Friday, November 1, 2019

Spread Narrows? Did Anyone Else Notice? -- November 1, 2019

I guess I wasn't paying attention.

Both Brent crude and WTI advanced nicely today.

WTI was up 3.7%, up $2.02 by the end of the day; trading at $56.20

Brent was up 3.47%, up $2.07, trading at $61.69.

I could be wrong, but that WTI-Brent spread seems very narrow.

OPEC basket is at $61.24, well below the IMF break-even for Saudi Arabia.

Saudi Aramco IPO to be launched Sunday, November 3, 2019.

Meanwhile, Saudi Arabia foreign exchange reserves, most recent data, just released, September, 2019, link here. Corroborates IMF data suggesting that $61-oil is inadequate for Saudi Arabia.


Ten-year history:

Forty-Four Permits Renewed; Petro-Hunt With Three New Permits -- WTI Back Up Over $56 -- November 1, 2019

Businesswomen in the Bakken: from ozy.

Active rigs:

$56.2311/1/201911/01/201811/01/201711/01/201611/01/2015
Active Rigs5768533470

Three new permits today, #37150 - #37152, inclusive:
  • Operator: Petro-Hunt
  • Field: Charlson (McKenzie)
  • Comments: 
    • Petro-Hunt has permits for a 3-well USA 153-92 pad in section lot 2 / section 2-153-95;
Forty-four permits renewed:
  • Whiting (8): six Tarpon Federal permits in McKenzie County; a Pronghorn Federal permit in Billings County; one Kostelecky permit in Stark County
  • MRO (6): three permits in McLean County; one Merwin USA permit; one Avallon USA permit, and one Foote USA permit; two permits in Dunn County, Felix USA permit, and Elizabeth Felix USA permit; one Smith USA permit in Dunn County
  • Murex (4): four permits, all in McKenzie County -- Vernon E. Skari; Iner Skari; Evar P. Skari; and, Laura Skari;
  • EOG (3): two Van Hook permits (Mountrail), and one Hawkeye permit (McKenzie County); 
  • EOG (3): three Burke permits in Mountrail County
  • NP Resources (3): three McDonald permits in Billings County (southwest ND) 
  • EOG (3): three Austin permits in Mountrail County
  • EOG (2): two Wayzetta permits in Mountrail County
  • Oasis (2): two Borden Federal permits in Williams County
  • Bruin (2); two FB Leviathan permits in McKenzie County 
  • Lime Rock Resources (2): a State permit and a Kary permit, both in Dunn County
  • Denbury (2): two CHSU permits in Bowman County
  • QEP (2): two MHA permits in Dunn County
  • Newfield: one Bice permit in Dunn County
  • Petro Harvester: one STR1 permit in Burke County

Notes From All Over, Part 4 -- November 1, 2019

Make my day! Beto withdraws from presidential race. Julian Castro next? Then Kamala?

Market: a most incredible day; both NASDAQ and S&P 500 set new all-time records; Dow up over 300 points; what just happened ... let's count the reasons ...

Sixteen Reasons, Connie Stevens
  • China -- wasn't there something about a breakthrough today? Memo to self: check twitter
  • China
  • China
  • easy money -- first rate cut
  • easy money -- second rate cut
  • easy money  -- third rate cut
  • jobs report smashes estimates -- African-American unemployment at record low
  • no wage inflation
  • November 1, 2019 -- first day after October 31, 2019 -- see note below -- professionals told to jump in
  • when market started to move, computer algorithms did the rest
  • FB
  • AAPL 
  • FOMO: fear of missing out
  • WTI up 3.5% (although this is somewhat a derivative of the China factor above)
  • total return -- dividends; buybacks; vs money market, cash, bonds
  • the worst is behind us? Santa Claus rally yet to come?
April 4, 2019: thirty reasons why the market is surging.

