Tesla .... And The Numbers Are .... 1Q19

Updates

April 25, 2019: self-proclaimed Tesla bull says 1Q19 was one of the worse debacles he's seen in 20 years.

• Ives slashed his price target from $365 to $275
• Ives identifies himself as a “long-term bull on the Tesla story.”
• “[I]n our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story,” Ives wrote.
• Although Musk said there was no need for additional capital at this juncture, Wedbush thinks Tesla “will likely have to raise $3 billion+ of capital in the near term to sustain [capital expenditure] and debt needs given its current profitability path, which is another black cloud over the name with an inexperienced CFO now at the helm,” the firm wrote.

Original Post

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

Tesla: actual results -- in red bold --

• for 1Q19:
• adjusted loss per share, range 64 cents to $2.60, with average at $1.30 -- $2.90
• revenue estimate, range from $4.40 billion to $5.12 billion, with average of $4.8 billion -- $4.54 billion
• automotive gross margin estimate: +17.8%
• CAPEX, range from $291 million to $625 million, with average of $508 million
• cash position: $2.2 billion; reduction of $1.5 billion from 4Q18
• operating cash outflow: $919.5 million reversing a positive cash flow in 4Q18
• for 2Q19:
• automotive gross margin estimate: +19.5%
• CAPEX, range from $250 million to $6

Guidance: to paraphrase Musk Melon --

• things couldn't be better
• results 1Q19 an anomaly
• back to superior results for the rest of 2019
• meanwhile, it's more fun to talk about autonomous taxis
• let's talk insurance

In comments at the linked article,

• from Doctor R:

Tesl (sic) will rebound. Their Model 3 performance is a great car and the S and X just got some much needed upgrades. 

For a luxury car company they are doing great sales figure wise.

•  from BG:

After listening to Musk answer some pointed questions (notably the first from the JP Morgan analyst), one thing comes to mind - Enron

• no mention in the article about federal credits will come to an end this year. Did analysts bring that up in the Q&A?

Comment: I have no idea how you can spin these results -- "average" consensus, a loss of $1.30/share. In fact, a loss of almost $3.00/share.

Kraken Operating With Five New Permits; Active Rigs Hold At Low End -- April 24, 2019

NFL draft: round 1 tomorrow night, Thursday; begins at 7:00 p.m. CT; multiple stations (ABC, ESPN, more).

Apple: Apple Watch launched four years ago today. I was wrong on this one. I always thought the Apple Watch would be seen as a "fashion accessory." I no longer find it fashionable at all; it appears to be a functional device that many folks can no longer do without (including my non-tekkie, non-Vanity Fair wife). Just wait until it measures blood glucose. Proud to be Fanboy #3.

Clash of the titans: OXY vs CVX. This will be fascinating to watch. Anadarko shareholders should be loving this. This will be fascinating. I can't recall a similar clash in quite some time. Some random comments, which may or may not accurate, simply idle chatter:

• one commentator suggests it was unusual for a titan like OXY to make a hostile bid like this in the energy sector
• OXY had been courting Anadarko for quite some time (three years?)
• OXY had pencilled in $75/share for Anadarko for quite some time
• OXY bid $76/share; cash and stock deal 
• shareholders caught by surprise; initially appeared not happy with this development
• seems unlikely that OXY would further infuriate shareholders by cutting dividend to pay for this but crazier things have happened to investors
• some talk that OXY almost sounds desperate to get this deal; if so, why?
• CVX swoops in, unannounced, with $67/share bid
• apparently the latter deal -- though much less/share -- more advantageous in eyes of Anadarko
• SeekingAlphac contributor weighs in
• OXY's offer
• Chevron may "sweeten the pot"; increase its $65/share offer by $5 to $10 (well, duh) 
• the question not asked yet: what makes Anadarko so special that it sets up the clash of the titans? by the time this is over, this may be the Trump-Mueller clash of the oil sector
• although completely different circumstances, the reminds me of the Texaco, Pennzoil, and Getty buyout back in the 1980s
• net income from continuing operations:
• CVX: $15 billion
• OXY:$4 billion
• $50 billion deal +/- a few/many billion
• earnings
• OXY repors May 6, 2019 (?)
• CVX reports April 26, 2019 (?)

