In the Energy News Beat – Conversation in Energy with Stuart Turley, Matt Willer, Managing Director, Capital Markets, Partner Phoenix Capital Group Holdings, LLC discuss the financial markets' role in energy, particularly the future demand for energy driven by AI and technology. Willer emphasizes the long-term need for hydrocarbons, despite political trends towards net-zero goals. They also touch on the increased discipline in the oil industry, the volatility of energy investments, and how private equity is playing a significant role in the sector. Willer highlights that, despite the political environment, U.S. energy independence remains crucial.
Matt thank you for stopping by the podcast, I had a blast - Stu
Highlights of the Podcast
00:00 - Intro
01:21 - Energy Markets and Financial Instability
01:47 - Election Impact on Energy
02:48 - AI, Technology, and Energy Demand
03:40 - AI's Power Demand and Technology Acceleration
05:50 - Oil and Gas Investments
06:22 - Oil as a Stable Investment
07:33 - ESG and Oil Investment Discipline
09:29 - Stealth Money in Oil and Gas
10:45 - U.S. Energy Independence
12:35 - Trump vs. Biden Administration on Energy
14:10 - How to Find Matt Willer
15:09 - Closing Remarks
Please follow Matt on his LinkedIn HERE: https://www.linkedin.com/in/matt-willer-30b61720a/
Check out Phoenix Capital at phxcapitalgroup.com
Stuart Turley [00:00:07] Hello, everybody. Welcome to Energy News Meet Podcast. My name's Stu Turley, president and CEO of the Sandstone Group. Right now with the world of a I, we are not going to cross that barrier in order to get to net zero. Net zero has just sailed off into the sunset. But some of the biggest questions that are out there right now, what do you do with your money? What's going on? What is going on in the financial markets and energy? Well, I happen to have a very great guest today. I got Matt Willers stopping by the podcast. I think we might even have some answers.
Matt Willer [00:00:42] Well, I certainly have stopped by the podcast here, Stu, and if I'm here without answers, then I should be fired immediately. I just have to get up.
Stuart Turley [00:00:49] There we go. I like your style already. So are you're up in Colorado, correct?
Matt Willer [00:00:53] Yeah, out here in Parker, Colorado, our offices in the heart of the tech center off by 25 and down the center of Denver Tech Center.
Stuart Turley [00:01:01] Boy, I like that you're not in Ohio where they're eating the cats and the dogs, So that's a good problem to have. But you're the managing director at a capital markets partner of Phenix Capital. That's pretty cool.
Matt Willer [00:01:13] Yeah, my mom thinks so. You know, titles are kind of lost on me, but we do some good work over here, and I'm just a small piece of a larger puzzle.
Stuart Turley [00:01:21] But you know what? What I'm finding is there's a lot of questions out there right now because the energy you take a look at the energy markets, there is no financial stability for any country that implements bad energy policies. And fiscal irresponsibility means a death to that country as far as a finance goes. So what are you seeing out in the markets right now?
Matt Willer [00:01:47] Well, I mean, we have a unique situation because we're right on the cusp of an election. So obviously, energy is getting a lot of press time and attention. And, you know, this is just yet another opportunity when we're talking to our investors, whether they're existing or prospective. We like to strip the varnish off of all the nonsense that we hear on the news. And you've even touched on this whole we might be green by 2030, 20, 35, net zero. This is poppycock. It's nonsense. It's not grounded in any type of fact or substance. So when we look at this data, we look at real information. And just like you do, what we're observing is that with the advent of AI and machine learning and data centers, this is really just the first half of the first inning on what is going to be a monumental power draw for this world over the next 25 years. So depending on what real study you might subscribe to, we're going to be using double the power that we are today 25 to 30 years from now. You tell me how that happens without hydrocarbons. And then I don't know that I'll be asked any other podcast, but I don't think it's possible.
Stuart Turley [00:02:49] I like the way you phrased that because, you know, Texas Ercot has basically said their demand is going to double in the next 3 to 4 years. It took 100 years to get to this point, so I went to Oklahoma State. But that math does not seem to add up.
Matt Willer [00:03:07] Well, like anything, technology is accelerating every facet of life. It is how quickly you can get content, how quickly you can get information. But all of the speed requires power to accelerate our access to the information. So we've become addicts to this real time relationship with content and information. Every kid is walking around with a phone or a device or a watch or an iPod. And so, you know, we've we've seen that you've satiated the American and the world public with technology, and then we're not looking back.
Stuart Turley [00:03:40] yeah. In fact Chat GP2 whenever you put in a request in the chat and you're sitting there and you're trying to do your homework, let's say you're a college kid and you're trying to do your homework, it takes 16 times the amount of power to do a chat request as it does just putting in a normal Google search. Okay. Now think about how much math. I don't. I'm old. In fact, Moses and I are buddies. But I also learned how to punch in a law. A real question in the can't keep punches. How much you tempted material would it take to keep a logging tool in drilling a well from overheating? All right. Put that in right now into your phone and you probably get an answer back pretty quick. Not on a gargi punch, right?
