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OIL & GAS INVESTMENT DEEP DIVE
Recorded: June 30, 2025 Duration: 2:01:57Space Recording
Short Summary
In a recent discussion, crypto enthusiasts highlighted significant growth trends in the market, with stocks like ROBN and MSTR showing impressive returns. The panel emphasized the potential of the cannabis sector and international stocks, indicating a shift in investment strategies and emerging opportunities.
Full Transcription
Thank you. Yo!
What is up, Gav?
How are we doing?
Happy all-time highs.
What's up, Gav?
Looks like Gav got rugged right in the middle of that.
We're going to try that again.
We'll get Gav right back up here.
And welcome in, everyone.
We're getting started here.
Wolf Financial, Stock Picks for the Week.
It's 5 p.m. Eastern.
It's Monday.
So you know what that means each and every week. It means Stock Picks for the Week. It's 5 p.m. Eastern. It's Monday. So you know what that means each and every week.
It means Stock Picks for the Week, of course.
And boy, did our crew absolutely crush it this past week.
And obviously, the market doing just fantastic things.
That long-term portfolio looking fantastic.
Gav, I think we lost you for half a second.
I'm going to shoot you that co-host again.
Yeah. There you are. Yeah, I'm gonna shoot you that co-host again but there you are yeah i'm back uh pretty hype day for sure uh across the board i mean obviously
some of my favorite holdings i think i've tried to pick hood or double levers robin hood on this
space uh every week for a little while now and yeah that thing went up 30 today i'm still moving here in after hours and
is up almost 50 in the past week so shout out who had robn who ended up getting it from uh last week
so this is actually a funny story sam solid did not pick it but i i typed it in from the previous
week i left it on there and i was going to correct it he said you know what just leave it it's on you
we'll see if it works out.
And sure enough, ROBN, top pick of the week, 41.5% since last Tuesday's open.
So I kind of like slid Sam Solid a little freebie here to win.
And we messaged.
He was like, no, actually, I like that pick better anyway.
So he stuck with it.
And yeah, the one week that you don't pick it or we're not, people aren't fighting over
I absolutely accidentally slid it in for Sam Solid.
He said, actually, I like that pick better than what he was originally going with anyway.
And so yeah, ROBN, 41.5%, our top pick of the week.
Yeah, that's pretty wild.
And it's actually a perfect 100% on ROBN over the past month.
It's actually a perfect 100% on ROBN over the past month.
It opened on June 2nd at $27.27, and it closed today at $54.54 at the moment.
So pretty cool to see.
A perfect 100% over the past month.
But yeah, obviously, I'm pretty hyped.
Hood's still moving here in after hours.
It might break 100 literally tonight.
It got me jazzed because I run these portfolios on autopilot now.
And one of them is 37% of the portfolio is hood.
And there's $2 million copy trading that portfolio.
And so, yeah, shout out.
We made some money today.
Those people are very happy, Gav.
Oh, yeah.
Those people that are subscribed.
They better be, bro.
They better be.
I mean, we're up 55% last three months.
So not too shabby.
But yeah, excited to see where this continues to go.
Obviously, a pretty pop of market at the moment.
New all-time highs.
Back to fresh all-time highs.
We took a break for a second, but we're back.
So yeah, I'm excited to get into it tonight and talk some stock picks with this group.
Yeah, for sure.
If you're new to the show, we kick off, our panelists go around, we do some market sentiment,
general thoughts.
I can't imagine what people are going to say today at new all-time highs.
So we'll see what everyone thinks, though, about where we're at and what's going on.
And if there maybe are any headwinds coming up anytime soon, it seems like number go up
is the current market.
And then in the back half of the show, we'll swing back around to everyone and we will
get everyone's two stock picks.
We take that from tomorrow's open, so Tuesday morning open until the following Wednesday
close.
So based on last week, I was looking the market itself, the S&P up. It looks like from Tuesday's open until today's close, I'm seeing 2.24%. Our average among the panel was 6.24%. So we absolutely dominated the market with our stock picks here.
the market with our stock picks here. I'll go ahead and shout out the top three. Sam's not here
yet. I'm sure he'll slide in at some point, but Sam Solid was our winner. He had ROBN, of course,
that we talked about, 41.5% return. His other pick, APP, was just slightly above breakeven,
but he's still, even with that, 21.23% average return. Second place myself, I had AVGX, 2X Leverage Broadcom, and 2X Leverage
Netflix, NFLU. Shout out to our friends at Rexhares for those. 12.5% and 12.28% for an average of 12.42%.
And then third place, this one was close and it came down to the very end. Chris Patel
edged out Jordan at the last second, 8.62% return from Chris Patel. He went with the
cruise liners, CCL and NCLH. CCL, 12.17%. NCLH, 5%. That's that 8.62 percent average Jordan your your bread and butter TQQQ and short SQQQ
your leverage cues play 8.41 percent not a bad return you stuck with your guns you were on the
podium until I mean just I mean Chris just continued to edge you out just a little bit there
but great returns I mean I just want to shout I mean, some of these picks are incredible. When I look across the board, that CCL was a 12 percenter. We also had several, you know, six, seven, eight
percent returns across the board. So great job by the panel. And with that, I want to jump into
some market sentiment. So we'll start throwing it around the panel here and see what our stock
pickers and traders slash investors think about this market.
And Andrew, Mr. Real Pristine Capital, you are up here first.
I want to throw it over your direction and have you kick us off tonight, sir.
How are you?
Yeah, what's going on, everyone?
Doing very well.
Yeah, if we think about the big picture of what's going on in the market,
Q2 has been absolutely fantastic, and we went out with a bang. But the market has
essentially been rallying into this big, beautiful bill, hoping that it passes.
Over the next couple of weeks, we could see continued negotiation. And originally,
with this Trump presidency, the whole idea was we're going to trim the deficit, which is really
going to help us in the long run. With this big, beautiful bill, we're going to be blowing out the deficit.
So now the game plan pretty much is, hey, we're going to blow out the deficit,
but that is okay because even though inflation has not hit the Fed's target,
we're going to cut interest rates at the short end of the curve.
Then we're going to start borrowing at the short end of the curve.
The economy is going to grow so fast that it's all going to work out well.
So everyone, let's just hold hands, sink, and buy on, just bid up risk assets.
And that's pretty much what we've seen all quarter.
So I definitely think after this huge rally into quarter end,
we could see some volatility in the market around that big, beautiful bill.
And if it passes, if it doesn't, if there's some theatrics around the bill.
So that's definitely something to be cognizant of.
Moving over to the actual market and what that is doing,
you'll see pinned in the nest.
I have the market dashboard that I use.
A couple of the themes that really stand out in the global equities section,
international stocks have really been outperforming
the US on a year-to-date basis. So that's something that I'm watching moving forward.
And if we look at today into quarter end, we have the MSOS cannabis ETF, which led the market,
blockchain assets, and gold miners. So that's really what I am seeing in the market right now
in terms of the picks that I'm going to be going with. My first pick is going to be that MSOS ETF that led the market today. We actually had on Fox News, Mike Tyson came on speaking about cannabis rescheduling.
within the American populace. About 70 to 75% of Americans are in favor of some form of cannabis
legalization. And when Terry Cole gets confirmed as the head of the DEA, that is when we can see
the paused cannabis rescheduling case get unpaused. So MSOS, I just really think it's gotten beaten
down. It's down like 90% off the highs over the next year or year and a half.
And especially as we go into the midterms next year,
I just think it's very important to keep that on your radar
in case it gets continued momentum.
I have a position in MSOS, full disclosure.
So definitely a good one to keep in mind.
So yeah, that'll be my first pick.
And then my second pick is going to be another position of mine, which is micro strategy.
And that is really just potentially benefiting from a further rally in Bitcoin,
because we have seen that there's been a huge demand in dollar alternatives like Bitcoin and like gold. So those are my two picks, MSOS and then MSTR MicroStrategy.
Looking forward to hearing everyone else around the panel.
I like the MSTR addition there.
I actually added that also to that portfolio that I have a ton of foot in.
Small position the other day, but I agree with you.
It does a crying for a breakout.
And Andrew, I will give you the option here because last week you took Broadcom and I had
AVGX. We were on the same, we actually had the exact same line of thinking last week. And I think
you had to leave. I know you're here usually in the first half of the show. And I took the 2X
leverage Broadcom. If you want MSTU, the 2xLeverage version of MicroStrategy,
you're more than welcome to have it if you want to stick with MSTR.
But I did want to give you that option just before we move around.
Oh, let's go.
I'll take the double levered.
There he is.
I like it.
I like it.
He's feeling salty.
All right.
MSTU alongside an MSOS from Andrew.
All right.
Appreciate that, Andrew.
Hope you stick around.
And we're going to continue around the panel, and we'll do the market sentiment thoughts.
Obviously, if somebody does have a time constraint, feel free to throw up a hand, and we'll go
ahead and get you in, get your picks in.
Nick Drindle, let's go over your direction next, and then we'll hit Ben after that.
Hey, thanks for having me on.
It's been a couple weeks, so I appreciate getting the invite back.
The cruises went crazy.
Didn't you go on a cruise?
I did, yeah.
Disappointing.
Next time you go, we got to go along all the cruise.
Chris Patel was the only one that caught on.
He was like, Nick Drendel's going on a cruise.
This is bullish.
And he didn't pick the leader royal caribbean that kills me no i didn't pick i didn't pick
royal caribbean only because carnival and norwegian are really tackling their debt right now so my
thing is royal royal is just outperforming everyone physically but in terms of like total
stockholder value there's a lot of value i'm, I'm telling you guys, if you look at Norwegian,
there's both Norwegian and Carnival, that is something that you should be holding long-term.
Their business model is just literally floating ATMs. And I'm sure that Nick could probably allude
as to how many people were there, how much money was being spent, how much money was going towards
the casinos, towards drinks. And now all the cruise lines have star
links on them. So even internet packages that are like $25 a day, there's 5,000 people that are
locked on a ship. All of them get the internet and that's all high margin revenue that's going
to come in. And a lot of people, they're still in the, oh, well, what about COVID kind of stage?
So yeah, definitely check it out. Yeah. Cruises. so i've only gone on one cruise ever april 30th
2024 uh since then uh that was on royal caribbean as well since then royal caribbean i should have
just bought it instead of going on the cruise royal caribbean is up 124 since then and i do
agree with you they're only getting more popular for the two reasons of one
the great wi-fi they already had actually pretty good wi-fi on royal caribbean like i was able to
do some space and stuff but now adding in starlink and stuff like that people who work full time can
go and still work remotely on the cruises it's not like it used to be where you had to like oh hey i
just have to take off a whole work week of work and then two i think that there's a there's a
really just a resurgence of them for
both work and fun like i'm doing my honeymoon as a royal caribbean cruise right like that's just
like getting like hey like let's just go do that right why did i figure out something else so yeah
i like it as well um and it's just continued to power up yeah two two things um i would not get
the internet package when you're on the cruise just Just use that as a time to unplug. That's like one of my favorite things to do is actually unplug from everything.
No, I'm just kidding. What does that mean? What does unplug mean?
Unplug? I'm unfamiliar with this term.
