Tuesday, April 9, 2019

April 9, 2019 -- As If ...

"Down Day" For Almost Everything; WTI Held Above $64

API weekly crude oil inventory data -- a big build -- a build of 4.1 million bbls. Forecast: a build of 2.294 million bbls (again, false precision). Including this week’s data, the net build is now 7.53 million barrels for the 13-week reporting period so far this year, using API data. But look at the gasoline inventory data: The API this week reported a draw in gasoline inventories for week ending April 5 in the amount of 7.1 million barrels. Analysts estimated a much smaller draw in gasoline inventories of 2.009 million barrels for the week. All background noise. Traders will do what they want regardless of the data. WTI trended down today, closing just below $64.

Aramco IPO: it's always been my contention we would never see an Aramco IPO. More evidence to support that contention: the "run on Aramco bonds was so huge, there is no need for an IPO." 

Active rigs:

Active Rigs6358493193

Three new permits:
  • Operator: Petroshale
  • Field: Croff (McKenzie County)
  • Comments:
    • Petroshale has permits for a 3-well Anderson North pad in section 14-149-96 in Croff oil field
Five permits canceled:
  • EOG (3): three Riverview permits in McKenzie County
  • Newfield (2): two Bernice permits, both in McKenzie County
Two permits renewed:
  • Whiting: a Westin TTT permit and a Kaden TTT permit, both in Mountrail County
Five producing wells (DUCs) reported as completed:in progress
  • 35312, A, CLR, Putnam 8-25H1, East Fork, t--; cum --;
  • 35311, A, CLR, Putnam 7-25H, East Fork, t--; cum --;
  • 35310, A, CLR, Putnam 6-25H1, East Fork, t--; cum --;
  • 34458, 1,931, Hess, CA-E Burdick-155-95-2017H-6, Capa, t3/19; cum --;
  • 32164, 1,812, Hess, CA-Anderson Smith-155-2635H-4, Capa, t3/19; cum --; 
    • 16083; off-line; t2/07; cum 253K 10/18;

Monday, April 9, 2019 -- T+97, Part 7 -- An Open Book Test; Despite Mainstream Media, Trump's Popularity Surges

53%. That sobbing you hear in the background ... Rachel Madcow ...

Open book test.

  • This is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.
  • I am inappropriately exuberant about the Bakken.
  • I dropped out of the Art Berman School of Oil Investing some years ago.
  • I have no formal training or experience in the oil sector. The last "business" course I took was "Econ 101" as a freshman at a liberal arts school.

Four Strong Winds, Ian and Sylvia

Monday, April 9, 2019 -- T+97, Part 6 -- "The Science Is Settled"; Why The Market Is Plummeting Today

Global warming: everywhere but in America? Tell me again the "science is settled." Easter: two feet of snow? Words we don't like to see in same paragraph: potentially historic winter storm "two feet of snow" blizzard "prepare now":

Why The Market Is Plummeting

Link here.

How bad is it going to be? Drum roll .... 3.5% estimate revised to .... drum roll .... 3.3%.

You have got to be kidding. Whatever.


Shorty, Marty Robbins

Reminds me of Ian Tyson.

Monday, April 9, 2019 -- T+97, Part 5 -- Market On Sale!

Saudi order book: now in excess of $100 billion. Prince Salman kicking himself -- why didn't I think of this ten years ago when interest rates were 0% and falling. LOL. What was that law of Sharia?
Sharia prohibits riba, or usury, defined as interest paid on all loans of money (although some Muslims dispute whether there is a consensus that interest is equivalent to riba).
Day 97, the list of accomplishments from the 115th US Congress:

And we move on.

The market ....

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

AAPL: on a day the market falls 200 points, AAPL is one of the few to surge -- up another $1.53/share. Whoo-hoo! In fact, AAPL and DIS are the only two of the thirty showing green.
  • BA: down another $4, trading at $370
  • TSLA: flat at $273
Edwards Lifesciences: also up a dollar. 

Boeing: no 737 sales in March. Delivered fewer MAX jets last month.  Pundits way smarter than I suggest Boeing will weather this just fine. I'm not so sure. Commercially, the 737 was their future. Airbus has huge opening.
The Streets Of Dakota

A reader's request ...

The Streets of Laredo, Marty Robbins

70 stanzas of which 69 have to be whistled.

See more at Schwa Nation.

Monday, April 9, 2019 -- T+97, Part 4 -- Look At The Billion-Dollar Projects -- Making America Great

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or recreational decisions based on what you read here or what you think you might have read here.

