The Energy And Market Page, T+28 -- February 17, 2017

Updates

February 18, 2017: Prince Salman's plan hitting lots of roadblocks. I wonder what the Las Vegas odds are on this IPO?

Original Post

Bigger, better: Fiat Chrysler will lay off 3,200 workers temporarily in Toledo while they re-tool for the next-generation Wrangler.  New investment: $700 million.

15,000 more jobs: Accenture announces plan to bring in 15,000 more US jobs. 

North Texas economy. Recently I've talked about the incredible economy around the DFW. Here's another example in this month's transportation update: the main highway along the south side of Grapevine/the north side of DFW/the north gateway to the airport -- huge project -- bridges, and highway lanes added; should be complete by April (2017); when complete the highway will be widened from 4 lanes to 6 lanes -- this portion is well west of the airport; cost $25 million. Meanwhile, the main highway along the east side of Grapevine, northeast of the airport, and the gateway to the airport from the north, is also being expanded, and should be completed by September (2017); when complete the highway will be widened from 4 lanes to 10 lanes; cost $60 million.  Another highway on same side of town, 4 to 6 lanes; construction has just begun; project to take three years; $40 million. In bullets, between Grapevine/DFW:

• state highway 26 phase 2: $40 million, 3 years; just beginning
• state highway 121 expansion: $60 million, almost complete; $60 million
• state highway 114 widening: $25 million, halfway completed; $25 million
• all within one county, driven by DFW and spa/resorts in Grapevine

Rumor: by the way, regarding the highway update above, that highway being expanded to 10 lanes -- original plans by the state were to widen the highway to 26 lanes -- studies of future needs suggested 26 lanes would be needed. The city said no: the city couldn't "give up" that much land. Interestingly, with turn lanes, exit/entrance lanes, frontage lanes -- awful close to 26 lanes. 

Peak Demand?  Are the Canadian oil sands a bust? High costs, low prices and tough new environmental rules forcing companies to cancel plans to produce oil. In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few decades is no longer profitable to extract.

Not so fast: Encana boosts capital spending by 50% amid oil recovery. Reuters via Rigzone.

Permian: can other basins ever catch up to the Permian's prosperity?  A Rigzone story.

Amazon. No, not the mail-order company, but Brazil. Russia's Rosneft starts drilling first exploration well in the Amazon (Brazil). Reuters via Rigzone.

Cash pile? OMV raises dividend by 20% as cash pile grows. Reuters via Rigzone.

DUCs: sooner or later, we should see more fracking. A reader's comment regarding one operator in the Bakken:

Moving to six rigs, 25 refracks planned in the Bakken. Hoping to have most of their production delivered on pipe. Major change in one or two quarters, must believe economics are now in their favor. I think they finally realized that more sand and sections per well is the answer.

*******************************

Prince Salman's Plan

If you thought "repeal and replace" ObamaCare would be tough, the tea leaves suggest that will be child's play compared to the Saudi Aramco IPO. From Reuters:

• original plan was to make Aramco "industrial conglomerate"
• this could make valuation more complex, lower
• authorities may "streamline" company
• issues of tax, reserves, state ownership not yet resolved
• state control over production decisions could worry investors

This IPO could still be scuttled, scaled back, or simply another "utility" with huge "regulation" by a 15th-century medieval theocracy.

*******************************

The Market

Closing

After being down all day, about 60 - 80 points down all day, somehow the market managed to eke out a 5-point gain for the day, setting, of course, another record for the Dow. 

Opening

Opening: profit taking. Opens 70 points down.

Deere: huge gain in share price; crushes estimates, raises forecast. EPS, 61 cents vs 55 cents forecast; compares to 80 cents a year earlier.

Enbridge: posts 4Q profit; 4Q16 earnings, $330 million. EPS, 29 cents/share; adjusted, 42 cents/share. For the year, the company report net income of $1.55 billion, or $1.45/share, swinging to a profit in the period.

Taser: body cameras.