#hottakeoftheday Episode 63 w/Vicki Hollub
Now, we're thinking audio. What is going on hot take the day nation. It is dear w here with an episode of the podcast that everyone expected I mean there is no doubt that at some point. Vicky of would be joining and today is interesting day because a hurricane is barreling down on Galveston where Vicki lives. So she's going to be i. have been apart I think our house. So lots to talk about in the next thirty minutes but first. Vicki thanks so much for joining us. How are you today? Good. It's it's such a sunny nice day here. You would imagine that by tomorrow afternoon or early evening there's going to be a hurricane here but But things are today at least. Okay. So this is this is the first major event of the year really where where we've had golf Mexico production shutting in. Platforms. What what is what does a hurricane look like in Galveston I mean, how did you have like like windshields that you put down on your windows and you just you just depart and come back and see what happens. Now, the problem is we we have to the biggest is cheaper us as to tie-down our boat in our boat. So we have to tie down, but we have to make sure it has the flexibility to move up and down. So we have a way to to do that, and and so the thing I'm most worried about is the boat. But we have. We live on Galveston. In GALVESTON and so but we're not on the main A. So we have a little protection from storm surge but a direct hit from Laura they. They're saying would create a storm surge of about seven to eleven feet. In. So yeah had high tide onto that and that's thirteen feet. So that would not still not quite get into my, but it would certainly be over the docking. My boat is going to not have a good day. I'm afraid we'll. We'll. Let's let's talk about this in the context of work from home. So I another storm hit the world and the oil markets and everything that we've been living with really since March which was when I was down is as funny I've had one live presentation since I saw you guys down at oxy March and. It's amazing. How much the world has changed since March fourth but I'm curious how the work from home been going for staff and and what have you learned and you know when people have to manage their lives, they have to leave their houses they have to manage their dogs, manage their kids what have been the pros and cons, and how are you thinking about this go forward assuming we go back to some level normal. Well. Certainly. We've been very impressed by what our teams have been able to accomplish in this kind of scenario because there's the the disconnection was okay for a while and then connecting business in all of that. That's it's been wonderful that we've been able to do it like this where we can actually see people as we're talking to them start think that's made this. Scenario that's been bearable in the teams have been performing incredibly well and exceeding expectations. You saw probably SARS second quarter earnings results in from an operation standpoint. Again, our teams exceeded even our expectations. So they're still performing at a very high level but but that can only only happen for so long you know they prolonged a disconnection from each other in having to do. It would have been a whole lot worse if we had had only phone lines and not disability to see each other but even disability to see each other, it's not like being in the office and being able to walk down the halls in in do the impromptu brainstorming, and that's what I worry about every time that we're gonNA miss out on first of our large cultural initiatives we were trying to to reinforce reinvigorate. It makes it hard to deal with our our cultural changes and help each other grow closer together as a team when we when we're doing it like this. So I was fine where we're GONNA be okay doing this for. For nine months, but if we have to go much. Beyond the end of this year, it's really GonNa Start to to bother me, and we're really going to have to pay more extreme measures about how to stay connected. I'm I'm really glad you say that because I think that you know if you follow the talking heads on TV or articles, everyone says work from home is going to change things and and I agree that presence that culture that that bringing people into the workforce and especially with the divisiveness that's that's really going on. So which is kinda pivots me a little bit and I don't WanNa be controversial on it, but you started your career in the eighties ish. And let's say. Am in the Eighties Ish and end the role of the role of women in the workforce. And Diversity in the workforce I think with everything going on with Blm and and you know opportunity you you rose to the top of a male dominated industry at the time and I'm curious what perspectives you have on diversity and inclusion in things that could have been done better things that are being done better and as we look forward to the future things that you're doing as part of the leadership at oxy industry to really change the perception of the way our industry but I think every industry was pretty male dominated in the eighties. So, curious how you were able to navigate that. Will for me back then it was. Working for Occidental really made a difference because oxy is a company that has always been pretty diverse. We've always had some interesting characters as CEO. I consider myself probably the most normal in that Steve State Super Smart and Steve is a financial gurun. So he's got all kinds of really great attributes. That I. Don't have, but I was I was more mixed within the organization itself more Party organizations. So as I came up, I had a little bit of net advantage over Steve in that I knew the people I knew. The people within the organization that knew how to do things. So I could connect and us. Oh so after that, but even before the we had people who CEO's who just