Big Digital Energy

0:00 Welcome to this week's BDE. We'll be covering the chord inner plus deal. Elliot gets into mining toll brothers flipping a data center for cash. What the fuck do you do reverses on E. B. What are

0:14 you doing? I know it is Northwest or Norway transitioning this week in natural gas and Indonesia's Valentine's Day election. Check out some feedback from I like Josh I shouldn't be being an ass,

0:30 but I was being an ass. Chuck got some feedback from Josh Young that he should do a pre-read at the beginning of the episode about all the things that we're going to talk about. A summary. Let's

0:41 start out using podcast. So Chuck, even I know that. Chuck, hold on, let's do get credit where credit is due. Last week's BDE was the first one that out downloaded Chuck Yates needs a job. And

0:53 it was on the strength of Mr. Young, I think The Josh, the Josh, my beans are plumping it

1:00 Mark and Sal has been in her place. That's the first time the boys have been back a couple of weeks, Mark and Sal's been out. I was out last week. You didn't bring your hair. I didn't bring my

1:10 hair. Yeah, I'm a whole new man. I'm 10 pounds lighter. Dude, I got a lot of feedback about last week's show about how good it was. Really? But then there was another comment that I was, thank

1:19 God, they said Kirk, you didn't talk enough in that episode. Lots of numbers. It's like - My favorite. I know numbers, but I guess I just can't determine the difference between locations and

1:30 acres. My favorite comment was two weeks ago or three weeks ago. We need a whiteboard in here to just walk you through that. It was me. Let's keep it mystery. It was me, Kirk, and Chuck. And

1:41 we came in here with no plan or just bullshitting. And after we turned off the recorder, like, man, our show is so much less - Information dense without my game and someone called us out on it

1:52 like in the comments. We're like this is like way too much Yeah,

1:56 they're pissed. They're mad. Yeah, people have the micro celebrity the numbers guys the nano celebrity or the pico celebrity Look, we're only we're only powerful as a team We can't we can't have

2:08 you missing out like it's a hundred point

2:13 I think there's some military team symbolism and Collins new do Yeah, I know we're going to talk about mining today, but who's going to see the mining movie The mining movie this weekend. What's

2:25 the mine fucking dune part two is out dude. I am so been waiting for this I never saw dune part one. So I don't know. I saw the original dude, which was great But I saw a great meme that talked

2:37 about Something about how the budget was spent way too much on worms

2:43 That was the Is it something I need to watch dune? Do I need to put on the list? I mean, it's about mining, ma'am. Okay. Mining for spice. We have a number of pop culture videos and movies that

2:55 you need to put on your list. Okay, that's what we need to come up with the BDE. Between MA, take downs, watch some culture. So, all right, I'll put it. Issue one, kick us off, Mark, chord

3:08 and inner plus. Yeah, it's the latest in public company mergers, Bakken consolidation, 11 billion in transaction value. I think

3:19 15 million and a half undeveloped acres. The chord CEO, Danny Brown, will be the merged company CEO. Ian Dundas, who's the CEO of inner plus, will stay on as an advisor to the CEO. And

3:35 you look at, I think the profile and duration of headline coverage and maybe I don't.

3:46 get access to or see things that cross the newswire, but where it was broadly discussed or frequently discussed, but it seemed to disappear from the headlines pretty quickly. And one of the data

4:05 points or one of the comments in the press release that caught my attention in thinking about the recent Permian deals is that the performa inventory is enhanced to 10 years at current at current

4:17 activity levels.

4:20 And I'll turn it over to you Chuck for a little back in story time. Now, you know what this is the equivalent of deals wise? This is when you get a friend request on Facebook from the head

4:31 cheerleader in high school that you haven't talked to since graduation day and you pull it up and she's got like 12 kids and weighs 400 pounds. It's like, oh, great. I mean, this would have been

4:43 a big deal 2012. This is when this deal should have happened. Yeah, I feel bad for everyone. Pussing about MA after the Pioneer deal and the Endeavor deal, like anything after those deals is

4:57 going to look less shiny and deals like this. And it's just like, there needs to be one company in the boxing. I mean, you still kind of got continental. I think XTO, the remnants within Exxon,

5:12 you got cracking in there. But at the end of the day, I mean, it's, it's a basin that's in decline. And I think the going to brag on, uh, on Kane Anderson here, we actually came to our Hagon

5:24 Kane Anderson. Did you work there or something?

5:29 Doesn't mean I'd say nice things, but you can find, find replace Kane Anderson with Chuck. Yeah, exactly. That'd be great. Now, but, uh, we, uh, we in effect actually kicked off the the

5:40 bock him with like a bobby lile.

5:43 It's a great story in that literally the only reason Bobby Lyle had the sleeping giant field and the 50, 000 acres there is, it was the only asset he owned that he couldn't sell. He was way over

5:55 lover, he sold everything. This was left, left. Came to us, wanted to drill, had a thesis of drilling horizontal wells, too risky, too scary for us. He got some money actually out of

6:07 Halliburton and went and drilled 9, 000 foot laterals And basically put a glorified acid job on it. He was calling it a frack, but it was just bullhead and acid down in there. And it worked like a

6:22 charm. He was crushing it, drilling these great wells. We backed him, we went from, I think, 300 barrels a day of production to 12, 000 in like 18 months and sold it to Enter Plus, made a

6:37 fortune The former house of Paul Van Wagenen became my house. because of an effect that deal. But that's what kicked the backing off. And the crazy part of that story is the only place a 9, 000

6:52 foot lateral would work with just an acid job were those 50, 000 acres. We went about five miles away, tried the same thing. It didn't work. We said it was a mechanical failure and we just sold.