Hey, three out of four ain't bad in this market. From Motley Fool, four energy stocks to buy right now:
  • Kinder Morgan
  • EPD
  • ENB
  • Crestwood Equity Partners
Another day, another pipeline story, making America great (gotta get me one of them hats). From Rigzone, $3.7 billion gas pipeline would combat Permian flaring. Data points:
  • Permian Global Access Pipeline -- PGAP
  • Tellurian Inc.
  • from the Permian to southwest Louisiana; 625 miles
  • at least 2 billion cfpd (350,000 boepd)
  • 42-inch diameter
  • origin: Waha Hub in Pecos County, TX
  • terminal: Gillis, LA (Lake Charles)
  • terminal: where Tellurian has proposed building its $15.2 billion Driftwood LNG export facility
  • could be in service by 2023, if construction were to start in 2021 
  • southwest Louisiana market expected to grow 300 percent in the next five years (if the next president doesn't screw it up)
How much gas are we talking? From same article:
In early Dec. 2018, the energy research and business intelligence firm Rystad Energy reported that the “persistent rise” in Permian production coupled with “severe takeaway challenges” caused gas flaring to hit an estimated average of 407 million cubic feet per day (MMcfd) during the third quarter of 2018. At the time, Rystad called that figure an “all-time high” but predicted that Permian flaring would likely hit “at least 600 MMcfd” by the middle of this year – assuming a West Texas Intermediate crude oil price of $60 per barrel.
Another day, another pipeline story, keeping America great (gotta get me one of them hats): From Zacks, Enbridge's TEAL pipeline expansion becomes operational. Data points:
  • Texas Eastern Appalachian Lease ("TEA" L)
  • new Salineville compressor stations
  • will supply Enbridge's new Nexus pipeline (planned capacity: 1.5 billion cfpd or 250,000 boepd)
  • look how long this pipeline is: 4.4 miles -- no typo, repeat -- 4.4 miles long  
  • $183 million

Thirty minutes of surf:

Dick Dale

Monday, April 9, 2019 -- T+97, Part 3

Shell Pernis refinery strike: most important "thing" about this story -- when reporting the Pernis refinery, be careful, very careful to avoid typographical errors ...

I'm Your Venus, Shocking Blue

Love the ankle pants and boots.

Apple Survey: back to that Apple story. In a recent survey, what percent of teenagers owned an iPhone? I doubt less than 10% own an iPhone. "A record 83% of surveyed US teens own an iPhone." That's like saying 64% of Americans own their own home. Actually, about 80% of all homes are owned by banks. Just a wag. Same with iPhones. Teens aren't paying $150/month for their cell phones, their parents are. Whatever Data points from the linked story, as of spring, 2019:
  • a record 83% of US teens "own" an iPhone
    • respondents: 54% male; 46% female (self-reporting)
    • average age: 16.3 years
    • 86% of teens expect their next smartphone to be an iPhone, this matches an all-time high set in fall of 2018 -- that would be, like, six months ago
    • this metric has steadily grown in Apple's favor over the years, rising from 75% in spring of 2016 -- that would be like three years ago
  • 27% of teens own a smartwatch; and 22% of respondents plan to purchase an Apple Watch within the next six months
  • already 161 comments
    • androids are a form of punishment
    • 'cuz dad is buying, right? I agree -- go big
    • Yep. My daughter gets my iPhone every fall when I upgrade. It’s a great way to do it
    • I had a transistor radio that had belonged to one of my older siblings, when I was 16
    • I hire a lot of engineers after college at 22-25 years old... with very few exceptions, they all want company Macs and iPhones, almost exclusively. It's a sea change from this once-IBM/Microsoft shop, the company is now 40% Apple, almost 100% Apple in product development, info services and marketing
    • Out of 21 students in my class 13 have a XR, 6 have another type of iphone, 2 have andriod. 
  • Best comment:
    • All of my 3 kids own iPhones, iPads, Apple Watches, AirPods, Homepods, and Macs. That’s because of their amazing grades and the fact that everyone at their school has Apple products. It’s so funny when I hear them complain about their Surface Pros that they have to use for homework. 
Scott Adams: I've been so much more productive (and happy) since I quit listening to Scott Adams; haven't listened to him in months.

Rush Limbaugh: a soothing balm -- like Vicks Vapor rub or wasabi. The first whiff "stings," but he is so worth it.

From twitter this morning, and NOT tweeted by the president: "jobs are up, unemployment is at record lows, and wages are still rising."


Bonds: Saudi Aramco order books now at $75 billion.

Prince Salman: kicking himself this morning. Why didn't he think of this ten years ago when interest rates were 0% and falling. LOL.

Elenore, The Turtles,

Happy birthday: Elenore and the White Album both the same age this year -- 50 years old.

Genius: Anyone who can find a way to get the words "swell" and "et cetera" into the same song deserves a medal.