focused on trying to make sure that we got people that can do the jobs, and then we had leadership throughout the organization that for a long time in my view didn't care whether you were. You were from the middle, eastern from from Africa from Russia from all the places that we had operations, we tried to utilize the best talent, and so we had the opportunity to take advantage of that talent. Now say that Mine Informal Mentor Golan who who actually got me, my first major leadership role in the company he he caught some backlash for that. So it wasn't like everything was rosy with him. Occidental the first time that that. I? Really. Significant role I got is leader. Managing. Edging are filled operations in. Ecuador. and. It was. A lot of people felt like A. Woman shouldn't be doing the always managing a filled operation that had about one hundred Ecuadorians in had. A. At the peak of our busiest time, we had about a thousand contractors working in all the areas of the field we were so remote that we had to fly, take a flight from Kito to a little town called Coca river than take a forty five minute boat ride just to get our camp it was self sustaining managing small city. So he he took some some backlash for winning. Put me in that role and but that was a that was. It really showed people that that if you're willing to take a chance on somebody and if you trust that person. Then than you're you've just give somebody a gift that on that will live with them and take them to places that they wouldn't have had otherwise have the chance to go in because he trusted me in because he stood up, did it against the people that didn't want it to happen I felt a lot about Gatien to make sure that I did the row really really well so that he would be would have been proved to be right in his decision and so. I think it's it's it's in any organization I think women. Need to have that person that supports them. They need we still need in the male-dominated dominated. Industries that that exists and like you said so many it's not banking energy manufacturing. So I've been to all these investor conferences not can tell you see more women in gas the Nazi in the investment community. Oh I think that any any industry like this needs people who are willing to step up four for whatever minority it is whether it's women whether it's Africa african-american weather it's. Latino or Latina. Whatever the person is, what we need to do is take full advantage of diversity that we haven't been able to use it to make our company stronger, and it's it's not just diversity its inclusion this it's making sure and in a lot of people, you'll quote stats conferences, they have this many this or that or whatever the, but the the real issue, the real. Thing that you need to focus on is, what do you do with it? Are you really getting full advantage of it and I don't believe that I'm doing? All I can can do within accede to make that happen, and so here recently I've trying to do more to to to advance this and make it happen and when we bought Anadarko, we noticed they did have diversity in inclusion initiatives that I thought were impressive and so a we are now trying to make that a part of our culture is trying to take advantage of what some of the best practices that they had and we're building on that. So tying those two things together I think that that. The Cova we have worked from home, and then we have culture and inclusion, and one of the things that I think stands out as potentially a risk to society is this sort of female recession of jobs because of schools and I don't know that I necessarily like phrased it right and I mean I hate to sound like you know very glib about it but generally speaking the roles of family and kid and stuff disproportionately fallen the women even. When men late myself are trying to help discover that I'm like mostly useless in that category, and so if my kids weren't able to go to school and weren't able to get driven and and their work from home that negatively impacts women, I'm curious what oxy does and what what industry and society does to help prevent this women's employment recession given how much progress we've made in in bringing people into the workforce and giving career opportunities and advancement him. Well I think that the biggest benefit that we're gonna see from what happened is part is a result of Kobe is going to be something that I think five years from now in ten years from now we're going to look back and say, yes, this was a horrible time people dies people suffered and and all of that was really horrible. The. One good thing that I hope will come out of this thing really will is that we're GonNa see that we can and should be much more flexible about how allow people to work. And I think that this flexibility this extreme flexibility should enable families where there's a mother father who both have jobs in both of them could have the flexibility that we should now be able to allow. Because now we know that people can work anytime him people can work from anywhere. So we have if we can allow this flexibility for both the father and the mother I think that that will make a make it possible for more women to remain a upon the workforce because if you look at what happens when no even the percentage of women that we bring into our industry into. Other industries when they get to the point of about mid career that's when we started start losing our women in losing that that progress that they had up to that point eight and part of it is that they get to a point where they look at their their children, the children's activities and I feel like the they've gotta be there for for their children for things that if they kept their job that might not be able to do. So we have to fix that we have to fix that so that they can address that both the mother and the father because The. What's great about the millennials in