Peak oil? What peak oil? Shell reports another big find in the Gulf of Mexico (previously reported):

Blacktip is a Wilcox discovery in the Perdido thrust belt and was discovered in the Alaminos Canyon Block 380, approximately 30 mi from the Perdido platform and Whale discovery. The find presents the opportunity to augment existing production in the Perdido area where Shell’s Great White, Silvertip and Tobago fields are already producing.

Drilling at the initial Blacktip well is still underway and has to date encountered more than 400 ft net oil pay with good reservoir and fluid characteristics. The well is currently being deepened to further assess the structure’s potential. Blacktip is operated by Shell (52.375%) and co-owned by Chevron U.S.A. Inc. (20%), Equinor Gulf of Mexico LLC (19.125%), and Repsol E&P USA Inc. (8.5%).

This discovery in a Shell heartland adds to the company’s Paleogene exploration success in the Perdido area. Through exploration, Shell has added more than 1 Bboe in the last decade in the Gulf of Mexico. The company’s global deep-water production is on track to exceed 900,000 boed by 2020, from already discovered, established areas.

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 what you think you may have read here.

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

Back to the Bakken

Active rigs:

$65.76	4/24/2019	04/24/2018	04/24/2017	04/24/2016	04/24/2015
Active Rigs	62	62	48	29	84

Six new permits:

• Operator: Kraken Operating (5); Whiting
• Fields: Oliver (Williams); Grinnell (McKenzie)
• Comments: 
• Kraken has permits for a 5-well pad in lot 1/section 6-157-98, Oliver oil field
• Whiting has a permit for a Sorenson well in section 34-154-97, Grinnell oil field

Seven permits renewed:

• NP Resources (4): four Elkhorn Ranch Federal permits in Billings County
• Bruin (3): three Ann H. Thome permits in Williams County

One permit canceled:

• a Kraken Development III permit, Brookbank 44-32H, in Mountrail County

One producing well (DUC) reported as completed:

• 35500, 2,204, RimRock Oil & Gas, MC MHA 24-10-2TFH, t3/19; cum --;

To Follow Up Later -- When Things Slow Down -- April 24, 2019

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.

Wow, what a day for investors>

Boeing: discussed earlier;

ATT: discussed earlier;

Microsoft: beats earnings; stock jumps. Market cap: $1 trillion. AAPL back below $1 trillion, market cap? Clash of the tech titans.

Xilinx: record quarter; shares drop 11% after hours

COP, OXY, and Anadarkoa: surprise, surprise, surprise. OXY drops over 7% in pre-market trading; recovers by end of day; very, very interesting story

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.

North Dakota Officials: Was Record Walleye Illegally "Hooked" -- April 24, 2019

From The Bismarck Tribune.

So, exactly how many fishermen (and women) know this rule?

US Looking For Heavy Oil -- April 24, 2019

Looking for heavy oil (in all the wrong places? LOL).

Note:

• Venezuela: say what?
• Mexico: in deep doo-doo!

From wiki:

If completed, the Keystone XL would have added 510,000 barrels per day increasing the total capacity up to 1.1 million barrels per day.

Let's see:

• Saudi Arabia: 750K
• Nigeria: 75K
• Iraq: 300K
• Kuwait: 75K
• Total: 1.2 million bopd

One could argue that had President Obama not killed the Keystone XL, North America's dependence on "foreign oil" or OPEC oil would have been reduced to zero. Saudi Arabia would still import their oil to their refinery along the US gulf coast, but that would have been about it. And US gasoline would have been significantly less expensive, all things being equal.

Oilmen realized decades ago that the US would need heavy oil from Canada. No one ever expected a president to make such an incredibly stupid strategic decision. Even Hillary, as SecState, supported Keystone XL until she didn't.

I assume President Obama would have made up the heavy oil deficit with heavy oil from Iran. Only Valerie Jarrett knows for sure.

Increased Storage Capacity Moves To Coast -- April 24, 2019

I remember all the posts on Cushing, Oklahoma, when I first started blogging, and analysts/pundits wringing their hands over inadequate US storage capacity. I was never worried.

