This week on Mining Money, Brandon Davis, CEO, and Imran Khan of Swan Energy discuss what may come to energy and the economy with a Joe Biden presidency.
Whether Biden’s policy’s combined with the direction of the country will result in major inflation, an increase in interest rates and energy cost increases to the consumer.
The interview also discusses the value of investing in natural resources during times of uncertainty, including Davis’ gold mine which he owns and operates.
Natural gas, banks lending, lay offs and how to become an investor are other topics from the interview.
Brandon Davis: Brandon Davis, Swan Energy.
Imrahn Khan: Imran Khan, Swan Energy.
Jason Spiess: All right, everything looks good, so let’s talk about today, what’s going on now. As we’re talking about this, we don’t have a President of the United States elected yet. I’ve been hearing all kinds of rumors about if the election happens, certain companies are going to react in certain ways and the market’s going to tank and all these different things are going to happen, so I thought we’d bring in, of course, Imran Khan, Brandon Davis, Swan Energy to talk a little bit about, uh, their thoughts, their reactions, their feelings on if it, uh, is going to make a hill of beans difference or if there is going to be some sort of impact about what’s going to happen. Because, you know, as we kind of sit right now, there’s a lot of uncertainty in the marketplace right now due to this election, and, of course, uncertainty always, you know, makes people wonder. But you guys seem to be moving ahead, closing deals, staying busy, staying active so, uh, let’s talk a little bit about… Is the election affecting your office place at all? Are you guys kind of maneuvering it all in any different direction? Or talk to me about what’s going on. First of all, how’s life treating you guys?
Brandon Davis: It’s so unfair, Jason. Life is so unfair. I’m kidding.
Imrahn Khan: If you want fair, you got to get on the bus, buddy.
Brandon Davis: That’s right, that’s true, yeah. I-I— Of course, the whole situation here, I think, is probably impacting everyone in the country, because it’s unprecedented and very, um, concerning and also it shouldn’t. So, you know, it’s it’s hyped up. It’s media hyped. It’s emotional hype. There are people that are angry, there are people that are happy. At the end of the day, I look at it, uh, like a situation from a business perspective. We just need to figure out what’s going to happen so we can plan and go forward. That’s-that’s all there is to it. What the result is is really not relevant. It just needs to have one.
Imrahn Khan: Yeah. I think that, uh, there’s-there’s so many different moving parts right now with, you know, the House, the Senate, the Presidential election. A lot of this stuff, you know, probably should be hopefully finished off, uh, hopefully early next week. I was gonna say today, but I don’t know if it’s today. Um, I don’t think that— Doesn’t look like it right now.
Brandon Davis: I think it’ll be in a month.
Imrahn Khan: Oh man, it’s gonna be, uh, dragging on a little bit.
Jason Spiess: Well, it certainly seems to be a a different direction in terms of if they’re talking about, you know, transitioning or eliminating fossil fuels or Trump, you know, continuing with the lifestyle that we’re all accustomed to. And to me, I think the bigger question here is, you know, what-what, like you said, is going to happen if this particular President goes in or whatever? And I was just thinking about this Biden this morning, and it just dawned on me. This is so much like the Jimmy Carter, uh, Jimmy Carter era when there were gas lines. Uh, we have now we have lines for toilet paper and rice and, um, you know, there’s inflation happening and that sort of thing. And luckily, we’ve been able to curb quite a bit of inflation, uh, on some things, uh, during the Trump administration and a lot of that has to do with shale and-and, uh, the-the abundance of energy that we have in order to not only create products, but get the products to the marketplace in an affordable way. But I see if this Biden thing happens or even a transition away in the next ten years or 15 years or whatever, it might be, you might be seeing European prices on things. Six-dollar cokes and energy bills four or five times. I mean, if natural gas goes up to eight bucks, you know, there’s-there’s, that’s going to be an increase on the residential and then the commercial heating bills. And, uh, you guys know what I mean, to where these are two really big extremes in the marketplace here.
Brandon Davis: They are.
Imrahn Khan: Yeah, I think the market right now, um, you know, so it’s interesting that you bring all that up. It’s, you know, if you look at the stock market, the Dow Jones this week has been, it’s been pretty positive even with everything the way that, uh, you know, the way it was. I think part of that was probably because of, you know, what the what the Senate looked like. Um, you know, everything looked to be, uh, uh, to where it would it was gonna stay a, uh, Republican Senate and I think people were positive around those areas. Um, and-and for the week, we’re still we’re still up, uh, but, you know, I know today it’s-it’s, you know, kind of, uh, balanced out a little bit, uh, dropped down a few points. So, I think, you know, we’re going to probably be going through some ups and downs until we figure out, you know, what, uh, who is in power and and how things are gonna move forward.