But, does it make sense? GDP at 1.9% and trending lower. Two things:
  • China
  • presidential election year
Reality sucks, state estate tax:
  • New York state tax: 16% on estates worth more than $10.1 million. Think about that: million. A billion-dollar estate -- heirs will immediately fork over $160 million to Governor Cuomo. 
    • It starts at 3.06% and goes up to 16% for taxable estates worth more than $10.1 million. The taxable estate is the value of the estate above the $5.25 million exemption (unless the estate reaches that cliff of 105% of $5.25 million, then the whole estate is taxable).
  • New Jersey: worse -- 16% on estates that exceed $2 million
  • Connecticut: complicated; the good news, there is a cap
  • Massachusetts: same as NY --16% on 10.04 million 
  • Oregon: begins on estates as little as $1 million; progressive, to 16%
  • Ohio: 7% on estates over half-a-million dollars
  • Illinois: begins on estates of $4 million; progressive to 16%
  • California, Florida, Texas: no death tax
Disclaimer: in a long note like this there will be factual and typographical errors. If anything mentioned in the blog is important to you, go to the source.

WTI: up 3.64% today.

Market: most incredible action today -- remember -- this was sent to me by a reader yesterday -- yesterday, October 31, 2019, last day that mutual funds made changes to their portfolios before "going final" for the year. Stocks sold off yesterday as mutual funds locked in profits. So, "stuff" was beat down a bit yesterday .... today .... mutual funds moving in with direction from the top to buy. There seems to me to be a huge FOMO ... fear of missing out. 

Note: the new Apple TV+ television show "Dickinson" is NOT a spin-off from the Coen Bros' "Fargo."

Wow! Not only is the general market doing well (NASDAQ and S&P 500 hit new highs), but WTI is up almost 2%. That was earlier in the day; closed up 3.64%.

Politics: nationally, Pocahontas is polling, at best, 23%. Twenty-three percent of 51% is ... drum roll ... 11.73% nationally. Yes, I know ... the numbers will change when its one-on-one with Trump.

European Wax Center: moving from South Florida to Plano, TX. Will close Florida and New York offices. Speaking on the move, a spokesperson for EWC, said that a significant reason for the move to Texas, specifically, Plano: the existence of a large pool of technologically-astute workers. Hmmm. Then a light bulb went off. Literally just down the road from Plano is University Texas Dallas -- UTD. Over the past two years I have been on the campus every few weekends and visited many weeks on a daily basis during the summer. I was amazed how fast this "new" campus has been growing, and it appears that its niche is technology. Our two granddaughters took software / computer coding summer courses at UTD during the past two summers. It is obvious that UTD is becoming the "farm team" for tech companies on the north side of DFW airport. This is a pretty big deal for what it represents.

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

Crescent Point Energy: confirms 1 cent/share dividend.

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SRE

SRE: beats on 3Q19 earnings; ups CY19 EPS view. Up $2.75, up almost 2%. Trading near 52-we high.
  • eps: $1.50 vs consensus of $1.49
    • but look at this: barring one-time items, the company generated GAAP earnings of $2.84 per share compared with 99 cents same quarter one year ago;
    • repeat, in case you missed that, earnings, $2.84 3Q19 vs less than a dollar 3Q18
  • revenues: 
    • 3Q19: $2.76 billion, up 7.5% y/y but that still missed estimates of $2.92 billion
  • segments, most interesting:
    • San Diego Gas & Electric: $263 million vs $205 million a year ago
    • Southern California Gas Company: $143 million vs $14 million one year ago
    • Sempra Texas Utility: $212 million vs $154 million one year ago
    • Sempra Mexico: $84 million vs $44 million one year ago
    • Sempra Renewables: $0 (no typo) vs $34 million one year ago 
    • Sempra LNG: $2 million vs $16 million one year ago
    • Parent and other: a loss of $139 million vs a loss of $211 million a year ago
SRE, other observations:
  • yes, once again -- did you all see the earnings SRE booked on renewables? Zero. Nada. Nil. Zilch. 
  • I was surprised by reduced earnings on LNG; didn't see that coming
  • Southern California Gas: a 10-fold increase in revenue, from $14 million a year ago to $143 million this quarter (probably needs to be double-checked)
Later, a reader wrote:
Sempra announced last September the first of a multi-phase initiative to optimize its portfolio, spinning off solar and battery storage and other renewable assets for $1.54 billion to Consolidated Edison. That acquisition, which included one wind facility, involved about 980 MW of installed capacity.
Sempra's activist investors, Elliott Management and Bluescape Resources, have called for the company to spin off its U.S. liquefied natural gas (LNG) businesses and its businesses in Latin America. The company created a new LNG and business development committee in September as part of an agreement with the investment management firms.
*******************************
Others

