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Hill Vaden:
All right, welcome back to EnergyCents. This is Hill Vaden (phonetics) and I am here today with Reed Olmstead in Houston and Prescott Roach (phonetics) in Denver, to talk about the Shale sector and some of the recent activities and a recent paper that Prescott has done on those firms coming out of bankruptcy in the prior year, so welcome, guys.

Reed Olmstead:
Thanks for having us.

Prescott Roach:
Thank you, guys.

Hill Vaden:
Thank you all. Thank you all for being here. So, this this paper caught my attention Prescott, that we try on EnergyCents to cover topics that sit on the intersection of energy and financial markets. And obviously a topic about bankruptcy filings within the energy sector would be of particular interest. But I guess before we get into some of the details, so I mentioned Prescott is joining us from Denver. This is the first time I think Prescott and I have spoken since really the pandemic, when previously we were the first ones in the office almost every morning.

Prescott Roach:
Indeed, indeed, how things change.

Hill Vaden:
Yes. So, are you still early to the office or are you earlier to the office now that your commute has been removed, and now that you’re in Denver.

Prescott Roach:
So, when I first moved up here, I had big plans to head back into the office as soon as it opened up. But here we are, I think probably seven months after I made the move up here. And I still have not even seen the inside of the office. So hoping, you know, with a little bit of light at the end of the tunnel, in terms of pandemic, things will start to open up here next few months and we’ll likely be heading in then. But as of right now, my office is my kitchen counter.

Hill Vaden:
All right. And…

Prescott Roach:
So, how about yourself?

Hill Vaden:
I’ve only been in once or twice and obviously our floor is now gone. So, that I think within the past what we were all on a floor that has been kind of downsized. And so, our stomping grounds are no more I haven’t been back since it’s been shrunk, have you Reed?

Reed Olmstead:
Yes, I’ve been going in a couple times. It’s good to go back in and some people are coming back. And there’s sort of a sense of normalcy to go back and have some conversations that honestly is what I’ve missed the most. And I’ve really started to be intentional about, you know, you can check the boxes and get work done when you’re not in the office. But you can really have these great cerebral conversations about things you that aren’t like in your typical workflow when you’re just around smart people.

So, the other day I was in the office and wound up having an hour long conversation about should we tax carbon or should be cap and trade things like that, which right now is not material to my typical responsibilities. But it was great to do that. Having conversations with other people about like asset quality of renewables. And these are conversations that you have when you’re not in the office, because you got to set up a phone call to have that which really kind of takes the spontaneity out of it. But it’s been good to go back in. You know, we’re getting a few people on the floor, and it’s good to go in and have a different environment.

Hill Vaden:
Yes. Well, Prescott, have you found I’m curious. I have, there are several friends and colleagues from Houston that, you know, pulled up steak and went to Colorado with the ability to work remote. Have you found like a little Houston, within Colorado for social reasons. Are there are you finding dozens of people that you used to see walking around the streets of Houston?

Prescott Roach:
So, I actually went to school in Boulder many years ago. And so, having been having lived in Houston for eight years it was really unbelievable coming back, just seeing how much has changed in Denver. I mean, it’s just grown so much in the time I’ve been gone and it seems like almost anybody you talk to here is not originally from here. So yes, to that end, there are certainly a lot of Texas expats here and you definitely don’t have to look far. Yes, it seems like whenever you go skiing or anything, you are more likely to run into someone you know from Houston than you would be if you were still in Houston. So yes, it’s been very strange in that regard.

Reed Olmstead:
You know, Prescott the third most popular license plate in Colorado is Colorado license plates. First is Texas…

Prescott Roach:
Exactly.

Reed Olmstead:
First is Texas, second is California, third is Colorado.

Hill Vaden:
All three of them on Subaru Outback, right?

Prescott Roach:
Exact.

Reed Olmstead:
Definitely.

