of nowhere. You're running it all off diesel And so I'm not sure. I see Colin McClellan has made me a believer. I think electric cars went

58:14 out just because of performance. I drove a Tesla for six years. It's a great car. Couldn't go to Austin so well, but outside of that, it was a great car. So I actually think electric vehicles

58:25 just went out on performance type stuff or went a large market share because of that But I think at the end of the day, they're made out of a bunch of petroleum-based products. and the precious

58:38 metals needed to do all that, you gotta mine it. Yes. And you mine with diesel. I, well, yeah. But unfortunately the story gets told, Oh no, we're doing everything electric. And they're just

58:51 ignoring the diesel generator that's right there. That's doing everything with electric motors. I love the memes where you've got the diesel generator powering the Tesla cars. Right, oh yeah. So,

59:03 okay, I got another theory. I'm gonna throw it at you since we're So, as recently as Tuesday, I was incredibly pessimistic about energy being able to attract new capital. I've been running around

59:18 preaching, Your cash flows it. So, watch every penny, watch every nickel, watch every dime. I think I heard a story that I'm willing to think about and I might even start buying off on it is,

59:33 'cause my whole premise is we're 3 of the SP 500 so nobody cares about us. And so to your point returns matter, a CIO doesn't have to worry about 3 of the SP 500. So a CFO will never lose their job

59:47 because they didn't beat the

59:51 index because of messing with energy. You know, you'll 3, you

59:55 probably don't even have to buy energy if you don't want, maybe if you do, you buy Pioneer and Diamondback - Right - You know, so, but here's the thing I've heard that kind of gives me hope and I

1:00:06 want to get your take on it is we're seeing presumably right now kind of this rotation out of tech into value investing. That seems to be happening right now. I've heard that the average value

1:00:23 investor, their portfolio, 11 to 12 energy. So it matters to the secular rotation that's happening here, out of technology Now I realize that in a very articulate way just said. if technology

1:00:39 starts sucking, we may get some money. But I think that's a possibility - That's been the headlines for the last two days.

1:00:49 Just again, listening to those new shows, that's effectively been the rotation, right? Tech's been underperforming, people been moving into value, you drive into the office in the morning, if

1:01:00 you're actually driving into the office, and Bloomberg's got whatever analysts kind of talking about, that's the trade of the day. I didn't actually know your stat about where value is invested,

1:01:13 but if that's the case, then that makes a lot of sense to me. And yeah, I know I'm talking my own book, but I'm very much a believer in terms of the EMPs have it figured out right now. And so

1:01:25 capital coming in

1:01:31 from a valuation perspective is good. Said differently, capital coming in. on a secondary basis, I don't wanna see a ton of capital coming in on a primary basis and just kind of adding to capacity,

1:01:43 I think we're not there yet to kind of know that we, how much incremental capacity we're gonna need out of the US, I do think we've probably taken as a globe, we've probably shortchanged ourselves

1:01:54 a little bit over the last few years and there could be, hence Goldman and B of A and others who've kind of talked about some pretty high oil prices that could hit us on some sort of a term basis,

1:02:08 but for you and me, we don't really like to model out, you might fantasize about what those super high prices look like, but you're building out these models that are looking kind of five and 10

1:02:19 and years out and so what's an average commodity price to look like and I'm, I think there's a healthy discipline now that if that capital rotation's happening, that's a secondary base that's not

1:02:32 yet giving the, yeah, it's not resulting in the IPOs and all of the that could really mess things up - And I think that's right. And I actually think it holds - I do too - Which,

1:02:44 that shocks me - Yeah - Having been in my whole career, I think that actually holds. I think another thing though that we have to do that's part and parcel of us, and it leads me into the next

1:02:57 thing I wanna talk to you about, is I think the financial discipline, I think providing the returns are important. I think something else that's really important is we somehow have to get the

1:03:12 narrative back.

1:03:15 I've said this a million times on the podcast, I get mocked for it, so I'll just say it again. I'll look right in the camera and just own it. But my three children have lived the greatest life. I

1:03:24 would love to come back as one of my children - I've heard you say this - Yeah - And it's all because of oil and gas, and if you ask them tomorrow, Hey, do you want to get rid of oil and gas?

1:03:33 They'd say yes.

1:03:37 We just lost the narrative. And the interesting thing about losing that narrative, and we can analyze it all we want. We're an industry run by a bunch of engineers that can't tell stories. We

1:03:54 didn't tell anybody what was in Frank Fluid. I think that was kind of one of the big first things the environmentalist got. We can talk all about how the other side just doesn't trust us and the

1:04:04 like, but I think that's really important. And it's something we need to take very seriously. We need to figure out a way to go through all the wonderful things we do, and at least have a balanced

1:04:20 discussion on this transition as opposed to us just getting regulated out of business. 'Cause I'll tell you, I am a big believer in the bull run coming on commodity prices,

1:04:34 And if we have 150 oil. and everybody makes a lot of money. And we act like, you know, jerks that we have historically, it's not gonna end well for us. It's gonna end in windfall profits, taxes,

1:04:48 more regulation, et cetera. So I share those concerns.

1:04:57 I have no followers on Twitter, but I'm gonna mention my Twitter just because I have a feeling you have a view So maybe, but I'm at Will Franklin and I got no followers, but we were watching the

1:05:09 championship game and the energy transfer commercial. Do you remember the game - Yeah - Yeah. And where everything starts disappearing and it's like, I'm a huge Alex F. Sine fan and the moral case

1:05:23 for fossil fuels and Shellenberger and Apocalypse Never,

1:05:29 we create tremendous good for society, totally lost the narrative. And when things haven't gone perfectly, you probably haven't owned them soon enough. Maybe that's your point on like, frack

1:05:44 fluids, like, you know, there wasn't really anything in there. What were people so worried about, right? And it's like, it was recipes that people were really watering out sand. Exactly.

