XOM Misses On Revenue; Beats On EPS; Three Wells Coming Off Confidential List -- February 1, 2022

Ukraine: to bolster / "increase" army as Ukraine allies start to rally. One wonders if Putin's delay will turn out to be seen as a mistake by his own military leaders. 

Germany: now considered by many to be a "client state" of Russia. Pretty interesting.

TSLA: recalling 53,822 US vehicles due to software bug that allows vehicles to travel through an all-way stop intersection without coming to a stop. That's strange: it appears the algorithm favors visual (all other cars stopped) over regulatory (stop sign). This seems to be an incredible flaw but easily fixed. The default for autonomous driving: a stop sign means stop. 

NOG: increases dividend by 75%; now paying 14 cents; that's on top of two major acquisitions last year. Someday they will say, "we really underestimated the Bakken." Pre-market flat.

T: as expected, T slashes dividend; will spin off Warner Media in a $43 billion transaction to merge its media properties with Discovery. 

ATT sharesholders will received 0.24 shares of Warner Bros for each ATT share they own; overall, ATT now owns 71% of the new Warner Bros Discovery company. 

ATT dividend slashed from $2.08 to $1.11 but this was known for the past year this would happen; this should be no surprise. In pre-market, T drops almost 6% in pre-market trading, but only $25.50 yesterday close to $24.04 right now.

UPS: up $20; up 9.5% in pre-market trading.

SBUX: misses on revenues; beats on EPS. Up $1.11 in pre-market.

XOM: misses on revenues; beats on EPS. Up about one percent pre-market. $48 billion in cash flow; unbelievable. Stock to watch? CVX. Feeling the heat.

This is pretty cool: a new business concept for me: "service delivery organizations." Back in the day, corporations stove-piped along "core competencies" -- organized along what they did best. Some would say that was looking "inward." Now, it looks like these companies have pivoted, and are looking "outward." Reorganizing stove-pipes based on their customers. So, as XOM moves from Irving, TX, to Houston, TX, XOM will restructure into three units: oil/gas E&P;  combining chemicals and refining into one unit; and, elevating its low-carbon unit into its own division.

EPD: EPS misses by 3%; revenue beats by an astounding 18%; shares down 0.6%.

AMD: pending; 76 cents forecast. Huge move yesterday; up again today by 2.25% in pre-market trading. 

Earnings search: I'm sure everyone has found their favorite site for tracking earnings, but the quickest way is staying on google and simply typing in ticker symbol earnings. Amazing how much information pops up. 

LNG, US exports: US approaches a year without any LNG cargo cancellations amid strong demand. S&P Global Platts. FOB Gulf Coast: nearly a fivefold jump in cargo values over the past year. I don't think folks realize how big the "US energy thing" really is. I certainly don't and I certainly can't get my head around it.

Pre-market: Dow implied open service delivery organizations

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Back to the Bakken

Active rigs:

$87.55	2/1/2022	02/01/2021	02/01/2020	02/01/2019	02/01/2018
Active Rigs	31	14	54	64	5

Tuesday, February 1, 2022: 3 for the month, 58 for the quarter, 58 for the year

• 37982, conf,  CLR, Clark Creek Federal 4-26H1, Westberg, no production data,
• 37911, conf,  CLR, Charolais South Federal 13-19H, Elm Tree, no production data,
• 37910, conf, CLR, Charolais South Federal 12-10H, Elm Tree, no production data,

RBN Energy: morphing midstream dealmaking into energy transition and "near green" opportunities.

Any time there’s a step-change in technology, it presents intrepid industrialists with tremendous opportunities. Just looking at U.S. history, this has played out many times, with railroads, oil, automobiles, computers, and the internet being a few obvious examples. The Shale Revolution provided significant opportunities of its own, not just for the savviest producers but for midstreamers who jumped at the chance to develop the pipelines, gas processing plants, fractionators, and other infrastructure that was desperately needed to transport and process rapidly growing volumes of crude oil, natural gas, and NGLs. Master limited partnerships (MLPs) led the way, boosted by their advantaged access to capital, but they got an important assist from private-equity-backed developers, who were willing to take big risks in the hope of creating successful businesses. In today’s RBN blog, we continue our look at midstream dealmaking — and midstreamers’ prospective role in the coming lower-carbon economy — this time with a focus on the private equity (PE) side.

In Part 1 of this blog series, we discussed the evolution of the midstream sector over the past couple of energy economic cycles, focusing on the tremendous opportunities presented to MLPs in particular during the Shale Era. With hydrocarbon production taking off in the Bakken, the Eagle Ford, the Marcellus/Utica, and other shale basins — especially the Permian — there was an urgent need for midstream infrastructure. And midstream MLPs, with their advantaged access to capital, jumped in with two feet, and through the 2010s built out much of the infrastructure that the industry depends on today. As effective as they were, many of them grew into behemoths and their focus was increasingly on huge, multibillion-dollar deals.

That left an opening for smaller companies to get in there and exploit lucrative midstream niches. And into that void stepped another group of daring capitalists. These are the independent, usually PE-backed companies looking to get a toehold in the market, build up their business, and then flip it for a profit, often to an infrastructure fund or strategic buyer. They frequently begin with smaller-scale, greenfield developments (less than $1 billion) and often focus on gathering and processing, terminals or connecting pipelines that develop over time. Alternatively, they may be centered on legacy assets spun off by other upstream or downstream players. These developers are like farm teams in baseball, whereby assets with high potential are developed before being called up to the big leagues.