The Million Dollar Way (The Bakken Oil Blog): 05/01/22

Sunday, May 1, 2022

Focus On Fracking -- May 1, 2022

The lede:

oil supplies at 745-week low (745 / 52 = more than 14 years)
SPR at 1055-week low
distillates at 726-week low
total oil + products inventories at a 710-week low

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Oakland, California Public School Enrollment

Very, very interesting.

Link here. I always find it interesting the big stories that don't make the evening news ... or any news for that matter.

Notes From All Over -- May 1, 2022

Putin's War: Saudi ends up being a winner. On many levels. Also, link here, and here -- Saudi's foreign exchange reserves.

Link here. Foreign Exchange Reserves. Huge turnaround. One expects this to continue for awhile.One wonders if OPEC+ is ready to go back to just plain old OPEC?

Random: I am absolutely convinced Buffett's investment in CVX in 1Q22 was a game-changer for Wall Street analysts, mutual fund managers, hedge funds, etc.

Energy: remains best investment. One would never guess this by all the negative mainstream media reporting but JPMorgan provides update / assessment.

This Wednesday, link here:

Just the luck of the calendar, but trading early in the month after a terrible April, the calendar might work to the advantage of these E&P companies. I don't know. Just a thought. One analyst is comparing May, 2022, as far as investing goes, to March, 2020.

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Rules of the Road

Judah just turned two years old. Apparently his twin brother, Levi, did not quite understand the goal, here:

I can watch this all night.

GTL Cerilon -- $2.8 Billion Plant -- Seeks Trenton, ND, Zoning Change -- May 1, 2022

Link here.

Seems to me like another project at risk, a company that does not yet have all its ducks in order when there's more ink required to explain the process than actually talking about the project.

Cerilon will be in front of the Williams County Board of Commissioners Tuesday with a request to change its zoning to heavy industrial for a $2.8 billion gas to liquids facility that has been proposed for the Trenton area.
The applicant will not be applying for a conditional use permit at that time. Under the current process, the zoning change doesn’t require a detailed scenario, a matter that came up during the Planning and Zoning discussion.
Williams County Planning Official Samantha Miller explained the reason the company is not yet applying for a CUP, and a little of the process going forward.
“A CUP expires 18 months after approval,” she told the Williston Herald. “The applicant is unsure that they will be ready to begin construction in the next 18 months.”

The zoning change does not give the company a green light to construct. They will still need the conditional use permit first, which is generally the point in the process where details like where and how many trees will be required to preserve the view, setbacks, safety requirements, and so forth are spelled out in detail.

“(The CUP process) has a public hearing process, so those residents who felt like they need to be heard and want to be heard, which they have every right to, can also attend the meetings for the CUP as well,” Development Services Director Kameron Hymer told the Williston Herald.
Hymer added that Planning and Zoning has recommended that the zone change not take effect until the company has obtained the CUP, and that, if the CUP is obtained, the whole thing could expire if the company doesn’t begin construction within the allotted 18 months.

They could request an extension, if construction doesn’t begin on time, but would then have to show a just cause for that extension. Any extensions would be granted administratively, and would not require an additional public hearing.

Diesel Supply Problems: Aviation At Risk -- May 1, 2022

Link here.

Q: If A Tree Falls In A Forest ... May 1, 2022

Russia's economy could spiral into a depression under an EU oil embargo. Link here.

Would anyone notice? And why does Markets Insider appear to be worried?

Again, trending over at Twitter. I am convinced that strange things are going on over at Twitter. But maybe that's just me.

However, that does raise the question. "Everybody" seems to assume Xi and Putin are buddy-buddy. I'm not so sure. Putin desperately needs Xi but Xi definitely does not want to be tied to Russia on the the Ukraine adventure.

Something Strange Going On Over At Twitter? May 1, 2022

With the news that Elon Musk will acquire Twitter, it seems some weird things are going at twitter. It's probably just my imagination but some things seem very, very strange.

Twitter has a feature that posts "hash tags" or subjects that are trending, usually five make the list. Originally, all five were "legitimate," not product or "ad" placement. But now one of the five, usually the second one is an ad. And, obviously ads aren't trending. Twitter is looking for ways to monetize its site.

If they can manipulate ad-placement on the trending feature, I assume they manipulate all items that make the trending list.

That was very obvious to me when overnight the top-trending item was "experts say masks are safe and effective in helping prevent the spread of Covid-19."

This looks like something from 2020 or early 2021, but certainly not 2022 after even Fauci says the pandemic is over and no one -- almost literally no one -- is wearing masks any more and no one is even talking about masks any more.

This "trending" item was obviously "agenda-driven."

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Later
Just after posting the above this appeared (and no hashtag -- so you know it's not trending): "Bill Gates: I'm Grieving The Same Way Melinda Is."

What a bunch of hogwash.

And, of course, he talks about using his fortune to combat the next pandemic.

Again, someone paid twitter to "place' this thread.

Somehow the thread reads to suggest he is trying to salvage his reputation. His wife is clearly out-shining him.

And that pregnant-male emoji? If one knows how well Steve Jobs and Bill Gates got along will know the inside joke on that one.