1:05:53 Exactly. So,

1:05:55 you know, but they all bought that proprietary, you know, name your service company that like had their recipe that they wanted to protect But

1:06:04 I think the challenge for us, 'cause I like Alex Epstein a lot, I'm not sure, and I don't mean this derogatory about Alex, but I'm not sure how many people he convinces. I have this feeling that

1:06:17 whenever we discuss energy advocacy, we're in an echo chamber. Yeah. And we're all sitting there, you know, going, God, that's great, that's great. And I think was it Dan Pickering who

1:06:29 tweeted out, or no, it was Paul Sankey tweeted out. the energy transfer commercial and said, Hey, do you think that worked - I think it was picturing you, said that - Was it picturing? Okay -

1:06:40 Yeah - It was one of the two smart goals - 'Cause I replied, yeah, I think it's a start and most people are like, no, we're talking to ourselves. I mean, get your - Yeah, no, 'cause that's

1:06:48 really interesting. 'Cause I think that's the challenge is how do we take, call it 15 year old to 30 year olds that have no idea what goes on to get their iPhones to come on or so they can get

1:07:05 online and play roadblocks or whatever. The complexity and the necessity to do that or all the intricacies that go into doing that. And that's a hard thing that I don't have an answer for - Now,

1:07:20 look, I don't have any genius answers for it either, but it does start with somebody collecting the data and pulling together the information to share and So if that's just being shared amongst the

1:07:34 echo chamber, at least it's actually been pulled together because nobody else has been able to actually support what we all kind of knew intuitively. And I think those people have done that. I

1:07:46 think the other side of the equation and part of why nobody cares is everybody is totally bought into CO2 is going to kill us and it's mankind's number one challenge And if you question that to any

1:08:02 degree, then you are immediately labeled a climate denier. And these labels from either side are just not useful. And this kind of brings you, this has gotten worse during COVID, right? Because

1:08:14 we're all now in echo chambers online. That is a curated content based on algorithms that knows what you like and therefore serves you up more of it. And that kind of further isolates us So we got

1:08:29 to get people back. actually together. And so this is just kind of fundamental human beings working together. How that's ultimately going to translate into hydrocarbons kind of defending themselves.

1:08:40 I'm not wholly sure. But that's also part of the reason that I wanted to be here today is I do think that I think it's important that people have spent their careers in the industry kind of stand up

1:08:55 to talk about how important the industry is and are doing that with regulatory influence, not to defend the industry and make sure that it gets a crony special treatment, but to ensure that people

1:09:09 understand when they're making calls for legislation, what are the long-term impacts? And we all get caught up in the movement of the day and what we need right now, and we kind of forget about the

1:09:22 cascading follow-on effects. But. as investors, that's one thing we're taught to always think about, right? It's like, whatever we do today, we need to be thinking about, particularly as

1:09:33 private equity, where you're not recycling that money, it's like, what is this gonna mean at my five year, my seven year, my 10 year exit point, wherever that exit point comes? And let's make

1:09:44 sure that we don't do something that gives us a decision tree that looks really bad when we get three years out. And my fear is that because hydrocarbons have effectively become so shamed that we

1:09:58 take short term decisions. And I think a perfect example, and I just read this the other day. And so one, either I should have known it or two, it's not true. So everybody should go and check

1:10:09 and make sure. But we know that Europe right now is facing an energy crisis. And that is brought on by the fact that the wind hasn't been blowing, but they've been moving toward renewables. And

1:10:20 it's also been brought on by the fact that there's been an underinvestment in hydrocarbons And let's take Germany in particular. Germany's been taking their nuclear plants offline and retiring them

1:10:31 early, with I think maybe over a decade left in their expected life. And what I heard about that recently, which is the part that needs to be kind of figured out, but that Angela Merkel had a

1:10:45 close election and was being challenged by Greens. And one way that she wanted to overcome that was by saying, Well, I'm green too. And so she agreed, I don't know how long ago this was, that

1:10:57 she basically made this policy move to let's get rid of our nuclear. Well, that's a policy decision made years ago that's now unfolding today. The technology's not there from a battery perspective.

1:11:10 The pipeline's not there and is under dispute with respect to Russia. And does Europe wanna be dependent upon Russian gas or not? That's a big question, which I can understand why people would be

1:11:20 asking that. But they're asking it too late because they took their base load off the grid. problem when the wind isn't blowing. And see, I think how that all comes about is we've lost the

1:11:34 narrative, we've been excluded from the discussion. So because I talked about this with the Texas Urquot situation on my year-end summary is I think the big miss that Texas did that Europe's doing

1:11:50 now is we know one was there to say, Hey, guys, reliability matters There are days when the wind doesn't blow. What are we going to do on that day? And I think the uneducated energy person was,

1:12:06 Oh, there's no difference between solar and wind and hydrocarbons. And so this whole notion of base load versus peaking or interruptible, whatever you wanted to call it, I think happened. And so

1:12:19 the thing I wanted to ask you about, and I always love visiting with you, but I wanted you to come in on, you're actually doing something about it, which I think you're certifiably crazy to do,

1:12:28 but let's talk about this. You're running for the Statehouse in Texas - I am, yeah. And that's what most of my friends say, you're crazy and why would you do that? And I've been in energy for

1:12:42 almost three decades. Last decade's been really tough. And so my standard answer to oil and gas people is, I've was stood oil and gas for the last 10 years. How much worse could it be? And I

1:12:54 don't really know yet 'cause I've gotta get through an election to see, but it's been a new world. But it's

1:13:01 this energy stuff that really, really drove me to this position.

