Monday, October 2, 2017

Holy Battery, Batman! Tesla Missed Its Production Guidance By A Mile -- But Plans To Send Earth People To Mars By 2024 Are Still On Track

Updates

Later, 9:07 p.m. Central Time: wow, Don is fast. Not more than six minutes did I post the note below than he sends me this March 19, 2017 article from SeekingAlpha: Tesla bankruptcy chances increased exponentially with the capital raise. I do not recall seeing this particular article. The summary:
  • Tesla communicated Model 3 ramp to investors ahead of the capital raise has disastrous consequences
  • the small raise means Tesla will run out of money during a bad Model 3 ramp and make it difficult to get future raises on advantageous terms
  • on the current path, we believe there is a better than 50% chance Tesla will be reorganized in the next 12 to 24 months
  • "If you think your IQ is 160 but it's 150, you're a disaster. It's much better to have a 130 IQ and think it's 120." - Charlie Munger 
It's a sobering article, to say the least. 
Original Post 

For those who might have forgotten, these were Tesla's production goals:
Re-posting Tesla guidance regarding production: What is the most current Tesla guidance for Model 3 production? 
According to the linked SeekingAlpha article, posted July 31, 2017:
  • July, 2017: 30 
  • August, 2017: 100 
  • September, 2017:1,500 
  • December, 2017: 20,000
So, how did Tesla do with regard to its September goals .... drum rolls --- badda, badda, bing --- missed them according to The WSJ: holy mackeral, Batman, it wasn't even close:
Tesla Inc. badly missed its goal of building 1,500 Model 3 cars in the third quarter, the first sign that the production ramp-up for the new sedan isn’t going as smoothly as planned.
The Silicon Valley electric-car maker built 260 of the Model 3s between July and September, the company said Monday in a statement.
In August, the auto maker predicted it would build more than 1,500 Model 3s before cranking up production to 5,000 a week by the end of the fourth quarter.
The Model 3, which starts at about $35,000, represents Chief Executive Elon Musk’s bet that he can transform the luxury auto maker into a more mainstream player around the world. Tesla blamed “production bottlenecks” for the weaker production.
This is interesting. It turns out that the wiring is a nightmare. Not sure if robots can do it. I don't know it, but this is a disaster.  How did the market respond? At the close, TSLA was up 43 cents (0.135. In after hours trading, at 7;59 p.m. EDT, shares were off $5.52 (1.62%). It will be interesting to see how the market takes this when it's widely reported tomorrow morning.

Again, between July and September, 2017, the company built 260 of the Model 3s -- its goal was 30 in July; 100 in August; and, 1,500 in September.

I can't wait for the "longs on Tesla" to explain this on SeekingAlpha how this is "good news" for Tesla. And it's already beginning. From the linked WSJ article:
Tesla delivered only 220 Model 3s during the quarter, well below the 1,300 that analysts surveyed by FactSet expected on average. Tesla sold these first Model 3 vehicles in the quarter to employees and investors, and expects to begin delivering them to nonemployees in the final three months of the year.
Some analysts weren’t confident in Tesla’s ability to meet Model 3 expectations in the quarter. Ben Kallo, an analyst for R.W. Baird, said in a Sept. 29 note to investors that Tesla was likely behind, estimating the company had delivered only about 300 to 400 Model 3s. “We believe Q3 will be the most challenging part of the Model 3 production ramp,” he wrote.
The only question: has Las Vegas any odds on when this company declares bankruptcy?

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The Edwin Hawkins Singers

Lay Down, Melanie and the Edwin Hawkins Singers

The Statoil Mark Wells In Williston OIl Field

Updates

January 8, 2019: it was noted that the producing wells are now off line suggesting that perhaps the newer Mark wells are being fracked.

