WEBVTT
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[SPEAKER_00]: Welcome to Different Makes a Difference, where we discuss investment matters that matter to everyday investors.
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[SPEAKER_00]: Join Audembrown's Equity Analysts as we examine pertinent topics in today's markets and look at things a little differently.
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[SPEAKER_00]: Audembrown is an independent Canadian investment firm.
00:20.675 --> 00:27.181
[SPEAKER_00]: We provide integrated wealth management solutions to help clients achieve their financial goals and we've been doing so for over a hundred years.
00:27.842 --> 00:31.545
[SPEAKER_00]: Join us for some lessons we've learned along the way that can make a difference for the future.
00:38.425 --> 00:39.806
[SPEAKER_01]: Welcome to Different Mixed Difference.
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[SPEAKER_01]: My name is Laura McLeare, and I'm Audland Brown's Research Communications Coordinator.
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[SPEAKER_01]: Today, we're digging into Canadian energy.
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[SPEAKER_01]: When we talk about energy, it's easy to focus just on the price of oil.
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[SPEAKER_01]: Is it going up?
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[SPEAKER_01]: Is it going down?
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[SPEAKER_01]: What does that mean for prices at the pump?
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[SPEAKER_01]: But for investors, there are deeper considerations.
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[SPEAKER_01]: Where is the supply coming from?
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[SPEAKER_01]: How does it reach the people who need it?
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[SPEAKER_01]: And which businesses are positioned to create lasting value?
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[SPEAKER_01]: Joining me down, Pack this is equity analyst, Filey.
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[SPEAKER_01]: Welcome, Filey.
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[SPEAKER_01]: Thank you.
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[SPEAKER_01]: So let's start with a bigger picture.
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[SPEAKER_01]: What do you pay in closest attention to today in the energy market?
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[SPEAKER_02]: Today, obviously, there's still the biggest news right now.
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[SPEAKER_02]: It's all related to the Iran War.
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[SPEAKER_02]: It's constantly in flux where oil prices are moving, almost on a daily basis, given what news are coming out around, so paying close attention to that.
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[SPEAKER_02]: and just looking for signs of where the market is heading and more importantly how long this can last.
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[SPEAKER_02]: And why that's important, we're longer-term ambassadors, but the longer this persists, the more cash that our companies that we are currently holding our portfolios, the Canadian companies, no more cash will generate.
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[SPEAKER_02]: And that can create some, call it, windfall cash that they can deploy to buy back shares, return to shareholders.
01:55.654 --> 01:57.375
[SPEAKER_02]: And that's generally part of the first sector.
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[SPEAKER_02]: Another thing I'm thinking about too is more recently and it's been an interest in Kerala today is that in the past, we've talked about Canadian oil producers not getting full price for the product.
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[SPEAKER_02]: Usually they produce heavy oil, historically, there's been times when that discount has been really wide.
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[SPEAKER_02]: And it part of that is because of a lack of infrastructure.
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[SPEAKER_02]: and from Alberta, out to either the West Coast or Canada or to the US.
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[SPEAKER_02]: And in recent years with the building of the Transbound Pipeline and some other expansion as well, that discount is actually improved.
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[SPEAKER_02]: It's actually, it's gone to a level, but
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[SPEAKER_02]: $10, let's call it a discount.
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[SPEAKER_02]: And that's actually not bad, but over the last couple of weeks it's actually widened and it's actually got up to go through about $30 and part of it is really to the fact that transplant and it's getting full.
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[SPEAKER_02]: And so we've gotten our ability to export the oil that really leaves us to the U.S. and there's been a little bit of a
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[SPEAKER_02]: more real coming from Venezuela and a little bit less demand because there's been more good effort light oil and some that discounts widen, which is interesting because we are talking about building more infrastructure in Canada as that's certainly that discussion is coming out of the good time, get what we're seeing on the discount.
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[SPEAKER_02]: The last thing is, as I mentioned, the oil companies right now, because of the current oil prices, there's even, with that discount, they're still going to generate a lot of cash, and I'll be paying time to what the companies are going to do with that cash, as they report their needs in it coming weeks.
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[SPEAKER_01]: So, well, let's start with the war then.
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[SPEAKER_01]: Obviously, the war in Iran has changed the equation, and I'm curious to know, like, if tensions ease tomorrow, how quickly would those oil prices drop, or would they drop?