Yeah, you get a couple drinks in you, then you bump into your friends randomly, gets you excited throughout the cruise. That's like the best part of the cruise. Second part, I don't know if I got COVID or just got
sick, but this weekend I got put on my butt with a cold or something. So definitely wash your hands
a lot if you do take a cruise, but had a blast. And it looks like that stock in the company is just blasting off.
Overall market is just incredibly strong. I keep on going back to my three kind of warning signals
before I get concerned.
The first NA-AIM exposure, if that gets over 95%,
that's typically a time where we get some pullback.
It doesn't mean that the rally's over or anything like that, typically a time where we get some pullback.
It doesn't mean that the rally's over or anything like that, but when you have everyone long,
typically you get like a good news push
and then some reversals.
We were at 94%, I think two weeks ago.
And as we made new highs, we actually dropped back down to 80,
which is exactly what you wanna see
for a just kind of FOMO-fueled rally
into new highs and past new highs. So those come out on Thursday, so we'll see if we're over 95%
there. But last week at 80%, and you can see the rally is continuing. If we get an unfilled gap
down on the indexes, we're only gapping up continuously, so still no gap downs there.
Or the third is a large volume break of a liquid leader.
And I was a little concerned about Palantir.
On Friday, we had that sell-off at the end of the day, but I guess that was partially rebalancing.
And we gapped up and reclaimed the 20-day EMA today. So,
so far, we haven't had any leaders or liquid leaders close into the 20-day EMA,
not any with a unfilled gap down or not many with unfilled gap downs. So the market is
checking all the boxes to continue to rally. But if you take a look at the comparison,
I keep going back to 2020 and comparing it to the market now
because that was the most recent V-shaped recovery that I've traded.
I'm sure there are others in history,
but it does feel very similar to 2020.
And if you take a look back at that,
we got into new highs right around June.
I put the chart right in the nest
because I was going to talk about the same thing.
Oh, perfect.
Yeah.
So we basically have a move into new highs.
And then instead of just a nice,
like kind of 30 degree rise,
as we see in other up trends,
we actually accelerate as the last people that had shorts are forced to cover at new highs.
You get FOMO buying and you were really starting to see, like Andrew pointed out, excuse me, the risk on assets are exploding.
And now you're starting to see Bitcoin set up to and looks great to go higher
here. But what we got in 2020 was after that acceleration, we had a pretty sharp stakeout.
I'm sure there was some type of COVID news back then that triggered that. But the comparison is
still the same. I don't think we'll get like a 5% down day, but I am getting cautious right around here to see
if we do get a stress test in the market in a pretty sharp pullback. The one that we had in
2020 only lasted for maybe like two weeks. And it was like one down day, a little bit of leakage
the next day, and then just chop, like pretty high volatility chop for two weeks before continuing higher.
And I kind of think that's what will happen here. All the leaders are acting well, but they're extended at this point. So anything that we do to kind of pull in the last buyers, push out the last
shorts, and then we'll flip and have that kind of stress test. So I think picking for this week
is probably going to be one of the tougher weeks to pick because when we do get that stress test. So I think picking for this week is probably going to be one of the tougher
weeks to pick because when we do get that stress test, it's going to be pretty sharp and immediate.
But because we have a shortened trading week, I'm not sure if that's going to happen
in this week or at the beginning of next week. But overall, great market. Just move your stops up,
kind of shorten your timeframe if you're trading and putting on new risk at this point, and then just stay on the right side of the VWAP. So if you
want to short something, only short it if it's trading below the intraday VWAP. And if the stock
moves back over VWAP, you got to cover that position quickly because we're in a risk on FOMO
type market. And typically the last push in those kind of rallies
are really aggressive.
So being a day early to trying to short
some of these extended names can really hurt.
So just try to stay on the right side of the VWAP
if you're doing that.
Great thoughts, Nick.
Great to have you back on the panel this week.
Hope you enjoyed your time off.
And of course, we'll come back around
and get your two picks for the week here shortly.
Ben, let's keep the market sentiment portion going, and let's throw it over your direction.
Yeah, well, as I talked about on the 1 p.m. show, I could not be any more bullish as I am right now.
I think we're just getting started with risk assets.
IWM broke the 200 DMA here just Thursday or Friday.
Expectations for rate cuts are, you know,
basically I think we're 90% chance for September now
or something.
And look, when we were in the depths of the tariff crash,
I was talking about the similarities with the COVID crash then and the prospects for a V-shaped recovery.
And that's exactly what happened.
And then when we crossed the 200 DMA on QQQ Spire, that China trade news, I predicted all-time new highs.
And that's exactly what happened.
And now if you go back and look at the pattern, it's identical.
It's absolutely identical where I pointed where Nick was talking about, where it says we are here.
Actually, the arrow is pointing exactly to that period he was talking about where he had this pullback for a week or two.
It's like right on there, Nick.
It's great that you brought that up.
But, yeah, that's where my thoughts are at.
Same as Nick here.
And it's all engines go.
You know, in the morning note that I write every morning for a Discord in the PDF,
I've been closing my macro analysis with the words carpe diem for the last five days in a row.
So, yep, things are looking great.
Nothing else to say.
You know, Ben, going into this, I was like, I'm curious how different people's thoughts are going to be.
I am curious about the rate story.
I haven't been super plugged in the last couple of days with some travel,
but I am curious.
Is that shifting?
I didn't get to hear your thoughts earlier.
Is the rate story shifting a little bit here?
I mean, yeah, I didn't, I'm not sure where the odds are at.
I think Friday they went up to 90% per rate cut in September.
But just listening to the pundits on TV and looking at my social media feed,
it's starting to become consensus that we're going to get a rate cut in September.
And we'll see.
I think, is this JP Morgan or Morgan Stanley?
I think it's Morgan Stanley that said like seven rate cuts in 2026,
which is, you know, I don't know how they're forecasting that. But at this point, I think this,
you know, rally in IWM and small caps and risk assets and growth stocks is being fueled by this expectation that we will get rate cuts. Yeah, very interesting. We'll definitely be
curious to see what happens as that develops obviously
uh the next meeting coming up here in july just a few weeks away but september we're seeing those
odds increase and uh maybe we do get that rate cut trump i think i saw on my feed at one point
he said like too late pal like five different posts today so i figure there's this continued
pressure and eventually we'll get that rate cut.
Appreciate those thoughts. Ben, we'll come back around and get your picks as well. Chris,
let's go over to you next. Mr. Chris Patel.
Okay, we'll double check back on Chris here in just a second.
Maybe we can get him back in.
We'll double check on that connection.
I saw Sam Solid up here.
Sam, you missed.
I was giving the little victory lap while I go.
I'm here.
Did I do it?
You pulled it off.
Did I do it?
And I told the story.
I said, I think I accidentally slipped in.
ROBN for Sam.
He texted me and was like, I actually like that better anyway.
So we stuck with it.
And boy, was it a banger.
41.56%.
What is a banger, dude?
That wreck shares two times ETF.
Honestly, I wish I added a lot to the portfolio.
I already have a gigantic hood position on my portfolio.
Now it's gigantic.
It's up like three times already.
And I also had leaps on it too, Now it's gigantic. It's up like three times already. And I also had
leaps on it too, which is just insane. I didn't think that they're going to come out with all
this stuff in the event. I know a lot of people said they did. For me, there's so much coverage
on this stock online. It's one of those things where it's got the Wall Street love, kind of
like how it gives you that Palantir vibes again um kind of like how
palantir did and for this one i'm getting the same vibes where it's just going to keep running
but this one i think has a little bit more market that it can attend to not obviously it's mostly
toward consumer not enterprise but the fact that they're reaching across the entire globe well
first now into eu but also the amount of products that they're putting
out there that has never been done in the market before at this scale is just i it's very exciting
it's very exciting as a broad market like continue as talk for the broad market i do think that um
you know we are running a bit hot here i'm'm getting 2021 vibes right now. And just it makes it doesn't make you feel uncomfortable where it's like, look, I'm going to try to time this and sell it. Like, I don't think I can do that for my portfolio for my entire portfolio. Maybe for like trading positions, like lighten up a little bit on the swing positions. But it's just, I hate to be like another one of those bull animals online. Like when I watch CNBC, it's just everyone there
is all bulled up. Everyone here is all bulled up, which like it can just keep going, right?
Because at the same time, you have a lot of fund managers that were underweight stocks and equities
coming out of April, even into May and early June. And now you're starting to see all that
sentiment pick right back up. Like I think it was Nick that was saying it was that the market,
it just has the same feeling it had coming out of COVID.
You had this massive lightning drop.
I think that was more like 30% during that time,
but like almost 20%, more than 20% intraday.
And now you're coming out of it and it's just balls to the wall,
bullish right now.
It's insane just seeing the moves.
But I think a lot of the easy money has been made where everything goes up like you had a somewhat
of a flat market before the last hour of the day uh about 30 basis points on spy before the end of
the day window dressing but you know certain names are just up like eight ten percent even more like
obviously hood i don't want to talk about agnosium but that event was very bullish and then there was
a lot of sympathy plays as well across the board with other things also a lot of other bitcoin miners were up very
big today probably on the back of the news with the cores being uh being their assets being bought
uh by core weave and just continued upward move but you know what what has me wondering like what
i would like to see for this to continue is for all risk assets across the board to go up, especially Bitcoin.
It's actually pretty ironic how you're seeing microstrategy or strategy up.
I think it was up like 3% or 4% earlier today, but Bitcoin was basically flat.
And there was a BTCL trade that I had going on in the newsletter from Wolf, and that's been doing really well too.
I could definitely see all-time highs again.
We are on BTCL, which is also the rec shares,
two times Bitcoin ETF.
But that one was actually,
I think it was like almost 55 bucks the other day.
But Bitcoin is just basically
just chopping away sideways at this point.
I mean, I wouldn't be surprised
if it ends up on the upside for Bitcoin
because technically speaking,
I mean, like in this bull market, it's hard to argue that we're going to get a lot of downside out of nowhere unless we get some sort of catalyst. But I think the market knows that there's going to be or it really thinks that July 9th is going to be an extension.
It's very likely Trump's going to do an extension.
My only problem is that if everyone's starting to think it and it doesn't happen, maybe we have a quick pullback, maybe a 2% or 3% pullback and a reflex bounce on that one once Trump actually does the extension.
But I mean, come on.
This is just a negotiation tactic.
He goes hard right before the big deal comes.
And I wouldn't be surprised if something like that happens with Japan, the EU.
I think the EU has already discussed to come up with the deal on July 15.
Also with China, we heard that that deal is already done, but we'll see.
July 9 is the day that everyone's looking at.
But, you know, it's like one of those situations where it's like nothing's really changed over the weekend.
Like we heard the Canada news happen where they're putting on the digital tax.
And then all of a sudden we heard on Sunday night that they're taking it off and they're going to continue their talks and so on.
It's like nothing's really changing those 48, 72-hour period.
But the market is up higher
than where it was at the highs of last Friday.
It's like you have the expectation
that the market has its expectation
of what's going to happen.
And then you beat those expectations.
Like you don't need to exactly have earnings yields
beat by some outlandish mark accelerating,
but earnings yields for this earnings
coming up in July,
earnings season is only 4%. In my opinion, I think that's really undershooting and considering that those revisions
were still down from what they were at the beginning of the year for this quarter.
So if those earnings come up anywhere above 4%, the market's going to continue to go up higher.
