This is Matt Reustle and today we’re breaking down Baytex Energy. With oil prices hovering over $100 a barrel, we thought it was a particularly good time to revisit this sector. Why Baytex Energy? The 80,000 barrel a day producer certainly isn’t a household name. And with a market cap just north of $3 billion, it’s far from a mega-cap. But Baytex has production in five different operating areas spanning across the US and Canada. Some of those fields are mature, some are emerging. The company has been allocating cash flow between unconventional wells, conventional wells, and debt reduction in recent years. When you take Baytex and everything that’s happening within that business, it offers a perfect lens to view the historically boom and bust industry of oil production. To help break down Baytex, I’m joined by oil and gas investor, Josh Young, of Bison Interests.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:03:19] - [First question] - The journey of producing a barrel of oil and how Baytex fits into the oil production ecosystem [00:05:29] - How $100 is dispersed amongst the value chain when a barrel of oil is purchased [00:08:03] - A broad overview of Baytex today and its history [00:13:05] - The production of a barrel of shale oil and unique characteristics of shale [00:16:25] - The main drivers of increased productivity and optimization in oil production [00:19:11] - What breaking even looks like today on a barrel of oil [00:23:20] - Describing the decline rate of a shale well compared to conventional plays  [00:25:22] - Overview of the differences of oil blends and quality coming out of Texas versus Canada [00:30:51] - A snapshot of what Baytex’s Canadian operations look like [00:35:38] - The other major Canadian assets Baytex has  [00:38:28] - The heavy oil decline rate of Canadian oil wells compared to US shale wells [00:39:59] - What makes Clearwater such an exciting and interesting opportunity for Baytex [00:43:30] - Identifying where oil might be and what that process looks like [00:47:02] - His process as an investor in evaluating new projects like Clearwater [00:56:00] - How to ascribe value to a project like Duvernay compared to Clearwater [01:00:05] - Baytex’s approach to hedging and how it differs from the rest of the industry [01:02:15] - How the management team at Baytex manages capital allocation [01:05:33] - Why return capital to shareholders  [01:07:41] - Metrics he uses to value an oil production company or adjacent business [01:11:19] - Rules of thumb to consider when it comes to evaluating the asset base [01:14:05] - Main risks that could drive stock underperformance [01:16:38] - Lessons and takeaways from his time investing and working with Baytex

Today we’re breaking down AppLovin. It’s a business you may not recognize but have likely interacted with. Founded in 2012, AppLovin provides a platform for developers to market and monetize their mobile apps. The business also owns some of the most popular mobile games in the world, which they use to feed richer data into their software platform. To help breakdown the business, I’m joined by its CEO and co-founder, Adam Foroughi. Please enjoy this breakdown of AppLovin.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:02:41] - [First question] - The first risk taken when creating AppLovin and how it all began [00:05:05] - Why was there pushback against games and adtech back in 2012 [00:07:12] - What it was like in the early days to get the app in front of a customer  [00:08:54] - Building a platform and software product versus becoming an advertising agency [00:10:47] - The major components of AppLovin and how it works  [00:15:21] - The space or areas where most people interact with them and see their work  [00:16:26] - What he considers to be the next key chapters after AppLovin’s early days  [00:18:25] - How they determine strategy between the app developer side of the business and app ownership [00:25:50] - How AppLovin interacts with Apple, Android, and the relationship between products [00:27:11] - What he’s learned about the importance of scale in advertising  [00:28:58] - The major breakout points in the business that led to where he is today  [00:30:22] - Their revenue model and it how it breaks between software and apps [00:33:55] - The margins of gaming, its business proposition, and the future value of this side of the franchise [00:38:53] - His perspective on what defines great digital marketing today  [00:40:31] - Walking through the shifts in privacy, targeting, and data as technology changes [00:43:13] - His thoughts on emerging platforms as competitive threats and/or opportunities  [00:44:58] - How they’ve kept the business nimble and very product-focused on a corporate level [00:46:53] - Their concept of meetings and how they’ve learned to run them effectively [00:50:24] - The missing pieces in his strategic mission that he still wants to do in five years time [00:51:42] - What he’s learned from Facebook, Google, and game studios he’s worked with [00:54:32] - How he thinks about defensibility and power in the business as they evolve and grow [00:57:19] - His philosophy on the maturity of the business and if they’d pay dividends in the future [00:59:32] - How he has most improved in his career during his time with AppLovin  [01:02:03] - Questions that the world’s largest bear would ask him today [01:03:18] - The most interesting trends happening around him in the digital space [01:06:04] - His thoughts on the eventual impact of Facebook and Google becoming competitors rather than the collaborators they are today