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[SPEAKER_01]: Like, what does that look like for prices, and then the Canadian companies
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[SPEAKER_02]: Yeah, I think if the war ended tomorrow, I would, or even if there's some expectation that it's going to end soon.
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[SPEAKER_02]: I think the, the price of oil will drop and it's crushing as how much we actually saw a little bit of that in June when there was that sign that cease fire, maybe that hostility would get better and and the price of oil did drop back in June, but then as the hostility is ramped up again and then we saw that and the most possible has actually increased
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[SPEAKER_02]: But I would expect the price to drop, but it may not drop as much as people think.
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[SPEAKER_02]: It may not get back to where we were immediately before the war, because we've drawn down inventories quite a bit.
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[SPEAKER_02]: That's been helped keep the price from really spiking, but I think countries are going to have to rebuild.
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[SPEAKER_02]: I think it was just a time and it's not going to happen overnight.
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[SPEAKER_01]: So do you think it's going to fall you had made a prediction earlier about $80 a while is that about the range that you think it belongs?
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[SPEAKER_02]: Or I think that's our longer term forecast.
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[SPEAKER_02]: But I think if it's the worry and then I won't be surprised to see the price of all, or but not over 100, I won't be surprised to see a drop to about $70.
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[SPEAKER_02]: I think over time, it eventually come back to $80 average.
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[SPEAKER_02]: But I don't, yeah, I won't be a rather drop to $70.
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[SPEAKER_01]: Okay, yeah.
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[SPEAKER_01]: And so that's the energy infrastructure too that you mentioned like we Canada has enormous resources in energy and historically getting those to global markets has been a challenge.
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[SPEAKER_01]: Our Minister Carney's government is trying to change that.
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[SPEAKER_01]: And if he succeeds, how different do you think Canada's position in the global energy market could be in five or 10 years from now?
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[SPEAKER_02]: I don't know if our position will change that dramatically.
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[SPEAKER_02]: I think it'll be great for the Canadian energy sector for sure.
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[SPEAKER_02]: On a global basis, just to give you some numbers, Canada produces roughly about 5 million barrels of oil today.
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[SPEAKER_02]: And that's about 5% of global supply.
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[SPEAKER_02]: They're talking about building a new pipeline to the west coast.
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[SPEAKER_02]: another million barrels.
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[SPEAKER_02]: So that's one million out of a hundred.
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[SPEAKER_02]: It's not insignificant, but it's not huge.
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[SPEAKER_02]: So yeah, but is it important to can you introduce us?
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[SPEAKER_02]: Yeah, it basically increasing the capacity of by about factor of 20%.
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[SPEAKER_02]: For can you introduce us, it's quite exciting.
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[SPEAKER_02]: But globally, probably not that big of a deal.
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[SPEAKER_01]: So, against that backdrop, and we've seen some extraordinary consolidation in the Canadian oil producers, Sonovas, for instance, purchased Meg Energy last year, and just announced the acquisition of Athabasko oil, and I'm curious to know is it's a common phenomenon that's kind of consolidation in the industry, is it something that we should be keeping an eye on?
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[SPEAKER_01]: What does this mean for the industry?
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[SPEAKER_02]: There's been no doubt there's been consolidation in the Canadian IT sector.
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[SPEAKER_02]: What's interesting to me is that, as an investor, it's when you look at what the companies are paying and what we call takeover premium.
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[SPEAKER_02]: They're not huge, so it's not like something that in some cases it's being maybe 5%, takeover premium, which sometimes these stocks move 5% in a day.
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[SPEAKER_02]: It's not like you're getting a windfall in the past.
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[SPEAKER_02]: It might speculate and say, okay, I'm going to invest in this sort.
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[SPEAKER_02]: all company and they get a takeover and they get like a 30% bump in one day.
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[SPEAKER_02]: That's more meaningful.
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[SPEAKER_02]: The takeover premiums these days seem to be a lot more modest as they say companies are more disciplined, which is good for if you are investing in a buyer.
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[SPEAKER_02]: I think there's been a lot more discipline in the industry.
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[SPEAKER_02]: But overall, I think for the buyers because they'd be more disciplined.
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[SPEAKER_02]: I think they get some more opportunity to create longer
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[SPEAKER_02]: And the companies we've been investing in tend to be more acquires, I think that's actually been a good thing for us that they haven't undisciplined in the purchasing.