You have your base expectation, come up and beat it no matter what the number is,
that's going to bring the mark back higher. I think we're also setting that up for GDP as well coming up. I think the GDP number is going
to be coming up in July. That's probably going to surprise the upside. Inflation is probably
going to surprise the downside as well again, even though PCE was a bit elevated. But when you
consider how much oil has been pumping up during, I think during early June, it was not surprising
to see that number. I think the market basically shrugged that off last Friday. So I think during early June, you know, it was not surprising to see that number. And I think the market basically shrugged that off last Friday.
So I think there's just a bit of a bit of a melt-up situation here still where not everything goes up and only select names.
And then you start to have other mega cap companies have been lagging, like Apple pick up like 3% up today based off that news.
It wasn't really a big deal, but I think that's somewhat bullish for Apple in regards to the fact that they're basically going to give up spending all this time trying to build their own AI model. And they're
just going to go with whatever's out there. And that makes a lot more sense because they're not
an AI innovative company. They're a company that does best by selling wristwatches, phones, and so
on, and just continue doing that and stop spending all this money trying to research other stuff.
It is what it is. They already got the financial engineering to keep their earnings continue going up.
So again, we're already down like 20%.
It's very hard to argue and have that sharp of a drop again
unless we get that level of uncertainty all over again,
which is very hard to do.
But at the same time, everyone gets bullish.
Everyone stays bullish.
You know what happens.
Buy the VIX when it's cheap or buy hedges when they're cheap.
Not when you need them, but when
you can. I'll be looking
out for that, but as far as I see right now,
I got a few names I'm going to pick for
this stock picking thing, so we'll see what happens
there.
Great rundown, Sam.
Appreciate you, and congrats on the
podium spot this week.
Paper games.
Number go up.
Is that your market sentiment?
What you got for us? I'm back.
I'm back.
Number go up.
I just wanted to know if Chris is gone,
but I was wondering if Chris pulled a Palantir on hoodie,
if he sold at like 20 and didn't look back or not.
I didn't catch that.
I'm still here, man. Let man let's go baby he's in
i'm here in the chat i did sell robin hood way earlier than no
did you see those cruises did you see those cruises yeah i did dude i did see the cruise
lines i did i did those are i'll let you guys in on something on the cruise lines. I did. I did. Those are ripping. I'll let you guys in on something. On the cruise lines, I'm about one-third of the leap volume on CCO.
You've had a specific strike.
Like, I have quadruple-digit contracts, like leap contracts,
that I bought about a year and a half ago.
Oh, my God.
Sam knows what I'm talking about.
I know what you're talking about, dude.
I know exactly what you're talking about.
Yeah.
It sounds like we need to do a cruise space in person on one of these
on on a cruise ship carnival no less i'm i'm guessing we'll probably have to do that i'm an
investor in carnival but we'll go in royal caribbean okay oh okay we'll have to rent an
entire yacht or entire boat i'm not gonna ride with the peasants sorry dude um anyways i i think
uh i don't know it might have been nick but i'm right there with you i'm about week three into my
possibly four to maybe six week market assault here so i'm i, I'm in, I'm in, I'm in the last stretch, honestly,
of a million dollar mission, really near term dated contracts. But, um, but this is usually,
honestly, this is pretty typical for the market. And I do think it's easy money. I sent a note to,
to our crew over the weekend and it's just and it's just been nonstop, right?
And we've been hitting bangers after bangers after bangers.
And I'm in the mode where I'm not really into the small caps here.
I'm more in the mid-cap growth still, moving up the market cap scale to like 100 billion plus at the moment.
But it works this way every single time and you know if we're going to
melt up the question i guess is really do do if we're gonna see new all-time highs who takes us
there and how do we get there right and i don't know that it's as simple as um do we broaden out
and do the laggards you know catch, catch up or do, uh, do the
ones that took us here in the first place continue on higher? I think it's just general
multiple expansions. So it's probably a little bit of everything. It's just a matter of when
and where, right? So like who is cheaper, who deserves a multiple expansion at what point in time um and and it does get very
frothy but to i think i believe it was nick's uh point it's a it's a short-lived thing and it
happens every single year and we could be closer to the end than we are you know the beginning but
the setup here and now coming into this look look, we were coming right off of,
you know, the trade wars. We're coming off of, you know, World War III type scare.
The setup is extremely squeezy. So the rally that can ensue can be very violent and my note to our crew was that you know you really actually kind of want to
put your noob hats back on but you need to size like a professional right which means for us it
is near dated uh options because we're an options crew and but it's small position sizes but it's very it's very tactical like it's very surgical
strike type precision and it's like very precise but um but we're hitting and we're hitting hard
and we're hitting fast and and that has to be kind of the thing. I cannot wait around for stuff to, to decide to go. I cannot
be distracted with shenanigans that are like maybe preparing to launch. Like if you're live
and you're, you're in motion, you're live and you're in motion. And I'm kind of going to ride
it till the wheels fall off right now, because that is the easy money. And I'm just going to
roll, roll, roll my contracts until they finally go to zero and by
the time they go to zero quite frankly i don't give a it's sorry from the language but by that
time i have rolled my robin hood contracts up from 75 to 77 to 80 to 82 to 85 to 90 to freaking 95
and i could care less if my 95s go to zero because you know what? I've quadrupled each one of those every single time. And that's kind of how it has to be right now. And you know that, yes, it's going to blow off at some point. But if you have a winner, you just have to continue to move your strikes up. And yeah, things can get super frothy, but that is how it is right now.
Right?
So, so, you know, if you have something that's cool, you cannot not take profit though in
this market because at a certain point, the wheels will fall off.
We cannot go this speed forever.
It will come to an end, but in the meantime, enjoy the party while it lasts because it's not going to last forever. It will come to an end. But in the meantime, enjoy the party while it lasts because
it's not going to last forever. So that is the sentiment at the moment. And it's a very special
type of situation where we need to make it count. So right now, the focus is absolutely making sure
that this special moment absolutely counts because it might not be,
it might be the last moment that we get for a long time.
And I need to make sure that this counts.
But that's my sentiment.
Beautifully said.
Chris, back over to you.
What's your market sentiment thoughts?
We'll do a couple minutes on this.
We'll hit Gavin, Jordan, and then we'll get into the picks.
Yeah, I mean, the markets are running. Today, one of the core focuses for me was trying
to understand some of the new products that Hood was coming out with. And I think at this point,
everyone is confirming that we are going to see the digitization of basically the transfer in the financial services industry.
This is being heavily promoted by our government as well with stablecoin legislation.
And I think one of the reasons why, even with the big, beautiful, dirty bill,
whatever anyone else wants to call it, I don't care.
Yeah, it may raise the prospects of higher future deficits. But then the real curious thing is then why did the treasuries go down
today? Yields went down. Why? And I think what it is, is the stable coin legislation is definitely
going to cause a lot more liquidity being driven into the U.S. dollar.
And if that happens, that means that all of these stable coins are going to be buying up treasuries.
And I think the bond market's figuring that out.
And yeah, I think the U.S. dollar primacy just pretty much got secured by this administration.
I mean, one of the things that everyone was concerned about is oh the u.s
dollar it's you know it's not going to be the world reserve currency well the u.s equity market
is the the best equity mark i mean the most uh broadest market in the world right now and then
if you add the if you kind of like combine the those two aspects you're going to get yourself
pretty much the u.s being the dominant economic force
at least for at least as far as i can see so everyone who's going to be buying on robin hood
when you think about that that chain let's say you're you're in you're in europe right now and
you want to buy some apple and if you want to do it through the robin hood platform well you know
you take your euros you convert it to usd usd buys the stock and then they put that in a holding pattern and then they issue tokens.
Well, the thing is, remember that euro had to be converted into US dollar to buy it.
So if we do see more and more of technologies like this being adapted and most of the stable coins being denominated in us dollar that just just goes to
show that hey wait a second there's probably going to be a lot more demand for us dollars and
coincidentally uh us treasury so yeah i think i think this is a a big sea change in how things
are going to happen um i know a lot of countries on the planet that they use us dollars even though
that's not their currency because they've never been able to kind of have a stable currency you know you go around the world it's either they use us dollars
or they peg their own local currencies to us dollars so this this debate on us dollar primacy
every day that's going by with this administration i'm starting to see that they're actually um kind
of solidifying that and the way that they're doing it through decentralization with crypto and, you know, with blockchain,
I think it was a very smart move from our side.
And I think future generations will thank us.
Yeah, that's about it.
And other than that, not really much else.
I mean, there is a couple of sympathy plays that are worth looking at with this whole
robin hood thing but i think um i think that's something we could probably discuss in in the
future once like more data comes out so yeah beautifully said chris thanks for the rundown
gab or jordan do either one of you want to toss in a couple quick thoughts and we've got about
19 minutes to the top of the hour to start jumping into picks.
I mean, not too much to add from me.
We're soaring at all-time highs.
Intraday trading becomes a little bit tougher, as we both know, Emp.
But I think it's still been pretty great, to be honest.
We still got VIX in a decent spot,
even though it's slowly getting drained out.
But really, it's just a matter of, I mean,
now I don't have any high timeframe thoughts. It's like, we're just drifting higher. And however far this thing wants to go, it'll go. I'm ready for it to, you know, whenever it does want to pull
back, I'll be ready for it. But it's really just taking it day by day truly now, even though I know
we kind of already do that as day traders. But it's just like, I'm always, I'm always, I always have that high timeframe, you know, bias perspective in my, in my, in the back of my mind as well. So, um, not having that now, it makes things interesting, right? You just really got to take it by the intraday, which is fine. I use the overnight levels and does the same. It does very similar stuff for me, right? Just smaller moves, but overall, just tougher ranges to deal with.
But I think price action has been really clean. And I guess, you know, got to stay bullish until
this thing wants to actually give us a reason to not be. And I haven't seen that yet. I think just
intraday, some intraday shorts here and there, but even then for me, not really pulling the
trigger on intraday shorts. I've been playing long. So yeah, we'll, we'll see how it wants to play out. But I
just think it's hard to catch shorts when we're not really getting delivery from anywhere. There's
no price action. There's no data to the left of us. That's giving us any sort of clarity there.
It's just like, we're going to reject at some point, you know, and we got to be ready for that.
And it'll be nasty when it does come, but either way, I just think we got to stay bullish until it does, right?
Until we have a reason to not be.
So going to stay rolling with that.
I don't know if that is going to be the way my picks go this week.
I'm trying to decide what I want to do, if I want to chance it or not.
But we'll see.
Just got to take it day by day right now.
And then, of course, if you're more on the swing trading side of things,
if you've been swing trading, you're probably already in in positions like paper just kind of rolling out of positions there so i would say uh
i would say that's where you just kind of hang on and you know write it as long as you can to be
honest i don't really think you can be putting on too many new positions up here uh except for just
the intraday trade so that's my thoughts right now just tough if you really want to try and get a new position or find a reversal from here it's just not it's not what the market's given
beautiful dav anything from you before we jump into the picks
yeah i'm excited obviously at this market um first off thank you everyone that shared out
the space out the paper gains building the mystery with the what am i out to Paper Gains, Building the Mystery with the What Am I Gonna Pick quote tweet.
Should be a good time.
