Have a rec for a good post on EV/reserves. I would enjoy seeing the rest of the data.

It is no surprise that OXY rates well by this measure. However, should not one back out assets not directly related to reserves from EV? That could significantly reduce the spreads.

OXY has a relatively small chemicals business based on chlorine that adds to its EV. And has a larger midstream business relative to its size than the integrated majors. (They've sold some to fund recent acquisitions.) Don't these contribute to EV?

Chevron has a large refining business and a petrochemicals business as a 50% JV with another partner. Ditto?

ExxonMobil has the largest refining business worldwide of the private O&G companies. And has a chemicals business that it no longer compares to its O&G competitors except for Shell. It is number one or two in its major product lines compared with the world's largest chemical companies. Ditto?

The feedstock costs to these downstream/petrochemical businesses go down when O&G prices go down, and up vice-visa when oil prices go up. So this acts to reduce beta. A flywheel. That isn't true of OXY's chemicals business.

The scale of these larger companies provides them with scale, technology, capital, project management organizations, and access to worldwide markets in terms of future developments to discover new O&G and combat climate change that OXY simply doesn't have.

If Buffett is investing based only on oil prices, OXY's EV/Proven Reserves makes sense. But if they compete in the broader markets going forward, they don't? They simply don't have the resources to be competitive worldwide. I do think they'll be competitive in the Permian.

As an aside, XOM introduced the "cove" process to produce from the Permian. It was developed after purchasing a large position in the Delaware. The cove process works where you have a large, contiguous, resource base that permits longer laterals and a stepwise drilling program that addresses all reservoirs, not high grading. Now it's being widely copied in the Permian. That's behind a lot of the acquisitions being made. It offers a lot of reductions in costs and capital.

I like your simple EV/reserves insight and analysis. It's not a bad measure for much of the O&G industry, paticurlysmaller US companies. But I don't think it's that simple - there aren't many that are.

And Buffett hasn't shown any real interest in companies similar to OXY with better financials. Why?

I'll be clear. I don't pretend to understand Buffett's thinking. But it seems to be centered around cheap oil from the Permian - no more complicated. And with size limits.