Off The Net -- 10:01 P.M. CT -- Wednesday, January 12, 2022

Good luck to all. See you tomorrow.

From fisherphilliops.com:

The Supreme Court may have just tipped its hand as to when employers can expect to learn the fate of both the OSHA Vaccine ETS and the CMS Healthcare Vaccine Mandate.

SCOTUS released its updated calendar for the remainder of January yesterday (Monday, January 10, 2022), and the update noted that at least one new opinion will be released this Thursday, January 13, 2022. 

Given the fact that it is somewhat out of the norm for SCOTUS to issue opinions on a Thursday, some believe this could be a sign that the Court is reserving this day for the release of these monumental decisions.

Why is a Thursday Release Day Significant?

A note of caution: the Supreme Court is notoriously secretive about its inner workings, and does not announce to the public which cases will be released ahead of time. 

Moreover, there are at least 25 other cases sitting on the SCOTUS docket that could be released at that time. 

And given the high stakes involved with the vaccine companion cases, it would not be at all surprising for the Court to drop the opinions in an hour, tonight [Wednesday, January 12, 2022] at 6 PM, or first thing tomorrow morning [Thursday, January 13, 2022]. 

However, as you can see from the Court’s calendar, opinions are usually released on Tuesday and Wednesday mornings and on the third Monday of each sitting. The unusual nature of a Thursday release day, therefore, may be an indicator that the ETS and CMS rulings are coming on that day. 

And again, this announcement came on Monday, the next business day after the oral arguments.

Much more at the link.

Incredible Bull Run -- 2021 - 2026

The "word on The Street": this is going to be an incredible bull run for the next five years, 2021 - 2026.

Link to Alex Kimani. Copper is the new oil. 

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Social Security Benefits

IBD.

Much could be said.

Good Ol' Texas -- January 12, 2022

One New Permit; Two DUCs Reported As Completed -- January 12, 2022

Rigzone: Bloomberg -- never thought I would see this from Bloomberg --

The gasoline market is painting a picture of tight supplies this summer -- the last thing Joe Biden will want to see as he tries to contain high fuel prices.

On the New York Mercantile Exchange, futures contracts for gasoline are in an increasingly bullish structure called backwardation. They show that those who trade the fuel expect a summer of relatively weak supply and strong demand. And that doesn’t bode well for a U.S. president who’s trying to keep fuel costs low.

The U.S. typically builds its supplies of gasoline from November through February. Then, they’re drawn back down in spring and the summer driving season.

This year, inventories are starting off well below the seasonal norm and there are signs that work on oil refineries could slow the buildup of stockpiles.

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Back to the Bakken

Active rigs:

$82.64	1/12/2022	01/12/2021	01/12/2020	01/12/2019	01/12/2018
Active Rigs	32	10	55	67	56

One new permit, 38739:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments: 
• Whiting has a permit for a Rohde Federal well in lot 7 section 6-153-92; 
• the well will be sited 790 FSL and 309 FWL

Twenty-one permits renewed:

• Whiting (4): four Borseth permits in McKenzie County;
• Petro Harvester Operating Company (4): four FLX permits in Burke County; all in section 17-163-90;
• NP Resources (3): an Agate permit, Golden Valley County; and two Mosser Federal permits, Billings County;
• Enerplus (3): a Widgeon permit, a Scaup permit, and a Pintail permit, all in Dunn County, section 20-148-93;
• EOG (3): two Liberty permits and one Austin permit, all in Mountrail County;
• Liberty Resources: a Tucson permit in Mountrail County;
• BR: one permit for an Ole well in McKenzie County;
• Hunt Oil: one permit for a Patten well in Mountrail County;
• Bowline: one permit for a Novak well in McKenzie County;

Two producing wells (DUCs) reported as completed:

• 38270, 505, CLR, Mittlestadt 9-17H1, Chimney Butte, minimal production, 
• 16316, 280, CLR, Jensen 1-5H, t1/07; cum 227K 11/19; has been off line since 11/19;
  
• 37883, 129, Crescent Point Energy, CPEUSC Sylven 4-11-2-158N-100W-MBH, Winner, no production reported;
  

CDC Releases Unusual Amount Of Covid-19 Vaccine Last Week -- January 12, 2022

Generally, the US distributes five million doses of covid-19 vaccine to US facilities. There have been some exceptions, with as many as nine million doses and fourteen million doses. 

But look at last week: 25 million doses released by the US government, five times the usual weekly amount. The vaccine is not free. Someone paid for that vaccine.

With about 1.5 million doses administered each day, or about ten million per week, a release of 25 million certainly catches one's attention. 

