Friday, August 3, 2018

Pipelines Beating Estimates -- August 3, 2018

Apple: the big story? Not that Apple notched a $1 trillion market cap. Rather -- it's just the first of many companies that will reach that same threshold over the next few years. Recession? Jamie Dimon says not at least until 2020 [and then it will be all hindsight -- badda-bing]. Jamie Dimon doesn't see a recession in 2019.

Apple: the big story? Not that Apple notched a $1 trillion market cap. Rather -- the excitement probably re-energized Buffett -- it took him a long, long time to jettison IBM and buy AAPL instead. He has to be thrilled. With that AAPL excitement, my hunch is that Buffett is reconsidering his relationship with Kraft/Heinz:
The billionaire, who turns 88 this month, already stepped down from Kraft Heinz’s board, ostensibly to reduce his travel commitments, though it could also be a precursor to winding down the $20.8 billion position. 
So much of the faith in Kraft Heinz’s management is due to Buffett’s support, so without him investors may look at the company in a different light. Even if Buffett remains intrigued, it’s hard to imagine his eventual successor and investing lieutenants — who are responsible for decisions like buying Apple Inc. stock — would hang onto this one when Buffett is no longer in the picture. 
Newspapers: as long as we're talking about Warren Buffett, an update on the Lee deal (previously posted) from Bloomberg. It looks like Warren Buffett learned about the internet about 30 years too later. My hunch: a lot of his lieutenants and a lot of his investors are hoping Warren departs sooner than later. Departs from Berkshire Hathaway. It seems Warren hathaway with Berkshire and it's not going as well as it might. Having said that, BRK seems to be the "goldilocks" stock.

Disclaimer: this is not an investment site.

APPL: shares rise another dollar. Euphoria begets euphoria. Yesterday at the close, market cap at 10.002 trillion. Today, 1.006 trillion. [Later: near the close, looks like AAPL may close "flat."]

Disclaimer: can't remember if I've posted yet today that this is not an investment site.

NOG, W Energy: previously reported, but here's the clip from WSJ

Huge, watch this space -- the space: the Permian: the largest unconventional shale producer in the Permian is Concho Resources. It got a lot bigger when it acquired RSP Permian not too long ago. Now, Concho says it is ready to begin drilling "several development projects" on that newly acquired acreage. Other data points:
  • Concho has 640,000 acres in the Permian (compare: CLR had about a million acres in the Bakken at one time)
  • Concho with 32 horizontal rigs -- wow -- that's a huge number -- 
    • 16 rigs in the Northern Delaware Basin
    • 6 rigs in the Southern Delaware Basin
    • 9 rigs in the Midland Basin
    • 1 rig in the New Mexico shelf
Keystone XL: three links today --
South Dakota, over at kallanashenergy.
  • TransCanada digging up section of "old" Keystone to check pipeline's coating
  • ordered by US regulators
  • pipeline section being investigated near previous spill; near Amherst, South Dakota
Pipeline progress, over at NPR --
  • company provided update at quarterly earnings call
  • some suggest it appears the Keystone XL is no longer needed
And, then, finally, at Reuters via Rigzone:
  • upbeat story
Line 3: Chippewas are working with Enbridge to get this done --
The Fond du Lac Band of Lake Superior Chippewa said they are willing to allow Enbridge Energy to route the new Line 3 oil pipeline through the reservation.

Saudi Arabia nearly sets all-time production record. Yawn. How many times have we heard this story
The kingdom’s oil production grew by 230,000 barrels a day in July, to 10.65 million barrels per day. This is just shy of an all-time peak reached in 2016, according to a Bloomberg survey of analysts, oil companies and ship-tracking data.
It's truly hard to reconcile that Bloomberg story with this graph. The data only goes forward to 2014, but it's hard for me to see much growth in Saudi production over the years.
I've talked about this on numerous occasions over at "The Big Stories."

All things being equal, Saudi needs to increase production in the summer: they use domestic oil for generating electricity for air conditioners. In addition, Vision 2030 calls for significantly increased domestic refining.

Saudi is in a tough spot:
  • they need to increase production to at least 12 million bopd to meet Vision 2030
  • but if the movers and shakers talk about 12 million bbls, the oil market will tank, even though not that much extra (if any extra) will end up in the global market
  • Saudi needs $70 oil -- that's what they say -- they probably need $80 oil, minimum 
  • the headline that Saudi is increasing production will drive the price of oil down, and yet, global exports might not even change -- by the way, did you all see that Saudi Arabia announced that it is cutting the price of its oil going to Asia

Jobs (link here):
  • new jobs added: less than forecast
  • previous revised upward from 241,000 to 248,000
  • unemployment ticks down to 3.9%
  • labor force participation: 62.9%
  • market yawns

Earnings: fast and furious --
Disclaimer: this is not an investment site.

Back to the Bakken

FWIW: an update of every MRO 16XXX permit in Bailey oil field.

Wells coming off confidential list today:
  • 34057, drl, BR, Rink 8-1-5MBH, Pershing, no production data,
  • 33931, SI/NC, BR, Three Sons 1A TFH-ULW, BR, Charlson,
  • 33395, SI/NC, WPX, Hidatsa North 14-23HB, Reunion Bay, no production data,
  • 33388, SI/NC, Crescent Point Energy, CPEUSC Paopao 7-35-26-158N-100W MBH, Dublin, no production data,
Active rigs:

Active Rigs64583474194

RBN Energy: a new drill down report on Permian gas takeaway constraints and their effects.
A big push is on to mitigate and ultimately fix the Permian’s natural gas takeaway constraints, which in recent months have widened the price spread between gas at Waha and at Henry Hub to levels not seen in years. Despite the efforts to quickly add incremental capacity to existing pipelines and build greenfield pipes, however, the momentum behind Permian crude production growth — and, with it, the production of more associated gas — make a months-long blowout in the Waha basis in 2019 a good bet.  Questions about the degree and duration of that basis pain and the amount of new pipeline capacity that will be needed (and how soon) can only be answered by taking a detailed look at what’s been happening and what’s being planned. Today, we discuss highlights from our new 24-page report on Permian gas takeaway constraints and their effects.

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