Hill Vaden:
All right. Well, so we can get into the topic. But before I do so, reading this week, Matthew McConaughey (phonetics) knew, I guess it’s an autobiography. It’s kind of a book of life lessons that that he calls green lights and reference to, sometimes life’s gives you green lights that allow you to go faster. Sometimes life gives you red lights that allow you to slow down. And I was reading last night and there’s a story in there about when he was in high school, Matthew McConaughey, and he was not surprisingly the big man on campus. And he said he had a girlfriend at his school and at the school across town had this great either Nissan or Datsun truck or something where he would, you know, take people out and he was, you know, just everybody thought he was great, right.

And then one day he got into, he found a red sports car, some small sports car, and he traded in his pickup truck immediately for the sports car, thought he was so cool would hang out, you know, at the deep end of the parking lot where the other doors wouldn’t hit his car because he didn’t want his, you know, red paint to scratch. And then after a while, he noticed that the girls weren’t coming up to him anymore, he wasn’t quite as cool as he was so he traded in the red car for the truck that he had previously traded in, like within the first month of ownership.

And it struck me , you know, that there’s -- we might find that the Shale sector in a bit of a similar situation right now where the Shale sector for four years was grow, grow, grow, grow, grow. And now all of a sudden they’ve been asked to be more prudent around that growth. Prices are stabilizing, or can these companies change or are they going to be trading in their red cars for the pickup trucks that everyone used to love, to give you the example. So, where are we right now in the Shale sector? And what is the new found price support just going to result in cash? Or, you know, do we see a real change in behavior and maybe we can start with you, Prescott, having, you know, maybe tied to the paper that you recently published and Reed if you’re way in as well?

Prescott Roach:
Yes, absolutely. So, yes, this is such an interesting question because I mean, you have what going on almost 10 years of data to show that no, many companies are not likely to embrace capital discipline, and are likely to spend be on cashflow. But I think there is reason to think this time is different. And a lot of that has to do with the fact that so much of this is out of company’s control when it comes to accessing capital markets, the simple reality is, capital markets have pretty much closed off to upstream players, which has forced them to live within cashflow. And so, even if there were wherewithal on their part, to spend the on cashflow, investors simply aren’t allowing it right now. So to that end, I think that there’s a really strong case to be made, that capital discipline is set to continue even with higher prices.

Now, that said, though, we’ve seen a pretty strong recovery in prices over the last few months, so we’d still expect us to see a pretty big ramp up in capital spending levels. But in terms of a return to the olden days, when companies were routinely spending the honest cashflows, I just don’t know how possible that is, given that capital markets are shut off to so many of these companies. What do you think Reed?

Reed Olmstead:
Yes, Prescott, so you’re right. So one, you -- I think when you touched on the, they’re going to stop cutting down trees the next question is, are they going to start planting trees? Right, they’re going to stop doing bad behavior, will they start doing good behavior? And so, one of the things that we’ve been looking at, you know, yes, the capital markets are closed. And you mentioned oils backup, I just checked, it’s about $64 right now, which is where it was last January, like January 2020. But we’re still down 300 rigs compared to where we were back then. So, not only are they not continuing to borrow and outspend, they’re actually right now from what I can tell what we’re what we’re seeing in the data they are intentionally underspending.

And I think, you know, as you know, the line always goes and you mentioned it, yes, this time will be different, I think there’s good reason to believe it is and part of that is just due to the pressure, there’s, you know, consolidation, there’s, you know, the energy transition that was heavy theme at CERAWeek last week. But also it’s the management of base decline. So, you know, if you stop spending and give money back to shareholders, production would collapse and that was bad because of covenants with banks. It which is too much the mechanics of how the industry work.

But basically, these guys couldn’t let their production drop years ago, so they had to continue borrowing money, or else they breach covenants. And so now we’re in a position where that where, you know, they’re, they’ve come out of that, that vicious loop. And so they can start making their own decisions, absent externalities of the, you know, banks. Now they have to deal with the externality of investors, but it was, in the past, they had the banks on their backs. And so, they were kind of hamstrung with that. But I do think this will be different. We’re seeing a real maturation of the business. And we saw that with every asset type through the last 100 years, right. It’s grow, grow, grow, and then stabilized. And I think that we finally turn the corner into that stabilization here.