7:07 And that wound up being the acreage that Brigham picked up and wound up selling because they figured out how to put the blacks on it. Two? The big, I'm blanking the Norwegian. Stat oil. Stat oil,

7:22 there you go. So that was actually the kickoff of the Bakken. I just want to know, in the Williston Basin, do they mine like the Canadians do? I mean, is it basically taking, I mean, does it

7:36 come out of the ground liquid or is it? No, you're drilling wells Yeah, you're, you're, you're, you're, you're, you're, it's not

7:43 it's not Sans. Yeah. Yeah, it's not all sense. The I don't know. They might to your point, they're not being any inventory there. As we started drilling horizontals there in 2001. And you know,

7:55 plus it's smaller than the Permian just in general, but you snort the cut is Austin chalk. Did you

8:13 just yeah, exactly, checks the boomer inside a door meme, one side now here. I did have the privilege of serving on a board years ago with Ian Dundas, which was a great addition to that board.

8:14 He's learned a lot from him. And you know, that's, I think that's a good role for him post merger. Just a really,

8:24 really good leader and really thoughtful analyst. Did you all see this? Sorry. I'm on Twitter. Did you all see this video? I posted of the pump jack at the ball and seat down on the bottom. Did

8:37 you all see this? The guy, my friends that wanted to take the video. He's like, He's taking it and it's a model of this pump jack at the top and at the bottom, you have a ball seat artificial

8:49 lift and he asked the guy by the counter. He's like, it's asking about it and the guy by the counter is like, yeah, when we have our own internal special parts in there, he's like, oh, what

8:57 internal special parts? Yeah, I can't tell you it's proprietary. My friend's like, it's proprietary.

9:03 Strategic. I like Gilmer said something about, he said, yeah, that's two, two levels safer than proprietary and three levels safer than Oh, what was the other word? He said, Alan, dude,

9:15 Alan's got some funny collins on Twitter, dude. He's a funny dude. I mean, hey, Alan's standing invite to come sit in on BDE with us. We don't know if we can beat Josh's numbers. If we had Alan

9:26 in here, that'd be. They just invited me to his to his spread with a piano bar. Oh, yeah, I saw that. I mean, so man cave. Yeah, so I got, I have to invite him back here. That's no, that's

9:37 what we should do Podcast from the video record. Yeah, PD a BDE from the drilling info Dude, the piano bar. The man piano bar. Yeah, that's why I bet he plays mean chords. That's our ass, Alan

9:51 Gilmer. We're coming to Austin, recording BDE. Oh, yeah, we are. From the man cave. All right, so - 'Cause I miss his great, he had the best events, man. He was at his prime, they threw

10:03 the greatest events. Well, he just posted a picture, and it's a limo from Rape, and it was Dolly Parton. And Kenny Rogers, right? Willie Nelson Yeah, you can't - Yeah, you can't - And I wanna

10:14 be in the middle of Kenny and Dolly. I commented, and I said, Is this real? 'Cause it looked like the real people. He's like, The night was real. And he's like, The young lady that hooked up

10:24 with the Willie Nelson and the personator from Las Vegas also thought

10:33 it was real. And I was just like, That's funny. But yeah, they won't get these Vegas and personators to come hang out with them at night, It looked like them. I thought it was them. And it

10:41 would be an Alan Gilmer thing to do. Yeah, for sure. The movie maker. The movie maker. So sorry to get derailed from the core deal, but I don't know. I mean, they're going to merge down to one

10:54 player there. They're going to continue to cut GNA. There's not a whole lot. They say 10 years to drill, which means there's probably five. And it is, I will say, it wouldn't be a bad thing,

11:06 even though it's smaller for an institution to own, because it is kind of your pure-play oil pie out there. You're not going to have natural gas gumming up the works there, just because I don't

11:19 really have much. Like you do in the premium? Yeah, exactly. You know, it's a couple of, it's just anecdotal, but I've been hit up by three EMPs this week about, hey, who do we talk to about

11:31 Bitcoin mining? Because gas prices, you're just getting wrecked and looking forward. new revenue stream. So I think that's interesting because I don't think I've ever had it where so many MPs are

11:43 reaching out inbound. Usually it's, you know, last few years is teaching people about it. But now people are thinking I'm tired of selling. And there's a relevant conference coming up. So the

11:56 power is going to be lit this year. Yeah, if you're not also prices go up at midnight, which is podcasting and come out tomorrow

12:05 You're not

12:08 going to index and power prices. Yeah, I'll get off my soapbox, but I'm just going to say this. You're an oil and gas company. You have cheap gas. You can actually plug in a computer and mine

12:19 yourself. Yeah. Yeah. So yeah, come down power because I'm not trying to show their own shit here, which I need to be better at, but it's going to be bad last time. I wanted to change the name.

12:29 You know, it's in power, energizing Bitcoin. I wanted to change it to empower. We're so back this year. everything tripped and so it's going to be fun. But I think it's interesting. You just

12:40 brought up, you know, the liquids versus gas with that. Like you're seeing a lot of these EMPs that are just getting crushed. Well, we've sat in fairness to us around here to in our own horn.

12:53 Love that expression. Um, no, we've, we've said you ought to be hooked up and you ought to look every day, just like you sit there and go. Do we strip out the ethane, you know, and sell it

13:04 separately? You should do that every day. Do I mind Bitcoin with it or do I sell the natural gas under the pipeline? I mean, it's the same, same capex versus cost, et cetera, decision or

13:18 discussion. You have on every other thing you produce. Absolutely. We should probably get amalgamated sludge. Okay. I mean, orson question. Do they have fast internet and these locations to

13:29 mind Bitcoin? Yeah, that's not a problem anymore. I 2018 that like to used.

13:37 Just asking, it's location now. Oh, wait, I'm sorry, it's a satellite driven, 'cause I know how fast satellite, original satellite internet, you're like, Have you used Starlink though?

