Friday, January 12, 2018

Arctic Blast? What Arctic Blast! Active Rigs Power Ahead To 56 -- January 12, 2018

Active rigs:


1/12/201801/12/201701/12/201601/12/201501/12/2014
Active Rigs563654156192

Five new permits:
  • Operators: Whiting (3); Lime Rock Resources (2)
  • Fields: Stockyard Creek (Williams County); Manning (Dunn County)
  • Comments: Whiting has permits for a new 3-well Moen pad in lot 1, section 2-154-99; Lime Rock has permits for a 2-well Laura Sadowsky pad in section SESW 1-142-96
Seven permits renewed:
  • Lime Rock Resources III-A (3): a State permit, a Kary permit, and, an Emil Veverka permit, all in Dunn County
  • Petro Harvester: a Miller permit in Burke County
  • BTA Oil Producers: a 20002 Agate permit in Golden Valley County
  • Sinclair: a Crosby Creek permit in Dunn County
  • EOG: another Clarks Creek permit in McKenzie County
Five producing wells (DUCs) reported as completed:
  • 24550, 533, Petro-Hunt, Sabroskky 144-97-6A-7-1H, Little Knife, t12/17; cum --
  • 24696, 1,502, Zavanna, Usher 28-21 1H, Poe, t1/18; cum --
  • 30373, 463, Statoil, Folvag 5-8 8TFH, Stony Creek, t11/17; cum -- (#24180)
  • 30375, 1,229, Statoil, East Fork 32-29 1H, East Fork, t11/17; cum -- (#24180)
  • 32709, 316, Statoil, Heinz 18-19 XW 1H, Alexander, t11/17; cum --

Wow! Who Wudda Guessed? This Story Has Legs -- January 12, 2018

The story was first linked at The Prairie Blog. I then posted a follow-up blog which linked the original post. At the time, I really didn't think the story would have much national exposure. Wow, was I wrong. It just tells me how much political clout the farm states have. Today, this story in The WSJ: USDA, senators vow to change farmer cooperative tax provision.
Added days before the tax bill was signed, the wording gives farmers who sell grain to cooperatives an unintended advantage.
The National Council of Farmer Cooperatives and the National Grain and Feed Association, which has members with both business structures, are working to revise the provision with Sens. John Hoeven (R., N.D.) and John Thune (R., S.D.), who originally backed it.
“A technical change needs to happen and everybody’s working hard to make sure that change can happen as quickly as possible,” he said.
At the original post I suggested that this "problem" could easily be solved, and there they say it's just a matter of making a technical change.

Maybe that's all that's required with regard to the mortgage interest deduction to make the law "fair" between red states and blue states: a technical change. LOL. 

Latest 4Q17 GDP Forecast Jumps -- Now Up To 3.3%; Previous 2.8% -- January 12, 2018

Updates

February 23, 2018: add another reason why the market is surging -- repatriation could make 2018 a $1-trillion buyback year.

February 23, 2018: sixteen reasons why the market is surging (see below); now, eight more reasons.


Original Post

Trump economy: sustained growth pace unlike anything seen in 13 years -- CNBC.
  • the Trump economy may be doing something not seen since 2005growth at a 3 percent or better pace for three quarters in a row
  • economists were ratcheting up fourth quarter growth to 3 percent or better after strong fourth quarter retail sales and strong revisions to prior months
Latest forecast: 3.3 percentJanuary 12, 2018.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.3 percent on January 12, up from 2.8 percent on January 10.
The forecast of fourth-quarter real consumer spending growth increased from 3.0 percent to 3.8 percent after this morning's retail sales report from the U.S. Census Bureau and this morning's Consumer Price Index release from the U.S. Bureau of Labor Statistics.
US economy, why is the market surging, sixteen reasons:
  • easy money
  • regulatory environment: an about-face
  • Fed remains cautious 
  • lower tax rates, literally overnight -- and lowered significantly -- really significantly
  • great corporate earnings environment
    • JPM surprises
  • Fiat Chrysler: NAFTA is dead
  • many sectors did not participate in rally during 2017
  • consumer confidence at 17-year highs
  • cheap, accessible energy
  • geopolitical risks dialed way back
    • mideast relatively quiet
    • Trump sounds more "optimistic" about North Korea
  • infrastructure discussion beginning
  • WTI flirting with $64 again today
  • one week until partial government shut-down
  • P/E nowhere near euphoric conditions 
  • big companies with huge cash holdings: Buffett with more cash than ever
  • $1,000 - $2,000 / employee across the spectrum; huge amount of money going back into economy (the government did this in 2008: The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit)