		Doses of vaccine distributed to health facilities	Change from day before	Vaccinations given	Change from day before	Percent of distributed vaccine that is actually administered	Doses received in past week, current Monday from previous Tuesday	Average number of doses given / day in past seven days
Monday	January 10, 2022	639,652,445	-20,670	520,166,098	830,676	81.32%	25,051,300	1,260,356
Monday	January 3, 2022	614,601,145	-189,330	511,343,608	921,407	83.20%	5,011,190	1,123,277
Monday	December 27, 2021	609,589,955	-577,474	503,480,667	814,585	82.59%	5,175,070	1,034,442
Monday	December 20, 2021	604,414,885	-822,000	496,239,573	1,137,635	82.10%	9,949,620	1,554,261
Monday	December 13, 2021	594,465,265	-10,310	485,359,746	1,168,850	81.65%	14,390,460	1,951,329
Monday	December 6, 2021	580,074,805	-342,300	471,700,443	1,402,597	81.32%	9,412,080	1,780,807

Recurring Theme Over On Social Media -- January 12, 2022

Link here. 

Hess Victory Lap -- Breakeven At $30 - $35 -- January 12, 2022

Link here. 

ISO NE Pricing -- Eighth Decile -- Not Burning Much Oil, Little Coal -- January 12, 2022

Link here. 

Electricity demand not all that much, but New England holding off burning oil and/or coal. Result: electricity wholesale prices into the 8th decile.

About That Whopping Increase In Gasoline Storage; Days Supply Drops -- January 12, 2022

Link here. 

Wow, wow, wow -- my hunch last week seems to have been correct: demand destruction due to high price of gasoline plus huge decrease in folks going to work, due to Covid omicron surge. 

Gasoline Days Supply, link here:

EPD Dividend History

Notes From All Over -- January 12, 2022

COP investor presentation, January 12, 2022. Link here. Only seven slides including a title slide and a disclaimer slide. I find it amazing when a corporate presentation addresses one issue: the dividend. Seriously?

• clear priorities:
• sustain (not grow) production
• pay dividend; annual dividend growth;
• "A-rated" balance sheet
• > 30% of CFO shareholder payout
• disciplined investment to enhance returns
• value:
• 1.8 million boepd, 2022 production
• 3-tier distribution framework to include variable return of cash (VROC)
• tier 1: ordinary dividend
• tier 2: share repurchases
• tier 3: VROC -- yes, when declared, payments staggered with ordinary dividend
• 8 + 4: a "dividend" each month? that's what it looks like
• first VROC, $0.20/share -- increases first-quarter cash return by almost 45% above ordinary dividend
• total 2022 expected distribution increase of $1 billion or 16% over that of 2021
  

Saudi Arabia to invest in European refinery just west of Russia: link to Charles Kennedy:

• Gdansk, Poland
• 30 percent share
• 210,000-bpd refinery
• refinery partner: BP, the world's largest oil company and top oil exporter

The Fourth Industrial Revolution -- It's Not All About AI Or The Meta-verse -- January 12, 2022

With their US senator in the news, I really have a fond spot in my heart for West Virginia. LOL.

Now this. Good for them.

Last sentence of the article: 

West Virginia competed against our neighboring states, especially Ohio and Pennsylvania, to attract the company.

Story at this link:

West Virginia Govenor Jim Justice announced on Wednesday that Nucor Corporation has selected Mason County, West Virginia, as the location for a state-of-the-art sheet steel mill.

The record investment will exceed $2.7 billion, making it the largest in West Virginia history, as well as the largest single investment Nucor has ever made.

Nucor produces steel by recycling scrap metal in electric arc furnaces, making the company North America's largest recycler of any material.

A reader points out that this facility is going to use a lot of electricity.

Someone recently said "we're" in the fourth industrial revolution.

Memo to self, google fourth industrial revolution: I completely missed this.

• first: First Industrial Revolution -- Steam Power -- 1760 - 1840 -- transition from hand production to machines; water power and steam power;
• second: Technological Revolution --1871 - 1914 -- extensive railroad and telegraph networks
• third: Digital Revolution -- late 20th century -- the computer
• fourth: Fourth Industrial Revolution -- early 21st century -- CPS, IoT, AI, metaverse
  

Product Placement -- Simply Because I Like the Images -- January 12, 2022

 Daimler. Truck. Group.

Weekly EIA Petroleum Report -- January 12, 2022

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Weekly EIA Petroleum Report

Link here.

