WPX With Four New Permits; Bowline With Three New Permits; Two DUCs Reported As Completed -- April 20, 2022

From today, April 20, 2022, the daily activity report:

Active rigs:

$102.80	4/20/2022	04/20/2021	04/20/2020	04/20/2019	04/20/2018
Active Rigs	37	15	32	63	59

Three new permits, #38885 - #38887, inclusive.

• Operators: Bowline
• Field: Pronghorn (McKenzie)
• Comments: 
• Bowline has permits for three Jacobson wells, to be sited in SESW 8-150-101; 
• sited 750 FSL and between 1974 FWL and 2024 FWL; 

Two producing wells (DUCs) reported as completed:

• 33616, 3,320, Grayson Mill, Garmann 19-18F 7H,
• 33618, 2,506, Grayson Mill, Garmann 19-18F 6TFH,

************************
Active Wells In Section 8-150-101

The wells:

• 29145, 457, Bowline, J Garvin Jacobson 150-101-8-5-8H, Pronghorn, t10/16; cum 162K 2/22;
• 29146, 457, Bowline, J Garvin Jacobson 150-101-8-5-7H, Pronghorn, t8/16; cum 136K 2/22;

• 29147, 470, Bowline, J Garvin Jacobson 150-101-8-5-6H, Pronghorn, t4/16; cum 147K 2/22;
• 29148, 550, Bowline, J Garvin Jacobson 150-101-8-5-5H, Pronghorn, t4/16; cum 148K 2/22;
  

• 23534, 589, Bowline, J Garvin Jacobson 150-101-8-5-1H, Pronghorn, t2/13; cum 284K 2/22; 
• 23535 574, Bowline, J Garvin Jacobson 150-101-17-20-1H, Pronghorn, t2/13; cum 314K 2/22;

*********************************
From Yesterday

From yesterday, the April 19, 2022, daily activity report:

Four new permits, #38881 - #38884, inclusive:

• Operator: WPX
• Field: Squaw Creek (McKenzie County)
• WPX has permits for four Palo Pinto wells in SESW 20-149-94, 
• to be sited between 881 FSL and 883 FSL and between 2372 FWL and 2462 FWL;
  

That was it. 

Existing wells in that section, SESW 20-149-94:

• 18908, 1,565, EOG, Mandaree 6-20H, Squaw Creek, t9/10; cum 218K 2/22;
• 21332, 1,189, EOG, Mandaree 101-20H, Squaw Creek, t9/12; cum 136K 2/22;
• 23215, 637, WPX, Corn Stalk 20HD, Squaw Creek, t1/13; cum 196K 2/22;
• 23216, AB/783, WPX, Corn Stalk 20HC, Squaw Creek, t1/13; cum 162K 9/19;

Demand Destruction? Oh, Give Me A Break -- April 20, 2022

Javier and I must be on the same page on this one.

Link here. 

Ah, The Irony And The Craziness -- April 20, 2022

Globally, everyone is getting hit with high energy bills. 

The Biden administration backhandedly acknowledges that the Keystone XL would help lower gasoline prices at the pump but that it would now take too long to put that pipeline in to make any difference with current situation.

The Biden administration is thinking like the EU. This headline story popped up a few minutes ago:

For renewable energy to make any impact on energy prices will take years, and it's very likely renewable energy will have an opposite effect by raising energy prices. But whether renewable energy helps at the pump, it's all agree that it will take years. 

But the Keystone XL? A year, at most. But that's too long for the Biden administration. Better to take even longer with wind turbines and solar panels.

Not-Ready-For-Prime-Time Rambling Re: Netflix -- From Investment Point Of View -- April 20, 2022

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. 

Updates

April 22, 2022: The train wreck in slow motion -- today --

Original Post 

I have not kept up with the "streaming wars" but after the Netflix debacle yesterday, I thought it time to sort some things out.

Background: tracked here at "streaming wars."

Then, after the Netflix debacle yesterday, that was updated here. 

Now, from an investment -- not a trading -- point of view.

Definition of investment:

• long horizon; for me 30 years
• accumulation on regular basis
• it takes a major change in the company for me to consider selling shares once bought

So, not-ready-for-prime-time:

1. It's quite ironic. Bill Ackman shorted the wrong stock. He should have shorted Netflix. 

2. I think these stand-alone streaming content companies like Netflix will have challenges going forward. It's possible someone -- like Google -- will buy them.  But what's to buy? How many stand-alone streaming companies are there and who are they?

3. Reminder:

• Google market cap: 1.697 trillion.
• Netflix market cap: 97 billion
• 97 billion / 1,697 billion = 6% and Google could use cheap money to make the deal.
  