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[SPEAKER_01]: Yeah, so are there fewer acquisition targets out there now?
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[SPEAKER_01]: Do you think that consolidation in our energy market has come to a halt or is there more out there?
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[SPEAKER_01]: I think there's holding a buyer.
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[SPEAKER_02]: Yeah, I think there's more scope in some areas.
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[SPEAKER_02]: Like in the oil sands, basically, with synovus buying assabasca, there's really not much.
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[SPEAKER_02]: Unless you see somebody like a really large player coming and buying one of them.
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[SPEAKER_02]: But even then, I don't see that will happen, because we will have group there.
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[SPEAKER_02]: And I don't think the government will allow.
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[SPEAKER_02]: So there will be restrictions on that.
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[SPEAKER_02]: So all fans, I don't see a lot of opportunity outside of all fans, not to gas.
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[SPEAKER_02]: There could be a few opportunities there.
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[SPEAKER_02]: But if you look at number of publicly traded companies, there's probably maybe about a dozen left that maybe could be potential targets or merger standards.
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[SPEAKER_02]: Yeah, I think there could be.
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[SPEAKER_02]: But it is certainly as we see more of it, it'll be less on forward probably.
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[SPEAKER_01]: from an investor's perspective is consolidation necessarily a good thing.
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[SPEAKER_01]: Does it increase as a company scale?
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[SPEAKER_01]: Is it reduces competition maybe or opportunity for investors to invest in these smaller companies and maybe make better return?
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[SPEAKER_01]: What does it mean for investors when industry consolidates?
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[SPEAKER_02]: I think the important thing to think about as an investor is really are their synergies.
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[SPEAKER_02]: And in terms of, if two companies get together, can they create a Congress scale, can they reduce their costs, and are the benefits from that?
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[SPEAKER_02]: If there are, then usually what you would expect, those benefits will be spread out between the buyer and part of the company.
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[SPEAKER_02]: So investors on both sides can benefit, but if the acquisitions don't create these synergies, kind of the scale we do is cost it.
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[SPEAKER_02]: If there are no benefits, send firm investments to standpoint, you're not really adding any value.
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[SPEAKER_02]: I'm gonna shareholder here.
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[SPEAKER_01]: Can we talk about lithium a little bit?
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[SPEAKER_01]: I'm talked to oil and gas care, but lithium is also a component in the energy markets, and you've covered albumarles for some time now, for those of us who haven't followed it as closely, can you tell us what's going on in the lithium market and albumarles in particular?
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[SPEAKER_02]: Yeah, in terms of album, I, during the probably asking is because the chair prices come off.
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[SPEAKER_02]: In the last two months, it's been down about 30% less in prices so off.
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[SPEAKER_02]: But, interesting, the market for demand for less in is actually still quite strong.
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[SPEAKER_02]: And there's been two key drivers of that.
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[SPEAKER_02]: One is electric vehicles.
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[SPEAKER_02]: Year over year, we're still seeing higher demand for electric vehicles.
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[SPEAKER_02]: particular places like Europe and which has been let's see how we talk about high oil prices that's led to high gasoline prices, high diesel prices and that's created additional demand for electric vehicles so that that's still being quite good and the
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[SPEAKER_02]: Other side of demand is we've also seen a big build out in AI, DSNRs and building out the grid and improving the grid and some countries that have been trying to diversify into more renewables like solar and wind and there's also been building that restores along with that.
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[SPEAKER_02]: So that's creating an extra demand for lithium and both of those factors have been actually quite robust but interesting enough.
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[SPEAKER_02]: So I think there's some concerns that
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[SPEAKER_02]: you know, particularly around maybe the AI build up slowing down and some questions about that and see that's caused some hesitation in terms of perhaps demand for some of and I don't need as much storage.
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[SPEAKER_02]: Yeah, maybe not and maybe that's not going to be as strong as what people thought might be.
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[SPEAKER_02]: So it's been under pressure.
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[SPEAKER_02]: But I think it's a longer term fact.
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[SPEAKER_02]: particularly around EVs are still strong as it was maybe 5% of the cars on the road are electric vehicles.
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[SPEAKER_02]: And I think there's still lots of long runway for electric vehicles.
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[SPEAKER_02]: And I think that's going to require a lot more lithium over the next 10, 20 years.
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[SPEAKER_02]: And I think all the modes can really benefit from that.
