The YOLO Of CLR -- May 6, 2021

One could blog 24/7 and still not post everything that needs to be posted. 

This absolutely makes my day but after posting this, I have to quit. Sorry, Suzanne. 

Over at social media someone notes that MRO will cut out its corporate jet fleet. 

The general heading: "they should have done this a year ago."

But then look at this reply:

Agreed (should have cut the corporate jets a year ago), for sure. But ... I gotta some credit, too: MRO making all the right noises now and about to de-level "quickly."

Decent rate-of-change name for a higher deck. Not the quality of DVN obviously or full YOLO of CLR but some nice upside.

Okay, so let's go through that.

The comment was made by an analyst with street cred. It behooves me to pay attention.

"Not the quality of DVN...." Of the thousands of oil companies out there the first one that gets the nod: DVN! I know nothing about DVN, and had never invested in it, never followed it, but all of a sudden I own a lot of shares of DVN. Pure luck. 

The other day Motley Fool asked the question: which are the three best oil companies to own? Their answer: Chevron, Conoco, and Devon.  

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.

Then, "... [not the] full YOLO of CLR ..." Wow, someone else noticed. I call CLR's activities in the oil patch "damn the torpedoes, full speed ahead." Someone also noticed and refers to it as YOLO. LOL. I've thought the very same thing. Who else but Harold "YOLO" Hamm would put together a 56-well unit -- without unitizing it -- and drilling it out over three years with one rig. LOL. What a hoot. 

Okay, I could blog 24/7 and never get caught up, so I'm going to quit here. 

One last thing, clearing out the in-box --- speaking of Devon ... from social media:

Lights off, on the balcony watching the ships come in, and headphones on, ...

Ding, Ding, Ding -- We Have A Winner -- Phone Home -- May 6, 2021

Link here. 

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Coal Is Dead! Long Live Coal

Link here.

Vietnam has pared back its 2030 target for installed coal-fired capacity, although imported coal-fired generation capacity is still expected to triple.

No New Permits; CLR Reports Eight DUCs; No Production Data -- May 6, 2021

Ketty Lester: I don't care what anyone says. YouTube is a national treasure. And it's only gonna get better and better. Ketty Lester at wiki. 

Enbridge: a little confusing. One site says the dividend was increased to 67.78 cents. The company's press release says the dividend was unchanged from the March 1, 2021 dividend of 83.5 cents. My hunch: 67.78 cents (US) whereas the press release of 83.5 cents is Canadian. This represents a dividend of 6.8%. Payable on June 1, 2021, to shareholders of record on May 14, 2021. If the dividend increased, it was perhaps a currency exchange "thing."

EOG: maintained its $1.00 dividend, payable July 30, 2021, for those of record, July 16, 2021; pays 1.3%. Later: see first comment. Reader caught my error. This is a special dividend declared by EOG. This is in addition to declaring its regular dividend, and, that one, I believe, is unchanged from previous quarters.

Futures, link here:

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Back to the Bakken

Active rigs:

$64.91	5/6/2021	05/06/2020	05/06/2019	05/06/2018	05/06/2017
Active Rigs	17	22	62	62	49

No new permits.

Nine producing wells (DUCs) reported as completed (again something noteworthy about the following):

• 36766, drl/A, CLR, LCU Jessie 11-24H1, Long Creek, first production, --; t--; cum--;
• 36764, drl/A, CLR, LCU Jessie 9-24H1, Long Creek, first production, --; t--; cum--;
• 36763, drl/A, CLR, LCU Jessie 8-24H1, Long Creek, first production, --; t--; cum--;
• 36762, drl/A, CLR, LCU Jessie 7-24H, Long Creek, first production, --; t--; cum--;
• 36761, drl/A, CLR, LCU Jessie 6-24H1, Long Creek, first production, --; t--; cum--;
• 36760, drl/A, CLR, LCU Jessie 5-24H, Long Creek, first production, --; t--; cum--;
• 36944, drl/A, CLR, LCU Jessie 4-24H1, Long Creek, first production, --; t--; cum--;
• 37057, drl/A, CLR, Angus Federal 10-9H, Elm Tree, first production, --; t--; cum--;
• 37058, drl/A, CLR, Angus Federal 9-9H, Elm Tree, first production, --; t--; cum--;

"Vaccine Hesitancy" -- May 6, 2021

Only "Thursday" data is presented. CDC data here.

