Monday, August 2, 2021

Headlines -- August 2, 2021

No links.

Xilinx: new high (not confirmed).

Nvidia: announces a 4-1 split. 

Poll: defying the odds, President Biden's job approval bounces. (Dead cat bounce?)

Top S&P 500 stocks for August: each has gained in August for the past five years:

  • Nvidia
  • Synopsys
  • Twitter
  • Mastercard
  • Visa
  • Intuit
  • Cintas
  • Microsoft

Micron: initiates a dividend for the first time; shifts to "opportunistic" share buybacks.

McDonald's: masks mandatory for staff and customers.

Music streaming: best music streaming service for 2021.

  • contenders:
    • Spotify
    • Apple Music
    • YouTube Music
    • Amazon Music
    • Tidal
    • Deezer
    • Qobuz
    • Pandora Premium
  • top three:
    • best overall: Spotify
    • best for iPhone users: Apple Music
    • best for audiophiles: Tidal

Apple Watch: Shazam.

Air Mail. 

Images From All Over -- The "This Is Not Sturgis" Edition -- August 2, 2021

 



The Gap Is Not Trivial -- August 2, 2021

Do you remember the trope that "daughter wells" in the Bakken are never as good as the "parent well"?

The following graphic is from CLR's August, 2021, presentation (CLR August, 2021, presentation: pdf link here.):

Note the 2021 wells. 

Everyone of those wells is a daughter well. The parent wells, in most cases, were drilled back before 2016.

And, oh, by the way, this is happening across the Bakken, not just in the "sweet spots."

Trivia: it appears that "150 = 150." 

Average cumulative MBoe (150) at 150 days. It's almost linear until 250 (either the x axis or the y axis) at which time the slope tends to decrease ever so slightly. But it looks like one can anticipate 300K boe in the first year.

At the wellhead:

  • 300K bbls x $25/bbl = $7.5 million.

Folks who have followed the Bakken for a long time, know the significance of that "$7.5 million" figure.

Notes From All Over -- The Louisiana Edition -- August 2, 2021

Dividend announcements:

  • FANG: raises dividend to 45 cents.
  • CMCSA: unchanged. 
  • Baker Hughes: unchanged.
  • CLR: increases dividend from 11 cents to 15 cents.
  • Norfolk Southern: increases dividend to $1.09.
  • Suncor: unchanged.

Two CLR wells with huge jumps in production:

CLR August, 2021, presentation: pdf link here.

  • most interesting slide? Number 8 of 24.
NKLA:
  • NKLA produced zero vehicles and sold nothing during the quarter. What exactly are they “reporting” tomorrow?

Covid-19:

  • Baton Rouge, LA: largest hospital in the city is at capacity; no more beds left.
  • at some point everyone will test positive for Covid-19, one variant or another
  • public policy: vaccines don't matter; it's all about the masks.
    • vaccinated, not vaccinated: everyone's gotta wear "the mask"

The Numbers Don't Add Up -- August 2, 2021

For all those folks who tell me that charging EVs overnight will not put any stress on the grid. 

From social media:

California has asked folks to stop charging their EVs. The state will pay them to use generators instead. 

This needs to be fact-checked but he source is impeccable. 

I wish I had $10 from every person who has told me EVs are the wave of the future. I could buy a new Honda Civic.

CLR: 2Q21 -- Absolutely Incredible -- August 2, 2021

Earnings: this week.

CLR: unhedged. Slide 4 of the August, 2021, presentation, zero percent -- no oil whatsoever -- was hedged. 

CLR: close to 100% of all natural gas was captured. Only 1.2% was flared. And CLR has wells "everywhere" in the Bakken, and they are about the only operator bringing on multiple wells every week.  Perhaps some hyperbole there, but not much.

From David Messler: shale giants were hit hard by poor hedging decisions. No sympathy. Link here.

CLR August, 2021, presentation: pdf link here.

Argus Media: CLR ups 2021 natural gas output, oil unchanged. Link here

Industries like oil are back to business as usual. And CLR is in a position to win. Link here.

Earnings:

  • consensus, 57 cents; whisper, 51 cents; reported: 91 cents; link here.
  • wow, CLR killed the quarter; raised the dividend; implemented $1 billion share buyback; company founder owns 80% of the outstanding shares; when you consider what Mr Hamm owns, the float is small; I can't believe it's got 16% short interest. Those shorts are screwed. Link here.
  • WAR52, jaw drops: link here.
  • WAR52: hedged vs unhedged, graph. Link here.
  • XOM, CVX, COP: get ready for a big move. Link here.
  • CLR presentation. Link here.
  • CLR presentation, zoom. Link here.

