Saturday, March 27, 2021

Devon: Announces Industry-First Variable Cash Dividend -- March 27, 2021

Incredible! All that SPAC talk but this really caught my attention -- Devon Energy announces industry-first variable cash dividend for common stockholders. Yeah, so there it is. I'm just a "common" stockholder. LOL. Common. Link here. Pretty cool.

  • Board declares $0.19 per share variable cash dividend based on fourth-quarter results

  • Variable dividend is in addition to previously declared fixed quarterly dividend of $0.11 per share

  • Both fixed and variable dividends are payable on Mar. 31, 2021

    The company’s “fixed plus variable” dividend framework was implemented following closing of the merger with WPX Energy on Jan. 7, 2021. This cash-return strategy is designed to pay a sustainable fixed dividend and evaluate a variable dividend on a quarterly basis. After the fixed dividend is funded, up to 50 percent of the remaining excess free cash flow in each quarter may be distributed to shareholders through a variable dividend.

Hoping to see other oil companies do the same. 

Notes From All Over -- March 27, 2021

Top stories for the week have been posted: link here. My heart wasn't in it, as they say, but at least it's done. I can always go back and "clean” it up.

Apple: on its way to becoming a bigger play in India -- Motley Fool.

Buffett and renewable energy: why doesn't Buffett own any renewable energy stocks? Motley Fool.

Shell: shift to green energy speeds up Shell's big natural-gas bet is at risk, The WSJ

Latest: still stuck. So much for getting it unstuck by Saturday night. Inshallah!

Chip shortage: Stellantis will halt production at five North American plans next week because of the global microchip shortage. Link here. Stellantis: Fiat Chrysler and French company Groupe PSA. Think Peugeot, Ram Trucks, and Fiat. What a motley crew. I just can't picture Jeep and Peugeot being run by the same company. But then that's just me.

U.S. Thirst for Russian Oil Hits Record High Despite Tough Talk -- Bloomberg -- March 27, 2021

Link here. Archived.

The oil tankers docking at the refinery in Baytown, Texas, look exactly like many others plying the waters of the Houston Ship Channel. But stashed inside their capacious holds is an unusual cargo: Russian petroleum. The sprawling complex, which belongs to Exxon Mobil Corp., isn’t the only U.S. refinery that’s been receiving shipments of Russian oil. Chevron Corp.’s plant in Mobile, Ala., and Valero Energy Corp.’s facility in St. Charles, La., are also customers.

Deprived of access to Venezuelan crude by U.S. sanctions on the regime of Nicol├ís Maduro, and facing reduced shipments from OPEC nations since the cartel cut output, U.S. refiners turned to Russian oil in 2020 to fill the gap. The buying spree, combined with sharply lower Saudi shipments, catapulted Russia into the position of third-largest oil supplier to the U.S. last year. The feat for the Kremlin has been the talk of the oil market, but surprisingly it hasn’t been discussed much in diplomatic circles. “Russia’s move into third place has not attracted any attention in Washington,” says Bob McNally, a former senior White House policy adviser who now runs Rapidan Energy Group, a consulting firm in Washington.

America’s increasing reliance on Russian oil is at odds with U.S. energy diplomacy. For the last two years, lawmakers in Washington have been lobbying European countries to abandon Nord Stream 2, a multibillion-dollar pipeline to transport Siberian gas to Germany, fearing it will give the Kremlin further leverage over U.S. allies. (Russian gas accounted for about 45% of Europe’s natural gas imports in 2019.) Congress went as far last year as to authorize the use of sanctions against companies involved in the project. The Biden administration hasn’t indicated whether it’s considering exercising that option.

More important, perhaps, the quiet surge in Russian oil imports shows that the mantra of energy independence championed by former U.S. President Trump is hollow, says Mark Finley, a former oil analyst at the CIA who’s now a fellow at Rice University’s Baker Institute in Houston. Campaigning last year in Texas, Trump boasted that the U.S. was the “No. 1 energy superpower” and the country would never again have to depend on “hostile” foreign suppliers. “So much for energy dominance,” Finley says.

