California Resources Corporation is rising on Friday, after announcing that the exploration and production company’s board of directors approved a dividend of a penny a share.
It is the first quarterly dividend announced for California Resources since it was spun out from Occidental Petroleum at the start of December. Of course, dividends and capex are being widely watched at energy companies, which have been pulling back amid continued low energy prices. Despite its dividend increase, California Resources otherwise slashed its spending budget for the full year by 80%, announced in its fourth-quarter earnings report last week.
Raymond James’s Pavel Molchanov noted that the budget “all but eliminates shale drilling” and reduces its rig count from 27 in November to just three today.
“It is virtually unheard of for a single operator’s activity to adjust this quickly,” he wrote, but the deep cuts come as the company grapples with debt:
Put simply, CalRe may well end up with the steepest spending cut of any U.S. E&P company in this downcycle…CalRe’s debt/cap ratio of 71% is near the high end of the E&P universe (currently averaging around 50%), a direct consequence of the $6 billion dividend paid to Occidental.
The steep spending cut needs to be seen in that context, and management clearly wants to achieve some deleveraging before organic growth becomes a priority.For newbies: this is for the archives. I have no financial interest in following this story. I have a huge interest in following this story for reasons I have posted before as it relates to the Bakken.
This is going to be so much fun. I still think oil and gas investors are going to enjoy 2017, if not 2016. Saudi Arabia is going to look back on 2014 as a watershed year.
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Used EVs A Great Bargain
LOL
This is a great story. I have talked about this issue from "the very beginning." I'm not going to re-hash it. Regular readers know the story. Bottom line, used EVs won't sell:
- gasoline is cheap (and could get much cheaper once Cushing reaches capacity)
- there is an oil glut as far as the uninformed can see
- mileage on new cars keeps getting better and better
- conventional cars keep getting better and better, fancier, and bigger
- batteries don't last forever; most folks assume batteries in EVs might last about seven years
- when gasoline was $5.00/gallon, EVs still did not make economic sense
- gasoline is now $2.00/gallon
Nissan Motor Co. ’s Leaf electric car has been a big seller for Atlanta car dealer Pat Hoban over the past three years, thanks to its low monthly lease price. But as those car leases are beginning to expire amid cheap gasoline, the vehicle is becoming a bit of a headache.
Mr. Hoban expects between 100 and 150 of the leased vehicles to be returned to his Capitol City Nissan dealership on a monthly basis over the next two years as their leases expire. The problem: used Leafs aren’t attracting much demand.
With gas prices down 33% from a year ago, and buyers cooling toward electric vehicles, some auto makers are offering deep discounts or attractive leases on battery-powered vehicles and plug-in hybrids. Nissan, for instance, slashed the price of a new Leaf by $6,400 in 2013 and is now offering a $199-a-month lease, or $3,500 cash back and 0% financing for 72 months, on brand new Leafs.One can buy a new Honda Civic for about $169/month right now -- a new car for less than leasing a three-year-old Leaf, and there's no comparison between a Leaf and a Honda Civic.
Used cars:
Other electric cars, including plug-in versions of Ford Motor Co. ’s Focus and Toyota Motor Corp. ’s Prius, are depreciating as fast as the Leaf with the average trade-in value in 2014 falling between 22% and 35%, depending on model. The depreciation rate on plug-in electric cars is nearly twice that of a comparable gasoline-engine car.
In December and January the average selling price of a 2012 Nissan Leaf at auction was about $10,000, nearly a quarter of the car’s original list price and down $4,700 from a year earlier.
Three-year-old Volts, a plug-in car with a backup gasoline motor, were selling for an average $13,000 at auction in January, down from about $40,000 excluding the federal tax credit.
Resale values “have been crushed on these cars,” said Chris Coleman, co-founder of Carlypso, an online used-car shopping site. “As a used-car value, they’re an absolute bargain.”And that's the problem: a used car salesman telling me a used Volt is an absolute bargain but not telling me a) when a new battery will be needed; b) how far a charge on an aging battery will take me; c) how much a new battery will cost me; and, d) who replaces the batteries.
Tesla, too, might be "over-building." It is generally reported that Tesla builds to demand -- when an order comes in they build -- and they are behind in meeting demand. A writer over at SeekingAlpha suggests that Tesla has "time" to build cars on speculation they will find a buyer -- meaning that they are keeping up with demand, and simply not selling as fast as they can produce.
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iCloud
After the recent near-miss -- thinking I had a hard drive crash -- I started looking into whether I should have a better back-up process in place (rather than external hard drive) and so I started looking into iCloud.
Setting up iCloud was one of the easiest things I've ever done, but it was like following the proverbial rabbit down the proverbial rabbit hole. Every time I thought I was done, there was, as Steve Jobs might say, "one more thing to do."
This is the process: perhaps through Google I found iCloud (I forget how I found iCloud but Google is always the fastest). (But now that I've found it, it's bookmarket. LOL.)
All I really wanted to do was store my photos on iCloud and possibly one file folder of documents. Pretty simple.
It turns out I already had an iCloud account (free), an Apple ID, and a password, set up some years ago and it all still worked. I still had $1.87 in my iTunes account which hasn't changed for about three years, I suppose.
But I was surprised that my operating system "10.8.something" was not sufficient; I had to upgrade to "10.10 Yosemite" -- something I had put off for months for various reasons, but now I had no choice. So at 11:00 p.m. last night when my internet is working best I started the download. It took about an hour. I watched old Seinfeld DVDs.
I was surprised how well Yosemite worked.
Then to load the photos. Another surprise. I could not access iPhoto because it also had to be upgraded. At midnight, I was not about to start another upgrade, so this morning, at Starbucks, that's the first thing I did, start the iPhoto download. That also took about an hour, and the bad news: there is no bar showing update status; you just have to have faith that something is happening.
And then, there it was, a notification that the installation was complete. My photos are there. Awesome.
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