Hill Vaden:
So with, even with the influx of cash, you know, I’ll come back to the truck, car example, right, that he traded the car back in, because he wasn’t getting the attention he wanted, and, you know, that the truck helped, you know, to get that attention. One can in theory grow and have cash come in right now that the impetus still, did you still need to go to financial markets to grow or have thing and your basic client is somewhat flattened, right?

Reed Olmsted:
Yes, so we’ve seen the base client really flat, and I don’t think they need to go to financial markets. And I say that partly because they can’t. But you know, we’re looking at 25 to 30% underspend of CAPEX this year or capital this year, meaning, we’re thinking they’re going to give back like $30 billion, which would kind of be the first time that happens. So yes, it’s the growing up of the business.

And we’ve seen consolidation, part of that is due to an inventory issue, these guys are, you know, they’re not going out and trying to find new place, part of its due to bankruptcy considerations, right. Part of it is due to, you know, just getting scale in the sector. So, we’re seeing consolidation. And when you get that too, you get more, or you get less volatility. So, all of that is pushing us towards maturity, they don’t have the ability to go and get more money. But I don’t think they need to right now, either, the world demand global demand isn’t, isn’t prompting those prices that justify huge growth plans.

Hill Vaden:
For the plans, and Prescott, you would agree and it sounds like that some of the bankruptcy analysis you did is kind of influencing the environment that we’re in now?

Prescott Roach:
Yes, absolutely. Well, and I think Reed mentioned a really good point, which is the maturation of the industry, kind of alleviating some of the need to go out and raise capital, simply by virtue of these companies having a really large production base that they can turn to, that makes it easier to either hold production flat, or even deliver modest growth with less CAPEX that would then would have been required, say, you know, five years ago when they had relatively nothing in the way of base production.

So to that end, I mean, yes, the maturity of the industry certainly helped in terms of capital discipline. In terms of the maturation of the business, we’ve seen a really big change in sort of the structure of company’s economics. I mean, the companies that have filed for bankruptcy in the last year or so have a very different asset portfolios than those of 2015, 2016. And then in the years past, you generally see companies today have much lower break evens. And so just from that standpoint alone, you would expect greater odds of survivability base on that.

Hill Vaden:
And what were some of the similarities within those companies that, that did fall for bankruptcy? And I think you grouped them into that there was a too early to tell on to kind of a survivor bias. And then those companies that were going to come out stronger and those companies were, maybe they weren’t going to come out at all. What was there an asset similarity between those who are going to emerge more strongly than others?

Prescott Roach:
Yes, absolutely. So, we looked at about 50 companies that had filed for bankruptcy in this study, and these are companies that made filings between 2015 and 2020. And so to your point Hill, we grouped those companies into three sort of tranche. For the companies that declared bankruptcy between 2015 and 2018, we were able to see you know, what ultimately became of them. So, we’re able to group those companies into either companies that survived that is, they went through bankruptcy, they came out on the other side of it, and then ultimately, they’re able to return to growth. And then we lump the rest of those companies that did not survive based on whether they liquidated or whether they, you know, they may have survived, but they just kind of entered zombie mode production continued to decline, they had very low levels of spending and activity. So, we had those two groups for companies that went through bankruptcy in the past.

That third tranche that I mentioned, are your more recent companies. And that group we called the too soon to tell group. So, these are companies that made filings within the past year or so. So, kind of work building off of that we wanted to get a sense of that third group’s survivability odds, that is the odds that these too soon to tell companies will be able to come out on the other side of this and, and emerges stronger, leaner companies. So, we looked at a couple of things to kind of make this assessment. The first was asset break evens. So, when we look at the wellhead economics of a lot of the operators that filed for bankruptcy over the last year or so, we see that most of them break even at oil prices of $50 or less, which is referenced in the report. And is really different from the past downturn when you had a lot of operators that filed for bankruptcy with break evens in the $60, $70, or even $80 range. And so, history tells us that companies did break even either below about that $50 threshold have a relatively strong chance of staging a turnaround following bankruptcy, while those that didn’t, just didn’t -- I’m sorry, go ahead.