Original Post

The Mark wells:
  • 25958, SI/NC, Statoil, Mark 4-9F 3H, Williston,
  • 25957, SI/NC, Statoil, Mark 4-9F 4TFH, Williston,
  • 25956, SI/NC, Statoil, Mark 4-9F 5H, Williston,
  • 25955, SI/NC, Statoil, Mark 4-9F 6TFH322, Williston,
  • 32292, SI/NC, Statoil, Mark 4-9F 7H, Williston,
  • 32293, SI/NC, Statoil, Mark 4-9F 8TFH, Williston,

  • 22384, 2,910, Statoil, Mark 4-9 1H, Williston, t5/12; cum 307K 8/17;
  • 23746, 2,145, Statoil, Mark 4-9 2TFH, Williston, t5/12; cum 165K 8/17;
  • 32238, SI/NC, Statoil, Mark 4-9F XE 1H, Williston, 
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A Man And A Dream

The eleven trusses were delivered this morning.

By nightfall, all eleven trusses were in place.


Eagle Ford Struggling -- October 2, 2017

As most readers know, I'm not sold on the Eagle Ford.

Argus Media has an interesting article that adds to my skepticism about the Eagle Ford. Regular readers of the blog will probably note some of the same things that caught my eye at the linked article. 

It will be in the archives in case, the article "disappears."

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FERC Approves Another Natural Gas Pipeline

From Argus Media:
The US Federal Energy Regulatory Commission (FERC) has approved a $412mn project that would allow Kinder Morgan to convert a 964-mile stretch of natural gas pipeline to carry NGLs from the northeast US to Texas.
The 430,000 b/d NGL system known as the Utica Marcellus Texas project will use infrastructure on Kinder Morgan's Tennessee Gas pipeline (TGP) system. The project will be capable of moving propane, butane, natural gasoline, and y-grade in batches from processing facilities near Scio, Ohio. It involves building 200 miles of new pipeline from Louisiana to Texas and will connect to a header system in Texas that can reach storage sites near Mont Belvieu.
Kinder Morgan plans to bring the pipeline on line in the fourth quarter of 2018.
The project underscores a transformation underway at cross-country gas pipelines such as TGP, Williams Partners' Transcontinental Gas (Transco) and Enbridge's Texas Eastern Transmission (Tetco). Those pipelines historically have provided a conduit for gas from the US Gulf of Mexico and large producing states such as Texas to key consuming markets in the northeast.
Those traditional south-to-north gas flows have reversed because of the advent of shale production and a surge in output from fields like the Marcellus and Utica, two gas- and liquids-rich formations close to key northeast consuming markets.
The operators of Tetco, Transco and TGP have converted those systems to bi-directional service, allowing low-cost northeast gas production to reach growing demand in the southeast from power plants and for exports to Mexico and overseas markets. Demand for NGLs from the northeast has also sprung up along the US Gulf coast.
More at the linked article.

CLR's Anna Wells -- All Appear To Be On Line And Producing -- October 2, 2017

Link here. Nice IPs.

Also, CLR's Anna wells are tracked here

Updating A CLR Bridger Well -- October 2, 2017

See this post. The Bridger/Bonneville wells are tracked here.

It appears the wells on aneighboring pad (31845, 31846, 31847) were fracked at the same time, and had some great IPs. Still confidential or SINC:

31845, CLR, Bridger 7-14H2:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20173119468194963586320837153715466
BAKKEN7-2017114706457911798494732861661
BAKKEN6-20173261252787000


31846, CLR, Bridger 8-14H:

DateOil RunsMCF Sold
8-20173226821963
7-201743212544
6-20174600

31847, CLR, Bridger 9-14H1:

DateOil RunsMCF Sold
8-20173313424450
7-20171846180



Tom Petty -- October 2, 2017

Musician, full cardiac arrest.

