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We pay special attention to insider purchases by independent directors that have an investment background and our top insider purchase this week fit that bill. Moreover it happens to an insider purchase in an oil and gas pipeline company with a particular focus on the Permian basin, which accounts for 75% of the 7.33 million barrels it transports per day. I was reviewing the financial statements of oil exploration and production company Continental Resources (CLR) last week after Harold Hamm offered to take the company private for $70/share in cash and was struck by how much Continental has increased its capital expenses. After holding the line for several quarters on not increasing production, the frackers have finally given in and have increased their capital spending.
This increased production by oil companies translates to higher volumes transported and stored by pipeline companies like Plains All American Pipeline (PAA). This is the first insider purchase of PAA by Director Kevin S. McCarthy since he joined the board in 2020. Given below is a brief overview of Mr. McCarthy’s background from the PAA website,
Mr. McCarthy has served as a director of PAA GP Holdings LLC since October 2020. He is currently Vice Chairman at Kayne Anderson, where he co-founded and oversaw the firm’s energy infrastructure securities activities, and served as CEO and Chairman of the Board of Directors for Kayne Anderson’s closed-end funds from 2004 through July 2019. Prior to joining Kayne Anderson in 2004, Mr. McCarthy was global head of energy investment banking at UBS Securities LLC and held similar positions at PaineWebber Incorporated and Dean Witter Reynolds. Mr. McCarthy serves as a director of Altus Midstream Company and Whiting Petroleum Corporation, and previously served as a director of Range Resources Corporation, ONEOK, Inc., Emerge Energy Services LP and K-Sea Transportation Partners L.P. Mr. McCarthy earned a BA in economics and geology from Amherst College and an MBA in Finance from the Wharton School at the University of Pennsylvania.