Saturday, January 27, 2018

Update On Helmerich & Payne -- Motley Fool -- January 27, 2018

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship-related decisions based on anything you read here or think you may have read here.

Motley Fool has an update on Helmerich & Payne. I haven't invested in HP and have no plans to do so, but there were a few interesting tidbits that might be of interest. This paragraph provided some insight regarding its rigs and business strategy:
The thing that may have some investors a little concerned is the company's continued free cash flow burn. One thing to keep in mind, though, is that the company spent $47 million on one time acquisitions for a couple technology companies that should help separate its offering to producers from the rest of its peers.
Also, management has decided to increase its capital spending rate in 2018 to upgrade more of its available rigs to what it calls super-spec. These super-spec rigs have more powerful equipment on them to handle longer and longer wells as well as adding walking capability to each rig such that it can quickly move from one well to the next without assembling and disassembling the rig. Management estimates it will spend $350 million for fiscal year 2018 compared to its initial estimate of $250 million to $300 million.
The Katie Ledecky Page

Another perfect meet for Katie this past weekend when Stanford (7-0) defeated USC (6-1), 223 - 77

Update On The Road To Connecticut -- January 27, 2018

Earlier this month:
From The Hartford Courant: business leaders say state economy is in crisis.
Jim Loree, CEO of Stanley, Black & Decker, opened the meeting with a sprawling diagnosis of Connecticut’s fiscal ills. In 2001, Loree said, Connecticut was ranked the eighth-most competitive state in the country by the Beacon Hill Institute, “competitiveness” being a measure of fiscal policy, quality of life, labor supply and infrastructure. By 2016, he said, Connecticut had slipped to 43rd by the same index.
Outmigration is a well-documented phenomenon in Connecticut, but Loree singled out a telling statistic: On average, a family that moves into Connecticut has a household income of $93,000. The average income of a family moving out is $123,000. With such a fluctuating tax base, Connecticut’s income stream is “incredibly volatile,” Loree said, rendering the state “very vulnerable to market downturns.”
A disproportionate amount of tax revenues flow from a handful of well-heeled enclaves, he added. Thirty-six [percent] of the state’s personal income tax revenue comes from 10 towns, including West Hartford, Glastonbury and Fairfield County towns. Twelve percent of all personal income tax comes from 357 families alone, Loree said.
Today, from The WSJ, the state's mayors asked the governor to "save them" from collective bargaining.
Connecticut mayors grappling with rising retirement costs and sinking economies this week issued a distress signal to lawmakers in Hartford: Save us from our public unions.
The state would be in a “stronger position if we don’t negotiate for benefits,” Joe DeLong, the executive director of the Connecticut Conference of Municipalities, told a committee convened by the legislature to restore fiscal stability and economic growth.
The conference of municipalities implored the state to end collective-bargaining for pensions and health-care benefits as well as limit binding arbitration when unions and local politicians deadlock during contract negotiations. This usually results in a sweet deal for the unions.
“We’re suggesting it’s very difficult in the state of Connecticut under the current labor agreements and under binding arbitration,” said Waterbury mayor Neil O’Leary, a Democrat. His town’s health care and pension costs make up 30% of its budget.
Gov. Dannel Malloy, after multiple tax increases, last year tried to close the state’s $3.5 billion deficit by shifting teacher pension costs to municipalities. Mayors warned that this would lead to property tax hikes. The legislature punted some pension payments to the future, but mayors are worried that they will eventually be required to pick up more of the bill.
Much, much more at the link.

Prince Alwaleed Freed! -- January 27, 2018

From Reuters, so it must be true: senior Saudi official says Prince Alwaleed freed after financial settlement. I think he was being held for a $6 billion ransom. Saudi's foreign reserves had been dwindling by about $4 billion / month (range, $3 billion to $8 billion) over the past year or so.

Later, WSJ has an updated story.

The Gap Between The EU And The US Will Continue To Widen, Update -- January 27, 2018


January 29, 2018: Germans to go on strike beginning tomorrow (Tuesday). Won't accept 6.8% wage increase; want 8%. Also, employers willing to compromise on 28-hour workweek; labor unions won't compromise.

Original Post

Back on January 10, 2018, this was posted:
On the day that Toyota/Mazda announced a new $1.6 billion automobile plant to be built in Alabama, Reuters is reporting that "German industrial workers widen their strikes in wage dispute."

So, guess how much German workers want in wage increases? 1%? 2%? 3%? Nope, double that, 6%.

But not only that, they want shorter hours (I assume the hours will be the same number of minutes as before, but they want fewer hours, not shorter hours -- perhaps a shorter work-week is what the writer meant).