4. Since I'm focusing on Netflix in this note, I will look at streaming companies with new, original, content.

5. The big ones with new, temporary, current, original content:

• HBO is now owned by Warner Bros Discovery (which I'm accumulating).
• I don't think Google owns anything with original content. Google owns YouTube but YouTube is getting out of the original content business (too expensive; too risky; I suppose). Is Google getting out of original programming altogether or might it buy Netflix for original programming?
• Apple TV+ is into original content; very expensive but doing well ... so far.
• Disney, of course, with original content (owns ABC, and jointly owns ESPN with Hearst)
• Paramount is owned by Viacom. Paramount has lots of original programming but it's mostly old stuff; not much new stuff yet.
• Amazon, of course.  But so far, I'm not impressed with its original programming.
• So, of the big ones without a parent company with deep pockets, does Netflix stand alone?

Original new content:

• Netflix
• Apple
• HBO
• Amazon
• others?

Sports:

• Amazon
• Apple
• Disney (ESPN)

Documentaries, histories, mysteries, fads, medical?

• Warner Bros Discovery

Metaverse

• FB
• the rest will follow

7. Big, parent companies, deep pockets with subsidiaries or divisions involved with hardware, software, content, etc, and market cap:

• Viacom: $24 billion
• WBD: $56 billion
• Disney: $230 billion
• Facebook: $547 billion
• Amazon: $1,580 billion
• Google: $1,700 billion
• Apple: $2,720 billion
• others?

 

8. When I look at all that, for long-horizon investing, say ten years, I think Netflix has the most challenges simply because it's a stand-alone without a parent company with deep pockets.

• It can either, long-term, plateau, some ups and downs, but its glory years are behind it or get lucky.

• I'm not talking about trading taking advantage of what happened yesterday. I'm talking about investing, see above.
  

9. But long term accumulation, as an investment, I am constantly reminded by why happened to Samuel Adams. No wide moat. Netflix has no wide moat. Pays no dividend. Huge competition from those with deep pockets. Original content very, very expensive, very risky. On top of that there seems to be an in-bred "who knows whom" feeling with regard to original programming. Right now the Hollywood big names are flocking to Apple.

This is not-ready-for-prime-time.

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.

So Many Story Lines Here -- Ukraine Air Force -- April 20, 2022

Link here. So many story lines here:

US Exports Record Amount Of Crude Oil And Refined Oil Products Last Week; Reaches 10 Million BOPD, Second Time Ever -- Apriil 20, 2022

US exports, link here:

This must drive some folks in the White House absolutely nuts, but they love the money it brings into the US.

The EIA's Weekly Petroleum Report -- April 20, 2022

The EIA weekly report:

• US crude oil in storage decreased by 8.0 million bbls, vs a 9.0-million-bbl increase last week;
  
• US crude oil in storage now stands at 413.7 million bbls; 15% below the five-year average;
  
• US imported 5.8 million bbls per day last week; down by 159,000 bbls per day; over the past four week weeks, crude oil imports have averaged about 6.1 million bbls per day (yawn);
  
• US refiners now operating at 91.0% of their operable capacity last week;
• distillate inventories decreased by another 2.7 million bbls last week; inventories are now 20% below the five-year average;
  
• jet fuel delivered was up 15.7% compared with the same four-week period last year.
  

Distillate fuel:

Distillate Fuel	Date of Report	Change in Millions	Relative to 5-Year  average
Week 77	February 9, 2022	0.90	-19.0%
Week 78	February 16, 2022	-1.60	-19.0%
Week 79	February 24, 2022	-0.60	-18.0%
Week 80	March 2, 2022	-0.60	-16.0%
Week 81	March 9, 2022	-5.20	-18.0%
Week 82	March 16, 2022	0.03	-16.0%
Week 83	March 23, 2022	-2.10	-17.0%
Week 84	March 30, 2022	1.40	-16.0%
Week 85	April 6, 2022	0.80	-15.0%
Week 86	April 13, 2022	-2.90	-17.0%
Week 87	April 20, 2022	-2.70	-20.0%

Notes From All Over -- April 20, 2022

Netflix: worse than anticipated. In early morning trading down almost 40%; lost $130 / share; trading at $220. The 52-week high was $701. Oh, oh. This suggests investors feel there is a problem that is not necessarily transitory. 

Anticipation: Legacy Fund deposits should be reported today or tomorrow. Link here.

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.

Market:

• strangest market I've ever seen;
• the only "market correelation" is an "inverse relationship" indicator:
• the lower the president polls, the higher the market goes
• needs to be fact-checked

Pre-market:

• all major indices green
• AAPL: up 1%
• SRE: flat to up slightly
• ENB: up  0.4%:
• EPD: up 026%
• CVX:  up 0.45%
• MNRL: up 3.25%
• DVN: up 1.35%
  
• BRK-B: up 0.43%
• UNP: flat to slightly negative
• NFLX: down an astonishing 28%; could open at 250, losing 100 points on open
• 52-week high: an astounding: $701 
• reminds me of Samuel Adams (BEER) from which it has never recovered
• "Streaming Wars" update here.
  

