Friday, December 10, 2021

GM -- EV -- Detroit, Lansing -- $3 Billion -- December 10, 2021

Link here.

  • GM - $3 billion
  • two EV-related projects
    • suburban Detroit, Orion Assembly plant: hub for its electric pickup trucks
      • $2 billion; 1,500 jobs
    • Lansing, MI
      • 50-50 joint venture between GM and LG Energy Solutions
      • battery partner
      • $2 billion split; 1,200 jobs

Obvious questions:

  • source of semiconductor chips?
  • software partner?
  • who will do the software design work?

A Musical Interlude

Time for the head phones and loud music.

All You Ever Do Is Bring Me Down, Mavericks

Week 49: December 5, 2021 -- December 11, 2021

Top story of the week:

  • Brandon's cough turned out to be "nothing."

Top international non-energy story:

Top international energy story:

Top national non-energy story:

Top national energy story:

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:






Bakken economy



Meanwhile, the EU / UK energy crisis:

AAPL -- December 10, 2021

Without question, the biggest story of the day for me, was AAPL.

Consider checking out the "AAPL feed" on twitter.

At the close, AAPL market cap: $2.944 trillion.

AAPL closed at $179.45, up $4.89, up 2.80% and held the gain after hours.

To get to a $3-trillion-market cap, AAPL shares need to get to slightly less than $183 / share.

MSFT: market cap at $2.572 trillion. 

Five reasons to buy AAPL; one reason to sell. Motley Fool

Most interesting:

Apple already trades at 30 times forward earnings. That's a very high price-to-earnings ratio for a company that is expected to grow its revenue and earnings by 4% and 2%, respectively, this year. Next year, analysts expect its revenue and earnings to grow just 4% and 7%, respectively.
Could someone remind me the P/E of Tesla? Oh, there it is, thank you: 330. 

But back to this, revenue and earnings growth:

  • 2021: 4%; 2%
  • 2022: 4%; 7%
If your revenue growth rate is flat, but your earnings (profit) rate more than triples, wouldn't that suggest margins are increasing? Or the company expenses, taxes, yada, yada, yada.

Santa Claus Rally

To continue through end of the year and into January, 2022. Writer argues that the semiconductor sector is the true indicator of the US economy. I can't disagree. 

US household wealth: at an all-time record high -- $144.7 trillion. Link here. It's an interesting article. Most noteworthy: the value of equities held by households and nonprofits fell by $300 billion -- this was back in the third quarter, July - September, 2021. It will be interesting to see the 4Q21 number. 

Much more data and analysis at ZeroHedge

One of the interesting data points: household debt at $17.6 trillion. One would expect that number to increase with increasing price of homes, used cars, new cars, EV (particularly), higher education. 

Also, unsaid, the length of loans. All things being equal, wouldn't longer periods for loans increase overall debt? Could be wrong on that.

NDIC Reporting That Enerplus Has Renewed Four Hess Permits -- Link To Earlier Deal Provided; No New Permits; Five DUCs Reported As Completed -- December 10, 2021

Days supply, US crude oil, link here:

  • first week of December: has dropped to 27.7 days
  • previous week: 27.9 days
  • before that: 28.3 days

Enbridge dividend: Michael Fitzsimmons overs at SeekingAlpha.

  • Somewhat unfortunately, I became an Enbridge shareholder when the company bought natural gas pipeline specialist Spectra Energy.
  • I say unfortunately because while dividend growth has been good (until this year.), capital appreciation has been - like many energy companies - pretty much non-existent.
  • The stock has been very weak after this week's 3% dividend increase. It should be - the payout ratio is too low.
  • The good news for shareholders is that the current cap-ex plan for FY2022 is much more pragmatic. No more "pushing on a string" on big pipeline projects that get delayed for years in court. 

If the writer is unhappy with Enbridge, he should check out Apple (AAPL). 

Back to the Bakken

Active rigs:

Active Rigs3115546453

No new permits.

Four permits renewed:

Five producing wells (DUCs) completed:

  • 37654, 3,145, MRO, Albert USA 31-5TFH,
  • 36219, 1,595, Grayson Mill, Jake 2-11F 8H, Last Chance, no production data,
  • 37415, 1,317, Kraken, Redfield Central LW 24-13 1H,Lone Tree Lake, no production data,
  • 37887, 159, Crescent Point Energy, CPEUSC Burgess 2-14-23-158N-100W-MBH, Winner, no production data,
  • 37884, 123, Crescent Point Energy, CPEUSC Burgess 3-14-23-158N-100W-MBH,Winner, no production data,

Definitive rig report: some notable observations --

  • 31 active rigs being reported by the NDIC
    • T&S Drilling 2 is new: Ballard Petroleum, Smalls 31-8, Bottineau;
    • CLR with ten active rigs

Four Hess Permits Renewed By Enerplus

Scout ticket: one of four LK-Quilliam permits originally issued to Hess:

In the Friday, December 10, 2021, NDIC daily activity report: these "former Hess" permits were renewed by Enerplus:

This Inflation Thing -- I'm Off The Net For The Afternoon -- Sophia Has Running Club And I Am Running Errands -- December 10, 2021

This inflation thing is interesting.

