Wednesday, September 2, 2020

Whiting Emerges From Bankruptcy -- September 2, 2020

Investors of the "old" Whiting will receive one share of the "new" Whiting for about every 75 shares of the "old" Whiting they held.

From SeekingAlpha:

  • Whiting Petroleum says it successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy protection. 
  • The company says its new capital structure will reduce debt by $3B and includes a new $750M reserve-based revolving credit facility maturing in April 2024.\
  • Current Whiting shareholders will receive one share of the reorganized company's new common stock for every ~75 shares previously owned
  • Lynn Peterson assumes the CEO role, as previously announced, and James Henderson becomes CFO, effective immediately, succeeding Correne Loeffler, who has resigned to pursue other interests.

Now It Makes Sense: The CNBC Crawler And SHLL Earlier Today -- But I'm Running Out Of Fingers And Toes -- September 2, 2020

I'm running out of fingers and toes.

"Hi, Hyliion."

Remember this post and a similar one posted about the same time?

I'm sure everyone is aware of the 6% drop in TSLA today.

This from earlier today

Electric vehicle companies are enjoying an incredible moment in 2020, spearheaded by Tesla (TSLA), which saw shares surge 600% from their March lows, and Chinese rival Nio (NIO), also enjoying a similar 700% pop.

Investors also battled over shares in electric truck maker Nikola (NKLA) earlier this year, which debuted via a special purpose acquisition company (or SPAC) in June as shares spiked about 110% in the week following its debut.

Now, yet another Tesla rival is looking to make its public debut — this time in the form of Austin, Texas-based electric trucking company Hyliion.

The company announced in June it would be following Nikola’s lead by going public via a reverse merger with Tortoise Acquisition Corp. (SHLL) to trade on the New York Stock Exchange in a deal the company said would net $560 million in proceeds.

But rather than start by only manufacturing electric trucks from the ground up, Hyliion is taking a different approach by offering to retrofit existing trucks with its electric drivetrain.

“What we're doing is actually focusing on the drivetrain of the vehicle as opposed to re-inventing the entire vehicle from the ground up,” Hyliion CEO Thomas Healy tells Yahoo Finance’s YFi PM. “The benefit of this is it's a lot quicker of a development.”

I don't now if CNBC addressed this company today (I had CNBC on mute) but SHLL was "all over" the crawler today.  As far as I know, Phil LeBeau spent a lot of time on TSLA and F but failed to mention this one. 

Random Look At Three Bakken Wells Of Interest -- September 2, 2020

Results of a re-frack:

  • 20139, 1,122, MRO, Oren USA 31-6TFH, Van Hook, t12/11; cum 321K 7/20; a re-frack; see this post;

Another Bakken well goes over 500K bbls crude oil:

  • 20170, 2,939, Newfield, Moberg Federal 149-95-29-32-2H, Bear Den, t5/12; cum 500K 7/20;

Advantaged oil:

  • 20233, 947, MRO, Marlin 44-12H, Chimney Butte, t6/11; cum 277K 7/20; however, two wells parallel to this well were fracked at the time this well had a jump in production; neighboring wells; see this post; and, this post, with graphics;

Saudi Aramco Slows Diversifiction -- Short Of Cash -- September 2, 2020


September 4, 2020: Saudi Aramco shelves plans for $20 billion petrochemical plant.

Original Post

Misstep after misstep after misstep. 

This will be the third misstep by Saudi Arabia since the advent of the Bakken revolution. The previous missteps:

  • the first attempt to kill US shale by flooding the world with oil;
  • the second attempt to kill US shale by flooding the world with oil:

Now, the third misstep: Saudi Arabia is delaying plans to expand at home and abroad due to:

  • sharply lower oil prices; and,
  • a heavy dividend burden.

Although they probably had no choice this time.

This story was previously posted -- just the headline -- but here's the story and the source, The WSJ. The numbers show just how badly things are going for Saudi Arabia right now, although this has gone on for much longer than just the last few months. Long-time readers will remember Saudi's plans for huge a huge renewable (solar energy) some years ago, but was canceled, due to the incredibly high cost. Anyone remember Paddy?

The linked article will be behind a paywall but probably accessible through various methods. Be that as it may, from the article at the link:

Saudi Arabia’s state oil giant is reviewing plans to expand at home and abroad in the face of sharply lower oil prices and a heavy dividend burden it assumed as part of its recent initial public offering.

Saudi Aramco is now slowing down and reviewing a $6.6 billion plan to add petrochemical output at its Motiva refinery in Texas.

It is also reviewing a big natural-gas project with Sempra Energy SRE 1.88% in the same state, and pausing investments in refineries in China, India and Pakistan.

At home, Aramco is delaying by a year plans, announced in March, to boost crude production capacity to 13 million barrels a day, from currently about 12 million.