1:13:10 And with my kids, I've set around the table for 20 years. My eldest is 20 talking about things that are important to me. And one of these things is energy and energy policy. And I feel like the

1:13:22 nation is taking the wrong turn. And I'm fearful that the state may take the wrong turn, particularly as our electorate changes. And part of it's changing for a really good reason. We still do

1:13:35 have largely a capitalist system, a low regulatory system, and that promotes entrepreneurship

1:13:43 and attracts people. And so we're seeing companies move here. That's bringing jobs, that brings opportunities, all of that's good. The unfortunate thing is those people, everybody worries So I'm

1:13:55 running as a Republican just to make it clear where I am. And

1:14:00 Republican concerns are, is Texas turning blue?

1:14:05 And when I think particular about energy policy, I'm really concerned that these people are coming without an understanding of how important hydrocarbons are to Texas's economy. And so,

1:14:20 what do I mean by that?

1:14:23 Direct and indirect employment, this is from a study from PWC, I think, and this is a pre-COVID, so 19, but 22 of Texans were directly and indirectly employed in the hydrocarbon business. So

1:14:35 super important to our employment base. We're not fully diversified away from it. With respect to county taxes and mineral royalties,

1:14:49 oil and gas provides, and this is a Texoga number, but 14 billion to the state last year. So that's a meaning. Schools rose. That's where I was going. That finances our schools. Everybody wants

1:15:05 their kids to get a good education. That is one. Now, we may disagree in terms of how we get there, but one area of agreement, because it's good to talk about where we agree. Conservatives and

1:15:14 liberals both want to ensure that our kids get educated And so how has that happened? Well hydrocarbons are important there. our infrastructure, if we want companies to come here, we gotta have

1:15:25 roads that work, and infrastructure is funded through hydrocarbon taxes. So yeah, this stuff is very important to us. And so we'll like what I like to say, and maybe I've already said it on this

1:15:40 hydrocarbon. The other thing is a politician, you say the same thing like 20 times a day, it's like fundraising for a fund, and you can't remember like, did I say this in the conversation or not?

1:15:49 But by the way, fundraising, I always had to have a script. So whatever page I was on in the pitchbook, I knew what I was gonna say. And if any of the marketing people interrupted, took me in

1:16:03 another direction after the meeting, I'd say, Hey, that's great if you don't like the script. I have no pride of authorship there, but let's not change the script in the middle of a meeting

1:16:12 because if you get me off track, I'll tell the same story two and three times. And I love my kinds I mean, he's still like my brother today. Mike got in there and just started talking. I mean,

1:16:22 during fundraising, I'm like, no, no, no, no, no, script on page three, we do this. So yeah, no, you'll, you'll learn that. The other good thing you'll learn about being a politician is

1:16:31 you get asked a question. Right. You repeat the question and then you have a bridge statement and then you say whatever you want to say. So I've got to found that I'm working my way into that. And

1:16:42 I've never, I've never been the great fundraiser for, for Lime Rock. I'm not the good storyteller and the like And I, that's one of the things that I, I told the team is like, when I embark on

1:16:55 this, I absolutely hope to win and I'm not doing it for a vanity project. I've never been the popular guy in the room. Um, that's just hasn't been, you know, I'm naturally an introvert, happy

1:17:08 to go talk to people. But, uh, but I told them I was like, look, one thing I will be much better at is sitting in front of people and asking them for money. Because you know what I do every day,

1:17:16 all day, I call people and ask them. money. I mean, you just can't have enough money to run a campaign and then my evenings or events or whatever. And then

1:17:27 my weekends are out in the community knocking on doors, saying hello to strangers and finding out what's important to them. And that's one of the really interesting parts of running for office is a

1:17:41 lot of people don't want to talk to you. A lot of people aren't home. But people do open their doors and people open up their hearts. I mean, you know, people are worried about things and they

1:17:51 meet somebody who I do care. So when I say pretends to care, I don't mean to say that I don't care. But when somebody's at the door, you know, when somebody's at your door, you don't ever really

1:18:01 know how genuine they are or not. But but people are are worried and they're ready to kind of talk about their things and then you just get this like this feeling.

1:18:12 And but one thing that I would say about it, which goes back to our conversation about energy as well is, you know, there's angst and concern and nobody's really talking about hope and opportunity.

1:18:23 And so if you want to talk about one thing that the other side does better. And by the other side, I mean the greens. And I also from my perspective, I'm talking about liberals, but they're

1:18:33 better at talking about caring for people and like this sense of empathy and the like. And what I, I think it's great to be a conservative in Texas because we do have a hopeful message to offer up.

1:18:47 And this is what I think we have to seize on if we can get beyond the echo chamber that you referred to for energy. We have a very positive message for society to deliver, if we can figure out how

1:18:57 to deliver it. But I also feel that as a conservative here, we have this entrepreneurial system, this capitalist system that's working. If you watch Fox news, all you're going to hear about is,

1:19:08 you know, the evils of socialism and the like. And you know, that's an area where a lot of conservatives get their news. And I share a lot of those concerns, but like if that's how we're gonna

1:19:18 attract the next generation of voters as conservatives, we have a challenge. And so - Let me cut you off real quick. Give me the stats of what you're running for. What house seat

1:19:30 is the geography, except - Yeah, so it's state of Texas District 133. It's effectively the Memorial Villages Memorial out through the energy corridor. So I-10 is the Northern border, Westheimer's

1:19:44 the Southern border, goes out to George Bush Park or Highway 6 out West. And then the Eastern side, it's kind of chimney rock, kind of north of San Felipe, and then it almost goes to the Galleria

1:19:55 south of there. So that's the general area where I'm running - And who's the existing state - So Jim Murphy is the incumbent,

1:20:04 and he announced his retirement back in September. And with a retiring incumbent,

1:20:13 demand, I guess I would say, amongst people who want to run. So I, and I was the last person to enter. So there are four competitors plus myself. So I'm