13:45 Starlink's fucking amazing. How fast is it? Very fast. You can mind Bitcoin with Starlink. I'm up, I can take Zoom calls on the plane with Starlink. They have it on JSX. You ever flown JSX?

13:56 Fuck, I'm not rich like you guys. It's cheaper to fly JSX than it is Southwest, sometimes to Dallas, it's cheap. Really? Yeah, if you ever fly up to Dallas, you should be flying JSX, but they

14:06 have startling on it, and you can stream calls up there. You're getting like 70 to 80 megs. It's crazy. I'm just saying, when I'm fighting all these other Bitcoin miners and speed is everything,

14:16 it's really the speed of your network that matters, almost as much as your aches. Yeah, it's actually the, well, the speed doesn't - That was my question. If I'm in the middle of bum - You don't

14:24 need fast internet for Bitcoin money 'cause you're hashing and submitting your answers, like you don't need, it's not speed doesn't help you, you need connectivity, So you need horsepower, but

14:37 you think network speed is not relevant. So that's important. Yeah. Yeah. All right. You heard it here. No, yeah. So all right on to mining.

14:48 Yeah, Elliot, I pretty well about mining the Dune. We did. Oh, we did. I already covered it. My name's done. No, it's going to talk. Oh, yeah. But it's not even laughing. He's just trying

14:57 to get the

14:60 topic. You know, I didn't have criticism without me I'm quitting or out to me. You know, the guys that are usually the tangents on the show are guys that probably just really like Mark and they

15:11 tolerate the rest of us. I know one of our fans. Yes. No, that's true. Oh, my gosh. I'm telling you, I'm telling you, I wish everyone else to just shut the hell up so I could listen to Mark.

15:21 That's how the Yates household operates. But anyway, so Elliot, well-known activist announced last week. I saw a summary in Twitter since I don't subscribe to the source,

15:36 They're rolling out a1 billion metals in mining or a chest known as Hyperion

15:44 objectives are under finance, mine investments and possible public company buyouts. And as we've talked about in our mining detours over the past several months and a couple of years, we're looking

15:58 at a global capacity pinch and a lot of the base metals and other minerals that implies that you'll need a multiple of current capacity, not fractions in terms of growth, if we're going to get to

16:13 the Nirvana state that many envision it's big. So

16:22 looking at, and we've talked about this before as well, but these are nifty little comparatives, I found a new favorite tool

16:32 called company's market cap, and it's the largest mining companies which happened to number 223 in this snapshot. Their total market cap, BHP at the top at 144 billion. The total market cap of

16:47 these 223 mining related companies, summer precious metals, et cetera, is 154 trillion. Today, Apple boasts a market cap of 28. And you look at the critical dependencies on everything that Apple

17:04 does And all of its peers on all of the commodities produced and precious metals produced by these companies and others. It

17:17 seems to suggest some opportunity, obviously. It seems to, but we've been talking about that for years, you know, like, I wouldn't want to invest in any of these mining companies just because it

17:29 always seems like the thesis always seems sound, but it is crazy like. I was at Exxon's campus, me and Chuck were a while back, and you see how big that company is, and it's hard to just kind of

17:45 fathom how big those companies are. But then you look at Apple's market cap, would you say it? Apple's market cap was - 28 trillion. 28 trillion. Exxon is 415 billion.

17:57 Like it, you can't even wrap your head around. It's kind of analogous. Yeah, you can't even wrap your head around how much bigger Apple is from a market cap standpoint than Exxon, when you go to

18:09 Exxon's campus and you just like see how big that of is, operation an and then you just think that Apple is literally several times bigger than it. I think when we looked at it from,

18:22 well, you could buy all these top 223 with a

18:28 little more than half of Apple's market cap and you'd have a lot left over to buy. years of supply and copper, et cetera, in terms of money left over. I mean, you might not be able to reach the

18:41 scale of an apple, but basically what this story is representing is people are seeing this huge opportunity because if the world continues to go electric and there's need, all these, you know, the

18:55 energy transition needs all these metals. Common metals, copper being number one and all these precious metals. There's a few great mining companies. Yo, having worked for one for a brief period

19:09 of time, but Elliot's not alone. They've jumped in, there's Orion Resource Partners, Appian Capital, and then interestingly enough, Saudi Arabia has jumped in. They established a joint venture

19:21 last year called Menara Minerals. So everyone's sort of seeing that, let's go after the source I remember when I was working for a computer company. that flat screens, when flat screens started

19:37 becoming, hey, not only flat screens, but we could make these TVs and silicon became a commodity that all of us looked at. In fact, my company, we set up a joint venture to go actually buy that

19:51 commodity directly and sell it

19:55 to the partners that actually made the product and then we'd buy it from them. This seems like just another one of those plays where it's like we need to go to what is the most expensive

20:08 material in the bottom of these cars. It's gonna be, it's the precious metals. Well, let's go make sure that we have access to those metals. Same as the bottom of these cars? Bill of materials

20:18 or, no, not bomb acronym. Oh, I did say that. I was sorry, that's old speed, but I'm just thinking about if these are the most sought out materials and the most expensive materials, I just

20:29 thought you were taking a jab at EVs. He said in the bombs of these cars, I was like - There was a dirt one time in there. That

20:37 turned my mind when I was like, damn, he's talking about EVs. Speaking of EVs, who's, was it Mercedes? Mercedes, yeah. Mercedes in 2021 puts out an estimate that 50 of their new sales will be

20:52 EVs by the year 2025. So it's coming up here in a year. And they just readjusted that target to say, actually that's going to happen by 2030. And

21:02 so moving the goal post here. It was 100 by 2030. Everything they make was 100. And the original, oh, I didn't see that. Yeah, I just saw the 50 number. And there's a

21:15 story that came out today. And with the caveat, as markets allow. Story of the day about both Lucid

21:19 and Rivian, before they were saying they've raised all this capital and they're like, well, we can't build fast enough and they're learning how to manufacture quickly at scale. And they're running

21:29 to all the same problems that all these, you know, the fords of the world of like we've done this for years, get out of the way. But they're finally starting to figure out how to manufacture these

21:38 things. And now they can't find customers. So the market's gone soft. And what Rivian came out and said is that interest rates are high and there's economic uncertainty to unable they're so And.

