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7/29/25 Capitalist Times Live Chat
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AvatarElliott Gue
2:23
A new data center JV plan in West Texas.
And, lest we forget, Venture’s modular LNG facilities can go from final investment decision to first exports in 2 to 2.5 years compared to 5 to 10 years for the traditional “stick built” construction process. So, there’s room to layer in plenty of additional LNG export capacity in the US by the end of the decade or in the early ‘30s.
Also, don’t forget Mexico. The Saguaro pipeline project will connect 2.8 bcf/day of Permian production to the LNG Energia project on Mexico’s Pacific Coast.
That’s a lot of new demand. The gas business is a marginal cost business. To meet current demand and expected growth over the next 2 to 3 years you will need more than Marcellus + Permian volumes. You will need to attract some additional volumes from the next-cheapest play, which is the Haynesville. Haynesville producers need $4/MMBtu to generate attractive free cash flow, so that’s where I think gas averages the next few years.
2:24
One more point. In my view the potential uplift for a lot of Permian producers -- particularly Devon -- is overstated. Even if I triple my model assumptions for DVN gas in 2025, the free cash flow uplift is modest  -- the company needs higher oil prices. Gas is, at best, a minor tailwind.
Alex M.
2:31
Hi Roger.  It seems like high speed internet and broadband are more essential than ever before.  How is it that companies like CHTR and CMCSA are losing broadband subscribers?  What alternatives are households switching to in such large numbers?  Thanks.
AvatarRoger Conrad
2:31
Hi Alex. Charter and Comcast are losing broadband customers to what I call the "Big 3" US telecoms--AT&T Inc (NYSE: T), T-Mobile US (NSDQ: TMUS) and Verizon Communications (NYSE: VZ). And it looks like the trend will continue if not accelerate. The Big 3's killer app is rapidly expansion of fiber connections, but they also have a fixed wireless product that's increasingly superior to coaxial cable. And with both Charter and Comcast restructuring, they're unlikely to fund the massive CAPEX it would take to compete to hold broadband users.

One possible scenario is Charter and Comcast adopt a MVNO strategy in broadband as they have in wireless, basically renting space on the Big 3 networks. it's a lower margin but also good cash flow business. But I think the Big 3 are better investments now.
Susan P
2:33
In the June E&I issue, you wrote "Oil prices...are actually five years into the energy up-cycle that began in mid-2020." Mid-July of 2020, oil was hovering around $40 for WTI spot prices. What's a realistic expectation for the "up cycle" timing/duration and eventual price of WTI and/or Brent oil. Thanks
AvatarElliott Gue
2:33
The last upcycle lasted from the late 1990s through to 2014, depending on how you measure it. So I think 10+ years is a good starting point. What "kills" energy supercycles is always new supply -- for example, the 70's bull market ended when the North Sea, Cantarell/Mexico, North Slope, Alaska came onstream in the late 1970s and early 1980s. Additional non-OPEC barrels loosened the cartel's grip on global supply. Same think in 2014 --  massive new shale supply, also deepwater projects started coming onstream -- prices collapsed when the Saudis realized they were financing the shale boom by propping up oil prices. So, what will eventually hit the current supercycle is major new supply. I don't think US shale can do it because major fields like the Permian are now mature and likely to enter a plateau. We have new volumes from Guyana and a bit more from Canada and Brazil perhaps, but that's likely only enough to offset natural decline from existing base production. I think we eventually need more
AvatarElliott Gue
2:33
CAPEX to drive new supply and we just haven't seen that this cycle yet. Only just recently, producers like BP have reversed their prior plans to allow production to fall significantly through 2030. As for price, I think we need $90/bbl plus eventually for Saudi to fund its social spending and for US shale to drill aggressively enough to generate some modest growth in volumes. However, oil prices historically overshoot fair value when the market looks tight, so I wouldn't be surprised to see well over $100 at times. In short, I think the world is sleepwalking into an energy crisis on the crude oil front, though that's probably a story for a few years down the road.
Jack A.
2:44
Hi Elliott:

I've been disappointed in the recent fall in the price of EXE and EQT. What do you think is behind their recent fall in price?  And what do you see going forward?  
President Trump is trying to keep inflation down, which to him is keeping energy prices down. But yet he wants to increase income into the United States, which means increasing the export of LNG... I've been playing this scenario by loading up on pipeline stocks, whose recent price action is also somewhat disappointing.... How much more upward potential is there in pipeline stocks, which already have had a good run over the last 12 months?
Thanks
AvatarElliott Gue
2:44
I wrote about this at some length in the alert we issued earlier today. I know that only came out a couple of hours ago, so let me summarize.

