Ep 11  |  The Business Acumen Podcast

What 10 Oil & Gas Earnings Calls Reveal About the Future of Energy

Show Notes

Brent Barclay (Chief Operating Officer at Acumen Learning) and Greg Kandare analyze current shifts in the global oil and gas industry. Drawing on a recent Acumen Learning report examining the earnings calls of 10 major energy companies—spanning integrated majors, upstream, midstream, downstream, and oilfield services—the hosts break down how geopolitical conflicts, energy security concerns, and the massive power demand from AI data centers are quietly reshaping the global energy landscape.

Using Acumen Learning's five business drivers framework (Cash, Profit, Assets, Growth, and People), Brent and Greg discuss why companies are prioritizing capital discipline and returns over raw volume growth, how major service providers are rebranding as energy technology companies, and what leaders need to watch for as market volatility continues.

Key Takeaways for Leaders

1.  The Paradigm Shift in Energy Security

Global energy security has evolved from simply securing supply contracts to controlling the full "molecule-to-market" integrated value chain. Geopolitical disruptions—such as conflicts in the Middle East, the war in Ukraine, and refining bottlenecks—have highlighted the risks of outsourcing processing. Countries and major energy corporations are increasingly seeking control over every step: from extraction and midstream transportation to refining, petrochemicals, and retail distribution.

2.  The AI Power Boom and Oilfield Technology

Artificial intelligence and data center construction are driving an unprecedented surge in energy demand, with over $1 trillion in capital flowing into data center buildouts. Beyond supplying natural gas for turbine power generation, oilfield service giants are leveraging their core engineering capabilities to build modular infrastructure and specialized cooling systems. Companies like SLB and Baker Hughes are increasingly positioning themselves as energy technology companies rather than traditional oilfield services providers.

3.  Capital Discipline and "Value Over Volume"

Despite crude oil price spikes and strong market demand, energy companies remain disciplined with capital allocation. Burned by historical boom-and-bust cycles, executives are favoring "value over volume". Instead of chasing top-line revenue growth for its own sake, companies are focusing on returns, optimizing feedstock to produce high-margin distillates like diesel, and dynamically shifting assets (such as fracking equipment) to global regions that deliver the highest contribution margins. 

4.  Interdependence of the 5 Business Drivers

A key theme across all 10 earnings calls is the tight connection between the five drivers:

• Cash funds strategic investments and asset deployment.
• Assets must be optimized through digital tech and predictive maintenance. 
• Profit rewards operational efficiency (e.g., higher crack spreads and lower turnaround times).
• Growth captures market opportunities across new energy and data center needs.
• People drive strategy execution and adapt legacy knowledge to changing market realities.

Featured Tools & Resources

• The Molecule Moment
  

  Download Acumen Learning's complete report analyzing the earnings calls of 10 representative energy giants through the five business drivers framework.

• Acumen Intelligence AI Platform
  

  Fill out the waiting list form to get early access to Acumen Learning's specialized AI tool designed to automate company research, synthesize earnings calls, and generate strategic call plans for salespeople. 
  

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What 10 Oil & Gas Earnings Calls Reveal About the Future of Energy

Host: Stephen H. Covey; Guests: Brent Barclay (Chief Operating Officer), Greg Kandare (General Manager)

Greg Kandare:

You and I have been working together in this industry for better than a decade with lots of different companies. As I look back, I don't know that there has been a more dynamic or interesting time when it comes to this industry. When you think about things like geopolitics, conflicts, and factors driving demand, what feels different to you right now?

Brent Barclay:

You highlighted some of them right there. A big one we are all familiar with is geopolitical issues. It is not just what is happening in the Strait of Hormuz. We experienced it with Ukraine and international constraints around getting resources from Russia into European and Asian markets. We have felt that for some time, and it continues to be a growing challenge.

At the same time, limitations around refining have become a bigger issue. I know, for example, Phillips 66 shut down one of their major refineries in California. So you are getting less refining capacity alongside higher demand for product availability, especially with what is happening in the Strait of Hormuz. It is a combination of geopolitical issues constraining refining capacity, alongside future growth needs.