21:50 offload their cars, but unlike the Mercedes Benz, they can go to the ICE vehicles and be okay. Yeah, what's Rivian do? Yeah, you know, it's interesting 'cause it is like Tesla adoption and

22:01 Houston's material. Like I see very material which - Tesla's everywhere. I mean, I'm driving down I-10 and I would say that, you know, one out of every five, six cars, it's less like, seems

22:12 like it's less than 10 sometimes on stretches of the highway where you see a Tesla. So what's clear to me is that Tesla's

22:20 head and shoulders above the rest of the competition when it comes to EVs And so you're kind of seeing this.

22:29 think you're seeing the separation where it's like, yeah, I'll have a Tesla, but I'm not really interested in any other EV from any other manufacturer, whether it's Mercedes or Vivian or, you

22:36 know, F-150 lightnings getting crushed. So I think that there does need to be some separation and Tesla from the rest of the pack. But yeah, the,

22:50 you know, so comparing the 50 or calibrating the 50 goal to global new car share of EVs in, in Europe, where Mercedes-Benz is located,

23:08 that was 8 of total global new car sales last year were EVs, 13 in Europe Yeah, it's a pretty long put 50 in these rather approaching the end of the runway deadlines or, you know, yesterday I had

23:27 a. had an encyclopedia busted out and I'm just reading a bunch of random shit. And one of the chapters was on internal combustion engines and I had a little section on Rudolph diesel and Rudolph

23:39 diesel is such a fucking Chad. So do you know, do you know, there's some like huge mystery around the sky? No, I didn't. Yeah, there's some good, like great stories about, but I imagine, but

23:50 new world gasoline, gasoline engine comes out, dude sees that, Hey, you know, people in rural areas need a more energy efficient engine, invents the diesel engine, has a higher compression

24:03 ratio than gasoline, runs off a peanut oil so people could, you know, boil their own peanut oil and run, run off of it and then just thinking like, you know, how much more efficient diesel

24:14 engines are than gas engines and Europe's historically always had high percentages of diesel vehicles, which are super fuel efficient And we just never did that in America because everyone always

24:26 thought of diesel as being. dirty and and clunky. And I always think about that. It's like, why, why are we not running more diesel engines and cars? Why are we not running more plug-in hybrids?

24:39 Can you run plug-in hybrids with diesels instead of, you know, running it simultaneously with a gasoline car? I don't know, but again, back in 2000, caught 17 and 18 when I was fundraising

24:53 energy fund. A, that was all the rage. You know, Tesla is out. They're not going to be any internal combustion engines on the road in five years. And I used to always give this speech where I

25:08 would get up there and read these headlines about, you know, electric cars set to take over, electric cars, women find sexy, you know, just all these headline stuff. And then I would go through

25:20 the speech about how we got 300 million cars in the United States, you know how long they stay on the road forever. I mean, 92 of cars are on the road 10 years later. How deep are you? I ran

25:32 through all this and I would basically say, nothing's gonna happen for whatever, 20, 30 years. And I get the plight of flaws and then I go, oh, by the way, those headlines are read to you.

25:45 They were from the New York Times, 1917, 1918 and 1919. This is nothing new, guys. Yeah. Well, it's interesting like right now, I got a 2015 Toyota Tundra and it's got 150, 000 miles on it.

26:01 Thing runs just as good as ever. And, you know, it's coming up on, what is it, nine years old now? And it's paid off and if I wanted to go trade in on a Tesla with interest rates where they're

26:17 at, I mean, I'm just looking at like, it doesn't, it doesn't make sense from an economic perspective I'm like, why would I want to go buy a new car in the first place? a expensive EV on top of

26:29 it. And so, you know, I think EVs have a place in the world. I think that they're cool cars, but then you can go back and find like, BD. episodes from back in the day, or even before BDE.

26:42 when it was me and Rob doing the roundup. I mean, we're just talking about like these 2021 predictions are just fucking crazy. Actually, I should go to Clyde Pro and search up Mercedes and see if

26:53 we covered that story back then because all these goals and predictions that came out during the zero interest rate phenomenon of 2020 and 2021, I want a tracker for it. Go back. We should go to

27:05 the tracker on DW. 's website. Well, and let's go all the way back to the late '90s because I think there's a classic Goldman Sachs research report that said by the year 2015 or something, 50 of

27:17 all cars would be hybrids. And I don't think hybrids ever hit. Didn't make it 2 of the market. There is hope for an inflection in the and the change in consumer choice for EV adoption. You listen

27:30 to Rogan's podcast with a guy who absolutely hates modern stuff, who was actually born in

27:37 Dearborn, Michigan, Kid Rock. He said,

27:42 I love the Cybertruck. I hate the fact that I love it, but I love it. And then Rogan told the story of him shooting the 80 pound bow into the side of the Cybertruck and it barely made a scratch.

