Monday, November 4, 2019

Notes From All Over -- Monday Afternoon -- November 4, 2019

Market: apparently all three major indices closed at all-time highs today --
  • Dow: 27,462
  • NASDAQ: 8,433
  • S&P 500: 3,078
Gold. Drilling for gold in the Black Hills -- The Rapid City Journal.

OXY: waiting for 3Q19 earnings report ...
  • up almost 5% during the day; up $4.22
  • after hours, up one cent
  • estimates
    • EPS: 41 cents/share
    • revenue: $5.46 billion
  • these are huge declines from a year earlier; if the numbers and/or guidance comes in with worse news, it could be a tough day for those holding OXY ... or another buying opportunity ...
  • later, 3:32 p.m. CT -- now down 23 cents/share; 
    • earnings release
    • if I'm reading this correctly:
      • a loss of $1.08/diluted share (a loss of $912 million)
      • adjusted income of 11 cents/share (adjusted income of $93 million)
    • smoke and mirrors: Vicki Hollub says "the company returned excess cash flow to shareholders, as evidenced by $4.9 billion of third quarter debt repayments, including all 2020 debt maturities, and returning $600 million to investors."
    • total per BOE lease operating costs for 3Q19 decreased by 12% to $9.26, from $10.55 for 2Q19, due to lower plant and downhole maintenance costs.
  • now we're starting to see investor realization of what just happened: down 2.58% at 4:41 p.m. EST, down $1.14; trading at $43.08 -- trending back to where it was at the beginning of the day
  • from my perspective, this is a very, very tough day for Ms Hollub
  • Later, 6:32 p.m. ET: it looks like we will have to wait until tomorrow to see how this plays out -- last trade, down 21 cents/share suggesting OXY "held" despite the bad news; more tomorrow
  • Later, 6:48 p.m. ET: OXY vows to slash spending after Anadarko hits earnings; of course OXY has huge interest payments to Warren Buffett to make; from Bloomberg: OXY will slash spending by 40% next year; but expects to increase overall output by 2%
    • will spend $5.4 billion next year, vs the $9 billion the two companies would have spent separately
    • expenditures in OXY's Permian area will drop by half to $2.2 billion
    • OXY says the company earned 11 cents vs the 38 cents forecast
Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here. 

Markets: new all-time highs -- Chevron, XOM lead DowJones to all-time high; China stocks surge.

Number Of Active Rigs Slips To 56; Five DUCs Reported As Completed; Two New Permits -- November 4, 2019

Active rigs:

Active Rigs5666553769

Two new permits, #37153 - #37154, inclusive:
  • Operator: RimRock
  • Fields: Twin Buttes (Dunn County)
  • Comments:
    • RimRock with permits for a 2-well Hammerhead/Tiger-pad in section 14-147-92, Twin Buttes;
Five producing wells (DUCs) reported as completed:
  • 26815, 2,049, Bruin, Wm Helstad 158-99-34C-27-2B, Ellisville, t9/19; cum 20K over 15 days;
  • 34903, 2,177, Hess, SC-Gene-LE-154-98-0805H-1, Truax, t9/19; cum 24K over 14 days;
  • 35397, 895, Hess, RS-Aadnes-157-91-2829H-3, Ross, t9/19; cum 10K over 25 days;
  • 35398, 745, Hess, RS-Aadnes-157-91-2829H-4, Ross, t9/19; cum 7K over 13 days;
  • 34901, 1,512, Hess, SC-Gene-154-98-0805H-8, Truax, t9/19; cum 4K over 4 days;
Some months from now it will be interesting to see if any neighboring older wells were affected by these newly fracked wells.

Random Update Of An XTO Charlson Well -- November 4, 2019

The well:
  • 30715, 2,384, XTO, State 11X-16MB4, 25 stages; 2.9 million lbs; Charlson, t1/16; cum 213K 9/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

OXY In The Spotlight -- November 4, 2019

WTI goes over $57/bbl this morning. 

Bloomberg: Vicki Hollub in the spotlight. Earnings call tomorrow, Tuesday, November 5, 2019.

Earnings should be released after market close today, Monday, November 4, 2019.

EPS, consensus: 38 cents/share.

At Investor's Business Daily here.