I think I got a good sleeper today, actually.
He's always got a good sleeper.
The king of sleepers. Everybody go ahead and share out those. Share out
the space, though. Hit it with a retweet. Would love to
have your followers in here. These are about to be some legendary
picks. Obviously, it was a pretty crazy
week this past week. If you added
up all our picks, the average was over six percent return in one week so not too shabby for comparison i'm pretty sure
it's buying qqq uh qq was pretty flat over the last week and spy was up but a percent something
like that so not too bad at all excited to see what continues to happen here um hood i mean everyone
touched on it but yeah i mean this is like it's just a volume
play right it's like hey if you open up all these new markets so much more money is coming through
um and that's going to be obviously some big money as well hopefully from those crypto areas
and that's what matters more i've actually had a chance to talk with vlad ten of a decent amount
and i've also gotten a chance to talk with ceos of other pretty large brokerages and it's not
necessarily about individual users it's about assets on platform. And that's what this opens up. And I think that
that's where people aren't necessarily seeing the vision of how much money is going to be able to
enter the ecosystem. So should be pretty freaking cool. Shout out to Sam Solid, did a whole write
up on hood that we posted from the Wolf Financial page. And I pinned to the top of here as well.
And then, yeah, this market just continues to go.
You hear people whisper 2021, 2022, right?
It gets a little bit scary.
So I think just continue to keep an eye on market conditions.
I think the difference here, the biggest difference is,
you know, keeping an eye on quantitative easing versus tightening,
rates rising versus falling,
just understanding market economics as we continue to go
and being flexible. So, yeah, exciting times exciting times turn back over to you um beautiful i'm not gonna add
anything i don't think there's much we can add i think you guys covered it perfectly and we've got
just about 15 minutes so we're gonna fly through these picks a little bit here and we'll start with
our current champion sam solid sam what are your two picks for this week? Do you need me to hand you one this week?
I think you got it.
I'm going to go with all in SQQQ.
No, just kidding, Ron.
I'm going to need confirmation
before I do something as crazy as that.
I appreciate the shout-out, Gav.
Yeah, go ahead and check that out, guys,
in case you missed the Robin Hood event today.
That was a wild one.
I'm just still, like still astounded by it.
Anyways, what I want to go along is ticker symbol.
I think it's AAPU, which is a two times Apple ETF.
That one, I think it's possible Apple might go on a run.
Very bullish on the news that we heard toward the
close i feel like this was um kind of recycled news in my opinion but uh maybe this kind of
gives a confirmation on apple side that they're no longer gonna try to build try to build their
own ai model uh which is great because then now they don't have to spend all that money they could
just focus on delivering new iphones um but even from a technical perspective, it's possible they might break out here. They've been in a range of the 195 to 210 area. If they do break out of this range,
we did see a lot of volume into the close today. It's possible that we might get a breakout
targeting about 225 possibly in the next couple of weeks, but maybe the large tail of that
might be in the next week. So hopefully we do continue to see that. One of the strongest MAG7s stocks out of all seven of them.
So, you know, hopefully we're going to get that burst out there today.
Also want to go along Irene, I-R-E-N.
That is a Bitcoin mining company or crypto mining company
that focuses more on using renewable energy resources.
On the back of cores being acquired.
And no, I'm not stealing this from Stock Talk.
I was actually looking at this.
He did provide the catalyst for it, which is great.
So hopefully he keeps buying,
so that way I might be able to win this week's competition.
But yeah, so I'm going to do AAPU 2x Apple and IREN.
Perfect. Got that, Sam. perfect got that sam solid you took aapu 2x leveraged long apple and ir en uh second place
is me i'm gonna take meli that's mercadolibre and the greatest retailer in the world walmart wmt so
m-e-l-i-w-m-t from me um Chris Patel, third place.
You're up next.
What are your two picks?
So I'm going to go with something I personally will not buy in my own portfolio, but I think
it's going to do well.
SBET, S-B-E-T.
I'm just not a crypto guy, but just seeing a lot of interest in this thing. And I think with this whole Robinhood thing, I think we could see some Ethereum buying in.
So I think if Ethereum starts riding up, this thing could really do well.
So SBET is one.
And the other one is I'm just going to stick with what works.
So NCLH, Norwegian Cruise Lines.
Norwegian Cruise Lines.
All right.
All right.
Chris Patel with SBET alongside
and NCLH running back.
That's Norwegian Cruise Lines there.
From Chris Patel, thank you, sir.
Appreciate you joining the show as always
and great job on that podium spot.
And let's keep it going around.
Nick Drendel, we'll go over to you
and then we'll hit Ben.
All right. Andrew took my first pick with MSTR. So I'll go HUT on the long side.
Really nice kind of gap up, strong close today. If Bitcoin can actually get moving,
this has shown multiple times that it can make really drastic moves in the short term so
hopefully that plays out um we're gonna go h-o-h-u-t excuse me to the long side and then
i am gonna do a short uh i'm gonna go a-e-v-a short and like i said earlier in the in the space
i think this is going to be a tricky week to pick because we are extending the short term.
And a lot of these kind of names are getting quite, quite extended.
But the last, like typically the last move is the most vicious.
So I'm trying to see if we can get a gap up, a big move in the morning tomorrow, and then reversal as a potential short on this name.
But if you're actually playing this, like I said earlier, you want to stay on the side of the VWAP.
You cannot stay wrong trying to short an extended stock in this market because we are risk on.
We are seeing speculative stocks run right now.
So make sure you're using a stop,
make sure you're using position sizing correctly.
But this is the name that is getting quite extended here.
So a gap up and fade either tomorrow or the next day would be a nice entry.
Very interesting. I was wondering the only short picks we've had in
quite a while are Jordan shorting the inverse. So interesting. We finally have a short. I'm
actually excited about that, Nick. That's Nick Drendel there, H-U-T on the long side,
and then short A-E-V-A. That is AVA Technologies on the short side.
Appreciate that, Nick Drendel.
Ben, let's go over to you from Story Trading.
Okay, so I did come in last place last week, minus 3%.
And the reason I mention that is because last week was actually my best week of the year.
Up 20% last week, up 5% today, now up 300% year to date.
So these weekly competitions are tough, right?
And definitely not necessarily representative of returns.
You know, last week we killed it on Core Z with a Core Weave pending buyout, hopefully.
So C-O-R-Z, I mean, many, many, many people in
our community made six figures each on that. We're in this very early. So it's tough right now.
There's so many things cooking. And I'm saying this all as a preamble to my pick here might not
work this week, just like cores, you know, from week to week didn't work. I didn't know it was
going to be last week that it exploded. And it was my largest position um so i'm going to give you
air as the first pick aehr so aehr we talked about this on the the 1 p.m show um special place in my
heart because it was my first and so far my only seven figure returnure return. But AHR, I rode this from $2 to $25 a couple years ago.
And I'm back in it.
I added it to my short-term and long-term account recently.
I kind of overlooked this major catalyst on June 3rd.
You can go look at the chart.
Maybe it was June 4th.
There was a major catalyst that
was not in a, you know, you'd have to look for it.
It was the Will and Blair press conference, Will and Blair investor conference.
And at this investor conference, the CEO, Gane Erickson, was the most bullish I've heard
him in many, many, many quarters.
So I expect the stock to continue running up into the earnings
report which is mid July so two weeks from now so it could be you know maybe
I mean we only have a few days right because it's gonna be tough like I don't
know what's gonna do the next three days but in any case yeah air is one of my
newest swing positions I added in size those call options options and common shares, both in my short-term
account and my long-term account. Will it work by Monday afternoon? No clue. All right? Probably
not. Okay. So that's one pick for you. Second pick, I got to go with a sympathy play on cores.
So I've been, like I was trading these sympathy plays today like riot and galaxy
and uh cifr um and i'm just talking out like figuring out which one i think someone just
added iron right i think someone just chose correct yes sam took iron all right so so that's
one of the simplest plays for cores let me go with go with—I'm going to go with Riot.
I'm going to go with Riot because there was a note out.
I put this in my PDF this morning.
Let me tell you what analyst it was.
J.P. Morgan.
J.P. Morgan favors Riot over Coors.
It says owns more computing power than Coors and trades at a
deeper discount to Coors.
All right.
So I had a good strong day today, up 7%.
The whole sector will explode, you know, if that deal is confirmed, depending on what
the premium is as well on Coors.
But I'm hoping that Coors deal will close before July 4th.
If not, maybe by Merger Monday,ger Monday, coming into our show next week. So I think
Riot, Iron, Galaxy,
CIFR,
this group is a really good choice
for this competition.
It's only a few days.
What do we have? We have Tuesday.
It's only a two-and-a-half-day competition.
Right?
You throw in Monday.
Three-and-a-half days.
No. Wait. Tomorrow's Tuesday. We have Tuesday, Wednesday, half of Thursday. right well you throw in monday you throw in monday three and a half days no wait tomorrow's
tuesday oh tomorrow's tuesday wednesday we have tuesday wednesday half of thursday and all of
three and a half day competition i do like this uh this sector this high high performance compute
bitcoin miner um sector so we'll see how that works out so air ahr and riot ahr and riot both
on the long side from ben over at story trading i am doing a tweet with
all these in here so i'll get that posted and pinned as soon as we get the last ones picked
in here paper games you're up next oh i'm up okay um so who who picked apple already? Sam took AAPU.
There's another one.
There's AAPX.
AAPU.
AAPX?
What's AAPX?
It's 2X Leverage Long Apple from RecShares.
Okay, well, so AAPX it is.
That's the obvious play, right?
It is the first day of July tomorrow.
You have to kind of be long, Apple.
Everybody and their mother should know that.
The hedge funds know that.
If we're going to melt up, listen, Apple really is at the lows.
Trade location is important.
This thing cannot go down.
It's in every freaking ETF.
It's just going to melt up.
But Apple also has a 93% probability of being green for the month
with an average return of 7.9 in july over the last 15 years that's the hard stat so the odds
are in your favor and it's not really fair because sam's in the crew so he already knows we're super mega long apple but um but damn what a candle at the close
today um anyways then the next one is kind of my sleeper and i gotta give props to one of our list
one of our members his name is gr but this guy has been been bugging me on this chart for, oh, why am I beeping here? Sorry. For, I mean, probably months, maybe, definitely
weeks. And every time he asks me about this chart, I'm like, it's not ready. It's not
ready. It's not ready. I'm an options trader. And I look at the chain like all the time
and I'm like, dude, stop asking me about the chart. But, um, but I look and this last time I look and I'm like, this freaking option chain had lit up like a goddamn Christmas tree.
And I was like, oh my God, the chart has been primed for a while, but it was never really triggering.
never really triggering last Friday it did trigger and I swear I've never seen a dead
option chain light up like this before until last week and it was just a it was just a
no-brainer hammer at the open the thing goes up six percent this is day one the ticker is
kava I think in general uh across the board this is is part of the broader melt-up.
It's a growth stock.
It's not your AI boom or anything like that.
Trade location, again, it's way down there, but it's a huge move.
I think it can get legs.
And this one has been dormant for so long.
Day one boom, it can carry through.