Then there is artificial intelligence and energy generation. A lot of that energy is going to be generated from natural gas and other resources where the oil industry plays. So it is a myriad of factors: geopolitical issues, less availability of assets to produce end products, and the need for more and more energy to run data centers. Those seem like the big differences compared to what I have seen in the past.

Greg Kandare:

You often have to look beyond the short term—whether that means the last six months, nine months, or a year. One thing that has changed is how countries view energy security today. In the past, it might have been about securing supply through agreements, contracts, or imports. Now there is a different dynamic. How do you think countries are evaluating their energy security in the long term versus the short term?

Brent Barclay:

I did not hear a whole lot about energy security back in 2014 when oil was priced at over $100 a barrel, or even in 2016 and 2017. Over the last several years, the idea has shifted beyond where to access energy to the ability to take it from a molecule to refined products. It is about getting access, but also being able to produce what you need from it.

The situation in Ukraine was a great example. All of a sudden, volumes coming out of Russia were constrained, and availability disappeared. Countries are now thinking beyond basic supply to a fully integrated model like an ExxonMobil or Shell, where you control the whole resource. You get the oil, but you also need transportation through midstream, refining capabilities, and access to retail products like diesel, gasoline, chemicals, and plastics. You have to have all of that available to you, otherwise you have to outsource it from other locations where trade challenges, tariffs, and geopolitics cause friction. People recognize they need more local control over those resources rather than relying on other countries, making energy security a continually growing issue.

Greg Kandare:

Those are interesting dynamics on the supply side. Turning to the demand side, how are AI specifically and power demand creating a unique situation today?

Brent Barclay:

Specifically in the oil industry, we think about the products oil companies produce that can generate energy, primarily natural gas. Beyond that, companies like SLB are taking their cooling system technology to create modular infrastructure for data centers. As these data centers are built out, oil service companies are utilizing their expertise in manufacturing and cooling. They are creating modular stacks that allow construction to move about 40% faster than traditional methods.

So oil and gas companies are producing technology stacks for data centers. It goes beyond just producing energy to applying existing technologies in new ways. SLB also completed that big acquisition of Kelvion, which is focused on cooling systems where 50% of revenue comes from data centers. They are taking what they know and diversifying their capabilities to drive AI initiatives, which is unique in my experience.

Greg Kandare:

That specifically impacts service providers as they leverage global yet locally sourced executional capabilities to meet customer demand. Beyond the buildout, execution, and supply chain sides, there is a massive dynamic on energy consumption. One thing people do not realize is that some planned data centers are projected to be larger than Central Park in New York City. They require massive amounts of energy, and you cannot simply plug them into the local utility grid. You have to plan for your own energy creation, which to a large extent will be gas-driven turbines. That creates a massive demand and years of backlog for companies like Baker Hughes that manufacture turbo-compression components.

Brent Barclay:

You triggered a thought when you mentioned Baker Hughes and turbines. When you look at what these organizations need, oil companies are looking at new energy approaches. While solar and wind are big, geothermal and nuclear are growing. There is a group in Utah developing nuclear energy generation about the size of a truck. It functions like a generator powered by nuclear energy that can be placed right next to a data center to supply electricity. All these new approaches to energy generation play into how we drive power to these data centers.

Greg Kandare:

The Wall Street Journal recently reported that over a trillion dollars of capital is being poured into building data centers, with energy being a critical component. As these companies look to the mid and long term, new energy is an element that is important to almost all of them. Whether it is clean energy, geothermal, or energy storage to handle periods when solar or wind are not generating power, there are many dynamics creating a heightened state of change in the industry.

Brent Barclay:

The integrated model is definitely getting more attention. When you talk about energy security, controlling assets from the wellhead to the end product is key. We saw companies like ConocoPhillips spin off Phillips 66 in the past, creating separate upstream, midstream, and downstream entities. Now, the concept of energy security is favoring having all the assets needed to take a molecule all the way to end products. Companies expand, contract, and consolidate over time, but that integration dynamic is impacting everyone right now.

Greg Kandare:

Let's switch to the ten earnings calls we analyzed across integrated, upstream, midstream, downstream, and service companies. What jumped out at you from those reports?