1:20:23 a free markets person and the voters are going to have a free markets choice. There are five of us to choose from, which, you know, I think, I think it's good. And look, I obviously think I'm

1:20:33 the better one or I wouldn't have gotten into the race, but it's not one of those races where I think voters are going to have to hold their noses. I think there's some good opportunities and, and

1:20:44 I think the district will be well represented. And the Republican primaries and affect the election, right? If I'm guessing this is a what? A 60 Republican seat. It's a 65. It's an R plus 15

1:20:56 sort of district. Okay. Yeah. I got you. So how, so back 30 years ago, when I was at Rice, I managed five campaigns for state representative And what the name of the game back then was, was

1:21:11 you got your voter roll. And so you knew whose house you were gonna knock on, but it was literally door-to-door retail politics. I mean, you were sending them a letter saying, Ham, and being

1:21:21 your neighborhood over the last couple of days, you'd knock on doors, you'd chat with them, you'd send them a letter afterwards saying, It's great meeting you or sorry, I missed you. And that

1:21:34 was literally how you did it. 'Cause you had back then, call it, I think 125, 000 people in a rep district, only half of them were registered to vote. Take it beyond that, only half of them

1:21:50 even showed up to vote. So that's 30, 000. And then when you looked at kind of the Democratic primary voters, you wouldn't go talk to them anyway. And the Republican primary voters

1:22:02 were gonna vote for you anyway. It was actually a pretty small swath So you literally could go knock on every door. How is that changing with technology and are there elements of that still around?

1:22:16 That is still, I mean, of all the advice that I've gotten, including from from the incumbent, it was very nice to spend some time with me. Um, he's like nothing replaces knocking on a door. And

1:22:30 when I knock on doors and talk to voters, the consistent message is there's only one other politician who's ever knocked on my door. And it's Jim Murphy So, uh, uh, I take that as, as a good

1:22:42 sign. Um, you know, it's interesting you said, because I've got two block walking stories from back in the day. So I'm going to recruit you. Three clean up.

1:22:51 I, I, I actually might be able to help you with some mechanics on walking. Cause what you want is you want somebody walking with you that's got the clipboard can keep the notes and they actually

1:23:02 ring the doorbell when you're walking up So there's literally a system to this that I was pretty good at back in the day. So I'm happy to come walk with you. It's interesting you say that's going to

1:23:14 be taking my notes. There we go. The, yeah, it'll still be a volunteer job like this one. So that'll be perfect. No, but it's interesting. So a couple, two or three of the campaigns I ran

1:23:27 were in effect. Westview Belair, state rep races. And when I would go out with

1:23:35 the, I had a couple of candidates in there when I went out with them, they would say the same thing They would say, no politician has come and knocked on my door since Tom delay. Tom delay was the

1:23:44 greatest block walker. I mean, he had a pest control business that filed for bankruptcy in the middle of his first state rep race, yet he knocked on every Republican primary voters door twice. The

1:23:57 guy was a machine. He got him twice himself. Yes. He was a machine. That's on that Another great story, because around that time when delay first got elected to Congress, another young candidate

1:24:11 running was a economics professor from North Texas state named Dick Army, who was running up in Dallas. And a buddy of mine was his consultant. And so, you know, Tom DeLay would hit, you know,

1:24:25 in a three hour period at night, 175 doors. I mean, he was just a machine. He had a great spiel, you know, all this. Dick Army was hitting like two or three. And so the consultant flies in to

1:24:36 say, what's going on? Turns out Dick Army was going in, having pie with the people Because they'd say, you want to come in and have some pie? Dick Army would say, sure. And he'd talk for, you

1:24:46 know, two hours to one voter. But yeah, no, it is retail. Yeah.

1:24:52 And I haven't fully worked out that art.

1:24:57 I can't, I can't imagine getting a hundred and seventy five dollars in three hours. I think, well, we target significantly fewer than that. So that's tough But it's still the same thing. The

1:25:08 math, you know, a House District now is roughly 200, 000 people. And then you've got the kids. So you kind of reduce it down to the voting population. And then you got to depend on, okay, is

1:25:20 it a primary or a general? And what's going on? So in a

1:25:28 year where there's not really a big race on the ballot, then

1:25:33 you might get a primary turnout in our district of maybe 15, 000 people And you, but in a

1:25:41 year where there's a presidential race, you're gonna get probably 30, 000 people who kind of show up. So we do modeling and now, you know, and the data analytics is a big part of this as well.

1:25:55 So I've got a consultant. I mean, I was computer printouts, like literally the green and white paper with holes in the side. Right. So I, yeah, I mean, my consultants, we have voter turnout

1:26:06 models where we're kind of modeling who all's on the ballot. And this year we've got a competitive at the primary. There's a competitive gubernatorial race, attorney general, general land office.

1:26:19 So those are big Texas jobs, right? And so, and you've got four Republicans, going back to Glenn Youngkin, who we mentioned earlier, I think Republicans kind of feel like there is gonna be some

1:26:32 swing their way coming, which generally happens in a midterm election that the party who owns the White House doesn't perform as well. And so, there's an energize in the Republican base that will

1:26:45 probably bring a higher number of voters than would normally be in just a gubernatorial year. So, we have our models, I won't give you the exact number, but that kind of ranges where it is. And

1:26:57 then you're kind of looking at that, how does that break down across households? And then how do I touch those households? Obviously, I can't get to, So, you know, let's say Let's say we think

1:27:10 there'll be like 24, 000 people show up just to take a number. And that's 24, 000 voters and people are married and then they some have voting age kids who are in there. So maybe you're looking at

1:27:23 17, 000, 18, 000 houses out of that. Like that's impossible for me to hit 18, 000 houses starting in November. Or pretty much next to impossible But I am out there as much as I can and then