Old News: Chicago

A reader sent me a link about bond ratings for the city of Chicago after recent public school teachers' strike / new contract.

I completely missed this -- back on July 1, 2019: the Illinois gasoline tax doubled.
The state’s tax on gasoline today will spike to 38 cents per gallon – doubling from the 19-cents-per-gallon state tax Illinois drivers have paid to fuel up since 1990. Just in the first year, the gas tax will take $1.2 billion more from Illinois drivers, or an average of $100 more per driver.

Illinois’ doubled state gas tax comes as part of a $45 billion capital plan Gov. J.B. Pritzker signed into law June 28, on top of 20 more tax and fee hikes to pay for required infrastructure spending as well as for the state’s record $40.6 billion fiscal year 2020 budget, which also starts today. Despite all the new taxes, this will mark the 19th year Illinois will end up spending more than it collected in revenue – as much as $1.3 billion more.

The gas tax hike will propel Illinois’ state and local tax burden on gasoline to third-highest in the nation, according to 2018 data from the Tax Foundation. Prior to the tax hike, Illinoisans paid the nation’s 10th-highest overall gas tax burden.

Beyond the state-level increase, the new law also allows Chicago to increase its local gas tax by 3 cents; Lake County and Will County to impose a gas tax of up to 8 cents per gallon; and DuPage, Kane and McHenry counties to double their 4-cent-per-gallon gas taxes to 8 cents. These additional hikes may end up making Illinois’ average gas tax burden the highest or second-highest in the nation.

The new law also ties the state’s gas tax to inflation, meaning it will automatically rise in future years without lawmakers facing any constituent backlash.
That was the point I was making to the reader. The increases in taxes and fees are much like the increases in one's television cable bill; one's monthly cell phone bill; etc. Small enough to irritate those paying attention, but not great enough to get them to move out of the city or out of the state (or even to vote out incumbents).

Gasoline tax? An average of $100 more per driver (I assume that's for the year). $100 / 365 days = 27 cents/day. Seriously, is that enough to get one to move out of state? Especially knowing that many states are raising their gasoline taxes.

And note: the new Illinois gas tax is still not the highest in the nation. And we haven't even gotten to fees on gasoline to pay for global warming issues. Those are fees that can yet be levied.

Cleaning Out The In-Box -- Notes From All Over, Part 1 -- November 4, 2019

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

First things first:

LaDainian Tomlinson's Arby's Steakhouse

LaDainian Tomlinson: wiki

Barron's: two companies that raise their dividends quarterly, not annually -- Penske and ONEOK.

Hess: Mercer Capital, October 9, 2019. 3Q19 earnings; Bakken is huge for Hess.

Barron's: Berkshire stock could get a lift as earnings, cash pile grow.

Kallanish Energy: oil production increases 20% at CLR, November 1, 2019.

Kallanish Energy: Bakken shale oil production boots Hess, October 31, 2019.

Motley Fool: Hess is about to stop on the gas, October 30, 2019.

AirPods Pro: in The WSJ -- big improvement, the new air pods. Article itself got nice reviews. Like the US debt, price for Apple products no longer matter. (Actually, never did, except maybe once.)

Credit cards have gone out of style in China: in MarketWatch, November 3, 2019.

The Book Page

After going through this book for the fourth time, I have finally decided to move on.

The book: And Then There Was Life: The Plausibility Of Life: Resolving Darwin's Dilemma, Marc W. Kirschner and John C. Gerhart, c. 2005. Link here for notes.

I learned a lot from the book but at the end of the day, a book for the library, but not a "top shelf" book. The best thing it did was help me ask more questions.

I realized I had forgotten an important part of genetics. I don't have the book with me, but I'm going to have look at it again. I don't recall the authors using the word "epigenetics." If that's accurate, that was a huge omission.
I'm surprised Stephen Meyer, David Gelernter, et al, didn't mention epigenetics.

Not only does epigenetics provide a huge explanation for phenotypic changes, but more importantly, the epigenetics points out again, how incredibly "amazing" DNA is. I assume it's already been discussed but epigenetics also explains the "Lamarckian" phenonmen. LOL.  Just connecting the dots.

