Saturday, October 17, 2020

North Dakota Oil Production Increases By A Whopping 12% Month-Over-Month; Bismarck Tribune Says "Production Rises Slightly" -- October 17, 2020

As soon as the Director's Cut came out I immediately calculated the change month-over-month. I do that every month. I was absolutely amazed that not only did production increase month-over-month, but it increased by 12%. Did anyone see that coming? Looking at the daily reports and looking at production of wells of interest, I was pretty confident that oil production in the Bakken would increase month-over-month, but not confident enough to make that prediction. Interesting, I am not aware of anyone predicting an increase in production month-over-month in the Bakken.4

But a 12 percent increase month-over-month despite the headwinds. I was blown away. I checked the numbers several times, and it always came out the same. So I posted the note with the usual disclaimer that I often make simple arithmetic errors.

Later that day or the next day, this headline and story in the Bismarck Tribune:

Rises "slightly"? Say what? I went back and checked the numbers. I was still showing 12%. Note that the Bismarck Tribune doesn't show the percent change month-over-month (which, by the way, speaks volumes, but that's another story for another time). I was so concerned that my numbers were off I almost "pulled" my "12%" figure from the blog.

But then, later that evening, Reuters said the month-over-month increase was 12%. Whew. 

Since April, 2010, there have been thirteen occasions in which ND oil production increased by 5.29% or more, month-over-month.

Since April, 2010, there have been five occasions in which ND oil production increased by 7.00% or more, month-over-month. 

Since April, 2010, more than ten years ago, there have been only three occasions in which ND oil production increased by 10.00% or more, month-after-month:

  • production increased by 10.39% in July, 2011, month-after month;
  • production increased by 11.74% month-over-month, in the most recent report, for August, 2020, data; and, finally, only for a third time did production increase more than 10% month-over-month, and that was "last" month, 
  • data for July, 2020, when an all-time record was set (at least since April, 2010) when production increased by a whopping 16.6% month-over-month.

For the complete spreadsheet, see this post

The usual disclaimer applies.

Maybe the Bismarck Tribune will provide a bit of analysis of the Bakken in tomorrow's paper. 

Oh, that's right. The Tribune no longer publishes a Sunday edition.

Top Stories For The Week Posted -- October 17, 2020

ICYMI: top stories for the week have been posted.

From PowerLine this week, the week in pictures. This one is most disturbing. The premier children's hospital west of the Mississippi, Children's Hospital of Los Angeles. 

Chinese Flu: North Dakota Update -- October 17, 2020

Link to the Covid-19 worldometer data base.

Set the filter to "yesterday."

Click on the ninth column, deaths/million population, and make sure you have "most" to "least."

Then scroll down until you find North Dakota and South Dakota.

At the moment, ranked by deaths per capita:

  • North Dakota is ranked #23 (above [worse than] California, Minnesota, Washington state, and 24 other states and DC
  • South Dakota is ranked #34

I don't know what that means. Good, bad, indifferent, it is what it is.

But when I first started looking at these numbers back in August, for deaths per capita, the rankings:

  • North Dakota was ranked #41; and,
  • South Dakota was ranked #40.

So, in the space of less than two months, the Dakotas have moved up the list (bad) from around 40 (only ten states worse than the Dakotas) to around 23 for North Dakota, or worse than 28 other states and DC.

And then look at this, from August 26, 2020:

Total deaths in:

  • Fargo: 76
  • Bismarck: 13
  • Mandan: 5
  • core Bakken (four counties): 5

Now, look at the same graphic from October 12, 2020, just a couple of days ago:

  • Fargo: 78 deaths
  • Bismarck: 63 deaths
  • Mandan: 43 deaths
  • core Bakken (four counties): 21

Assuming the data is "somewhat" accurate and that there are no typos, I have just one question: what is going on in Bismarck/Mandan?

In the past two months, Fargo's total number of deaths has gone from 76 to 78.

In that same time period, Bismarck-Mandan has gone from 18 to 106.

And interestingly, The Bismarck Tribune, which tweets almost everything under the sun, has never tweeted this data point. At least I've never seen it over at twitter. 

I see Dickinson went from six to twenty-five in that same time frame. Watford City, the heart of the Bakken, went from two to three. I assume most of the seriously ill in Watford City and Dickinson are being flown to Bismarck. I assume the seriously ill in the eastern third / eastern half of the state are being flown to Fargo or Grand Forks. Minot went from one to twenty, suggesting a lot of seriously ill are being flown to Minot.