The decline in gas producers like EXE and EQT is entirely a function of the recent decline in front-month gas futures (from late June). that, in turn is  mainly a function of concerns about cooler summer temperatures (lower power burn demand) coupled with an uptick in the Haynesville rig count two weeks ago. While gas E&Ps can get hit on newsflow like that it's immaterial fundamentally because most hedge a significant portion of their production quarters (even years) ahead of time. Longer term gas prices are much higher -- next winter you're still looking at a healthy $4+. The bigger story is all of the new LNG demand -- Plaquemines and Golden Pass in the second half of this year, for example. If anything, the recent US-EU trade deal underlines Europe's pressing need to import more US gas.
AvatarElliott Gue
2:44
I don't think US politics are particularly important when it comes to the US gas market. Producers will drill more aggressively, and produce more gas when prices are high enough to support it (that's probably $4/MMBtu +). To the extent that the President makes it easier to permit new pipelines or LNG export infrastructure, that's at least a modest tailwind as it would help drive new demand. In my view the selling pressure we've seen in the E&Ps like EQT/EXE and the midstreams represents just some normal profit-taking after a tremendous period of outperformance. In my view that's a buying opportunity -- I see EXE and EQT at least 30% to 50% below what I'd consider fair fundamental value in a $4 gas world.
Karl E.
2:47
re: BEP. I see that BEP just announced that it is investing a billion dollars to buy a 38% stake in a Columbian energy company. BEP owns 51% of Westinghouse nuclear with the remainder being owned by Cameco. Yet the stock price seems to not recognize the value of some of BEPs assets. The BEP nuclear connection doesn't seem to get any attention. What do you think it will take for the market to finally recognize the value of BEP? Should we just hold on and collect the dividends or would you recommend nibbling on price dips?
AvatarRoger Conrad
2:47
Hi Karl. I think having the world "Renewable" in your name is probably a turnoff for some, who then won't bother digging any deeper. But I would point out that BEP is actually up over 22% year to date, while the C-Corp shares (symbol BEPC) is up 35% plus--so there actually is something of a stealth rally going on.

The company reports Q2 results and updates guidance on August 1. And based on what its partner Cameco has said, the earnings from Westinghouse are accelerating. That could give the stock an added lift. The US hydro assets are going to earn a much higher return in PJM, a story that may get traction. And the Isagen deal in Columbia is actually that lowest risk of expansion moves--buying more of an asset you already know well. And its a typical BEP move, adding about 2% to 2025 FFO per share.

I think as BEP continues to post solid results and grows its business, investors now wary of "renewable" energy stocks will gravitate to it again. But I'm comfortable collecting that rising dividend meantime.
Susan P
2:49
I understand your views that political winds don't have lasting impact compared to supply/demand conditions. But, I have wondered if "secondary tariffs" on Russia oil exports to China, India and Brazil are imposed could they be more effective than the limp impact of the sanctions under the prior administration and result in higher prices for fossil fuel-related commodities. Thanks.
AvatarElliott Gue
2:49
In my view, efforts to lock Russian crude oil out of the global market will ultimately fail because the world needs those volumes. Europe has gone through several iterations trying to sanction Russian oil, impose price caps, etc. but none have had any real impact. And they still have to import Russian volumes of gas. And, I do think President Trump is alert to the issue of interrupting global supply to the point that it drives up oil prices. In my view, it's possible to design a tariff/sanctions regime that would have an impact though I question the political will to actually do that in a world where most governments are focused on keeping inflation in check.
Larry W.
2:58
ENLAY is up since I bought it, but lately is declining. Is it up because of the falling dollar or because it’s a strong company? Is there a better place for that investment now, or is there more upside to come? Thanks for your wise advice!
AvatarRoger Conrad
2:58
Hi Larry. Enel SpA is another good example of why it pays not to chase stocks after they've risen sharply. The ADRs' year to date return is still almost 30%. But it's now at a much more reasonable price to take positions (11X expected 12 months earnings, 6.6% yield).