Jason Spiess: You know, I’m not big into gossip and boss up and all that different stuff, and-and just to kind of illustrate, though, kind of what’s going on with the uncertainty in the politics, uh, two days ago – I’m in the Permian here right now – and there’s a lot of activity going on, of course, you know, 100-some rigs out here and a lot of different things, a lot of companies. And I was at a Starbucks outside with a frakleberry hound, you know, my dog and we were sitting out there working and there was a oilfield executive’s wife that— She was kind of taking a taking a spa day, if you will. She was— Not a spa day, but a coffee day. She had one of her kids in the daycare and she’s got another one on the way, four months, and so her and I probably chatted for a good hour outside. And while we were text— Or while we were talking, she got a text from her husband that – and he works for one of the majors, I’ll say top five, okay, top five – and they had an emergency meeting about, uh, whether, how many, how many people they might lay off if Biden gets, uh, elected, and up to half they were talking about, you know, and that’s— And I looked at her and I said, “Man, that’s an amazing reaction over something that’s not finalized yet.” So, it just shows how people are kind of shifting some resources to react and taking time and moving some different directions to where they’re preparing for all kinds of different things. And this morning here I pull up an article and I’m seeing that, you know, ‘No let up for oil and gas but borrowers,’ and another story about how nobody can find financing in oil and gas, and I’m going, “Well, the guys at Swan Energy are talking to these guys at the Texas Bank and they’re getting all kinds of great deals and working together putting people together.” So, uh, let’s talk a little bit about the financing that you guys have seem to find, whether it’s through this Texas, uh, Bank or whether it’s pooling people together. Let’s talk about that a little bit, the strength in numbers, if you will, to help people visualize how to get through these times that are very uncertain, if you wouldn’t mind.
Imrahn Khan: You know, we’ve got, uh, we’ve got probably, we’re juggling about four or five different projects right now, uh, looking at different things. And it’s funny that you bring up, uh, banks, because I did reach out to, uh, our banker earlier this week, just to kind of chat with them just to see if, you know, how things were going. And-and I probably do that pretty regularly over at, uh, First Capital Bank of Texas. Um, Marcus is, uh, Marcus Ferdrin is our our bank representative, a great guy and, you know, I reached out to him just to kind of see how things were going, what he, what his thoughts were around things. And, uh, you know, as of right now, he was still very positive about, uh, about doing the deals and things like that that we’ve got planned already, so I think that was very positive from that standpoint, um, from our end of things. I think one of the main reasons why he’s positive and it looks good is that it gives us an opportunity to be able to evaluate things better, right? So obviously we’re going to do what-what makes sense, depending on, you know, uh, what, uh, what election results are and, you know, how things kind of move forward in the next month. Um, and we want to be able to have the right opportunities set up, um, and and that’s pretty much where we’re at right now. It’s kind of, uh, framing a lot of what 2021, uh, is going to look like.
Jason Spiess: Brandon, how about when it comes to transparency? I know that’s a big, uh, you know, I say, I want a ch-chief mission, if you will, a driver that you’ve got at Swan Energy, as the CEO, transparency and trying to make sure people are up to date on anything that they necessarily want to be up to date on. You’re very upfront that, hey, this is a risky deal and it might not be for you. I mean, you’re kind of a little over transparent at times, to be honest.
Brandon Davis: [Laughter]
Jason Spiess: I’ve never seen a guy take away so many deals.
Brandon Davis: That would disagree with that, um, and—
Imrahn Khan: Better-better to be able to see from that perspective, especially when people are putting money into things like—
Brandon Davis: We-we, as far as transparency, pass along everything that-that we get and that sometimes isn’t enough for some people, um, and that’s, uh, unfortunate, but it is what it is.