In February of last year, the Trump administration blacklisted a trading subsidiary of state-run Rosneft, the largest Russian oil company, saying it provided a financial lifeline to Maduro’s government. But no other Russian entities were targeted, meaning U.S. companies could carry on buying Russian crude and refined products.

The path for Russia to become a key oil supplier to the U.S. was paved with market savvy, luck, and the Kremlin’s proven ability to turn Washington’s policies to its favor. After years of accounting for less than 0.5% of annual U.S. imports of oil and refined products, Russia steadily increased its share over the last decade, reaching an all-time high of 7% last year, according to Bloomberg News calculations. U.S. imports from Russia averaged 538,000 barrels a day in 2020—more than the 522,000-barrel-a-day average from Saudi Arabia.
More at the linked article.

Idle Rambling -- Mid-Day Edition -- Saturday -- March 27, 2021

Crude oil exports / imports: the metric is fairly moot for most of us. At least it is for me.

  • global oil is no long controlled by a cartel;
  • the cartel still has a huge influence on the price, but it's no longer the only game in town
  • with the US shale revolution, oil became a true commodity;
    • interestingly enough, compared to most products traded internationally, I'm not sure to what extent tariffs play with regard to oil;
  • if push came to shove, as they say, the US could manage on its own
  • that cannot be said for Europe, Africa, Asia or Antarctica; not sure about South America
  • refined products becoming a more important issue than imports/exports 
  • very similar to raw cotton / cotton products during the British Empire

US crude oil imports:

  • to Texas, Louisiana, Gulf coast: Canada, Mexico
  • to one refinery on Gulf coast: Saudi Arabia
  • to New England and northeast: Russia
  • to cokers along US Gulf: Russia Mazut 100
  • to California: Alaska, and Mideast oil

Link here. And, here.

Suez Canal
11: 49 a.m. Central Time, Saturday, March 27, 2021

Cairo: local time -- 6:49 p.m. Saturday evening, March 27, 2021; Egyptian authorities said earlier in the week the ship would be freed by Saturday night, March 27, 2021. Inshallah.

  • no sign, as of one hour ago, that the ship had been freed up
  • rudder is free and moving; apparently not damaged
  • bow and stern resting on sand;
  • middle of the hull is sagging; divers seen no breach in the hull or any other damage;
  • the canal is a V-shaped canal;
  • sand pouring into the base of the "V" could disrupt normal traffic, or change the best route through
  • the canal -- all that sand that is being "hoovered" up has to go somewhere, and I assume it's being dumped into the middle of the canal;

Whiting's Wold And Wold Federal Wells In Banks Oil Field -- Update -- March 27, 2021

Whiting's Wold and Wold Federal wells are tracked here. After all these years, these are still some great wells. Recently, a couple of the wells were off line and have come back on line. A couple remain off line. Most likely Whiting is simply managing their assets or some "minor" work. The production data at the linked site has been updated.

Notes From All Over -- Early Saturday Morning Edition -- March 27, 2021

Humor: Power Line in pictures vs the Suez chip memes.

A reader replied: How one boat with one job in body of water can bugger up the entire shipping industry, boggles the mind. The memes are great though. 

In Other News

The markets, Friday: wow, go back through the individual holdings, and yesterday, Friday, March 26, 2021, was an incredible day. And then there was ViacomCBS (VIAC) and Discovery.

Poorest timing ever? Contributor recommends buying UNP on pullbacks one day before UNP hits all-time high, surging over 3 percent, up almost $7.00 / share. 

MDU: dividend aristocrat.

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.

Jobless claims: reported a day earlier, March 25, 2021, US jobless claims reached the lowest level of the pandemic; claims fell to 684,000 last week, adding to evidence the economy is ramping up. Link here.

Beverly Cleary, Klickitat Street, Portland, OR, dead at age 104. Covid-19  apparently not the cause of death. 

Insurers: the Suez ship. This article said almost exactly nothing. Over at Bloomberg

Speaking of which: it is now being reported that a crane will be brought in to start off loading some of those containers. 

Tesla: "breach of contract" talk

Misery index: link here. I suspect less than 1 percent of the US population follows the misery index, but 99 percent of Americans know the price of gasoline.