Notes From All Over -- Part 1 -- February 3, 2022

Texas freeze: we're located just a mile or so west of the DFW airport. It looks like we're going to get more snow than forecast. 

At one time, the forecast was for now snow, then gradually increased to one to three inches. Well, it's snowing pretty hard right now, and pretty much straight down, and it appears we already have bout two inches on the parking lot. At this rate we could have ten to twelve feet by midnight. But I do believe this rate is not expected to last. We'll probably end up with four inches of snow -- officially -- in some local areas. DFW is shut down; expected to open after noon, or thereabouts.

Price of oil: I was blown away by WTI this morning. 

It had been trending down yesterday and I thought with all the other bad news (read, FB) WTI would also plummet. Everybody says EVs are the wave of the future. Whatever. So, here it is: flirting with $89. 

MPC: workers ready to go on strike. Upset with 9% increase in wages over three years. No comment. The link is to Charles Kennedy, one of the four best contributors over at Oilprice.

Shell: whoo-hoo! Link here.

• reports sharp upswing in full-year profit; 
• Royal Dutch Shell Q4 21 Earnings: - 
• Adj EPS: $0.83 (est $0.66) 
• Adj Profit $6.39B (est $5.3B) 
• Sees Share Buybacks Of $8.5B For H1 2022
• I used to hold/accumulate RDS but sold it when they went "green." Replaced it with US oil companies. Plural.
• announced an $8.5 billion share buyback program for 1H22
• expects to increase dividend by 4% to 25 cents/share
• history here; that dividend cut from 75 cents to 25 cents was the deal breaker for me; RDS-B here;
  

COP, earnings beat: whoo-hoo! Link here. I've accumulated shares in COP longer than almost any other holding. 

The first company I ever invested in? BNI -- Burlington Northern -- which ended up being bought by Berkshire Hathaway. Another early stock, began accumulating forty years ago, SRE -- although it was called something else then: San Diego Gas & Electric. Texaco was an early investment; long story; I've told it before, but truly amazing through thick and thin. Now a dilemma, but we'll talk about that later. Right now COP:

• adjusted earnings per share of $2.27 beat estimates of $2.19 for Q4.
• additional $1b to be allocated to shareholder returns in 2022 for a total of $8b (~7% of current market cap).
• includes a $0.46 base dividend (unchanged) and a Q2 special dividend of $0.30.
• bumped the capex plan to $7.2b versus 2021 spend of $5.3b.
• expects to produce 1.8mb/d in 2022 versus 2021 production of 1.6mb/d, and Q4 production of ~1.8mb/d (pro-forma).

COP, more here:

• ConocoPhillips press release: Q4 Non-GAAP EPS of $2.27 beats by $0.08.

• Outlook: The company’s 2022 operating plan capital budget is $7.2 billion; production guidance is 1.8 million barrels of oil equivalent per day.

• First-quarter 2022 production is expected to be 1.75 MMBOED to 1.79 MMBOED, essentially flat to fourth-quarter 2021 on a pro forma basis.

• Guidance for 2022 includes adjusted operating cost of $7.3 billion and some anticipated inflation; adjusted corporate segment net loss of $1.0 billion; and depreciation, depletion and amortization of $7.9 billion. Guidance excludes potential special items.

Transcript, COP: link here.

Analysts: one of my favorite contributors over at SeekingAlpha was also a long-term investor in COP. 

He grew disillusioned when COP announced it would cut its dividend starting in late 2021 / early 2022. That contributor, who I thought really knew his/her stuff, completely missed what COP was going to do. The good news: his cost basis in COP was so low, he "couldn't afford" to sell it.

Flashback: COP -- well design provides narrative for the Bakken, 2018 - 2019. Michael Filloon. 

Really? I can't wait to see video of the box seats. Super Bowl fans will be required to wear masks. We'll see. LOL. 

Will that include the announcers? LOL. Can't wait to see this. I assume the players will be maskless when on the field, but wearing masks on the sidelines. LOL.

Saskatchewan: fictional home of Dog River, where fictional "Corner Gas" takes place. My favorite comedic re-run.  

Why did I bring that up? Oh, that's right. The premier says its time to get rid of the mandates.

Other Covid headlines:

• Olympic athletes coping with intense anxiety; a positive test and they're out. There is at least a 10% false positive rate.
  
• San Francisco -- this is bizarre -- "will allow" people who originally got the JNJ vaccine to get a second booster shot -- "will allow" --- wow, talk about a police state -- though the "allowance" of a potential third dose goes beyond the guidance outlined by the federal government. If only.
• The US Army will immediately begin discharging soldiers who have refused to get mandatory vaccinations. Why is this news? That's the way it should be. Let's see: next from the US Army: soldiers will be immediately discharged who refuse to wear their uniforms.
• New Zealand will end its quarantine requirements for incoming travelers and re-open its borders; my hunch: their tourism industry had said, "enough is enough."

Masks: with regard to the Super Bowl and masks, I think we are so beyond this. If folks want to wear masks, fine, but mandates? We are so beyond this. The tipping point was reached in December, 2021, if not earlier. Two years of wearing masks. Someday we will look back on all this and wonder in disbelief.