Oil after CLR reported:

Miscellaneous after CLR reported:

  • if we curb supply, but not demand, oil prices will spike well into the $100 range. Link here.
  • EVs: the numbers don't add up. Harold Hamm knows it. Link here.
  • rising gasoline prices signal trouble for climate change action. Link here.

US Crude Oil Supply -- 27.2 Days -- Fourth Week, July, 2021

Link here.

Down from 27.3 days one week ago.

The CLR Springfield FIU Wells In Brooklyn Oil Field

The wells, NWNE 17-155-98:

  • 38360, conf, CLR, Springfield FIU 10-8H1, Brooklyn, 385 FNL 1813 FEL,
  • 38361, conf, CLR, Springfield FIU 9-8H, Brooklyn, 385 FNL 1858 FEL,
  • 38362, conf, CLR, Springfield FIU 8-8H1, Brooklyn, 385 FNL 1903 FEL,
  • 38363, conf, CLR, Springfield FIU 7-8H, Brooklyn, 385 FNL 1948 FEL, 

The wells to the east of the Springfield FIU wells above:

  • 38299, conf, CLR, Rolf Federal 7-17H, Brooklyn, 385 FNL 1428 FEL,
  • 38298, conf, CLR, Rolf Federal 8-18HI, Brooklyn, 385 FNL 1383 FEL,
  • 38297, conf, CLR, Rolf Federal 9-17H, Brooklyn, 385 FNL 1338 FEL,
  • 38296, conf, CLR, Rolf Federal 10-18HI, Brooklyn, 385 FNL 1293 FEL,
  • 38295, conf, CLR, Rolf Federal 11-17HSL, Brooklyn, 385 FNL 1248 FEL,
  • 38294, conf, CLR, Gjorven Federal 8-16HSL1, Brooklyn, 385 FNL 1203 FEL,
  • 38293, conf, CLR, Springield 11-8HSL, Brooklyn, 385 FNL 1158 FEL,
  • 38292, conf, CLR, Bismarck 8-9HSL1, Brooklyn, 385 FNL 1113 FEL, 

Rolf wells in Brooklyn field are tracked here.

Graphics:


But Is It Sustainable? August 2, 2021

Fortune Global 500 rankings just released.

Apple, Inc., leaps from third to first place for profit.

Link here.

Most profitable company in the world. But is it sustainable?

#1: Apple -- $57 billion (57.411 / 274.515 = 20.914%) (last year: 55.256 / 260.174 = 21.238%)

#2: Saudi Aramco --$49.287 billion

#3: SoftBank -- $47.053 billion

#4: Industrial and Commercial Bank of China -- $47.783 billion

Continental Resources (CLR) -- Earnings -- 2Q21

Press release.

From a reader:

  • CLR non-hedged was paid $ 62.37 per bbl of oil in the second quarter. $ 3.06 per MMcft natural gas.

That, for me, is the bar for others to meet.

It will be interesting to see what PXD will report.

Notes From All Over -- The BluBlox Red Light Edition -- August 1, 2021

Book review: Power Play: Tesla, Elon Musk and the Bet of the Century. It's interesting to see where Musk's chiefs ended up and where they are now. Link here. Author: WSJ reporter Tim Higgins.

David Bowie's favorite books: link here. Leads off with one of my favorite books, and a most interesting personality.

Gasoline demand: India's July, 2021, gasoline sales above pre-pandemic levels, link here.

Reality sucks, link here:

  • fuel demand in 4Q21 likely to be less than two million bopd than FY2018
  • but guess what, overall oil demand by 4Q21 still exceeds 2018 levels per IEA, EIA & OPEC
  • so, peak oil theory lovers, oil demand has neither peaked nor will do so for a good few years to come.
  • global demand:
    • FY2018: 99.7 million bpd
    • 4Q21e: 99.8 million bopd
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The Science Page



Notes From All Over -- The Abbreviated Book Edition -- August 1, 2021

Book review: Power Play: Tesla, Elon Musk and the Bet of the Century. It's interesting to see where Musk's chiefs ended up and where they are now. Link here. Author: WSJ reporter Tim Higgins.

David Bowie's favorite books: link here. Leads off with one of my favorite books, and a most interesting personality.

Gasoline demand: India's July, 2021, gasoline sales above pre-pandemic levels, link here.