The day the music died. They caught the CBR train for the coast:

American Pie, Don McLean

US Crude Oil Inventories Up A Whopping 5.5 Million Bbls -- April 24, 2019

Later, April 26, 2019: a reader comments (see first comment):

Gasoline supplies have been sliding, probably in conjunction with the low refinery throughput you've been noting. But even with this week's big increase in the amount of oil being refined, gasoline output still fell by 136,000 barrels per day, after falling by 252,000 barrels per day the prior week. 

So gasoline inventories fell for the 10th week in a row, and they're now down to 225,826,000 barrels, from 258,301,000 barrels on February 8th. Ok, that's only 2% below that "5 year average for this time of year", but heading in the wrong direction only a month before Memorial Day.

In round numbers, the US is said to have set an all-time crude oil production record very recently by producing 12 million bopd. Today, the EIA says production dropped slightly to 11.9 (or maybe increased to 12.1 million bopd -- the data is "funky" as someone over at twitter is reporting). But that same "someone" has run the latest import/export numbers and suggests US crude oil production hit 12.9 million bopd. If accurate that is I.N.C.R.E.D.I.B.L.E.

And we move on.

Unfortunately, it's the wrong kind of oil. Thank you, Mr Obama.

EIA weekly petroleum report, link here. API reported a whopping increase of almost 8 million bbls of crude oil in its report yesterday.

• US crude oil inventories: increased by a whopping 5.5 million bbls (expectation: an increase of less than a million bbls)
• US crude oil inventories: total inventories now stand at 460.6 million bbls; at the 5-year average, but the average has been increasing ever since the Saudi surge, 2014 - 2016;
• refineries: operating at 90.1% capacity; much better than previous few weeks, but still very, very low; 
• but look at this: imports increased by 1,157,000 bopd from the previous week
• imports now average 6.6 million bopd, almost 20% less than the same four-week period last year, so the increase had to occur sooner or later, I suppose 

The good news: WTI seems to be unaffected by the news.

And then, look at this. Why I love to blog. I have mentioned this numerous times -- the "false precision" -- now Z4 Research says the same thing: "no way EIA has this kind of granularity." Z4 Research is a gazillion times smarter than I am. Screenshot from Z4 Research over at twitter today:

Re-balancing: remember, a couple of years ago "we" were shooting for 350 million bbls as the "definition" of re-balancing. Historically, 300 million bbls in inventory is just fine, and now we continue to trend upwards, and currently sit a modern record inventory of over 460 million bbls:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	447.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	454.8
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5
Week 21	Apr 17, 2019	-1.4	455.2
Week 22	Apr 24, 2019	5.5	460.1

The "460.1" hits another new all-time high. 

Never Mind; Plenty Of Oil Despite Sanctions On Iran -- April 24, 2019

Posted yesterday:

Markets caught off guard: oil surges 2.7%; close to a 6-month high. It's a false narrative but it is what it is. 30-second sound bite:

• Iran produces about 4 million bopd
• exports:
• exports when things are going well: 2.4 million bopd
• exports in past couple of years; world has adjusted to Iran exports: 1.2 million bopd

Today: IEA is reporting that OPEC's "spare capacity" reaches 3.3 million bopd.

But, of course, we all knew that.

EIA weekly petroleum report, link here. API reported a whopping increase of almost 8 million bbls of crude oil in its report yesterday.

• US crude oil inventories: increased by a whopping 5.5 million bbls
• US crude oil inventories: total inventories now stand at 460.6 million bbls; at the 5-year average, but the average has been increasing ever since the Saudi surge, 2014 - 2016;
• refineries: operating at 90.1% capacity; much better than previous few weeks, but still very, very low; 
• but look at this: imports increased by 1,157,000 bopd from the previous week
• imports now average 6.6 million bopd, almost 20% less than the same four-week period last year, so the increase had to occur sooner or later, I suppose 

Reminder: NFL draft begins tonight. 

Canadian Federal Government Says Pipeline Still Important (Wink, Wink) -- April 24, 2018

Canadian federal government kicks pipeline decision down the road. Link here.

Canada has extended the deadline for a decision on whether to push forward with the expansion of the Trans Mountain oil pipeline to June 18 from mid-May.

The Trans Mountain expansion (TMX) project would nearly triple the amount of crude flowing from Alberta’s oil sands to British Columbia’s coast, but has been beset by regulatory delays and opposition from indigenous groups, environmentalists and the government of British Columbia.

