Sunday, August 16, 2020

This Week's Edition Of Focus On Fracking Has Been Published -- August 16, 2020

This week's edition of Focus on Fracking has been posted:
  • Global oil supplies were 3.35 million barrels per day short in July; 
  • US gasoline imports rose to a 53-week high

US equity futures: look surprisingly good -- okay, not a surprise, absolutely expected.

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. 

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Themes, 2020 -- Commentary

For Investors

Link here. 

Post-Biden Election

Could China move on Taiwan in 2021? 

Re-locations: tracked here. 

US politics: tracked here. 

Batteries: link here.

Prior to Biden Election

Periodically I post a commentary to bring readers up to date with regard to my interests other than the Bakken. These are the major stories that currently interest me. This post will be linked at the block of commentaries at the sidebar at the right.

Covid-19 pandemic:

  • counterintuitively, the pandemic accelerated US (global?) 2030 into 2020;
    • was the market's worse "black swan" in decades actually a soaring eagle in disguise?

Commuting Americans:

Saving(s) rate: 

Mass transportation: dead

All things shale

Refineries going away.

US stock market investing. 

How Covid-19-changes America

  • How Covid-19 changes America, blog site;
  • big corporations (McDonald's) will outlast -- and then -- outperform mom-and-pop retail
  • huge amounts of money will flow to small pharma and Big Pharma
  • NYC may no longer be the "economic engine" for the US;
  • it behooves one political party in the US to convince Americans the country is nowhere near ready to move on; it behooves the other political party to take the opposite tack;
  • leading indicators:
    • Waffle House is back (previously reported); Walmart to extend store hours at more locations as pandemic fears fade; for link to this story, google it;
    • China's diesel demand set to jump to record this year; multiple sources;

The big migration, commercial and residential, the meme.

  • of those who can, Americans are moving from high-tax states to low-tax states:
  • Cities on the ropes that should not be: NYC, Chicago, Seattle, Portland, Minneapolis
  • I would like to see United Van Lines data;
  • too much is being blamed on the pandemic, including the "great migration"; folks fleeing some states;
  • Portland: for the most part, the demonstrations were peaceful; LOL; for the most part, bombs dropped during WWII were not nuclear bombs;

Corporate moves: California to Texas

  • HP (the printer company) announces move from San Jose, CA, to Houston, TX, Dec 1, 2020
  • Schwab left San Francisco for DFW area
  • GS division moving to Florida, maybe Texas
  • Tesla moving from California to Texas

NYC: another national lock down will be the final nail in this city's coffin.

Saudi Arabia in deep doo-doo;

Mexico going down the road to Venezuela:

  • Pemex in deep trouble;
  • SRE's LNG export terminal on west coast of Baja California could be sign AMLO has some common sense; doesn't want to go down the road Venezuela took;

 The US grid:

  • renewables: the scam
  • power outages in California and EVs not even in the mix yet; ISO California; 
  • rolling blackouts associated with:
    • third-world countries
    • piss-poor planning
    • renewable energy scams

Forest management:

  • lease it (grazing);
  • log it; or,
  • lose it (wildfires)

Investing in general:

  • gap between haves and have-nots will widen;
  • investors will have huge decade, 2021 - 2031
  • streaming -- Disney investors' day, December 10, 2020
  • definitions:
  • huge amounts of money will flow to small pharma and Big Pharma, 2020 - 2020;
  • CureVac doesn't rule out accelerated approval for Covid-19 vaccine; interesting, interesting story; connecting the dots;
    • German biotechnology firm
    • expects to put its vaccine on the market in mid-2021
    • CureVac: backed by Bill Gates
    • CureVac: listed ont eh NASDAQ three days ago, Friday, August 14, 2020, raising $213 million;
    • ticker symbol: CVAC
    • closing price on first day of trading: $55.90; up 250%)
  • five companies with huge free cash flow; Investopedia, updated August 15, 2020
  • of the five companies listed, one is a) an outlier; and, b) shows up on many other lists 
  • did Warren Buffett just bet against the US economy; I think it's a non-story but that doesn't mean it's not confusing; my understanding is that Berkshire Hathaway deals less than $1 billion are seldom made by Buffett/Munger themselves, but rather their lieutenants; if so, that would explain a lot; I think if one understands my dad's investing philosophy in his advanced age, one might understand Buffett's investing philosophy at his advanced age;

