Tuesday, January 31, 2017

XOM: A Huge Miss -- January 31, 2017

Dilbert: the Canadian option. Speaking of which, a security analyst provides rationale for Trump's action. Again, Trump is a step ahead of the politicians. He understands 9/11.

Politics: Trump is expected to "pull out" of the Paris climate agreement by the end of this week. 

Politics: Dems arguing for more "open borders" into the US won't play well in the heartland. Or among New Yorkers. Maybe in Silicon Valley, but that's about it.

Politics: an LGBT-executive order today is expected today. It will be interesting to see who has accepted his invitations to attend the ceremony. Trump usually signs his executive orders in a "reality-show" venue.

XOM: huge miss; 41 cents vs forecast of 70 cents; top line also a huge miss. This helps explains XOM's "doubling down" in the Permian. I still still XOM entering the Permian was "Johnny-come-late" and too-little, too-late. I still think XOM should have bought CLR years ago.

CEO - barista wage gap: Starbucks CEO earns half-billion dollars in nine years; baristas? Not so much. 

A Little Mythology

Shell sells $4.7 billion of North Sea assets, from Bloomberg. Needs cash to pare debt from last year's acquisition of BG Group, a $54 billion deal. North Sea buyer: Chrysaor.  From wiki:
Chrysaor was the brother of the winged horse Pegasus and son of Poseidon and the Gorgon Medusa. When Medusa was decapitated by Perseus, both Chrysaor and Pegasus were born at the same time. Little is known about Chrysaor; he was considered a stout-hearted warrior, and his name means "he who bears a golden sword".  
Chrysaor is a private company established in 2007; focused on developing and commercializing oil and gas "incremental resources."

Oil: oil steady as rising US output offsets OPEC-led cuts.

US shale revolution: BP embraces the US shale revolution, Rigzone. Blog posting here.

Wal-mart: expands free shipping, but has long lost the battle with Amazon Prime.
  • free; no annual fee
  • free shipping applies to orders over $35
  • applies only to specific 2,000 items [the Achilles heel in this announcement]
  • Amazon Prime applies to "all" orders, more than 40,000 items
  • Wal-Mart: "in this day and age, two-day shipping is just table stakes." [Table stakes: the minimum resources needed to enter a market.]
Robots: the new baristas.  Keurig on steroids. I'm not sold. Maybe at high-volume, where speed is not an option -- airport terminals.

Back to the Bakken

Active rigs:

Active Rigs4045146191185

RBN Energy: new REX Zone 3 capacity and northeast gas markets, part 2.

The market: futures (Dow 30) imply a 50-point drop  when the market opens. This is still a continuation from yesterday but earnings being reported before market opening are not good.

GDPNow: 2.3 percent for 1Q17 -- January 30, 2017.

COP dividend: although not by much, COP raised quarterly dividend from $0.25 to $0.265. 

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