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

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2015 ND Derailment Due To Broken Wheel

Link here.
The National Transportation Safety Board has released its final accident report and safety recommendations nearly three years after a fiery oil tanker train crash in north-central North Dakota that spilled 96,400 gallons of crude oil in the area.
The accident on May 6, 2015, one mile east of the small community of Heimdal, was caused by a broken wheel that led to the derailment of six of the 107 loaded tank cars on the Burlington Northern Santa Fe train, said the board in a release on Thursday, January 11, 2018.
Coming up on three years to sort this out? Life-time employment security for these investigators. My hunch is that the operator of the train knew within 24 hours what happened.

An Old Williston Airport Well Now Flaring Again -- January 12, 2018

From November 22, 2017: #20282. Has been off-line for two years; now IA. Eight seven wells around it have recently been fracked. Name: Williston Airport 2-11 1H; Todd Field.
Update: #20282 is now back on "A" status.

Note the production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-2017140017081758058411739
BAKKEN10-201711006379789634155
BAKKEN9-2017300012427000
BAKKEN8-201731000000
BAKKEN7-201731000000
BAKKEN6-201730000000
BAKKEN5-20177000000
BAKKEN4-20170000000
BAKKEN3-20170000000
BAKKEN2-20170000000
BAKKEN1-20170000000
BAKKEN12-20160000000

If I remember, I will check on this well monthly for the next few months. 

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My Indoor Garlic Garden


Random Update Of A "New" Well Drilled Back In 2008 -- An MRO Voigt Well -- January 12, 2018

Updates

July 13, 2018: update here.

Original Post

Back on November 22, 2017, these four DUCs were reported as completed:
  • 28462, 1,894, Petro-Hunt, USA 153-96-24C-13-3H, Keene, t10/17; cum --
  • 33326, 1,814, MRO, Spring 21-15TFH, Bailey, t11/17; cum --  (#16964, #20321)
  • 33325, 5,072, MRO, Chapman 31-15H, Bailey, t10/17; cum -- (#16964, #20321)
  • 33324, 2,282, MRO, French 31-15TFH, Bailey, t10/17; cum -- (#16964, #20321) 
I noted that it would be interesting to take a look at two neighboring, older wells: #16964 and #20321.

The neighboring wells:
  • 16964, 315, MRO, Voigt 11-15H, Bailey, t5/08; cum 203K 11/17; re-fracked 8/17; re-frack with 45 stages; 5.5 million lbs;
Recent production (#16964):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-20173017493173452132795615057006
BAKKEN10-201722286832872755416075012881
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-2017589641058040
BAKKEN4-2017306616631485410292

Note initial production at time of original frack (#16964):
BAKKEN10-200831255025503789759750
BAKKEN9-20083025112590407116011600
BAKKEN8-20083134263223615158715870
BAKKEN7-20083140134080708165716570
BAKKEN6-20083057145895975179717970
BAKKEN5-200824699065991117000
BAKKEN4-200812903696303000

Comment: we talked about this back in 2008 - 2012 the importance of all these early wells even if they initially appeared "uneconomical."  This was just one of several reasons why these lower-producing wells back in the early days of the boom were (and, are) so important.
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-20170000000
BAKKEN10-20171210018016
BAKKEN9-20170000000
BAKKEN8-201722107910979268966554
BAKKEN7-2017311640162013451414818236
BAKKEN6-201730165717391372133190175
BAKKEN5-201731174217071448138595661



Another Sign That The Bakken Is Back -- 2017 Truck Traffic Is Up In Western North Dakota -- Williston Wire -- January 12, 208

From the Williston  Wire.