My favorite chart, money market fund monitor, link here:

MPC: switching from Russian oil to Ecuador --

*******************************
The Book Page

Illustrating J. R. R. Tolkien's The Lord of the Rings. Link here.

E15 -- Impact? RBN Energy -- April 20, 2022

PG: Procter  & Gamble posts its biggest gain in decades. Link to The WSJ.   

I just put a load of wash in and what did I use? PG's Tide. And I used cold water -- as PG markets the fact that Tide works just fine in cold-wash cycles. I'm lovin' it.

The Cincinnati consumer-products company said organic sales rose 10% for the quarter ended March 31, 2022, the biggest jump since P&G started tracking the metric 20 years ago. 

Organic sales is a closely watched figure that strips out deals and currency moves. 

P&G’s priciest offerings were in highest demand, the company said, continuing a trend that has persisted throughout the pandemic. 

Rather than switching to discount alternatives, consumers on average switched to even-pricier products, from fragrance-free diapers to high-end razors, P&G finance chief Andre Schulten said in an interview. 

“So far, the consumer is holding up and they clearly see the value in the superiority of our brands,” he said.

BKR, Baker Hughes:

• better than last year, but misses by wide margin
• five cents short of estimates; 15 cents per share -- holy mackerel, that's a wide miss
• shares fall 2% in pre-market trading
• last increased its dividend in 2017
• 2017: 17 cents
• 2018: 18 cents
• 2022: 18 cents
  

FCF, link here: 

FANG --> FAG? If so, everywhere but Florida. Link here:

DUCs, link here:

Oil: in a trading range?

• WTI: $102 - $106? 

*************************************
Back to the Bakken

Active rigs:

$104.20	4/20/2022	04/20/2021	04/20/2020	04/20/2019	04/20/2018
Active Rigs	36	15	32	63	5

No wells coming off confidential list.

RBN Energy: Biden turns to E15 as next tool to keep gasoline prices under control. LOL. 

It’s no secret that higher gasoline prices are a problem for a lot of folks, including everyday drivers, businesses and — maybe especially — the politicians who hear the complaints from the first two. Although prices at the pump have been trending higher for some time, they’ve really come to the forefront in the past several weeks following Russia’s invasion of Ukraine, which has stressed global energy markets and sent U.S. officials looking for any and all options to keep a lid on prices. In today’s RBN blog, we look at President Biden’s decision to allow the sale of E15 gasoline during the summer months, whether it’s likely to provide U.S. drivers significant relief from high prices this summer, and how global pressures are moving ethanol prices higher too.

The bottom line, as expected:

Altogether, the impact of the Biden administration’s move to allow E15 sales this summer will likely be negligible due to E15’s limited availability around the U.S., increasing costs for corn, and the much larger issue of global crude supply availability. Also, increasing costs for corn and ethanol could erode E15’s narrow price advantage over conventional gasoline.

It's very possible E15 could be more expensive than "regular" gasoline.

EIA Dashboards Have Posted -- April 20, 2022

EIA dashboards:

• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

All three plays show decrease in "monthly changes from one average rig":

• oil:
• Eagle Ford, from 2,052 to 1,990, a drop of 62 bbls/day; a 3% drop;
  
• Permian, from 1,160 to 1,146, a drop of 14 bbls/day, a 1.2% drop;
  
• Bakken, from 1,879 to 1,847, a drop of 32 bbls/day, a 1.7% drop
  
• natural gas:
• Eagle Ford, from 7,370 kcfpd to 7,149, a drop of 221 kcfpd, a 3% drop;
  
• Permian, from 2,261 kcfpd to 2,234, a drop of 27 kcfpd a 1% drop;
  
• Bakken, from 2,630 kcfpd to 2,586 a drop of 44 kcfpd; a 1.7% drop;

On the other hand, all three showed an increase in overall production across the entire play.

Clearing Out The In-Box -- Nothing About The Bakken -- April 20, 2022

More global warming: April snowstorm knocks out power across northeast.

ISO NE: link here. Note: New York is not part of ISO NE. New York City: NYISO.

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.

Housing Starts: March, 2022 -- Surprise

An unexpected increase in March, 2022. Link here.

• building permits increased but starts for single-family housing tumbled amid risigin mortgage rates
• housing starts:
• adjusted annual rate: 1.793 million increase vs a forecast of a decrease to 1.745 million units
• and, then look at this: permits for future home building increased at a rate of 1.873 million units
• was this the real reason why the market surged yesterday, after these numbers were reported?

Twitter 

Elon Musk story not yet over.