I won't even get started on the color-coded legend. 

Maybe I'm misreading something and if I am I will have egg on my face, as they say, but the charts seem to be pretty straightforward.

The Blank Pad -- October 17, 2020

I'm never disappointed in PowerLine's Saturday edition of "the week in pictures," but for some reason this particular edition is particularly good.

I did not see the ACB hearings, so I didn't get the joke with regard to the first dozen or so cartoons, but I can guess. But I was hoping to see it.

YouTube did not let me down. LOL. Here it is. 

By the way, that's the first time I've heard her voice.

Can you imagine what viewers thought when her inquisitors were rummaging through two-inch binders looking for the point they were trying to make and knowing what ACB brought to the hearing. 

On another note, until I saw the cartoon at PowerLine, I did not realize that Trump has yet another Nobel Peace Prize nomination, his fourth. That's true. Google it.

Apple: iPhone 12 -- "Supersize It" -- October 17, 2020

Barron's has a headline, front-page story suggesting that Apple's phone is going to be "super." A huge surprise. A runaway best seller. In fact, two stories. But the stories are behind a paywall. There is a new word or a new phrase or a new "thing" -- at least a term I had not seen before -- we will explore that later -- introduced by Barron's in the headline.

So, instead of trying to go-around Barron's paywall, I simply googled the key word in that headline and got the story over at Motley Fool

The Motley Fool article is a worthwhile read. Look at the price points if one wants 5G:

  • Samsung's 5G-enabled Galaxy S20: starting price of $999 earlier this year;
  • top-of-the-line Samsung S20 Ultra started at $1,399
  • Apple iPhone Mini
    • priced identically to OnePlus 8, the least expensive 5G Android phone that consumers could have bought six months ago
    • price point for the Mini: $699
  • "consumers looking to make the jump to 5G won't have to pay through their nose if they are looking to either stay wihint the Apple ecosystem or purchase their first IOS-powered 5G phone."
  • what's more, the better Apple iPhone 12's are much less expensive than Samsung's
    • the standard iPhone 12: $799
    • Pro: starts at $899
    • Pro Max: starts at $1,099
    • compare all with the entry-level Samsung: $999

Motley Fool also explains the "supercycle" in the Barron's headline behind a paywall:

Now that Apple has something for everyone with a variety of price points, it looks poised to take advantage of what's being called an iPhone "supercycle" that could see millions of users upgrade their existing devices. It is believed that there are 350 million to 950 million iPhones across the world that are ready for upgrades.

Apple iPhone 12: supercycle.

McDonald's fries: supersize it.

Same analogy.

Even though folks definitely don't need the extra calories, for a few cents more folks will gladly supersize the McDonald's French fries.

Likewise, even if one doesn't need 5G (which I assume is about 95% of the current US population), folks will gladly trade in their old phone, sign up for a few add-ons, and gladly supersize ("supercycle") their old phone for a few dollars more. 

The old frog-on-a-log-in-an-ever-hotter-pot-of-water-on-the-stove phenomenon.

Hiden' Biden, Dr Faust, And Kash 'n Karry Will Only Make Things Worse For Working Women -- October 17, 2020

Women voting for Hiden' Biden need to pay attention to this. They won't. Whatever.

Yesterday, this tease from McKinsey & Company: a jaw-dropping number reflects a new reality for women in the workplace.

I almost missed it; I was going to delete it from my in-box -- I had way too much stuff to read, way too much stuff to post, and I didn't want to be bothered with "jaw-dropping numbers" from McKinsey. But I'm glad I looked. There was a story there. Or as Tina would say, "there's a there there."

McKinsey provided the data point but didn't provide the 30-second soundbite that would have explained it for folks who didn't have time to read the study.

First, the McKinsey "jaw-dropping number":

The sixth annual Women in the Workplace report has dropped, and its most notable conclusion is stunning: more than one in four women are contemplating downshifting their careers or leaving the workforce completely.

That would have been unthinkable just six months ago.

To be fair, McKinsey linked the data point to the study and the answer was provided. I had already guessed the answer and I assume(d) any reader not living under the Geico Rock would also have guessed the answer. But instead of just providing the answer in a 30-second elevator speech, we needed to link to a long McKinsey study.

Anyway, that's that.

On the other hand, The WSJ provided the answer in a headline

I saw the McKinsey report in my in-box yesterday afternoon but did not have time to read it. Then, earlier this morning, I saw The WSJ headline. I had already guessed the answer but The WSJ article confirmed it.