I can’t tell people how to think, and-and-and make-make people look at things the same way I-I see them, right? And I can try to explain it, but that’s about it, so, um, we are very big on that and, um, yeah, I-I would want that if I were on the other side of the table, um, and buying into something with someone. I would want as much information as I could possibly get my hands on and, you know, so we try to, try to do that. And, um, but, I mean, at the end of the day, we-we manage, uh, 30-somesuch partnerships and businesses right now and – 34, I believe – and, you know, some of them, some of them have happy people. Some of them don’t. It just depends on how it goes. You know, you just, you can’t control that, so it’s kind of like this whole election deal and thinking about what you just said of laying off half their employees at certain places. I— There’s two different ways to look at everything, and I-I always look at that as opportunity for us to be able to pick up some good people that would otherwise have been employed by companies that they would have worked for for 40 years. so, um, I’m not upset about that. I’m not concerned about the results of the election. There’s nothing we can do about it and life goes on and if it ends up killing this business, I’ll go into another one, so, whatever. It is what it is. Um, I’m not, I’m not too concerned.
Jason Spiess: You know—
Imrahn Khan: If that’s, uh, I’ll—
Jason Spiess: Go ahead.
Imrahn Khan: That’s a big, good-good-good point to kind of bring up, right, you know, from an entrepreneurial standpoint. That’s-that’s basically the outlook that you have to have. Um, you know, you-you-you look at different businesses, and-and Brandon being in in many different businesses, I guess, you know, I mean, I’m in a few businesses also, uh, and it’s, you know, you-you-you know, you-you go through and you hedge things, right? You-you make sure that, you know, you don’t look forward 30 days. You look forward 20, 30 years, right? And that’s really the main objective. And, you know, a lot of times, you know, it probably looks like Brandon and I are sitting here in the office, you know, shooting the shits, but in reality, you know, we’re sitting there trying to figure out things for the future, right, to make sure that, um, you know, the company is relevant and in, around in five, ten, 15, 20 years, right? I think that’s really, uh— And-and part of what I was saying earlier, what, you know, looking at what we’re going to do in 2021, you know, it’s been it’s been basically very, uh, transparent, in a way, for-for a little while just because where oil and gas has been at. Um, and, you know, each time you have a new kink in it, you have to kind of, you know, rethink and reevaluate and then, based on the new knowledge, come up with new suggestions and new ways of doing things, so.
Jason Spiess: You know, another way about transparency is-is-is with the employees as well and, you know, I’ve talked to a lot of your employees before and they seem that-that you guys are very transparent with a lot of different things. And, of course, Imran, you know this at restaurants, servers and-and cooks and hostesses, they like to almost know too much information. They certainly like to tell you how to run your business that’s for sure and, um, I don’t—
Imrahn Khan: [Laughter]
Jason Spiess: I don’t know about gold mines but, uh, gold mines might be the best investment you got right now for in the Jimmy Carter era again and, uh, anyway, this little sidebar there. But, uh, talk to me about, you know, the transparency with employees and also the importance of a community relation, really, that’s happening through a lot of this. That’s really the one thing I’ve seen that’s kind of come to light in a lot of this election stuff is-is the importance of community relation and fellowship. Because of COVID, you know, a lot of people are having a hard time assembling, so they can’t get like minds together or they can’t get the type of community and fellowship that they’re looking for. So, uh, talk to me a little bit about that, the transparency with employees, and how you guys feel about the community and in that sort of development.
Imrahn Khan: I think all those things are very relevant and, you know, whether it’s now with with the-the different, uh, concerns going on with elections, pandemic, this, that, the other, or when, you know, things are great, uh, you know, transparency and communication are always very key. Um, yeah, it’s funny, we’re doing a community event, uh, where we’re sponsoring some, um, uh, a, uh, dinner thing, today actually, at the, at the restaurant. Um, you know, from-from an employee standpoint, I’ve probably had several talks with, uh, with my manager there that you’ve met, uh, uh, Jason, uh, and he, it’s-it’s just great to be able to, you know, let them know what’s going on, let them know what, you know, what, uh, what the future holds, and, uh, provide the right guidance, right? Um, I think those are the key things to be able to-to make sure that you’re participating, and from a community standpoint, you know, a lot of times I try to do whatever we can to participate in different, uh, local community events and things and sponsor, uh, dinners or snacks or whatever they’re doing, uh, that are there in a positive way, right? So, I think that’s always important to be able to be part of the community. Um, I think we’re-we’re all in-in different cities and different, uh, uh, states, but at the end of the day, the community is really what, you know, what makes us, uh, get our local business going, right? So, uh, you know, you always hear a lot of ‘buy local’ and things of that nature, and that’s great, uh, you know, that’s great to be able to see, but at the same time, you know, you have to make sure that, um, you’re competitive with everyone else in the marketplace.