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[SPEAKER_01]: In theory too, the war in Iran and emphasis on oil there could, could it not increase the desire for people to want to kind of wave?
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[SPEAKER_02]: I think if you're looking to buy a new car these days, I think a lot more people are probably thinking about harbours.
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[SPEAKER_01]: Yeah, I can figure it out.
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[SPEAKER_02]: Yeah.
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[SPEAKER_01]: So if we were to have this conversation again in a year or so, what do you think we'd be talking about?
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[SPEAKER_01]: Or are we still going to be talking about high oil prices or consolidation or infrastructure?
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[SPEAKER_01]: What's ahead?
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[SPEAKER_02]: I think in a year hopefully the world will be doing it and that's what we're hoping.
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[SPEAKER_02]: I don't know if I can continue I think that we real serious issues if it carries on stronger than that but hopefully I think there's a lot of incentive on both sides to come to some agreement there so hopefully we do reach that.
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[SPEAKER_02]: On the infrastructure I'm hoping we see you'll be year first along in terms of approvals in terms of development hopefully we'll get some more.
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[SPEAKER_02]: We'll move further along in terms of that timeline.
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[SPEAKER_02]: And I think the thing is it's always hard to be to even predicting out in terms of months.
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[SPEAKER_02]: And say, we'll be in for a lot of surprises.
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[SPEAKER_02]: I would expect it.
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[SPEAKER_02]: Yeah.
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[SPEAKER_02]: It'll be a whole different purpose.
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[SPEAKER_01]: It's an evolving landscape.
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[SPEAKER_01]: Thank you for that.
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[SPEAKER_01]: I appreciate you walking astral of the changes and what's going on right now.
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[SPEAKER_01]: Thank you for joining us.
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[SPEAKER_01]: And thank you for listening.
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[SPEAKER_01]: Please like and share this episode.
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[SPEAKER_01]: And we'll talk again soon.
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[SPEAKER_01]: Right.
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[SPEAKER_02]: Thank you.
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[SPEAKER_00]: Thank you for listening to another episode of Different Makes a Difference.
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[SPEAKER_00]: Just as every individual is unique, so are your financial circumstances.
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[SPEAKER_00]: Be sure to talk to your professional advisors for advice related specifically to you.
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[SPEAKER_00]: Audembrown is a member of the Canadian Investor Protection Fund.
00:04.161 --> 00:09.486
[SPEAKER_00]: Welcome to Different Makes a Difference, where we discuss investment matters that matter to everyday investors.
00:10.226 --> 00:16.272
[SPEAKER_00]: Join Audembrown's Equity Analysts as we examine pertinent topics in today's markets and look at things a little differently.
00:17.453 --> 00:20.135
[SPEAKER_00]: Audembrown is an independent Canadian investment firm.
00:20.675 --> 00:27.181
[SPEAKER_00]: We provide integrated wealth management solutions to help clients achieve their financial goals and we've been doing so for over a hundred years.
00:27.842 --> 00:31.545
[SPEAKER_00]: Join us for some lessons we've learned along the way that can make a difference for the future.
00:38.425 --> 00:39.806
[SPEAKER_01]: Welcome to Different Mixed Difference.
00:39.966 --> 00:43.970
[SPEAKER_01]: My name is Laura McLeare, and I'm Audland Brown's Research Communications Coordinator.
00:44.591 --> 00:46.773
[SPEAKER_01]: Today, we're digging into Canadian energy.
00:47.993 --> 00:51.074
[SPEAKER_01]: When we talk about energy, it's easy to focus just on the price of oil.
00:51.574 --> 00:52.234
[SPEAKER_01]: Is it going up?
00:52.475 --> 00:53.255
[SPEAKER_01]: Is it going down?
00:53.795 --> 00:55.436
[SPEAKER_01]: What does that mean for prices at the pump?
00:55.956 --> 00:58.116
[SPEAKER_01]: But for investors, there are deeper considerations.
00:58.477 --> 00:59.797
[SPEAKER_01]: Where is the supply coming from?
01:00.297 --> 01:01.818
[SPEAKER_01]: How does it reach the people who need it?
01:02.258 --> 01:04.959
[SPEAKER_01]: And which businesses are positioned to create lasting value?
01:05.759 --> 01:08.220
[SPEAKER_01]: Joining me down, Pack this is equity analyst, Filey.
01:08.500 --> 01:09.040
[SPEAKER_01]: Welcome, Filey.
