No More Blogging Until Saturday Morning -- March 9, 2018

It's been an incredibly good day -- biking, lunch, the equity markets, yada, yada, yada -- I think I'm going to take the rest of the day off.

I'm going to see "the play" again tonight (posted earlier). I will be picking up Sophia from Tutor Time in a few minutes. The weather is gorgeous -- windy for biking but otherwise great.

I've got several books I want to read. We'll be celebrating later (and late) this evening after the play. May has already bought the sparkling grape juice (no alcohol at this party for the granddaughters).

By the way, having said that, how's this for an exotic cocktail, discovered in the book I picked up at the library today on octopuses:

An octopus's garden cocktail: shake three parts gin and one dry vermouth with ice; strain and serve garnished with a charged baby octopus and a black olive.

Our adult daughter doesn't (actually both of them don't) drink alcohol, but she will enjoy the thought of the recipe. 

She and I had planned to buy a large Spanish octopus, marinade it overnight to "soften" it up, and then grill octopus shish kabobs. We had thought of grilling what she normally gets, the large common Spanish octopus, but baby octopus sounds so much easier.

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

The Tesla Page 

Ouch is "right."

Tesla's shrinking solar business: declining at an astonishing rate -- Motley Fool.

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

The Apple Page

2018, link here:

For millennials (typically individuals in their early twenties to late thirties as of 2018), Apple earned the top spot as the most intimate brand in the U.S. In second place was Disney, followed by YouTube, Target, and Amazon. The top four spots last year for millennials were Disney in first, followed by Amazon, Netflix, and then Apple, so the company has climbed and beaten out a few well-known brands this year. 

Apple and Disney ranked as the first and second most intimate brands for millennials. Comparatively, in MBLM's 2017 report, Disney placed first, followed by Amazon and Netflix.

The other brands that round out the top 10 are: Target, Amazon, Nintendo, Google, Xbox, Netflix and Whole Foods.

The age group of 18-24 year-olds had a slightly different mix of top companies. The top 10 for the group are: Apple, Amazon, YouTube, PlayStation, Starbucks, Nintendo, Google, Netflix, Coca Cola and Walmart.

Back in 2014, all ages, not just millennials, the most intimate brands, link here:

Here, are the 20 brands with which Americans feel most intimate, in descending order: Apple, Sony, Nike, Dell, Starbucks, Samsung, Ford, Clorox, Tide, Pepsi, Coca-Cola, Nabisco, Kraft, Volvo, Amazon, Toyota, HP, Whole Foods, Levi’s, and McDonald’s.

Biggest surprise: Volvo made the list.

Other surprises:

• Whole Foods made the list
• for the 18 - 24 demographic -- Walmart; Starbucks; and, Apple made the list; but no Disney or Netflix
• for millennials: Disney, Netflix -- they like their DVD
• Microsoft, Android, Samsung do not make the list
• no pure Chinese play makes the list

Not surprised: Toyota made the list. But I was surprised that Honda did not make the list.

Not surprised: no airline made the list.

Another surprise: Tesla did not make the list (perhaps it had to do with the denominator -- too few customers to date). F-150 did not make the list. 

From a google search:

“Brand intimacy is an essential relationship between a person and brand that transcends purchase, usage and loyalty.”

In other words, price (within reason), means little, and customers will keep coming back to their intimate brands, no matter what.

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

The Apple Page

Page 2

Another example of analysts watching the wrong metric.

It's no longer about the iPhone, it's about cash flow.  And has been for quite some time.

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

The Apple Page

Page 3

Another example of another revenue stream for Apple -- and another way the Apple Watch will be making money for Apple. Apple Watch can accurately test for high serum potassium (K+) and atrial fibrillation.

"These Are Crazy Numbers" -- Steve Liesman -- The Market And Political Page, T+9 -- March 9, 2018

Updates

March 10, 2018: the "job picture" since Trump became president has been so stunning, CNN has quit updating its "Trump's Jobs Tracker." I can't make this stuff up. My hunch: CNN is going to start tracking U-6.

Original Post 

I feel like I'm beating a dead horse, but this is a big, big deal.

As you all know, I quit watching television on February 1, 2018, because I knew the news that day was going to result in huge volatility; I now forget the specific bit of news. I said I would not go back to business news (CNBC) until March 1, 2018.

By March 1, 2018, I had really lost interest in returning to CNBC (I felt so liberated) but then, as luck would have it, it was reported that President Trump was going to place tariffs on steel and aluminum. I knew that volatility was back, as would the inanity and banality of the talking heads trying to explain daily movements, up or down, of 400 points on the Dow, so I continued my own little boycott.