Probably got a little of attention today but i think if this continues it it can be it can it can get nasty so second
second pick kava for the win all right but for the way chipotle part two man i'm i any look at
look at across the it was weird Chipotle's breaking out right Walmart Walmart
Costco even today failed breakdown so the two primary
Primary setups like failed breakdowns and then of course the breakouts but like Melly
Obviously looking really good Walmart today was looking really sus and then all of a sudden
And then all of a sudden, it flips.
Flips and it's like you're gonna break out
And it's like, you're going to break out?
So I think this is part of the broadening out.
And if the market wants to hunt for some value that's like, oh, I forgot about you.
I used to really like you.
Yeah, they're going to swoop it up.
And I think Kava is one of those names that they're going to see and be like, oh, yeah, I really like this stock.
And it's primed
you know also also that's part of the iwf uh russell 1000 growth and i think today i'm not sure if it's still date because logical saying it earlier is that the iw hasn't closed about the 200
day moving average for the first time in a long time so So could be primed for a breakup of that entire ETF,
which will definitely bring Kyle up.
So we'll see.
All right, Ben, go ahead real fast.
Yeah, I got it.
I got to run,
but I think we forgot that last week you mentioned the second half of the year pick.
Yes.
We're going to move that.
We're going to move that forward to next week and we'll just give everyone
the heads up.
We are going to do second half picks.
We'll do that next Monday,
second half picks.
So go ahead and get your picks ready.
If you can't make it next Monday,
send them in to me,
DM me,
DM the wolf account or the group chat,
whichever one second half picks,
two tickers.
So great thought on that,
Ben,
appreciate you joining today.
And to recap real fast,
paper gains,
a P X and C a V a Kava were his two picks. And to recap real fast, Paper Gains, AAPX and CAVA, Kava, were his two picks.
And Jordan, let's get two picks thrown in real quick from you.
Yes, sir.
Not much to go off of with, you know, things at all time highs.
So I'm actually going to pick some individual names.
We'll go 2X leveraged Amazon long, is amzz i believe yeah amzz the granite
shares and then i'll do ub rl uber 2x leveraged long i think uh the ub rl and uh yeah so we're
switching into individual names for the for the week i'm actually kind of shocked i i don't know what to do with cues right if i try a short or
coming from nowhere except for like whatever the previous high might be and then it's like
if i'm trying long i ain't trying long where we closed on a monday from today for the comp so i'm
just like okay we'll go we'll go with something that's lagging maybe that's trying to get back
to the upside i like apple though apple's a good one i just got taken but uh apple's a great one this is the this is this is one of the first weeks you're
not bearish i think we're all gonna get smoked now hey yeah no i'm rethinking my be ready for it
i'm ready for it intraday these are just my weak picks i'm ready for it but i'm afraid this market
just might continue to drift higher gosh it just, these all-time highs, you know?
So we'll see.
Either way, I'm ready for whatever price action comes.
We'll play whatever.
Maybe it's going to be the summer of love.
I like the sound of that.
That sounds way better, actually.
That sounded way better.
All right.
AMZ, you picked AMZZ, correct?
AMZZ, UBRL.
UBRL.
I always think of URL in that one.
Okay.
AMZZ, 2X leveraged Amazon and UBRL.
I almost went with Uber in my pick too.
I really like that chart.
2X leveraged Uber on the long side from Ace the Kid.
And Gav, that brings us over to you.
Yeah, just a quick note before i go um ed uh kovalik uh for our next space if you're able to i see you in the audience if you
can hit that request to speak button that's in the bottom left that'll let me get you up on stage
and i can get you on as a speaker we should be good to go um with that being said, I am going to say if it ain't broke, don't fix it.
100 billion market cap, here we come.
Did anyone take ROBN?
I didn't hear ROBN taken.
Not one person dipped their toes in the hood.
Yeah, in the hood, nice.
In the hood, Robin Hood.
Yeah, I'll take ROBN, double leverage Robin Hood. Yeah, I'll take ROBN, Double Leverage Robin Hood. We just emailed out that write-up from Sam Solid on why we are continuing to be bullish there. So I am going to stick in that area. And then, you know what, I'll do something a little bit interesting here. Let me see. Yeah. All right. I will flip my second pick and then we'll roll into this chat with Ed and others. I'm just going to go ahead.
Has anyone taken QQQ?
No, nobody took D&D.
I finally didn't take it.
Yeah, for once, Jordan left it.
So what, TQQQ?
All right, yeah, I'll just take TQQQ.
15% last week.
Still TQQQ, not at all-time highs.
Funny how that works with leverage leverage but not quite there yet
so i like the upside here we'll see where this goes beautiful so wolf financial mr gav there
robn tqqq bull trade finder mr knots uh he had something come up but he did send me he's
similar to jordan amzu so. So Amazon leveraged an SE.
And I'm going to tweet this out right now.
And Gav, I don't know if you want to introduce Ed for us so we can jump into it.
Yeah, I want to give a big thank you to all of my favorite stock pickers up here.
What a week for everybody to the audience.
If you're interested in the market, stick around.
We've got a great conversation coming up here.
And we're going to keep things rolling. We've got a few new speakers that will be jumping on stage. I see Snipe in the market, stick around. We've got a great conversation coming up here, and we're going to keep things rolling.
We've got a few new speakers that will be jumping on stage.
I see Snipe in the audience, and I believe a couple others are going to be joining us.
I think Jordan's staying up here to co-host with this with me.
Thank you, Paper.
Appreciate you.
Thank you, Chris.
Appreciate all of y'all.
Let's go ahead and get right into things.
So obviously, the theme of the market lately, really the theme of the year in the last month or so, has been all this war stuff that's going on.
And that's led to a ton of interest in a raise in oil specifically.
And so I figured what time better to bring in an expert on this industry than now.
And so that's why we've got Edward Kovalik joining his firm, Trades, under the ticker
P-R-O-P.
That is PROP, Prairie Operating Co.
Nice little 3% actually jump here at after hours already on Prairie.
Kind of looking at that right here.
I'm going to change the title to space to reflect this unless you want to go ahead and
do that.
But and I'm going to also I'm super excited to be working together with that.
I'm going to read off a couple of disclosures.
But before I do that, Ed, would you like to give the audience just a quick introduction
and background of yourself?
See if I can hear him.
You might have to tap that unmute button.
Make sure that you are in a place where we can hear you.
I see Lou coming up here as well.
I see it trying to unmute, not hearing him just yet.
I'm going to get get Lou up here as well. Lou is going to be perfect for not hearing him just yet. I'm going to get Lou up here
as well. Lou is going to be perfect for this too. Lou, how's it going?
Good, man. Thanks for having me. Sorry, I'm a few minutes late.
No, you're good. We're just getting started. We're going to introduce Ed there, but we're
unable to hear him. Ed, maybe try reloading the space. Just drop down, close out the app,
reload it, come back up, and you should be good to go if we can't hear you now. With that being said, Lou, I already just gave a quick intro
of Prop. Do you want to give a quick instruction of yourself? I'll read some disclosures and we'll
get rolling. Yeah, that works for me. So, I mean, I've joined a space with you before. I'm a lifetime
investor, analyst, came out of Morgan Stanley's private client group, have always been a small cap, micro cap guy.
And find myself a couple of years ago digging into the oil and gas space, met some common investors in Prairie.
And then I watched Landman and became an oil and gas guy in the beginning of January.
Now, look, I think I've always been a contrarian.
There's a unique setup in the oil and gas space that's going on in terms of just the
waiting in the S&P 500, undervalued, underfollowed.
And there's a unique opportunity, which is why I decided to join the team in a company
that's rolling up producing oil and gas assets in a place that people don't think about.
And that's Colorado.
It's one of the more prolific producers of oil and gas.
And just excited to be a part of the team.
Ed's going to really share the overview of what we're doing, how we're going about it,
and hopefully it resonates with some people. Beautiful. Ed, I think we got you now. How's
it going? I heard him there for a second. I heard him drop something. All right, Lou,
if you want to text Ed, just have him reload the space and come back up.
Can you guys hear me now?
There he is.
Beautiful.
How's it going, Ed?
Sorry.
Technical difficulties.
No, it's great to be on with you guys.
Happy to give some background.
I actually started my career as an investment banker, not to date myself, but I banked sort of the first generation
of shale companies back in the late 90s,
just as the technology was evolving and emerging.
And I've had the pleasure of starting
and monetizing several shale companies in the past.
And we launched Prairie two years ago,
really with a very specific vision around consolidation
of assets in our neck of the woods and happy to dive in.
Beautiful, beautiful.
Okay, right before we get started, then quick note here, this, I love bringing publicly
traded companies to these spaces.
I think that there's no better way to get the transparency and start you due diligence
and use this as a great place to start that due diligence funnel.
We'll get some information pinned to the top of the space as well for people who want to
dive deeper into that research.
With a quick note here as well, this advertisement for PROP is a paid advertisement.
It's intended for informational purposes only.
It's not a recommendation or endorsement of any specific stock or investment strategy.
Investment stocks, of course, involves risk, including the possibility of losing your principal. Always conduct thorough research,
and if you feel the need to, consult a licensed financial advisor before making any investment
decisions. With that being said, let's dive into the good stuff here and really uncover what makes
this firm special and why people should be paying attention overall to this entire industry. So
let's take it from the top here. I'm going to
throw this first one at Ed. Lou, feel free to jump in at any point that you'd like with any
questions and different pieces there. Let's take us back to the inception of Prairie Operating Co.
And of course, what makes any good company a great company, which is solving a problem.
So what was the problem or the opportunity that you saw in this oil gas market that led you to
launch this venture?
So going back a couple of years when we started the company, kind of going back in a time machine and remembering those times, we had just come out of COVID and oil, for everyone that remembers
this, actually went negative in value during... I'm sorry, I lost you there for a second.
And so after going negative in value, the industry bounced back.
And the hottest place to consolidate assets was the Permian Basin.
But of course, like any other asset play, the Permian just got very, very busy.
And the more buyers, obviously, you have, the more expensive everything gets.
And by the time we started Prairie, everything in the Permian became so inflated in price that the returns that acquirers were tolerating was just, you know, way below our hurdles.
was just way below our hurdles.
And so typically, we calculate our returns
on both what we call a half cycle basis
and a full cycle basis.
The half cycle basis is just the economics
of drilling wells,
what it costs you to drill a well.
His down is cutting out a little bit it's not it's not you guys don't worry blue sorry i'm happy my phone my phone's cutting in and out there so um so as i was saying you
know the returns in the permian just got very low and we had to look at other basins that we thought
were really interesting where we could make considerable returns of drilling wells but
also acquire things really deep in the money.
And the DJ basin was really the only place that we could find in the country that was oily, where you can generate 70% liquids and not really a gas play.
Yet the economics of acquisition were still really, really low so that we could make the kind of outsized returns that we wanted to make.
That's nice. That's succinct.
Kind of leads directly to saying, hey, here is a clear problem.
Here's an area where we saw a potential answer. So let's get into kind of the reason for urgency
here. Based on your background, you explained you're an investor first, right? And understanding
there's a problem here. There were a couple of challenges still facing this industry, right?
ESG narratives, EV ev transition a lot of different
pieces so you know wanting to understand that you come from a place of saying i want to take
money and turn it into more money right why choose oil and gas i understand that there's
a problem but there's a lot of you know headwinds to that problem
i don't know if i'm cutting out at all.
Yeah, there you go.