• US crude oil in storage decreased by a fairly significant 4.6 million bbls from the previous week.
• US crude oil in storage now stands at 413.3 million bbls, about 8% below the five-year average.
• US crude oil imports average 6.1 million bbls per day, up by 185,000 bpd from previous week; the four-week average is 6.2 million bbls, 10.7% more than same four-week period last year.
• refiners are operating at a operational capacity lower than last week; now operating at 88.4% and yet gasoline inventories increased by a whopping 8.0 million bbls -- who saw this coming?
• gasoline inventories are 3% below the five-year average.
• distillates fuel increased by 2.5 million bbls; supplies now 15% below five-year average;
• propane decreased by 3.4 million bbls; now 6% below five-year average
• jet fuel supplied was up 27.7% compared with same period last year;
  

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OPEC Spare Capacity? There Ain't None

Link here. Be sure to read the comments at this social link. A 2022 major theme.

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Jim Cramer Flashback: I'm So Done With Fossil Fuels

Link here. Almost exactly two years ago -- January 21, 2020.

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Michael Fitzsimmons Today: COP Closing In On 7-Year All-Time High

Link here.

• A rising tide lifts all boats and ConocoPhillips has ridden the current wave of relatively oil prices to close-in on a potential new all-time closing high.
• Despite the biggest bull market of our lives, this would be the first all-time high for COP since June of 2014: more than 7 years ago.
• In addition to the relatively high price of oil, COP currently has multiple other very positive near-term catalysts working in its favor.
• One of those positive catalysts is the company's first variable dividend payout. That will occur this Friday, January 13th.

From the linked article:

It took ~7.5 years - during the biggest bull market of our lives - but ConocoPhillips (COP) is finally closing in on its previous all-time closing high of $85.73 set way back in June of 2014 (see graphic below). Of course much of this has to do with the on-going rally in the price of oil, but there are a few other positive catalysts in Conoco's favor as well: a recently announced variable dividend policy (the first being a $0.20/share distribution that will payout this Friday), recent strength in the price of Cenovus (CVE) stock (which COP still owns a very large stake in), and the fact that COP is on track to receive significant contingency payments from Cenovus because those payments are based on the currently high price of Western Canadian Select ("WCS") crude. I'll discuss all of these factors in the article below.

The dividend: 

Note COP's variable dividend payments will be staggered relative to the ordinary dividend payout. The first VROC of $0.20 per share will be paid on Jan. 14, 2022 (this Friday) while the ordinary dividend is typically paid out around March 1. That sets up COP shareholders for the potential for 8 annual dividend payments per year.

Currently, COP's ordinary quarterly dividend is $0.46/share, which was only a 3-cent increase over the prior year (7%) despite the big rally in the price of crude and natural gas and - as I have repeatedly reported - COP's ability to generate massive free-cash-flow. The current ordinary dividend equates to $1.84/share annually for a 2.2% yield.

However, all things being equal COP should - at a bare minimum - easily be able to payout four VROC quarterly payments of at least $0.20/share. That would push the total estimated dividends for 2022 up to $2.64/share, or a 3.2% yield. Still nothing to crow about, but certainly better than the meager dividends COP shareholders have been receiving since the quarterly dividend was slashed from $0.74/share to $0.25/share back in 2015. Indeed, after 7 years, COP shareholders have yet to get back to that level of income.

Holy mackerel. There is so much at this article. This is quite interesting because the last time Fitzsimmons wrote about COP he was madder than heck that COP cut its dividend. But most of us knew what was going on; not sure how Mike missed it the last time.

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EPD

Motley Fool link here. 

Posted previously; another link: EPD enters the Permian in a huge fashion. 

Enterprise Products announced its acquisition of Navitas Midstream Partners Monday for $3.25 billion, purchasing about 1,750 miles of pipelines and up to a billion cubic feet per day of natural gas processing capacity in the Midland sub-Basin on the eastern side of the Permian in Texas.

The added capacity included completion of the Leiker Plant, expected in early 2022, with an expected capacity of 240 million cubic feet per day.

In buying Navitas’ assets, Enterprise hoped to enter the prolific Permian Basin, one of the U.S.’ most active oil and gas fields. The Midland Basin, per an Enterprise news release, represents about 20 percent of U.S. onshore drilling.

Enterprise is already active in the Delaware Basin on the western side of the Permian, operating multiple facilities in southeast New Mexico and West Texas.

Another Never-Ending Medicare Cottage Industry -- January 12, 2022

Medicare:

• starting this Sunday, Medicare will cover up to $12 / in-home Covid test
• up to 8 tests per person per month (8 * 12  = $96 / month) -- pretty good deal for Medicare recipients -- mostly seniors, I suppose -- what a great country
• 8 / month = twice a week which is just about science-based
  
• now you know where your Medicare fees go
• one may want to fact check this but I'm pretty sure this is exactly what the CMS spokesperson said on CNBC this morning

"Market" Loves The Inflation Numbers Reported This Morning; WTI Goes Over $82 -- January 12, 2022

Ah! There we go. WTI just went over $82. 