First, does this increased spending that has recently been passed by Congress and has not yet been spent yet, how does that affect inflation? 

Second, when did "used cars" become a thing? LOL. Apparently "used cars" are at the top of the "inflation list."

But if "used cars" is driving inflation, what's driving the high cost of used cars? New cars getting too expensive. Getting too expensive because new cars unavailable because shortage of computer chips? So, this inflation thing is being driven by a shortage of computer chips; it is not being driven by printing of more money by the Fed.

Third, if inflation is being driven by "Congressional" spending that spending occurred under previous presidents, for example, Donald Trump. Brandon has not been in office long enough for those money bills to even begin affecting the inflation rate. A lot of the money authorized by Congress during the Trump administration has not even been spent yet.

Shortages from China driving the increased cost of "stuff"? Sure, but I'm not sure if Hormel is shipping Spam to Texas and/or California via China. But that needs to be fact-checked.

Gee, I wonder if there's a bit of poor planning involved leading to increased prices. Folks in charge of ordering never expected "us" to come out of the lock down so quickly. 

This explains a lot why the market surged today, and why the 10-year Treasury is not yet trending toward 2.0 percent. And why bond yields are rising, which, of course, makes no sense. I don't really understand that but that's what "they" said on CNBC before I turned it off again.

Who Let The Dogs Out? December 10, 2021

Note: earlier today I mentioned that I went back to watching CNBC after not watching it since the "flash crash" the Friday after Thanksgiving. Well, that didn't last long. CNBC is keeping to script. Everything was planned one to two weeks ago to discuss the market crashing when CPI came in at 6.5%. In fact, just the opposite happened despite the CPI coming in as expected. CNBC talking heads trying to talk the market down. I'm done with CNBC again. Won't come back to it until maybe next week. 

Corps increases flow out of Fort Peck:

From the second linked article:

Mountain snowpack in the upper Missouri River Basin is accumulating at well-below average levels. About 25% of the mountain snowpack typically accumulates by Dec. 1, and normally peaks near April 15. While the mountain snowpack is currently below average, it is too early in the season to make a projection of the final 2022 mountain snowpack. Additionally, plains snowpack in the upper Missouri River Basin is sparse. 

EPD: I'm seeing the same thing. Link here

  • In 2019, EPD traded between $25 and $30 a share and had $6.5B of operating cash flows 
  • In 2021, EPD is on pace to have $8.5B of operating cash flows and trades at $21 per share; currently paying 8.52%; interesting comments at the link;

Energy investors and inflation, what me worry?

Who let the dogs out? Link here.

Explains everything, doesn't it? Link here

Investing 101

The ex-dividend date and the dividend.

A Random Look At Sinclair In The Bakken -- December 10, 2021

About those Sinclair DUCs that were reported as completed yesterday .....

  • 32461, 1,361, Sinclair, Crosby Creek 4-5H, Little Knife,
  • 33425, 1,532, Sinclair, Crosby Creek 6-5H, Little Knife,
  • 33424, 507, Sinclair, Crosby Creek 5-5H, Little Knife, fracked 9/27/21 - 10/13/21; huge frack, 12.5 million gallons of water; 92% water by mass;

First some historical links:

Now the most recent wells:

  • 32461, 1,361, Sinclair, Crosby Creek 4-5H, first production, 10/21; t--; cum --; 10,794 over six days extrapolates to 54K over 30 days;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  •  33425, 1,532, Sinclair, Crosby Creek 6-5H, first production, --; t--; cum --;
  •  33425, 507, Sinclair, Crosby Creek 5-5H, first production, --; t--; cum --;

TGIF -- December 10, 2021


Later, 1:52 p.m. CT: talking on head on CNBC -- what company has "pricing power" -- able to pass its prices on to consumers. "His" choice, AAPL. But he's waiting to jump in when AAPL pulls back "a bit." He is waiting to buy back in when AAPL goes down to its September, 2021, highs of 155. Today, AAPL is up over $3.00 and trading at $177. 

Later, 9:00 a.m. CT; consumer sentiment 70.4 vs 68. Amazing.

Later, 8:16 a.m. CT: Donald Trump's SPAC is up four percent. Could open at $58. Lucid recovers; up over 4% -- again, these are all futures. AMD has recovered; the chips have all recovered and some are surging; look at Broadcom. Big Pharma, generally down a bit, as vaccine mandates fade. Oracle up 16%. Again, futures. Holy mackerel, I had not seen how far ATT had fallen. ATT and Discovery are both down 20% for the year. 

