"Take a simple idea and take it seriously" Reality over fantasies Actions over words Track records over forecasts Incentives / skin in the game equals outcomes
Joined June 2022
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$OIH $RIG $VAL $NE $SDRL $ODL.OL
Fredriksen is selling tankers at >cost and buying offshore drilling exposure (adding to $NOL.OL holding).
At some point an equivalent to the 'tanker bonanza' will happen to the offshore drillers: their rigs will be valued by the stock market at or above replacement cost.
Cyclicals are cyclical. Feel free to bookmark this.
Baron of Ivy Grottage retweeted
This chart is simply mind-blowing. It’s a perfect visualization of the German “green” energy transition though. Let’s take a look.
1. Germany increased its installed energy generation capacity since 2000 by a whopping 120%, yet German electricity generation fell by 13%. Isn’t that a paradox? The answer is simple, renewables do not generate electricity constantly, as required for an industrial nation, so they need parallel energy-generating infrastructure, e.g., gas. That’s the main reason countries that moved to renewables, like Germany or the UK, have the highest energy prices for industry and households.
2. Based on fairly conservative estimates, Germany has spent about €400 billion on this “green” energy transition, an eye-watering amount.
3. Higher energy prices have made German energy-intensive industries uncompetitive. Industrial production imploded, and countless well-paid jobs disappeared. This explains the reduction in energy demand and generation.
4. By shutting clean nuclear plants while keeping coal and gas, German energy production generates about 10 times more emissions than France’s. You read that right: 10 times more. If Germany had switched off coal power plants first instead of nuclear, by now it would have avoided CO2 emissions equivalent to Berlin’s emissions over almost a century. Keep that in mind next time you chew on a paper drinking straw.
5. Worse still, production moved from Germany to Asia, where the same products generate far more emissions in manufacturing and shipping. A Chinese-built car shipped to Europe causes about 70% more emissions than one built in Germany, cement production causes twice as many.
Honestly, can you name a bigger absurdity than the German “green” energy transition? They spent a fortune to ruin their industry and hurt the climate badly. Isn’t it hilarious that German greens seriously claim other countries will follow the German way? In which parallel universe do these people live?
Baron of Ivy Grottage retweeted
$NE just reported, meh earnings but some interesting contracts:
* Blackhawk (7G DS) won 50 days offshore Uruguay for $500K/d plus extras and mob/demob.
* Globetrotter 2 (6G DS) will drill offshore Peru for $400K/d then do 1,5y of well intervention (over 3y) offshore Nigeria.
Baron of Ivy Grottage retweeted
This post goes some way to explaining the dire financial straits the UK is in...
"Britain has almost run out of taxpayers, or at the very least, it’s slowly running out of people who pay enough taxes to plausibly finance the state."
"...in 1998, about 43 per cent of British earners paid sufficient tax to cover the Government’s average per-capita spending. During Covid, that figure fell to an absolute low of circa 20 per cent, then by 2025 recovered modestly to 26.6 per cent."
No wonder if fewer than 27% of people are net contributors to the state
It's stats like this that make me want to leave. Big new project in the US in the next few months might be just the springboard I need
@griffitha @LiamHalligan
open.substack.com/pub/ieains…
Agree: negativity seems to be approaching contra levels!!
Looks like it might be time for gold to outperform oil now!
(Don't forget boys and girls: the sell side always predicts the past / present - not the future.)
Baron of Ivy Grottage retweeted
Net zero added £140.3bn to Britain's electricity bills in 2002–24: £2,286 for the average household. Modelled, in 2024 prices. Nobody official counts it. Parliament should require a yearly statement, with data anyone can check.
richardlyon.substack.com/p/n…
Baron of Ivy Grottage retweeted
My bet would be that Borr will find an agreement with BW to replace Prospector 5 with Titania. Market is getting really tight now for the 400 feet size
Baron of Ivy Grottage retweeted
Holding a big winner doesn’t feel like it should.
The stock slowly, almost imperceptibly, grinds higher.
But most of the time, it’s below its all-time high, making you wish you had sold.
Then every so often, there’s a gut-wrenching drawdown.
No wonder so few investors compound.
Baron of Ivy Grottage retweeted
In 1932 Hitler’s party was elected in Germany. Within weeks the newly founded Bank for International Settlements in Basel was arranging a Wall Street syndicated loan for $125 million to reindustrialise and rearm Germany for the next war against Russia. The loan was renewed at term.