Sixth column: number of vaccinations given in past 24 hours.

Compare today's data, Thursday, May 6, 2021, with every preceding Thursday going back to March 4, 2021.

Note, it was Tuesday, April 13, 2021, when the JNJ vaccine was pulled from the market with concerns about its safety. Four days later it was determined to be safe but another six days before it was returned to the marketplace. 

After the April 13, 2021, announcement, note how fast the rate of vaccinations dropped.

		Doses of vaccine distributed to health facilities	Change from day before	Vaccinations given	Change from day before	Percent of distributed vaccine that is actually administered
Thursday	May 6, 2021	324,610,185	3,060,850	251,973,752	2,406,932	77.62%
Thursday	April 29, 2021	305,478,495	3,620,610	237,360,493	2,721,079	77.70%
Thursday	April 22, 2021	282,183,915	4,245,040	218,947,643	2,995,734	77.59%
Thursday	April 15, 2021	255,400,665	4,402,400	198,317,040	3,525,204	77.65%
Thursday	April 8, 2021	229,398,685	4,104,250	174,879,716	3,403,061	76.23%
Thursday	April 1, 2021	200,496,635	4,914,910	153,631,404	3,358,112	76.63%
Thursday	March 25, 2021	173,525,335	4,302,210	133,305,295	2,831,442	76.82%
Thursday	March 18, 2021	151,108,445	3,517,830	115,730,008	2,692,381	76.59%
Thursday	March 11, 2021	131,131,470	3,262,315	98,203,893	2,482,603	74.89%
Thursday	March 4, 2021	109,905,530	2,876,640	82,572,848	2,032,374	75.13%
Thursday	February 25, 2021	91,673,010	3,003,975	68,274,117	1,809,170	74.48%

Notes From All Over -- The Late Market Edition -- May 6, 2021

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. 

Dow: hit new all-time intra-day highs and will most likely close at an all-time high, again, two days in a row. [At the close, it was close but all four major indices were positive at the end of trading today. The NASDAQ and Russell 2,000 finally went green in the last few minutes.]

But look at this: BRK-B up almost $6/share -- trading like a tech stock. LOL. Up over 2% and trading at $288.50. BRK-B hit an intra-day high of $290.00; and closed at an all-time closing high of $289.71.

Pipelines:

• KMI: up slightly;
• ENB: down slightly;
• EPD: down slightly;
• ET: up 1.4%

Majors:

• CVX: flat; slightly negative, if anything:
• COP: flat; slightly negative,
• XOM: exception; up 0.65%

Others:

• MNRL: flat, slightly negative;
• RECAF: up almost 3% after a pretty amazing run already;
  

Miscellaneous:

• UNP: up 1.36%; up $3.11/share; trading at $226.74

TSLA:

• melting down over the past few days. Regulatory credits becoming less valuable? Tracking bitcoin?

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. 

ROKU:

• has had a huge "overshoot" -- CNBC
• dropping significantly over past two days
• CNBC "talking head" in ATT rather than Roku -- interesting

Market at the close:

• Dow: now over 300 points at the close;
• NASDAQ: turns positive / black at the very end of the trading day after being red all day
• S&P 500: up 31 points -- the 10:1 ratio holds;

Social Media On Oasis -- May 6, 2021

Link here.

Others agree that Oasis way overpaid last year.

From the link above:

OAS is paying about $200 million less to add about 5x the acres, in a known basis, and 7.7x the boepd when compared to their 2017 entrance into the Permian Basin via Forge.