End of the Line, Tom Petty and the Traveling Wilburys

Eight New Permits -- October 2, 2017

Active rigs:

$50.5710/2/201710/02/201610/02/201510/02/201410/02/2013
Active Rigs573368190186

Eight new permits:
  • Operators: Statoil
  • Fields: Williston (Williams)
  • Comments: Statoil has permits for an 8-well pad in Williston oil field, Lot 2 5-154-100;
Two producing wells completed:
  • 33348, 2,070, MRO, Shrader 41-13H,  Big Bend, 4 sections, t8/17; cum --;  (22910, 22911, 19996, 25049, 25050)
  • 33349, 1,306, MRO, Homme 11-18TFH Big Bend, 4 sections, t8/17, cum --;  (22910, 22911, 19996, 25049, 25050)
Dry hole:
  • 32908, dry, BR, Lillibridge 3A MBH;
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Proposed area for Statoil's 8-well Sjol pad:


Existing well:
  • 21146, 3,109, Statoil, Sjol 5-8 1H, Williston, t6/12; cum 284K 8/17; API 33-105-02284,

The Energy And Market Page, Part 2, T+255 -- October 2, 2017

Who wudda thought? Jet fuel was the most consumed fuel, accounting for 44% of total U.S. government energy use in FY 2016 -- again, this is for US government use, not total US -- and one wonders who used most of that jet fuel? Yes, it had to be the USAF.


The close. All four major indices set new records -- Russell 2000; S&P 500; NASDAQ; and, Dow 30 -- and when CNBC covers the close -- not one mention of what might be going on. We are almost into a full year since the presidential election and not one mention of that milestone coming up. 

Fast food. I missed this one: McDonald's increased their dividend recently, from 94 cents to $1.01/share/quarter, I believe. By the way, if you scroll through the headlines for McDonald's today, you will see more than a dozen articles suggesting a surge in burger sales. One article from CNBC:
McDonald's new burgers are a big sales hit with consumers, according to one small Wall Street firm, which lit a fire under the stock on Thursday.
Longbow Research raised its rating on the restaurant chain to buy from neutral, predicting McDonald's will report sales above Wall Street expectations. "Given our latest positive checks and favorable short and long-term view of MCD's fundamentals, we are upgrading the shares this morning," analyst Alton Stump wrote in a note to clients Thursday.
"Beyond positive trends for the current quarter, we believe the shares of MCD deserve to trade above the company's own historical multiples in light of its ongoing turnaround story both in the U.S. and internationally." 
I don't know if there is something going on in the burger industry or if this is "specific" to McDonald's.

However, I did note this: two Subway restaurants in our neighborhood closed in the past year or so. Some would argue that McDonald's is the antithesis of Subway.

So, what's going on with Subway? From Bloomberg back in April, 2017:
Subway Restaurants closed hundreds of domestic locations last year, marking the biggest retrenchment in the history of a chain that spent decades saturating America with restaurants.

The company lost 359 U.S. locations in 2016, the first time that Subway had a net reduction. The store count dropped 1.3 percent to 26,744 from 27,103 in 2015, but Subway remains the nation’s most ubiquitous eatery. (McDonald’s Corp. is No. 1 by sales.)

The closely held company is coping with a sales slowdown in the U.S., made worse by the emergence of newer fast-casual rivals and the industry’s heavy reliance on discounts and promotions. Subway also has lost some of its luster as a healthier-food option. It’s been working to restore its status by eliminating antibiotics from its chicken and switching to cage-free eggs. 
Well, that's a start: antibiotic-free chickens and cage-free eggs. LOL. I am obviously living in the wrong generation. 

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or think you may have read here.

Disclaimer: I have never directly invested in McDonald's and have no plans to ever do so. I have to say "directly" because I assume some of the mutual shares that I hold are invested in McDonald's.

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A Man And A Dream

The roof trusses arrived this morning. Remarkably, the individual delivering the trusses took a look a look at the transmission line over the building being constructed, said he could do it, and he did: he raised and lowered eleven frames to the top of the building, missing the power line.