Sophia's mother would have had to quit her job to take care of Sophia had it not been for Sophia's sisters and me. Sophia's daycare this past summer was closed -- for the entire summer, and when school "opened," it was only through remote learning ("the iPad"). But because she has older sisters who are also staying at home and because Sophia and I are joined at the hip, as they say, not only has her mother been able to keep working but has actually extender hours. 

More on that later.

Chinese Flu: Now It's Ireland In Deep Trouble -- Must Be All Those Pubs -- October 17, 2020

Link here.

First it was France, then the UK -- all last week -- now it's Ireland, overnight, with regard to Chinese flu, in a heap of trouble.

Looks like Ireland will be the first EU country to go back into lockdown once again this weekend.

What is "Crudehad" over at Twitter looking at?

Link here.

This is a more fascinating story than most folks realize. It's very difficult to articulate but I will do my best later when I post the graphics.

Wall Street Likes Idea Of Conoco-Concho Tie-Up -- SeekingAlpha -- October 16, 2020


Although he lists it number five (of seven), Stephen Covey's most important habit for highly effective people is, "seek first to understand, then to be understood." 

Hold that thought.

When I read the "headline" for the SeekingAlpha story linked below and then saw the first bullet, I thought I must be missing something, or the headline was wrong. The first summary bullet: 

  • shares of COP shed 4.5% after the announcement that COP might acquire Concho Resources.

That certainly did not look like Wall Street liked the idea of a Conoco-Concho tie-up.

But then, remembering Covey's fifth habit, I read the summary again (and again) and then realized where I was wrong.

Long-term investors know that in deals such as these, 99% of the time, the share price of the acquirer, the buyer, will go down. But the buyer is not "Wall Street."

In this case, Wall Street "is" / "are" the analysts:

  • J.P. Morgan analyst Phil Gresh says Concho has strong confidence that it has assembled the highest quality inventory in the Permian Basin, and shareholders are looking for a 20%-plus deal premium
  • Tudor Pickering Holt says its checks show support across the board, and believes a deal would be accretive to Conoco on free cash flow metrics even if it pays a premium, given Concho's discounted trading.

It's hard to find a company with more credibility than JP Morgan and JP Morgan analyst likes the idea, as does Tudor Pickering Holt. 

More could be said, but that's enough for now.

Original Post

Wall Street likes idea of Conoco-Concho tie-up. Link to SeekingAlpha:

  • Shares of Conoco Phillips shed 4.5% in the past three days while Concho Resources jumped 8.7% after Bloomberg reported Conoco is near a deal to buy Concho, in what could be the largest shale industry deal since the collapse in energy demand earlier this year. 
  • The companies are finalizing the terms of a transaction and could announce an agreement as soon as Monday, Bloomberg now says. 
  • According to Street Advisor, Wall Street analysts note the acquisition would make strategic sense for Conoco given the increased exposure in the Permian for an asset that likely would be accretive. 
  • From Concho's perspective, analysts say the company's solid inventory status and healthy free cash flow generations mean the company does not need to capitulate at lows, and shareholders would expect a healthy premium to Oct. 13's ~$44 price. 
  • J.P. Morgan analyst Phil Gresh says Concho has strong confidence that it has assembled the highest quality inventory in the Permian Basin, and shareholders are looking for a 20%-plus deal premium. 
  • Tudor Pickering Holt says its checks show support across the board, and believes a deal would be accretive to Conoco on free cash flow metrics even if it pays a premium, given Concho's discounted trading. 

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.  

Other articles on this story:

  • Conoco closing in on Concho in year's biggest oil deal -- Bloomberg; link here;

a tie-up of the explorers will create a heavyweight driller in America’s most prolific oilfield -- the Permian Basin of West Texas and New Mexico -- rivaling only the likes of Occidental Petroleum Corp. and Chevron Corp. in terms of crude output.

  • what rival Concho could mean for ConocoPhilips -- Houston Chronicle, link here;

Concho makes an attractive acquisition target because it has a relatively low amount of debt and desirable assets in the Permian Basin where scale is needed to compete. 

Concho has drilling rights on about 800,000 acres in the Permian, which stretches from eastern New Mexico to West Texas. 

Conoco has a relatively smaller position in the Permian Basin than some of its peer.s That’s kind of been an obvious hole. Having scale in the Permian would be a key driver.