I haven't watched CNBC since February 1, 2018.

Until today. Sort of.

With the release of the February jobs numbers I was curious what the market would do, and turned on television and turned to CNBC for less than 30 seconds when I got home a few minutes ago.

Wow, what a day.

I still didn't watch any CNBC today because a) I didn't want to; and, b) I was either riding my bike; at the Grapevine, TX, library; or at a sushi restaurant (Kula, near Plano, TX) for lunch with my wife.

I just got home and wanted to see if the market was holding. I got my original information from the Drudge Report. I posted much of that earlier.

Then this link from Drudge: "These numbers are crazy." -- Steve Liesman.

Steve Liesman, what can I say:

• there are few analysts I like less than Steve Liesman
• Liesman is clearly a huge supporter of the past president (Obama)
• Liesman is clearly skeptical that Trump's policies will make any difference; and, always seems surprised when there is good news with Trump in office

And, so today, how could I not go to the linked story?

Wow, what a great screen shot. Notice the market just after the numbers were released. Prior to the jobs report, the Dow was set to open about 34 points on the upside.

Up 127 points immediately after the jobs numbers were released and once the traders had a chance to look at the "deeper" data, the market was up over 400 points -- before the close on a Friday afternoon.

Also, note that WTI is up over 3%. 

So, now let's listen to the "these-numbers-are-crazy" analysis by Steve Liesman:

• a certain perversity to the numbers
• this is crazy
• retail up 50,000 -- outside of the funky seasonal adjustment period
• government jobs surging: up 26,000 as well
• construction up 61,000 -- apparently good weather helped a little bit (that's all he had to say? and he's an analyst?
• manufacturing up 31,000 -- said it was good but no analysis
• here's the perversity: the unemployment numbers
• all these numbers (for the past three months) are double what the Fed believes is the "natural rate of job growth and yet these numbers are not bringing down the unemployment rate
• that's what's perverse about it
• participation rate (63%): huge move but "you have to be careful" -- Liesman, but doesn't say why
• perversity: jobs rising but wages not rising
• Santelli: a world where labor force participation is going up -- sort of the foundation of the argument that 95% of the unemployed are not employable -- a false argument; Santelli argues (and has argued for quite some time) -- many of the "unemployed" are, in fact, employable, and that's why the overall number of unemployed (along with labor force participation rising) is why unemployment remains unchanged
• U-6: rate unchanged month-over-month at 8.2%

Not much analysis by Steve Liesman. Not one word about Trump's policies. Not one word about anything except simply reading numbers from the report released by the government. You, dear read, could have done that.

4Q17 Natural Gas Results From Ohio (Utica) Released -- March 9, 2018

From a reader:

Ohio's DNR just released 4th quarter production results from the Utica. (http://oilandgas.ohiodnr.gov/). 

Increase of 38% over 2016's 4th quarter at 5.5 Bcfd (energy equivalent to almost 1 million barrels of oil/day). 

Yearly output rose 24% from 2016 to 2017. 

Cowboyistan in the Buckeye State.

The Utica is tracked here.

The Market And Energy Page, T+9 -- March 9, 2018

Trade war? What trade war? Ya gotta love Trump. He knows how to play the game. I'm sure "The Apprentice" helped. He learned how to "stage" cliff-hangers -- not just at the end of the season; or, at the end of an episode; but, every 12 - 15 minutes, at the end of each segment of that television show. He's carried that over to the Oval Office.

He announces something that seems extreme -- or at least the press releases something he supposedly said that seems extreme -- and then when you hear it directly from him, it's not so extreme; and then, when it's finally "pen to paper" it's even less extreme.

That "30% tariff on steel; 10% tariff on aluminum"?

Turns out that:

• it's 25% tariff on steel -- not as bad as advertised
• 10% tariff on aluminum -- anyone complaining about a half-cent on a can of beer is ...
• some countries were exempt at the "signing"
• all countries can negotiate better terms -- all countries can negotiate better terms
• Gary Cohn exposed Trump for what he is: a friend of Main Street; an enemy of Wall Street; remember, Donald Trump was a registered Democrat from 2001 to 2009

What's the problem? Where's the trade war.

Boeing: the only company that might have had a legitimate gripe. Share price for one year and for one morning (today):

Give me a break. Gary Cohn truly showed his colors. Good riddance.

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

Notes To The Granddaughters

The three books I'm looking at today:

Mary Shelley, Miranda Seymour, c. 2000.