In 1934 FDR made all ownership of monetary gold a criminal offence and expropriated all the gold reserves of citizens, corporations, and the Federal Reserve Banks to the US Treasury at $35 an ounce.
If I received a letter like this I would urgently start exploring protecting my wealth OUTSIDE the United Kingdom and relocating military eligible youths to universities abroad as they neared draft age.
Baron of Ivy Grottage retweeted
$BORR precedents worth a look: Velesto lost a jack-up in 2021, stock fell ~6%. Saipem lost one in 2013, stock actually rose ~4%. Transocean fell ~18% after Deepwater Horizon, but that was a different beast. Awful news for the crew, but not convinced the stock gets hammered.
Baron of Ivy Grottage retweeted
In November 1941 the richest man in America drove his twenty-three-year-old daughter to a hospital in Washington without telling her mother, had two surgeons drill holes in her skull and cut into the front of her brain while she sang God Bless America to them, and when the singing stopped she had a mental age of two and the family did not speak her name for twenty years.
Rosemary Kennedy was the third child and the first girl, and she was slow. A nurse at the birth had held Rose Kennedy's legs together for two hours while they waited for the doctor, and the baby had been starved of air. She learned to read and write, but late, and in a family where the boys were being bred for the presidency and the girls for the right marriage, she was the one who could not keep up, the one who had to be coached and watched and given the simpler part in the photograph. She was also, by every account, the prettiest of them, and when the family went to London in 1938 she was presented at court in a white dress and curtsied to the King without a mistake.
Then she was twenty-one, and the trouble started. Moods. Rages. Slipping out of the convent school at night and coming back in the morning and not saying where. The nuns said she might be meeting men. For Joseph Kennedy, who was managing his sons towards the White House and could not have a daughter who might get pregnant or get talked about, that was the end of it. He had read about a new operation. Walter Freeman had promised the newspapers it calmed the agitated, and Joe Kennedy had never in his life been told that a thing he could pay for would not work.
Rosemary was given a mild sedative and kept awake. Freeman and his surgeon, James Watts, opened the skull on both sides and Watts pushed a blade into the frontal lobes and swept, while Freeman asked her to recite the Lord's Prayer and sing, and count backwards, so they would know how far to go. They went until she was incoherent. Then they stopped.
She came out of it unable to walk or speak. Years of therapy got her a few words and a limp. Joe moved her to a private hospital in New York and then to a convent school in Wisconsin, told the family she was teaching the retarded in the Midwest, and never went to see her. Rose, her mother, was not told what had been done until long after, and did not visit for twenty years. The brothers and sisters, including the one who became President, were told she was away. When Joe had his stroke in 1961 and could no longer manage the story, Eunice went to Wisconsin and found a woman of forty-three who did not know her, and came home and started the Special Olympics.
Rosemary lived to eighty-six, in the convent, and died in 2005 with her surviving sisters at the bed. The brother who became President had signed the first federal mental health law in 1963, and the family has said she was the reason.
Freeman kept operating for another twenty-six years. His notes on Rosemary have never been released.
That is what the expert's confidence looks like when it meets a powerful man with an inconvenient child. The science was published. The father was certain. The daughter sang to the surgeon until she could not.
Every institution that has ever decided it knows what is wrong with you and how to tidy it has the same two ingredients in the room, and the person on the table is still the only one who pays.
Baron of Ivy Grottage retweeted
Soros Fund Management launched when George Soros was 43. Julian Robertson didn’t start Tiger until he was 48. Jim Simons was 50 when he started the Medallion fund. By pretty much any measure, these three belong in the top 5 or 10 best hedge fund managers ever. Things to keep in mind if you haven’t hit your stride by ~30.
Baron of Ivy Grottage retweeted
I don’t have £2 million in assets, and I don’t earn £200k a year. I’m quite short on both counts. So the HMRC wealth audit doesn’t impact me. Yet.
But it signals a clear intention. A lack of respect for the individual. What is yours is only yours until the government decides they want it to fund further welfare expansion.
Property rights only exist in this country as long as your holdings are meagre enough to escape the fiscal Eye of Sauron. They will come for it all.
Baron of Ivy Grottage retweeted
The point of no return by Richard von Mises is worth reading:
"A state becomes almost unreformable when the majority of the population is financially or structurally dependent on the state (state employees, civil servants, recipients of subsidies, grants, or transfer payments, etc.). As soon as those who net benefit from or are supported by the state outnumber those who do not, the system blocks reforms, since the majority votes out of self-interest for the preservation or expansion of state services."