American companies that fascinate me:

  • Amazon, Apple, LEGO, SRE,
  • certain companies in the Bakken: Slawson, Bruin, CLR, Whiting, XTO, MRO, others;

Companies that don't fascinate me:

  • Facebook, Microsoft, Google

EVs are not on my radar scope: new page here.

Graphics, miscellaneous:

**********************************
Flashback

This was from Bloomberg, posted October 9, 2019, "the flood." The original post is linked at the sidebar at the right under "Commentary."

Re-posting. This is an incredibly good article on so many levels.

Flood of cash for investors:

Big Oil's renewable shift seen flooding investors with cash -- Bloomberg. Early this week COP made a huge announcement along this same line. COP is linked at the sidebar at the right. The story has a data point that I brought up years ago and no one else has mentioned it until now. [Obviously it's been mentioned before/elsewhere but I've not been able to find other examples.]
So, the story.

The lede:
Shareholders of global oil giants will be “drowned” in cash from dividends and buybacks for the next 20 years as the firms shift their capital structure to finance renewable projects, according to Rystad Energy.
Majors such as Exxon Mobil Corp. and Chevron Corp. have traditionally had to hoard cash as they looked to their own balance sheets to fund billion-dollar megaprojects, founder Jarand Rystad said at his firm’s annual summit in Singapore.
That will change as they gravitate to wind and solar projects, which tap debt markets backed by project financing for as much as 95% of their cost, he said.
The shift will create huge amounts of surplus cash that majors can return to investors as they increasingly tap pension funds and other lenders for lower-risk renewable projects, said Rystad. It underscores the massive changes oil and gas giants will need to undertake as they transition to wind and solar projects, the fastest-growing sources of energy.
Again, this is from Bloomberg, not a source that is usually inappropriately exuberant about Big Oil. LOL.

It would be interesting for the analysts who wrote the article above (and the studies that led to the story) respond. My hunch is that though things look bleak right now, the final chapter has not yet been written on this subject.

Disclaimer: I am inappropriately exuberant about the Bakken.

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An Apple A Day For The Teacher -- August 16, 2020

Anyone have any doubts about Apple?

Note this "urgent" update from the school that Sophia will be "attending" tomorrow.

We are so excited to have your child in First Grade at O.C. Taylor this year! 
The school day begins at 7:40 each morning. 
We encourage your child to use the time from 7:40-8:00 a.m. to prepare for the school day by locating the Learning Toolkit and folder that was given at the Meet/See the Teacher Drive Thru. 
This is also a great time to unplug the school iPad from the charger and get it ready to join Webex. 
All First Graders and First Grade Teachers will meet at 8:00 a.m. on Webex for the first day of school on Monday, August 17. If you encounter any technical difficulties when logging in on Monday morning, please call the GCISD help desk at: 817-251-5629. If your child has forgotten their username and password, please contact the GCISD help desk. We do not have a list of their usernames/passwords.
Wow, Sophia with her own username and password. Awesome.

But look at that in bold: I don't know the details but it certainly sounds as if students were issued an iPad. 

And, if so, this is happening all across the country. 

On another note. Sophia has been attending Tutor Time / Montessori for the past couple of years. The mobile device they use at Tutor Time / Montessori? The Apple iPad. 

They have a bank of iPads in Sophia's classroom. My hunch is that they will be doubling the size of that iPad bank by the end of the year. I assume Facebook, Amazon, YouTube are blocked. Not sure about Google and/or Yahoo.

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. 

