Let's show appreciation and gratitude towards each other's contributions on the board.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 8
No. of Recommendations: 5
Bought another 3,921,835 shares for $246,408,342. Average share price of $62.83.
In other words, shares up from 224.1m to 228.0m; stake up from 25.3% of shares to 25.7%; total stake up from 31.8% to 32.1%, if the $5b in warrants to buy shares at $59.62 (i.e. 83.9m newly issued shares) are exercised.
dtb
No. of Recommendations: 4
The previous set of purchases in May/June 2023 was at prices below $60, in the range $57-59. There was wide speculation that his limit was $60. Now he has purchased at higher than $64.
OXY hasn't been bid up or down significantly, after recent Exxon and Chevron acquisitions. There were rumors that Chevron would make a bid for OXY after Exxon bought Pioneer, but that won't happen now. The only ones big enough to buy OXY now would be the European majors, but that seems unlikely die to strong ESG pressures from Europe. So OXY now is probably more a hunter than prey in the M&A space.
Buffett probably just likes OXY as a standalone company, which is focusing on optimizing its operations and balance sheet and is willing to pay about 8% more today than 4 months ago. Maybe found some loose change in the office sofa.
No. of Recommendations: 7
"Maybe found some loose change in the office sofa."Footnote in the SEC Filing:
"The shares of the issuer's preferred stock reported on this form were issued on August 8, 2019 and are held by Berkshire indirectly through its subsidiary, National Indemnity Company. Between June 30, 2023 and September 29, 2023, the issuer redeemed a total of 7,067 shares of Series A Preferred Stock at the contractually specified redemption price of $110,000 per share."https://www.sec.gov/Archives/edgar/data/1067983/00...OXY are slowly redeeming the 8% preferreds. Buffett likely taking the proceeds and buying more common.
No. of Recommendations: 9
In other words, shares up from 224.1m to 228.0m; stake up from 25.3% of shares to 25.7%; total stake up from 31.8% to 32.1%
Actually, 25.8%, not 25.7%: 228,051,027 shares now owned by Berkshire, 884,681,888 OXY shares outstanding as of June 30, 228,051,027/884,681,888 = 25.77%; with the warrants, that would be 32.2%: (228,051,027+83,858,848.81)/(884,681,888 + 83,858,848.81)=0.32204...
Buffett has regulatory approval to purchase up to 50% of Occidental's shares. He has said he would not buy the company outright, but as far as I know, nothing stops him from going up to 49.99%; I don't know whether being at about 41% would prevent him from exercising the warrants and going over 50%, I would guess that it does, and if I am right, that would put a natural stop to these purchases at another 9% or so of the company (another $5b worth of shares, or about 12 times this week's purchases.)
dtb
No. of Recommendations: 2
Amazingly, all this buying by one of the greatest investors of all time has had almost no impact on the share price.
The geopolitics around the oil supply and price and climate change concerns totally dominates the conversation.
This blog post by Vitaly Katzenelson highlights how important oil and gas is and will remain for decades to come.
https://vitaliy.substack.com/p/our-investments-in-...
No. of Recommendations: 2
"This blog post by Vitaly Katzenelson highlights how important oil and gas is and will remain for decades to come."If you are interested learning more about future energy demand, this presentation/discussion by an Exxon guy is worth listening to. He may have a fossil fuel bias but at least he's not completely arm waving.
https://veriten.com/stream/cobt-203/Katzenelson mentions Vaclav Smil's book (which Bill Gates also has recommended):
https://www.amazon.com/s?k=how+the+world+really+wo...Why world demand for hydrocarbons is not going away any time soon:
1) Plastics
2) Cement
3) Steel
4) Fertilizer
No. of Recommendations: 5
Why world demand for hydrocarbons is not going away any time soon:
1) Plastics
2) Cement
3) Steel
4) Fertilizer
Demand for hydrocarbons may not go away, but increasing demand will go away. However, increasing supply will probably also go away so pricing will ... TBD.
The percentage share of total U.S. petroleum consumption by major end-use sectors in 2022 was:
transportation 66.6%
industrial 27.5%
residential 2.8%
commercial 2.5%
Craig
No. of Recommendations: 6
"Demand for hydrocarbons may not go away, but increasing demand will go away."Maybe in U.S., but not globally according to the XOM forecast. See slide 8.
https://mcusercontent.com/59b28891a6a2c8ca6e839d5d..."The percentage share of total U.S. petroleum consumption by major end-use sectors in 2022 was:
transportation 66.6%" As was pointed out in the presentation, light duty vehicle energy demand, may peak this decade but heavy duty trucking, aviation, marine and rail transportation will all be growing globally.
Industrial demand will be up as far as the eye can see...according to XOM of course.
P.S. Might be good to post a link referencing where you are getting your numbers.
No. of Recommendations: 5
BreckHutHigh
Nice presentation, thanks for sharing. I think the data on page 8 is for total energy demand (it says BOE but I am guessing they are converting all energy supply to BOE), not necessarily for oil and gas. Page 13 shows oil demand flat to down from now to 2050. Natural gas increasing substantially. A good reason for the recent purchases by Exxon and Chevron which I think are natural gas focused except for the Hess production from Guyana.
So my statement about increasing demand going away should only apply to oil, not natural gas.
Craig
No. of Recommendations: 1
An alternative view of energy demand from the IEA. On page 26 they are showing their projection of oil and gas demand peaking before 2030. By 2050, demand decreasing about 5% for both oil and gas. Yes demand continues but will be dropping. My investment thesis is that supply will drop quicker than demand drops which will push pricing higher. I am quite long on XOM.
https://iea.blob.core.windows.net/assets/2b0ded44-...The projection is based on current policies, not what is required to meet net zero by 2050. From the report in Section 1-1.
In the WEO-2023, the Stated Policies Scenario (STEPS) sees lower demand projections for
each of the fossil fuels than in the WEO-2022. This reflects current policy settings by
governments worldwide, a slight downward revision in the economic outlook, and the
continued ramifications of the 2022 global energy crisis. It also reflects longer term trends:
fossil fuel technologies have been losing market share to clean energy technologies across
various sectors in recent years, and in many cases fossil fuel-powered technologies have
already seen a peak in sales or additions.
No. of Recommendations: 1
Without studying the details, I suspect the difference between XOM and IFA is the outlook for economic growth in the developing countries. XOM projects that is where all the demand growth will occur. Growth in developed countries is offset by efficiency improvements and growth in wind and solar.
IFA is a scenario. XOM's is a forecast - which is the basis for their plans and investment decisions. Of course, XOM also tests upper and lower alternates to the forecast, particularly the lower ones. Investments must continue to meet minimum return targets at the lower alternate.