Hill Vaden:
Are these low breaking areas in old place or are there some, did you notice exposure to certain place that, you know, there were clusters of bankruptcies? Are there some plays that are just not going to work?

Prescott Roach:
They’re great question. So yes, I mean, based on the need for a relatively low break evens to survive, we know that geology really matters. But to your point, geography really matters too. Most of the companies that have the lowest break evens tend to be concentrated in your headline place. So, that is firms in the Permian, the Bakken and the Eagle Ford. And what’s really interesting though, is you have a disproportionate number of companies with much higher break evens, that is, those above, say $50 a barrel, that tend to be concentrated in mid-continent place.

And we see that not only among recent bankruptcy filings having high break evens located in mid-continent place, but also among those historical cases. So, companies that filed for bankruptcy in 2015, 16, 17, and 18, that did not survive and had really high break evens a lot of those were located in those mid-continent place. Whereas we see those lower cost plays, like the Permian, Bakken and Eagle Ford giving a distinct advantage for a company’s survivability chances.

Hill Vaden:
And so, what do we expect from those companies and those place this year?

Prescott Roach:
So, it’s an interesting question. When we look at historical examples of bankruptcy, even for companies that did survive, come out on the other side and turn things around, you never really see a rapid return to production growth, or a rapid return to, you know, huge CAPEX budgets. Even for survivors, it often takes, you know, a year, maybe two years for them to start reversing those production declines and begin growing once again. And even then, you rarely see companies ever go back to their previous all-time record high production levels.

So, I think going forward history is a pretty good indicator of what we can expect. The fact that then on top of that you layer in all of this newfound emphasis on capital discipline, and the fact that capital markets are pretty much shut off for a lot of these companies, I think that we can really expect going forward that even though a lot of these companies that it may have recently filed for bankruptcy will survive, you’re really not likely to see them returned to growth anytime soon. It seems like a much more likely scenario is likely to be sort of maintenance production levels.

Hill Vaden:
And one point I want to make here is you say growth, but I think when you say growth, Prescott, you mean production growth, which goes back to the conversation a few minutes ago, that’s not necessarily what investors are pursuing. Cashflow growth, that’s the new red sports car, right. So, are they going to -- while they may not grow production, I wonder if you could make -- I don’t know if this is part of your look but, is the, did they emerge out of that more constrained in cap expand with a larger focus on cashflow, right, as opposed to profound growth?

Prescott Roach:
I think definitely, which makes them no exception to the broader industry at large. And, you know, maybe one data point supporting that is this huge emphasis among companies that have recently gone through bankruptcy on lowering their operating cost structures. So, there’s really been, I guess, an industry wide shift toward trying to get your lease operating expenses down as low as you possibly can. And, you know, this is no exception with companies that have ever recently filed. I think anything in the name of trying to maximize returns, and ultimately getting in the good graces of investors, once again is going to be a huge priority for a lot of these companies.

Hill Vaden:
The paper identifies a handful of bankruptcies within the mid-continent place. If the assets aren’t going to support growth with those assets support maintenance.

Prescott Roach:
So, with a lot of the companies that did file for bankruptcy in the mid-continent, as I mentioned earlier, a lot just did not survive in the past. They either liquidated or in more often than not they were acquired by other companies. There are several examples where we can look at distressed operators that were acquired by stronger competitors. And maintenance production really seemed to be the most optimistic case, in some cases following two companies merging, we continue to see production declining over time. And the priority really being on attaining cashflow and minimizing your operating cost structure. So, even holding production flat isn’t necessarily possible in all cases, and it’s certainly not what we’ve seen. So, that it got just mitigating the decline and generating as much cash as possible seems to be the priority in those place.