1:27:39 we're doing a lot of analytics on, okay, of the people who turns out the most frequently and then we're doing polling of issues as opposed to things that I'm talking about to try to identify,

1:27:51 because a big chunk of it is just getting your turnout. So finding those people who share your position of issues and then getting them there. And then the other thing that we get to use today is

1:28:01 targeted digital So, um, you're not seeing any of my ads, but if you were a Republican primary voter living in my district, then they can effectively, they've effectively no devices, at least to

1:28:17 an IP address, which is a household. And so we know if we've got Republican primary voters at this address, then anything that uses that IP address is likely a Republican primary voter. So we're

1:28:29 targeting digital ads to those people that, and this is very important to me because I'm the least politically known amongst my four opponents. And so it's really important that I quickly build name

1:28:38 ID and it's like everything in life. It's all come down to

1:28:48 data analytics and how you find the right people and deliver your message to them - And quite frankly too, I think it's important from an educational point of view that folks ought to know who you

1:28:58 are. When they walk in and know what you stand about, I'm

1:29:06 when I would talk with candidates about it, yeah, I mean, the selfish side is I want to convince somebody to vote for me and then turn them out. But I think the democracy side of it's really

1:29:17 important of you need to go tell those people what you care about so that when you get elected and you don't do it, they can call you on. That's right. That's right. And I think so, so I think

1:29:29 that's the other side of it that's really important Yeah, I mean, you know, I'll knock on doors and a lot of times I'll get, oh, yeah, we're Republicans. And I'm like, well, hang on, it's a

1:29:39 Republican primary. You're going to have five of us to choose from. So just being a Republican isn't enough. Isn't enough. You got to figure out whom it is that you want to support amongst the

1:29:48 five of us. And this is like another lesson learned. I mean, you know, civics is so important and,

1:29:57 you know, we do not plug in enough at the primary level and we all not all but there have been numerous elections where people have been frustrated that they show up in November and they don't like

1:30:07 their choices. And the question is, how are these our choices? And the answer is, you got to get involved at the primary level in order for you to get choices that you like when you wind up there

1:30:19 in November. And unfortunately, that requires work because the ballots are lengthy and you don't have two people. You've got five people in my case that you've got a research and kind of figure out.

1:30:30 And that takes time. And obviously, you're not going to do that on every single race, but you better find the ones that are important to you and go and figure it out. And that way, you'll be much

1:30:39 happier when you show up in November to kind of say, okay, you know, I feel like this, my choices are representative of what I would have expected as opposed to I didn't get involved and I left it

1:30:49 to other people. And I'm not happy with who my habit to use a fair ask. Yeah, I really do that that is a fair ask. Because, you know, to some degree, when we sit around and and say we hate our

1:30:59 politicians. It's like, well, we voted for them. I mean, you know, it's not. Well a lot of people want to say our system is broken and the two party system is broken and it definitely has

1:31:06 issues. But one way we can take responsibility to make it better is just educating ourselves at the primary level. Yeah. And it's interesting at the retail level because one of the things I think

1:31:20 that is way underappreciated is we sit there and we watch Fox News, CNN, whatever, and we see these politicians, Nancy Pelosi, McConnell, whoever, and we got, oh my gosh, they're idiots.

1:31:36 Look at that. They misspoke. I've actually ridden a elevator with Nancy Pelosi.

1:31:45 I got to chat with Jesse Jackson and I'm trying to think of people that are politically different than me that I've got I got, I've ridden an elevator with Donna Brazil one time and the thing that's

1:31:58 amazing about them, they're incredibly charming. I mean, Nancy Pelosi and I laughed the whole time. And if it wouldn't have been inappropriate, I would have said, let's go grab a drink. You

1:32:09 know, and you forget just how incredibly charming these people are at an individual level, you are not the speaker of the House

1:32:19 of the Congress and not able to charm someone on a one-on-one basis. Right, yeah. I think that's - I thought you were making a declaratory statement that I am not the speaker of the House And I'm

1:32:30 like, yes, you're right. And I probably don't have that charisma. But yeah. No, but I mean, where I was going with that is just being at the retail level, all politics are retail. And it's

1:32:43 very true. Yeah, it is. And you know, those statements, I think, are true. I think you can look at politicians on both sides. And charisma does go a long way I think, you know, it's, I

1:32:57 think character should trump. charisma. I think that's something that we have to remind ourselves. And you want a mix of all of that with some wisdom and experience. And, you know, to me, if

1:33:07 you're kind of describing your ideal, you know, these people are leaders, right? So your ideal leader, you want, you want a mix of all of that. But charisma goes a long way. And these are

1:33:17 short periods in which you got to make a decision, right? I mean, you didn't, you didn't explore the race. The person showed up at your door, they talked to you for a few minutes and you're like,

1:33:26 huh, I like that person or no, I don't. And so I'm choosing a different name. And, you know, a lot of times that's how votes are made. Particularly, you know, the country still has, is still

1:33:36 largely independent. And so, you know, those of us who tend to vote, you know, more partisan by the time you get to November, you pretty much know whom you're voting for. But if you're an

1:33:47 independent and, and you know, you are trying to figure out like that, that can really differentiate your ability to kind of drive the vote is and you know at the it from a partisan perspective,

1:34:00 that takes place at the primary. Yeah, it does. So I'm going to leave issues to the general type politics for another forum for you. You can go talk about those things because I think most of my

1:34:14 audience are energy-based folks. Let's spend just a bit of time on energy policy when you show up in Austin and we can go back and forth. I think, number one, we have a real problem with stranded

1:34:32 wells, abandoned wells out there in terms of, I mean, we've been drilling in Texas since the wells

1:34:41 1920s. You know, we plugged an abandoned well in the '50s. There's not an engineer out there that'll say cement lasts for an entire lifetime. You know, we've got temporarily abandoned wells that

1:34:55 have been temporarily abandoned for 12 years and the like. You get to. to see all this, I think it's a real issue. I think it's something we're gonna have to address any thoughts on maybe what a

1:35:11 regulatory framework would look at. And I come at it from the view of we in the industry really need to figure that out. And we need to self-police andor do it at the state level or else the EPA is

1:35:25 gonna come in. And that's not gonna end well for us - Yeah, your last point is probably one of the driving motivators for myself in terms of I wanna keep the federal government out of what I, as I

1:35:39 said before, view as Texas's economic engine. And so I don't want them to use backdoor federal policies in order to get into our business.