I said the exact thing, qualitatively, not quantitatively, when I talked about Oasis entering the Permian a few years ago ... and then declared bankruptcy. What a great business model.

Now, this new purchase, all with debt (?). 

What a great country. 

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CNBC

Now that my wife has Hulu I'm getting a kick out of watching CNBC again.

By an metric, higher earners are going to be subject to a whole more in taxes (whether they pay or not is another question). Had Trump done this, this would have been a never-ending story on CBNC how Trump is killing the American entrepreneurial spirit. 

With Biden, it's all good. 

Me? What me, worry? The market is on a tear and all indications: it's only going to get better, led by energy.

What I like best about Hulu? So incredibly easy to use. Spectrum was incredibly "bad." 

Basic cable / wi-fi service is still somewhat limited in choice, but once you have cable / wi-fi, the "world is yours," as they say. My hunch Hulu and YouTube are going to be the winners in the medium term (three to five years out). Long term, greater than five years, impossible to say. So much will change over the next three years. 

Later, about an hour after posting the above: CNBC announces that ROKU is having a bad day; dropping almost 7% over worries that it won't be able to attract more subscribers.

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Inflation

Lots of talk about inflation the past few weeks. 

I think one needs to look at the "entire" picture, not just looking at individual examples.

Exhibit A: mailing costs.

• First class mail: has gotten very expensive to mail a one-ounce letter. But I seldom mail a one-ounce letter any more. Anything to be sent weighing one ounce or less can generally be sent by e-mail. 

• Packages: 99%+ of all things I order over the net? Free mailing. Exceptions: specialty items like frozen steaks. But one can wait for "deals" in which shipping fees are waived. And when I buy gifts for folks living out of town, I ship them directly with free shipping.

Exhibit B: Starbucks coffee.

• At the restaurant: upwards of $4.00.

• At home in a Keurig: about 50 cents a cup and one can generally get a second cup from a Keurig cup, effectively cutting the cost to twenty-five cents/cup.

Exhibit C: Dinner at fancy restaurant for two.

• At the restaurant: $100 and up for middle-income couple.

• Answer: hey, learn to grill on a Weber. Maybe $30 total and a whole lot more fun.

Exhibit D: homeowners.

• Property taxes are increasing, but ...

• Interest rates are dropping ... hey, re-finance and the world is your oyster, a phrase coined by who else, but Shakespeare.

Exhibit E: renters.

• Downsize if necessary. Do you really need a three-bedroom apartment if your children have moved out?

Exhibit F: computers.

• Prices on computers have plunged over the years when capability vs dollars is analyzed. 

Exhibit G: automobiles.

• If you are not getting ten years out of your automobile, you are not doing it right.

Exhibit H: roses.

• I remember living in California forty-five years ago and stopping at the corner florist to buy roses for the love of my life. I forget the price but I assume around $10. That was forty-five years ago. Yesterday Sophia bought a dozen incredibly beautiful "Freedom" roses for her mother. Price: $9.99. 

Exhibit I: paper.

• When I was in elementary school, it was amazing how much paper I used, and how much paper all of the students used. Today, the students use dry erase boards. Who wudda thought. After initial outlay for a couple of bucks, no more money spent on paper. Period. Dot. 
  

Exhibit J: gasoline.

• Compare with mileage and requirements to drive. My only driving these days? Chauffeuring the granddaughters, and any other stops I need (grocery, post office, etc), I combine with thee chauffeuring trips. I stop at the service station maybe once every two weeks. A "fill-up" used to cost about $18. Now about $22. And I bet I could reduce that if I wanted.
  

Notes From All Over -- May 6, 2021

California recall: yesterday I mentioned in passing that the tea leaves suggested there would be no recall election in California. But if there it is, it will fail. Note:

• Covid-19: California has the lowest Covid-19 positivity rates in the nation
• driven in part by high vaccination rates
• state budget: windfall could top $30 billion by next summer
• re-opening: governor says he will re-open the economy by mid-June

California recall: likely opponents -- lack star power.

