There's some ROCE swimming in the water. Get a boat and start paddling.

When I started out in oil & gas I was responsible for a small sector within the downstream services space.

I quickly realized I was at a competitive disadvantage being siloed into my little list of names.

I had no clue what drove returns and thus capex for the Supermajors, E&Ps, and refiners. Sure I had some knowledge at a high level but not enough to be dangerous.

When looking at these companies I go back to my mantra that high returns will attract capital, provided there are minimal material constraints.

Returns can be a guiding light to tell you where the proverbial “puck is going to be” so you will know where to skate.

In 2022 the Weighted Average Return on Capital Employed for the oil & gas industry was 22.8%.