earlier career people that we have now is they care about family is like they care about. Their Children's fathers don't feel lockets his job to sacrifices time with the kids because he's gotTa go be earned. He's gotta go spend. Fifty, sixty seventy hours a week worked the job and it can't be with the kids because that's the expectation for for him. The expectation for the women has been they they do the take the primary responsibility Straw, the kids activities. So we WANNA take in should take the pressure off of both of them. And bring them closer together. So each gets to experience their children going on because I can remember the times when I was a working with guys when when the kids were far were young, it was like I can tell they wanted to go spend the time that they didn't think that they would be allowed to or should even want to. It seemed like sort of Macho. Thing back then and I'm so glad our. Young people today are so enlightened much more than we were why like I? Really like your your hybrid approach because you're taking the best of Covid, which was people can work from anywhere. It is Kinda funny to think about the fact that I ended up in Denver because I mean, obviously, we were sold Anadarko, Canada, I got moved to Denver I had to move but like, well, it's time for you to transfer to Houston and now you sort of say that and I think people would have a difficult time saying that with a straight face. So the best of both worlds I think is really good now. You know that I'm passionate about executive compensation that I've been I've been complimentary review because you know two of the most difficult decisions the came on the back of both covert and the Anadarko merger were cutting the oxy dividend which had been held there for very very long time and also lowering yours and other executive comp. and. I'm curious how that played out in how you think about executive comp going forward I mean we continue to see and and I think Kodak. The example of where options were granted the day before this. Loan, happened and all the exact got rich and everyone got fired up and some of these bankruptcies of seen very, very large pay packages be awarded to CEO's that may or may not still be with the company and you really look in my view the industry in taking different approach. How do you think oxy's views on executive compensation will evolve out of this and what are your personal views on go forward I don't want the rest of the CEO's in the industry. And other industries to hear me say this but I think overweight overpaid. it's you know it's an I can understand the compensation levels of CEO's because it's a risky job. It's a very risky job normally. I don't know what the average tenure of CEO Today is. But I, I, know that when I took the job I was looking at the stats knows in. Four years. So I'm thinking I've got this great career in operations in a love what I'm doing and and. Can Twenty sixteen when I when I took this. Four and a half years younger, and at that time I was thinking I've got A. Fifteen year career as a as an operations person than doing technical work and things that I love to do versus. Take the CEO role in the average CEO. Last four years oh. At that time I don't know if it's gotten longer now but but you take a job that's risky and in that's part of the reason for the incremental compensation. That's the only reason I can figure that that happens because. Really. When I look at the difference in the value I add versus the leadership team in the organizations. That it's it's. Really disproportionate. To to what others in the organization make. So I'm fine with where my coauthors today I think that. We have to overtime. There needs to be. There can't be as much as a gap in between. People. Don't see Ios when they get to these roles. They had a lot of support like I. I saw people in the organization that I've now with me and putting those because I knew I could do and they're doing a great job. Those people are helping so much and so it's To me, it's always a team. It's a team that makes things work. It used to be a lot of industries you look to some of the leaders of some of the the The the very well respected accompanies passed in you always see some personality's amazing. No doubt they're amazing. But but today's world is so much more complex than things were back. Then to think that one individual can really make the difference in making a company great versus not is. Is. For for where we are today, not to ride assessment, it's really it takes a team in a takes a leader who recognizes that, and who will let the t mix l. let the teen do what they need to do, and the people within the organization organizations do I need to do? That's what we're trying to do. We're trying to to let. Our key executives and our key leaders in the organization. They're empowered to to do things without without having to. Having to go through A. Whatever decision they make has to be vetted through dramatic thoroughly, and we've got people doing the things that. I just tell him to go do it. Kim You informed go do it in the. Doing amazing things and they just got to keep you informed and you know at some point if there's a strategic direction change then. We as a team, get together and do it. So it is again, it's a great time because one of the things that was going to say is as I. Think about like typical maybe typical is wrong word but historical leaders who this big personality and seeing you over the multiple times we've chatted and seeing if the office seen the way that the staff looks at you, I mean you're a team member and you're a facilitator in your your coach in your your they're making performance better. You're not doing it out of the sheer mega larger than life personality and and juxtaposed that with you also did the single largest deal and energy in the last three or four years. You beat Chevron in an in a bid