Yeah, at the time we started the company, the ESG narrative was sort of at its height,
like oil was an obsolescent asset and nobody would need oil come 2030. And so there was a lot
so much so that investors that we talked to three years ago felt like oil was an obsolescent asset and nobody would need oil come 2030.
of education on our part around the fact that there's never been a decline in oil demand year
to year, except for two instances in human history. One of those was the credit crisis in 07,
where you had a small blip in demand and then oil showing its elasticity kind of
climbed in demand immediately thereafter. And then in COVID, when everybody was forced to stay home,
and then you saw the same kind of elastic increase in demand immediately thereafter.
And so there was a lot of educating on our part around the fact that demand for the commodity increases every year and its uses span everything that makes our modern life modern and livable.
It's not only just energy, which is not just, you know, powering your home, but it's. yeah
Lou whenever he cuts out I might have you jump in
yeah no that sounds good I'm not sure
just technical difficulties right technology is great when it works and
stinks when it doesn't I think think, you know, Ed's just really pointing out, which I think not everyone does because the ESG narrative was so strong and wasn't combated, that fossil fuels everything.
I mean, no pun intended. If you think about all the things in our life that we enjoy, you're probably using them right now.
And they're all a byproduct of fossil fuels and fossil fuel exploration. There's a great scene in Landman that really drives that home. So I think
the key there as an investor is that there's always a fundamental demand for fossil fuels.
So Ed and the team had the vision to understand that eventually the pendulum was going to swing
back the other way. And we're starting to see that now. So they laid the groundwork
by putting the company together before you saw a change in administration,
a change in attitudes and a change in focus on fossil fuels.
Got it. Thanks, Lou. Em, do you want to jump in?
Yeah, I'd love to jump in and ask Lou, Ed, both. Where are you guys doing this? When I think oil and gas, I think Permian. That's the
thing that I always hear. Where are you guys located at? Is it Permian? And if it's not,
what drew you away from Permian?
Yeah, Lou, you want to take that until we grab that back?
Yeah, no problem. We are exclusively in Weld County, Colorado. For those
that are unaware of the geography, it's northern Colorado, the northern corner that will give you
an idea where they are politically. They tried to secede to Wyoming a few times. So all of our
acreage has been acquired there since the foundation of the company. We anticipate being a single basin company for the foreseeable future. We mentioned, I think
maybe in the intro, we made a recent acquisition that brings our total
acreage to about 55,000 net acres there, roughly the size of Miami, if you want
to put it in that perspective, and still see a lot of acquisition and organic growth potential in that basin.
So, Lou, where are these different regions?
Permian is the one I think most people know, but what are the different regions and why did you select that one?
I think we got Ed back there, too. Ed, did you want to take that one?
Yeah, sorry, I've got an incredibly unreliable audio setup here, apparently.
Sorry, I've got an incredibly unreliable audio setup here, apparently.
So we picked the DJ Basin because the returns are the highest here compared to any other
basin but the Permian.
And there is still quite a runway of assets to buy.
We've bought nearly a billion dollars of assets in the last 18 months, for example.
And that's really where the rubber always meets the road
is economics as a company.
You know, we're big fans of this area because there's some interesting dynamics
at play compared to other areas besides just M&A.
But with respect to M&A, there is no other oily basin
where you had the cons...
So, we looked at the Eagleford, for example, in Texas,
we looked at the Williston in North Dakota,
and both of those basins were highly consolidated.
So that's kind of what led us here, if that answers the question.
Hey, Ed, why don't you give an overview of just the cost differences for just drilling and completion like Permian versus DJ?
Because I think that will really drive home where the value is here as well, not just the opportunity to roll it up.
Yeah, for sure. So, you know, in terms of
economics at the drill bit, you know, our range of proven inventory returns anywhere from 30%
on the low end in IRRs to over 100% on the high end in IRRs. And it's not because the amount of
oil in place is greater than the Permian. It's because the cost of drilling is disproportionately cheaper.
So we are drilling two mile lateral wells for a little over $5 million.
In the Permian, those two mile lateral wells are about twice as expensive.
Our cost to operate per barrel here is, you know, sub $4.
The cost to operate per barrel in the Permian is north of $10 per barrel.
And so those are some of the highlights.
And again, the cost of acquisition here is we're buying things for about a PV-17 on proven
producing reserves on average as compared to a PV 10 in the Permian. So you take all of those pieces
together in the Permian and acquirers and developers are tolerating sort of a low double
digit return. For us, that's just not a sexy enough return as a public company. So, you know,
we like the north of 30% drilling returns and, you know, around the 17% returns on acquiring proven production.
Perfect. I got one quick follow-up. When it comes to selecting this and the analysis and all this stuff,
the way I understand, and there's a lot of technology that goes into all this, and some people, I guess, maybe don't mix those two, but at this age of AI and just
tech and how much it's used and all this analytic stuff, how are you guys using tech?
How did you come to, hey, this is the best spot? And what innovations and stuff are out
there with the technology side of things?
with the technology side of things?
So our drilling rig is basically like an AI-powered robot.
And there's been a lot of innovation in this area that's underappreciated.
But, you know, in the Shale 1.0 times of, you know, 15 to 20 years ago,
the analogy I'd make is, you know, and remember our wells are down about a mile.
So you drill down a mile, and then you drill out horizontally for two miles.
And so knowing where you're at is critical.
And if you don't have that information and it's instant feedback,
you could be drilling out of your zone and destroying capital in the process.
So in prior incarnations of this technology, the analogy would be if you get in
your car and put a blindfold on and hit your gas for the count to three and hit the brakes in three
seconds, take your blindfold off and see where you are, and then just keep repeating that for two miles. Now, the drilling rig is employing AI and essentially able to, in real time, assess
the rock qualities that it's drilling through. That together with imaging, showing all of the
seismic sort of features of the rock, allows you to steer that drill bit in real time,
capturing 100% of the reserves you're trying to capture down there.
Wow, that's incredible.
I had an inkling that AI would be involved,
and that's one of my favorite questions to ask anybody I get introduced to.
Gav, I'll toss it back over to you.
That answered most of my life.
I don't want to hog it here.
Beautiful, beautiful. Yeah, I see we got some hands up, so I'm going to work around the panel
a little bit and take some. Ed, I will note, the sound quality is still not great. Are you
on computer or on desktop? I'm on a desktop. Are you on a computer or phone? Yeah, no, I'm on a
desktop but the audio on the desktop doesn't want to work so it's connecting through my phone you
desktop, but the audio on the desktop doesn't want to work, so it's connecting through my phone.
want to try to join from your do you have an iphone i do okay do you want to try to take a
second to join from your iphone yeah um that might be helpful if you if you have twitter on it you
can stay on from your desktop in the meantime um but yeah i think that that might be helpful so
i'll throw a question over to lou from tropic and then I'll circle back around to you in a minute when you're all set up. Okay. Tropic, go for it. Awesome. Hey, guys. And just a
quick question. So for someone who might be fairly new to the sector, investing in the sector,
explaining, I guess you'd say, your business model, the source of the revenue for how you guys operate in like a
one-liner way that someone could really look at to then further assess what kind of risks are there?
Would you be able to do that for me, please? Yeah, I can do that because I had to figure this
all out in January, right? So I'm a generalist first. So the easiest way to understand it is
we're a manufacturing company. We pull a product out of the ground, run it through our assembly line
and get it to a terminal where we can sell that commodity and product. I mean, that's the simplest
way to think about oil. It's a molecule. It's a store of molecules that's in the ground. We get
it to the customer through our processing and there's a defined market. So unlike technology,
we don't have to worry about finding customers, selling them on anything. There's a price that gets quoted every day. We know that we can sell that product at any given time for as
much as we can bring up. So our revenue is a direct function of how much oil do we bring out
of the ground and produce and bring to market to sell. So if you look at, and so I gave you the one,
I'm going a little bit longer here, just give Ed some time to come back on here. But if you look
at some of our recent news, you know, we've made five acquisitions to date.
After the fourth one, we were producing about seven to eight thousand barrels a day.
This latest acquisition brings us to 30, roughly 30,000.
That's the pro forma estimate. We'll exit the year doing 30,000 barrels a day.
So if you want to get a kind of a back of the napkin calculation, do 30,000 barrels times
the WTI price, and you'll get an idea of what our daily revenue could be on a run rate coming out
of the back of the end of the year. Awesome. Yeah, I appreciate that short, concise answer.
And as far as, again, assessing where risk lies within this are you guys in in any way involved in the discovery
of the oil or is it just you're going where proven reserves are and then extracting it
and just getting it to market that's that's a great question can you all hear me now
much better okay fantastic so we don't acquire any exploration properties. Everything we've purchased is a proven property. And we have a billion dollar credit facility reserves on their books against that credit facility.
And so everything we do is just development drilling as a result.
Awesome.
I think you I'm not sure if you cut out or if you're finished answering the question there, but I do appreciate that.
And I will pass the mic.
I do see other hands up.
And if there's
time i'll circle back beautiful hey chris appreciate you hanging out man what's on your mind
sure um quick question guys what's your break evens on bo on a barrel of oil equivalent i know
chevron at one point i think they're about 50 to 60, somewhere around there.
There was another company,
because I know that a lot of the plays around there are pretty much like taken by the big guys.
And also one other question was,
how much of your production is spot
and how much are you actually contracting?
Sure.
Yeah.
So our break even is around $40
and we're actually surrounded by Chevron's operations. They bought out a company called PDC, which had assets all around us. And so we share a fence line on several of our properties with them.
Their break-evens in our area are a little higher than us because they drill wells for more than us.
We're drilling two-mile wells for a little over 5 million.
They're drilling the same wells for a little over 7 million.
And that might be a head-scratcher for everybody listening.
But big companies tend to gold-plate everything they do.
And so they tend to hire other big service providers
that provide a bundled solution for them where not only do they pay for the drilling rig, they
get all of the chemicals and the drill pipe and casing and frac sand and all of those things as
a one-stop shop. But the company from whom Chevron buys all of those goods and services,
marks everything up. We disintermediate all of the middlemen, so we essentially act as our own
contractor. We purchase sand directly from the mine. We manage the transloading of that sand
and delivery ourselves. We do the same thing with chemicals from the refiner, with casing from the steel mill.
And so we essentially factored out all of those costs.
And so exactly the same rock, same area, significantly less cost per well, which significantly increases our returns, but also lowers that break-even price pretty substantially.
In terms of risk off, we're big believers in hedging.
We don't believe people buy a stock like ours to gamble on commodity price.
Our job is just to lock in the price at which we can produce at the time we produce it. So we're currently 85% hedged on all of the hydrocarbons we've acquired
for the next three years. And those hedges were laid on at about $68 for oil and a little over
$4 for gas. As we put on additional new production, which we're constantly doing because we're
currently completing 28 new wells, we'll hedge the majority of all that incremental production
as well.
Yeah, I'm sure the banks love hearing that, man, because I've dealt with oil companies
in the past who've tried to go more on spot.
And what ends up happening is they have the commodity fluctuations that absolutely tears through their balance sheet and then their cash flow start to
disappear. And at that point, they've got no, and especially if you have a prolonged downturn,
like we did post 2016, man, I still remember my portfolio got whacked. So I've been in that
for a while, but that was not fun. No. And it's look, I mean, at the end of the day, commodity prices is the one thing we have no control over.