Yesterday, I read much of the following book and took notes:

Mary Shelley: Romance and Reality, Emily W. Sunstein, c. 1989.

Author says this if the first complete or definitive biography of Mary Wollstonecraft Godwin Shelley -- the only stellar English Romantic author for whom there is no complete or definitive biography.

So, we can now compare the two biographies.

The Trojan War, Barry Strauss, c. 2006. Wow, I never get tired of reading and re-reading about Homer's Iliad and Odyssey.

And finally, Octopus: The Most Mysterious Creature in the Sea, Katherine Harmon Courage, c. 2013.

It's possible I've read these books (or parts of them) before, but I do not recall.

By the way, Sophia and I attended a college/high school play last night: "James and the Giant Peach." It was the first play that her older sister, a freshman in high school, had ever participated in. She played one of the actors.

It was incredible. We will go back and watch it again tonight.

Sophia, age 3.6 years old, appeared to be enthralled and actually paid close attention to the play. For those who don't know the play, there is a scene in which James is instructed to find a magic potion from a book and then cast a spell.

When we got home, on her own, my wife was lucky enough to get three photos of Sophia doing the same and explaining to May what she was doing. Until this morning when I told her, May did not know there was a scene in "James and the Giant Peach" that involved making a potion and casting a magic spell.

Here are the photos:

This is at Sophia's house. Not ours. Sophia is fortunate enough to live in a real house, a house big enough to play "tag" and/or "hide and seek." We live in a small two-bedroom apartment -- big enough to play "hide and seek" with a four-year-old, but not big enough to do so with a five-year-old.

Random Update Of Some Incredible MRO Wells In Bailey Oil Field -- March 9, 2018

Updates

October 1, 2018: neighboring wells showed various degrees in jump in production, mostly moderate  --  #16654, #16993, #17797, #18382.

June 2, 2018, production data for two wells:

• 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 85K 3/18; (#16654, #16993, #17797, #18382 -- several of these wells showed significant jump in production)

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2018	30	28579	28675	36060	28686	23943	1449
BAKKEN	3-2018	25	25338	25369	32875	20716	15863	1934
BAKKEN	2-2018	25	48021	47828	21449	31306	16495	9404
BAKKEN	1-2018	7	11991	11849	0	9909	2408	6181

• 33534, 5,113, MRO, Bronett 14-7H, Bailey 4 sections, t1/18; cum 27K over 11 days - extrapolates to 73K over 30 days; cum 133K 4/18;

 Monthly Production Data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2018	30	45938	46019	42923	33891	26910	1801
BAKKEN	3-2018	28	34633	34398	36776	26696	20265	2460
BAKKEN	2-2018	14	25950	26087	21247	15564	8376	4274
BAKKEN	1-2018	11	26905	26587	0	19516	5989	10555

Original Post 

Some of this might be a repeat from earlier posts. It's hard to keep track of everything. 

A reader reminded me that I need to follow-up on a few wells. I have some of these wells at my "Things To Follow Up On " page, but I will start the post now. However, it will be a few months before all the data is in. I can't recall if I've posted a graphic of this area previously.

The wells (all of these may or may not be on the graphic); note the IP for 6,204 for Three Forks first bench well; years ago, Lynn Helms opined that Three Forks wells, individually, might be better than middle Bakken wells; very little is known about the deeper Three Forks benches but we are starting to see a few deeper-bench Three Forks wells:

• 33535, 6,204, MRO, Arkin 44-12TFH, hard to believe it's not a typo, but this is what the sundry form shows; Arkin 44-12TFH, Bailey, 4 sections; Three Forks B1, 45 stages; 6 million lbs; t1/18; cum 126K 3/18;
• 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 85K 3/18; (#16654, #16993, #17797, #18382)
• 33401, 3,161, MRO, Kenneth 24-7TFH, Bailey, t1/18; cum 67K 3/18;
• 33402, 3,040, MRO, Bethol 34-7H, Bailey, t2/18; cum 69K 3/18;
• 33403, 3,484, MRO, Stroup 34-7TFH, Bailey, t2/18; cum 73K 3/18;
• 33534, 5,113, MRO, Bronett 14-7H, Bailey 4 sections, t1/18; cum 27K over 11 days - extrapolates to 73K over 30 days; cum 87K 3/18;
  

Among the things I'm interested in:

• continued production data for the wells noted above
• the production data for these wells: #17498, #16654, #16993, #17797, #18382, #18384 (I have posted the production data for some of these wells elsewhere; not all of them are on the map below)
• things I might learn from the geologists' reports
• things I might learn from readers