Truck traffic in the Bakken: up.
  • west: permitted oversized and overweight vehicles on US Highway 85 was 45,540 in 2017 compared to 44,484 in 2016
  • central: permitted oversized and overweight vehicles travelling on US Highway 83 (Bismarck to Minot) was down from 13,378 in 2016 to 11,452 in 2017
  • east: similar permitted vehicle traffic about the same on I-29 in eastern North Dakota
Ribbon cuttings: new post offices in Watford City, Tioga

Employee-owned: AE2S; 280+ employees across six states; employee-owned  as of the new year

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Weather Update

I was worried about the "winter storm" that was to hit our area last night. It turned out to be a non-story. The temperature plummeted from 60 to 20 in the past 24 hours, but there was no significant wind and no precipitation. None. Nada. Nil. Although our oldest granddaughter says there was some snow yesterday. If so, I didn't see it. Radar suggested there was snow to the east of us last night.

So, this morning, a beautiful, beautiful morning -- brisk but beautiful.

So, there you have it.


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File Under: Things I Used To Be Able To Do

Link here.

4Q17 Earnings

This is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source. There will be factual and typographical errors on this page. If something looks wrong, it probably is.
 



Earnings for the current quarter will be reported at this page; the link will be on the sidebar at the right, under "Earnings Central." When we start to see earnings reports for any quarter, the "Earnings Central" link is moved to the top of the sidebar until the earnings season is over.

I don't have time to check/update earnings on all companies that might interest me or readers.

Much of this information is done in haste. I assume there are factual and typographical errors. It is for my personal use only. If this information is important to you, go to the source.

Note: by 4Q16 I lost a lot of interest in tracking earnings. I'm not sure where I will go with this page. In fact, there are more and more days when ... no, I won't go there. 

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Daimler: nothing to do with earnings but came out during earnings season -- but announced today -- huge Chinese automobile company bought 10% of Daimler for $9 billion.

ERF: shatters forecast; huge report.

ONEOK: 4Q17 slides.

GE: will restate earnings for 2016 and 2017.

EOG: 4Q17 and full year results.

GE is not going to spin off Baker Hughes any time soon: can you think of a more bullish energy signal? I cannot. GE is up nicely today.

CLR beats Street as production surges: memo to self, call the naysayers. CLR expects stronger performance in 2018. But look at this: 4Q17 net income of $2.25/share vs 7 cents/share one year ago. Earnings 41 cents vs 32 cents forecast. Wow.

CenterPoint beats 4Q17 profit forecasts: 33 cents/share vs 30 cents/share forecast.  Denbury Resources tops Street 4Q forecasts: 12 cents vs 7 cents forecast. Doing some exciting stuff; I will come back to Denbury later.

Chesapeake Energy back to profit as production, prices rise. 33 cents/share vs 30 cents/share forecast. But look at this: revenue jumped 25 percent to $2.5 billion. Analysts had only expected revneues of $1.23 billion. Wow.

Zacks oil, energy wrap. This is really quite amazing. 4Q17 results.

Enerplus: quarterly profit beats expectations.  27 Canadian cents/share vs 17 Canadian cents/share. ERF shares up 7% today.
 

ENB: 4Q17 earnings slides here.

EW: holy mackeral, up 4% in after-hours trading after it announces earnings. EPS beats earnings by 4 cents, but more important: strong guidance for next quarter. Sales crushed consensus.

AMZN: huge; shares surge 6% after hours; after earnings announced.

AAPL: beats by 3 cents. Revenue beats; a little over $88 billion in revenue. Investors not impressed; shares down in after hours. It will be interesting to see what shares do when the dividend increase is announced. See my note here: From the weekend print edition of the WSJ, Saturday, January 20 - 21, 2018, doing the math, analysts suggest that AAPL will declare a special dividend of $2.35/share once the repatriation dust settles. In addition, the analyst suggests Apple will target $71 billion in share buybacks, and increase the dividend by $1.00/share over two years. The current dividend is $2.52. I can't post the electronic link because I'm reading this in the print edition. But I'm sure the story is easy to find for those interested.

CVX: boosts quarterly dividend for first time since late 2016 The company had expected to raise the dividend 3 cents to $1.11 but surprised everyone and raised the dividend to $1.12.