Does this sound familiar? Some European countries, France, Belgium, Finland are already way beyond that point, closely followed by Germany, Spain, Austria and Italy. It works for a while, as long as markets buy more sovereign debt at reasonable interest rates. The party ends when they stop though. For France, they stopped this month, Belgium will be next.
The longer the socialist illusion persists, the more painful the inevitable cuts and adjustments will be. It’s pure arithmetic. Good luck Europe, good luck Euro. Buckle up, it won’t be pretty.
Baron of Ivy Grottage retweeted
a very simple solution to virtually every problem would be to stop allowing people who live off taxpayer money to vote
anyone whose entire livelihood depends on the government taking money from other people will always vote for a government that takes more money
we’ve built a system where people can literally vote to give themselves more of other people’s money
the conflict of interest is beyond ridiculous and if you remove the incentive you remove the problem
The point of no return by Richard von Mises is worth reading:
"A state becomes almost unreformable when the majority of the population is financially or structurally dependent on the state (state employees, civil servants, recipients of subsidies, grants, or transfer payments, etc.). As soon as those who net benefit from or are supported by the state outnumber those who do not, the system blocks reforms, since the majority votes out of self-interest for the preservation or expansion of state services."
Does this sound familiar? Some European countries, France, Belgium, Finland are already way beyond that point, closely followed by Germany, Spain, Austria and Italy. It works for a while, as long as markets buy more sovereign debt at reasonable interest rates. The party ends when they stop though. For France, they stopped this month, Belgium will be next.
The longer the socialist illusion persists, the more painful the inevitable cuts and adjustments will be. It’s pure arithmetic. Good luck Europe, good luck Euro. Buckle up, it won’t be pretty.
Baron of Ivy Grottage retweeted
Great summary of Mike Alkin's recent presentation on #uranium.
My add on.
-The price is still way too low. Miners need $150/lb and up.
-Many miners have missed their targets and costs. It's a double edge sword. Poor financial performance, which leads back to my 1st point.
👇
As many of U know, Mike Alkin - CIO of @SachemCove Capital Management - is IMHO the Godfather of the #Uranium sector investing thesis🧙♂️⚛️⛏️💰 who way back in 2018 began giving investor conference presentations outlining his well-researched belief that fuel buyers are being overly complacent & suffering with recency bias in their expectations that their future reactor fuel needs can be easily met by new emerging uranium supply at a low cost, especially with their reliance on Kazakhstan to flood the market with cheap uranium for decades to come.♒️😆
🧮He's spent thousands of hours crunching the numbers, definitively making the case that the coming uranium bull market will make a lot of investors very wealthy as prices skyrocket far beyond the old unrealistic conservative estimates tossed around by fuel market analysts with their head in the sand.🙈
👨💼When he gave his presentation to a room full of fuel buyers back in 2019 at the NEI's International Uranium Fuel Seminar he was basically laughed out of the room, dismissing his numbers and conclusions as ridiculous.🤡
Now, 7 years later, as the Spot price has since risen nearly 4X from $25 to $90 and the long-term contract price has steadily soared to an all-time industry high of $97/lb, he just gave the same group a new presentation, IMHO his best ever!🌟👨💼 This time, instead of laughter, the room was filled with the worried faces of fuel buyers who, having ignored his 2019 warnings, are now facing a deep structural supply deficit in a "seller's market" with producers demanding ceiling prices in new long-term supply contracts at $150-160 or with no ceilings at all! Laughter was notably absent.🦗😒
Below is a synopsis of Mike's presentation. I've not been given permission to publicly post his proprietary charts and graphics so will instead just share with you the key points in his talk. I hope he doesn't mind, but I am posting 1 slide of his that will blow your mind!🤯
THE DIE IS CAST ON URANIUM’S COST CURVE. WHAT THE LOWEST COST PRODUCER JUST TOLD YOU ABOUT EVERYONE ELSE
"For a decade, the industry met today’s reactor requirements with uranium produced yesterday. What happens when that bridge is gone?"
WHAT THE MARKET BELIEVED
SUPPLY: Inventory liquidation and underfeeding could keep filling the gap.
