James West

James West asked how Constellation plans to balance locking generating assets into long-term PPAs versus keeping them available for normal generation markets, considering the significant demand from the data economy.

Answer

President and CEO Joe Dominguez indicated that there is still significant room to pursue long-term deals. He noted that at some point, Constellation might slow down or adjust pricing to reflect the scarcity value of its offerings, but the company is not yet at that stage. Mr. Dominguez emphasized that Constellation's incentive is to provide sustainable, long-term, and growing earnings for its owners. He believes that continuing to execute in the long-term contracting space is in the best interest of the company, its customers, and the nation, viewing the question as more theoretical than practical at this point.

James West asked about Constellation's strategy for allocating its generating assets, specifically how it balances locking them into long-term PPAs for the data economy versus keeping them available for normal generation markets.

Answer

President and CEO Joe Dominguez stated that there is still significant room for long-term deals. He indicated that at some point, Constellation might slow down or increase pricing to reflect scarcity value, but they are not at that point yet. Mr. Dominguez emphasized that the company's incentive is to provide sustainable, long-term, and growing earnings for owners, and meeting the demand for critical load from the data economy is in the company's, customers', and nation's best interests. He concluded that the question is currently more theoretical than practical, as they will continue to execute in the long-term PPA space.

James West followed up on the LNG question, noting the company has reached 10 MTPA in its commercial strategy and asking if ConocoPhillips plans to pause and digest or lean in to reach the stated 10-15 MTPA ambition.

Answer

Andy O’Brien, Chief Financial Officer and Executive Vice President of Strategy and Commercial, reiterated that the strategy remains unchanged, with 10-15 MTPA being the comfortable size for portfolio optimization and value chain control. Ryan Lance, Chairman and CEO, added that the approach is deliberate, ensuring placement with re-gas capacity on the back end, and while they could add more if low liquefaction cost opportunities arise, they are being cautious after reaching the 10 MTPA mark.

James West followed up on the LNG question, noting the 10 MTPA commitment and the stated 10-15 MTPA ambition, asking if the company will pause and digest or lean in to reach 15 MTPA.

Answer

Andy O’Brien (CFO and EVP of Strategy and Commercial) stated that the strategy remains unchanged, with 10-15 MTPA being the comfortable size for portfolio optimization and value chain control. Ryan Lance (Chairman and CEO) added that it's a function of being deliberate, ensuring commitments are backed by regasification capacity and a clear plan, and they will add more if low liquefaction cost opportunities arise.

James West asked Larry Coben to rank the top non-LS Power initiatives NRG is most excited about and hopes to announce soon.

Answer

Larry Coben, Chair, President, and CEO of NRG Energy, highlighted several key initiatives (in no particular order): the exciting growth plan in C&I, retail, energy, and smart home; the residential Virtual Power Plant (VPP) program; demand response potential post-LS Power close; and progress on Texas Energy Fund (TEF) projects. He reiterated strong confidence in NRG's 14% EPS CAGR and double-digit free cash flow discount rate, even without data centers or power price changes.

James West from Melius Research asked Larry Coben to rank the top non-LS Power acquisition initiatives NRG Energy is most excited about and expects to announce in the near term.

Answer

Larry Coben, Chair, President, and CEO, listed several key areas without specific ranking: the strong growth plan in C&I, retail energy, and smart home; the tremendous excitement for the residential Virtual Power Plant (VPP) and post-LS Power demand response potential; and progress on the Texas Energy Fund (TEF) projects, including bringing the first one online. Mr. Coben emphasized that these initiatives, even without data centers or power price changes, contribute to a 14% EPS CAGR and double-digit free cash flow, underscoring his bullish outlook.

James West asked about the differentiators behind Chevron's success in the Permian, particularly hitting 1 million barrels a day, compared to smaller operators who are reducing CapEx, rigs, and frac spreads.

Answer

Chairman and CEO Mike Wirth attributed Chevron's Permian success to a long-term, manufacturing-type approach, emphasizing consistent planning and execution rather than reacting to short-term commodity dynamics. He contrasted this with smaller operators who may face financial constraints. He highlighted that this steady approach enables continuous improvement, piloting new techniques, and achieving better efficiency and productivity, such as a 40% increase in drilling productivity over a few years. He also noted that NOJV partners, often large operators, are maintaining activity levels aligned with Chevron's business plan, providing good visibility for 2025 and 2026 production.