The strike for a shorter work-week comes on top of the 35-hour work week Germans already have.
According to the article, "workers have drawn a line in the sand."

So, where do we stand today? From Bloomberg, so it must be true:  -- oh, but before we get to this, look at this graph once again --

Okay, back to the linked story -- German workers ready to go on strike -- and it could be a devastating one -- coming on the heels of Davos; President Trump's speech; and, lack of political leadership in Germany:
Talks with IG Metall, which represents some 3.9 million workers in Europe’s largest economy, broke off without a deal early Saturday following 16 hours of negotiations preceded by weeks of tense back-and-forth. The union, which has rallied about 960,000 people across Germany for one-hour protests in recent weeks, said it plans day-long walkouts that would be much more disruptive.
  • IG Metall plans 24-hour walkouts next week as no deal reached
  • BMW braces for production losses as strikes set to escalate

Week 4: January 21, 2018 -- January 27, 2018

Trumped. Internationally, the biggest story was President Trump's reception at Davos. Enough said.

Invisible: government workers took the weekend off; send "thank you" note to Senator Schumer.

Venezuela: Canadian oil, selling at steep discount, will replace Venezuela oil in the US.

Taking the wind out of global warming. The other big international story this week: Denmark joined Germany in walking away from the Paris Accords.

By the way, speaking of wind energy (the Denmark story), juxtapose these two recent articles:
... with this posting from April 15, 2016: Warren Buffett bets the (wind) farm on Iowa

Solar. And, of course, while on the subject of global warming, I can't resist posting one of my favorite graphs from just a few months ago:

To end badly? Something tells me the purge in Saudi Arabia is not going to end well. Read between the lines of this article at The Wall Street Journal.

Coals to Newcastle. The biggest international energy story, without question, is the LNG shipment coming to Boston this weekend, originating from Siberia, Russia. Google Russia LNG import Boston. Note all the hits and where the hits are coming from. Everyone knows the story line. As much attention as this story is getting, this blog, yours truly, was on the third page of hits. A couple of my favorite links from that google search:
Look at the original ULR for that Bloomberg article: Interesting, huh?

Bloomberg does not once mention:
  • the Marcellus
  • the Utica
  • Pocahontas
Historic drawdown. The biggest natural gas story nationally was the drawdown. Incredible. The graphs are worth a thousand words, as they say. No wonder we are importing LNG from Siberia. LOL.

Bakken strikes back. The biggest story coming out of the Bakken was certainly the news that Hess and Targa are forming a joint venture to build a 200-million cfpd dry gas processing plant. This is not trivial. To understand how big this story is, google Hess Targa 200 and see all the hits, and where they are coming from.  In addition, the story was a "headline" story over at Yahoo!Finance these past few days, and it is still there today:

The Big D. And in addition to that, RimRock, a start-up, announced a $400 million gas gathering system for the Fort Berthold Indian Reservation. A "start-up" is getting funding from someone or someones. Something tells me the story behind the story is bigger than the story itself. Stay tuned. Something tells me there's a former ND politician involved. Just saying.

66: WTI flirted with $66 all week. But no matter what "they" tell you, there's still a huge glut of crude oil in the US and it will still take 20 weeks to re-balance (unchanged from the previous week).

Big Stories Coming Out Of The Bakken This Past Week

EOG "returning to the Bakken: permits for a 6-well Austin pad in Parshall oil field
New Williston airport could affect neighboring oil field operations
BR Dimmick Lake well with jump in production
Kraken Operating with increased activity in the Bakken
Random note regarding MRO activity in the Big Bend area
A huge Petro-Hunt Charlson well comes back on line
Update of a poorly-performing CLR well
A huge number of wells came off the confidential list this week
Random update of a BR Jerome well with a jump in production
Random update of a huge short-lateral EOG well
Random update of a BR Copper Draw well
Random update of another MRO re-fracked Bailey well

Too early to tell if a CLR Buelingo well was favorably impacted by neighboring frack
CLR reports an 86-stage frack 

ONEOK's plan to boost Bakken takeaway capacity

Bakken deals
RimRock acquires some Whiting assets
List of HRC (Halcon) wells transferred to Bruin

Bakken 101
Update on Bruin E&P
Tier 1, Tier 2, Tier 3 
The irrelevance of rig counts
Misconception regarding super-light and ultra-light grades

Three Forks
Geologic update of the middle Three Forks 
Natural gas
RimRock to build a $400 million gas gathering system in the Fort Berthold area
Hess-Targa, NG processing plant -- biggest Bakken story of the week

September, 2018, data updated  

Bakken economy
1,900 job positions in Williston remain unfilled
January, 2018, Legacy Fund deposits posted