Jason Spiess: So, I wanted to ask you too, uh, let’s say somebody is thinking about investing. You know, it’s that time of the year where they’re checking out their budgets for next year. They’re maybe moving some things around. Maybe there’s 401ks or some retirements. We mentioned layoffs happening. So, there’s there-there is a lot of different opportunity for people to invest. There is. And I’ll be honest, if-if you take a look at what industry has-has done the most over the past 30 years, it’s the investment industry that’s— The one that’s-that’s actually done the best is the investment industry. So, those people who are making investments and pulling them together have actually made the most money and, um, anyway. So, I-I just want to make sure that, uh, give you guys an opportunity to kind of walk through how somebody can do this. You know, let’s say that they go to the website and, uh, there’s a pre-qualification process, isn’t there, guys? You got to be pre-qualified before you just start sending investment information to people.
Brandon Davis: If somebody wants information about us, they just have to go to our website and fill out a form and ask. I mean, that’s really the the simplest way, and from that point forward, based on qualifications or lack thereof, then the conversation can move. But that’s really that simple. I mean, it’s-it’s Swanergyinc.com and you can get everything you need, and as far as investments going, from your standpoint, looking at the world today, what would you say is the best thing to invest in?
Jason Spiess: Me personally?
Brandon Davis: Yeah!
Jason Spiess: Well, you know, honestly, I’m-I’m very much a natural resource guy. I really am. I-I look at fossil fuels as a very safe investment. I look at gold as a good investment. I look at some of these rare earth minerals. I’m not sure exactly how to invest in cobalt or palladium or some of these other things. I— Is it like, is it a lot like gold? I’m not sure but, um, I’ve, I’m just, I look at natural resources as such a safe investment. And there are times where you can do really well because they spike up in price but if you’re looking at something over the long haul, it’d be like that. I think real estate is going to get very good in the next six months. I think after this winter, you’re going to see – whether it’s Airbnb’s or second lake home properties or things like that – I think you’re going to see a pretty good, pretty good opportunity in there. You know, if you want to buy a camper right now, go to Craigslist or Facebook Watch and you can get all kinds of people unloading things like that. Right now, you’re seeing a lot of the, uh, um, residential, uh, you know, what-what do they call that, um, you know, frivolous things, you know, people don’t need. Uh, those are kind of going-going and that sort of thing but, um, that’s how— I-I don’t know. I’m not sure. There, that’s-that’s kind of my opinion, I guess. Natural resources and then real estate second. So, I’m not sure if I answered your question or not, but—
Brandon Davis: You did. I mean, at the end of the day, I-I agree with you and, you know, gold is obviously with-with— We’ll see what comes but it could definitely even get better than it already has.
Jason Spiess: But let me interrupt you for just one second. Let me interrupt you for just a second and then you can continue with oil. But, you know, gold, you actually own, you own the mine so, you know, it’s a little bit different investing in gold. You know, me, I go to the store and I, you know, the gold store and I buy, you know, some gold from Jack Seaman from, you know, he’s our gold proprietor in Fargo and, you know, go home, put in my safe, and call it a day. I mean, you-you actually own the mine, so, I mean, does that, is-is that a good investment? I don’t know. I mean, it just, it just seems like there’s a little bit more involved with what you’re doing.
Brandon Davis: Yeah, you have to produce it and you have to produce the gold for less than it costs, uh, for, you know, you get more gold than you have cost, and that’s, it’s a challenge. Gold mining is not easy. Um, oil and gas is a lot less complicated, I’ll tell you that, and as far as the raw materials you’re talking about, there are, there are public companies that own specific assets, and in different, you know, natural resources, whether that’s oil and gas, steel— What were you talking about earlier, uh, iridium or something?
Jason Spiess: Uh, palladium.
Brandon Davis: Oh yeah, whatever.
Jason Spiess: Palladium is actually—
Imrahn Khan: You can find it—
Jason Spiess: Yeah, go ahead.
Imrahn Khan: Yeah, I think the the main thing is, you know, just it’s more of the, to Brandon’s point, it’s more of what your, what your knowledge bases around and which you’re comfortable with, right? I think that’s really the the bottom line around the different areas, and I-I totally agree with you, uh, Jason, around natural resources. Um, yeah, at the end of the day, you have to be able to, you have to have energy to be able to move, right, so—
Jason Spiess: well, not only that, but it makes so much of the products that we’re using, in so many of the different directions that we’re going. I mean, if people really wanted to get, you know, in, into the doomsday talk, well then, really, invest in fossil fuels. Because if-if we’re going to go the wind and solar direction, that, they ain’t going to work at all without fossil fuels, whether it’s the-the plastics and-and the, um, crude oil that’s needed on one side of it, or if it’s then that natural gas to be a base load to help it and subsidize the power part of it. So, I-I look at it that way. I mean, it’s-it’s, that’s how safe it is, but, so—
Brandon Davis: That’s a good way to look at it, for sure, and we’ll see what happens with the vote counting between now and next time we talk and hopefully we’ll have some resolution by the end of the week, next week. We’ll see.