Matt Willer [00:04:31] Yeah, absolutely. And the time to get that feedback and even the reliability of the data, I mean, this is all taking monumental computing power behind the scenes in an instantaneous time. Right. You know, and it's just something that you can tell is only in the first inning because of how markets are reacting to it. Right. You know, the canary in the coal mine is in video. I think every one of their brother, either known or unknown, owns the stock. And it has been a wild run up. But. That's just a proxy for the future. They just happen to be the first horse out of the stable. How are you going to power all of this? Required demand. Exactly right. And that's that's the key. Now, to your other point, though. The whole prosperity and domestic security thing, they do run hand in hand, right? A company that relies on a country, rather, that relies on imports in full or in part Right. In a very vulnerable position, especially with all the nuances that we have going around the world. So what I am pleased, at least, is that over the last four years, despite the political headwinds that exist today, we have gotten our domestic energy profile back to a relatively peak production. And that's been private industry and private capital that's been deployed in the face of a government that hates the industry.
Stuart Turley [00:05:50] You know, you and I sat back, you and I were chit chatting before the show. And my investments in oil and gas are about 32% right now. And I love mailbox money. I absolutely am a fan of Mailbox Mine. Did I tell you I hate taxes, by the way? You?
Matt Willer [00:06:05] No, but it's not surprising.
Stuart Turley [00:06:07] So having an investment with tax advantage. By the way, that's kind of cool for me. I like that. And that's stuff that people are going to need to get their teeth into even in there. So is that the kind of stuff that you're hearing out there?
Matt Willer [00:06:22] Well, in particular, that's all I hear because I manage about $750 million of investor capital in our oil business. And so, realistically, every oil and gas investment's got its own unique profile. But I can say thematically, what our investors are looking for is something that has a respectable rate of return. Right now, all of the volatility that exists in the day to day stock market. Now, oil in and of itself is a volatile commodity. But there are ways that you can invest in oil and gas that are far less volatile than just putting your money in the in Apple or Amazon or other stocks. And at a time where it's been hard to find real yield in a bank or a treasury or a credit union or an annuity. But you're uncomfortable with all the ups and downs of the market. We've met thousands and thousands of hardworking Americans, a lot of them retired or approaching retirement that have learned that domestic energy can also be a cornerstone to their investment portfolio. And so that's all I talk about. And I'm not here for that purpose today. But in my day to day interactions with Phenix Capital Group, it's speaking to investors. So I don't know this. It's very cool.
Stuart Turley [00:07:33] You know, Michael and I, Michael Tanner is my partner and he's a partner in crime on the Deal spotlight. And I truly appreciate he and the team tearing apart a deal because not all oil and gas deals are created equal. And in it to me is great fun when you can sit back and analyze. You know, ESG is now taking a black eye in the investment world. But, boy, it did do a great thing. When you sit back and take a look at the oil boom when they just started, they got money and then they threw it back into the well and they got money and they kept throwing it back in the well. And they were not fiscally responsible to the shareholders. But, boy, in the last ten years, oil and gas companies, both private and public, have done a phenomenal job getting the money back to the shareholders. That, to me, is very critical.
Matt Willer [00:08:29] That's discipline. All right. That's absolutely discipline, because what happened in iteration 1.0 is he got a little bit everyone got a little bit of cavalier. There was a little bit too much yeehaw. All right. And there was a lot of liquidity. So every bank, every every institutional credit provider, there was too much capital. That exacerbated the boom bust that we went through. And as a as a result of that, either are people that don't like getting kicked by the mule the second time or people that didn't want to answer to angry shareholders or people that had board of directors to answer to the thesis was far different in this boom cycle. It is return value to shareholders or stakeholders, whether that's larger dividends, whether that's share buybacks, whether that's more measured approach with your drilling programs. The entire industry has matured to that level. And so your investment experience is just a proxy for that discipline. And and we've all observed it in the last four and five years in particular.
Stuart Turley [00:09:25] What do you see? What are you hearing coming around the corner for the oil market?
Matt Willer [00:09:29] Well, you know, it's interesting because right now there's a lot of stealth money out there. These private equity guys, which you can't find out what they're doing in real time, like you could with Amazon Global or Occidental or any of the publicly traded companies. There is so much capital in this business right there in this industry right now that is stealth. And the reason that that's kind of exciting is that when private equity gets involved in an industry that scale, you recognize that there are some profits to be had. And so. Guys like us. We've been chewing on those since day one, but it's been a pretty protected mode. When the Wells Fargo's and the B of A's and the Chase's don't want to lend into your industry. Guys that really know how to make money step in and fill that void. And that's what we're dealing with right now. You're seeing relentless capitalism in oil and gas right now. And it's fascinating. We're we're doing quite well. We've seen production volumes across the industry rise to levels where we're self-sufficient again in this country or can be. And I don't see that changing. I really don't. We have we've put a lot of good people to work in North Dakota and Montana and Wyoming. Great. And, you know, it's just we're having a lot of fun with it. We're working well with our investors. And I think we've we've shown that domestic energy is definitely not a chapter that's ending anytime soon.