BAX: beats by 5 cents;

COP: meets forecasts. Income of $1.58 billion vs a loss the same quarter one year ago. EPS of 45 cents were right in line. Press release: ConocoPhillips reports fourth-quarter and full-year 2017 results; increases quarterly dividend by 7.5 percent and planned 2018 share repurchases to $2 billion; announces preliminary 2017 year-end reserves and bolt-on transaction in Alaska.

T: booked a $20 billion paper gain from federal tax overhaul; will gain about $3 billion in extra cash this year. At The Wall Street Journal. Shares up 3%.

GE: shares are plummeting; epic selloff. Went below $16. One shark said his target is $13.  One wonders how much Jack Welch contributed to this? Did he inflate his company with earnings reports that were not decipherable?

Netflix: huge earnings report. Results even better than already-high expectations. Shares surge over 8%. Wow.  It looks like Kevin Spacey cost Netflix as much as $39 million. Destroys expectations; stock soars.

HAL:
  • forecast: earnings to soar to 46 cents vs 4 cents a year ago
  • in fact: earnings soared to 53 cents, excluding various items
SLB: results better than analyst views; EPS soared 63% to 44 cents with revenue up 14% to $8.12 billion; book a billion-dollar charge on a Venezuelan investment; and signed an MOU with Occidental Petroleum for a 5-year service project in New Mexico's Delaware basin for 700 wells

Schwab: earnings beat estimates; revenues in line

KMI: 4Q17 loss compared to profit same period one year ago; after adjustment, earnings were positive, at 21 cents, beating consensus of 18 cents; KMI shares rose very, very slightly on a huge day for the Dow

F: Ford 2018 profits forecast disappoints. Shares fall almost 7%.

Bank of America: takes $2.9 billion charge, but adjusted results came in above expectations

GE: to take $6.2 billion charge; more bad news could follow; tea leaves suggest company will be broken up

Citigroup: beats on Q4 earnings; records $22 billion tax charge

United Health: earnings more than doubled

CSX: easily beats; 64 cents vs forecast of 56 cents/share


WFC (Wells Fargo): EPS beat, $1.16 vs $1.07; missed on revenues; investors liked the numbers; shares up 0.5%;

JPM: very, very nice report.

The Market And Energy Page, T+356 -- January 12, 2018

Updates

Later 2:21 p.m. CT: coming up dry. Bloomberg is reporting that "hope wanes for 'elephant' oil discoveries in Norway's Arctic.
After a disappointing year for drillers, Norwegian authorities are reviewing their hopes for the Nordic country’s hottest exploration area.

“In the part of the Barents Sea that’s currently open, you’ve sort of tried the elephants -- the big opportunities,” Bente Nyland, the head of the Norwegian Petroleum Directorate, said in an interview. “You’re now down to the next generation in size.”
That means the industry regulator would be happy with any discovery of about 500 million barrels of oil, she said. That’s a far cry from the multibillion barrel deposits discovered in the North Sea, which have helped Norway become one of the world’s richest countries over the past decades.
Later, 10:45 p.m. CT: market now up more than 202 points. Most interesting, CNBC seems to be spending more mid-day reporting on political events than the huge news the stock market is making. 

Later, 9:36 p.m. CT: market is up 175 points in early trading. And CNBC is back to trying to talk the market down. Quite amazing. The talking head, a former Federal reserve member, again brings up the "synchronized global economy," and took forever to get to the Trump tax bill -- which he did not mention by name.

Flashback: from Bloomberg, November 12, 2017 --
No matter which theory of flattening you subscribe to, the world’s biggest bond market is sending a signal that traders can’t ignore. The longer the trend continues, the more likely its effects could spread to bank earnings and the real economy, while at the same time it would limit the Fed’s ability to respond when these risks emerge.
Today, with the Dow up almost 200 points (after a 205-point surge yesterday after 70+ Dow records this past year, absolutely no mention of the flattening yield curve. In fact, bank earnings coming in today are quite good.