01:09.380 --> 01:09.660
[SPEAKER_01]: Thank you.
01:10.221 --> 01:11.441
[SPEAKER_01]: So let's start with a bigger picture.
01:11.481 --> 01:14.322
[SPEAKER_01]: What do you pay in closest attention to today in the energy market?
01:15.047 --> 01:18.671
[SPEAKER_02]: Today, obviously, there's still the biggest news right now.
01:18.731 --> 01:21.013
[SPEAKER_02]: It's all related to the Iran War.
01:21.193 --> 01:29.441
[SPEAKER_02]: It's constantly in flux where oil prices are moving, almost on a daily basis, given what news are coming out around, so paying close attention to that.
01:30.162 --> 01:35.325
[SPEAKER_02]: and just looking for signs of where the market is heading and more importantly how long this can last.
01:35.545 --> 01:48.131
[SPEAKER_02]: And why that's important, we're longer-term ambassadors, but the longer this persists, the more cash that our companies that we are currently holding our portfolios, the Canadian companies, no more cash will generate.
01:48.971 --> 01:55.634
[SPEAKER_02]: And that can create some, call it, windfall cash that they can deploy to buy back shares, return to shareholders.
01:55.654 --> 01:57.375
[SPEAKER_02]: And that's generally part of the first sector.
01:59.451 --> 02:09.114
[SPEAKER_02]: Another thing I'm thinking about too is more recently and it's been an interest in Kerala today is that in the past, we've talked about Canadian oil producers not getting full price for the product.
02:09.474 --> 02:15.836
[SPEAKER_02]: Usually they produce heavy oil, historically, there's been times when that discount has been really wide.
02:16.497 --> 02:19.678
[SPEAKER_02]: And it part of that is because of a lack of infrastructure.
02:20.858 --> 02:25.684
[SPEAKER_02]: and from Alberta, out to either the West Coast or Canada or to the US.
02:26.625 --> 02:34.074
[SPEAKER_02]: And in recent years with the building of the Transbound Pipeline and some other expansion as well, that discount is actually improved.
02:34.314 --> 02:36.136
[SPEAKER_02]: It's actually, it's gone to a level, but
02:36.857 --> 02:39.239
[SPEAKER_02]: $10, let's call it a discount.
02:39.379 --> 02:51.049
[SPEAKER_02]: And that's actually not bad, but over the last couple of weeks it's actually widened and it's actually got up to go through about $30 and part of it is really to the fact that transplant and it's getting full.
02:51.509 --> 02:58.115
[SPEAKER_02]: And so we've gotten our ability to export the oil that really leaves us to the U.S. and there's been a little bit of a
02:58.495 --> 03:15.267
[SPEAKER_02]: more real coming from Venezuela and a little bit less demand because there's been more good effort light oil and some that discounts widen, which is interesting because we are talking about building more infrastructure in Canada as that's certainly that discussion is coming out of the good time, get what we're seeing on the discount.
03:16.202 --> 03:29.209
[SPEAKER_02]: The last thing is, as I mentioned, the oil companies right now, because of the current oil prices, there's even, with that discount, they're still going to generate a lot of cash, and I'll be paying time to what the companies are going to do with that cash, as they report their needs in it coming weeks.
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[SPEAKER_01]: So, well, let's start with the war then.
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[SPEAKER_01]: Obviously, the war in Iran has changed the equation, and I'm curious to know, like, if tensions ease tomorrow, how quickly would those oil prices drop, or would they drop?
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[SPEAKER_01]: Like, what does that look like for prices, and then the Canadian companies
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[SPEAKER_02]: Yeah, I think if the war ended tomorrow, I would, or even if there's some expectation that it's going to end soon.
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[SPEAKER_02]: I think the, the price of oil will drop and it's crushing as how much we actually saw a little bit of that in June when there was that sign that cease fire, maybe that hostility would get better and and the price of oil did drop back in June, but then as the hostility is ramped up again and then we saw that and the most possible has actually increased
04:11.443 --> 04:14.666
[SPEAKER_02]: But I would expect the price to drop, but it may not drop as much as people think.
04:14.946 --> 04:20.911
[SPEAKER_02]: It may not get back to where we were immediately before the war, because we've drawn down inventories quite a bit.
04:21.252 --> 04:25.896
[SPEAKER_02]: That's been helped keep the price from really spiking, but I think countries are going to have to rebuild.