friend darker which we've talked about at length and and I am and continue to be supportive of the deal because you know everyone forgets oil was seventy three dollars. I think the day that you announced and the world has changed. But with the context of CEO's have a very high risk job that you are the lightning rod for this deal that Kovic happened that no one could have predicted to the point where even the three way callers you had like win below price that no, one would've ever believed possible. How do you look at the transaction now in twenty twenty hindsight as you do a look back, how do you judge the success or failure? Over the duration as opposed to these quarter to quarter, you know pressures you'd get from Wall Street and everyone telling you like what did you do? You're like well, give us give us some time I'm curious your thoughts. Well I I look at the deal and certainly I'd. Then, Blake now, the deal was exactly the right thing to do for oxy because we were not looking at making. transforming. Nazi in a year, we were looking at transforming obscene two years. We were looking at making oxy over three to five period a totally different company and accompanied that's committed to sustainability for the long term and what this did for created a NASA basis phenomenal an asset base where we can apply accommodates to that development that overtime is going to not only make give us incredible resources. For the future for development but also it will give us a lower carbon footprint than I think any of competitors on a per barrel basis. So while the Europeans are moving more to renewables, we're moving toward our core competence and that's to use o two for enhanced oil recovery, not only in conventional but in unconventional, not only the United States but all around the world and as we do that. We are able to help the world lower co two in the atmosphere will start in the Permian and will move. We've already started at the Permian. We'll be moving to other places where we operate and internationally the deal not only did that forest help us differentiate ourselves from an asset based standpoint. But also from a low-carbon standpoint, it also lowered our risk against The potential of fracking going away because our footprint now domestically is so large. It's larger from lamb perspective than any other company today in the United States. From hydrocarbon standpoint. So all we have to do is apply co two to all that should fracking get banned and without foot brand, we can still double the resource that we have today w reserves we have today and do it without needing to Rockwell's. So it takes a significant risk off the off the table for us. We're now much more domestic than international, but where we are internationally were in stable countries in in places with aware that had been honoring the bitter. CODA business in their own laws so that we feel comfortable that we can sustain that over time in that it kicked out her ex expropriated and some people feel like this was a bet on oil prices. This was absolutely not a bad on oil prices. This was a bet on our employees and I'll make that bed any day and made that were winning at. Certainly. Lot of what we're accomplishing is being overshadowed by the COVID price for in all of that. But if you go back and look in time you go back to the first week. Matt Wti ever averaged forty dollars. You probably know this you have somebody stats amazement with your stats. I just love to listen to but but if you go back in July of two thousand and four was the first week got wti averaged forty dollars. And since that time deputy is averaged forty dollars ninety five percent of the of the weeks that occurred. So ninety five percent of the time W TI's averaged above forty dollars or above. So we knew that even before their acquisition after the acquisition that our break even price was still going to be around forty dollars, but the upside is tremendous. So we knew that we would make it through at forty dollars, lower risk more US operations, and all our employees to do was make it work and they're making it work. So so I know a hurricane barreling down on you. So I'm going to I want to make you comfortable I've have three more questions to or quick, and one is some advice. So the two quick ones are so coming out of cute to you did announce Wyoming sale, which was which was interesting. It was clearly a legacy. But it was a little more different than I thought had surfaced land and a whole bunch of things with love for you to just comment quickly on that transaction and part of the you know the proceeds. Leading towards being able to pay down the debt. Yeah that that was the one of the most complex things we've ever sold because it's got trona mines at has other minerals that have yet to be developed. It has hydrocarbons in ahead the surface that that could be used to build resorts in all sorts of things, and so we had to bring in two different advisors who had expertise around each of the areas that we did not. So the things other than hydrocarbons. Our team sent out. A teaser to more companies and individuals than we've ever Senate to we seem to a lot of Hollywood movie stars we send into a lot of billionaires. We send it to companies until we sent out about fifty teasers, I think we ended up signing about twentysomething seat company jailed agreements ended up with thirteen bidders as very serious bidders in the first round and then second round had more. Than seven that were reasonable bids and then with the high bidder with Ryan and We're happy about what we were able to accomplish their even with all the complexity of it and think that we're going to be able to partner with Ron Orion going forward be kept the hydrocarbons because we know they're the upside. So if you looked at pre code we're looking at probably we'd get. Around one and a half point seven and with the deal we got one