COST: Historical mine economics were a reasonable guide to future supply
Over the past decade fuel buyers have been lulled into believing that Uranium supply has been in a structural surplus when in fact, due to the misleading way the industry consultants count inventory drawdown as "supply", the market has been under-supplied.🗜️
Actual new mined uranium coming into the market versus that consumed by reactors was ~58 Million lbs below requirements from 2016 to 2025, while the drawdown of stockpiles and supply from underfeeding was counted as 172 Million lbs of supply over the same period, giving fuel buyers the false illusion of a +115 Million lbs supply surplus.😳
The thing is, stockpiles are finite. Once they are sold, they're gone. Underfeeding is a source of supply when SWU is cheap and enrichment demand is low, but now SWU prices have skyrocketed and demand is high, so enrichers are switching from underfeeding to overfeeding, which is drastically reducing that source of "secondary supply" from 11% to less than 2% of global supply over the next 5 years.
In 2017, industry consultant forecasts estimated 10 years of 8M lbs per year from inventory drawdowns as "supply", but actual drawdowns have been 29M lbs per year providing 14% of global supply! As stockpiles have depleted, that misleading source of supply is becoming scarce.🏜️
Then the market delivered its verdict
"Uranium prices rose sharply despite a market widely characterized as adequately supplied. If the market was truly oversupplied, why did price rise?"😲
The 2016 the consensus estimates showed a 115M lb surplus. Prices more than tripled anyway. Commodity prices don’t do that in a market that is truly oversupplied.
Houston –We Got A Problem –Mining Costs Are Soaring 🚀🌜
“You can’t run a mine if you can’t afford to run a company. The cash cost of mining a pound is not the economic cost of sustaining a business."
Since 2018 the reported C1 cash costs for Kazatomprom, the world's lowest cost miner, have soared +127%, but that increase is actually +227% if the mask of currency depreciation is removed. 2026 C1 cash cost guidance is +150% higher than in 2018.⏫
Over the same period, Kazatomprom's All-In Sustaining Costs have soared +164%, a staggering +280% with that currency depreciation mask removed. 2026 AISC guidance is +182% higher than 2018.⏫
However, their realized Uranium prices have risen just +99% over that same timeframe. AISC has risen far faster than the prices realized in their sales.
Uranium: Missed Targets and Runaway Costs, 2022–2026
From the largest producer to the newest ISR start-up, the industry has delivered less supply than promised, at far higher costs per pound.
Production shortfall vs. original target:
Peninsula Lance CY2026 ⬇️ -70%
Ur-Energy Lost Creek 2024 ⬇️ -56%
enCore Alta Mesa (vs design) ⬇️ -50%
Boss Honeymoon (vs 2021 EFS) ⬇️ -42%
Paladin Langer Heinrich FY25 ⬇️ -29%
Husab (vs design) ⬇️ -26%
Cameco McArthur River 2025 ⬇️ -19%
Kazatomprom 2025 ⬇️ -17%
Kazatomprom 2024 ⬇️ -14%
Operating costs: study vs. actual:
Kazatomprom AISC ⬆️ ~2.4x
Kazatomprom C1 ⬆️ ~2.1x
Boss Honeymoon AISC⬆️ ~+95%
NexGen Arrow opex ⬆️ ~+83%
Paladin Langer Heinrich ⬆️ ~+126%
US ISR (Ur-Energy, enCore, UEC) ⬆️ ~2x
You Can’t Run A Mine if You Can’t Sustain The COMPANY
"In 2019, At This Conference, I Argued The Industry Cost Curve Was Wrong As it Excluded A Lot of The Costs Uranium Companies Incur."
There are 3 very different costs for mining uranium:
01 CASH COST
What it costs to produce the next pound today.
02 ALL-IN SUSTAINING COST (AISC):
World Gold Council framework: operating costs plus sustaining capital, corporate overhead, sustaining exploration and reclamation. What does it cost to sustain production today?
03 FULL-CYCLE INCENTIVE PRICE
What a new mine must earn to recover development capital, financing costs and a risk-adjusted return. What price finances replacement supply?
YOU CANNOT SUSTAIN AN INDUSTRY ON CASH COSTS —OR BUILD NEW MINES ON AISC ALONE.