Reality sucks, link here:

  • fuel demand in 4Q21 likely to be less than two million bopd than FY2018
  • but guess what, overall oil demand by 4Q21 still exceeds 2018 levels per IEA, EIA & OPEC
  • so, peak oil theory lovers, oil demand has neither peaked nor will do so for a good few years to come.
  • global demand:
    • FY2018: 99.7 million bpd
    • 4Q21e: 99.8 million bopd

Notes From All Over -- The Super-Spreader Edition -- August 2, 2021

PPD: watching homicides surge. Link to The WSJ. Does anyone really care, as long as it stays downtown?

Who's sorry now? Link here.

Inflation watch: apparently the 10-year treasury hit a new low today. If so, not sure what it was. 

Currently, the 10-year treasury is yielding 1.179%. Link here. I'm lovin' it -- makes my dividend-weighted portfolio look pretty good. The risk here, is, of course, the US become nipponized. Of course it won't. But already there's at least one tweet suggesting "deflationary pressure of an aging developed population is too strong to overcome." Apparently the twit is not following Jay Powell very closely nor the Biden surge along the southern border.

Vaccine:

  • Florida: 69% of 18+ population has had at least one dose;
    • New York: 75%
    • Oregon: 72%
  • twit: stop with the mis-informed, rather sickening tropes that southerners are ignorant morons that deserve to die.
    • twit: what about Louisiana, Mississippi, Alabama, and Arkansas?

Trucker shortage: a shortage of truckers, not a shortage of trucks. Bloomberg. I probably won't blog much more about the "trucker shortage." Once I understand an issue, I quickly lose interest. Long pdf here; previously posted.

On the other hand:

  • Russian natural gas to Europe
    • Russia seems not keen on sending additional gas to Europe despite record prices
    • this was highlighted last month, but the situation appears to be getting worse;
    • link here;
  • the amount of natural gas entering Germany at the Mallnow compressor station has suddenly dropped, signaling Russia is flowing less natural gas through the Yamal-Europe link;
    • meanwhile, none of the 4Q21 capacity to flow more natural gas to Europe via Mallnow was booked in an auction Monday; link here;
  • whenever I can't answer a question, I have two choices: a) follow the money; b) google it. In this case, neither option works, but common sense tells me what is going on.
    • winter is going to get very, very uncomfortable. Just saying.

Density and Covid-19, super-spreader events:

  • geography
    • Obama's home on Martha's Vineyard: 29.3 waterfront acres
    • Sturgis: 6.08 square miles = 3,891.2 acres
    • Meade County: 3,483 square miles = 2,229,120 acres
  • Obama's birthday party
    • Michele, Barack, two daughters and 500 invited guests = 504 on 29.3 acres = 17 people / acre
    • Sturgis rally: 500,000 / 3,891.2 acres = 128 people / acre
    • Meade County: 500,000 / 2.229.120 acres = 0.224 people / acre

NDIC Website -- August 2, 2021

A reader updated me with the situation at the NDIC regarding scout tickets, production data, etc. 

The update was too long to post and I generally won't post information not publicly available (see below) but bottom line I take from the very long note:

  • the best thing I can say: NDIC is aware of the problem(s) and working the problem(s);
  • my true feelings: absolutely out of control; there is no way to know if the data being posted is accurate or timely

June production data should have been posted by now: it might be out two weeks from now. It's being loaded by hand rather than automated.

The reader tells me that the NDIC confirms that information provided is "public information" and thus allowed to be posted, but I will hold off for now. 

From the reader:

The NDIC now has a public relations officer, Katie Haarsager, vs. regular staff fielding questions. With most public relations officers, one can get general information but nothing specific. 

Katie says to send questions to oilandgasinfo@nd.gov but I still haven’t received a reply on last week’s question I sent, and that's why I called DMR today.

The person that answered the 328-8020 phone quickly handed me off to PR Katie Haarsager.

Apparently the Bakken is not that important even to the NDIC any more ever since New Mexico overtook North Dakota in production some months ago.

Holy Mackerel! Our July, 2021, Electricity Bill

The month of July is our heavy air conditioning month, and our large electric bills. August will be similar, then it starts to cool down. Making it worse this year: both May and I were home the entire time. It helps when we leave town for a couple of weeks to travel. But not this month; there the whole time.

I just got my July, 2021, statement: $86.66.  

For the archives for the grandchildren. It would have been a lot lower, but Texas is on the forefront of moving to expensive and deregulated renewable energy to save the planet.

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Forest Fire, Flathead Lake

A reader sent me a photo of the forest fire on Flathead Lake, Montana. This is located on the east side of the lake, about nine miles north of Polson. 

I believe the fire started Saturday, July 31, 2021, and continued to burn through yesterday. All traffic was halted in that area, diverted, and the immediate area evacuated. A number of homes apparently were damaged or destroyed. 

