Five Wells Coming Off Confidential List -- July 23, 2020

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I don't know if folks recall but we were bombarded with news stories a month ago telling us how badly earnings were going to be. In fact, earnings are beating expectations, it seems, almost across the board. Of course, earnings forecasts were set incredibly low so it wasn't hard to beat estimates.

Fast and furious:

• T: it's hard to read this one but if I'm reading it correctly, consensus for T's EPS was 79 cents; in fact, it hit 83 cents. Others says the consensus was EPS of 70 cents. Analysts say the dividend is safe. Revenue estimate: just under $41 billion; actual: $41 billion. The fact that T is in the green in pre-market trading suggests traders were satisfied with results. According to Variety via Yahoo!Finance,  Wall Street analyst consensus estimates for AT&T’s second quarter were for in $41.1 billion in revenue and adjusted EPS of 70 cents.
• TSLA: regardless of what one thinks about the company or the actual numbers, the investment world is "going gaga" after Tesla reported earnings last night. One of a gazillion stories on Tesla here. All I can say is moving to Texas was huge. By the way, for those wondering, the other city in the running for the new Tesla factor: Tulsa, OK.
• Dividends: it's hard to believe but Motley Fool highlights these three companies as providing safe, high dividends: Walgreens Boots Alliance, paying 4.6%;  XOM, paying 7.8%, has raised its dividend for 37 consecutive years; and, finally, T, paying 7%. "With AT&T halting its share buyback program earlier this year, it's a virtual certainty that its dividend, as well as its 36-year streak of increasing that base payout, are safe. That means AT&T's 7% yield can singlehandedly double your money, with reinvestment, about once a decade."
• Dividends: let's see what Bloomberg has to say: not much, same old story. 
• Memo to self: follow up in ten years.  Walmart, Target, and CVS team up to find alternate to paper, plastic, and reusable bags. Good luck with that. Unless it's Amazon cardboard boxes.
• From twitter:
• rail shipments of US-produced gasoline additive MTBE to Mexico are on the rise as port delays and other infrastructure issues have pushed imports away from waterborne routes, Argus;
• deposits at US banks have surged 18% so far this year (more to come) to a record $15.6 trillion;
• power load in east China's Zhejian provice rose to a historical high, boosted by increasing temperatures following heavy rains, Argus;
• China map: for those who have forgotten where "east China's Zhejian province" is located. If one overlaid a US map over China, Zhejian (or Zhe Jiang) would be : south of Charleston, SC, and east of Atlanta, GA:

OPEC basket, link here: down slightly at $44.24.

From above: US savings have surged -- $15.6 trillion --

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Back to the Bakken

Active rigs:

$41.74	7/23/2020	07/23/2019	07/23/2018	07/23/2017	07/23/2016
Active Rigs	11	57	66	58	32

Five wells coming off the confidential list -- Thursday, July 23, 2020: 60 for the month; 60 for the quarter, 506 for the year:

• 37269, loc/NC, CLR, Kate 14-19H1, Big Gulch, no production data,
• 37071, loc/NC, WPX, Wolverine 21-22HC, South Fork, no production data,
• 37070, loc/NC, WPX, Wolverine 21-22HZ, South Fork, no production data,
• 36790, loc/NC, Sinclair Oil, Harris Federal 5-32H, Lone Butte, no production data,
• 36489, drl/A, Hess, TI-Stenbak-158-95-2526H-3, Tioga, t--; cum 38K over 3 months;

RBN Energy: Chevron's $13 billion Noble Energy deal signals return of upstream M&A.  

On July 20, 2020, Chevron struck the first major energy sector deal since the onset of the pandemic, announcing a $13 billion agreement to acquire U.S. E&P Noble Energy. The transaction comes 15 months after the oil major bowed out of a bidding war with Occidental Petroleum to acquire Anadarko Petroleum, a landmark, $56 billion deal in which the winner may eventually end up as the loser after taking on massive debt. Oxy is just one example of how the sharp decline in oil demand and prices has ravaged producer cash flows and earnings, virtually freezing the M&A market.

Despite widespread speculation that a resumption in deal activity would target the most distressed E&Ps, Chevron has broken the market wide open with a blockbuster deal for a premier E&P. The target this time, Noble Energy, has a portfolio very similar to that of Anadarko, and is being acquired at a small fraction of the cost. Today, we examine the strategies that drove this transaction, the impacts on buyer and seller, and the implications for the upstream M&A market going forward.