The company will announce Q2 results and update guidance July 31. And I expect the same favorable earnings momentum we saw in Q1. One additional development that could raise interest in the stock--Enel has founded an advanced nuclear company in Italy, putting it in prime position to benefit from the country's pro nuclear push.
Kurt C.
2:58
What do you think are the best oil and gas or natural gas market takeover target(s) for the next 12 months?
AvatarElliott Gue
2:58
A good bit of the acquisition activity lately has been focused on private targets like EOG's recent deal in the Utica (first significant deal in nearly 9 years). There are still a few more private operators in places like the Permian though that's a dwindling list. On the public front, I think Comstock (CRK) in the Haynesville is a possible target either as part of a take private deal by majority owner Jerry Jones or if Japan's Mitsui decided they wanted to boost their acreage there (they're a major producer from the western Haynesville, which an important CRK asset). CRK is, however, a volatile name we normally regard as a trading vehicle. On the midstream front, I wouldn't be surprised to see Chevron acquire in the part of Hess Midstream they don't own following the deal.
Michael L.
3:04
Roger,
I believe when you wrote about LYB you indicated that the company stated that they expected to have an exceptionally large amount of cash freed up toward year end, but I can't remember the specifics. Would you please refresh my memory? I believe they report Friday morning, so I suspect you don't have anything new but would you please give us your take on the investment thesis for LYB and where you see it price wise in 12 months?
Many many thanks to you and Eliott for truly exceptional work over the decades!
AvatarRoger Conrad
3:04
Hi Michael. Thank you for those kind words. LYB has a "Cash Improvement Plan" targeted to boost cash flow $500 mil in 2025, which is based entirely on cost reduction measures. They affirmed that target when they announced Q1 results in late April. And I expect them to confirm it again with Q2 results August 1.

Other than that, you're correct my outlook for the company is pretty much the same. LYB's just increased dividend is well covered with free cash flow, even at what appears to be a low point in the cycle for margins. I still think we'll see a $100 plus share price if we're patient--though I will be looking for confirmation in the Q2 results.
Susan P
3:12
Does Dow's dividend cut impact your view on LyondellBasell? Thnaks
AvatarRoger Conrad
3:12
Hi Susan. LYB just increased its dividend last month. The payout has been well covered by free cash flow (after all CAPEX and debt service) leaving room for debt reduction and stock buybacks--even at a time of headwinds for the chemicals business. And the investment grade credit rating (BBB) was recently affirmed, meaning there's no balance sheet pressure to force a cut.

Dow is classified as being in the same business. But the product lines are far different. Dow, for example, has had multiple challenges in Europe, resulting in the shutdown of three facilities announced this month. LYB has faced some of the same headwinds but has been profitable there while boosting its core US Gulf Coast position.

Again, I want to see what LYB reports for Q2. But at this point, this looks like a case of one company in the "same" sector being in better shape and better positioned than another.
Lorraine G
3:18
Is there an advantage to owning BEP shares over BEPC shares?
AvatarRoger Conrad
3:18
Hi Lorraine. The difference is BEP shares are partnership units--the distribution is tax advantaged but you will receive a K-1 at tax time. Also, many large financial institutions can't own partnership units like BEP, which is why the company launched the C-Corp shares traded under the BEPC symbol.

BEP and BEPC pay the same dividend and represent the same level of ownership in Brookfield. And in my view, paying $10 more for BEPC rather than BEP doesn't make a lot of sense for individual investors--especially anyone investing for income.
Jay
3:26
Just want to say you got the answer right on the CVX vs XOM dispute on the HES merger.  Post merger it was a disapointment that the price of CVX was close to unchanged, but kudos on you read.
AvatarRoger Conrad
3:26
Hi Jay. The immediate investor reaction to most merger announcements and closings is usually negative. And while I thank you for the kudos, I think the outcome here of Chevron closing on Hess Corp was actually widely anticipated--which along with concerns about oil prices later this year explains the lack of positive reaction.

But that said, there are massive benefits in this deal for Chevron in the long-term that will almost certainly flow through to shareholders. Simply, they're now a 30% partner in what's arguably the world's most prolific low-cost oil reserve (Stabroek in Guyana). And their partner is the other top two super major ExxonMobil (NYSE: XOM). Basically, this deal jump starts their oil production profile at a time where they needed it most. And when oil prices start rising, you're going to see it in CVX' share price as well.
Frank
3:33
Not to rehash what was said earlier about BSM and DMLP, but BSM yielded 10% prior to the reduction, the drifted lower afterwards to once again yield10%. Likewise DMLP was at 10% prior to their divy reduction. Is it reasonable to expect the price of DMLP to also drift lower to land at 10% also. I'm looking for a entry price and didn't want to buy right before a downdraft
AvatarRoger Conrad
3:33
Hi Frank. Dorchester Minerals pays a purely variable dividend, which they adjust up and down with cash flow from quarter to quarter. So investors are used to seeing that happen and the stock price generally reacts ahead of time when natural gas and especially oil prices strengthen or weaken--in anticipation of a higher or lower yield.

Black Stone has tried to pay a steadier dividend without so much variation. That I believe often earns shares a premium to DMLP. But it also means there's likely to be a bigger reaction to changes in the dividend.