Hill Vaden:
Do we expect, in M&A there’s a handful of mergers acquisitions toward the end of last year, very small handful, and some consolidation of some, you know, small players coming together to be a bigger player. Do we expect more of that this year? And what happens to the mid-continent player within that world? Is anybody going to want to bolt any of that together or does that section get ignored as people focus on opportunities, and I think that the Permian or Eagle Ford.

Reed Olmstead:
You know, from my standpoint, we did see some really meaningful acquisitions at the end of last year, those opportunities are largely been captured and realized. Certainly there will be some this year. And as the energy transition continues to accelerate, those will also accelerate. You know, investors don’t need 30 Permian stocks to pick from they need like seven. But back to your question about the mid con, it’s going to be a tough sale for business units to their management or to their boards, it simply isn’t as attractive as most, most other opportunities. Now you’ve got a couple of large operators in mid con, but they’ve got optionality in their portfolio. And so you’re competing against capital.

The smaller players perhaps will continue to try to try to work it and turn it over into something big, you know, sort of the HGTV flipper mentality, like I’m going to buy a piece of junk and, and, you know, put a fresh coat of paint on it and flip it. And there’s a lot of companies that are trying to do that. As far as meaningful deployments of capital, I don’t think that mid cons going to be that attractive, but Prescott’s actually writing a report on it right now, so what are you seeing in the data?

Prescott Roach:
Yes, definitely. I mean, to your point Reed, mid-continent is obviously very depressed in terms of spending levels and activity levels. And so yes, I mean, the fact that companies with portfolio optionality are going to show a preference for highest return plays like the Permian, the Bakken, the Eagle Ford means that the mid-continents, likely to kind of get picked over. And so, any consolidation in that space, I would have to venture a guess and say that it is going to be among mid-continent specialists.

And so, you might see the rise of sort of mid-continent pure players in there, but I wouldn’t expect a large diversified EMP like EOG or pioneer to be going into the mid-continent anytime soon. Just in terms of overall activity and spending levels in the mid-continent, it certainly seems to be right now a theme of maintenance production or minimizing declines trying to make it a cashflow generating play as opposed to growth play.

Hill Vaden:
So Reed, you mentioned that we don’t need 30 growth players in the Permian anymore and some of those, you know, some of that has changed. You know, I guess within the past week or two, Exxon had its analyst’s day in and that was pretty aggressive growth targets for the Permian. And I think Chevron did as well, in terms of growth targets. If we can expect prudency from the small caps or the mid-caps and the majors who growing, what does that mean for the sector?

Reed Olmstead:
So, two things that you’ll probably notice, those two companies you mentioned only talked about growth in the Permian. They didn’t talk about growth anywhere else in the lower 48. Also, and my apologizes, I haven’t gone back and done the full digest to know how that offsets any other production declined globally in their portfolio, right? So just because one assets growing doesn’t mean the entire production base is growing.

I’ll put it this way, as one of my colleagues said that some like 2023 or 2024, a lot can change between now and then. But I did note that those guys haven’t been punished. You know, there’s Chevron came out with it this week, and their stock prices held up. So look, I think there’s an opportunity for growth. The issue is, it’s got to be prudent like you said, it’s got to be moderated. But we don’t need -- my point was we don’t need 30 options to choose from in a stock, how do you differentiate yourself in that field? No analyst is going to go into the detail of saying how much, you know, Company A is paying for water hauling versus Company B and say I want Company A now because they’re better at that.

So, I think we’re going to see a lot more consolidation, we’ve already started to see it, I think it’s going to continue. I think, what was it, 20 years ago, there were something like 20 offshore, deep water players, and I think now there are seven, the industry just doesn’t need that many. You get experts, you get guys with scale capital efficiency, supply chain management, and we’re starting to see the unconventional business turned into that type of environment with large pads and, and things like that.