James West asked about Chevron's differentiators in the Permian, particularly as other operators are reducing CapEx, rigs, and frac spreads, while Chevron recently hit a million barrels a day and continues to achieve success.

Answer

Chairman and CEO Mike Wirth explained that Chevron operates on a long-term, manufacturing-type plan, avoiding whipsawing based on near-term commodity dynamics, unlike smaller operators with different financial constraints. He emphasized that this steady, consistent approach allows for continuous improvement, piloting new techniques, and grinding out better efficiency and productivity daily, citing a 40% increase in drilling productivity over a few years. Wirth also noted that NOJV partners, some of the largest operators, are not showing significant changes in activity levels, aligning with Chevron's business plan and providing good visibility for 2025 and 2026 production.

James West from Melius Research questioned Baker Hughes Company about the margin performance of its Oilfield Services and Equipment (OFSE) business, noting its outperformance relative to peers. He sought insights into the factors influencing margins in Q3 and Q4, and expectations for OFSE margins in 2026 given the anticipated decline in exploration and production spending.

Answer

CFO Ahmed Moghal expressed satisfaction with the OFSE team's resilient performance, noting that 2025 guidance implies only a 10 basis point margin decline despite an 8% revenue reduction, attributed to cost-out initiatives and simplification efforts. For Q3, a modest margin decline was largely offset by productivity improvements. Q4 is projected to see modest revenue and margin declines due to typical seasonality, tempered year-end product sales, and E&P budget constraints in U.S. land. Looking to 2026, Moghal anticipates subdued operator activity and a modest reduction in global upstream spending. He affirmed the continued focus on cost efficiency, pricing discipline, upselling, and prioritizing margin quality over volume to close the margin gap with peers.

James West from Melius Research focused on the OFSE business, inquiring about the drivers behind its margin outperformance relative to peers in Q3, the specific moving pieces contributing to margin maintenance, and the outlook for OFSE margins in 2026 given the projected modest reduction in global upstream spending.

Answer

CFO Ahmed Moghal expressed satisfaction with the OFSE team's performance and resilience. He noted that despite an 8% revenue decline, OFSE margins are expected to be down only 10 basis points for 2025, attributing this to cost-out initiatives and simplification efforts. For Q3, a modest margin decline was due to business mix and cost inflation, largely offset by productivity improvements. Moghal explained that the Q4 projection for modest revenue and margin declines is due to typical Eastern Hemisphere seasonality, tempered year-end product sales, and E&P budget constraints in U.S. land. Looking to 2026, with subdued operator activity and softening oil fundamentals, the focus will remain on cost efficiency, pricing discipline, upselling, and prioritizing margin quality over volume to close the gap with peers, while SSPS backlog is expected to drive positive momentum, excluding SPC deconsolidation.

James West from Evercore ISI asked for an update on the IET business, seeking confirmation on the full-year order forecast, an outlook on puts and takes for 2025 orders, and an estimate of when IET income might surpass that of the OFSE segment.

Answer

Lorenzo Simonelli, Chairman and CEO, expressed high confidence in achieving the midpoint of the $11.5B to $13.5B IET order guidance for the year, highlighting the portfolio's diversity. For 2025, he anticipates a similarly solid year, with an expected pickup in LNG FIDs and continued strength in FPSO markets. He did not provide a specific timeline for IET's income to exceed OFSE's, instead emphasizing the strong growth trajectory of both segments.

James West asked about the puts and takes for the fourth-quarter free cash flow guidance of $100 million with a 'plus' mark, emphasizing the importance of Mexico receivables to achieving this target.

Answer

Anuj Dhruv, Executive Vice President and CFO, stated that the $100 million+ guidance includes a decent amount of conservatism, with potential for higher free cash flow if Mexico payments continue. He reiterated the company's structural target of 50% free cash flow conversion. Girish Saligram, President and CEO, confirmed $100 million as a floor, with significant upside from additional Mexico payments, and projected free cash flow conversion well north of 40% for 2026.