1:35:51 That has effectively been handed over to the railroad commission with respect to who has administrative over it. But I can't disagree that we have, let's forget all the wells that have already been

1:36:06 abandoned, but we have a bunch of wells that ultimately are going to need to be abandoned relatively soon, maybe absent the recent uptick in prices, but the stripper wells suddenly seem a lot more

1:36:19 interesting

1:36:21 than they probably did But I remain

1:36:28 much a believer in free markets, and this I think is one of these clear messages that's coming from investors. If you want to talk about some of the stuff of E that really does make sense that isn't

1:36:39 just greenwashing, it's like you've got to be a responsible operator from the moment that you lease land and permit that well, till the moment that you fully abandon that well. And you know, I

1:36:54 mean, you know, because you've been through it from a diligence perspective. When you're buying things, we're always worried about chain of title and is something going to come back to me and

1:37:04 ensuring that things are sold on and moved to responsible operators so that we don't wind up wearing something in the future. That's particularly a problem for perpetual entities, public companies

1:37:19 and private companies that are family owned that aren't going anywhere. They want to be There are some natural reasons why the industry should care about it. It's not as though, those of us in the

1:37:32 industry know it's not as though we all just go about our job saying, this doesn't matter and I ought to ignore it. Well, and I want to give us props because we take enough grief and private equity.

1:37:43 I actually think private equity was really good on that front because we would go into a new area There's a wolf camp bench that we're going to drill brand new horizontals on. The first thing we did

1:37:57 was clean up all the old infrastructure because it wasn't going to help us. And we knew if we were going to turn around and sell that asset, we were in effect going to have a total examination by

1:38:08 the buyer. And so we did a lot of good work on that. I actually think where horizontal drilling and modern fracking wasn't done is more of the problem as opposed to where it was done because we seem

1:38:21 to, you know, we always knew we were going to sell that to somebody else So yeah, we should get credit for that. Agreed. Agreed. I'll take the credit. There we go. I'll take a positive.

1:38:31 Perfect.

1:38:34 Yeah. You know, I would say one thing that really drove me into wanting to get into this is really that intersection of federal policy. And it's, you know, it's why I don't disagree with you that

1:38:47 we need to take care of this stuff internally before the feds get here But one of the things that the feds are doing to Texas' hydrocarbon business is. some kind of indirect things. Obviously, we

1:38:58 don't have federal lands. We don't have those issues that New Mexico and Colorado have where drilling moratoriums really affect our business.

1:39:09 And this is clearly where one of my own biases will come through, but I do think it's important. But what we are seeing is we're seeing federal energy policy that is very geared toward renewables

1:39:22 And I think that while there's a lot of causes, we'll probably never know all of them, but there's a lot of issues as to why we had our debacle in last February with respect to winter storm, ureery

1:39:36 or ureery or however you say it. One of the challenges is we've had these federal production tax credits for wind that have effectively incentivized a lot of wind to come onto the grid and they've

1:39:50 taken away the profit opportunity for thermal generation. And as a result, When profit opportunity goes away, reinvestment goes away. And we talked about earlier the importance of reliability.

1:40:04 And so as you have more renewables coming on, we're losing the reliability and that reliability, I think comes from the hydrocarbons. And particularly, moving from coal to gas, and just a side

1:40:14 note, Toby Rice wrote a phenomenal letter to Senator Warren if you didn't see it. Right And it's really good. And

1:40:27 talking about really making change is why I wonder what the real end game of climate change awareness is if they really want to improve the planet, just moving everybody to it. I've said it multiple

1:40:40 times on the podcast that if we truly wanted to do something, the United States with our little brother, brother Europe needs to sit down with China Indian say no more coal, but we get the fact.

1:40:55 that we got here sooner, will finance natural gas infrastructure for you. And we're going to have to take somewhat on the, I don't think it's an unfair ass for China and India to say, hey, you

1:41:08 got to cut us in on that. Cause you guys got to benefit from your long run of cheap coal. We should get to do the same. I could actually live with some sort of subsidy there. Now devil's in the

1:41:20 details on all that. And I get that China's our enemy But at the end of the day, if we truly wanted to do something about CO2 emissions, that's it. That's the big game changer. Those are the big

1:41:32 game changers. Moving them from coal to gas is the massive game changer. If you're, yeah, if CO2 is like the chief concern. And so I question what are people's chief concern, but anyway, that,

1:41:48 that's the, the big move, which brings me back to, you know, Texas and between 21 and 24 for projects that have been proposed, it's 38 gigawatts of renewable energy to be added to Texas' grid.

1:42:04 It's one gigawatt of thermal generation with a base load based on population ad estimate of six gigawatts. So we are continuing to add renewables, I think largely driven by subsidies, create

1:42:21 incentives And I think you can't discount that. And with those subsidies though, we are adding destabilization to our grid.