So that’s the companies that aren’t just good at rock, but that are good at logistics that we’re going to start to see emerge as the true winners. Now, whether that, and how that affects the pace of consolidation is yet to be seen. But I think those are the things that are really going to play into the rocket set. People know the rock, people know what the production is, now, it’s how do you manage the above ground? And who’s going to be better at that that really emerges as, you know, the victor here.

Hill Vaden:
So, I guess another thing, you know, you mentioned kind of looking back 20 years ago, if we look back, you know, 10, 11 years ago, gas shale, what was still popular. And around, you know, discovering the Eagle Ford you know, people and I guess more of a maturation the Bakken people started to focus their companies on exposure to oil/liquids. I think Prescott, several of the, you know, am I correct that your paper was focused on oil operators or was that just a result of the data that it was the oil focused operators that were?

Prescott Roach:
Yes, it was predominantly focused around oil operators solely for the basis of being able to have kind of an apples to apples comparison when it came to your production levels, changes in production levels and the lease operating expenses and all that. But yes, you’re right, it is mostly liquids.

Hill Vaden:
So, do we expect any more interest, you know, the big thing globally for our kind of energy sector as lower carbon, and obviously gases, lower carbon than oil. Do we see any appetite from some of the, you know, the rush to liquids to start moving back into low cost gas as kind of a, you know, a next wave of activity here.

Prescott Roach:
Based on M&A activity over the last few years I mean, I would have to guess and say no, given that there’s been these continued efforts to shed gas weighted assets. That said, obviously, the lowest sources of gas supply in the US are in either Appalachia or in the Haynesville. And so, any activity would almost certainly be concentrated there in terms of gas, rather than your higher cost mid-continent place even though some of those may be relatively gassy.

Hill Vaden:
Reed, you agree?

Reed Olmstead:
Yes, I’d agree. I mean, these oil operators are kind of emerging on the backside of who moved my cheese, right? Like they were grow, grow, grow, and then in the span of 18 months, they were told cashflow. Now God, help them that investor start saying, okay, you’ve caught up and you now you’re giving me cashflow, and oh, hey, go find more gas. So I think that’s it’d be tough for them as well. Now one of the things that we’re talking about internally, particularly after CERAWeek, I’ll say a couple things here. One is we talk about clean energy, carbon capture all that, like you mentioned how most of those plans are 2030 is the first date for some sort of goalposts in 2050 for the late date, and you go talk to a US operator, and they’re looking 12 months into the future.

Hill Vaden:
Right.

Reed Olmstead:
So, it’s a little different horizon there. The other thing goes back to what I just said, which is, how are you going to have an investor say, grow, grow, grow 18 months after they accomplish that in 18 months -- hey, give me cashflow, takes a couple of years to do that. Now they say go invest in green energy, carbon capture all that, like, hey, I’m getting my cashflow. Right now operators have the do I drill or do I give it back to investors, you put another objective in there of clean energy or, you know, alternatives carbon capture, that’s a third option for that dollar. And that’s a dollar that the investors have been clamoring for years. So, I don’t know and I’m not going to say that it’s not on the radar. I don’t think that that the clean energy is as high a priority for, for the US independence, as it is for, you know, some of the NOCs in the global operators.

Hill Vaden:
And when you say clean energy, you’re talking about gas in the situation?

Reed Olmstead:
I’m talking about gas or any anything other than crude that they’ve been pushed to go after, since what 2013. I mean, it’s been eight years that investors have pushed towards crude to now switch that, you know, when we finally got our very efficient, the most efficient crude producing system in the world to then try and go and add friction to that with, you know, alternative production, or something is not going to go well.

Hill Vaden:
It almost seems as though most us independence, maybe focusing on ESC targets, reducing carbon emissions in their processing, reducing flaring volumes, things like that. But so far, that doesn’t really seem to extend into their production portfolios. Companies that were liquids waited last year continue to be liquids waited this year, and it doesn’t seem like so far anyway, that there’s really been a meaningful shift away from that and toward gas, say.