Pelosi: did I read somewhere she's about to get some "big" medal?

Monday, April 9, 2019 -- T+97, Part 2

The Red Queen is back, The WSJ. Link here. Most surprising, already 155 comments. First comment:
"..You really look at the entire life cycle of the asset.”....Chevron chief.

This is the company that two months before 2015 oil price collapse said $120 a barrel is a new normal.

The reason he is saying this is not because thus Big Boy is any smarter - but their overheads - not to mention bureaucracy - does not allow quick decision making.

I spent 43 plus years in the oil patch - upstream, though not in shale - and working for Big Boys.

These are the same Boys who scoffed

that there is even such a thing called shale fracking that might yield a bonanza. They are coming to this party late and trying to spin they missed it out in the first place.

Now, as to flaring of gas - while one bcf a day sounds big - but when you are producing 100 more times as much - this gas is a rounding error.

And ok to compare it to auto emissions - but without shale, many Americans won't be able to drive as much because gas prices would be so high.

A good alarming story - but just a story.
I only read the first five comments. The first five folks commenting were on the same page of music that I am on.

Monday, April 9, 2019 -- T+97, Part 1 -- Nothing About The Bakken

Basketball: apparently Virginia won.

Cohen: apparently Mike lost.

Beto: on fumes.

Turnover: Clinton, Bush II, Reagan -- turnover in White House all greater than the turnover in the Trump White House at this point in their respective administrations; and it's a close call who had greater turnover between Bush I and Trump. [And just think how close we came to Bush III -- no wonder Barbara was so harsh on Trump in her memoirs from the grave.

The market ...

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

Back to the market -- pre-market trading ...
  • WTI: up slightly; at $64.50
  • Dow: down sixteen points
  • TSLA: down seventy cents
  • BA: down another $1.71
  • T: down 48 cents
  • UNP: up 13 cents, at $168.80
  • RDS-B: up 16 cents
  • AAPL: on a tear -- up another $1.34 -- trading at $201.45 -- whoo-hoo!
  • NOG: up 1%; up 3 cents;
Quick: according to recent survey what percent of teenagers own an iPhone? Link here.

Tax refunds: less than expected this year; Americans paying more. But tax rates went down. I don't understand. LOL. 

1Q19 Earnings

This is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source. There will be factual and typographical errors on this page. If something looks wrong, it probably is.

Earnings for the current quarter will be reported at this page; the link will be on the sidebar at the right, under "Earnings Central." When we start to see earnings reports for any quarter, the "Earnings Central" link is moved to the top of the sidebar until the earnings season is over.

I don't have time to check/update earnings on all companies that might interest me or readers.

Much of this information is done in haste. I assume there are factual and typographical errors. It is for my personal use only. If this information is important to you, go to the source.

Note: by 4Q16 I had lost a lot of interest in tracking earnings. I'm not sure where I will go with this page. In fact, there are more and more days when ... no, I won't go there. 

NOG: huge non-cash loss due to hedging, 1Q19; adjusted, earned 7 cents/share; forecast, 12 cents/share;

RDS: fantastic 1Q19.

EOG: outstanding 1Q19;

MRO: crushed earnings - link here
  • forecast for 6 cents/share
  • actual: 
  • adjusted, 31 cents
  • unadjusted: 21 cents
  • missed on revenues ($1.2 billion vs $1.23 billion)
  • wow, talk about excellent execution -- slightly short on revenues and earnings come in at 5x forecast
  • wow
MDU: misses by two cents; EPS of 21 cents; is that about a 10% miss?; revenue of $1.09 billion beats expectations by $90 million. Shares down by about half a percent. Slides.

AAPL: blow-out quarter; shares up over 5% after-hours; earnings call here;

BP: revenues lower year-over-year, but beat estimates; lower profits due to maintenance

AMZN: shares surge. Amazon doubles profits.

SBUX: beat, but lots of anxiety; competitors making inroads.

Ford: crushed earnings.

Hess huge earnings -- a gain of 9 cents vs a forecast of a loss of 26 cents;

Boeing: discussed earlier;

: discussed earlier;

: beats earnings; stock jumps.