Covid-19 Vaccine

See below:

• there is now a global supply surplus
• JNJ does not earn a profit from these vaccine sales
• other Big Pharma said to be making huge profits on vaccine sales; links everywhere, here's one;
  

Mask

On-again, off-again:

• Biden says decision to wear mask is now individual choice; not a mandate
• within hours, Biden's DOJ says, "hold on, not so fast" -- there are bigger issues of control here:
• sounds like DOJ will confer with CDC on whether to appeal judge's decision that mask mandate exceeded CDC's authority
• recent rulings suggest the judge is on firm ground; could be risky for DOJ to appeal
• in addition, if mandate "naturally" expires as scheduled, it becomes a "moot" case, doesn't it?
• US Supreme Court steps in at some point; SCOTUS doesn't take "moot" cases.
• first take; much to play out;

The Apple Page

News:

• iPhone production "proceeding well" in Chinese city of Zhengzhou despite new lock downs and restrictions; MacRumors;
• Apple may have inked NFL Sunday ticket deal; very, very sketchy; but we should know soon who won: Apple or Amazon?

Sunday Ticket airs on DirecTV, but rights are up for auction as the NFL's DirecTV deal is expiring after the 2022 season. DirecTV paid around $1.5 billion for the games, but whoever wins the rights for the 2023 season will likely pay around $2.5 billion.

Should Apple win the bid for Sunday Ticket, out-of-market fans will be able to watch non-prime time games from all 32 NFL teams on Apple TV+. Sunday Ticket would join Friday Night Baseball, which Apple airs each Friday as part of a deal with Major League Baseball.

Netflix

Much more needs to be sorted out:

• big story; one report here; this was first time in ten years that Netflix lost subscribers.
• shares plunged after hours after report released 
• chart looks similar to Sam Adams (BEER) chart; BEER has never recovered;
  
• for investors, first question: where did those subscribers go?
• some suggest this is result of Covid lock downs coming to an end
• I never thought of that; tend to disagree
• there are better options out there; competition is severe 
• either way, doesn't seem to be good news for Netflix
• already looking for additional revenue streams, such as ad-supported options.
  

JNJ

Has huge day: shares rallied 3% following release of its 1Q22 results.

• EPS: $2.67 vs $2.58 expected;
• Whisper earnings: n/a.

Notably, J&J said it would suspend its guidance for COVID-19 vaccine sales due to a global supply surplus. 

But the company said that it does not earn a profit from these vaccine sales, so the change would not impact its adjusted earnings figures. 

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.

Schwab Funds

SCHX or SCHG: Michael Fitzsimmons weighs in over at SeekingAlpha.

• edge to SCHG
• options:
• SCHX: 760 large-cap stocks, and tech particularly
• SCHG: broader portfolio; more than just large-cap stocks
• Fitzsimmons prefers "cobbling together a personal portfolio with the best-of-the-best"
• his own such portfolio is a four-stock "A-List Technology Portfolio" (sounds simiilar to Jim Cramer's "FANG" or "FAANG" or whatever it is now.
• of course, now, perhaps "N" for Netflix needs to be removed, giving us "FAG" or replacing Nvidia for Netflix
• Fitzsimmon's A-List Technology Portfolio: AAAB
• Apple, Amazon, Alphabet, Broadcom
• compare Broadcom (AVGO) with Qualcomm (QCOM) here;
  

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.

Russia Joins An Elite Group

Russian stocks: Putin signs decree (I guess his version of an "executive order") to remove Russian stocks from overseas exchanges.

• more and more, Russia moves into elite foursome: Cuba, North Korea, Russia, Iran
• financial nuclear war: Russia leapfrogs Iran and North Koree to become the world's most sanctioned country; link to Fortune, March 8, 2022.
• it doesn't matter how much oil Russia "sneaks" to China, India, bottom line is this: without western technology, Russia's energy sector will eventually implode, along with Russia's financial system
• still waiting to see if Russia fails to meet bond obligation due April 4 (with 30-day grace period); tea leaves suggest that Russia won't pay; will be in default.
  
• folks are focused on the war; it's obvious this has become much, much bigger than a shooting war;
• Putin has set his country back fifty years
• China vis-a-vis Taiwan is watching closely

Amazon

And finally "news" that isn't news: USPS to slow down nearly a third of its first-class package deliveries (https://www.foxbusiness.com/lifestyle/us-postal-service-first-class-package-deliveries)

• Amazon, FedEx, USPS must have loved this "news."
• random thought: might Amazon ever go into direct competition with FedEx, USPS? Why not? I can already imagine the business model; it's not difficult. 
• maybe more on this later, but think about it this way
• when an 18-wheeler takes a cargo-load cross country, the driver wants to return home with another paying cargo; crazy to drive back home empty
• now think of the Amazon delivery; the driver brings the package to the door but then leaves empty; why now carry a package to be mailed with him/her
• at fulfillment center package would be shipped, and consumer would receive electronic statement / bill