Graphics Worth A Thousand Words; About That OPEC Cut (Wink, Wink) -- October 2, 2017

Pardon The Interruption 
By the way, pardon the interruption, before you do anything else, look at the amount of crude oil the us imported from OPEC from February, 2017, to the most recent reporting period, July, 2017, on a monthly basis (and then get back to me regarding the OPEC cuts [wink, wink]).


Now, back to the original post.

For the archives: WTI is down over 2% today; trading at about $50.57.

I posted these two links over the weekend. I never got around to reading them; something tells me they are incredibly timely articles in light of all the data on this page.
And one more thing, CNBC is reporting that OPEC production for the month of September, 2017, increased by 50,000 bopd:
  • trivial in the big scheme of things;
  • but, going in the wrong direction; and,
  • mostly due to continued increase in Iraqi production
The tea leaves are not hard to read.  
Original Post

This is simply remarkable.

It took a year but Saudi Arabian crude oil imports into the US have finally ... fallen off the chart. This is amazing -- there were reports in the mainstream media that this had occurred but I do not recall any stories suggesting it was this "bad" for the kingdom. I do not recall CNBC talking about this. With Saudi Arabian crude oil imports falling off the chart, the price of oil should be surging, shouldn't it? It's not. In early trading oil was down over 1.2% and WTI was trending toward $50 again.

So, the graphics, from this source, in thousands of bbls / DAY:

The graph:



Look at Saudi cash reserves as of July, 2017.

Now, look at the most recent data, just released:



Meanwhile, crude oil imported to the US from Iraq is surging. The graph below is in thousand bbs/month (the Saudi graph above is thousand bbls/day):

How do the various OPEC countries compare? This is bbls/month for the OPEC countries over the past few months:



Look at US monthly import, comparing Saudi Arabia, Iraq, and Venezuela. Over the six-month period shown:
  • Venezuela: volatile, but basically the same
  • Saudi Arabia: significant decrease
  • Iraq: has more than doubled in the past six months
For Saudi Arabia vs Iraq: this is not trivial

The Political Page, T+255 -- October 2, 2017

Trump's "favorite" for the "next" "Fed" chairperson? According to CNBC, it is not Janet Yellen. Kevin Warsh has moved out in front. For me, this was a bit confusing, to say the least, on several levels.
Kevin Warsh, the favorite to be the next chairman of the U.S. Federal Reserve, apparently believes the central bank has become a servant to the stock market after years of loose monetary policy.
Uber-bear Albert Edwards, an economist at Societe Generale's strategy team, said Monday that after listening to Warsh speak at a banking conference last week, he would be his choice to lead the Fed. He also revealed Warsh felt the Fed had been captured by the "secular stagnation" ideas of former U.S. Treasury Secretary Larry Summers and had become persuaded by the idea that more monetary stimulus is needed.
If I'm interpreting that correctly, it is the "Fed" that has become persuaded by the idea that more monetary stimulus is needed, apparently something that "uber-bear Edwards and Warsh are against.

In addition, Warsh is seen as more hawkish than Janet Yellen, suggesting that rates would go higher faster under Warsh than under Yellen. The dollar would likely strengthen, all things being equal, something Trump does not want.

Clear as mud. As usual.

Some explainin' to do: tell me again why this is not treasonous?

The National Anthem: this probably could have been written differently -- from The Washington Post:
It’s a reversal of course, one that reflects the network’s decision to remain nimble as far as showing the anthem during this season of “Monday Night Football.” It had intended to return to its new, normal practice of not showing the anthem until at least 50 people were shot to death and more than 400 injured in the shooting in Las Vegas.
The pro-athlete disrespect for the flag and national anthem is looking more and more trivial every day. It seems a bit hypocritical that it takes a sniper to turn a concern into a killing field for a network to change course. Another NFL-free Monday night for me.

