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  • Writer's pictureRyan Brown

Adding to the Energy Sector

Bill Baruch adds ConocoPhillips after its bid to acquire Marathon Oil, here is why.

Published on May 31, 2024 

I told you before the break that we have some business to take care of with that man right there Bill Baruch. So it's nice to see you. You said you sold Salesforce. We documented how poorly that stock traded after its earnings. You took the money and you put it into Conoco Phillips, tell us.

Yeah. ConocoPhillips just recently announced the acquisition of Marathon Oil. And the integration here I think is really excellent. Ryan Lance, the CEO of Conoco talked about it earlier in the week that it wasn't really their plan. It wasn't really on the radar, but it came under the radar a few weeks ago, and they just basically couldn't ignore it and hopped on it. The integration here is going to reduce costs, it's going to bring in free cash flow right away, specifically in Eagle Ford, as well as in the Bakken where they overlap a lot of land. And it's sort of like a shale 2.0, where they're going to be able to go back into these wells between the two of them. There's about 2000 wells. So I think the efficiency here in where we're drilling is picking it up. In the US, I think this is really great lining up that we only have about 9% energy right now. So I wanted to add this to to increase that we've typically on average had about 12% Over the last couple of years. So I am looking at that to get us where we want to be

H O D highs of the day for CLP. Take a look at that you own Conoco. Yeah,

we've owned it for about a year, it's it's up a good bit over that time frame, they beefed up their asset base still trades reasonably inexpensively. They've got great operating margins, low debt, great balance sheet, high free cash flow. So it's it's a terrific business in that space. And they're one of the largest and lowest cost producers.

So you sold new core, as well as part of your action this week. Why so

you know, like Salesforce new core was in our bottom five, you know, about a 1% position, you know, we were down to about, say 10% or so on that. So 10 basis point hit to two portfolios, just kind of you know, cleaning things up, move that away putting that cash somewhere else we move on from it now, after I sold that yesterday. We've had Chinese PMIs in Chicago, PMI is Miss. So you know, the trajectory here, I don't think it's too favorable. So I'm happy with with the move for now.

Yeah, I mean, just when you think that manufacturing is going to work its way back you. You get you know, two steps forward, maybe and then one step back, or maybe one step forward. And I don't know. It feels like a few steps back. Thank you. We'll talk to you soon. That's bilbrook As we move to our calls of the day, let's focus

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