27:53 It bounced, it flattened the broad head And

27:56 my favorite EB. story is, so I drove a Tesla X for six years. And one night, I just - Was this offsetting the jet? This was offsetting the jet. I also had a Hummer at the time. Yeah, there you

28:09 go. So, whatever - You have a big watch too. In

28:14 the dust, or I was talking to you, I kind of had the right tool. Chuck has the biggest watch in the rim right now. Yeah, exactly. There we go. So, anyway, one night I just forgot to plug in

28:22 my car. So I get in my car and I live 25 miles from the office, right? So I'm driving in and I've got 80 miles left. I've got a meeting in the woodlands later that afternoon, then a kid's soccer

28:34 game and I'm just like, oh man. So I'm sitting there and this is when the chargers at Whole Foods would maybe charge 10 miles an hour. Unless my Raptor was parking spot. Yeah, exactly. And so

28:46 I'm driving along and I finally can't figure it out. So I'm just driving into the office and I go to my assistant, I go, Stacy, I'm sorry But you're gonna have to drive to the supercharger, north

28:56 of town, it's about 12 miles from here. It's gonna take you about an hour, hour and a half to charge my Tesla and bring it back. And she goes, Man, you've officially become a prick.

29:07 With another test for Clyde Pros to find out how many tons we've

29:13 told that story. Hey, you know who the largest EV

29:17 company is right now? The largest EV maker? Are they the top selling EV maker? We're trying to outsell and tussle right now. No, Chinese, you're right, you know the name of them. It's three

29:27 letters, right? BYD. BYD. Bring, bring your, anyway. Bring your what? But I'll tell you what, I got me interested in BYD is they just, they're, they just announced a car that sort of rivals

29:41 the Ferraris of the world. Ferraris and Lamborghinis, it's the most expensive car for them It's

29:50 168 million won or233, 000. And it's

29:55 called the

29:57 Yang Wang Yunai. And it's only being sold in China.

30:01 Yang Wang Yunai? Nice. Yang Wang Yunai. Dang. I'm like, it looks pretty cool. That's pretty expensive as

30:09 your car. Let me see. Yang Wang Yunai. It looks pretty bad ass. And you can only get in China though. This does look sick. Jacob's gonna have to throw this up on the screen. Oh, dude I mean,

30:10 it's

30:15 pretty hot. Oh, I'm all over that.

30:21 Dude, you look so good getting in and out. I would. Gosh. Think about your girlfriend, she'd never allow you to drive it without her in it. I could imagine. Yeah, it kinda, it's kind of got

30:30 like, Ferrari and Bugatti. No, I'd drive the one. I think if a Ferrari or Corvette had a baby with a Bugatti, that's what. That's it. That's a great, great expression. So what the, what was

30:42 it? The U9, what's the company's name again? BYD. BYD. But they - BYD. Or BDE That's the natural sponsor. I know. Yeah, yeah. Send us one of those. Send us a car. We'll share it. They did

30:57 mark it their luxury models under the brand of Yang Wang and Feng Ching Bao. Ooh. You want a Feng Ching Bao or Yang Wang? You sound Chinese. Either one, man. If it looked that cool, I don't

31:14 care what it's called. With some bum sauce, that'd be great. That is pretty cool. I am going to, well, it's Japanese, What's the, can we import Chinese cars? Like, I wonder if anyone with

31:25 enough resources can - Oh, I'm sure there's gonna be a few Europe. Yeah. Oh, I bet Hunter Biden could get us one.

31:35 Great, now our show's gonna be - Yeah, we've got five guns on YouTube. Thanks, Chuck. Yeah, sorry about that. I can pack it up, guys.

31:44 All right, crazy story. I actually like this one, and I'm gonna steal your thunder and tell it, Mark. But toll brothers, they build luxury houses. Oh, steal your joke, depending on what you

31:56 think luxury means. But they had some land in Virginia. They were going to build houses on it and a data center developer came along and paid them181 million for this And so, Toll Brothers said it

32:11 was such a good offer,

32:18 they just had to take it. so they made like 175 million bucks on this one deal. So crazy to think the dirt actually matters that much for a data center. And then, but in that word, Dominion

32:35 servicing people and saying they can't take more data centers, which I'm sure they check out. Directionally, yeah. Or maybe they're just buying an option. Let the buyer beware For a 31x

32:48 pre-text multiple by my calculation. I mean, if you're in real estate, of course you're selling, if somebody comes in and says, I'm gonna pay a multiple of what it's listed for, or what you

33:00 think you're gonna turn it into, I wanna know who bought it. Do we have any of that data? It wasn't this fallow tract of land either because Toll Brothers said in their earnings call, and this

33:11 just came out of a Bloomberg screenshot from a tweet that I saw

33:16 the comments from I guess the Q and A. on this, they were in motion with permitting construction approvals already. So it's, I don't know how far down the road, I'm not a home builder expert in

33:33 terms of what that takes. And I guess it varies location to location, but this was not just some option piece of land that they had. And so is a data center developer or operator

33:48 reaching some level of urgency that makes them come in. And as the CEO of Toll Brothers said on the call, came along and made us an offer that we couldn't refuse. And is it really a one off? And

33:59 so where's this land, see this type of frothy activity where you've got intended purpose and somebody comes along and says, we gotta have this, price is really not. I'm curious why the, I got two

34:16 initial issues for a while, DC, right?

34:19 I mean, you want to be near the capital with data centers. Yeah, it could be. Where are they going to plug it in? I know, because we've reported here many times, Dominion is supposedly telling

34:34 data center customers. I mean, you already have the largest subset of data centers in the area already. Yeah, are these, is this maybe building a, I mean, unless they're going to shut some down

34:46 or maybe, I mean, because one of the problems with the existing data centers is not only the power coming in and out, having enough is cooling down and all the water use of, especially these

34:57 higher performing and video chips. So maybe one of the problems with the existing data centers is you can't just pull out these server racks and put in higher, higher performing GPUs 'cause the

35:11 power and the actual data center design itself is you can't do it So, maybe this is a way to. Reallocate power, I don't know, it would be interesting to find out. Or we just run an extension cord

35:23 from North Dakota or not.

