Spreadsheet Jockeys - Eric Nuttall - Kiss Of DeathEric Nuttall goes on the record with his thesis regarding Energy Companies, he wants all their free cash flow directed to share buybacks, something spreadsheet jockeys can model. He thinks that is the ultimately the best thing for the shareholder.
So, his investment thesis is vey simple, maintain production, generate cash, and buy back shares.
He suggests his fund is getting big enough, and they own large enough stock positions in a company he can dictate his thesis. He demands that CEO commit to this directive forcing a rerating in their stock.
Thus CPG bought some land to expand their Duvernay play, issued a special dividend, and increase production guidance and capex for 2023, so he exited the stock. I don't think management was prepared to follow Eric's Guidance, and all his experience is around building spreadsheets.
These are companies he is comfortable with (ARX, ATH, MEG, BTE, TVE) he says they will comply with his thesis. NVA is an exception, but i believe they have made a commitment to ramp up to 90,000 boe/day then buy back stock. In fact I don't think they need to use all their cashflow for the ramp up, and now that they have met their debt targets, they will start buying back stock.
Real Energy Movers
Eric respects Tourmaline (TOU) and Mike Rose but he is not listening to Eric. TOU is going to issue special dividends and return the cash to the share holders. Eric doesn't like this model but can't convince Mike Rose otherwise but has added TOU to oil income fund because they know how to make money.
Do you think for one-minute POU and JR will listen to Eric and follow his advice on what the best option for the cash deployment for the company. POU can't reduce the share float anymore it is already thin, and essentially, they have zero debt, and equity on the balance sheet.
Do you really think the best and brightest oil guy care a hoot about Eric Nuttal, and his investment in their company, not at all. If he decided to meet with the board and tell them what they need to do and POU or TOU, he would get booted out of the offices.
So, companies complying to Eric Thesis are not the best one to own and if ERIC can influence them, they are essentially being run on the thesis of Spread Sheet Jockeys. These companies have accountants running them like ARX, and they make big mistakes. Real energy leaders know all investments are not the same, they know what plays offer the best returns, and they know how to create wealth in the future and not simply in a high price commodity environment.
It Eric Nuttall recommends a stock, its all based on spread sheet models that does not represent insight or experience of a seasoned oil and gas professional.
Eric’s picks are not the best ones in my opinion. Eric has a price target for POU at 60 dollars but will not buy it because ERIC gets in the way of himself.
IMHO