James West asked for details on the fourth-quarter free cash flow guidance of $100 million plus, specifically the puts and takes, the importance of PMX (Mexico) receivables, and factors needed to achieve the target.

Answer

Anuj Dhruv, EVP and CFO, stated that the Q4 free cash flow guide includes a decent amount of conservatism and could be higher with continued Mexico payments, emphasizing the company's structural target of 50% free cash flow conversion. Girish Saligram, President and CEO, added that $100 million is a floor, with recent Mexico payments providing comfort, and expects free cash flow conversion to improve significantly to well north of 40% in 2026 as the Mexico situation normalizes.

James West posed a two-part question, asking about Weatherford's M&A strategy given its strong balance sheet, and for new CFO Anuj Dhruv's initial impressions of the company and his key priorities.

Answer

President and CEO Girish Saligram addressed M&A, stating the company has a robust pipeline focused on well construction and production, but will remain disciplined on valuation and value creation. EVP & CFO Anuj Dhruv shared that his priorities include capital allocation, driving free cash flow and margins, business simplification, and acting as a strong business partner.

James West from Evercore asked how Weatherford plans to grow and potentially outpace a stable market environment, and which areas represent its biggest strengths. He also followed up on the margin profile, questioning the potential for further expansion in a slower growth scenario.

Answer

Executive Girish Saligram stated that Weatherford aims for incremental growth through specific areas like the new Modus NPD launch and a strong focus on production optimization for mature fields. He noted that while multi-hundred basis point margin expansion is unlikely, the company is confident in achieving 25 to 75 basis points of annual margin growth in a flat market, driven by internal efficiencies, improved execution, and capturing more value.

James West sought clarity on Halliburton's unique contributions to the VoltaGrid relationship, particularly emphasizing the importance of established relationships in regions like Saudi Arabia beyond just industrial scale. He also asked for Halliburton's perspective on the 2026 international market outlook, specifically regarding Saudi Arabia's potential bottoming and deepwater recovery.

Answer

Jeffrey Miller, Chairman, President, and CEO, confirmed that Halliburton's 'global industrial scale' encompasses critical elements like customer relationships, deep market knowledge, and a respected history of execution with governments and clients internationally. Regarding 2026, Mr. Miller agreed with the assessment, expecting Saudi Arabia to improve from mid-year (not declining is an improvement) and deepwater business to continue strengthening as projects commence and contracts are won. He expressed strong confidence in the international business and Halliburton's technical position.

James West sought clarity on Halliburton's unique contributions to the VoltaGrid international partnership, particularly regarding relationships and market access in regions like Saudi Arabia, and asked if customer feedback aligns with expectations of Saudi Arabia bottoming and recovering in H1 2026 and deepwater returning in H2 2026.

Answer

Jeffrey Miller, Chairman, President, and CEO, confirmed Halliburton brings 'global industrial scale,' encompassing customer relationships, market knowledge, and a respected history of execution in international markets, including with governments. He agreed with the 2026 outlook, noting deepwater is gaining traction and strengthening, and expects Saudi Arabia to pick up next year, improving from current levels, reinforcing confidence in the international business's solid technical position and value proposition.

James West questioned the timing of Halliburton's increased focus on its well intervention business and asked for context on its development and current strength. He also explored whether growth in this segment could lead to less cyclical earnings and a higher valuation multiple for the company.

Answer

Chairman, President and CEO Jeffrey Miller explained that the focus on intervention highlights its critical role in maintaining global production and showcases Halliburton's significant R&D investments, such as the new riserless intervention technology. He agreed that this business provides a stable, less cyclical revenue stream, as production decline is constant, thus justifying continued investment for outsized growth.

James West sought to clarify if the Q3 utilization miss was unplanned and whether recent day rate increases were pure rate hikes or influenced by a mix effect from high-rate vessels being active. He also asked about the timing of when customers might provide more clarity on 2025 plans.

Answer

CFO Sam Rubio detailed that the utilization drop was due to higher drydock days, repair days, and a vessel mobilization. CEO Quintin Kneen acknowledged a product mix impact on average day rates from the pullback in the high-rate North Sea region. CCO Piers Middleton expects more visibility on long-term plans by year-end, noting that customers remain committed to key long-cycle projects.