Surprise: no one saw any of this six months ago -- this could turn out to be quite embarrassing for the GOP. But a lot can happen between now and when/if the recall goes forward.

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2021: The Year Of Rail

UNP: announces plans to open a new intermodal terminal in the heart of southern California's import distribution region; press release here;

• fastest-growing region of industrial warehousing
• located near the ports of Los Angeles and Long Beach
• will open in 2Q21 -- within the next two months:
• will provide expanded access to Chicago
• the project will start with a "pop-up" terminal at it West Colton rail yard
• initial service between southern California and Chicago
• with plans to expand service to Dallas and southeast markets
• UNP: says it has the largest intermodal network in North America with the most direct services from coast to coast
• operates in 23 western states

From May 3, 2021, just a few days ago:

• press release: builds state-of-the-art transload terminal in Chicago; "rail is real, the year for rail";

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Natural Gas Fill Rate

FWIW:

Marcellus News: EQT Buys Alta's Northeast Pennsylvania Assets -- $10K/Acre? May 6, 2021

Updates

Later, 2:07 p.m. CT: from a reader who really follows this --

I have been poring over Alta's production history to try to better grasp what EQT has in mind.

This single 'factoid'  from the press release speaks volumes ... a claimed reduction in the 'break even' cost by 10 cents per mmbtu. 

This is just one important consequence of the ongoing consolidation/mergers in the Appalachian Basin. 

The cost to produce and transport natgas continues to plummet. 

One ripple effect is to hinder future  developments worldwide such as those in Trinidad, Mozambique, Tanzania and many, many more now-indigenous sources.

Look for news involving Exxon's/XTO's divestiture from the Appalachian Basin in the months (weeks?) to come.

Exciting times in the hydrocarbon production world.

Original Note

Social media link here. 

Press release here. 

Bloomberg here.

Some numbers rounded.

Deal:

• $3 billion
• 300,000 core net Marcellus acres;
• 98% held by production
• current net production: 1.0 Bcfe per day; 100% dry gas
• 300-miles of owned and operated midstream gathering systems
• 100-mile freshwater system with 255 million gallons of storage capacity
• projected to increase free cash flow by 55% or $2.0 billion, through 2026 -- just five years from now;
• projected annual free cash flow: $400 million
• projected annual adjusted EBITDA of $600 million

Hess Reports Another Nice Manitou Well; Active Rig Count At Seventeen -- May 6, 2021

Dow: opens at record high. First record since April 16, 2021.

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. 

***********************************
Back to the Bakken

Active rigs: 

$65.36	5/6/2021	05/06/2020	05/06/2019	05/06/2018	05/06/2017
Active Rigs	17	22	62	62	49

Two wells coming off confidential list -- Thursday, May 6, 2021: 11 for the month, 35 for the quarter, 116 for the year:

• 37831, drl/NC, WPX, Dakota 1-36HW, Mandaree, no production data,
• 36602, F/A, Hess, EN-Anderson-LE-156-94-1820H-9, Manitou, first production, 11/20; t--; cum 77K 3/21;

RBN Energy: a review of hydrogen production pathways. 

It’s been two weeks since our last blog on hydrogen, so we’re back again with the latest installment of what has become something of a “Hydrogen 101” course. As with any college course, the time comes to review some material, in preparation for what will be our “final” on the subject, a one-day virtual conference in late June.

No, today’s blog won’t be a repeat of what we discussed before, but we thought it would be helpful to look over the various hydrogen production pathways we have discussed so far this year, this time focusing on the drivers, advantages and disadvantages, and how they relate to each other. Finally, we will also review the general carbon intensity of each approach to producing H₂, a method that we think will eventually replace the somewhat flawed hydrogen “color” scheme. In today’s blog, we draw upon our recent coverage of hydrogen production technologies and put them in perspective.