Crude oil prices have plunged by 50% in less than half a year and the related public energy industries have seen stock declines of between 13% (Integrateds) and 45% (Drillers).
Warren Buffett’s Berkshire Hathaway is sitting on over $50 billion in cash, not to mention the mammoth flows of capital washing in each month from his portfolio of insurance operations. A glance at Berkshire’s latest 13F turns up the fact that the company doesn’t have a tremendous exposure to the oil and gas sector at all, outside of the Burlington railroad subsidiary that ships oil from the Bakken shale. He doesn’t have an oil stock in his top five public company holdings although Exxon Mobil is his 7th largest at 41 million shares (or 3.8 billion). The only other oil name in his top holdings is Suncor Energy (SU), his 19th largest at $600 million dollars or so as of his latest filing.
It should be noted that Berkshire also has exposure to the electricity generation business via a utility subsidiary with far-flung operations throughout the country.
An interesting question now might be whether or not there’s been enough market cap destruction in the space for Buffett (or Combs and Wechsler for that matter) to be taking a hard look at any of the myriad companies in the space. Time has been on their side, if they are indeed interested, as the crash in crude stretches into its seventh month.
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