6 Comments
Jul 21, 2023Liked by Kingswell

Great piece! Actually curious that large O&G firms like Exxon and Oxy are becoming more active in the carbon capture space, not just for political/ESG reasons but for good business.

Speaking of which, NRP (a royalty company owning millions of acres of land/mining rights) has a deal with Oxy to do carbon sequestration in the Gulf.

https://www.businesswire.com/news/home/20221027005983/en/Natural-Resource-Partners-L.P.-and-Oxy-Low-Carbon-Ventures-Enter-into-CO2-Sequestration-Agreement

Interestingly, NRP also has an agreement with Denbury (which Exxon bought).

https://www.businesswire.com/news/home/20220207005850/en/Natural-Resource-Partners-L.P-Enters-into-CO2-Sequestration-Agreement-with-Denbury

I may be biased (since I own NRP) but it’s very interesting to see coal royalty/mining rights companies being beneficiaries of current energy trends.

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author

Thanks for sharing this! The whole energy scene is so interesting right now. (And I'm adding NRP to my list of companies to study further.)

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Great compiling, Kingswell. We also love old energy. It's massively contrarian and still absolutely necessary. We think it's a layup.

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Kevin, great writing. I am a BRK fan. WEB and CM have taught me a lot. There is a but coming...

It seems that BRK as a large company can continue to perform M&A while many of the other mega cap companies know it is a hard NO from the US Gov. Why do you think that is? I know it is not an easy answer, and I can come up with some of my own answers. It seems one could make an argument against BRK with antitrust points.

I get WEB and CM enjoy a halo effect and I am smiling at them too. But, what do you think?

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Well, that's a very good question and I'm not sure that I have any amazing answer for it. I definitely agree about the halo effect and I think that plays a pretty big part in keeping Berkshire above the regulatory fray. I also think Berkshire does a good job of spreading its purchases around in lots of different industries, which alleviates competition concerns to some degree. I also wonder if they shy away from any purchase that they think might become ensnared in a long, drawn-out review process. Kind of like applying their hands-off approach to operating subsidiaries to the acquisition process, too.

I'm not sure if any of this is helpful (or right), but these are just my guesses to an excellent question.

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Jul 23, 2023Liked by Kingswell

Berkshire has started to attract government "NOs" on a few pipeline deals. They had part of their original Dominion deal undone by regulators. They don't seem likely to try their luck on any other railroads either.

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