Legacy Fund -- March 9, 2018

We talked about this the other day. I dare someone to find a a link to a site that provides transparency regarding the Legacy Fund. I have not looked recently and it may be easy to find, but when I did look some months ago, I was unable to find anything. I'm sure it's easy to find and I'm just looking in all the wrong places:

• monthly deposits
• where/how the deposits are invested
• the annual rate of return on Legacy Fund investments
• if the Legacy Fund has been tapped; and, if so, how much and for what

John Kemp On Saudi's Reserve Assets -- March 9, 2018

I did not bother to link / post the story suggesting that Saudi's announcement that they might target shale in their own country -- after I read the story, I found it meaningless, and more oilprice.com click bait.

And here it, John Kemp noting that Saudi might not go after shale -- I did not read the article but if accurate it speaks volumes about Saudi's oil and natural gas reserves.  Saudi is facing an existential crisis and regardless of what they might say publicly, they would go after "new" reserves in their own country if it was economically feasible.

Anyway, regardless of the idle chatter, here's John Kemp's graphic today via Twitter and my comments that follow.

Updates

March 9, 2018: Saudi Arabia's official reserve assets, monthly change in US$ billions --

Story lines:

• Saudi reserves were already dropping significantly by the time Saudi reacted with flooding the market with oil, hoping to "break" US shale
• we will never know how "bad" it would have gotten for Saudi if they had not announced they were going to open the spigots
• it is interesting: I think "we've" all forgotten the reason Saudi said they were opening their spigots; I do distinctly remember that the Saudis said it was not in reaction to US shale, and that they were not doing this to "break" US shale; I think they said they were trying to get the attention of the Iranians, which, in hindsight, seems an incredibly weak argument
• look how long it took for the "recovery" even after Saudi said they would cut production
• even with the cut in production and the "shakedown of the sheiks," the recovery is not particularly noteworthy
• when I was doing the calculations, my "rule of thumb" was that Saudi was losing about $5 billion / month during the surge; more than $5 billion loss in any month was staggering; less than $5 billion / month was noteworthy

February Jobs Report -- March 9, 2018

And more:

 

February jobs report: Wow.

• trade war? what trade war?
• forecast: 200,000
• actual: 313,000
• unemployment: remains at 4.1%
• wage growth less than expected: rising 0.1% (month); 2.6% (annualized) -- huge news for those worried about wage inflation
• last month stocks sold off "aggressively" after January's payrolls reported wage inflation of 2.8 percent annually -- the biggest gain since June, 2009
• unemployment rate was last this low in December, 2000

Optics: in one graphic, and a few links, the Drudge Report does more to "paint the picture" than all the articles; no wonder "everyone" likes Drudge -- except the alt-left and the FCC.

What to watch for: WSJ.

• unemployment rate could drop to 4.0%; I find this statistic incredibly unimportant in today's employment report
• job-growth trend: an incredibly important metric

Economists expect employers added at least 200,000 workers to payrolls for the second straight month (and fourth month in the past five). That would start off 2018 at a better hiring pace than last year’s average monthly job growth of 181,000. An acceleration in hiring runs counter to economists’ expectation for job gains to ease in a historically tight labor market.

• wages wind back: and they did -- a bit
• work force participation: more important then the unemployment rate
• volatility in certain sectors, due to small sample size, for example, black unemployment

Blink, C-in-C:

"Arctic" rigs:

$60.63↑	3/9/2018	03/09/2017	03/09/2016	03/09/2015	03/09/2014
Active Rigs	59	43	33	114	191

RBN Energy: how a refiner bet on accessible American crude, and lost.

When Philadelphia Energy Solutions (PES), owner of the East Coast’s largest refinery, recently announced it was seeking Chapter 11 bankruptcy protection, it begged a question: What happened? The answer requires a look back at the company’s original vision — namely, to capture the upside of the Shale Revolution by processing price-advantaged light, sweet crude oil produced in the U.S. — as well as a review of market developments that undermined its plan.

Today, we look at the factors that drove PES’s hopes and why, in the end, they weren’t realized. PES was formed as a partnership in September 2012 between The Carlyle Group and Sunoco Inc. to rescue the 335-Mb/d Philadelphia Refining Complex. Carlyle would hold a two-thirds ownership interest while Sunoco Inc. (which bought the complex’s Point Breeze refinery in 1988 and its Girard Point refinery in 1994) retained ownership of the remaining third. Just after the PES partnership was launched, in October 2012, Sunoco became a subsidiary of Energy Transfer Partners.