Brent Barclay:

We like to look at those calls through the lens of the five business drivers. Growth was right at the top, closely followed by profitability and cash. Growth in the oil industry has changed dramatically. In February, oil was around $73 a barrel, and now Brent Crude sits around $120 a barrel, with West Texas Intermediate near $100.

Typically, when oil prices rise, downstream refining margins drop, but we are not seeing that right now. Because of geopolitical issues and constraints in the Strait of Hormuz, the ability to get refined products to market is difficult. Instead of seeing higher volume with lower margins at refineries, crack spreads are larger than usual because refined products like diesel are over $7 a gallon.

The whole industry is experiencing growth, driven by geopolitical factors, refining capacity limitations, and future energy needs. Profitability margins are exceptionally strong across the board. Kinder Morgan is investing in LNG and power demand, while Williams is getting involved with power generation and data centers. Across the board, growth beyond the core is a major standout.

Greg Kandare:

With prices staying in the $100 range for a few quarters, margins are very high. Why are companies still being judicious and protecting cash and returns rather than purely chasing growth opportunities?

Brent Barclay:

People are evaluating how much long-term confidence to place in these market investments. It is not just about growing for the sake of growth; it is about protecting margins and ensuring long-term sustainability. Companies want to manage their cost structures so they can win even if market conditions change.

We saw prices jump to $120 after events in Iran, drop back to $80, and then rise again. Companies do not want to overextend capital investments and then see the market shift. For years, the oil and gas industry was extremely cyclical—building up assets and hiring people when prices were high, only to lay people off and divest assets when prices dropped. Now, with unique demand drivers around refining and AI, companies are exercising caution to protect margins and long-term sustainability despite massive global capital deployment.

Greg Kandare:

We often associate growth purely with revenue growth, but profit growth is equally important. You can grow profit faster than revenue by remaining disciplined and returns-focused, which has been the primary theme for the industry across the stack for several years.

Brent Barclay:

Absolutely. On the services side, it is not just about closing deals for market share, but asking what contribution margin and profitability those deals generate. Business acumen helps commercial sales teams understand that the model must be profitable regardless of the commodity price. That way, you win big when prices are high, but maintain a healthy organization when prices tighten.

Greg Kandare:

Halliburton highlighted that while they are a U.S.-based company, they are seeing significant international growth. However, they are asset-constrained with equipment like fracking pumps. They stated they will move assets to whatever global region yields the highest return, even factoring in transition and relocation costs. Returns and capital discipline remain the priority over raw revenue.

Brent Barclay:

We saw the same strategy in refining with Phillips 66, Marathon, and Shell. If you have high demand and limited supply, you route feedstock to produce higher-margin products like diesel and jet fuel rather than lower-margin alternatives. Diesel requires heavy crude and has lower processing costs, creating strong margins. Marathon reported a 112% market capture by running assets efficiently and minimizing turnaround times to maximize high-margin yield. They are actively redistributing feedstock based on product profitability.

Greg Kandare:

Is there anything else worth highlighting from the earnings calls?

Brent Barclay:

It is an exciting time for the industry. Companies that were traditionally viewed as basic resource extraction businesses now describe themselves as technology companies focused on software, AI, robotics, and automation. The shift toward technology is transforming the future of the sector.

Greg Kandare:

We have major ongoing conflicts affecting the Strait of Hormuz and the Russia-Ukraine region that impact refineries and supply lines daily. How are those dynamics driving corporate decisions?

Brent Barclay:

These major geopolitical conflicts, alongside AI disruptions, require companies to maintain extreme flexibility. For instance, regulations like the Jones Act—a 1920 law requiring goods shipped between U.S. ports to be carried on U.S.-built and U.S.-crewed vessels—have faced temporary suspensions to allow greater supply chain flexibility.

Companies that can adapt and navigate these changing conditions will win. That flexibility is why so many executives are focusing on the "molecule to market" concept.

Greg Kandare:

The Jones Act creates unique logistical friction in the United States. Even though the U.S. produces and exports massive amounts of energy, regional supply does not always align with regional demand. California experiences high fuel costs because there are no direct pipelines from Texas, requiring transportation by truck or ship. Crude production, refining capacity, and end-user demand are located in three entirely different parts of the country, making logistics a complex dynamic.