Stuart Turley [00:10:46] Well, I'll tell you what, man. I think this could be the first of the series with you. And as we get things rolling, I always love talking to partners and CEOs that are out there really with their nose on the financial energy part of this. So I would look forward to the podcast in the future on this as well.
Matt Willer [00:11:07] So listen, we would myself, my partners, this is what we eat and breathe. We love talking about this. And if we can ever bring perspective that's valuable to your audience in any way, we'd love to be a part of that.
Stuart Turley [00:11:17] That'd be fun. Now, when does early voting start in Colorado?
Matt Willer [00:11:22] Listen, now I'm a I'm two deviations right of center. A conservative. I am very conservative. But the state that I am I'm living in is not. So I filled out my mail in ballot ballot accordingly, legally, etc.. But if you're asking me to take a census of what the rules and regulations are in Denver County, I'm literally not going to go down there because I don't want my windshield washed without asking for it.
Stuart Turley [00:11:45] I love that hangar night out. There is a joke and knowing that where you live, I am going to be glad to see this election come and go. And I am very positive. I feel very positive about this. And from an oil man's perspective, since I'm an oil man, now that I'm getting regular checks, it seems like this is a oxymoron for a investor or an oil man. Prices were lower under Trump. So do I want to vote for Trump and have lower oil prices or make more money under the Biden administration? This is a tough question. It's an oxymoron question and I'm voting for I'd rather have lower everything else on the planet as personally what I'm going to vote for. But I think it's kind of funny.
Matt Willer [00:12:35] It really is. It's the tale of two cities and investors will ask us about this. I said, Well, listen, there's only one reason I want Harris to win as president, and that's because of the unrelenting capitalist nature that is a portion of my psyche. But everything else I want Trump Now, in fairness, our companies operated under Trump. And there's for every pro there's a con, For every con, there's a pro. So let me share my perspective simply on the Trump administration. So obviously, he is going to cut the red tape and let business do what business does. And that's going to lead to more efficiencies, more drilling, softer prices. But what it also does is it leads to consistency and stability in the market. And so our company and I can speak on behalf of my partners, we will be just fine operating in a stable $65 a barrel environment rather than a pendulum that's going from 60 to 120 and everywhere in between. It is more challenging to run the business efficiently in that situation than it is under Trump. So we'll take the lower prices, we'll take the lower taxes will take the domestic security, and that's just an easier way to run the business, albeit in a softer environment.
Stuart Turley [00:13:47] man, I really like the way you phrased that. That was that was a pretty good one because I'm sitting there, I was like Scooby Doo when somebody mentioned that. Why are you going to vote for Trump when Harris will get you higher oil prices? And I actually went, I actually look like Scooby Doo on that. And that was a better way to articulate it then. So but I'll tell you what, how do people find you?
Matt Willer [00:14:11] Sure. I mean, most people in this day and age are on the Web. So Fenix Capital Group Holdings is the name of our company, Page X, Paul Henry Xerox Capital group.com is our website. I run the investment division. So if anyone wanted to rattle my cage, that's 720408 1850 But you know still if sometime in the future you'd like to reconvene and have me back on, then I'd love to revisit and share a little bit more with the audience.
Stuart Turley [00:14:38] That'd be fantastic. And again, thank you very much for stopping by. I absolutely love Colorado and I think that Colorado I wish would wake up someday, but I think maybe the Californians invaded Colorado because I my both my kids were born up there. I love Colorado. But. Now that I'm a Texan, I have a big sign outside as you're driving in. Leave your voting policies behind when you move to Texas.
Matt Willer [00:15:09] Absolutely. I don't understand that when people flee one state and have all these complaints and then they vote the same way when they arrive at this pristine new state. I said, pack up and go home, fella. Now, I will say one thing. I live in Douglas County, Colorado. Douglas County, Colorado. The truck's paid for, and you'd better believe that someone's got a concealed carry. So this is a conservative part of Colorado. We're just offset by the borders and the Denver's of the world.
Stuart Turley [00:15:34] So the Haitians eating cats and dogs does not happen in your.
Matt Willer [00:15:39] It definitely doesn't happen in my county. And it's certainly nowhere near my street or neighborhood.
Stuart Turley [00:15:43] Where I live. Thank you so much, Matt, for stopping by the buggies.
Matt Willer [00:15:47] Very good. Thank you, sir, for having me.
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