James West inquired about the growth of Sunrun's virtual power plants (VPPs), asking what the primary impediments are to scaling this opportunity. He also asked about the potential opportunity set for Sunrun related to the growing energy demands from data centers and AI.

Answer

CEO Mary Powell identified the 'regulatory and utility environment' as the main factor for VPP growth, noting that grid strain from electrification and AI is making these distributed resources a mainstream solution. She described the AI opportunity as an extension of VPPs, stating that Sunrun's aggregated residential storage assets are a reliable solution for data centers seeking clean energy. She confirmed Sunrun is under NDAs with AI developers.

James West of Evercore ISI inquired about customer feedback regarding Stem's recent strategic and leadership changes, and asked for specifics on the software enhancements customers are requesting.

Answer

Interim CEO David Buzby stated that the customer response has been very positive, as sophisticated buyers view storage hardware as a commodity and solar customers welcome the renewed focus on software. COO Mike Carlson added that requested software enhancements fall into three categories: improving user information flow and access, leveraging AI for predictive analytics on asset operations, and creating more automated warnings and integrated work processes.

James West inquired about the key drivers for continued margin expansion in 2025 amidst a more muted top-line growth forecast and asked for insights on the success of the recent Digital Forum.

Answer

CEO Olivier Le Peuch stated that SLB aims to continue its margin expansion journey in 2025, driven by a favorable international and offshore mix, a premium on digital technology with a goal of approximately $3 billion in revenue, and the full impact of cost optimization programs. He also highlighted the success of the Digital Forum, noting it accelerated customer realization of SLB's broad value proposition in AI and digital operations, which he sees as a long-term growth engine.

James West of Evercore ISI inquired about Borr Drilling's strategy for allocating its anticipated significant free cash flow in the upcoming year, asking how the board weighs priorities between dividends, share buybacks, and debt reduction.

Answer

Executive Patrick Arnold Schorn quantified the potential year-over-year cash flow increase at over $200 million, driven by lower CapEx, fewer special periodic surveys, and higher day rates. CFO Magnus Vaaler elaborated on the capital return tools available, including the existing dividend, scheduled bond amortization, a potential bondholder cash sweep, and a $100 million share buyback authorization. Vaaler stated the Board will determine the optimal mix based on market conditions and shareholder value at the time.

James West asked about Borr Drilling's capital allocation strategy for 2025, questioning how the Board will prioritize the use of significant expected free cash flow between dividends, share buybacks, and debt reduction.

Answer

Executive Patrick Arnold Schorn quantified the potential for over $200 million in increased year-over-year cash flow for 2025, driven by lower newbuild CapEx, fewer special periodic surveys, and higher contracted day rates. CFO Magnus Vaaler added that the Board has multiple tools available, including the current dividend, a $100 million buyback authorization, and debt amortization. He stated the final decision will be based on what is most beneficial for shareholders at the time, considering the share price and market conditions.

James West asked about the application and market size of Chart's cooling solutions for emerging areas like data centers and Small Modular Reactors (SMRs).

Answer

CEO Jillian Evanko explained that existing products like air-cooled heat exchangers and Howden's screw compressors are perfectly suited for these new, energy-intensive applications. She quantified the near-term data center opportunity at approximately $500 million, with potential for an additional $600 million to $800 million from heavy industrial chilling applications.

Asked about the future outlook for unit economics and the expected duration of the pause on adding new dealers.

Answer

Unit economics, measured by the fully burdened unlevered return, are expected to increase by 200-300 basis points. The pause on adding new dealers is part of a strategy to maintain a disciplined, gradually sloping CapEx increase to optimize cash generation, rather than pursuing aggressive growth. This approach will be maintained to prioritize existing core dealers.

The analyst asked for more details on the new Altus IQ software, specifically its rollout plan to existing and new customers. He also asked for an elaboration on the company's strategy and opportunity in the growing Community Solar market.

Answer

Executives detailed that Altus IQ is being rolled out to existing and new clients, serving as a key tool for early customer engagement and providing value through features like centralized billing and carbon footprint tracking. It will eventually be available to all customers. On Community Solar, they see it as a major market expander, leveraging their existing real estate relationships as new state programs (like California's anticipated one) come online. Community solar allows them to build larger, more profitable projects on customer sites by selling excess power to the local community.