Thursday, August 9, 2018

NOG Reports Earnings -- August 9, 2018

Fast And Furious

Beyond belief. Mexico bans fracking

Jobless claims: down 6,000 from a revised 219,000. First decline in three weeks. The new number, 213,000 was below the 217,000 estimate. Until recently, claims have not been this low since the early 1970s. From MarketWatch. Also at Econoday. Reuters says that jobless claims "unexpectedly fell."

The meter is running: Trans Mountain update. From Bloomberg -- the Canadian government may need to pay more to expand Trans Mountain. Kinder Morgan says:
  • the expansion will cost 26% more than estimated -- from my perspective, 26% is not trivial
  • it will take a year longer to complete
  • new price estimate: $7.1 billion (although I had originally heard the cost was going to be $7.4 billion; so I don't see how this is a price increase); price increase is "based on the uncertainty the investment had encountered." -- and, of course, KinderMorgan is now a contractor to the owner of the project (the owner being Canada with very deep pockets)
  • sounds a lot like the DAPL; at the end of the day, a few malcontents are going to cost consumers, taxpayers, others, a huge amount of money for no good reason
A target Saudi cannot afford to miss: unemployment. Link here at Bloomberg
I'm shocked! I'm shocked!: discrepancy over Saudi oil data could rattle markets. Link here over at The WSJ. Yesterday I posted:
Never mind: first we are told that Saudi production dropped in July, and then we are told Saudi reported record high production in July, and now this headline from oilprice: why Saudi oil production suddenly dropped. Apparently even Tsvetana is confused -- in her opening paragraph ... "as if oil market participants haven't had enough conflict market forces to digest ...."
Double standard? I came home yesterday after a bike ride, and opened up The WSJ online. The first headline that I see: the Albertsons - Rite Aid merger has been called off; and the meeting between these two companies to discuss this merger has been canceled. Now, how is this any different than Elon Musk tweeting his thoughts about taking his company private?
In the Albertsons - Rite Aid case, we have a story being reported by a journalist. We are getting the story second-hand; the journalist is reporting the story based on what he is being told and he/she is telling it from his perspective.

By the time The WSJ story was posted, how many "insiders" were already aware of this information. It was a long article and it obviously took time to compose. In addition, the reporter would have confirmed the story with at least one other source, I assume. That all takes time and while the story is being put together, background information obtained, other sources being contacted, any number of WSJ staffers had access to the story, and "insiders" were able to act on the news.

On the other hand, though details were lacking, we get the Tesla story directly from the CEO. If Elon Musk would have scheduled a meeting with the board of directors to discuss his idea, and then a spokesman for Tesla call The WSJ with the news and then let The WSJ report that story -- would that have been the appropriate way to do things? Would it have been better for the WSJ to report a story in which, "according to anonymous sources, Elon Musk is considering taking his company private"? And no one can say that tweeting such information is "unconventional" these days. We have the President of the United States tweeting daily, direct to the world, without going through reporters, his thoughts -- many of which can have great influence on the markets.
Back to the Bakken

NOG: 2Q18 earnings. NOG shares drop almost 10% on opening. 

No wells come off the confidential list today.

Active rigs:

Active Rigs64573373193

The arrow: on a day like this (and yesterday, too) it's hard to decide which way to place the arrow in the box score above. WTI took a 4% dive yesterday so the down arrows were appropriate, but in the overall scheme of things, $66 is still a nice price. The oil companies will survive on $50 WTI; thrive on $60 oil; and, post phenomenal results with $70 WTI.

RBN Energy: contenders in the race to build crude oil export terminals off the Texas coast.
Much like their heated competition to build new crude oil pipelines from the Permian to the Gulf Coast, midstream, logistics and trading companies are jockeying to construct the first new export terminal capable of fully loading Very Large Crude Carriers — Trafigura joined the fray earlier this week. While VLCCs are by far the most cost-efficient way to haul crude to Asia, their Godzilla-like physical dimensions restrict the number of land-based terminals they can use. And even those that can accommodate these seagoing behemoths can only load a VLCC part-way — “reverse lightering” out in deeper, open waters is required to fill the supertanker to the tippy top. So a handful of ambitious midstreamers are developing plans for offshore terminals out in deep water, miles from the Texas coast. Today, we continue our review of these proposals with a look at JupiterMLP’s plan for a terminal off Brownsville — and a new Permian pipeline to the city.

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