“New Realities are signaling that the era of cheap uranium is fading away “
MeirzhanYussupov, CEO Kazatomprom, August 21, 2026, Half-year results call
Producers Now Require Higher Prices Given Cost Structures Have Risen Materially and to Make Up for a Decade of Poor Returns to Investors During a Low-Price Environment
Over the past 5 years the average production cost estimates for major western producing uranium mines have doubled from ~20/lb to ~40/lb
Those fuel buyers still holding out for lower prices will need to see the industry magically reverse course.🪄📉↪️📈🤪
1 Existing mines must deliver the assumed production volumes.
2 New mines must start and ramp on the modeled schedules.
3 Secondary supplies must remain available in modeled quantities.
4 Incremental supply must be financeable at prevailing contract prices.
History Rhymes
Uranium prices soared during the last bull market cycle despite looming surpluses.
This cycle, there are supply deficits and rapidly shrinking secondary supply.
Global investment banks are now forecasting supply deficits in each of the next 10 years:
~10 Million lbs (4% of global demand) in 2026 growing to over 45 Million lbs (18% of demand) in 2035
BUT, Utilities have only signed supply contracts for on average 55% of their total reactor fuel requirements since 2015, far below that needed to replace the fuel being consumed each year.⚠️
Given how much the economic and strategic realities of uranium have changed over the past decade, as Nuclear fuel demand has shifted from an expected decline to surprisingly strong global growth, how high must uranium prices rise to prevent supply from disappearing? 🤔💲🛢️☢️
Are prices high enough to finance the uranium supply the world needs tomorrow?
Can new mines get built on on-time? Can they get financed? At what cost of debt? Do financing costs make prior assumptions more difficult to achieve?
What gives fuel buyers comfort that certain pounds from new mines will be offered to them for use in reactors?
What gives fuel buyers comfort that the strategic value of pounds from potential mines is not more valuable staying in the ground for longer than projected than producing at a time the utilities want and need?
What happens IF?
SUPPLY FORECASTS ARE TOO OPTIMISTIC
Project delays, slower ramp-ups and fewer deliverable pounds than forecast.
SECONDARY SUPPLY SHRINKS FASTER
Inventory drawdowns and underfeeding cannot bridge the gap at historical rates.
INCENTIVE PRICES ARE TOO LOW
New mine commitments slip while the capital and development clock keeps running.
The risk to fuel buyers today is not simply a higher uranium price. It's discovering too late that expected supply cannot arrive on time!
In closing, Mike offers up what sounds like his final warning to fuel buyers:
The cost of securing supply early is visible. The cost of discovering a shortage too late may be much greater. ⚠️😱
In other words... if fuel buyers continue to hold out for unrealistic lower uranium prices that have a snowball's chance in hell of materializing, instead of going full-on into replacement-rate contracting now at the prices and terms being asked by producers, then the mines those fuel buyers are counting on in future may not ever go into production! The risk then is that reactors will not get the fuel they need, at any price. The choice is theirs.🎭
IMHO... No matter the choice, uranium prices are going much much higher. History rhymes.
The end. Cheers and best of luck with your investments! ☘️🌈💰🤠🐂
Baron of Ivy Grottage retweeted
Decent video, mate. You speak a bit fast, though. I have a few points of feedback to make. The bear and bull cases for $RIG are far too narrow at -10% and +61%, respectively, over the 2026–2030 period.
Given the highly cyclical nature of the offshore drilling industry, these companies, especially $RIG with its significant debt load, could easily fall 50–75% in a bear scenario or rise 250–1,000% in a bull scenario.
We've seen similarly moves in $SUBC (despite its relatively unlevered balance sheet) and other cyclical companies, both over the past few years and in previous cycles.
Mohnish Pabrai would not buy $RIG if the upside in a bull scenario were just 61% over a 3–4 year period, particularly given the 10% hurdle rate.
This is a highly cyclical industry with substantial operating and financial leverage.
🇨🇭 Transocean ($RIG) Investment Thesis (2026)
1) Meaning: Global offshore drilling giant. Valaris acquisition creates a 70-rig fleet. Offshore CAPEX tailwinds.
2) Moat: High-spec rigs, $12.3B combined backlog. B− credit, high debt, cyclical profitability.
3) Management: ~10% insider ownership. Mohnish Pabrai's major bet. Historical dilution, deleveraging focus.
4) Margin of Safety: Interesting upside potential, but debt, dilution and execution risks warrant caution.
Full Video:
youtu.be/nP8v3tWQVx0
Baron of Ivy Grottage retweeted
Terrible news from Gabon. Borr Drilling’s Prospector 5 jackup rig sank during jacking operations, with five people still unaccounted for and search and rescue operations ongoing.
Hoping for the best possible outcome for those missing and their families.🙏🏻
$BORR