Reed Olmstead:
If investors want gas, they’ll go buy gas, they’ll go buy gas producing stocks, right? So, that’s kind of how they’ll build a synthetic portfolio of companies or, you know, a synthetic production base instead of telling pioneer go buy something in Appalachia, they’ll just go by Cabot.

Hill Vaden:
So, what maybe this is a good place to leave it, but it sounds like you know, that there’s we continue tend to stay prudency from the sector. You know, the bankruptcy efforts of reorganization efforts of the past couple of years have put these companies on a stronger footing from a debt basis, and in many cases from an asset basis. So in a way, there’s a wall of cash coming into the sector. If they’re not going to grow, what are they going to do with the cash? I mean, there’s, I guess, a lot of red sports cars out there, but I’m not sure.

Reed Olmstead:
Not for CEOs anymore. But it’s like anything, right? You’ve got to invest in it to get it big to get it to grow. And then when it’s there, it becomes just a cash generation vehicle. And, and I remember I’ve been in this business for over a decade, and listening to all these naysayers say, oh, the best way to lose a dollar is to give it to a US operator because they’ll lose two for you. But now I mean, look, it was that way, anything you try to prove up and definitely grow at the pace that us ply did that us production did it’s going to take a while to pay it back. But we’re finally cresting that hill. And now you’re right, we do have this wall of cash coming to us. Now it’s very, as some would argue it’s overdue. Some would argue it’s not enough. But the point is, it’s going to be a lot of cash. They’re finally you know, putting on their big boy pants and you know, living like adults.

Hill Vaden:
All right. Well, it will be a, you know, I guess we can sit and watch from here. Thank you guys, both for joining me today on this. I will mention, you know, just one other thing that you know, we’re just talking about attention and “Buzz” I saw a new ETF that was released called Buzz, B-U-Z-Z, that includes it’s some way of tracking these companies that are both talked about, you know, on the back of some of the retailer phenomenon and so I think Penn National and a few of these other you know, Tesla’s and these big names a single upstream company is captured in the Buzz ETF, do you care to guess which it is?

Reed Olmstead:
It’s catching names that is catching headlines that’s trendy, turning up to be captured by however they do this ETF.

Hill Vaden:
You’re out of time, Exxon.

Reed Olmstead:
The Chevron, oh, Exxon.

Prescott Roach:
I was going to say…

Hill Vaden:
Exxon.

Prescott Roach:
Okay.

Hill Vaden:
I was surprised I went into it looking for one of the, you know, Shale companies that maybe is catching more publicity but Exxon was the single company.

Reed Olmstead:
Exxon is doing a really good job promoting their, promoting alternatives, promoting green, promoting all that that could be why maybe it’s not because of the legacy EMP, but because of the spin or the message they’re sending about the next decade.

Hill Vaden:
Maybe so, I mean I guess, their PR group is hard work. The others were, I mean, it had, you know, all the names, you know, it’s multi-sector it’s good. It was kind of interesting thing to look at the names, you know, from Seeking Alpha and all these other pages.

Reed Olmstead:
Dillard’s (phonetics) right. Dillard’s was in there?

Hill Vaden:
I don’t want to call it GameStop with it.

Reed Olmstead:
I was going to ask if GameStop was on that.

Hill Vaden:
I don’t remember that. I think there’s some sort of criterion in there that I think limits. You can’t just talk about anybody but then I’m not sure exactly the details.

Reed Olmstead:
Some 30 day rolling average of volatility I’m sure would knock GameStop out.

Hill Vaden:
All right. Well, thank you both. And Reed it was a pleasure having you back as always and Prescott, it was great to see you again and have you on the podcast with us.

Reed Olmstead:
You, as well.

Prescott Roach:
All right.

Reed Olmstead:
Okay. Thanks for having us.

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