Bottom line is where these stocks go from here will depend on what happens to oil and gas prices the next few months. I do think BSM is the more likely to hold its dividend in place the next couple quarters, barring a big further drop off in gas prices. But end of the day, DMLP and BSM are going to follow commodity prices--DMLP a little more on the oil said and BSM on the gas side. I'm comfortable recommending both for investors who can handle volatility.
AvatarRoger Conrad
3:33
Those seeking a more stable dividend in energy should stick to one of our favorite midstreams, which are also trading at attractive prices.
Gary T
3:39
Thoughts on AQN?  I held AQNU through conversion and wondering if there is a bright future for the company?  I'm patient, however the current dividend is not stellar.
AvatarRoger Conrad
3:39
Hi Gary. Algonquin Power & Utilities is in early stages of executing a long-term recovery plan. They've successfully sold the non-utility businesses, with the exception of some contracted hydro assets management says it intends to sell. But the main target now for management is improving profitability at regulated utility operations by eliminating rate lag and gradually ramping up investment.

Management issued extensive long-term guidance in early June, which I expect it to affirm when Q2 results are announced August 8. But the success of its plans is going to be measured in years. And it will take more patience to realize the full investment return from betting on the company.

That said, Algonquin's NYSE-listed shares have actually returned around 37% year-to-date. And a return to dividend growth is possible as early as next year--based on the target earnings growth rate and payout ratio.
Alex M.
3:49
Hi Roger.  How do you see potential pharma tariffs impacting Abbvie since it has some Ireland operations?  Thanks.
AvatarRoger Conrad
3:49
Hi Alex. Abbvie management will likely be queried about tariff impacts when the company announces Q2 results and updates guidance on July 31. But based on what we now know, the impact should not be significant to sales or profits of the treatments now driving growth (Rinvoq, Skyrizi etc).

One reason is simply pricing power. These treatments are patented. There are no alternatives, so it should be pretty automatic to push through cost increases. The company also has a strong US supply chain, which could actually be more competitive (and profitable) with tariffs.

Bottom line: I don't expect a lot of impact for Abbvie. Rather, the focus is always on sales of key treatments driving growth and setting the stage for a new generation of treatments as patents expire. And the prognosis right now is pretty good, though the shares are a bit above my highest recommended entry point.
Sandy W
3:58
I'm in a quandry. I purchased NEE.PRR when it was down quite a bit. Today is the day decide if I either hold or sell. I'm following the CUI+ and REIT sheet. NEE isn't in either. At the current stock price, the conversion to stock is the best according to a previous post. What do you suggest is the deciding factor?
AvatarRoger Conrad
3:58
Hi Sandy. NextEra Energy (NYSE: NEE) is actually a core recommendation in another advisory we produce--Conrad's Utility Investor.

The company operates the largest natural gas power plant fleet in the US, is the world's seventh largest nuclear power operator and runs FPL in Florida, arguably the top utility in the US. But it's also the leading US producer of electricity wind, solar and battery storage. And with the Trump Administration even more anti-renewables than the Biden Administration was anti-fossil fuels, the stock has returned just 2% year to date, versus 13% for utility sector ETFs.

In my view, the company had good answers for investors when it released Q2 results and updated guidance last week. And while they will have to prove their case going forward for the stock to break higher, I'm very comfortable holding it and recommending converting the preferred to common stock--provided that doesn't severely overweight the position in individuals' portfolios.
Alex M.
4:02
The health insurance space has really been taking hits lately.  Are you seeing any opportunities there, or is it still too early?  Thanks.
AvatarRoger Conrad
4:02
I continue to like CVS Health Corp (NYSE: CVS), which with Walgreens going private and downsizing basically has the field to itself as a combination pharmacy, healthcare and health insurance company (Aetna). Q2 earnings are expected later this week. And I expect the same trends that produced the guidance boost this spring--particularly cost control measures--to show up in a strong result. The stock has backed off its early July highs for the year but is still sitting on a year-to-date return of close to 40%, while yielding over 4.4%.

I also like Abbvie, though at a slightly lower price.
Alex M.
4:10
You include Union Pacific (UNP) in your report card coverage.  What are your thoughts on the NSC/UNP transaction?  Thanks.
AvatarRoger Conrad
4:10
I think the merger is a winner for both UNP and Norfolk Southern. Railroads are and have always been a scale business. Bigger companies can make needed investment and spread costs more easily. Procurement is on better terms. And there are numerous opportunities for synergies by cutting costs.

The challenge has been to get US government regulators to approve deals. The Biden Administration, for example, pretty much rejected a bid from a big Canadian railroad for Norfolk Southern. But so far, the only mergers the Trump administration has threatened to reject have been deals between companies it's accused of having Diversity, Equity and Inclusion programs. And when companies have bended on DEI, approval has come quickly.

I suspect UNP/NSC to encounter few real obstacles once shareholder approval is achieved. And the result will be a stronger company than either partner currently is separately.
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