In its December IPO, Dhahran-based Saudi Arabian Oil Co. promised shareholders $75 billion in annual dividends for the next five years. That pledge helped persuade private investors to pay a premium for the thin slice of Aramco shares the government floated on the local stock market. Other big oil companies, such as Royal Dutch Shell PLC and BP PLC, have cut their dividend in recent months to preserve cash, amid sharply falling oil demand and prices thanks to the pandemic.

Aramco’s flexibility to do the same is limited because the Saudi Arabian government—which still owns 98% of the company—relies on Aramco dividends for much of its funding.

Last month, Aramco said it would maintain its quarterly dividend at $18.75 billion, dwarfing free cash flow of $6.1 billion for the period. That was down from $20.6 billion a year earlier, when oil prices were higher. It also reported a 73% fall in net profit in the second quarter and said it would cut capital expenditures by about half, to between $20 billion and $25 billion. The spending will target domestic crude production, it said. That is a sizable turnaround from two years ago.

At the time, Aramco laid out plans to invest $100 billion in chemical manufacturing, and unveiled a separate ambition to buy as much as $160 billion in natural gas assets. The company said it wanted to become a competitor in the global natural-gas market and also balance its giant oil-production capacity with the ability to process crude into other products—a diversification strategy employed by most of the world’s biggest oil companies. As part of this push, Aramco paid $69 billion to buy a controlling stake in Saudi Basic Industries Corp., or Sabic, the kingdom’s biggest petrochemicals company. It also paid $1.2 billion for a stake in South Korean refiner Hyundai Oilbank in December. The Sabic deal sharply expanded debt at Aramco after it consolidated the petrochemical company’s liabilities.

Much more at the link. Archived.

Today's Bull Market -- For The Archives -- September 2, 2020

Biggest rally since 1938 -- CNBC senior financial analyst but that was said back in April, 2020, also

Fortune headline: the market's rally is this close to becoming the "greatest of all time."

The two words I keep hearing from "analysts" over at CNBC:

  • "bull" as in bull market;
  • "accelerated" as in the rally is due to the pandemic accelerating the digital world from what we were expecting by 2030, telescoped back into 2020

I don't know when I first heard them use these two words, but the use of both words seems to be fairly recent, within the last week or so.

It is interesting. I can understand the hesitation in calling this a "bull market." 

For the archives:

  • Dow 30: closed up 1.6%; closed up 455 points; shot through 29,000;
  • S&P 500: closed up 1.5%; closed up 54 points to close barely above 3,580; new all-time record, of course;
  • NASDAQ: closed up almost 1%; closed up 117 points; clearly 12,000 for the first time ever;
    • TSLA: CNBC used the word "tank" to describe TSLA's 6% drop during the day; said similar words to describe AAPL's 2% pullback. In both cases, overly harsh. TSLA would have to fall at least 20% to call it "tanking"; remember, its P/E is almost 1,200. With a P/E of only 39 or so for AAPL and a forward P/E of 10, I would be very concerned if AAPL had any "significant, sustained pullback," a gradual meltdown, for example.
The butcher.

Three DUCs Reported As Completed -- September 2, 2020

Active rigs:

Active Rigs1064635633

No new permits.

Three producing wells (DUCs) reported as completed:

  • 35279, SI/A, Whiting, Vance 41-17TFH, Truax, t--; cum 106K 7/20; best month: 21K;
  • 35552, SI/A, Hess, SC-Barney-154-98-1819H-7, Truax, t--; cum 51K 6/20; off line 7/20; best month, 11K;
  • 36691, SI/A, Petro Harvester Operating, FTH1 22-15 161-92 B, Foothills, t--; cum 88 7/20; best month, 16K over 29 days;

Four permits renewed:

  • QEP: four MHA permits in Dunn County;

Of Hundreds Of Food Items At Our Local Costco, Only One Is Reported Out Of Stock: Spam -- September 2, 2020

Of the 1,000's of line items at Costco, our local store reported six items out-of-stock today:

  • deep / chest freezers
  • four items related to cleaning / cleansing
  • Spam


  • More than enough. Order it today, and get it by tomorrow morning, just in time for breakfast

Saudi Aramco Resets -- September 2, 2020

From SeekingAlpha:
  • Saudi Aramco is reviewing expansion plans at home and abroad as it copes with sharply lower oil prices and a heavy dividend burden, WSJ reports. 
  • Aramco will review a $6.6B plan to add petrochemical production at its Motiva refinery in Texas, as well as a big natural gas project with Sempra Energy in the same state, according to the report.
  • Aramco had agreed to buy 20 years worth of liquefied natural gas from the Sempra-led project planned for Port Arthur, Tex., and to take a 25% equity stake in the project's first production phase.
  • The Saudi state-run company also reportedly is pausing investments in refineries in China, India and Pakistan. 
  • In Saudi Arabia, Aramco is delaying plans by a year to boost crude production capacity by ~1M bbl/day to 13M bbl/day
  • The Financial Times reported last month that Aramco planned to cut its capital spending to $20B-$25B this year in order to pay a $75B dividend it pledged to investors during its IPO last year.

