Strategy Consulting - Strategic Sourcing, GTM and M&A | Negotiation Expert | Managing Partner @ Mainline Ventures | Kellogg MBA | Engineer | 3x Start-Up Cofounder
Earnings calls are a masterclass in corporate storytelling. Every word, pause, and phrase is chosen to send a message, and analyzing these linguistic breadcrumbs can reveal where an industry is headed. That’s why part of our analytics and machine learning platform utilized at Mainline Ventures focuses on keyword trends in earnings calls to make predictive estimates about market conditions. A recent analysis caught my eye. I ran the last 12 months of earnings call transcripts for North American E&Ps and uncovered a striking disparity: "Efficiency" was mentioned ~2,500 times. "Supply chain"? Barely ~25 mentions. This contrast speaks volumes about how E&Ps are orienting themselves in the post-consolidation era: driving maximum free cash flow (FCF). In general, oil and gas companies have three levers to maximize FCF: 1. Maximize Topline Revenue: Bigger fracs, longer laterals, better uptime, improved takeaway agreements. 2. Reduce Cycle Times: Drill and frac wells faster to reduce CAPEX exposure. 3. Optimize Supply Chain Agreements: Ensure pricing structures align with organizational strategy. The first two levers get all the glory—they’re easy to quantify, report to the street, and showcase in glossy investor decks. But lever 3? That’s the unsung hero, often ignored because it’s harder to measure and optimize. This is where negotiation science becomes a game changer. By quantifying all potential outcomes (normalized in dollars) and calculating how much of that value is captured—what we call the Utilization Rate—companies can finally shine a light on the value hidden in their supply chain processes. The earnings call data paints a clear picture: the industry is laser-focused on levers 1 and 2. But here’s the kicker—those lofty synergy targets (~1,400 mentions of “synergy,” by the way) promised to the street often depend on untapped savings and efficiencies in the supply chain. Ignoring this low-hanging fruit is like leaving a gusher untapped. Supply chain optimization might not have the buzzword cachet of "efficiency," but it’s the lever with the biggest upside—and it’s about time the industry starts pulling it.