Monday, Miscellaneous -- April 13, 2015

Golf is back.

Jimmy Johnson wins.

Apple sells out of its Apple Watch in six hours; one million on-line orders placed. Many won't get their watches until May or June. Some will be waiting until July. And the watch hasn't even gone on sale yet; those were pre-orders. The watch goes on sale April 24th.

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Yemen.

The lead story above the fold in today's WSJ: US widens role in Yemen conflict. The US and Saudi Arabia are at odds on how the fight should be fought. I doubt Saudi is taking much advice from President Obama. If anything, the Saudis are re-reading his "Arab Spring" speech he gave in Cairo some years ago.

News of Obama's fourth war (Iraq, Afghanistan, ISIS being one, two, and three) continues on page A6 and dominates the entire page of "World News." The first story: US moves to step Iran arms flow to Yemen. The second story on that page: Saudis deny fighting proxy war with Tehran. Every story on page A6 has to do with Yemen. The third story: Pakistan's decision to stay out of Yemen is causing a cleavage between the country (Pakistan) and its traditional allies in the Gulf, as the Yemen crisis begins to remake alliances across the Muslim world. And just a few months ago, Yemen was President Obama's poster child for Muslim countries that "go democratic."

Saudi Arabia is going to spend a lot of money defending itself. They can count on the US Navy to protect their sea lanes (or can they?) but they know they have to fight their own wars on the peninsula. Of course, while keeping the Houthi rebels hunkered down, Saudi Arabia will be putting together an Arab army (at Saudi's expense) to begin the ground offensive.

And that's the southern front. On the east, Iran; and, in the north SyriaIran (or is is IranSyria?).

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

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For Investors

COP

From Seeking Alpha:

For a major E&P company, ConocoPhillips  has grown production substantially faster than its peers since the company's spin-off in 2011. 

Previously, management had a plan of 3%-5% overall production growth and 3%-5% margin growth between 2013 and 2015. Then crude oil prices halved and Conoco has had to rethink its strategy for the last year of its plan. 

On last week's annual analyst day presentation, Conoco unveiled a new three year plan which reflects the current reality of commodity prices, and builds on the operational successes of the past three years. Conoco's new 'three-year plan' involves several major bullet point goals: Increase cash flow margins from $22 per barrel (in late 2014) to $25 per barrel by 2017, achieve cash flow neutrality by 2017 assuming $75 Brent and $70 WTI and production growth of 2%-3% with a continuing shift toward liquids and away from gas. Late last year Conoco announced a new, much-reduced capital spending regimen of $11.5 billion, down from $16 billion in 2014. On last week's analyst day presentation, management reaffirmed that capital expenditure guidance would be in the new 'three-year plan.'

An excerpt from COP's analysts' day transcript regarding the Bakken was posted here.

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The Map

Link here.

A reader asked me if I really thought the House of Saud might fall. The short answer: I don't think so.

Having said that, I have made some huge errors in my predictions on the blog, so I may be wrong here also. I don't think the House of Saud will fall (and it certainly won't fall any time soon), but a) nothing lasts forever; and, b) the House of Saud will have some huge new military expenses. In the past, they got away cheap with promised US protection. At one time Saudi Arabia's oil was part of America's national security; not so much any more. Not with the resurgence of the North American energy industry.

I can still connect the dots to seeing a fast-track Keystone XL. Not that such a fast-track is very likely, but I can connect the dots. This link on Motiva Enterprises is a huge dot.