Thursday Morning Links, News, And Views -- COP With Huge Earnings Beat -- Part I

Today would be a nice day to have television to watch CNBC. The talking heads must be going nuts with Dow futures up already 106 points, and WTI futures up $1.64 to $106.67.

A lot of 6's.

They say the price of WTI is surging because of all the economic growth in the US. LOL.

Active rigs: 180

RBN Energy: huge story on Houston -- Houston is replacing Cushing as center of universe for light oil. Combine this story with recent story on CVX moving talent and capital from California to Texas, and recent story that OXY USA may spin off California assets.

Seven (7) companies announced increased dividends yesterday.

Halcon's revenues jumped slightly today.

KOG is supposed to report after market close today.

COP announced earnings: profit falls 10 percent. COP is about almost 2% in pre-market trading.

Net income fell to $2.05 billion, or $1.65 per share, in the second quarter, from $2.27 billion, or $1.80 per share, a year earlier.

Oil and gas output from continuing operations rose to 1.51 million barrels of oil equivalent (boe) per day from 1.49 million boe per day a year earlier.

But having said, that COP beats estimates based on increased production; huge earnings beat, $1.41 vs $.129.  Reuters is reporting:

COP reported a better-than-expected profit due to higher oil and gas output and raised its full-year production forecast.

Output from continuing operations rose to 1.51 million barrels of oil equivalent (BOE) per day in the second quarter from 1.49 million a year earlier, the company said on Thursday.

Conoco, which is spending heavily to boost crude production in the United States, said its output from the Eagle Ford shale field in Texas almost doubled to 121,000 BOE per day.

XOM disappoints, however: Zachs is reporting --

XOM earnings of $1.55 per share missed the Zacks Consensus Estimate of $1.89. Earnings also plunged nearly 14% from $1.80 in the year-ago quarter. The decline was mainly due to weaker refining margins and volumes related to planned refinery turnaround and maintenance activities.

-- which means -- buying opportunity. See disclaimer.

Train traffic is doing just fine due to the oil and gas industry (President Obama won't mention, so we will):

Genesee & Wyoming beats by $0.03, slight miss on revs : Reports Q2 (Jun) earnings of $1.14 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $1.11; revenues rose 84.3% year/year to $400.7 mln vs the $404.55 mln consensus.

G&W's traffic in the second quarter of 2013 was 480,979 carloads. On a Combined Company basis, traffic increased 34,296 carloads, or 7.7%, compared with traffic in the second quarter of 2012. Combined Company same-railroad traffic increased 29,005 carloads, or 6.5%, compared with the second quarter of 2012. The traffic increase was principally due to increases of 10,455 carloads of petroleum products traffic (primarily crude oil and liquid petroleum gases in the Pacific, Southern, Mountain West and Canada regions)...

Maybe killing the Keystone was kounterintuitively the smart thing to do.

Back to flaring natural gas which most folks elsewhere don't understand

Shell, based in London, also took net write-offs of $1.85 billion, including a write-down of about $2 billion on natural gas acreage in the United States, where a decline in fuel prices has led the company to re-evaluate its holdings.

Shell also said it was reviewing its North American exploration and production portfolio, where it has been losing money. This exercise, the company said, will lead to divestments and a sharper focus on fewer projects.

When natural gas sells for less that what it cost to lay the pipeline to gather the natural gas and then pay someone to process it, ... well.... let's just say it's a problem.

By the way, that linked article to the Shell story also highlighted another story I have been following but have not posted because ... well, I just didn't want to ... but now it's become relevant:

[Shell] blamed the sharp decline on higher costs, foreign-exchange issues and production lost as a result of sabotage in Nigeria, an important area for Shell. Shell said the problems in Nigeria had lowered production by an average of 100,000 barrels a day during the quarter. Shell said it was reviewing its troubled Nigerian onshore operations and might sell leases producing up to 100,000 barrels per day. The company said the deteriorating security situation in Nigeria as well as a blockade of its Nigerian liquefied natural gas joint venture cost at least $250 million in the quarter. 

The state of Washington will slow-roll the coal industry. That's fine. The railroads will ship coal to ports of Houston and the East Coast. I used to worry about the Pacific Northwest but no more. Not when I learned the five major coal-shipping ports are on the east coast and the Gulf (none on the west coast) and that larger ships will now be able to pass through the Panama Canal. A reader noted that with oil and coal on trains through Nebraska, it's going to be tough for activist environmentalists to get to their appointments on time, waiting at train crossings, idling their cars, spewing CO2 into that pristine Nebraska air (except for cattle-methane). If the link is broken google two-year environmental study coal Washington state Powder River Basin.