Why We Continue to Invest in Murphy Oil, Exxon, and PBR

By Mickelberry Capital

In a market obsessed with stories, narratives, and short-term rotation, it’s worth pausing to ask:
Where are the companies built on real economic demand — and why does that matter?

At Mickelberry Capital, we don’t invest based on emotion or popularity.
We invest based on fundamentals, cash flow durability, valuation discipline, and long-term survivability.

That brings us to three names that have remained central in our energy exposure:

Murphy Oil Company (MUR)
Exxon Mobil (XOM)
Petróleo Brasileiro S.A. (PBR)

We continue to hold and add to these positions because their risk/reward profiles align with our strategic criteria — especially in a world where energy remains an unavoidable global necessity.

Below is our reasoning, clearly articulated and grounded in financial logic.

⚡ 1. Energy Is Not Optional — It’s Fundamental

Energy isn’t a buzzword — it’s the backbone of economic activity.

Whether:

powering factories
moving goods globally
heating homes
enabling transportation

Energy consumption persists through:

economic expansions
market corrections
demographic shifts
geopolitical changes

This pure macro demand gives energy companies a baseline of durability that most tech or “story stocks” simply do not have.

🛢 2. Murphy Oil: A Cash Flow Specialist With Value on the Books

Murphy Oil Company is often overlooked, but this is exactly where value-oriented, disciplined investors find opportunity.

Key reasons we continue to invest:

A. Asset-Backed Value

Murphy owns real, producing reserves — with valuations tied to tangible hydrocarbons, refining capacity, and near-term cash flows.

B. Improving Free Cash Flow

Murphy has shown the ability to generate:

positive cash flow even in volatile price environments
capital returns via dividends
disciplined reinvestment into core assets

This aligns with our philosophy:

Cash flow matters more than shiny narratives.

C. Valuation Discipline

Murphy often trades below:

book value
peer valuations
normalized earnings multiples

This gives a margin of safety, which is how we like to initiate long positions.

🛠 3. Exxon Mobil: The Classic Anchor of Energy Portfolios

Exxon Mobil is not an “energy fad.” It is an established operator with:

A. Scale That Matters

Exxon’s infrastructure spans:

Upstream exploration
Midstream logistics
Downstream refining
Chemicals and specialties

This integration reduces volatility in earnings across cycles.

B. Strong Balance Sheet

Exxon’s scale enables:

better access to capital markets
investment in high-return projects
resiliency during downturns

We do not equate size with value, but scale in energy translates into durability — a core risk consideration.

C. Shareholder Discipline

Exxon has a long history of:

dividends
share repurchases
capital allocation with long-term returns in mind

This is the opposite of companies that trade on hype.

🌍 4. Petrobras (PBR): Emerging Market Exposure With Energy Fundamentals

Petróleo Brasileiro S.A. (PBR) adds a dimension that many U.S. investors overlook: geographic diversification within energy.

Here’s why we maintain exposure:

A. Attractive Valuations

PBR is often priced below global peers — even when fundamentals look solid.

B. Natural Resources and Reserve Base

Brazil’s oil fields and related infrastructure deliver:

production growth
export potential
strategic positioning

C. Policy and Reforms

While emerging markets have risks, Petrobras has made strides toward:

better governance
market-friendly pricing structures
disciplined reinvestment

We are not blind to geopolitics — but we are not blind to value.

This is the balance that defines disciplined investing.

📊 5. Macro Tailwinds That Favor Energy, Not Speculation

Let’s talk reality for a moment:

✔ Global energy demand continues to rise

Renewables grow — but they do not eliminate hydrocarbons overnight.

✔ Geopolitical shocks still move markets

Supply chain disruptions, conflicts, and OPEC policy changes all influence prices.

✔ Inflationary pressure increases real cash flow

Energy companies often benefit from inflation in the short and medium term.

This is not about nostalgia for the past, but recognition of how economies actually function.

📈 6. Risk Management: Why This Isn’t Reckless Exposure

We do not invest in energy blindly.

Our risk criteria include:

A. Balance Sheet Health

Companies with:

manageable debt ratios
strong operating margins
tested capital allocation plans

B. Cash Flow Generation

We favor businesses that:

produce free cash flow
return capital to shareholders
invest rationally in growth

C. Valuation Discipline

We avoid momentum chasing — especially in sectors where sentiment swings wildly.

This keeps downside risk controlled.

🧠 7. Long-Term Ownership With Near-Term Safety

Here’s the core of our philosophy as applied to these energy positions:

We aim for durable ownership, not tactical speculation.

This means we:

avoid short-term valuation fads
respect risk before reward
size positions relative to capital that can withstand stress
view energy as a foundational layer, not a headline play

Long-term ownership doesn’t assume perfection.
It assumes survivability and cash flow.

Energy companies that can remain solvent and cash-positive across cycles are worth paying attention to — especially when other sectors feel overpriced or speculative.

🧭 Final Thought

Being contrarian for the sake of being contrarian is foolish.

But being disciplined — focused on real economic necessity, valuation discipline, and cash flow durability — is not only rational, it’s often profitable over the long horizon.

That’s why we continue to participate in Murphy Oil, Exxon Mobil, and Petrobras — not because they are glamorous, but because:

necessity, fundamentals, and value still matter in investing.

Subscribe to Mickelberry Capital to stay updated on how we think about energy, capital allocation, and disciplined long-term ownership.

Disclosure: This article is for informational purposes only and does not constitute investment advice. All investing involves risk. Readers should conduct their own research or consult with a financial professional before making investment decisions.