US Crude Oil Production -- EIA -- May, 2021, Data Posted

Link here.

Notes From All Over -- The Hard Seltzer Edition -- August 2, 2021

First things first, in The WSJ -- "Boz Angeles."

  • real estate is booming in Bozeman, MT

Katie Ledecky: The Washington Post

Hard seltzer: no one drinks it any more; it's always sold out. To paraphrase Yogi Berra. Link here. Bottom line: SAM blew it. Previously posted.

Vaccines: Big Pharma raising prices on vaccines. Link here

In it, to win it. We'll see. Apparently Simone Biles will return to compete in the balance beam. If I have this right, she has self-eliminated in all but one event due to mental health issues, age 24, at the Tokyo 202One Olympics. For the archives. 

New Mexico: breaks oil production record. Previously posted.

Tell me again, lithium batteries are the answer. A giant Tesla battery pack burst into flames during testing, and it took 150 firefights four days to put the fire out. Link here

EVs, California: one in five EV owners switch back to ICEs. Charging is a hassle. Previously posted. Link here.

Oil pad in the Bakken: a google search reveals no new information. Last report: the first had been burning for six days; three wells burning; a fourth well shut down; no injuries; fire "contained" to pad.

European gas market: European gas spikes again. Now exceeds $15/mBtu. Link here.  

Market: companies reporting this week -- https://www.foxbusiness.com/markets/july-jobs-adp-employment-victorias-secret-cvs-health-earnings-top-week-ahead. Include:

  • WMB, FANG,
  • COP, GM,
  • ROKU, UBER

Raised dividends last week: eleven companies including Wells Fargo and Hershey. Link here.

COP: whisper numbers -- 

  • whisper number: $1.24
  • consensus: $1.15

COP earnings, what to expect:

  • ConocoPhillips is scheduled to announce Q2 earnings results on Tuesday, August 3rd, before market open.
  • The consensus EPS Estimate is $1.13 vs -$0.92 in Q220 and the consensus Revenue Estimate is $10.44B vs $4.02B in Q220.
  • Analysts expect capital expenditure of $1.36B.
  • Over the last 2 years, COP has beaten EPS estimates 50% of the time and has beaten revenue estimates 38% of the time.
  • Over the last 3 months, EPS estimates have seen 15 upward revisions and 2 downward. Revenue estimates have seen 5 upward revisions and 0 downward.

One Well Coming Off The Confidential List -- NDIC Data Base Still Down -- August 2, 2021

WTI: down again today. In a trading range. Bulls and bears confused. 

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Back to the Bakken

Because the NDIC has been "down" since July 14, 2021, I no longer have any idea what information posted from the NDIC is current. For example, the number of active rigs ("23") has been unchanged for weeks.

Active rigs:

$71.39
8/2/202108/02/202008/02/201908/02/201808/02/2017
Active Rigs2312586359

wells coming off confidential list:

Monday, August 2, 2021: 1 for the month, 12 for the quarter, 192 for the year:

  • 37854, conf, CLR, Carus 14-28H1, Cedar Coulee, no production data,

Sunday, August 1, 2021: 0 for the month, 11 for the quarter, 191 for the year:

  • None.

Saturday, July 31, 2021: 11 for the month, 11 for the quarter, 191 for the year:

  • None.

RBN Energy: assessing the energy industry's carbon-related initiatives.

In case you hadn’t noticed, there’s a big push by the government, industry, and the broader public to reduce greenhouse gas (GHG) emissions and to offset those that do occur. Given its carbon-intensive nature, the oil and gas sector is at the heart of this activity, with almost daily announcements about carbon-neutral LNG shipments, carbon-dioxide capture and sequestration projects, and other efforts. The problem is, it can be difficult sometimes to figure out what’s real and what’s not — that is, which efforts have an actual, measurable impact and which are sort of vague or fuzzy and need to be sussed out. Today, we discuss the latest round of announcements by producers, midstreamers, refiners, and others to “green up” their operations and products.

Back in the mid-1970s, Hall of Fame catcher Yogi Berra was the manager of the New York Mets and America was in the midst of a streaking fad. (Stay with us on this.) Well, there was a rain delay during a Mets spring training game in Florida and, to help pass the time, two streakers climbed over the outfield fence and sprinted across the wet grass, ending their run with belly-flops onto the tarp-covered infield. The crowd went wild; the streakers were peacefully arrested. During his nightly phone call with his wife Carmen, who was back at the Berras’ home in New Jersey, Yogi mentioned the incident, and she asked, “Were they male or female streakers?” Yogi thought a moment and answered, “I’m not sure. They had bags over their heads.”