**********************************
Texas Wildflowers

-- by Sophia; August 15, 2020
-- age six years and 1.5 months

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Expect To See This Headline In The Near Future ... -- August 16, 2020

The US national debt doesn't matter ... Paul Krugman ...

....until it does -- ZeroHedge. 

Forbes says national debt to be $78 trillion at the end of the Kamala Harris presidency.  The lede:

The coronavirus pandemic pushed the government into the proverbial corner, prompting it to borrow heavily from the future to ward off a serious threat today. Without this intervention, the U.S. economy would be in a much worse recession or possibly even a depression. Even though borrowing excessively may have been the lesser of two evils, the burgeoning debt will have ramifications in the future. 
With the debt approaching $27 trillion, and projected to rise to $78 trillion by 2028, it will present significant challenges. How has the national debt changed during past presidential administrations? How will a Biden or Trump win in November impact the future? How will the current fiscal crisis affect future taxation?

********************************
US Supreme Court Staffers Burning The Midnight Oil
Prepping For Every Contingency

From UCONN Today

The Covid-19 pandemic is already having an impact on elections in the United States, with more questions arising as November draws nearer. We asked Professor Douglas Spencer, a professor of law and public policy at UConn, to explain what is happening and what the long-term implications may be.

If this were a sports tournament, the semifinals:

  • Pompeo vs Nancy Pelosi
  • Trump vs Kamala Harris

The finals: TBD

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History Of The Bakken -- Are We Ready For Bakken 4.5? -- August 16, 2020

Pad drilling: I had expected to see this earlier, maybe a year ago, but we are finally seeing it -- the "mass effect" pad drilling. See the list of wells coming off the confidential list this next week -- we've seen this off and on over the last twelve months, but it's now become the norm. I think it's too early to call it Bakken 4.5 but I'm considering it.

Bakken 4.5 would be "pad completions become the norm" in the Bakken.

***************************************************
History Of The Bakken

This was posted here.

From FAQs.

82a. What do you mean by Bakken 2.0? See this post. Important data points:

  • June, 2007: the very early days of the Bakken boom; began in Montana, 2000; Bakken 1.0
  • October 19, 2016: the beginning of Bakken 2.0
    • the event that triggered the Bakken 2.0 designation: the SM Energy announcement that it was selling some Bakken acreage/assets to Oasis
    • it appears Permian Shale 2.0 began with the WPX, Noble, and XOM announcements regarding acquisitions in the Permian -- late 2016/early 2017
82b. What do you mean by Bakken 2.5? See this post.
  • Bakken 1.0: began in the summer of 2007; it was originally tagged "Bakken101" and I continue to use the "Bakken101" tag 
  • Bakken 2.0: October 19, 2016
  • Bakken 2.5: April 10, 2018 -- correlates/corresponds with CLR's new completion strategies; North Dakota crude oil production to set new records; increased focus on the Permian vs the Bakken
  • Bakken 3.0: We go to Bakken 3.0 if the "Lynn Helms' production surge (LHPS - 2018) is sustained for six months.  Link here.
82c. Bakken 3.0 -- see above. The surge noted in 2018 certainly lasted for six months.

82d. Bakken 4.0 -- oil shock - market meltdown, 2020. Tag: "Meltdown_2020." And, of course, "Bakken_4.0.
"New" and very common well designations started appearing just as we went to Bakken 4.0: SI/A; F/A; F/NC. Link here for examples. SI/A are wells that have been completed, have come off the confidential list, but are immediately shut in, sometimes with no production or very minimal production (less than 500 bbls) but often 15 days of great production, such as 17K bbls crude oil over 14 days. I didn't know whether to highlight them in "red" or "blue," but because they came off confidential list "on time," had been completed and had production following a frack, I highlighted them in "red." F/A; F/NC were wells that producing wells (DUCs) reported as completed. It appears that in Bakken 4.0 we will have wells that come off the confidential list, or the SI/NC list, but are immediately shut in or choked back significantly. See this post, dated March 26, 2020, first time I tagged a post with "Bakken_4.0."
Bakken 101: across all "eras."