35:26 John Arnold's new company. Yeah, I saw something and you guys know much that the CPU to GPU. Multiple of power consumption is like four to five. Oh, yeah, it's big. It's huge. And the price

35:42 difference is huge, too, because I used to

35:46 buy GPUs at said computer company I worked for. Yeah, but also, I mean, just the

35:54 idea. Elia Ed backwards. That's something like that. Yeah, trying to find the land in question is 19 508 Freedom Trail Road in Ashburn, Loudon County, and was purchased from home builder toll

36:09 brothers by JK land holdings Wow, 180 acres. 180 million dollars. Yes, they have. 180 million dollars. It's crazy. We're going to steer clear of that. Do you think that guy got a commission,

36:21 a big commission for selling that thing?

36:25 Anyway, I was going to say also that, I mean, CPUs and GPUs aren't apples to apples. No, they're not. And calculation versus estimation. And so makes sense that GPUs are going to take more -

36:39 Sure. More energy, but - But just the order of magnitude. And the - Everything about GPS is - I mean, the memory is very special graphics memory and it's super expensive.

36:56 And every time NVIDIA designs a new ASIC, they design a specific type of memory to go with that ASIC. And that's

37:07 a nightmare. Well, you know what's funny is that's what you're going to see more ASICs come on to the market I was just talking to some VC and he's like, yeah, you know. Invested in this tech

37:17 company, they're creating something that's called an ASIC that's like a GPU, but it's only meant for artificial intelligence. I was like, Adam, I was like, oh, it's an ASIC? He's like, oh,

37:27 how'd you know what an ASIC is? I'm like, I thought we'd use them for Bitcoin mining.

37:34 Investors are always smarter than you. I mean, that's just the way you got to be careful about this.

37:41 But so you'll see different technologies in ASICs come out on the market to the more energy efficient for, you know, specific things like language models. But we should talk about this and I know

37:51 we're under-prepared today. But the amount of water. When does that ever stop

37:57 us? You

38:00 mean the amount of water you're in, the amount of water you use. Like all these big data companies are under-reporting or not reporting or haven't highlighted how much water they need to cool off

38:11 all their data centers. So that's something we should.

38:15 I saw an orange mouse. Well - Metrics. Yeah, I can make some shit up. Let's make some shit up. Acres locations. Swimming pools. Acres. Acres. Acres. Acres of water. Well, in right

38:27 locations. You know, like most Bitcoin miners are very cold, so they don't use water cooling. Oh, that's changing. But, you know, the actual data centers probably use a lot more. Tuck bro

38:39 throw down. Look when cooling. I mean, I mean, immersion cooling fucking sucks, like in terms of operations, it's just - It does suck, but it definitely works. Yeah, it works for sure. On

38:52 this note, though, while we're on this topic,

38:55 I don't know if y'all saw this or not, but the US Department of Energy put out or noticed all Bitcoin miners that they had a report where they're located, what their energy use was. And,

39:09 you know, it was kind of big news. It was funny 'cause like all the women guys are laughing on Twitter like, Oh, good to do EIA reporting, like, you know, making fun of them and I was like,

39:21 Are we boot liquors now? We want more federal oversight? Like what the fuck? But anyways, I want to give a shout out to my friend Dennis with the Satoshi Action Fund and

39:34 the Texas Blockchain Council fought it in partnership with Riot Blockchain and got a restraining order placed and ultimately paused the

39:47 reporting. So I thought that was really interesting to see that happen. I can't even see what their justification is for causing that reporting. You know what I mean? It's always the environment

40:01 or kids, right? It's always the basis of everything the government needs to do. Well, you know, it's funny because like. I had this lady in my mentions the other day and she's like, Oh, well,

40:11 what do you think about, you know, riot and apparently she's leading this whole effort to protest riot because a riot has a data center or a mining center right next to someone's house. And, you

40:27 know, first off, like I have no sympathy if you're out in the country and infrastructure is being built by you. Like, this is like rule number one. It's like if you enjoy the view, you better

40:36 own the land, right? Same fucking concept, if you don't want something built right next to your house, better buy the land next to it. And not saying that you shouldn't be a good operator and

40:44 take care of your neighbors, but nimbeism is the worst thing of all time. And it's kind of embarrassing when it happens to people in rural communities. Like, it's one time we're drilling for a

40:57 very petroleum and we're drilling in Gardendale, Texas, which is just north of Midland. And it's not an official city It's just, for some people, put some double wides and then they start

41:07 building neighborhoods and like, it's, it's a, it's a little city, but it's not officially incorporated. And we're drilling wells right in between people's houses. I mean, their houses were

41:17 right on the side of our reserve pits. And, you know, we tried to be good neighbors and good operators. Like we didn't trip hype at nighttime. Pretty much stopped our operations at nighttime so

41:27 people could sleep and like, don't get me wrong. No, it sucks. But it's like, hey, don't fucking move out to the country in a place where infrastructure is being built. You literally live in

41:38 Midland Texas. How do you know that though? I mean, when you're, how do you know if the structure is being built? You don't, but that's a risk. That's what I'm saying. Hey, if you don't want

41:47 any neighbors by fucking 200 acres, then put you out in the middle of it so that you got a buffer. But if you buy a five acre plot and someone builds something right next door to you, tough shit.

41:58 So, you know, having a little bit of a accountability and ownership Like, I don't feel bad for people, so. zero sympathy from Frank Slapp on, on that front.

42:12 All right. This week in natural gas, a couple items. This is really an ode to Kirk's new found affinity for net gas topical material, which is great. Yeah, topical, since it was my first choice

42:29 in the sound like your energy czar draft more than two years ago. Um, do you and our kindred? Pakistani government approved the start of construction of the first 80 kilometer segment of a total

42:47 length, 800 kilometer pipeline to connect to Iran.