Later, November 6, 2019:

The Origin of Prebiotic Information System in the Peptide/RNA World: A Simulation Model of the Evolution of Translation and the Genetic Code, Life, received 13 December 2018; published 1 March 2019.
Information is the currency of life, but the origin of prebiotic information remains a mystery.
We propose transitional pathways from the cosmic building blocks of life to the complex prebiotic organic chemistry that led to the origin of information systems.
The prebiotic information system, specifically the genetic code, is segregated, linear, and digital, and it appeared before the emergence of DNA.
In the peptide/RNA world, lipid membranes randomly encapsulated amino acids, RNA, and peptide molecules, which are drawn from the prebiotic soup, to initiate a molecular symbiosis inside the protocells. This endosymbiosis led to the hierarchical emergence of several requisite components of the translation machine: transfer RNAs (tRNAs), aminoacyl-tRNA synthetase (aaRS), messenger RNAs (mRNAs), ribosomes, and various enzymes. When assembled in the right order, the translation machine created proteins, a process that transferred information from mRNAs to assemble amino acids into polypeptide chains. This was the beginning of the prebiotic information age.
The new buzzword in evolution: information. Did Stephen Meyer and the "intelligent designer" proponents co-opt the "biologic origin of information systems"? Tag to include: Sankar Chatterjee and Surya Yadav.
Some Guys Have All The Luck 

Some Guys Have All The Luck, Rod Stewart

Thirteen Wells Coming Off Confidential List Today -- November 4, 2019

Active rigs:

Active Rigs5766553769

Wells coming off the confidential list over the weekend, today -- Monday, November 4, 2019: 17 for the month; 112 for the quarter:
  • 30087, 1,835, Sinclair, Highland 6-9TFH, Sanish, t9/19; cum 12K in 12 days;
Sunday, November 3, 2019: 16 for the month; 111 for the quarter:
  • 35174, 377, Resonance Exploration, Resonance Lodoen 4-6H South, target: Madison; Sergis, t9/18; cum 8K 9/19; 
  • 35102, 135, Resonance Exploration, Resonance Lodoen 4-6H North, target: Madison; Sergis, t9/18; cum 6K 9/19;
  • 34925, 1,647, CLR, Collison 10-23H1, Avoca, t7/19; cum 101K 9/19;
  • 33028, 3,020, CLR, Hereford Federal 13-17H, Elm Tree, t9/19; cum 28K over 14 days;
  • 29379, drl, Hess, EN-Chamley-156-93-0508H-9, Baskin, no production data,
Saturday, November 2, 2019: 11 for the month; 106 for the quarter:
  • 35735, 1,413, RimRock, Two Shields Butte 9-8-7-12H3, Heart Butte, t6/19; cum 73K 9/19;
  • 35734, 1,884, RimRock, Two Shields Butte 9-8-7-12H, Heart Butte, t6/19; cum 83K 9/19;
  • 35733, 1,636, RimRock, Two Shields Butte 9-8-7-5H3, Heart Butte, t7/19; cum 83K 9/19;
  • 35732, 1,853, RimRock, Two Shields Butte 9-8-7-5H, Heart Butte, t7/19; cum 88K 9/19;
  • 35624, 804, Liberty Resources, Gliko 159-93-23-35-1MBHX, Gros Ventre, t5/19; cum 91K 9/19;
  • 34720, 829, Oasis, Mildred Nelson 5298 12-25E 5T, Elidah, t5/19; cum 129K 9/19;
  • 29378, drl, Hess, EN-Chamley-156-93-0508H-8, Baskin, no production data,
RBN Energy: CBR will help Alberta producers, but pipelines would help more.
Crude-by-rail has saved the day for Alberta producers before, and it’s about to again. The talk of the Western Canadian province the past few days has been the Alberta government’s October 31 announcement that it will allow incremental crude oil production beyond the province’s 3.8-MMb/d cap — if that crude is transported to market by rail. Within hours of the government’s statement, a trio of major producers indicated that they now expect to ramp up their Alberta output by a total of more than 100 Mb/d over the next few months, with a good bit of the gain occurring by year’s end. Production increases from others are likely to follow, as are parallel plans to load that crude into tank cars and rail it to market. But can Alberta producers really thrive without more pipeline capacity? Today, we review recent developments in “Canada’s Energy Province” and what they mean for producers and Alberta crude prices.