Amarjeet Sohi, Canada’s minister of natural resources, said the delay would give the federal Liberal government more time to consult with indigenous groups impacted by the pipeline.

However, Conservative shadow minister for natural resource Shannon Stubbs said the delay meant another summer construction season would likely be missed.

Whatever. 

Line 3: can't remember if I previously posted this. Enbridge says work on Line 3 in Minnesota will be delayed one year. 

April 24, 2019 -- Boeing Misses But Investors Like Report

Factoid of the day: 5G can support up to a million devices per square kilometer, while 4G supports only 4000 devices per square kilometer. Importance? IoT.

EV: Ford accelerates its EV push with half-billion-dollar investment in Rivian -- WSJ.  Rivian:

• a start-up
• 10 years old
• when is a start-up old enough to be a teenage and no long a start-up?
• Plymouth, MI
• wants to introduce a line of electric pickups and SUVs; describes them as "adventure vehicles"
• will be able to travel 400 miles on a full charge
• "skateboard" design: large battery under the floor; each wheel with electric power
• no cost given for the large battery, but my hunch, runs about $45,000/battery based on data coming from other sources

Disclaimer: this is not an investment site. Do no make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.

Boeing: to announce later today

• analysts: forecast earnings of $3.25/share on $22.90 billion revenue
• pulls 2019 guidance
• pauses share buybacks due to 37 Max uncertainty
• misses its earnings, link here:
• earnings: $3.16
• revenue: in line
• operating cash flow slid almost 11% to $2.8 billion
• pre-market: Boeing up 1%; up $3.82; trading at $379

Facebook: to announce at 8:00 p.m.EST? That's what Yahoo!Finance says. Forecast: $1.63 vs $1.69 actual one year ago.

$15/Hour Minimum Wage? That's So Broke! Get Woke -- Typical Refiner Earning Nearly $200,000/Year -- WSJ -- April 24, 2019

Link here.

From the linked article:

It was a fruitful year for the rank and file at oil-and-gas companies, from Exxon Mobil Corp. to Phillips 66.

Oil and gas drillers and refiners had some of the highest-paid median workers in the energy and utility sectors in 2018, according to The Wall Street Journal analysis of annual pay disclosures by hundreds of big U.S. companies.

Houston-based Phillips 66 paid its median worker $196,407, the highest of any company in the sector.

Phillips was followed by Anadarko Petroleum Corp. APC at $183,445. Oil giant Exxon Mobil, which has roughly 72,600 employees, according to its latest proxy, had the third-highest median worker pay with $171,375.

Phillips 66 and Anadarko both boosted their 2018 median pay by about 15% in 2018 compared with 2017. Exxon raised its median pay about 6%. Oil-and-gas companies typically pay their workers better than many other sectors because they have fewer low-paid retail jobs and must compete in a tight labor market driven in part by the shale-oil boom.

Here We Go! OXY Plummets -- Down 7% In Last Seven Minutes -- April 24, 2019

Makes counter-offer for Anadarko. Links everywhere. Here's one. Link also at Wall Street Journal.

• Chevron offered $65/share on April 12
• OXY had been talking with Anadarko until Chevron suddenly announced
• now, OXY offers $76/share
• OXY investors not happy
• Anadarko, of course, jumped

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

Comments:

• initial indications were that OXY was not going to get into a bidding war
• an indication of how valuable shale is
• indication of how much OXY needs a big acquisition 
• CVX down about 0.35% 

Jones Act Executive Order? -- April 24, 2019; ATT Does Just Fine, Thank You

Like him, hate him.

Good, bad, or indifferent.

No one can argue this president is the most "active" of any modern president. One never knows what will happen next. Now, the Jones Act. He's weighing in. Link here at Bloomberg.

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.

ATT: misses 1Q19 revenue forecast; link here --

• adds 80,000 net wireless phone subscribers (it was reported yesterday Verizon lost around 40,000 subscribers)
• at 86 cents per share, hit forecast right on the penny (down a penny from last year, by the way)
• revenue: $44.8 billion vs $45.11 billion
• oh, give me a break -- "misses" revenue forecast -- give me a break -- 0.7%
• T is up 7 cents in pre-market trading
  

Housing slump? What housing slump: US new home sales hit one-and-a-half-year high. 