1:42:32 And I think that's an unfortunate result of federal policy but we are gonna pay the price of it. And I think that's important because none of us wanna go through another February. And let's be

1:42:45 really frank, I mean, that is another form of a regressive tax because I don't know if you have one or not, but. Even though you're not collecting a paycheck, you probably could have a generator

1:42:57 if you wanted to have a generator. That's not a choice for most people to have a way to get through a period like this. And yet, we've got policies that are driving these changes before the

1:43:10 technology is ready for it. And so that's an indirect way where federal policy is impacting something that is very state-specific. And I think that's really bad because I think economy ultimately

1:43:23 trumps all. And that doesn't mean there aren't a whole lot of other issues, which I'll talk about on another forum. But over the medium term and long term, the way that we see eye to eye with the

1:43:35 other side, no matter how you define the other side, is by having opportunity. An opportunity, I think, is defined as economy. And Texas is winning right now, but if we have an unstable grid in

1:43:50 the future, these businesses that are coming here are gonna quick. coming here. And so we need to be cognizant of the incentives that are in place. And if it's not a Texas incentive, but it's a

1:44:01 federal incentive, then we need to figure out in the state house how we can fix that. And I think there's a, I don't have the master plan, but I do think there's an element of ensuring that the

1:44:14 cost of reliability is burdened by each form of power. And right now, renewables are not burdened with a reliability charge, which is therefore causing too much of that coming on. And I think,

1:44:27 you know, so that's an incentive that way the wrong way. And it's a disincentive for more investment in thermal generation, all of which, you know, is ultimately, I think, going to be harmful

1:44:37 for a hydrocarbon business. And again, I don't want to go be a crony for hydrocarbons. I just want a free market energy transition. And we're not experiencing a free market energy transition. And

1:44:49 that results in issues like we had last February.

1:44:53 the in my year year end summary of the energy business podcast I did. I said really what the whole mess was in February with our caught is we were just trying to be good neighbors to the relocated

1:45:08 Californians. Make them feel at home. You know, we can mess up energy too guys. Don't worry about it. It's not just you guys, but yeah. So one other energy policy thing I want to touch on

1:45:20 because you hit the things I want to talk about we were at. When you get elected, I'm actually going to come to Austin. We'll go eat at Franklin barbecue. I'm going to push you for a relation, by

1:45:32 the way. Oh, that's true.

1:45:35 The

1:45:37 Aaron Franklin is actually a really nice guy. I know if you've gotten to meet him, I've gotten to meet him a couple of times, just the nicest guy and really a barbecue geek. I mean, truly just

1:45:46 loves it. Love I believe I can make a pretty mean brisket though if you check out my Instagram feed, but - No, but I'm not an Aaron Frank. Nice. But I think

1:45:59 the push on cleaning up the abandoned wells as much as I hate. I've only voted for a libertarian for president in my life. I've never voted for a Republican or a Democrat. I always vote for the

1:46:11 libertarian. So I'm a big free market guy. I do think there needs to be an element of kind of just more enforcement by the railroad commission to the rules that are already on the books. And I

1:46:22 think if we get in a situation, I think our budget right now is about 30 million a year that the state pays because you sell something to

1:46:32 somebody else. They go out of business. There are stranded pockets where there are issues. So there may need to be more money from it. I do think, to your point earlier though, is the industry

1:46:44 shouldn't be the one to just pay this because let's face it. Amazon benefited from the fact that we had cheap oil prices.

1:46:57 And so there needs to be some sort of sharing of the burden of that, 'cause it wasn't just oil company profits that need to be burdened - But that's - But you come to Austin and then let's - That's

1:47:05 not a sit down and we'll do that - We'll do that - No problems on it - We'll talk that. And then the last thing, energy relay, and so then we talked about Arcot, which I agreed. You know, the

1:47:16 thing I also did on the end of the year summary is, and I did it in real time when the Arcot mess was going on. I went to the websites and got the actual wind speeds going on at very spot. So like

1:47:30 the Amarillo Airport, down in South Texas where Los Fintos, the largest wind power. And I was pulling all that. You need 10 miles per hour to generate any electricity and really the name plates

1:47:43 about 25 miles per hour that you need. I mean, around Amarillo, There was one six hour. that average more than 20 miles per hour wind during that kind of week and a half, two weeks. I mean, the

1:47:57 wind just didn't blow. And that's what's happening in Europe right now. Yeah, that's exactly what's happening in Europe. And I'm actually pro-wind. I think we should have, I think we need more

1:48:07 of everything. It's just we've got to focus on the reliability aspect. 'Cause to your point, I mean, people die. Well, yeah. If we don't have enough power I will rephrase your pro-wind to

1:48:20 simply say, I'm pro-free markets and I'm pro-private property rights. And private property rights go down and they go up as well. And so if that's what people want to do with their money, I think

1:48:32 I'm all for that. Right. And that's why I call it a free market energy transition. Yeah, no, I think that's fair. The one other issue that you'll have to deal with in the state house that right

1:48:44 now, I think we're a leader on.

1:48:49 I think it's very important we stay that way, is just Bitcoin mining. Because if you look at the

1:48:57 35 gigawatts of renewables that are gonna be built, a lot of the justification to that, to your point, is the tax policy from the feds, but it's also serving Bitcoin mining. And I just think that

1:49:10 can be a huge industry, growth industry for us. It allows those renewables to be built and actually have opportunity there. 'Cause I think we've only got 12 gigawatts of transmission from the

1:49:26 Permian Basin to where the people are. So that's gonna have to be built out as well. And so I think having an energy person at the table when we're having those discussions is gonna be really

1:49:40 important - I agree and

1:49:45 federally for my district. currently in what's called District 7, which was at the federal level, George HW. Bush's seat.