XOM, beats:
  • beat expectations
  • 49% slump in earnings for 3Q19, y/y
  • earnings: $3.17 billion, down from $6.24 billion one year ago
  • EPS: slumped from $1.46 last year this time to 75 cents 3Q19 (another source said, 68 cents)
  • revenue: $65.05 billion
  • boe production: increased by 3% y/y; at almost 4 million bopd; soared by 70 percent in the Permian
  • up 7 percent quarter/quarter (3Q19/2Q19)
  • remains world's largest publicly traded oil company; five producers out-produce XOM but all of the are state-controlled companies like Saudi Aramco, Rosneft, etc
CVX, misses:
  • 36% decline in earnings, y/y
  • EPS: $1.36 vs $1.45 forecast
  • revenue: $36.12 billion vs $37.69 billion forecast
  • earnings: $2.6 billion, down from $4 billion last year
  • revenue: $36.12 billion

Did NASDAQ / S&P 500 Hit All-Time Highs Today? Notes From All Over -- Part 3 -- November 1, 2019

Link here.


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From A Reader


The Real Reason Trump Is Moving To South Florida -- To Get Out Of The Way Of Global Warming -- November 1, 2019


A Picture Is Worth A Thousand Words -- November 1, 2019


.... and this was a bad year for Apple, Inc. ....

Link here to a SeekingAlpha contributor, archived.

Summary:
  • Apple is now done with their bad FY 2019, and it didn’t end that bad at all with an upside revenue and EPS surprise in Q4
  • the year saw Apple transition even further off being the iPhone company, spurred by fast growth in wearables and services and reduced iPhone revenue
  • they are still in the middle of the transition, but it is going as well as can possibly be expected considering their headwinds
Miscellany:
  • Apple performed 3 billion Apple Pay transactions in the quarter, more transactions than PayPal
  • wearables now generate more annual revenue than two-thirds of the Fortune 500
  • they are getting close to half a billion paid subscriptions. That was 330 million just a year ago
  • Apple returned $21 billion to shareholders at a net cost of $4.3 billion to net cash. They borrowed $7 billion for the first time since 2017
  • Apple had $1.1 billion in foreign currency headwinds this quarter. Without it: China was slightly up; revenue up 3.6% vs. 1.8%; gross profit up 5.5% vs. 1%; EBT up 4.9%, vs. down 1.8%; net income up 4.7% vs. down 3.1% and EPS of $3.27 instead of $3.03

Incredible October Jobs Report -- What Was The Fed Thinking? Notes From All Over, Part 2 -- November 1, 2019

Making America great: October job creation easily tops estimates even with auto strike -- CNBC

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

Employment data for October, 2019, link here:
  • nonfarm payrolls, m/m change: 
    • prior: 136,000
    • consensus: 90,000 (due to GM strike)
    • actual: 128,000 -- wow
  • unemployment rate
    • prior: 3.5%
    • consensus: 3.6%
    • actual: 3.6% -- remains around the lowest in decades
  • unemployment rate for minorities
  • African-American: nudged lower to 5.4% -- a new record
  • total employment: 158.5 million -- an all-time high
  • average hourly earnings, y/y change: 3% gain, in line
  • average work week unchanged at 34.4 hours (Obamacare mandate - 35 hours)
  • average hourly earnings, m/m change
    • prior: 0.0%
    • consensus: 0.2%
    • actual:
  • but look at this -- prior data revised considerably higher:
    • August's initial 168,000 estimate revised all the way up to 219,000
    • September's intial 136,000 came all the way up to 180,000
    • at current rate -- well above the pace needed to keep unemployment rate around its current level 
  • with numbers like this one has to wonder if "the Fed" misread the economy; why it had to cut rates again (this week); whether Trump actually goaded "the Fed" into acting 
  • market surges; Dow up 93 points 

9/19 Production Data For North Dakota / Bakken Wells Now Being Reported -- November 1, 2019

The CLR Morris wells in Oakdale oil field have been updated.

BR's Midnight Run wells in Union Center have been updated.

CLR's Anna wells in Last Chance oil field have been updated.

The Enerplus' "Bush" pad in Mandaree oil field has been updated.

CLR's Hereford Wells Have Now Been Fracked And Are Coming Off The Confidential List -- November 1, 2019

This page will not be updated; these wells are tracked elsewhere.

CLR's Hereford Federal wells have been fracked, and are now off the confidential list as of 9/19. Wells have been updated.