point three three plus the upside hydrocarbon. So we got within the range that we expected to get pre covid and that's that's worked out well for us when we will be will use those funds to definitely pay down death. Awesome. So then the second piece was a little twist from your original plan I. Think that some of the Africa sales some of the international the you plan on divesting and and I thought was one of your brilliant executions to be able to lineup the needles with buffet and and have hotel ready to step in what do you plan to do now? Obviously, that was a big change. How do you think about that is part of the core strategy for oxy go forward Patrick. And I ran into a roadblock stelling Algieria. Home, what we found there as While we we didn't know the assets and we figured you know our strategy was not to be in Africa was just in the Middle East. South. America. And the United States. But as we learn more about the assets and we hit the road blocks which took a serious look at the assets than and in part of the reason to give Kudos Anadarko part of the reason we hit the block is. Two things first of all the the ALGIERIANS did not want to sell to totality because that would increase the percentage of production hotel had in the country and what they're trying to manage is diversity of investment within the country. So they didn't want to many eggs in one basket from an investment standpoint. So had nothing to do with hotel it was just a management of WHO's investing, but the other thing, the other big reason had a lot. To do with Anadarko so all the good things about Anadarko the Jerry thing was an incredibly good news story for for Anadarko because they had built a reputation there and the relationships there that Algeria did not want the ended Arco Organization to go away from Algeria. So that's a it was a initially positive news story for us that the reputation was so good that done a good job there but then what it costs for us is the problem. Of Needing to stay there, and that was what I initially due to be a problem until we looked at the assets in more detail in got comfortable with the fact that there is upside there things that can be done with just a some additional investment in attention to that. So we're actually excited about now we've been working with Sonatrach in some our other partners to look at our five and ten year plans over there and I think it's GonNa be turned out to be one of those things that were glad we We're glad we didn't make it happen I think it's a great win because one of the criticisms of the deal time was there was a lot of value. So parsing and keeping. So now you get all of that and all the exposure to long-term world prices. So congrats on that last question if you could go back in and meet yourself as a younger Vicky. Pick Twenty, two, twenty, three, starting your career knowing what you know. Now in all of the lessons that you got the resiliency, the career path mentorship, what advice would you give that would meaningfully change your outcome. I would say that first of all. Always. Be. Passionate Always take whatever job comes your way because you even if it's something that you don't want to do something that you think will not broad you that's haptic times but I never said no to anything every job I took on learn something from home and and that's the way you have to look at it. So if you end up being offered a job. The if possible, don't say now take it and then as soon as you take it, go figure out what going to. Bring to you what can I do for you So it's not only what can you do in that job to do the best job you can what expansion is again provide for you and take advantage of that, and the next thing I would say is always make sure that you're the person you're the kind of person that you would want to work with. So think about what of person would you really WANNA work with? Is it somebody? Who helps you be better than you are than somebody that may be? Sort of doesn't make you feel comfortable all the time but somebody that could actually make you grow over those the kind of people that you wanna work with if so be that person to others because that's GonNa likely get you in a position where people are going to want you to be on their team. There was one guy that used to used to work with. and. It didn't matter what I he he reported to me and it didn't matter what ask him to do. He would always say. And I would go through into these explanations in. At least three or four or five, wise and ice. nuts. But then what what happened to me is everytime I would get ready to go talk to him. I would know there's going to be at least for one is so then start working through all those wise in my head. And then it. So initially, it was a contentious relationship. Over time it got to be better and better and better because it got to be something that we laugh about because he knew he put me a little bit on edge initially had I knew that he was just driving me nuts but we made it work and it it really helped me down the road to anticipate what others are thinking and how and how they can help me to think differently and be open to that, and if you can be open to that, you can work with anybody. Well. You you know. Long Time Ago Sixteen eighteen months ago when I wrote my first post about about my phantom of you. Got To know you more personally I feel very, very blessed. You're very gracious with your time I. Think you're a wonderful sale. You've you've done nothing but reinforce all of my positive things I have to say about you and I. Wish you the very, very best of luck with the hurricane with the next quarter and with everything that has to come, and I look forward to staying in touch chatting with you soon. So thanks so much for joining us and beasts literally be safe. Right. Thank you. David. Okay. Thanks. For everyone else be safe be good. Have a great leap day and until next time.