Back to Spam (see below), from yesterday:

Hormel's sales rose 43% from the prior year to $3.5 billion, aided as well by the addition of Planters which the company acquired from Kraft Heinz for $3.35 billion earlier this year. Operating profits for Hormel rose 29% from a year ago.

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.

Later, 8:10 a.m. CT: okay, I broke down -- with the CPI having been reported and the market surging, the VIX dropping, and 10-year treasury dropping, I just had to check in on Jim Cramer, et al, on CNBC. Incredibly upbeat. 

Nothing has changed -- they were engaged in conversation about the ports in southern California and said the same thing I said last night -- about cargo ships being anchored over the horizon, out of sight, and, transit times are being doubled, as boats slow down crossing the Pacific.

Then, of all things, Jim Cramer noted that Hormel can't keep Spam on the shelf. I've talked about that before and it's impossible to find Spam. Okay, that's a bit of hyperbole but not much. I don't see much Spam on the shelves right now, but I keep a small stock in reserve at home.

Later, 7:53 a.m. CT: if today's trading keeps pace with futures, I want to see two more things out of the Brandon administration:

  • more releases of crude oil from the SPR: and,
  • more government spending


The market could be huge today.

Original Post

Daimler Truck: day one. I'm am incredibly biased, but I think Daimler Truck is #1 or #2 now -- only Tesla and Daimler Truck are in the same league with regard to tractors. The new company is the largest truck maker in the United States by way of its Freightliner brand. Globally, Daimler Truck is also the largest maker of buses. Its other brands include Mercedes-Benz trucks and buses sold primarily in Europe and Fuso trucks sold in Asia.

CPI: 6.8%, y/y. Up 0.8 vs 0.7 est, m/m. Equity markets surge.

First group "financial / economic" indicators:

  • 10-Year Treasury: link here.Trending up; at 1516%.
  • DXY: link here. Trending up; at 96.36.
  • Silver: link  here. Trending down; at $21.8780.
  • CBOE volatility index: link here. Explained at Investopedia. Had been trending down significantly the last couple of days; yesterday up almost 4%, today trending down, down about 4%. 

Global warming:

  • we hit a record high yesterday; 
    • today it will be a bit tougher to hit a new record simply because the current record is a bit higher than the old record yesterday
  • 6:25 a.m. at DFW, north Texas: 70°F
  • forecast: high of 82°F; sun, no precipitation;
  • through the next few days, back to a high in the mid- and high-60s
  • by Wednesday next week, back to 80°F

Photo of the day: link here

Back to the Bakken

EIA: North Dakota's natural gas producers met the state's natural gas capture target. Link here.

Active rigs:

Active Rigs2915546453

Friday, December 10, 2021: 60 for the month, 63 for the quarter, 314 for the year:
36306, conf, Bruin, FB Belford 148-95-22D-15-7B,

RBN Energy Canada's Trans Mountain Pipeline restarts after three-week shutdown

Trans Mountain Pipeline, the only pipeline that connects crude oil production areas in Alberta to Canada’s West Coast and the U.S. Pacific Northwest, has started to resume operations after a three-week shutdown. The pipeline closure — the longest in TMP’s 68-year history — began November 14 after major flooding exposed portions of the 300-Mb/d conduit, which also carries some refined products. Fortunately, Trans Mountain did not suffer any severe damage, breaks, or spills, and its operators were able to initiate a phased restart on December 5 at reduced pressures. Full service is expected to be restored soon. So what happens when a primary source of crude oil to five refineries — four in Washington state and one in British Columbia — is removed from service with little notice? In today’s RBN blog, we discuss the impacts.

From the article: 

The four Washington state refineries north of Seattle import from TMP in roughly equal amounts, averaging close to 50 Mb/d each over the first nine months of 2021. 
As we said earlier, crude exports from TMP to the Pacific Northwest have averaged 206 Mb/d through 2021 to date, which means that TMP was providing about one-third of all the crude into these refineries when compared to their combined refining capacity (206 Mb/d of imports divided by 619 Mb/d of capacity). The small differences are likely due to timing and reporting differences. 
However, these refineries also have more flexible access via dockside terminals to receive waterborne crude, as well as the ability to rail in crude oil, mostly Bakken crude, from other parts of the U.S. and Canada (except for HollyFrontier’s Puget Sound refinery, which does not have rail access). Based on crude railing data for the third quarter of this year from the Washington Department of Ecology (WDOE), crude from the Bakken averaged 90 Mb/d and from Alberta averaged 31 Mb/d. Of that railed amount, EIA data indicates 14 Mb/d went to the US Oil & Refining center in Tacoma, leaving 76 Mb/d for the state’s four other refineries.