Monday, August 30, 2021

The Saga Continues: California Companies Relocating To Texas -- August 30, 2021

California companies relocating to Texas.  

Now, this from today: businesses exiting California surges in 2021, dealing 'death knell' to state's economy. Link:

California has seen 265 companies relocate their headquarters outside of the state. I'm waiting for Chevron to move out of San Ramon, California. 

Since the beginning of 2018, California has seen 265 companies relocate their headquarters outside of the state – 74 of which left in the first six months of 2021, according to a new analysis published by the Hoover Institution, a right-leaning think tank at Stanford University. By comparison, 62 businesses moved outside of the state in 2020, while 78 relocated in 2019. In 2018, 58 companies exited the state. 

The migration is taking place across a broad range of industries, such as manufacturing, aerospace, financial services, real estate, chemicals, health care and technology. The headquarter exits include Big Tech legacy firms like Hewlett-Packard Enterprises and Oracle, but also smaller, rapidly growing firms like Darvis, which helps digitize hospital logistics, hygiene and documentation.

From November 22, 2019, pre-pandemic:

And that's why I love Tim Cook. Sees the writing on the wall and moves Mac Pro to Texas.

Speaking of which, I forgot to post this story: 660 companies moving facilities out of California with many bound for Dallas-Fort Worth. It's behind a paywall but I was able to access the entire story earlier on my iPad. This is the interesting story. The headline would be a bit more accurate to say that these 660 companies are pretty much located in two geographic areas in California: the Bay area in the north, and Los Angeles County. I doubt many companies are leaving beautiful San Diego, and there are "no" California companies north of 38.4404°N.

So, these 660 companies are leaving a relatively small geographic area of California.

On the flip side, these companies moving to Texas are mostly moving to DFW area, and more specifically, to the north side of the metroplex, and even more specifically, to three cities: Plano, McKinney, and Frisco. The sleeper is Las Colinas, Irving, on the southeast side of the airport, closer to Dallas than to Fort Worth.

Twenty years from now the population center of the DFW metroplex will be 10 miles west of the airport, on TX-114. 

AAPL Surged Today -- Why Was That?

Do you remember this post on July 16, 2021:

Whoo-Hoo! AAPL Is Closer To $150 Than $149 (Again) --July 16, 2021.

It's taken a long time. 

I'm sure this is accurate, but it's hard to believe.

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.  

Everyone knew this was going to happen. On top of that, it's an Apple-Alphabet deal that's been going on for years, although the new agreement may be even more advantageous for Apple, Inc. I don't know. But it's hard to believe the reason that Apple popped today was for this reason. 

There's also risk the courts will step in. 

Link to The Motley Fool via Yahoo!Finance. Or here for the full article.

Apple's stock price climbed 3% to a record closing high of $153.12 on Monday, following an intriguing analyst report. Alphabet's  Google could pay Apple roughly $15 billion this year to retain its place as the default search option on iOS, according to Bernstein analyst Toni Sacconaghi. Apple's shares popped on reports of a lucrative new deal with Google.

Sacconaghi posits that the deal with Google will boost Apple's services revenue growth by 8.5 percentage points -- and account for as much as 9% of the iPhone maker's gross profits in fiscal 2021

It's not hard to see why Google would be willing to pay such large sums. Despite its efforts to diversify its business, advertising revenue still represents the lion's share of its profits. And while Google remains the dominant search engine in the U.S. and many other areas of the world, the last thing it wants to do is let rival Microsoft outbid it and claw back market share.

As for Apple, there's little to lose and much to gain. Google is clearly the most popular search engine, and the great majority of its users would probably choose Google for their search needs. Apple also lets its users choose among different search providers, such as Microsoft's Bing, if they prefer a different option. So for simply doing something most of its customers would do anyway, Apple reportedly earns billions of dollars of high-margin revenue.

The risk, however, is that regulators will move to block these payments to curb Google's ability to stifle competition. Yet for today, at least, investors appear to be taking a more optimistic view -- and are bidding Apple's shares up in kind.

So, we'll see. 

If / when there is even a slight bit of bad news for Apple, Inc., the stock will fall like a rock. 

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

But think about this. Everyone has known for years about the lucrative agreement between Alphabet and Apple. Why the pop today on that news? The Motley Fool is probably correct, but it still doesn't make sense. My hunch: if it has anything to do with this lucrative Apple-Alphabet deal, some high rollers made some phone calls to those with inside knowledge regarding the regulators or have been reading the tea leaves, and are confident the regulators won't stop the deal (for now). 

I don't know. But it's fascinating. It's just hard for me to believe that AAPL popped today on "old news" that was already known by "everyone."

But again, never bet against Motley Fool.

The Road To New York -- August 30, 2021

The road to New York.

New Yorkers trying to shut down a Mitsubishi green hydrogen facility ... like the one recently proposed for North Dakota.

No New Permits; Slawson Renews Five Permits; Three DUCs Reported As Completed -- August 30, 2021

Active rigs*: daily activity report did not report the number of active rigs today.

