Enron Notes

* My job requires me to analyze oil and gas companies. Basically I read everything I can on a company. I pour through financial documents, try to find trends, talk to CEOs, COOs and CFOs. I am on the distribution list of every IR department in town so I get end-of-day stock quotes, press releases, news alerts, and sometimes personal correspondence to let me know when something is about to happen. In short, I see a lot of oil and gas deals – upstream, mid, and downstream. As though it has become the standard against which all other companies are measured, I can’t help but compare every deal to something Enron did.

Something strikes me, in retrospect, about Enron’s deals. How utterly normal they were. The things that critics seize upon are so utterly mundane. The subs of subs, the cross-collateralized Raptors, the off books assets, the amounts of the deals… all of it was just completely normal for the industry.

A few weeks ago, Harvest Operations Company, which is a sub of the Korean state oil company, bought a project from its parent company for $375 million. (A great quote from a co-worker: “Hey, don’t laugh, $375 million is a lot of money for Canada.”) But this made me think of the uninformed outrage of Enron selling some assets LJM1 and LJM2. How is the Harvest deal substantially different from an LJM deal? It wasn’t. They’re identical, they’re legal, they’re done today, they’re a valuable business tool, and anyone who argues otherwise is uninformed.

*CEOs. Since Richard Grubman is retiring from Highfields, I am thinking about Jeff Skilling calling him an asshole. My observation, from talking to them, is that most CEOs and other executives are not as smooth as they’re generally portrayed or imagined to be. They’re not all Larry Ellison or Richard Branson hang-gliding into the office and doing blow off a hooker’s ass. An example: This week, an oil and gas company signed a big deal to develop shale gas. I called the CEO to talk about the deal and the conversation was like he’d never been called by an analyst before. He seemed personable enough (in a Canadian kind of way) but just… not polished.

Personally, I’d take Jeff Skilling’s style over this CEO’s. Jeff wasn’t polished either but he was engaged, active, and happy to talk to people when he had the time. He was just plain alive in a way that many business guys aren’t these days.

* My co-worker who used to work at Enron said today, “You are so go-go-go. I can see why you’d fit in perfectly at Enron.” Greatest compliment of my life. Of. My. Life.

* I have an idea for a new business line, which I’ve discussed with my co-worker. It is basically doing the Nigerian Barge deal over and over and over. I rock.

* Some nights, long after the immigrant maids have gone, and the city is full black and outside my window, the lights are up and flickering like a cat’s eyes, I will realize that I am all alone in the calm, protected world of my office, like a netted fish. Then in the reflection of the glass, I will notice that I am wrong. A guy from the brokerage side comes slinking through my side of the office, looking for the kitchen, or maybe just checking out who’s still at the office. The brokerage guys are easy to spot. They wear shirts that are rolled to the forearms and their ties are askew. They are always walking fast and they look frustrated, they mutter to themselves like homeless veterans, they pause, looking into the office, and say with a little wonderment, “You’re still here?”

Glare-lit, without the requirement of any expectation, I suddenly see something beyond the gross physical. I see a power of imagination, will, endurance. It is almost not of this world at all – a ghost carrying messages of progress. It is the impulse for success, for being alpha, and is still alive. It is ridiculous but I feel suddenly so grateful for the concept of capitalism and for what it turns people into that I could fall to my knees in gratitude.

“Yes. I’m still here.”