“Fortune favours the prepared mind”
Louis Pasteur
Merchants,
back in February, I wrote you about a company almost nobody on the energy desks was watching, and I told you plainly that I had bought it.
The thesis was simple, and at the time it was still a bet.
Venezuela was quietly turning from a sanctions problem into a US strategic asset and one oilfield services name was sitting exactly where the new money would eventually flow.
So I bought it.
Then I sat on my hands while it went nowhere and for a good stretch it went down.
This week, the bet started to pay off, and not in a small way.
It began a couple of days ago, when Axios reported that the Trump administration was closing on a direct stake in Venezuela’s oil fields.
By Friday evening it was done.
President Trump announced that the United States and Venezuela had signed, and his administration called it the biggest oil deal in world history.
17 of Venezuela’s best fields, around 65 billion barrels of proven reserves, with Washington taking a controlling majority in the venture that will pump them.
That is the signal I have been waiting for since February, and it just went from likely to done.
The part I most want you to sit with, before the paywall, is this.
Underneath the Venezuela headline sits a much bigger move a decision about where America gets its heavy oil, a fight it is picking with its oldest supplier to make that switch, and one company that gets paid before a single new barrel comes out of the ground.
Let me walk you through the whole board, and then the trade.
(Below: the deal, the heavy crude switch that ties it to the Canada tariff war, why OPEC is fraying, the one catch that caps the whole thing, and the full re underwrite of the name I hold, with refreshed price targets.)
