A Decade of Oil and Gas Investing in One Hour | Alejandro Yela

Alejandro Yela is the founder of Hermit Ventures and the author of The Hermit, a Substack focused on nano- and microcap companies. He began as a debt investor in Latin American oil and gas bonds, later worked in restructuring, project finance, and M&A.

This discussion took place live on October 2nd, 2026, on the MicroCapClub Community. Join MicroCapClub and unlock the ability to listen and participate live in these discussions - microcapclub.com/#join

In this episode, Alejandro explains how to value an oil producer on its proven (1P) reserves, and why a company's exposure to the oil price depends on whether it extracts, refines, or transports. He walks through his thesis on Computer Modelling Group, the reservoir simulation software company facing pressure from AI while it pursues acquisitions and buybacks. He also explains why he thinks Canadian oil stocks are fully priced after the run in oil, and why he sees more value in oilfield suppliers like OMS Energy.

Share your feedback - david@microcapclub.com
David’s X (Twitter) - x.com/Valuehunte
Alejandro's Substack - substack.com/@ayela

Chapters

00:00 Introduction
02:13 From Latin American Oil Bonds to Canadian Oil
04:50 Investing in Oil Without Exploration Risk
05:53 Why You Need to Be a Specialist to Build Conviction
07:45 How to Value an Oil Company: 1P, 2P and 3P Reserves
10:21 Are Oil Stocks Just a Bet on the Oil Price?
12:29 Why Refining Is Political: The California Example
14:18 Pipelines as Toll Booths
15:19 Canadian Companies With Assets Abroad and Expropriation Risk
17:16 How to Screen for Oil and Gas Ideas
19:55 The Computer Modelling Group Story
22:34 Is AI a Threat to CMG?
23:29 CMG's Organic Revenue Decline
25:04 Cash Flow, Buybacks and Capital Allocation at CMG
26:04 The 15% Free Cash Flow Yield Rule
29:56 What LNG Canada Phase 2 Means for Canadian Gas
34:56 Why He Wouldn't Buy Canadian Oil Right Now
36:53 What Cash-Rich Oilfield Suppliers Should Do With Their Money
37:27 Geopolitical Risk and Surviving the Oil Cycle
40:07 What If the War Lasts 10 Years?
43:10 His Fund, Mandate and Private Investments
46:19 Helping OMS Energy's CEO With Capital Allocation
47:24 Why Private Businesses Trade at a Premium
50:11 Open Questions: High-End Retail and Crocs
52:13 Information as a Moat: Red Violet and Pagaya

Disclaimer: All content on this channel is for discussion, education, entertainment, and illustrative purposes only and SHOULD NOT be construed as professional financial advice, solicitation, or recommendation to buy or sell any securities, notwithstanding anything stated on this channel. There are risks associated with investing in securities. Loss of principal is possible. Past performance is not a predictor of future investment performance. Ian Cassel and the guests on this channel are not responsible for investment actions taken by viewers. Should you need such advice, consult a licensed financial advisor, legal advisor, or tax advisor. You agree to verify all information yourself before investing. Any past performance discussed during this program is no guarantee of future results. Investing involves risk and possible loss of principal capital; please seek advice from a licensed professional. All views expressed are personal opinions as of the date of recording and are subject to change without the responsibility to update views. No guarantee is given regarding the accuracy of the information on this channel. Releasees undertake no obligation to provide accurate or sound investment statements. You waive any and all duties that may exist flowing from you to any Releasee. You agree not to hold any Releasee liable for any possible claim for damages arising from any decision you make based on information or other content on the Channel.