Running scared: CBS took no time to fire VEEP for tweeting "no sympathy" for Vegas victims. VEEP said victims were most likely Republicans. So much for free speech at CBS:
CBS has parted ways with one of the company’s top lawyers after she said she is “not even sympathetic” to victims of the Las Vegas shooting because “country music fans often are Republican,” when discussing the tragic mass shooting that occurred in Las Vegas late Sunday night. 
Her tweet:
“If they wouldn’t do anything when children were murdered I have no hope that Repugs [sic] will ever do the right thing,” Geftman-Gold wrote in a now-deleted message that was first reported and captured by The Daily Caller.
Geftman-Gold continued: “I’m actually not even sympathetic bc [sic] country music fans often are Republican gun toters [sic].”
I wonder if she kneels?

How low will the go? CNN also reports that the Vegas casualties were probably Trump supporters.

Democrat delays impeachment bill. With 500+ injured; and 50+ killed; and, some/many/most Trump supporters, the Democrat says this is not the right time to bring the impeachment bill to the floor of the House. Well, that's nice. I wonder how "Saturday Night Live" will handle this. I'm sure Tina Fey will figure it out.

Banned. I don't get it. How could the killer use the long gun that he used? It was banned in 1986. Fortunately he didn't have a silencer on that gun -- Hillary says the tragedy could have been much worse had he used a silencer on the automatic weapon. I am not making this up. 

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Camille Paglia on Hugh Hefner's Passing

Link here.

It's unfortunate the interviewer did not preface the interview with a bit of background. This little bit of personal history is critical for those trying to "understand" Hefner:
In 1949, Hefner married Northwestern University student Mildred ("Millie") Williams. They had two children: daughter Christie (b. 1952) and son David (b. 1955). 
Before the wedding, Mildred confessed that she had an affair while he was away in the army. He called the admission "the most devastating moment of my life." A 2006 E! True Hollywood Story profile of Hefner revealed that Mildred allowed him to have sex with other women, out of guilt for her own infidelity and in the hope that it would preserve their marriage. The two were divorced in 1959.

The Energy And Market Page, T+255 -- October 2, 2017

Later

GDP now: Latest forecast: 2.7 percent — October 2, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.7 percent on October 2, up from 2.3 percent on September 29.
The forecasts for third-quarter real consumer spending growth and third-quarter real private fixed investment growth increased from 1.8 percent and 0.3 percent, respectively, to 2.3 percent and 1.8 percent, respectively, after this morning's construction spending release from the U.S. Census Bureau and this morning's Manufacturing ISM Report On Business from the Institute for Supply Management (ISM).
The model's estimate of the dynamic factor for September—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.04 to 1.59 after the ISM report.
Early late afternoon trading: Dow 30 is up 120 points. There are now 212 issues traded on the NYSE that have reported new 52-week highs, including BRK-B: Phillips 66.

 Original Post

Dow 30, new 52-week highs in early morning trading: 104, including -- GM, D. R. Horton,
  • new lows: 10
Records: all three major indices open at new highs today -- Dow 30; NASDAQ; and, S&P 500.

ISM: September, 2017. Hitting new records. An incredible report. The ISM hit a six-year record in August, 2017, and now it looks like an 11-year record with the September, 2017, report. When I find a link for today's report I will post it. Yes, here it is: US factory activity surges last month to highest since 2004 -- thirteen years. The Trump rally continues. Let's see, we're almost into Trump's first year, especially if one considers the optimism he drove began in early November, 2016. One year. From the linked article:
U.S. manufacturing activity shrugged off a series of hurricanes and rose to the highest level in 13 years last month.
The Institute for Supply Management said its manufacturing index rose to 60.8 from 58.8 in August, the highest reading since May 2004. Anything above 50 signals that manufacturers are growing, and the ISM survey shows they've been on a 13-month winning streak.
New orders, production, hiring and new export orders all grew faster in September.
Seventeen of 18 manufacturing industries reported growth, led by textile mills and machinery. Only one industry — furniture manufacturing — contracted last month.
GDP now. Most recent forecast will be reported later today. The previous and latest report was dated September 29, 2017: 2.3 percent
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.3 percent on September 29, up from 2.1 percent on September 27. Since the previous GDPNow update on Wednesday, the forecasts of the contributions of net exports and inventory investment to third-quarter GDP growth increased from -0.16 percentage points and 0.90 percentage points, respectively, to -0.01 percentage points and 1.13 percentage points, respectively. The forecasts of real consumer spending growth and real nonresidential equipment investment growth declined from 2.0 percent and 5.7 percent, respectively, to 1.8 percent and 4.0 percent, respectively.
Coal: a great report for coal. Coal demand is going to surge over the next few years