Investing: why the 60/40 portfolio is dead for retirement planning (Rebecca Lake: nominee for 2019 Geico Rock Award)

Dropbox: another one I missed; never invested in it; should have; won't now.

CP Railway: misses; cold weather in Canada unexpected (whatever happened to global warming?)
Canada's challenging winter conditions extended to February, with a winter storm dumping heavy snow and ice pellets on the most populated parts of the country, paralyzing transportation.

• Canada's second largest railroad
• earned C$2.79/share; forecast -- C$3.01 -- a big miss
• revenue rose 6.3% to C$1.77 billion; forecast not provided

Noble Energy: approves 9% hike in dividend.

Energy targets: seven big oil targets that may go next after the Chevron-Anadarko deal. Link here --

• Diamondback Energy: $13.29 billion (market cap);
• Concho Resources: $22.94 billion;
• Noble Energy: $13.03 billion;
• Pioneer Natural Resources: $29.58 billion; -- one of the largest Permian operators (acreage)
• Parsley Energy: $5.81 billion;
• Apache: $13.96 billion;
• Hess: $19.22 billion.

Comments on above list:

• no mention of potential acquirers (domestic, foreign, peers)
• surprised (but excited) to see Hess on the list: personally I would hate to see Hess bought -- it's been such an icon in North Dakota from the very beginning
• JAG, market cap of $2.4 billion should have been on the list

Market, pre-market opening, and related news:

• futures: Dow positive overnight; now turns negative (7:45 a.m. ET)
• Tesla: earnings to be "ugly" today according to many sources
• Tesla: bringing back its less expensive Model S, Model X
• XLNX: up another 47 cents; on a roll
• SRE: no data; interesting to watch; rate hike requested;
• expect majors to be down today 
• OXY: 7% drop -- wow

Late-morning trading:

• all the oils are down
• but, holy mackerel, XLNX is up another $4.20, up over 3%; now trading at $141

API Inventory Data Shows US Crude Oil Grew By A Whopping Seven Million Bbls -- April 24, 2019

API weekly inventory data, link here:

• crude oil:
• forecast: a draw of 167,000 bbls
• actual: a whopping 6.86 million bbls
• gasoline:
• forecast: a draw of 333,000 bbls
• actual: a draw of 1.82 million bbls 

EIA weekly petroleum report, pending, today:

Wells coming off confidential list today -- Wednesday, April 24, 2019: 75 wells for the month; 75 wells for the quarter

• 34309, drl, Crescent Point Energy, CPEUSC David 10-29-32-157N-99W-LL TFH, Lone Tree Lake, no production data,
• 34214, 788, Whiting, Periot 24-20TFH, 40 stages; 6.1 million lbs; Dollar Joe, t11/18; cum 66K 2/19; spud date, August 10, 2018; cease drilling, August 21, 2018; vertical drilled in about 24 hours; middle Bakken TVD, 9,954 feet; max gas reading of 2,699 units in lower Bakken; max gas, 5,872 units in the Three Forks; TVD, top of the Three Forks, 10,031 feet; target, 20' into the Three Forks;

Active rigs:

$65.97	4/24/2019	04/24/2018	04/24/2017	04/24/2016	04/24/2015
Active Rigs	61	62	48	29	84

RBN Energy: more US LNG export projects moving toward FID. Archived.

2019 is slated to be a watershed year for U.S. LNG export projects vying to catch the second wave — the first wave being the slew of liquefaction trains already operational or in the process of being commissioned or constructed.

As expected, regulatory and commercial activity has heated up around the two dozen or so longer-term proposals to add liquefaction capacity along the U.S. coastlines over the next decade.

Last week, the Federal Energy Regulatory Commission approved two of those projects — Tellurian’s Driftwood LNG and Sempra’s Port Arthur LNG — and several others, including Driftwood and NextDecade’s Rio Grande LNG, also have made progress on the commercial front. Many of these projects are targeting a final investment decision this year. Today, we continue a series highlighting the second-wave projects’ latest developments.

US LNG export terminals, December, 2018.
Original list, October, 2016.