1:49:54 It's gonna be redistricted into District

1:49:57 38 because they took West U and Bel Air, which are now the more liberal part of the district. Those have been carved out and been left with District 7 and we have this new District 38. But my whole

1:50:09 point in saying all that was, it was pretty shocking to me when I went and looked and saw that from a federal perspective, there's nobody in DC from either side of the aisle who comes from the

1:50:19 energy business. And when you think about federal policy is so focused on energy policy right now and there's nobody from Texas with an energy background,

1:50:30 sitting up there, that was a pretty surprising revelation to me and so as I was looking at this state house and looking at my competition and didn't see that experience and knowing how important

1:50:44 energy is to Houston to our district. Um, yeah, I thought we need to have somebody who's at the, those tables kind of talking about it with some informed perspective. And, and even if you, you

1:50:55 know, none of us can know everything, but there's also a benefit when you spend your entire career in an industry, there's a benefit of relationships that come right where you at least know the

1:51:04 right experts to tap and begin to, you know, you can come and sit down and you and I can talk about and you can share your ideas and you can probably bring, you know, three or four CEOs that

1:51:15 you've backed to kind of talk about what we ought to be doing on well abandonment and, um, you know, and we can get there on Bitcoin as well. But the point is, you know, you need somebody who's

1:51:26 informed, who knows, has a decision-making framework that they use. And you and I know we're very good at using help when we need help because we don't know everything. And that's part of what

1:51:36 private equity is, is kind of acknowledging what you don't know, find the risks, finding people who do so that you can assess that risk and determine that you're going to get paid to take that risk.

1:51:46 And that's we need some of that in Austin - 'Cause I still think the most effective thing the other side did is they convinced the world that the only reason wind and solar don't power everything is

1:51:60 'cause of the big bad oil companies won't let it happen. Instead of their truly differences, qualitative differences to the power generation

1:52:10 from both sources. And so you're right I mean, not having anyone at the table to just say, Time out - Right - The sun doesn't shine certain days, the wind doesn't blow on certain days, which is

1:52:23 fine. But we got to solve for that and batteries aren't there yet - Right, yeah - So give me the details in terms of where can people go to find you on social media, the web, wins the primary date,

1:52:37 et cetera - Yeah, well, I'll keep it really simple You can go to willfranklandcom, all my social media is linked at the very top. So that'll get you to everything. But Twitter is willfranklin.

1:52:53 And the others are versions of Will Franklin for Texas, but getting into the spelling, just find it on the website. The election is March 1st. Early voting starts Valentine's Day, February 14th,

1:53:05 and it goes through the 25th. If you're not yet registered to vote in Texas, you have to be registered 30 days before election day So I would just say get registered now. You've got two weeks left.

1:53:18 So get yourself registered so that you have a voice. Even if you're voting in the other party, like get registered, be an active participant, and then complain all you want when you're unhappy.

1:53:30 But if you don't participate, I mean, talk about going into an echo chamber. It's like, what are you doing if you're not participating? And then complaining about how bad everything is. So I

1:53:40 would encourage you to do so. And of course, I would love the support on March 1st. So I want you to register and come out and vote for me. And if you want to give to the campaign, do that as

1:53:49 well - So appreciate you coming on. I've known you a long time. You're way too fine a person to take this advice. So I'll more tell it as a story. When I was running a campaign for state rep when

1:54:05 I was a senior at Rice, it was the Republican primary for the West U Bel Air District for State House Three great candidates, Tim Turner, who's a land man in the oil and gas business. She may have

1:54:18 met Kyle Janick, who's a doctor, sharp guy, good guy. And Mike Shelby, who unfortunately has passed away, but he was an amazing human. He was an assistant district attorney with Johnny Holmes.

1:54:34 Then he was a US prosecutor. And he was the guy that they sent in to do the heavy duty drug cases. I mean, so anyway. three amazing candidates. I was working for Mike Shelby and this is the thing

1:54:49 I pulled. So

1:54:53 I was out one night with one of Mike Shelby's friends and we were putting up yard signs because you know, you go block walk all day and the people that would say they'd take a yard sign, you know,

1:55:05 nine o'clock when you shut down walking, go back, get the yard signs, drive back out, you know, put them out, right? So we're doing that. I'm doing it. Yeah, I'm doing that with one of

1:55:14 Mike's friends. And Mike's friends sees,

1:55:20 you know, Tim Turner signs and goes, man, I can't stand that Turner guys. He starts knocking them all down. And he's like picking them up, throwing them in the back of the truck. And you know,

1:55:29 I'm a senior in college and this is a 50 year old man who may or may not have been in law enforcement. So definitely a man's man. So getting rid of all the Tim Turner signs. So the Shelby signs and

1:55:43 we drive back, I drop them off. And I was worried about that that night. And I didn't know, do I go tell Mike about it? Do I, what do I do? So I actually went and got some Kyle Janick signs and

1:55:57 put them where the Tim Turner signs used to be. And Tim and Kyle went to war. Their two camps spent the whole time tearing down each other's signs. And they kept calling Mike, can you believe that,

1:56:11 you know, Tim's doing that. Can you believe Kyle's doing that? And anyway,

1:56:19 at the end of the day, I finally fussed up to Mike after the election. Mike, Kyle wound up winning and Kyle wound up being state rep and then a state senator on. And it's like, yeah, I kind of

1:56:29 did that.

1:56:33 Well, I'll say, you know, time has moved on. So, you know, one - It's part of first and two Well, character matters, but to like everybody has a ring doorbell. So you will be on camera. And

1:56:44 that's one thing, when you're knocking on a door, you're on camera immediately. So you have to remember that. But two, it does still happen. I signed, went up for me in one of my supporters'

1:56:58 yards and they left their house at 11 and they came home at three and it was gone. And it was like, really? And yeah, I mean, you know, that's campaigns. They go away, unfortunately, but I

1:57:08 don't do that - I told that story last 'cause I don't think we actually keep that in But anyway, I knew it was

1:57:16 funny, but it was. As I told it, I get, yeah, that's not something that's gonna get cut in.