Jobs, Jobs, Jobs -- Not! -- April 6, 2018

Jobs: anticipating 178,000 new non-farm jobs; unemployment rate down to 4.0%. Nope: unable to tick down. Still at 4.1%. "March jobs disappoint."

The March jobs report is out and it’s a miss.

In March, the economy added 103,000 jobs while the unemployment rate held steady at 4.1% for the fifth-straight month, according to the latest report from the Bureau of Labor Statistics.

Economists had expected the report to show 185,000 jobs were created in March while the unemployment rate was expected to fall to 4%, according to estimates from Bloomberg. March’s report is also a big slowdown from the 313,000 jobs created in February.

Fascination: apparently I'm not the only "oil blog" fascinated with the Tesla story. A screenshot of the "front page" over at oilprice.com today:

Story here:

• Fox Business News analyst suggest share price could "crash" within next six months with capital raise
• even if Tesla were to finally hit a Model X production target, Tesla would continue to face financial challenges. Tesla, [the analyst] argues, is still losing $2 billion per year and $20,000 per vehicle on its $100,000 vehicle. The Model 3, which will sell for about half that, is unlikely to be a bearer of significant profits for the EV manufacturer.

 Best way to track traders' confidence in Tesla: follow the 2025 non-callable bonds.

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

Back to the Bakken

Active rigs:

$62.93↓↓	4/6/2018	04/06/2017	04/06/2016	04/06/2015	04/06/2014
Active Rigs	57	49	28	94	192

RBN Energy: oil-weighted exploration and production companies are flush at $60 oil.

Despite widespread predictions that the oil and gas exploration and production sector would drown in an ocean of red ink after the crude oil price crash that started a little over three years ago, E&P companies finally returned to profitability in 2017. Better yet, with oil prices exceeding $60/bbl, margins are expected to increase in 2018, giving the 44 major E&Ps we track $24.5 billion in incremental cash flow. It’s no surprise that the 17 companies in our Oil-Weighted Peer Group are the prime beneficiaries of the higher crude price, garnering $13.6 billion, or 55%, of the incremental cash flow. Today, we continue our review of how rebounding oil prices are affecting E&P cash flow, this time zeroing in on oil-focused producers.

The severe plunge in oil prices in late 2014 and 2015 at first appeared to be a crippling blow to U.S. E&Ps addicted to wild spending fueled by $100/bbl oil prices. But most of the upstream industry weathered the crisis remarkably well through new strategies. 

These included the “high-grading” of portfolios, impressive capital discipline and an intense focus on operational efficiencies. After slashing capital expenditures by 70% — from $46 billion in 2014 to $15 billion in 2016 — and reducing drilling and operating expenses by an average 50%, the oil-weighted producers we track emerged financially stable.

Growth resumed in 2017, as our universe of E&Ps boosted capex by 43% to $56 billion, a level still less than half of 2014 spending. The focus of that spending shifted to premium unconventional plays, with two-thirds allocated to the Permian, Eagle Ford, SCOOP/STACK, Bakken, and Marcellus/Utica. Even at $50/bbl crude oil prices, the industry returned to profitability in the first quarter of 2017. Despite a mid-year dip in oil prices that dampened production from first-quarter 2017 levels, most E&Ps didn’t throttle back on their capital investment budgets, expecting a recovery. By year’s end, prices were up to about $60/bbl, validating their strategy, and the E&Ps we track ended 2017 narrowly in the black.