Notes From All Over -- May 17, 2021

Again, I have to apologize. I haven't been able to post everything I wanted to post because of family commitments: high school and college graduations; out-of-town visitors; etc. 

In fact, so much is happening so fast, I don't know if I will ever get caught up with the news, much less the commentary.

I have received a lot of e-mail today and have yet to answer most of it. I apologize. Just too much "stuff" to do. 

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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The Phrase That Will Define 2021 - 2022: Free Cash Flow

Investors: the tea leaves suggest the oil companies are going to have some blow-out quarters for the next year or so. 

I don't have time to find / post all the headlines / stories, but this looks quite interesting.

Remember, "everyone" agrees that "all" US shale companies have a breakeven at "no more" than $50 / bbl, WTI. Anything above $50-WTI is free cash flow. And unlike most sectors, the E&P companies tend to increase dividends in direct proportion to their EPS. 

WTI trading at $66.56.  

Let's see: $66.56 - $50 = $16.56 / bbl.

Exhibit A: EOG has already declared a $1.00 / share special dividend. 

Exhibit B: fifty percent more active rigs in the Bakken today than one year ago. 

There are now eighteen operators with at least one active rig in the Bakken. 

Headline over at oilprice.com tonight: natural gas prices jump on warmer weather. 

ArgusMedia: Asian premium beckons as US LNG outgrows Panama.

Higher premiums for spot LNG delivered to Asia could become more common, with growing US liquefaction having already far outstripped the capacity of the Panama Canal.

The canal is the quickest and lowest-cost route to northeast Asia for exports from the world’s largest spot supplier.

With growing Asian demand on course to exceed available supply within the region, buyers are likely to become increasingly reliant on long-range deliveries. And the need to deliver along longer routes means Asian buyers are poised to pay higher premiums for the marginal Atlantic cargo to cover additional freight costs.

The US is already capable of loading around 90 cargoes a month, following the commissioning of a third 5mn t/yr liquefaction train at Corpus Christi. This could rise to just over 100 cargoes a month by this time next year, when another 10mn t/yr of export capacity should have been added.

But there is a limit on how many of these cargoes can take the most direct route to northeast Asia, because the Panama Canal offers only two bookable slots — one in each direction, or two northbound that are typically for empty carriers returning to the US.

This leaves the equivalent of a maximum of one bookable southbound slot for every three cargoes likely to be loaded in the US in any given month.

And the booking window for these slots favours northeast Asian buyers that intend to use their US LNG offtake as base-load gas supply, because the window opens 80 days ahead of the intended transit date — a touch too early for firms looking to sell US cargoes on the spot market.

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Miscellaneous

ATT: wow, what a disaster. 

ZeroHedge: suspended (again) from twitter. 

Could US shale learn from US lumber?