04:25.976 --> 04:28.198
[SPEAKER_02]: I think it was just a time and it's not going to happen overnight.
04:28.785 --> 04:34.747
[SPEAKER_01]: So do you think it's going to fall you had made a prediction earlier about $80 a while is that about the range that you think it belongs?
04:34.887 --> 04:37.428
[SPEAKER_02]: Or I think that's our longer term forecast.
04:37.448 --> 04:44.290
[SPEAKER_02]: But I think if it's the worry and then I won't be surprised to see the price of all, or but not over 100, I won't be surprised to see a drop to about $70.
04:44.770 --> 04:48.512
[SPEAKER_02]: I think over time, it eventually come back to $80 average.
04:48.572 --> 04:51.773
[SPEAKER_02]: But I don't, yeah, I won't be a rather drop to $70.
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[SPEAKER_01]: Okay, yeah.
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[SPEAKER_01]: And so that's the energy infrastructure too that you mentioned like we Canada has enormous resources in energy and historically getting those to global markets has been a challenge.
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[SPEAKER_01]: Our Minister Carney's government is trying to change that.
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[SPEAKER_01]: And if he succeeds, how different do you think Canada's position in the global energy market could be in five or 10 years from now?
05:13.055 --> 05:16.978
[SPEAKER_02]: I don't know if our position will change that dramatically.
05:17.198 --> 05:20.621
[SPEAKER_02]: I think it'll be great for the Canadian energy sector for sure.
05:20.861 --> 05:27.245
[SPEAKER_02]: On a global basis, just to give you some numbers, Canada produces roughly about 5 million barrels of oil today.
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[SPEAKER_02]: And that's about 5% of global supply.
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[SPEAKER_02]: They're talking about building a new pipeline to the west coast.
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[SPEAKER_02]: another million barrels.
05:36.193 --> 05:38.375
[SPEAKER_02]: So that's one million out of a hundred.
05:38.735 --> 05:40.738
[SPEAKER_02]: It's not insignificant, but it's not huge.
05:40.958 --> 05:44.021
[SPEAKER_02]: So yeah, but is it important to can you introduce us?
05:44.342 --> 05:48.406
[SPEAKER_02]: Yeah, it basically increasing the capacity of by about factor of 20%.
05:48.447 --> 05:51.190
[SPEAKER_02]: For can you introduce us, it's quite exciting.
05:51.230 --> 05:53.993
[SPEAKER_02]: But globally, probably not that big of a deal.
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[SPEAKER_01]: So, against that backdrop, and we've seen some extraordinary consolidation in the Canadian oil producers, Sonovas, for instance, purchased Meg Energy last year, and just announced the acquisition of Athabasko oil, and I'm curious to know is it's a common phenomenon that's kind of consolidation in the industry, is it something that we should be keeping an eye on?
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[SPEAKER_01]: What does this mean for the industry?
06:15.358 --> 06:18.440
[SPEAKER_02]: There's been no doubt there's been consolidation in the Canadian IT sector.
06:18.660 --> 06:26.006
[SPEAKER_02]: What's interesting to me is that, as an investor, it's when you look at what the companies are paying and what we call takeover premium.
06:26.146 --> 06:34.333
[SPEAKER_02]: They're not huge, so it's not like something that in some cases it's being maybe 5%, takeover premium, which sometimes these stocks move 5% in a day.
06:34.474 --> 06:37.176
[SPEAKER_02]: It's not like you're getting a windfall in the past.
06:37.296 --> 06:39.598
[SPEAKER_02]: It might speculate and say, okay, I'm going to invest in this sort.
06:39.878 --> 06:43.641
[SPEAKER_02]: all company and they get a takeover and they get like a 30% bump in one day.
06:43.721 --> 06:44.942
[SPEAKER_02]: That's more meaningful.
06:45.382 --> 06:53.027
[SPEAKER_02]: The takeover premiums these days seem to be a lot more modest as they say companies are more disciplined, which is good for if you are investing in a buyer.
06:53.047 --> 06:55.849
[SPEAKER_02]: I think there's been a lot more discipline in the industry.
06:56.390 --> 07:00.412
[SPEAKER_02]: But overall, I think for the buyers because they'd be more disciplined.