Jason Spiess: How about, uh, oh, it’s, so it’ll be, it’ll be next week.
Imrahn Khan: I think, yeah, I think they said 13th is the last day of votes coming in, so I’m just wondering if it’s going to be next week or when it’s going to be that these guys will have all their everything together.
Jason Spiess: Isn’t it remarkable how it has the opportunity to turn into a cliffhanger on a Friday night? It’s just, I mean, me and the media, I look at this and just look at like, well, life’s just writing the script for the news networks to just usher in the eyeballs! That’s what everybody’s doing this weekend is watching that stuff. Oh, then a little football on Sunday, I guess, but maybe Saturday if you’re into the college. College is big down in Texas so there’s football there, um, but I did want to ask you guys—
Brandon Davis: Thank God college is back.
Jason Spiess: What’s that?
Brandon Davis: I said, thank God college is back. it’s just, it’s been horrible not seeing them play and, you know, I guess some of the some of them were playing. Some of them weren’t, but now it seems that everyone is, which is nice to see.
Jason Spiess: I’d like to have a conversation sometime at Cowboys and Indians, at your, at your restaurant. Maybe-maybe we can throw the recorder on or not, but how-how different the economy is going to look in the world to collegiate sports. Because when you take a look at some, man, they got a monopoly going right now. A lot of these teams, there’s no one else to watch. You only got a certain amount of teams and, I mean, how that’s going to affect recruiting and— You know, like when North Dakota State beat the University of Minnesota in football, so we’re, you know, one double-A and we beat, you know, Big Ten school, our enrollment spiked in the next week. So, like, football is very related and correlated to, like, your enrollment things, like— And I imagine it’s true with Duke basketball and North Carolina basketball and, you know, other sports and things like that. But anyway, that just shows you the ripples and how certain things can impact the economy and marketplace and how the world’s gonna-gonna be different when we’re done with the COVID and getting everything back to it. So, all right. Sorry, guys. I kind of got— I don’t know if you want—
Imrahn Khan: That’s actually a really good point. It’s very interesting to think, you know, I think Brandon and I were talking the other day about how, uh, viewership on so much of the different types of sports out there has dropped drastically, um, you know, and you would think, from a COVID standpoint and everything else, when people are at home they’d they’d actually sit there and watch tv and watch the sports and things. So, it’s just, uh, it’s interesting thing, think what-what’s really impacting that.
Jason Spiess: For me, what has been my biggest challenge getting back to sports is there’s no cr— There’s no crowd! I-I-I really do enjoy the barometer of the crowd noise and I did not realize it until – exactly – I didn’t even realize it until, you know, they started bringing baseball and basketball, and actually, it was pro wrestling that did it for me. I turned on pro wrestling one time. They didn’t have any fans and I went, ‘this is the worst soap opera I’ve ever seen in my life!’ Work, bring the fans back so at least they could trick me into thinking it’s athletics! I mean, this was just like, terrible because there was no music. It was just— Anyway, but, it, the fans just bring in so much and so, um, as they, I guess, usher that back, that’s going to help out too. But, uh, any final thoughts, guys, as we wrap up for the week here? Any-any, uh, thoughts that you want to leave people for the week?
Imrahn Khan: It’s, uh, it’s a, it’s such a, it’s a week that, you know, I feel like because of the way the elections are and everything else, it’s like, uh, it’s going to be a week that’s going to continue into the weekend. Um, you know, people are going to be, as you said, at cliffhangers, uh, you know, sitting and watching what’s going on, um, you know, how things are being resolved, all these different, uh, lawsuits and things that are that are happening and going to be happening. It’s, uh, it’s it’s interesting times. Uh, you know, it’s really, uh, uh, you know, I thought, I thought that, uh, coronavirus and-and, uh, all that stuff was bad enough, but we’re-we’re really in, uh, in new times today with, uh, with the elections even, so it’s, uh, 2020 has really been, uh, something different.
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