Active Rigs24*10646254

No new permits.

Five permits renewed:

  • Slawson: four Mole permits in Mountrail County, and one Phatkat Federal permit in Mountrail County.

Three producing wells (DUCs) reported as completed:

  • 34395, 1,390, White Butte Oil, Jore Federal 9-12TFH. Clarks Creek, no production data, still being reported as drl/NC by the NDIC;
  • 34392, 1,321, White Butte Oil, Jore Federal 5-12H. Clarks Creek, no production data, still being reported as drl/NC by the NDIC;
  • 37053, 1,160, CLR, Angus Federal 14-9HSL1. Elm Tree, minimal production data, still being reported as drl/NC by the NDIC;

Mission Complete -- August 30, 2021

Apparently the Pentagon has announced the Afghanistan evacuation is complete, at least as far as the US military is concerned. No link. Stories should be everywhere by this evening's nightly news.

How did the market react?

Let me turn on "Hulu/CNBC":

  • WTI: closed up 0.55%; trading at $69.12
  • Dow down 56 points
  • S&P 500 up 20 points
  • NASDAQ: up 140 points

It looks like the S&P 500 and the NASDAQ will set new all-time highs. 

Enerplus To Sell Small Amount Of Williston Basin Assets For $115 Million -- Source -- August 30, 2021

Deals in the Bakken are tracked at the sidebar at the right.

Link here. Also here, at social media, to see comments.

6-K filing announces the sale of Williston assets for $115 mm. Included are 244 wells producing 3,000 boepd (before royalties) and ~ $22 mm of net operating income; no future drilling locations.

Nothing else regarding the assets, at least at this source:

Enerplus Corporation today, August 30, 2021, announced that it has entered into a definitive agreement to sell its interests in the Sleeping Giant field (Montana) and Russian Creek area (North Dakota) in the Williston Basin for total consideration of US$115 million. 
In addition, Enerplus will receive up to US$5 million in contingent payments if the WTI oil price averages over $65 per barrel in 2022 and over $60 per barrel in 2023. 
The effective date of the transaction is July 1, 2021. The sale consists of the Company's Interests in the developed Sleeping Giant field in Montana and the southernmost portion of Enerplus' North Dakota position in the Russian Creek area. 
The Interests do not include any future drilling locations in Enerplus' identified Williston Basin drilling inventory. Enerplus' working interest(1) production from the Interests averaged approximately 3,000 BOE per day (77% crude oil and natural gas liquids) in the second quarter of 2021 and includes approximately 244 net wells. Estimated 2022 net operating income associated with the Interests is approximately US$22 million based on a US$60 WTI oil price.

I always like to see the acreage, that's that only way I can compare apples to apples, at least to some extent. Net acres not provided here. 

But this is not particularly great Bakken. Assuming only one, maybe two wells, per standard drilling unit we get somewhere between 122 drilling units and 244 drilling units (as usual, some numbers rounded):

  • 122 * 1280 acres / drilling unit = 156,160 acres; $115 million / 156,160 acres = $740 / acre; or,
  • 244 * 1280 acres / drilling unit = 312,320 acres; $115 million / 312,320 acres = $375 / acre

Which sounds about right for this acreage. If I'm off by a factor of two, which is highly unlikely, it's still only $1500 / acre.

Yawn -- August 30, 2021

Lots of swimming this week, leading up to Labor Day:

New Orleans: first pictures coming out of French Quarter this morning, on CNBC -- yawn. "But the danger is not over yet." Anything to keep people watching and television ratings up. Levee system apparently held. 

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.  

CNBC: Cramer must have the morning off.

Market: CNBC trying to talk market down (nothing new). Reminds us of lots of geopolitical headwinds. It is interesting that CNBC has not yet mentioned Afghanistan. Speaks volumes.  

DXY: 92.78, up 0.1%.

TYT: 1.307%, down 0.005 (yawn)

Oil stocks: dropping; some precipitously. I mentioned the other day that the rise in price was transitory. It looks like GoM oil sector will come back on line quickly. 

AAPL: surged; up over $3.00/share. Now solidly above $150/share for this $145-share company.

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:

Active Rigs24*10646254

No wells coming off confidential list.

RBN Energy: Permian natural gas growth spurs more processing capacity

In the past four years, natural gas production in the Permian Basin has doubled — from 6.6 Bcf/d in August 2017 to 13.4 Bcf/d now. 
To keep pace, the midstream sector has spent many billions of dollars on new gas gathering systems, processing plants, and takeaway pipelines, with virtually all of that investment backed by long-term commitments from producers and other market players. 
Thanks to that build-out, the Permian now has sufficient takeaway capacity — at least for another couple of years. 
But despite the 50-plus processing plants that have come online in the play’s Delaware and Midland basins in recent years, still more processing capacity is needed, as evidenced by the expansion projects and new plants that we discuss in today’s blog.