Treasury yields, most recent:
  • 10: 2.54 (delta, 10 year - 2 year: 0.56)
  • 5: 2.32 (delta, 10 year -5 year: 0.22)
  • 2: 1.98
One year ago:
  • 10: 2.42 (delta, 10 year - 2 year: 1.19)
  • 5: 1.93 (delta, 10 year year - 5 year: 0.49)
  • 2: 1.23

Original Post

WTI: $63.40

Misspoke: did Robert Kaplam, CEO of the Federal Reserve Bank of Dallas mispeak? He clearly stated that the Permian accounted for 70% of US crude oil production -- at least that's what I clearly heard in his interview with Steve Liesman, CNBC, this morning. Impossible. Maybe he meant that 70% of US crude oil production INCREASE in the US in 2018 will come from the Permian since in his next statement he said that the Permian will increase production by 700,000 bopd in 2018.  From the EIA:

Dow futures: up 110 points after a 205-point gain yesterday after 70+ Dow records set in the past year. Even Jim Cramer says he was surprised by some of the gains yesterday, singling out CVX as just one example.

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

Waterboarding: "... the waterboarding of the American economy ended on November 8,2016." -- Joe Kernen, CNBC.

Tedious: I guess we got the answer to the question that CNBC talking heads asked ad nauseum whether the stock market had "baked in" the tax bill before it was even passed. Clearly, the stock market had not "baked in" the tax bill before it was passed. Interestingly enough, even after the bill passed, it took several weeks for investors to understand what really happened, at least based on the market yesterday and what futures are showing today. What caused the 205-point Dow surge yesterday and Dow futures suggesting another 3-digit gain today? Two things:
  • Becky Quick's interview with Warren Buffett on Wednesday, January 10, 2018 (date?)
  • Fiat Chrysler's incredible announcement yesterday
Blog: why I love to blog. Yesterday I noted that the Fiat Chrysler announcement meant that de facto NAFTA was dead. In an early morning interview on CNBC earlier this morning Joe Kernen said the same thing: regardless of what actually happens "officially" with NAFTA, the Fiat Chrysler suggests that NAFTA is dead.

Pickens: closes his two funds. Various reasons cited.

JPMorgan: beats; $1.76 vs $1.69. This is huge. The company had said it would take a "huge" hit after the tax bill passed. "Trading was down sharply year-on-year."  JPMorgan's effective (?) tax rate in 2017 was 30%; in 2018, the effective (?) tax rate will be 19%. According to CNBC analyst, there were a lot of "one-offs" in JPM's 4Q17 earnings report. But, the new tax rate is permanent -- that is not a "one-off." JPMorgan was trading slightly lower (futures) but is now trading up (futures), near a new all-time high.

Shortage of shares: Jim Cramer has been beating the "shortage of shares" drum for the past several weeks. Now, Dick Bove used the very same phrase, "shortage of shares," when discussing investment banking. He thinks that investment banking will do very well this year. Again, see disclaimer above.

GM: will debut self-driving car without steering wheel in San Francisco in 2019. It certainly seems GM has leap-frogged Tesla. Tesla is concentrating on EVs while GM and others have moved well beyond EVs. In fact, the Tesla Model S looks absolutely "ancient" when compared to the graphic below. Wow, technology is moving quickly. Reuters link here.
Heidi: when it comes to infrastructure spending, it sounds like Heidi has no concern with deficit spending. She loves fracking, hydrocarbons, crude oil, economic growth -- Joe Kernen says she sounds like a Republican. 

GDP forecast: latest forecast -- 2.8% for 4Q17-- January 10, 2018
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 2.8 percent on January 10, up from 2.7 percent on January 5.
The forecasts of the contributions of net exports and inventory investment to fourth-quarter real GDP growth increased from -0.63 percentage points and -0.46 percentage points, respectively, to -0.60 percentage points and -0.42 percentage points, respectively, after this morning's report on import and export prices from the U.S. Bureau of Labor Statistics and this morning's wholesale trade release from the U.S. Census Bureau.
Next forecast: to be released today.
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Back To The Bakken

Active rigs:

$63.401/12/201801/12/201701/12/201601/12/201501/12/2014
Active Rigs543654156192

RBN Energy: streamlining Permian water delivery and produced water takeaway, part 2