Eric Oliver, Video #2

Video on Vimeo

EO hits the following points:

    Vote the white card if you intend to vote FOR him. Hits the point made here yesterday.
    Not running for day to day executive leadership. Running for oversight in the form of 1 of 3 Trustee positions.
    Takes issue with the 2018 NPRI sale to CVX and the surface acreage sale to WPX. Makes the case that both sales look short sighted from a strategic perspective.
    Wonders why former Chief David Peterson did a water sale deal with an entity that ended up employing him after his resignation from TPL.

Hits home on the need for both 1) proper oversight and 2) the strategic thinking of an experienced portfolio manager.

The attractive marginal trade available to a portfolio today might be antithetical to the portfolio strategy of tomorrow. Ask me how I know.

Lastly, I think of the quote below often. Hits the Peterson situation well. How much did he own?

Show me the incentive and I will show you the outcome. – Charlie Munger

While I have you, was it a signaling error for none of the crew (Glover, Packer, Barry, Norris) to lift sub-units at the end of 1Q? Was thinking about this on a long drive today. Alligator arms? Not bullish? What’s the reason? If it’s regulatory, I’d love to know so I can be corrected.

SEC filing of transcript

Integrateds Spending

Some good, reader supplied articles on major m&a. Have to think the implications for TPL are many. Fewer counterparties is obvious. 2020+ counterparties will be: low levered, patient, exacting, strategic, cost disciplined, and looking to drive margins high and sustainable for as LONG as possible.

OilPrice.com: Could This Be The Next High Profile Permian Takeover?

The shale-doom crowd chooses to ignore the obvious, and frankly, the most compelling pro-argument for shale that exists. Big Oil is committing resources to shale in droves. Companies are falling over each other in the attempt to land big “Shale” fish, like Anadarko. And, in so doing have laid out ambitious growth plans for this resource. BP, (BP), ExxonMobil, (XOM), and now Chevron. What are they telling us by voting for shale with their capex dollars?

It’s simple really. They are saying that their geophysical teams-which, let’s acknowledge are the best in the business, have told them that with scale, they can wring more oil and gas for less money than any other equivalent investment. What scale brings is a low base cost of production, which when combined with the high technology these companies can bring to bear on a project, turns into profits and free cash flow.

SL Advisors: Chevron Writes Shale’s Next Chapter

The CVX/APC deal highlights how things have changed. IOCs are no longer focused on trying to act like a small company practicing rapid innovation. Instead, they’re applying the scale and efficiencies of a big company to drilling techniques that are now well established. It’s the next stage in the Shale Revolution.

Forbes: Which Company Could Be The Next Permian Basin Acquisition Target?

Ultimately, price and valuation are only part of the equation. Anadarko wasn’t the cheapest acquisition target for Chevron, but Chevron liked the synergies of Anadarko’s locations. Thus, every major operator in the Permian is more likely to acquire companies whose properties are adjacent to their own. A deeper dive thus becomes an exercise in not only value, but in studying maps of the Permian producers — large and small.

Two Cards, One Vote

***Warning: I’m not a lawyer or a proxy expert.  Below are my conclusions based on research of similar cases.  I take no responsibility for your vote or the outcome.  Below is my opinion only.  I just write a blog.***

TL;DR:

We’re all going to get two proxy cards in either physical or electronic form (or both).  You do not need to vote both cards.

Vote only one card.

If you have a candidate that you prefer, I strongly suggest you specifically vote FOR that person using the card explicitly naming that person in the ballot question.

White = Oliver.  Blue = Cook.

An AGAINST vote for Oliver is not a FOR vote for Cook.  An AGAINST vote for Cook is not a FOR vote for Oliver.

It is my belief that the candidate with the most FORs win*. AGAINSTs are essentially non-votes and don’t contribute to the denominator of the tally*.

*My conclusion.  Could be wrong.

Any help in nailing this down definitively would be appreciated!  Also, feedback on my logic (or lack there of) is welcome.  Let’s get this right. 

Two Cards:

You will get two cards electronically or via mail.  I’ve personally received both via Fidelity.com (who uses proxyvote.com) but only one physical card (White) via snail mail.  I expect the physical Blue card will arrive at home in the coming few days.