: record quarter; shares drop 11% after hours: dropped about 20% overall after spectacular earnings report and announcement that it was making an acquisition on its path to becoming a platform company;

COP, OXY, and Anadarkoa
: surprise, surprise, surprise. OXY drops over 7% in pre-market trading; recovers by end of day; very, very interesting story; by the end of the week, had recovered, and OXY was trading in line with other oil companies;

Shell: strikes big oil in Blacktip well, Gulf of Mexico; co-owned by CVX, Equinor, and Repsol

  • Shell's second material discovery in thePerdido Corridor
  • I assume it's heavy oil
  • for more, see this post
Tesla (pending):

Tesla estimates, link here, estimates --
  • for 1Q19:
    • adjusted loss per share, range 64 cents to $2.60, with average at $1.30
    • revenue estimate, range from $4.40 billion to $5.12 billion, with average of $4.8 billion
    • automotive gross margin estimate: +17.8%
    • CAPEX, range from $291 million to $625 million, with average of $508 million
  • for 2Q19:
    • automotive gross margin estimate: +19.5%
    • CAPEX, range from $250 million to $650 million, with average of $551 million
Facebook: jumps almost 6% after hours; up $10.42; beats expectations; takes $3 billion legal expense; Yahoo!Finance;

Visa: quarterly profit jumps 14% on higher consumer spending. Americans aking America great.

First Solar (pending): Zacks.

ATT: link here. The spin-offs begin. This could well be the story of the decade. First, go back and look at the properties owned by Time Warner at the time ATT bought Time Warner. Link here. Look at the incredible number of companies ATT acquired in one deal. This week ATT sold its minority stake in Hulu. We're talking about a very, very small position -- and ATT sold it's stake for more than $1.4 billion. Time Warner had acquired that stake for $600 million about three years ago. ATT is going to have to divest a lot of assets to pay off its huge (and ballooning debt). Another investor weighs in on ATT.

SLB: earnings fall but revenues tops estimates.

: miserable first quarter. And bad news may continue for another quarter.

: also beat forecasts, as did UNP. Railroads reflect the strength of the US economy. CSX also reported a solid quarter; led transports higher.  

Tesla: preview at Zacks. Should be a good quarter.

NOG Will Present Today; ND Rigs Back To 64 -- April 9, 2019

The Red Queen is back, The WSJ. Link here

Brexit deal: best for oil, gas industry. "No deal" not good outcome. Link here

Inventories: still too high -- and significantly -- Saudi Arabia. Link here.

EOR: remember all those stories that operators would not produce as much oil as projected! Now, "EOR push may make the Permian even bigger." Link here to Bloomberg. Data points:
  • Occidental
  • New Mexico
  • CO2
  • goal: move primary recovery from 10 - 11 percent to 17 - 18 percent
NOG: will present today at IPAA's symposium, NYC, link here

Wells coming off the confidential list today -- Tuesday, April 9, 2019: 29 wells for the month; 29 wells for the quarter
  • 33682, drl, Crescent Point Energy, CPEUSC Berner 7-19-18-157N-99W TFH, Lone Tree Lake, no production data,3
  • 35215, SI/NC, XTO, Teddy Federal 12X-5EXH, Haystack Butte, no production data,
Active rigs:

Active Rigs6458493193

RBN Energy: Rockies NGL production gains spur Williams / Tara pipe-and-frack deal.
Rising natural gas liquids production in the Niobrara is increasingly straining existing pipeline capacity out of the region and has spurred midstreamers to propose various combinations of new pipelines, expansions to existing pipelines and pipeline conversions in order to ease constraints. One of the latest entrants is a joint venture of Williams and Targa Resources that would expand Rockies producers’ ability to move mixed NGLs to the Mont Belvieu, TX, hub for fractionation and marketing/export. Williams plans to build a 188-mile pipeline — Bluestem — that would extend from its Rockies-to-Conway, KS, Overland Pass Pipeline to Kingfisher County, OK. For its part, Targa will build a 110-mile extension of its new Grand Prix NGL pipeline from southern Oklahoma north into Kingfisher to connect with Bluestem. As part of the deal, Williams has also contracted substantial volumes on Grand Prix as well as at Targa’s fractionation facility at Mont Belvieu. Today, we discuss Williams and Targa’s plan.
We should begin by noting that while Williams for decades has been a dominant gas-processing player elsewhere in the Rockies — including the Green River-Overthrust, Piceance and San Juan production areas — it has only recently become a gas processor in the Niobrara’s Denver-Julesburg (D-J) Basin. The company and joint-venture partner KKR & Co. in July 2018 announced a nearly $1.2 billion deal to acquire Discovery DJ Services. Discovery started up its first gas processing plant in the D-J in Fort Lupton, in Weld County, CO (capacity, 60 MMcf/d) in the third quarter of 2017; that plant, now owned by Williams and KKR, recently underwent an expansion that increased its capacity to 260 MMcf/d. Williams also is planning four 225-MMcf/d processing plants in Weld County — Keenesburg I and II, both of which will come online later this year — and Milton I and II, which will start up in 2021 and as soon as 2022, respectively. That means that within three years or so, Williams may well have more than 1.1 Bcf/d of D-J gas processing capacity, making it a leading NGL producer in the play.