Think about that: cutting upwards of $10 billion in capex projects (seed corn) just so they can maintain that $75-billion dividend payout each year. The prince must be going nuts. 

And will their plans to delay an increase in production help support the price of oil? In a word, "no."

Off The Net For Awhile -- Going To LEGO, Costco, And Tom Thumb --- September 2, 2020

No swimming today. Raining since last night; more forecast for today and it's pretty cold out there right now, 72°F. 


  • Costco: $0; nothing; quiet; masks required but many wearing them below the nose;
  • LEGO: $20, two mini-figures; but I spotted a rare, retired item that I will pick up later in the week;
  • Tom Thumb: ice cream, bananas and that was about it; very, very quiet. Practically empty.

Dallas-Ft Worth area: Covid-19 risk lowered from "red" to "orange" as number of cases continues to decrease. 

Xilinx: over at SeekingAlpha. Archived.

Saudi Foreign Exchange Reserve: pending.

WTI Drops Well Below $42/Bbl -- September 2, 2020

From oilprice:

Venezuela: oil production could go to zero. Consider the source. A reader brought this article to my attention; thank you. My reply:

This is a very, very interesting story. Of course, it was a number of factors that drove this, but at the end of the day, China, Saudi Arabia, Canada, Mexico, and the US are all benefiting from this development. I think there is more concern that Venezuela will someday get its act together and actually start producing oil in large volumes again. Truly amazing. 

EIA Weekly Petroleum Report -- Huge Decline Is Crude Oil Inventories -- September 2, 2020

WTI drops $1.12; drops 2.6%; now trading well below $42.

Link here.

  • US crude oil in storage decreased by a whopping 9.4 million bbls;
  • US crude oil in storage now stands at 498.4 million bbls, still 14% above the already-fat five-year average;
  • imports averaged 4.9 million bopd; which was a decrease of 1.0 million bopd from the previous week;
  • imports average about 5.5 million bopd, or 20% less than the same four-week period last year
  • refineries operated at 76.7% of their operable capacity; this was a significant drop;
  • distillate inventories decreased by 1.7 million bbls but are still a whopping 23% above the five-year average for this time of the year
  • propane is back in the news as near the harvesting season: propane inventories increased by 4.4 million bbls and are about 11% above the five-year average
  • jet fuel delivered was down 47.1% compared with the same four-week period last year
  • United Airlines just announced huge layoffs at the time this summary was being produced;

Jet fuel supplied:

Jet Fuel Delivered, Change, Four-Week/Four-Week


Date of Report


Week 0



Week 1



Week 2



Week 3



Week 4



Week 18

July 15, 2020


Week 19

July 22, 2020


Week 20

July 29, 2020


Week 21

August 5, 2020


Week 22

August 12, 2020


Week 23

August 19, 2020


Week 24

August 26, 2020


Week 25

September 2, 2020


US crude oil inventories:

Date of Report=


Million Bbls Storage

Over/under 5-year average

November 21, 2018



November 28, 2018



December 6, 2018



December 12, 2018



December 19, 2018



December 28, 2018



July 15, 2020




July 22, 2020




July 29, 2020




August 5, 2020




August 12, 2020



August 19, 2020



August 26, 2020




September 2, 2020




Distillate fuel inventories:

Distillate Fuel Inventories


Date of Report

Change in Millions

Relative to 5-Yr Avg

Week 1

August 26, 2020



Week 2

September 2, 2020



Crude oil imports:

Crude Oil Imports

Week (week-over-week)

Date of Report

Raw Data, millions of bbls

Change (millions of bbls)

Four-week period comparison

Week 0

March 11, 2029



Week 1

March 18, 2020



Week 2

March 25, 2020



Week 3

April 1, 2020



Week 4

April 8, 2020



Week 5

April 15, 2020



Week 6

April 22, 2020



Week 7

April 29, 2020




Week 8

May 6, 2020



Week 9

May 13, 2020




Week 10

May 20, 2020



Week 11

May 28, 2020




Week 12

June 3, 2020




Week 13

June 10, 2020




Week 14

June 17, 2020




Week 15

June 24, 2020




Week 16

July 1, 2020




Week 17

July 8, 2020




Week 18

July 15, 2020




Week 19

July 22, 2020




Week 20

July 29, 2020




Week 21

August 5, 2020




Week 22

August 12, 2020




Week 23

August 19, 2020




Week 24

August 26, 2020




Week 25

September 2, 2020