WTI Bulls Get Another Dose Of Reality; WTI Down Over 1% in Pre-Market Trading; Stronger Dollar -- October 2, 2017

Why I love to blog: with regard to the pre-market trading of WTI, see my comments yesterday. From Reuters via Yahoo!Finance:
Oil (Brent) fell more than $1 a barrel to below $56 on Monday as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices to register their biggest third-quarter gain in 13 years.
U.S. energy companies added oil rigs for the first week in seven and Iraq announced its exports rose slightly in September while OPEC overall boosted output.
Brent crude, the global benchmark, was down $1.02 at $55.77 a barrel at 1310 GMT. It notched a third-quarter gain of about 20 percent, the biggest third-quarter increase since 2004 and traded as high as $59.49 last week.
"I think it's going to be a struggle to move above $60 Brent," said Olivier Jakob, oil analyst at Petromatrix.
U.S. crude was down $1.22 at $50.45. The U.S. benchmark posted its strongest quarterly gain since the second quarter of 2016.
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Active rigs:

$50.5610/2/201710/02/201610/02/201510/02/201410/02/2013
Active Rigs583368190186

RBN Energy: Permian pipelines shuttling crude oil from gathering systems to takeaway pipes.

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Exxon: the company's big bet on Brazil oil could signal major "pre-salt" role -- Reuters via Reuters. Exxon paid almost $1 billion for one block, Brazil's highest-ever such bid. Almost a billion dollars and return won't be seen for decades?
Marking a return to Brazilian exploration after a five-year absence, Exxon took eight blocks in the coveted basin, one of Brazil's most productive, at an auction on Wednesday. Six were taken in partnership with state-run Petrobras.
The auction's record take included an Exxon bid of 2.24 billion reais ($704 million) for one block, Brazil's highest-ever such bid.
That showed how oil companies that can afford significant overheads are willing to shell out for and develop high quality reserves in far-flung locations, despite oil prices that have roughly halved since 2014.
Timing: oil's September surge propels bull market run on demand optimism -- this is a reposting of a Bloomberg article.  Timing? See my comments here. Data points:
  • OPEC's production increased in September, 2017
  • Mideast summer demand and US driving season coming to an end; demand optimism? echo chamber
  • WTI pre-market trading: down over 2%; flirting again with $50 "floor" (?)
  • WTI moves from $50 to $52 and US drillers add oil rigs for first week since mid-August, according to Baker Hughes

Re-Living The 2016 Presidential Campaign -- October 2, 2017

I've got more important stuff to do than re-live the 2016 Hillary - Trump campaign, but this is too good to pass up. After posting my note about the LA Times yesterday, a reader sent me this note: "whatever you say about the LA Times, remember, that publication was the ONLY major media outlet that predicted Trump's win." The reader provided this link at Bloomberg.

The reason I find this so refreshingly delicious is that the poll referenced, the USC-Los Angeles Times poll was the only poll I used during the campaign and posted it almost daily once I got started. Two links:
Making this even more refreshingly delicious is this: I clearly recall one reader making a snarky remark about using this poll, suggesting that I was using this poll simply because it was the only one that showed Trump leading; the reader noted that all other polls showed Hillary winning (in fact, the ABC poll infamously showed that Hillary would win by 15 points and that poll was released a day or two before the election).

And finally, just throwing this in: USC is my alma mater. Have no idea if they won over the weekend. It was a football-free weekend for me; didn't want to see any kneeling.