Unconventional 1.0; 2.0; and, 3.0 -- WoodMac.
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BofA Trading Platform See 180% 2Q20 Boost -- August 16, 2020

 

Many, many story lines:

  • this bodes very, very well for the stock market -- or this bodes very, very badly for the stock market;
  • discount brokers vs Merrill Lynch, et al;
  • CNBC talking head: "... if a $4.95 commission is a barrier to investing, they shouldn't be investing.." --- the talking head doesn't understand human nature
    • commission-free trading is akin to Amazon's free delivery
  • CNBC talking heads (except Jim Cramer): AAPL and TSLA splits don't mean a thing -- don't understand human nature
    • if the 4 - 1 (AAPL) and the 5 - 1 (TSLA) splits don't mean anything, would these same talking heads say the same thing about reverse splits? (yes, I understand the reason for "reasons" for reverse splits; I'm not sure folk understand the reason for [regular] splits);
    • Jim Cramer: says the AAPL and TSLA splits will be a "plus" for those stocks -- he understands human nature
  • valuations seem to be harder and harder to discern;
  • lightning strikes unpredictably, but no longer infrequently
  • tectonic changes occurring everywhere
    • US presidential election looming
    • Covid-19: things appear to be getting better; things appear to be getting worse;
    • huge amounts of government money will be transferred to little pharma and Big Pharma
    • money rotating out of some sectors into others
  • daytime television sucks; only alternative for some: CNBC
  • question: to what extent do day traders affect computer-generated algorithms? who has the greatest leverage: computer algorithms written by humans (although AI and machine learning may be more involved than we think) or emotionally-driven day traders?

***************************
Re-Visiting REI

Re-posting from August 15, 2020, link here.

White (can we still say that?) elephant in Seattle, Washington:

I think there is much more to this story than meets the eye.

Take out a yellow legal pad and make two columns, pros and cons for a corporation to have employees work from home. The "pros" column will be much longer than the "cons" column but don't be fooled: the list you have drawn up doesn't place a dollar value on any of the items; many of the "pros" / "cons" cannot be monetized.

I don't think it's as straightforward as the zerohedge article might be implying. 

I track "how Covid-19 changes things in America" at this post.

*****************************
How Covid-19 Changes Things In America

From that site:

July 16, 2020: cocoon culture. 

  • forecast: permanent drop in US miles driven could be as high as 10%
  • due to:
    • working from home
    • on-line shopping
  • historically: 17 million autos sold annually
  • going forward: likely to be 16 million autos annually
  • "people will fight very seriously for a million vehicles, especially if sales drop"

My hunch: that may need to be re-examined.

  • first, "could be as much as" -- lots of wiggle room
  • second, "as high as 10%" -- if comes to fruition, 10% not that extreme in big scheme of things
  • third, mass transit is dead; for those who cannot afford their own automobiles, Uber/Lyft exist and, if I recall, their mode of transportation is ... drum roll ... the automobile
  • fourth, transportation by air --
    • business: more and more, such travel will be reduced by Zoom meetings;
    • pleasure: really? really? really? for trips less than day's (18 hours) drive -- automobiles favored over flying? certainly for the next eight months
  • trucking industry: tea leaves suggest there could be a short-term boom as the pandemic fades
    • long term? think Amazon, Target, Walmart, etc
  • automobile miles: a whole new demographic -- all those stay-at-home folks (many of them seniors) who never went out for dinner, can now have it delivered -- from everywhere -- from fast food restaurants to high-end establishments
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From Twitter This Morning -- August 16, 2020

Peak oil? House of Saud in deep doo-doo:



Many, many story lines here:

Poland: can all be reversed January 21, 2002:

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Initial Production For Wells Coming Off The Confidential List This Next Week -- August 15, 2020

The wells:

  • 36537, conf, XTO, Marilyn 21X-23D, Capa, no production data,
  • 35998, conf,  Hess, AN-Mogen Trust-153-94-2932H-9, Antelope,
    DateOil RunsMCF Sold
    6-20201830333032
    5-20202296913486
    4-20202186020071
    3-20202484717165
    2-2020203272266
  • 35596, conf, Enerplus, Stratus 149-94-33C-28H-TF, Eagle Nest,
    DateOil RunsMCF Sold
    5-20201842720282
    4-20202388325063
    3-20203109329726
    2-202041123746
  • 36686, conf,  Whiting, Iverson 41-14-2HU, Sanish,
    DateOil RunsMCF Sold
    6-20201908317269
    5-20202218619103
    4-20202422311130
    3-2020245550
    2-202050
  • 36538, conf, XTO, Marilyn 21X-23H, Capa, no production data,
  • 35997, conf,  Hess, AN-Mogen Trust-LE-153-94-2932H-1, Antelope,
    DateOil RunsMCF Sold
    6-20201998641091
    5-20202871617137
    4-20202049519577
    3-20202470329631
    2-202096758089
  • 33799, conf, CLR, Bohmbach Federal 13-26H1, Elm Tree,
    DateOil RunsMCF Sold
    4-20201510724004
    3-20201754324249
    2-20203670
  • 33798, conf, CLR, Bohmbach Federal 12-26H, Elm Tree,
    DateOil RunsMCF Sold
    4-20202058132970
    3-20202952940538
    2-20201420
  • 36539, conf, XTO, Marily 21X-23C, Capa, no production data,
  • 36540, conf, XTO, Marilyn 21X-23G, Capa, no production data,
  • 37077, conf,  BR, Cleofill, 1E, Croff, no production data,
  • 36541, conf, XTO, Marilyn 21X-23A, Capa, no production data,
  • 35872, conf, Whiting, Fladeland 13-10TFH, Sanish,
    DateOil RunsMCF Sold
    6-20201129311162
    5-20201212415126
    4-20201223713890
    3-2020118189165
    2-202011100
  • 37076, conf,  BR, Cleofill 1D, Croff, no production data,
  • 36464, conf, Whiting, Michael John 12-13XH, Sanish,
    DateOil RunsMCF Sold
    6-20202299615828
    5-20202475017392
    4-202059083449
  • 37075, conf, BR, Cleofill 1C, Croff, no production data,
  • 36351, conf,  Hess, EN-Thompson Trust-154-94-1930H-6, Alkali Creek,
    DateOil RunsMCF Sold
    6-20201855832621
    5-20202373644774
    4-20201920333219
    3-20201056410410
    2-202038453388
  • 36158, conf,  Hess, GO-Hauge-156-97-2116H-2, Dollar Joe,
    DateOil RunsMCF Sold
    6-20201590
    5-20201064223029
    4-20201361827216
    3-20202227339637
    2-20201533221456
  • 36109, conf, BR, Gladstone Gap 44-23TFH-ULW,37074, conf, BR, Cleofill 1B, 
  •  37073, drl/NC, BR, Cleofill 1A, Croff, no production data,
  • 36110, SI/NC, BR, Gladstone Gap 34-23MBH-ULW, Sand Creek, no production data,
  • 33929, SI/IA, CLR, Hendrickson Federal 13-25H2, Elm Tree,
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN6-20200000000
    BAKKEN5-20200000000
    BAKKEN4-20202766996698137687500735150
    BAKKEN3-2020271376613394272741973719155359
    BAKKEN2-202062221222139361290129
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Wells Coming Off The Confidential List This Next Week -- August 16, 2020

Monday, August 24, 2020: 69 for the month; 140 for the quarter, 586 for the year:

  • 36537, conf, XTO, Marilyn 21X-23D,
  • 35998, conf,  Hess, AN-Mogen Trust-153-94-2932H-9,
  • 35596, conf, Enerplus, Stratus 149-94-33C-28H-TF,

Sunday, August 23, 2020: 66 for the month; 137 for the quarter, 583 for the year:

  • 36686, conf,  Whiting, Iverson 41-14-2HU,
  • 36538, conf, XTO, Marilyn 21X-23H,
  • 35997, conf,  Hess, AN-Mogen Trust-LE-153-94-2932H-1,
  • 33799, conf, CLR, Bohmbach Federal 13-26H1,
  • 33798, conf, CLR, Bohmbach Federal 12-26H,

Saturday, August 22, 2020: 61 for the month; 132 for the quarter, 578 for the year:

  • 36539, conf, XTO, Marilyn 21X-23C,

Friday, August 21, 2020: 60 for the month; 131 for the quarter, 577 for the year:

  • 36540, conf, XTO, Marilyn 21X-23G,

Thursday, August 20, 2020: 59 for the month; 130 for the quarter, 576 for the year:

  • 37077, conf,  BR, Cleofill, 1E,
  • 36541, conf, XTO, Marilyn 21X-23A,
  • 35872, conf, Whiting, Fladeland 13-10TFH,

Wednesday, August 19, 2020: 56 for the month; 127 for the quarter, 573 for the year:

  • 37076, conf,  BR, Cleofill 1D,

Tuesday, August 18, 2020: 55 for the month; 126 for the quarter, 572 for the year:

  • 36464, conf, Whiting, Michael John 12-13XH

Monday, August 17, 2020: 54 for the month; 125 for the quarter, 571 for the year:

  • 37075, conf, BR, Cleofill 1C,
  • 36351, conf,  Hess, EN-Thompson Trust-154-94-1930H-6,
  • 36158, conf,  Hess, GO-Hauge-156-97-2116H-2,
  • 36109, conf, BR, Gladstone Gap 44-23TFH-ULW,

Sunday, August 16, 2020: 50 for the month; 121 for the quarter, 567 for the year:

  • 37074, conf, BR, Cleofill 1B,

Saturday, August 15, 2020: 49 for the month; 120 for the quarter, 566 for the year:

  • 37073, conf, BR, Cleofill 1A,
  • 36110, conf, BR, Gladstone Gap 34-23MBH-ULW,
  • 33929, conf, CLR, Hendrickson Federal 13-25H2,
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BRK: Idle Rambling -- August 16, 2020

I was surprised how little attention was paid to the 2Q20 Warren Buffett / Berkshire Hathaway quarterly report. Maybe there was a lot of coverage and the fact that I "was on the road" -- maybe it was me, not the business writers. 

I touched on Berkshire Hathaway yesterday. When you look at that short note, what jumps out at you?  I'll give you a minute to think about it. 

Has it been a minute. 

Look at the short clip again: dumped all his holdings in Goldman Sachs, dumped all his holdings in OXY. Dumped the rest of his airlines (four of them: AA, DAL, UAL, and LUV); dumped the majority of his holdings in Wells Fargo. That's a lot of cash.

What did he buy. About a half-billion dollars of a gold miner.

Obviously there was more, but if it ha been "materially" more, it would have been reported. 

So, I woke up with a start this morning (as they say), wondering just how much cash Berkshire Hathaway has on hand.

As an aside, I believe BRK is #3 globally in revenue; only Saudi Aramco and one other company have greater revenue than BRK. Which, of course, is more cash.

Before looking at BRK's cash position, let's be ready to put it into perspective. What other company is known for holding cash hoards? Apple, Inc.

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.

Market caps of the current trillion-dollar companies:

  • AAPL: $1.965 trillion
  • MSFT: $1.581 trillion
  • GOOG: $1.025 trillion
  • AMZN: $1.577 trillioin
  • Saudi Aramco:

Which companies are next (same link)?

  • FB: $745 billion
  • BRK-A: $503 billion
  • V: $432 billion

At an annual return of 11% for BRK:

2021

503

1.11

558

2022

558

1.11

620

2023

620

1.11

688

2024

688

1.11

764

2025

764

1.11

848

2026

848

1.11

941

2027

941

1.11

1044
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