They are all going to be great wells.

In addition, we will see great examples of advantaged oil

This one is particularly interesting, though it is back on the conf list:
  • 32354, 174--conf (noted 9/19), CLR, Hereford Federal 8-20H2, Elm Tree, t8/19; cum 0; has never produced anything; no frack data; API: 33-053-07430; FracFocus says fracked 3/28/17 - 4/15/17; huge frack with 12.6 million gallons of water; 88% water by mass; now, update, 9/19 -- I note that the well is back on the conf list, but it is producing some oil now;
Example of advantaged oil:
  • 19503, 275, CLR, Simmental 2-21H, Elm Tree, t12/10; cum 349K 9/19; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-201929115831129170661981919037441
BAKKEN8-20193117295172331020728200194918290
BAKKEN7-20193118099184071247127833027436
BAKKEN6-2019302128921587150543262371331505
BAKKEN5-2019159243849068331559143814990
BAKKEN4-20190000000
BAKKEN3-20190000000
BAKKEN2-20190000000
BAKKEN1-2019002470000
BAKKEN12-201825179419038653017261875
BAKKEN11-2018302386211014313319283590

For newbies:
  • this well was originally drilled, completed, and tested back in 2010, in the middle of the Bakken boom
  • this well is almost a decade old
  • it had plateaued to 2,500 bbls/month -- very respectable for a decade-old well, but then jumped to 20,000 bbls in June, 2019 -- an 8-fold jump in production;  
Most recent jump in production is well better than what this well did when it was originally drilled, completed, and tested back in 2010:
BAKKEN6-2011308008833815731370172966405
BAKKEN5-20113193299647186615320142801040
BAKKEN4-201130109981060022821619016000190
BAKKEN3-20112911490116932317161461607175
BAKKEN2-201128117121150030701647216122350
BAKKEN1-201112605761162022719758011396
BAKKEN12-201022629957684681833951943145

Slawson's Gunslinger Federal Wells In Sand Creek

Note:
  • 33625: 351K in less than 20 months; still producing 15,000 bbls/31 days
  • 33625: note the "chronologic number"
The wells, a 10-well pad, from the south, running north:
  • 36363, conf, Slawson, Gunslinger ....1TFH, Sand Creek,
  • 36362, conf, Slawson, Gunslinger ....1H, Sand Creek,
  • 36361, conf, Slawson, Gunslinger ....1TF2H, Sand Creek,
  • 36360, conf, Slawson, Gunslinger ....1TFH, Sand Creek,
  • 36359, conf, Slawson, Gunslinger ....1TF2H, Sand Creek,
  • 36358, conf, Slawson, Gunslinger ....1H, Sand Creek,
  • 36357, conf, Slawson, Gunslinger ....1TFH, Sand Creek,
  • 36356, conf, Slawson, Gunslinger ....1H, Sand Creek,
  • 36355, conf, Slawson, Gunslinger ....1TF2H, Sand Creek,
  • 26354, conf, Slawson, Gunslinger ....1TFH, Sand Creek, 

From the north, running south:
  • 33626, conf, Slawson, Gunslinger ....1TF2H, Sand Creek,
  • 33625, 1,433, Slawson, Gunslinger Federal 4-1-12H, Sand Creek, t2/18; cum 351K 9/19;
  • 33624, ros/conf, Slawson, Gunslinger Federal 7-1-12TFH,
  • 33623, conf, Slawson, Gunslinger ....12H, Sand Creek,
  • 33621, conf, Slawson, Gunslinger ....12TFH, Sand Creek,
  • 33622, PNC, Slawson, Gunslinge Federal 16-1-12TF2H, Sand Creek, 
For newbies:
  • "H": middle Bakken
  • TFH: Three Forks, first bench
  • TF2H: Three Forks, second bench
Of the sixteen Gunslinger Federal permits (one now canceled):
  • middle Bakken: 5
  • Three Forks, first bench: 6
  • Three Forks, second bench: 5 (one now canceled)
Graphics:




Wow, Already The First Day Of November -- 2019

Four wells coming off the confidential list today -- Friday, November 1, 2019: 4 for the month; 99 for the quarter. I showed these four wells coming off the confidential list today, Friday, November, 1, 2019, but they were reported yesterday by the NDIC; I don't know what happened, but here they are again from yesterday:

  • 29377, drl, Hess, EN-Chamley-156-93-0508H-7, Baskin;
  • 34207, 60 (no typo), BR, Anderson Ranch 1C MBH, t7/19; cum 29K 9/9;
  • 34718, 240, Oasis, Nordeng 5298 12-25E 5B, Banks, t5/19; cum 100K 9/19;
  • 34719, 288, Oasis, Nordeng 5298 12-25E 6T, Banks, t5/19; cum 128K 9/19; #20026
Advantaged oil: this does give me the opportunity to remind newbies to look at #20026 again. This is happening all over the Bakken

Active rigs:

$54.3911/1/201911/01/201811/01/201711/01/201611/01/2015
Active Rigs5968533470

RBN Energy: will new crude oil export terminals be "frozen" in favor of expansions, instead? Does it matter?
In our blogs and at our 2019 School of Energy a couple of weeks ago, we’ve spent a lot of time discussing the ins and outs and pros and cons of a multitude of proposed crude oil export terminals. What we’ve come to believe is that, with U.S. production growth appearing to slow and market players fearful of overbuilding, many of these multibillion-dollar greenfield projects are unlikely to advance to financing and construction. Odds are that the midstream sector instead will focus on ways to add new capacity to existing terminals, even if that means still relying on reverse lightering in the Gulf of Mexico to fully load Very Large Crude Carriers (VLCCs). In today’s blog, we discuss why producers, traders and midstreamers alike may be pulling back from investments in big, expensive export projects, and what it could mean down the road.
Exports of oil, gas, and NGLs are still the topic du jour in the U.S. energy sector, and with good reason. From a crude oil perspective, the forward curve is not very exciting — prices in the low-to-mid-$50s as far as the eye can see — nor is it very supportive of faster production growth. Permian pipeline deals were all the rage in early 2019, but as the Gray Oak Pipeline begins line fill in November, that system will be the last big addition to the basin until 2021. Yes, there are some interesting developments in the Rockies, some possible new pipes in Cushing, and some marginal production gains in other spots around the U.S., but overall, there isn’t a whole heck of a lot of intrigue and mystery in most parts of the domestic crude market. That is, except for exports and how new and existing terminals will fare in their quest to move oil, gas, and NGLs to overseas markets.  

Notes From All Over, Part 1 -- November 1, 2019

First things first: it's cold across the US. I don't know if folks are paying attention but it's very cold for this time of year. I was caught off-guard; couldn't find my ice-scraper for the windshield this morning; I needed to use my Neptune Society plastic membership card.

First things first: the market was down yesterday so I did not check in -- at all, except to see if my cash account had grown (dividends) so that I could buy -- I assumed everything was on sale. After hours last night I started watching futures, and I watched futures go up all through the night. Right now the Dow is up 50 some points.

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

The market. So this morning, I checked a few companies. I was blown away -- I never expected this. I assumed they were going to all be in the "red." From yesterday:
  • AAPL: this one surprised me the most; up $5.50 yesterday; who wudda guessed?
  • SRE: with the bad news coming out of California, I thought SRE was toast, literally and figuratively; it was up almost $3.00; up over 2%; completely unexpected
  • UNP: continues to trend down
I'm not interested in anything else this morning.

Politics: fascinating to follow the polls. Of course, meaningless at this point in time except for qualifications for debates and donors. With both Harris and Castro running out of money, one can only assume the same for most of the rest. Buttigieg will get a huge bump -- a headline -- out of Iowa but then will fade in New Hampshire. Remember, one must get 15% of the popular vote to be awarded any delegates. Buttigieg is polling at10% in New Hampshire. He's hardly even on the radar scope in any state outside of Iowa. But that bump would change things.

New York taxes: I think folks talking about Trump officially moving from NYC (and state) to Florida are missing a huge, huge story. This is the bigger story, actually two stories: a) Trump simply represents one of thousands moving from high tax states to low/no-tax states; and, b) the headline story will encourage those to move who have, for some reason or other, felt they couldn't leave. From the chief economist of the Heritage Foundation:
There are four so-called "states of the apocalypse” – New York, New Jersey, Connecticut, and Illinois – from where residents are fleeing in droves due to high taxes and state budget issues.
The states benefitting the most from this population movement are Florida, Tennessee, Texas, Utah and North Carolina.
Tennessee is always on those lists.