42:52 Okay. And so

42:55 to say that there's not a tremendous number of hurdles, not the least of which is what does Iran look like from a price data. Section standpoint, looking out

43:10 next year, next five years, the next decade,

43:14 probably a pretty low risk that this actually gets done, but I think it's representative or symbolic of, when we've talked quite a bit about Pakistan, including their election. Last week,

43:29 they had trouble, as you recall, securing a single LNG cargo in the energy crisis of 22, 23. First response to that was to quadruple their coal-fired generation over time. And now you look at

43:46 kind of the reality of the pivot to natural gas and where does it source?

43:56 This all kind of ties into the theme of the US pause on LNG, what are we doing? doesn't really affect anything today or in the queue to essentially double LNG export capacity, but what does it mean

44:11 for where does market share go in the longer term, post 2030?

44:20 So, well, and this flies right in the face of everything we heard from US. government officials during the pause we're taking at looking at LNG export is, oh, well, the market doesn't need this

44:33 Well, great, there we go. Let's hand the Iranians more hard currency. And the market might not, but you look at the players involved here around in Pakistan, you've got

44:50 a nuclear power and a society and a

44:56 Islamic Republic that is very different in its doctrine.

45:03 And as we saw in Europe, providing natural gas to people can be used as a weapon. It was used as a big weapon by the Russians. So I hate to let that take hold when Toby Rice is happy to ship a

45:18 Melon G. We're not saying that we're continuing to operate on the assumption that the US and LNG players like every other provider, an investor of risk capital is going to let largely market factors

45:27 decide whether or not to build, not that

45:40 we won't or couldn't overbuild. But I think countries that are in deficit for natural gas are telling you that they're looking at long-term and saying, I've got to find something more secure.

45:54 Pakistan calling.

45:59 FBI's telling us to shut up That's right.

46:03 And then the other, the other piece under this and the somewhat in the same theme is that the Qataris announced last week, they're adding I guess no fucking sense of

46:14 humor does not give a shit about us. Contidio,

46:21 he said Q and A or was that Q and A. I couldn't figure it out All right, sorry, Q and A.

46:32 The Qataris announced that they're adding another 16 million tons of LNG capacity by 2030

46:42 against the current baseline capacity of 142 million metric tons And 2030 and beyond, when we talk about this, you know, kind of hit pause button while countries are showing that they're wanting to

46:58 continue to hit play. longer term, they see the structural market reality based upon where they think demand is going to go. So we're going to get out there as a first mover or one of the first

47:11 movers and thinking about longer term that there's a pretty, pretty growthy horizon for LNG. They may be wrong, but

47:20 there's no hesitation

47:24 to try and capture what I think is going to be a fairly robust market share game going out beyond 2030. I agree. I don't see LNG slowing down, so

47:39 just not at all. I mean, it is kind of cool, like, when you think about it, that you can literally look for natural gas and ship it anywhere in the world. I mean, that's pretty fucking sweet.

47:51 I mean, this is going to be, Clyde is going to be so awesome. We ship it when it gets more and more data, but in 10 years, if we're still doing the after we signed these really big deals with

48:00 digital wild counters, because we have millions and millions and millions of users, is we could go back and collide and see me saying that three years ago when I signed this really big deal with

48:14 digital investors, that what do you mean? You didn't know that instead of getting paid, you're paying.

48:21 But what's interesting is to look at market share, like what's going to happen to United States on an export basis and will these sort of long-term contracts that you know the Qataris, you know,

48:36 once some of these plants get built, Scotland's about to shut down their sort of last refinery, partly because it's not run very well and it's been losing money, but Scotland starting to import

48:48 more and more, it'll be interesting to see like who's going to win long-term and that will always change, you always have the ability to get in there with a lower price, but some of these, some of

48:58 these. countries are signing like, you know, 30 year deals as we've talked about before. If it was truly about the environment, the Marshall Plan of the current time would be for the United

49:12 States and Europe to finance cheap LNG infrastructure all throughout the world and let's just be done with coal. I mean, that truly is just about the environment That, that could be a rational step

49:30 to take. I'm not sure I would do it, but I'm just saying you could make that case.

49:37 So. Yeah. I don't know, I'm kind of just being an energy maximalist. Like, I don't like passion on coal anymore, to be honest. I'm with you 'cause I was just thinking this, like what do you

49:48 think the coal, people listening that are pro-coal? No, I know what they think, I know what they think because I know what they think 'cause I'm at Toby Rice's house one day three o'clock in the

49:58 morning drinking whiskey with them, wake up at six o'clock to get on a plane to come back home. And I'm like, man, I'm gonna pass out like, I don't drink a lot and I definitely don't drink

50:08 whiskey, but when I'm with Toby, he likes drinking whiskey, so I'll drink whiskey with him. Get on this plane at seven o'clock in the morning. And I'm like, okay, I'm gonna pass out, take a

50:16 nap. Well, the guy that I'm sitting next to is Congressman for some district in West Virginia. And we saw that whole plane had a fucking four hour energy talk from me and this dude. And like I got

50:30 so much perspective from that talk because he was one of those guys that is pro-coli's. Like we did everything that they asked, you know, we cleaned up our coal plants, you know, clean coal. Yep,

50:41 he's like, and they still attack us. He's like, so I don't agree with Toby's messaging when it's natural gas versus coal. He's like, you guys can win on that. He's like, but they're gonna come

50:50 for natural gas. He's like, so it actually changed my perception on that a little bit because I did meet someone I came from the coal industry, and if we keep going down that path of just propping

51:02 up natural gas because it's displacing coal, well, next thing is is, well, you know what I will say, I will look at the camera and say, West Virginia, I'm sorry, I talked bad about coal. I

51:14 didn't even know y'all had the internet and had YouTube and could watch this, so I'm really

51:21 sorry So one thing to interject, and I'm exactly where you are on coal, and that is really well illustrated. If you watch Scott Tinker's Switch On from a couple of years ago, he does these full