07:00.453 --> 07:03.194
[SPEAKER_02]: I think they get some more opportunity to create longer
07:04.195 --> 07:11.969
[SPEAKER_02]: And the companies we've been investing in tend to be more acquires, I think that's actually been a good thing for us that they haven't undisciplined in the purchasing.
07:12.392 --> 07:15.093
[SPEAKER_01]: Yeah, so are there fewer acquisition targets out there now?
07:15.113 --> 07:20.115
[SPEAKER_01]: Do you think that consolidation in our energy market has come to a halt or is there more out there?
07:20.635 --> 07:21.715
[SPEAKER_01]: I think there's holding a buyer.
07:21.735 --> 07:25.097
[SPEAKER_02]: Yeah, I think there's more scope in some areas.
07:25.257 --> 07:30.799
[SPEAKER_02]: Like in the oil sands, basically, with synovus buying assabasca, there's really not much.
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[SPEAKER_02]: Unless you see somebody like a really large player coming and buying one of them.
07:36.421 --> 07:39.702
[SPEAKER_02]: But even then, I don't see that will happen, because we will have group there.
07:40.062 --> 07:41.303
[SPEAKER_02]: And I don't think the government will allow.
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[SPEAKER_02]: So there will be restrictions on that.
07:44.006 --> 07:48.509
[SPEAKER_02]: So all fans, I don't see a lot of opportunity outside of all fans, not to gas.
07:48.529 --> 07:50.491
[SPEAKER_02]: There could be a few opportunities there.
07:50.531 --> 08:01.461
[SPEAKER_02]: But if you look at number of publicly traded companies, there's probably maybe about a dozen left that maybe could be potential targets or merger standards.
08:01.601 --> 08:02.562
[SPEAKER_02]: Yeah, I think there could be.
08:02.662 --> 08:06.065
[SPEAKER_02]: But it is certainly as we see more of it, it'll be less on forward probably.
08:06.465 --> 08:09.968
[SPEAKER_01]: from an investor's perspective is consolidation necessarily a good thing.
08:09.988 --> 08:12.210
[SPEAKER_01]: Does it increase as a company scale?
08:12.310 --> 08:19.217
[SPEAKER_01]: Is it reduces competition maybe or opportunity for investors to invest in these smaller companies and maybe make better return?
08:19.477 --> 08:22.420
[SPEAKER_01]: What does it mean for investors when industry consolidates?
08:22.820 --> 08:27.744
[SPEAKER_02]: I think the important thing to think about as an investor is really are their synergies.
08:28.425 --> 08:35.792
[SPEAKER_02]: And in terms of, if two companies get together, can they create a Congress scale, can they reduce their costs, and are the benefits from that?
08:36.032 --> 08:42.878
[SPEAKER_02]: If there are, then usually what you would expect, those benefits will be spread out between the buyer and part of the company.
08:43.338 --> 08:50.542
[SPEAKER_02]: So investors on both sides can benefit, but if the acquisitions don't create these synergies, kind of the scale we do is cost it.
08:50.962 --> 08:55.924
[SPEAKER_02]: If there are no benefits, send firm investments to standpoint, you're not really adding any value.
08:56.224 --> 08:57.125
[SPEAKER_02]: I'm gonna shareholder here.
08:57.725 --> 08:58.946
[SPEAKER_01]: Can we talk about lithium a little bit?
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[SPEAKER_01]: I'm talked to oil and gas care, but lithium is also a component in the energy markets, and you've covered albumarles for some time now, for those of us who haven't followed it as closely, can you tell us what's going on in the lithium market and albumarles in particular?
09:12.170 --> 09:16.872
[SPEAKER_02]: Yeah, in terms of album, I, during the probably asking is because the chair prices come off.
09:17.032 --> 09:20.633
[SPEAKER_02]: In the last two months, it's been down about 30% less in prices so off.
09:20.653 --> 09:26.515
[SPEAKER_02]: But, interesting, the market for demand for less in is actually still quite strong.
09:26.755 --> 09:28.436
[SPEAKER_02]: And there's been two key drivers of that.
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[SPEAKER_02]: One is electric vehicles.
09:30.417 --> 09:33.238
[SPEAKER_02]: Year over year, we're still seeing higher demand for electric vehicles.