So we want to lock that in at every opportunity we can.
Our economics are great.
We also happen to produce a gravity of oil that's in high demand pushing.
So we get about a1.50 uplift in pricing.
And we have great midstream contracts in place so that we can grow our total production as a
company from around 30,000 barrels a day to 100,000 barrels a day on all the systems that
we have in place today with locked-in economics. But the one thing we'll never control is obviously
the price of oil. And the one thing everybody in our industry is always wrong about is predicting
the price of oil. So we're big into hedging all that risk. There's only one thing I learned
investing in oil markets, and especially oil companies, that's only the strong survive.
And that's always the key. Whoever's got the
best balance sheet and they can capitalize during the worst times and consolidate all the ones during
bad times, they end up doing really well. So it looks like you guys have pretty good acreage.
And yeah, I wish you all the best. Thank you.
Great questions. Chris, I appreciate you hanging out with us. Love that. Let's bring it over to a few others on the panel. We've got Lady Trader up here. Lady Trader, do you want to throw questions to the next?
So great work there. Thank you for putting this on my radar.
The question I have is around any emerging text that you guys may be using.
I know there was a little bit of a discussion around AI.
Tokenization is big. I am mostly currently in Web3 and really heavily into crypto and blockchain.
Of course, AI and tokenization is another area of focus for me. So just wondering if you are utilizing any of these emerging techs, especially within the tokenization category.
No, that's a great question and a personal passion, but that hasn't yet cross-pollinated in our industry in any way.
We're exploring ways to do that on a go-forward basis because it's super interesting.
But nobody's done it yet.
I'd love to be the first.
That's really awesome.
I'm glad to hear because you want to be the first.
And that's really awesome because you get a lot of different takes, especially from the companies that are in Web2.
Some companies are like, oh, we're going to wait and see what others have done and learn from their lessons that they have, you know?
And then there are also companies
that wanna jump on the bandwagon quickly.
And I'm glad that you are going to adopt this technology.
So definitely I'll continue to look into
what you guys are doing more.
And thank you so much, Gav.
That was the only question I have for today.
Got it, fantastic.
Thank you, lady trader. No problem at all
there. Let's go ahead. I'm going to circle back to myself, actually, and throw a couple others in
here. I want to talk about the Bayes Water acquisition, because I know acquisitions can
kind of be the lifeblood of this industry. So how did a $200 million market cap company,
your company, pull off a $600 million acquisition.
And how quickly does it transform your company in terms of production, future growth, cash
flow, ability to pay dividends, all these different pieces?
Yeah.
So the deal we did was very unusual in the market, and you've alluded to why.
It was very much a minnow swallowing the whale.
At the time, we acquired the assets from Bayswater for over $600 million. We had a little over 2,000
barrels a day of production, and we acquired a little over 25,000 barrels a day of production.
And the way we did it is, is first just thinking through the financing, you know, having been in this industry and on the street for over 20 years, our team has a great relationship with all the banks.
And the cheapest cost of capital is always, you know, credit from the banks. And so we worked those relationships to put in place our billion
dollar credit facility, which we drew, I believe, about $380 million to close on that deal. We used
a financing from a preferred instrument and from the sale of common stock to finance the rest.
But our aspiration has always been and continues to be to build sort of a,
you know, $3 to $5 billion mid-cap public company. That opportunity is really driven by
the additional deals that are available to us in our pipeline of acquisitions that we continue to execute on, large and small, and through the
drill bit in terms of organic growth. So through the drill bit, we're employing a one-rig program
in the DJ basin where we operate. We're currently drilling wells in a little over four days.
If you can wrap your mind around that, a two-mile long well in a little over four days. If you can wrap your mind around that, a two-mile long well in a little
over four days. So we can comfortably drill about 60 wells a year with one rig, and we have a frack
fleet that matches that. And so that's a significant amount of production that we're continuously
putting on through drilling. But in terms of M&A and growth there, we see deals that range
in size from a few million dollars to about a billion dollars in value. This area where we are
in particular has a very interesting sort of M&A background. It is an area where you had another public company called Civitas consolidate about six different
small and mid-sized assets. Civitas was really trying to design themselves to sell to Chevron.
Well, Chevron picked another bride at the altar, so to speak, and acquired PDC, which kind of left Civitas without a suitor.
And so Civitas' reaction to that was to begin acquiring assets in the Permian Basin with the
thesis that building out a multi-basin mid-cap company was their path to value creation.
But in so doing, they left on the table, you know, billions of dollars in other
M&A prospects sort of immediately in our fairway. And when we started the company as kind of a
head scratcher for us, no one had come in there and recognized that and began aggregating those
companies. And so that's also why we decided to be public because it's really
hard to do a roll up and use currency without being public. And so we're really the only
remaining public company left in the DJ base and being able to use our currency to roll up
the balance of the assets out there.
Yeah, it's really fascinating.
You do not see many doing this.
And I know that it leans into the strategy moving forward for managing capital and continuing to do this.
I want to just dive a little bit deeper under the hood there, if you could talk about balancing
dilution and leverage, right?
Because there's a lot of different moving pieces here.
Sure. So the last deal we did was certainly more dilutive
than we would have liked.
We issued a preferred instrument at a conversion price
of $4.95.
You know, clearly we're out of the money there now,
but as a function of where we know we're taking this company
on a value basis, that's
still massively inexpensive. And so that was dilutive for us. We don't intend to do any
additional dilutive transactions. We are very cautious around the value of our equity and
preserving that upside. In terms of balance sheet, we like operating the company at about
1 to 1.2 turns of leverage, which is where we sit with a credit facility. As we go
bite off other acquisitions, we can lean into that credit facility and use it to acquire.
We're frankly a little bit bigger than we were the last time we did a deal.
So now what we're hearing from targets is very different than what we heard six months
ago and a year ago.
And the big difference is that everybody that we talked to wants to own our equity.
They want equity consideration because when we're able to pick off assets for about two times, the sellers typically want to ride the trajectory that we're on, which is a high-growth model with an under-levered balance sheet.
And that just doesn't exist in this industry anymore.
You've got basically a peer group that's fairly mature,
the result of a lot of consolidation, both pre and post COVID. So the average growth rate is one or 2% in the industry. We're putting up growth rates that are double digits.
And we're not yet at the point of returning capital to shareholders, but we're not far off either and so as a big equity shareholder myself I love dividends and focused on accelerating the company's
path towards paying out a dividend as quickly as we possibly can.
Hey, I'm gonna jump in just maybe to provide some context if we paid or a
prairie hypothetical speaking right this is forward-looking, I'll disclaim that, but if we started paying a dividend that was in line
with the industry, what would that lead to in terms of a re-rate of the stock if we applied
that to just industry averages to help people understand how that transforms it?
Yeah, the average industry yield is about 5.7%.
Average industry yield is about 5.7%.
So, you know, ascribe any kind of meaningful dividend to there, and I want to be careful
that I don't make any forward-leaning statements, but, you know, obviously, if we could pay
out a dollar per share, then we think we've got an $18 stock. And so that speaks to why we
have no intention of diluting anywhere close to where we are right now.
Good point there, Lou. Tropic, did you have a hand up?
Yep, I have a question because I know we're kind of balancing two conversations at the same time.
Of course, there is the investment standpoint looking at stock performance and how it is relative to peers and so forth.
But the question pivoting back towards the business side of it, I'm wondering, right, because as someone, again, who is not an expert on this particular industry, I would imagine economies of scale with the much bigger competitors in the market would give them a massive giants in the space from a business standpoint, not particularly the stock performance standpoint, but the actual running of the business and the operating cost
and all of those different things? Sure. That's a great question. So we are absolutely,
as we noted, a cost-driven business. This is actually manufacturing. We're manufacturing
oil or widgets. Oil is our widget. And so our key is to do it for as little money per widget as possible. And so that economy of scale typically for a company like ours is being able to run one drilling rig full time and one frack fleet that kind of accompanies that rig full time, which is where we are now as a company.
accompanies that rig full-time, which is where we are now as a company.
Most of the smaller companies that are private, the drill, you know, five wells a year, some
de minimis number of wells, they don't have those economies of scale. So they have to pay spot price
for everything, which leads to significantly higher prices per well, typically north of $7 million per well in our areas
compared to our little bit above $5 million per well.
But then on the other, on the flip side, the very large companies, as I noted earlier,
like Chevron and Occidental, they tend to also be kind of high cost operators because they gold played everything and they don't necessarily
grind all of their vendors to a pulp and try to take every dollar of cost out of their operation.
They'd rather just hire a big company like Halliburton to manage that for them or Schlumberger
or whoever. And so for those reasons, they sometimes end up being high-cost operators themselves.
The way we look at it is typically on G&A per barrel and then on your overall margin.
And so G&A per barrel, we're sort of running a little over $2.
So GNA per barrel, we're sort of running a little over $2.
Our next closest comp, Civitas, for example, runs at a little over $5.
So, you know, that's a keen focus for us.
But as we grow from here, we'll be able to maintain the same kind of cost efficiencies that we've accomplished to date.
Really interesting. So the other question related to that, I guess, is since you said that the wells are pretty much running full time compared to a
much smaller company, does that mean you're at max capacity at the moment? So if something,
let's say crazy happens overseas overseas and there's a huge spike
in domestic oil production, do you have the ability to scale up quickly? If so, like how long
would that take you to, I guess you would say, meet that new spike in demand? So for us to grow
faster, we would have to add a second drilling rig and a second frack fleet. The good news for us is that equipment is fairly underutilized in our industry right now,
and in particular in the DJ Basin.
Pre-COVID, there were twice as many rigs running in the DJ Basin as there are today.
So we have, for example, the rig that we've contracted from Precision, they have a sister rig that's designed exactly the way ours is for the basin that's currently stacked in a yard.
So we have, for example, the rig that we've contracted from Precision.
So it's available. There are frack fleets available.
But, you know, I'd be lying to you if I told you we could snap our fingers and kind of get that put to use immediately.
There's probably realistically a 60-day delay to really getting all of that equipment humming in the field
and making sure you're doing it safely,
which is our chief concern,
and making sure you've got great crews manning everything.
So a little bit of a delay, but not significant.
Really cool. And last question I have before I pass the mic again, related to that, because you
always just lead into my next question, which I think is just coincidental, but it just works.
As far as manpower, the ability to find the workers and the trained people to actually do the necessary tasks and so
forth, is there a shortage of that? Do you have to train people or is there like basically a waiting
list of people just waiting to be called on the site? How does that look? Oh, that's a great
question. Nobody's asked me that before, but we're actually blessed where we are to operate because, you know, having operated in the Permian, and I'll just draw the contrast for you.
We were competing with every other company in the Permian. It was very busy. And so, you know, we had a very hard time getting skilled labor.
getting skilled labor. There's also, you know, nothing, no big population centers right in the
Permian. So people have to drive a couple hours. And so we had to build man camps to house people.
And, you know, you've seen sort of a representation of what those man camps are like on TV.
And they're exactly like that. And so you get a lot of,
you know, not skilled labor that's very expensive and all sorts of problems.