51:36 feature, high production value, world traveling, energy investigations, and one of the segments in Switch On is about Vietnam Vietnam is overwhelmingly coal fired, and they have a huge domestic

51:52 endowment of coal. And the. the Vietnam segment was on meeting with people in the human health and welfare and public interest and all the recognized problems of unabated coal burning or unmitigated

52:14 coal burning. But the trade-off was just about everybody on the street said, we recognize that that is a trade-off But the trade-off to not continue to plowhead and grow based on being coal-powered

52:32 is not one we're willing to take because standard of living is just growing by leaps and bounds. And that's the other thing that the realistic displacement of coal by natural gas internationally has

52:47 a huge efficiency and cost advantage to overcome that the cruis to coal and countries are just not. going to, okay, we get an emissions improvement. There's going to be a real economic hurdle to

53:04 overcome. Arjun Merti's talked about this quite a bit, and I thought about it when I first thought, well, we just displaced coal worldwide and saw the emissions problem. It's not that

53:16 simple. The same thing I say to renewable folks, they're like, oh, well, LNG is gonna keep these countries from getting on renewables. It's like, if renewables are better - Right. From an

53:26 economic perspective. They'll do it. They'll do it, yeah. And it's the same thing with coal and natural gas. It's like, hey, they're gonna pick coal if coal was the cheaper and more efficient

53:36 method to doing that. It's where do the additions come from and what makes sense? But, you know, in many countries around the world to have a functioning natural gas grid, you gotta build the

53:47 infrastructure. Yeah. So - No, 100. Huge, huge capital up front Yeah, I mean, we really

53:56 You know, when everyone talks about, oh, well, the building pipelines, I don't think that the average American realize how many pipelines are in the United States. I mean, it's crazy just the

54:06 veins that are running through this country, right? Just look at them up. Yeah, it's incredible. Yeah, it really is incredible. Like it's something that Jacob should pull up a map of, you know,

54:16 natural gas pipelines. And that's just - And pull up pipelines that are older than 50 years. I mean, even that's a crazy look at that too And so that's a century, almost of building infrastructure.

54:28 And yeah, so none of these conversations are that simple is what it boils down to. Right. Always. And poorly operated, you have food to the methane emission issues that kind of cancel out. Yeah,

54:46 100. All right, quick close on what we've been doing on VDE is at the end of each episode running a quick summary of election in a country. This is the year of the election. Two billion people are

55:00 estimated to be voting on the planet. Seven of the 10 largest democracies are having elections this year. A lot of geopolitical important countries like Great Britain, etc. are having their

55:13 elections. So we've gone through various. We've talked about Taiwan. We talked about Pakistan last week. This week is going to be a little bit of good news when it comes because we've been

55:25 pointing out the problems, AI, corruption. This is a little bit of a good news. Indonesia on Valentine's Save 2024 had their election. They're the third largest democracy on the planet. They're

55:39 the largest Muslim majority democracy on the planet. They wound up having almost 65 voter turnout for an election that by all reports. had a little bit of hint of corruption, but not much. So the

55:59 good news was we seem to have a legitimate election. Everybody's accepted, the losers, accepted official tallies will be out next month. But what you had happened, and by the way, this guy is

56:12 literally one of the coolest names. So Joko Widodo, I think is how you pronounce it, was the two term serving president. Does he drive a Yokokawa? He's turned out, so he couldn't run, his

56:28 nickname is Joko-wee. Oh yeah, Joko-wee. Joko-wee. And so anyway, Joko-wee couldn't run again, but the 72-year-old defense minister, Pro-Bo-woe sub-be-onto. You know that is Mark. Can't do

56:46 this. I'm not sure, I'm actually pronouncing these names. I love the fact that people in West Virginia fun to make for that. But anyway, he won with what appears to be about 60 of the vote. And

57:01 the only real controversy that happened is his running mate is the 36-year-old son of Jokowee. And the

57:11 reason that's controversial is 40 is the minimum age, but the Indonesian constitutional court, who is headed by Jokowee's brother-in-law, ruled that it was okay, that the son was vice president.

57:27 Can't make this up. There were also some lower court suggested delays in the race, but an appeals court overturned it. But outside of that, this is pretty impressive because there are literally

57:38 like hundreds of islands that make up Indonesia. There was some rain, but you had 65 turnout. Everybody worldwide seems to be accepting the the election. So we had an election in a growing

57:54 democracy, which is always good to see the the betting is is that Indonesian policy towards China and America is going to stay the same. They're going to play both of us off each other and not

58:07 really take it side. So and in related news, part of his campaign platform planks will be adopted Southwest is adding Indonesia Jakarta to the to the global root map. So check we'll be able to

58:21 visit. Nice Perfect. May not come back. But I exhaust my

58:29 working knowledge of Bahasa and say to Rima Kasi, which means thank you. Well, let me just caveat one thing. Democracies are short lived and in violently. So I'm not sure I'm necessarily

58:40 celebrating the democracy because we are republic, by the way. But second, I wanted to ask you a question. You said 2 billion people are voting. Potentially worldwide. How many of those people

58:51 are voting twice? Now many of them are actually alive and how many dead everybody. Oh, better than

59:00 Mark laughing. But we got to wrap the show up. We're getting long in the tooth here. I heard you guys are the Josh. Yeah. An hour and a half. I mean, I have someone here to sit you guys. It's

59:12 just been so long. Good to see you, bro. Market saw just had no humor today's Arkansas straight. I was on a 6 20 flight this morning. Straight, straight facts after just the fact I was asleep.

59:24 Couldn't crack a smile from Mark tough crowd today. But hopefully you guys left. We'll be back next week. If you like the show, please share it. Love when we see you guys sharing on Twitter and

59:36 LinkedIn. It helps a ton. So thank you for doing that. And we'll catch you on the next one. We'll see you in Midland on Thursday. Yeah, we'll be in Midland every day.