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.  

Inflation figures coming out today. I've seen them. I may report them later, but not particularly interested. The market doesn't care. Dow surging. Ten-year treasury actually down, at 1.74%. We'll get analysis on this all day. But again, Dow futures went from +35 to +135. Whoo-hoo. Now +143.  CNBC talking head is now confused: asking why the market is surging after these numbers have come out. Now, +164 -- the implied open for the Dow.

Investors' corner: three ultra-high-yield energy stocks to buy in 2022 -- Motley Fool. Spoiler alert (I can do this one from memory): ENB, EPD, and TTE.

Whining: a reader wrote to me early this morning that he/she was getting tired of all the whining. Here's another one: whining about the high cost of crude oil. From a Brit's perspective, crude oil is way underpriced: adjusted for November, 2021, dollars, crude oil is running about the same as it was in 1990.

Let's check the futures:

• AAPL: up $1.51. Later, up $1.68.
  
• CVX: up 38 cents.
• PSX: up 41 cents.
• QCOM: up $1.69 after a gain of $5.72 yesterday.
• EOG: up $1.19 after a gain of $4.14 yesterday.
• UNP: up $1.34 after a loss of $3.86 yesterday.
• RIVN: an entry point; opening below its IPO? 
  

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.  

Jim Cramer on Covid:

• "everyone" seems to be getting it;
• once one gets it, testing comes back negative in five days (NFL data)
• for Jim Cramer: his Covid illness was "worse than a 'cold,' but not as bad as the side effects he had after his Moderna vaccination"
• Great Britain and South Africa seem to have turned the market. 

Talking head on CNBC, Mario Gabelli:

• the inflation numbers remind him of the economy surge after WWII
  
• $9 trillion"stimulus money" still working its way through the economy
• US GDP in 2022: $25 trillion
• tradeoff between reality and perception
• pre-tax earnings will surge
• what he likes: 
• automobiles; mix of cars has to change; likes car companies across the board; only one million new cars on dealers' lots right now; normally runs three million at this time of hte year
  
• trucks: VK spin-off; Daimler-Benz;
• Boeing; Airbus
• Crane; Textron
• Deere; 
• wow, wow, wow -- he mentioned the high price of energy to heat homes in New England because that region is not importing natural gas from the Marcellus / Utica just across the state line

Could WTI Hit $82 Today? One Well Coming Off Confidential List Today; Chart Of The Day And More -- January 12, 2022

Chart of the day: how incredibly wealth the US is. 

• check out North Dakota -- ND's GDP per capita is greater than every country in the world except Luxembourg; and,
• ND's GPD is #6 among the US states
  

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Back to the Bakken

Active rigs:

$81.62	1/12/2022	01/12/2021	01/12/2020	01/12/2019	01/12/2018
Active Rigs	32	10	55	67	56

Wednesday, January 12, 2022: 13 for the month, 13 for the quarter, 13 for the year

38323, conf, Petro-Hunt, Tomlinson 161-100-2A-11-2H, Alexandria,  up in the far northwest corner of North Dakota, in Divide County, a few miles east of Montana and a short drive to the Canadian border.

Date	Oil Runs	MCF Sold
11-2021	4330	2383
10-2021	175	76

RBN Energy: Gibson and USD open a new avenue for Alberta bitumen to the Gulf coast, part 2. Archived. Another workaround for the Keystone XL.

With Alberta’s bitumen production rising to record levels of late, finding more ways to export this molasses-like heavy oil has become more important than ever. In early 2020, Gibson Energy and US Development Group embarked on the construction of a diluent recovery unit in Hardisty, AB, to greatly reduce the need for diluent and retain more of it for reuse. With the unit’s commercial start-up at the end of 2021, another unique pathway for transporting Canadian bitumen to the U.S. Gulf Coast — and, possibly, overseas markets — has become a reality.

In today’s RBN blog, we provide an update on this venture and discuss where it might lead next.

The production of bitumen in Alberta’s vast oil sands continues to increase. Shipping all of that high-viscosity material requires blending with diluent, an extra-light hydrocarbon, with the resulting mix shipped in pipelines (usually referred to as dilbit) or transported in rail cars (called railbit).

With Alberta’s production of bitumen reaching a record high of just over 2 MMb/d in November 2021, demand for diluent simply keeps rising and there never seems to be enough of the stuff.

Coincidentally, a reader sent me this graphic after I posted the RBN link earlier this morning:

Pretty amazing, huh? More on this at this post.