Brent Barclay:

While overall growth is the dominant theme, execution varies across the value chain. Upstream is focused on maximizing volume through digital tech, rigs, and automation. Midstream is growing through LNG, transportation pipelines, and power generation. Services are expanding through international markets, offshore deepwater projects, and digital automation. Downstream is focused on extracting maximum margin out of existing refining capacity. Everyone is investing for both today's demand and future infrastructure needs, particularly around powering data centers.

Greg Kandare:

In the oil and gas service sector, digital technology is one of the largest growth areas. This includes cloud data analysis, AI, predictive maintenance, remote monitoring, and data analytics. Almost every major service provider views digital as a top growth driver.

Brent Barclay:

SLB mentioned that developing digital capabilities requires them to compete directly with tech giants like Google and Amazon for programming talent. Digital transformation significantly reduces costs. Instead of driving trucks out to manually inspect pipelines, technicians monitor systems centrally and use predictive analytics to schedule repairs. Refineries use predictive technology to service specific valves or boilers as needed rather than shutting down the entire plant for weeks. Olivier Le Peuch at SLB explicitly describes SLB as a technology company.

Greg Kandare:

Baker Hughes has similarly rebranded as an energy technology company. Across all ten analyzed companies, common themes emerge around returns focus, advantaged assets, operational efficiency, and disciplined growth. Yet each company approaches the market with its own unique asset base and strategy.

Brent Barclay:

It is fascinating to see how they navigate both their unique nuances and shared industry challenges.

Greg Kandare:

Everything in this industry is interconnected. You cannot make a decision regarding refining, pipelines, or drilling without impacting multiple business drivers. How do you see that playing out?

Brent Barclay:

The five drivers—cash, profit, assets, growth, and people—are completely interdependent. Growth requires cash to fund new assets. Those assets must operate efficiently to generate profit, which in turn funds further growth. At the center are people. People must anticipate customer needs and execute strategy effectively. Leaders who have spent twenty-five years in the industry must adapt their knowledge to handle new energy sources and external factors. Cash funds choices, profit rewards efficiency, assets deliver products, growth captures market opportunities, and people drive execution.

Greg Kandare:

In our report ranking driver frequency across all ten earnings calls, the people driver ranked last. Why are people receiving less explicit mention on these calls?

Brent Barclay:

That is typical for external quarterly earnings calls. On analyst calls, executives focus their communication on growth, assets, cash, and profitability because that is what investors and analysts ask about. If those same executives were speaking at an internal town hall, the people driver would be at the top. Ranking last on an earnings call does not mean people are unimportant; it simply reflects the target audience of the communication.

Greg Kandare:

If you are working in the oil and gas industry today, what should you watch over the next twelve to eighteen months?

Brent Barclay:

First, watch physical supply bottlenecks, particularly in the Middle East and refining. Second, evaluate capital allocation to see if investments in AI and new technologies are delivering tangible returns on metrics. Third, watch execution to see if companies actually deliver on their strategic plans. First-mover advantages will go to companies that anticipate market changes, deploy assets effectively, and execute cleanly.

Greg Kandare:

Rising interest rates and higher costs of capital are also critical to watch, as they can alter project economics. As companies report third and fourth-quarter results, pay close attention to their guidance and 2027 outlooks. Global service providers like Halliburton, Baker Hughes, and SLB offer particularly valuable perspectives on international economic conditions.

Brent Barclay:

The key over the next eighteen months will be watching which companies navigate volatility, adapt quickly, and execute effectively.

Greg Kandare:

Having analyzed and trained teams across this value chain for over a decade, the one certainty is that conditions will continue to change dynamically. We encourage everyone to read our report, The Molecule Moment, to see how the five-driver framework applies across these ten representative companies. Brent, do you have any final thoughts?

Brent Barclay:

Take this information and apply it. Have conversations with your team, evaluate your own company's earnings calls, and determine how you can drive execution within your role.

Greg Kandare:

Thank you. This concludes our inaugural recording of The Molecule Moment with Brent Barclay and Greg Kandare.