09:33.858 --> 09:47.899
[SPEAKER_02]: particular places like Europe and which has been let's see how we talk about high oil prices that's led to high gasoline prices, high diesel prices and that's created additional demand for electric vehicles so that that's still being quite good and the
09:49.220 --> 10:06.787
[SPEAKER_02]: Other side of demand is we've also seen a big build out in AI, DSNRs and building out the grid and improving the grid and some countries that have been trying to diversify into more renewables like solar and wind and there's also been building that restores along with that.
10:06.847 --> 10:14.590
[SPEAKER_02]: So that's creating an extra demand for lithium and both of those factors have been actually quite robust but interesting enough.
10:14.630 --> 10:16.351
[SPEAKER_02]: So I think there's some concerns that
10:16.791 --> 10:28.457
[SPEAKER_02]: you know, particularly around maybe the AI build up slowing down and some questions about that and see that's caused some hesitation in terms of perhaps demand for some of and I don't need as much storage.
10:28.638 --> 10:33.700
[SPEAKER_02]: Yeah, maybe not and maybe that's not going to be as strong as what people thought might be.
10:33.740 --> 10:35.161
[SPEAKER_02]: So it's been under pressure.
10:35.181 --> 10:36.742
[SPEAKER_02]: But I think it's a longer term fact.
10:37.342 --> 10:42.865
[SPEAKER_02]: particularly around EVs are still strong as it was maybe 5% of the cars on the road are electric vehicles.
10:42.945 --> 10:45.987
[SPEAKER_02]: And I think there's still lots of long runway for electric vehicles.
10:46.047 --> 10:51.050
[SPEAKER_02]: And I think that's going to require a lot more lithium over the next 10, 20 years.
10:51.130 --> 10:53.751
[SPEAKER_02]: And I think all the modes can really benefit from that.
10:53.871 --> 11:00.855
[SPEAKER_01]: In theory too, the war in Iran and emphasis on oil there could, could it not increase the desire for people to want to kind of wave?
11:01.315 --> 11:05.760
[SPEAKER_02]: I think if you're looking to buy a new car these days, I think a lot more people are probably thinking about harbours.
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[SPEAKER_01]: Yeah, I can figure it out.
11:07.582 --> 11:07.762
[SPEAKER_02]: Yeah.
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[SPEAKER_01]: So if we were to have this conversation again in a year or so, what do you think we'd be talking about?
11:12.526 --> 11:16.831
[SPEAKER_01]: Or are we still going to be talking about high oil prices or consolidation or infrastructure?
11:16.871 --> 11:17.451
[SPEAKER_01]: What's ahead?
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[SPEAKER_02]: I think in a year hopefully the world will be doing it and that's what we're hoping.
11:23.511 --> 11:34.853
[SPEAKER_02]: I don't know if I can continue I think that we real serious issues if it carries on stronger than that but hopefully I think there's a lot of incentive on both sides to come to some agreement there so hopefully we do reach that.
11:35.433 --> 11:42.934
[SPEAKER_02]: On the infrastructure I'm hoping we see you'll be year first along in terms of approvals in terms of development hopefully we'll get some more.
11:43.415 --> 11:45.875
[SPEAKER_02]: We'll move further along in terms of that timeline.
11:46.755 --> 11:52.161
[SPEAKER_02]: And I think the thing is it's always hard to be to even predicting out in terms of months.
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[SPEAKER_02]: And say, we'll be in for a lot of surprises.
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[SPEAKER_02]: I would expect it.
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[SPEAKER_02]: Yeah.
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[SPEAKER_02]: It'll be a whole different purpose.
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[SPEAKER_01]: It's an evolving landscape.
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[SPEAKER_01]: Thank you for that.
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[SPEAKER_01]: I appreciate you walking astral of the changes and what's going on right now.
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[SPEAKER_01]: Thank you for joining us.
12:03.374 --> 12:04.295
[SPEAKER_01]: And thank you for listening.
12:04.595 --> 12:06.457
[SPEAKER_01]: Please like and share this episode.
12:06.477 --> 12:07.458
[SPEAKER_01]: And we'll talk again soon.
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[SPEAKER_01]: Right.
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[SPEAKER_02]: Thank you.
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[SPEAKER_00]: Thank you for listening to another episode of Different Makes a Difference.
12:16.090 --> 12:19.673
[SPEAKER_00]: Just as every individual is unique, so are your financial circumstances.
12:20.273 --> 12:24.236
[SPEAKER_00]: Be sure to talk to your professional advisors for advice related specifically to you.
12:25.136 --> 12:28.438
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12:34.042 --> 12:40.226
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