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    Douglas Leggate • Wolfe Research

    Douglas Leggate's questions to ConocoPhillips (COP) leadership

    Douglas Leggate's questions to ConocoPhillips (COP) leadership • Q1 2025

    Question

    Douglas Leggate sought clarification on whether the $0.5 billion capital reduction was from growth or base maintenance capital and asked about the resulting impact on the company's breakeven price.

    Answer

    SVP Andy O'Brien clarified that the reduction is a mix of deferring non-producing items and capturing deflation, rather than altering major activities like rig counts. He stated the full-year free cash flow breakeven remains in the mid-$40s per barrel, inclusive of about $7/bbl for major projects. He reiterated that the breakeven is expected to fall to the low $30s as these projects come online.

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    Douglas Leggate's questions to Diamondback Energy Inc (FANG) leadership

    Douglas Leggate's questions to Diamondback Energy Inc (FANG) leadership • Q1 2025

    Question

    Douglas Leggate questioned the capital efficiency trade-off of the new plan ($400M cut for a 5M barrel loss) and asked for insights from non-operated assets on how the broader industry is reacting to lower prices.

    Answer

    President Kaes Van’t Hof explained the production impact is nuanced by its intra-year timing, with a sharp mid-year drop affecting the annual average. He added that anecdotal evidence from conversations with private operators indicates they are broadly 'pushing everything to the right,' confirming a dramatic slowdown for the marginal U.S. barrel.

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    Douglas Leggate's questions to Chevron Corp (CVX) leadership

    Douglas Leggate's questions to Chevron Corp (CVX) leadership • Q1 2025

    Question

    Douglas Leggate asked for Chevron's perspective on two major macro issues: the potential loss of production from Venezuela and the market share dynamics with OPEC+, particularly concerning Kazakhstan's production.

    Answer

    CEO Mike Wirth stated that while U.S. liftings from Venezuela have halted, the barrels are flowing to other markets like China, and discussions on license modifications are ongoing. Regarding Kazakhstan, he clarified that discussions with the President did not involve OPEC+ quotas, as TCO barrels are high-value and have historically not been curtailed.

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    Douglas Leggate's questions to Chevron Corp (CVX) leadership • Q3 2024

    Question

    Douglas Leggate of Wolfe Research observed the stock's underperformance since the Hess deal announcement and questioned why Chevron doesn't close the deal now, given its confidence in its legal position regarding the arbitration.

    Answer

    CEO Mike Wirth acknowledged that uncertainty around the Hess deal is a contributor to stock performance, along with other factors like the past TCO update. He explained that the deal structure includes a condition precedent that the arbitration must be concluded before closing, and Chevron intends to execute the transaction as written.

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    Douglas Leggate's questions to Valero Energy Corp (VLO) leadership

    Douglas Leggate's questions to Valero Energy Corp (VLO) leadership • Q1 2025

    Question

    Douglas Leggate of Wolfe Research asked about the prognosis for the Wilmington refinery, given it was also impaired, and inquired about the future implications for capital spending and cash flow after the Benicia closure.

    Answer

    Homer Bhullar, an executive, confirmed impairment charges for both Benicia ($901M) and Wilmington ($230M). An executive named Greg added that historically, Benicia has had higher operating expenses and capital needs than Wilmington, and a large upcoming turnaround was a factor in the decision.

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    Douglas Leggate's questions to Valero Energy Corp (VLO) leadership • Q3 2024

    Question

    Douglas Leggate of Wolfe Research questioned the global supply outlook, suggesting that latent utilization capacity could delay a market rebalancing, and asked about the cost competitiveness and future of Valero's California portfolio.

    Answer

    EVP and COO Gary Simmons acknowledged the role of utilization but stated he expects additional, unannounced refinery closures due to poor economics and capital needs elsewhere. CEO Lane Riggs conceded that California is their highest-cost operation and that while their strategy has been to act as a call option on West Coast cracks, the intense regulatory environment is forcing a re-evaluation of their long-term operations there.

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    Douglas Leggate's questions to HF Sinclair Corp (DINO) leadership

    Douglas Leggate's questions to HF Sinclair Corp (DINO) leadership • Q4 2024

    Question

    Douglas Leggate asked for an update on the status of Small Refinery Exemptions (SREs) and their potential financial impact. He also sought further clarification on the long-term strategy for the lubricants business, questioning whether it is considered core or an asset to be monetized for maximum value.

    Answer

    CEO Timothy Go stated that while a path for SREs may exist, the outcome is highly uncertain, but noted three of their plants have received exemptions in the past. Regarding the lubricants business, Go clarified that he views it as 'independent' rather than 'core' or 'non-core,' which provides strategic flexibility for growth or monetization. The near-term focus is on capturing internal value, but all options are continually evaluated to maximize shareholder returns.

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    Douglas Leggate's questions to HF Sinclair Corp (DINO) leadership • Q3 2024

    Question

    Douglas Leggate asked about the risk to HF Sinclair's mid-cycle gross margin assumption of $15/bbl, given market changes like new capacity and the TMX pipeline. He also inquired about how the renewable diesel portfolio is positioned for the upcoming shift from the Blender's Tax Credit (BTC) to a carbon intensity (CI) based system.

    Answer

    CEO Timothy Go and EVP of Commercial Steven Ledbetter expressed confidence in their mid-cycle guidance, viewing 2025 as a more balanced environment despite near-term pressures from TMX on crude differentials. On renewables, management stated they are preparing by increasing their low-CI feedstock mix and can pivot sales to markets less dependent on CI value. They anticipate future support from higher RINs and LCFS credit prices, including the new New Mexico LCFS program, which should provide a tailwind.

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    Douglas Leggate's questions to APA Corp (US) (APA) leadership

    Douglas Leggate's questions to APA Corp (US) (APA) leadership • Q3 2024

    Question

    Douglas Leggate asked for more details on the financial impact of the new Egypt gas price agreement and for a breakdown of the moving parts in the U.S. oil production guidance following recent asset sales.

    Answer

    CEO John Christmann explained the Egypt gas deal aims for economic parity between new gas and oil wells on incremental volumes but could not disclose specific pricing. He clarified the U.S. oil outlook, starting with Q3's 143k bbl/d, subtracting 13k for divestitures, to reach a flat 130k bbl/d target with 8 rigs. CFO Stephen Riney added that incremental gas volumes are measured against a pre-agreed decline curve. EVP of Exploration Tracey Henderson noted Egypt's significant, underexplored gas potential.

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