The BLUE card is a solicitation to vote FOR or AGAINST General Cook.  The physical card received in the mail will be blue.  Electronic voting and the physical card will both have the language immediately below. blue

The WHITE card is a solicitation to vote FOR or AGAINST Eric Oliver.  The physical card received in the mail will be white.  Electronic voting and the physical card will both have the language immediately below. white

One Vote:

This PDF written by Fried Frank is a treasure for getting into the nitty gritty on proxy battles.  The following language on page 8 is relevant to our situation:

In the course of a proxy contest, investors may receive multiple proxy cards from each side, and may, intentionally or inadvertently, submit more than one proxy card. The latest dated proxy card revokes any prior proxy.

I take this to mean that your latest vote nullifies and earlier votes.  For instance, if you voted the WHITE card FOR Eric Oliver yesterday and then vote BLUE card AGAINST General Cook tomorrow, your second vote is the ultimately the one that counts.  In that instance, your counted vote would be a vote AGAINST General Cook which isn’t the same as a vote FOR Eric Oliver.  The reverse is also true.

It appears to me as if AGAINST votes are non-votes and effectively function the same as the ABSTAIN option.

To be safe, I suggest you ignore the card of the candidate you oppose.

What Now?:

If you are unsatisfied with your vote (for instance: you made an AGAINST vote instead of a FOR vote), I suggest you clear your current vote online (I can do this on Fidelity.com/proxyvote.com) or call your brokerage and have them assist you with clearing your vote.  After your vote is clear, find the FOR card that you support (White = Oliver, Blue = Cook) and vote FOR.

If you’ve responded via physical mail and want to amend your vote, contact your brokerage to have them assist you in doing so.

Of course, if the card you didn’t vote is the FOR card for the candidate you prefer, you can simply vote that card as FOR.  It will override your prior vote (assuming the plumbing works as expected).

Supporting Evidence and Miscellaneous:

If you inadvertently voted to support the current board with the White Proxy Card, it is not too late to change your vote. Simply vote for the Blue Proxy Card. The most recent vote sent before voting closes will be the only vote that counts.

  • Barron’s writes on the state of proxy voting.  Votes via brokerage houses get rolled down to the owner and then get rolled back up in a fairly ugly way.  This makes the case for voting once and doing so as directly and simply as you can (FOR).

For an annual meeting vote, DTC/Cede identifies the bank-broker participants that hold the stock as of the record date and sends them an omnibus proxy. Participants, in turn, send a proxy or a voting instruction form (VIF) to their own clients, such as institutions, individual investors, or respondent banks, which have accounts with a participant bank.

Cascades of proxies can follow. Respondent banks may have their own clients, which may include still other banks with shareholder clients. All will send out proxies or VIFs to their clients. As votes are cast, the proxies and VIFs reverse course, heading back up the chain until they reach the tabulator of the vote. This can be done by mail, email, or telephone, depending on the participant, the shareholder, and the third parties involved.

Eric Oliver Video

Horizon Kinetics Hosts

Click the top link. Video shot 4/16.

Transcript in 14A

What I want to say to all of you is this election is so important. There’s only been four elections in thirty years. And with a lifetime appointment, we may not have another meeting until another trustee dies or resigns. Which, actuaries tell me could be thirteen years. So Murray and Alan and I got our heads together and said this election is so important we need to at least let our voice be heard. That we think it’s time for modern corporate government. We think it’s time for term limits. We think it’s time to expand the board. To have real committees. Have functioning accountability and checks and balances in place. We believe it’s important that the board be represented by its owners. If my opponent is elected, it would be the least amount of ownership on the board in over fifty years, since the Frasier and the Meyer family have served for three generations. And finally, we think this third and final seat deserves to have an expert in the oil and gas and royalty and Permian Basin marketplace.

Universal Guaranty Life Supports Oliver

LiveInsuranceNews.com: Universal Guaranty Life Insurance Company Announces Support of Eric Oliver

Stanford, KY, April 16, 2019 –(PR.com)– Universal Guaranty Life Insurance Company, a wholly-owned subsidiary of UTG, Inc., announced today its enthusiastic support for the election of Eric Oliver as trustee of Texas Pacific Land Trust (TPL) at the special meeting of shareholders to be held on May 22, 2019. UG intends to vote all 39,000 of their shares for Eric Oliver using the White Proxy Card.

Eric Oliver introduced UG to TPL 10 years ago. Eric had followed UG for some time and was an active investor. Eric has continually demonstrated his belief in TPL by investing both personally and through companies he controls. With his background, knowledge and experience as a seasoned oil and gas investor, UG believes Eric Oliver is the right candidate to succeed Maurice Meyer III as a TPL trustee.