Where we are in Colorado is really local to a really like large, qualified, skilled
employee base of operators and welders and truckers and all the kind of folks that we
need to do what we do. And they're local, so they sleep in their own bed at night,
which makes for happy employees, happy contractors. They're safe because they're not
up all night driving forever to get to us and go home so for all those reasons it's uh a great place
to operate from a people perspective
was that did i get the second half of your question i think i think i forgot the second
half there if you can no yeah you pretty much hit it off basically yeah you you have a
supply of workers that are right there locally so that that pretty much answers if you do need
to scale up you'll be able to find those workers they're right there you know that i remember what
i was going to say there's a there's another dynamic which is that chevron having bought
nearly everything around us of scale um they have gone through a recent cost-cutting measure
where they have shut down their Colorado office
and laid off a bunch of...
Oh, man.
...and take the auction, ended up getting laid off,
and so we've had a field day hiring great people
from Chevron. We just hired a facilities engineer from there that's superb. We just hired a VP of
field operations from there, really high level guy that we were just blessed to get.
I'm back in here, Tropic. Great questions. I kind of want to dovetail off of something. You mentioned peers. I've heard Chevron mentioned here a couple times. When I look at the industry, the industry is growing 1% to 3% at best.
When you have these organic growth plans and your plan to grow, I think 10% was the number that I saw.
How are you planning and going to execute on that plan and get that 10% growth number while the rest of the industry is in that 1% to 3% range?
So our growth is driven by our development program.
And we, as a new company, we don't have all the legacy issues
that the peer group has. So, you know, going into, you know, the era post-COVID, most of our peers
had to focus on repaying debt because of the downturn they suffered through COVID. And when
they were kind of done paying down debt to a
manageable level that averages about 1.5 to 1.8 times leverage in the industry, they then were
really forced to return capital to shareholders in the form of dividends and stock buybacks.
And so without any of those legacy issues as a newborn baby of a company, we're really free to deploy capital the way we see fit.
We never got over our skis in terms of leverage, and so we don't have that being a use of capital.
So all of our capital currently is going into the ground to grow.
Now, our philosophy of growth is a little bit more nuanced than that.
And we are big fans of dividends.
And so the way we manage our business is really on a 10-year inventory life basis.
What I mean by that is to say that we've got about 600 proven locations to develop.
And currently, we're drilling at the pace of about 60 wells per year.
And so at that pace, we've got 10 years of inventory with the one rig and the one frack
fleet.
And this year, we're having to reinvest all of that cash flow we generate back into the
ground to maintain that pace.
But at some point in the not
too distant future, really next year, we start to generate significantly more cash than we are
putting back into the ground through that one rig program, which is cash that's earmarked for
dividend income. And so we won't be able to maintain this kind of a growth rate forever,
And so we won't be able to maintain this kind of a growth rate forever, but for the foreseeable
future, we can.
And so, you know, it kind of comes back to why we started this company.
We were looking around at the peer group and saw opportunity to sort of generate a mid
single digit yield.
And that just wasn't interesting enough for us.
We really wanted to multiply our capital invested and generate
alpha before we kind of shifted into a yield model. And so we're really a company that's
marrying two different business models. One on the front end is a high growth kind of get to scale
model. And then the backside of that model, the tail, the nine-year tail in that 10-year
inventory is a cash generation engine.
Tropic, go ahead.
I saw you throw up a hand there.
I love hearing about growth.
I appreciate that answer, Ed.
Yeah, one more quick question.
So obviously we've seen a huge pivot
from the last administration to this administration.
So I was just wondering,
what are you guys looking forward to hedge against?
Let's say the next administration
goes the opposite direction.
Is there anything that you guys can do
to sort of hedge the, the future growth potential
of the company and so that it continues on that trajectory?
You know, uh, I wish, I wish we could come up with a way to do that.
Unfortunately, um, we've never had a great administration to operate in.
I know the idea of drill baby drill sounds great, but it's really great in slogan, but not great in implementation in any way for our industry.
So I'd be lying to you if I told you it was helping us.
In the prior administration, obviously you had the administration doing everything in their power to lower oil prices by dumping all of the oil out of the SPR,
as they did, to try to keep prices down. This administration is obviously also trying to keep
prices down. But, you know, people have been led to believe, I think, largely that oil is expensive
at $65 or $70 or $75. But in truth, there's about $15 to $20 of inflation
that's priced into oil. And so shale, as sort of a new class of production in the oil and gas
industry, was really designed around $65 oil, less the inflation component. So from a true economic perspective, fair market value on
the commodity is probably closer to $80. Now, any administration that says they can't run a good
economy at $80 oil is just trying to find a scapegoat. And there are all sorts of other
reasons why the economy has issues. But oil at $65 is not one of them.
Really interesting.
So what you're saying is we can't believe everything politicians say?
You gasp.
All right.
I'll pass the mic on that.
Yeah.
And look, not to get into politics, but being conservative by nature, I can't tell you that
this administration is actually helping us at all.
It's really interesting.
I don't think most people would have thought that way.
So it's helpful to have spaces like this.
So can you just talk me through, I'm just curious, you know, as we move into maybe the
last 10 minutes or so here at this chat, however much you can share regarding upcoming catalysts
for Prop specifically that you're going to be paying attention to.
Because like you said, right, and then you can explain like there's a ton of recent
volume on this name, but it hasn't allowed it to see that move to the upside.
So I'm just curious kind of on both of those things, however much you can talk to the stock
and upcoming catalysts.
Sure.
So, you know, again, recall that as of the end of March, we were a company that was one
tenth the size of what we are now.
And, you know, the amount that we're growing annually now per year is much, much larger
than the size of our company before this last acquisition.
And I don't think the market really understands the financial profile
of the company yet. For one, we haven't yet filed a consolidated queue and had an earnings call
because we closed the acquisition with two days left in the last quarter. And so this next
earnings cycle for us coming up in August is really the
first one where I think people will scratch their head and not have realized how substantial we are
as compared to what we look like. And, you know, before two weeks ago, we had no analyst coverage.
Now we've got Citibank and some others that have launched on us.
Probably by the time we have an earnings call, we'll probably have eight to 10 analysts, half of those being bulge bracket banks launching on us. So I think there's a moment in
time here where the market just hasn't done its homework and doesn't understand what our true valuation ought to be as compared to comps.
Got it. Lou, do you have any thoughts on that as well?
Yeah, I mean, I think if you look, without speaking out of school, if you look at the
company's history and, you know, we've been a natural acquirer. So I think any additional acquisitions, as Ed said, we're going to do things that are accretive.
So those would be potential catalysts. There's a significant pipeline of opportunity out there.
And Ed mentioned earlier in his remarks that, you know, they span from small bolt on acquisitions to larger opportunities.
Again, market dynamics are always in flux. They always change. So we can't make predictions on when and what and exactly how, but I think that would be
another natural catalyst. And I really think to Ed's point too, is you're seeing the analysts
lay the ground cover of what we could grow into with their price targets, which are all north of
$8 and as high as 16. But we have to backfill that with execution. And the first step in that is reporting that consolidated quarterly report.
And then again, in the next Q, the Q3 results that would come out by mid-November, be able
to show as a company, as a team, that we're executing against the goals, both organically
and integrating these large acquisitions.
Yeah, checks out.
Makes sense to me. We'll see if there's any other questions i did see
you joined up on the panel did you have any questions here that you wanted to throw into
the mix oh my god everybody asks so many awesome questions i'm pretty sure we have everything
covered but if i were to kind of ask for closing uh questions uh where do we where do people find
you how do we follow you how do we follow the company and what you're trying to build?
So we're NASDAQ Traded, ticker symbol P-R-O-P. Our website is prairieopco.com.
We have great materials on the website with respect to our latest company deck and other information through our portal
there. So that's probably the best way to follow us. And we'll be more and more present on these
types of forums and other avenues as well. Love it. Yeah, definitely looking forward to doing
more of these together.
Certainly enjoying the information that I can get.
And there's no better place than to get it right from the company.
And that's what these spaces allow us to do.
And that's why I'm a big fan of them.
They're obviously very unique in what they allow us to do.
So a lot of good pieces here kind of across the board.
Great insights that continue to be shared.
And I'm just going to check back to you, see if you have one or two more questions,
if anything that we haven't hit on yet,
then we'll move in a wrap of thoughts.
I think we pretty much hit everything that I was looking for.
Obviously when it comes to diving deeper into this,
Ani stole my question actually,
I was going to ask exactly how can I follow the story?
What should I be looking forward to? I think both of you hit that pretty well right there.
So that's what I'm most excited about next is, okay, what a great introduction.
I really appreciate you guys coming on with us this evening.
And not only am I being educated some around the willing guest space, but I'm also finding out about a really interesting company that I want to dive deeper into.
So that kind of covered it all for me, Gaff.
Okay, beautiful.
Well, then I think we hit on a lot of these details.
Ed, I want to ask you, is there anything that we didn't touch on
that you think is pertinent that investors should be paying attention to?
No, I think everybody asked great questions.
In parting, I would just say that we're happy to talk to anyone individually.
As questions arise, you can reach us through our website.
But we're really excited about what we're building here.
We think it's a really great time to be doing it.
We're contrarians.
We don't think oil and gas is going away in our lifetime, let alone anytime soon.
And we have a great business that generates a lot of cash flow. What got me most excited about starting a company in this day and age
is the fact that our industry has the lowest valuation multiple of any sector on the S&P,
yet we generate the most cash flow as compared to any other industry on the SMP.
And within that industry comp set, Prairie is the cheapest stock currently. So that's,
I think, where I'll leave you guys. Beautiful. Lou, any other comments you want to share on
this one? Yeah, I would just echo what Ed said and end it with kind of with the punctuation point of that. We have skin in the game. The executive team as a
whole is at about 11, 12% ownership. And if you pull up the latest filings, we've all been buying.
Hires shows the conviction that we know what we're building is not a week endeavor or a quarter
endeavor. It's a multi-year endeavor, but we're excited by it
and we're putting our own capital behind it. Fantastic. Yeah. I will say personally, you
know, I always love investing in great businesses, but I love investing in great people even more. So
I've had the chance to spend a lot of time with Lou now and see what the leadership of this
company looks like. Had a chance to spend some time talking to Ed as well. Definitely the right guys to be running this company.
Super excited to see where this continues to go.
We're going to be monitoring this.
This is not, you know,
the only time that you'll hear about it
on our spaces, on our shows.
You should be consistently seeing us
talking about this company and industry.
So feel free to go ahead
and just add this to your watch list now
so you can continue to watch where it goes.
That's going to do it for tonight's show
ed lou thanks so much for uh coming here and being here with us thanks for having us really
thank you absolutely and i'll turn back over to you yeah absolutely ed lou really appreciate it
tropic lady trader stock sniper ani came in here. Chris asked a great question earlier. Big shout out to the whole crew joining us here on this Monday evening. A great full day of spaces here
around the Wolf family of networks. We're going to be live first thing in the morning. That's
8 a.m. Eastern or wherever you're at. Just adjust accordingly for our futures education and trading
show. We've got some great futures minds coming on like we do every Tuesday morning.
So with that, I'm going to log off for the evening.
We appreciate everyone tuning in wherever you are.
Good afternoon, good evening, good night.
We appreciate you, and we will see you guys bright and early in the morning.
Take care, everyone.
Thanks, everybody. Thank you.