By the way, that feature is no longer called "Trending," but rather, "What's Happening." Big difference.

For Investors Only, I Suppose -- EOG Is Mentioned But Not About The Bakken, Per Se -- May 1, 2022

Two links from SeekingAlpha.

The first link is very, very good, about SU and CVX.

I mentioned SU quite awhile ago on the blog.

on February 21, 2021, trading at $30 and paying almost 4%;
past week, trading at $36, pays 3.7%

And, of course, we know the CVX story. But the contributor is looking at .... drum roll ... EOG. Spend some time studying EOG. Archived.

The second link is way, way too long, but lots of background. I like two of the six mentioned.

Six no-brainer-blue-chip bargains: link here. Six ultra SWAN blue-chip bargains:

BTI
MMP
LGGNY
AMZN
ADSK
TSM

US Bowlinig Congress Open Championship -- Vegas Is Back, Baby -- LOL -- What A Great Country -- May 1, 2022

The USBC Open Championships will head back to Las Vegas and the South Point Bowling Plaza in 2022 for its 118th edition.

2022 USBC Open Championships
March 12 - July 17, 2022
South Point Bowling Plaza
Las Vegas, NV

Bismarck, ND, native: Jon Breckel

bowls a perfect game
17th perfect game of this year's 129-day event
recently: 28 pins shy of David Jecko of Whitesboro, NY
with his 657 doubles set added in, Breckel now finds himself in seventh place in Regular All-Events with a 2,177 total. Brett Cunningham of Clay, New York, leads with 2,220.
Facebook.

And I thought a four-day gold tournament was two days too long. LOL.

Buffett - CVX -- May 1, 2022

Berkshire / Buffett

Tracked here.

Updates

May 7, 2022: Buffett's unrealized gains in five days.

May 3, 2022: why Buffett bought Chevron.

May 2, 2022: CNBC -- Buffett bought more Apple during 1Q22; would have added more if the stock had not rebounded (LOL --sounds like a day trader, not an investor).

$600 million additional shares during a three-day decline
current value: $159.1 billion
now about 40% of his equity portfolio

Unless there was a typo, CNBC says Warren / BKR's equity portfolio is now 40% AAPL.

Prior to the purchase, AAPL was 47% of his equity portfolio according to other sources.

If the numbers are accurate, then the $25 billion (or whatever it was) purchase of Chevron and increase in energy prices overall and the significant drop in price of AAPL shares, the 47% to 40% change is incredibly noteworthy.

Buffett said he would have bought more had the price not rebounded (it has since dropped again) Buffett sounded like a day trader rather than an investor). I thought that answer -- why he didn't buy more AAPL was glib -- and not worthy of Buffett.

My hunch is he saw the returns that CVX was guaranteeing him (blue chip dividend payer) compared to the one-penny increase in Apple's dividend.

May 2, 2022: Barron's -- Buffett bought CVX for the dividend.

May 2, 2022: Barron's -- total earnings (BRK) were lower than operating profit in 1Q22 because of paper declines in Berkshire's big equity portfolio in a weaker stock market. Link here.

Original Post

If we don't see a half-dozen or more articles on Seeking Alpha with regard to Buffett and CVX, it will speak volumes. This is probably the biggest story for the first quarter of 2022, including the meltdown / implosion of tech stocks.

This morning: it's going to be all about Warren Buffett and Chevron.

We will start with re-posting a bit from last night, and then move on to several links. Probably just the links for now, and no comments. Just too much to absorb.

First, re-posting:

Berkshire Hathaway increased its holdings of Chevron in 1Q22: multiple sources. From Barron's:

But this from thestreet back in February 14, 2022:

I'll let others sort this out, but if I'm reading this correctly, someone seems to be mistaken. But again, I often misread things.

CVX was trading for about $157 on Friday, at the close, April 29, 2022.

Only two stocks were prominently mentioned at the 2022 annual meeting: Chevron and Activision.

But look at the Chevron headlines:

Buffett's Berkshire Hathaway made big bet on energy as first-quarter operating profits edged higher -- Barron's
Warren Buffett is betting more on Chevron -- Bloomberg
Warren Buffett significantly increases Chevron bet, now in Berkshire's top four positions -- CNBC

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The Links

One of my best posts ever with regard to investing and the energy sector was about Devon, posted in August, 2021. This post won't be as good but hopefully it will be as prescient.

Buffett and Munger know more about fossil fuel energy than anyone in the business.

The big question: what did Buffett see?

The links:

CVX, earnings call transcript, 1Q22, link here.
CVX, earnings per share, 2010 - 2021, link here.
CVX has best quarter since 2014, that was the last quarter of 2021, not the most recent quarteer, New York Times, January 28, 2021, link here.
1Q22 results, freee cash flow, press release, link here.
Compare EPS with others, Macrotrends, link here.

CVX, earnings per share, 2010 - 2021:

Comments:

the last bar is for 1Q22, just reported, not yet on the macrotrends chart; it is approximate: $3.36, adjusted, per share;
at $3.36, the 1Q22 EPS exceeded all but four previous quarters since 4Q09. forty-nine quarters
losses in those 49 quarters were trivial, except for:

4Q19: shale write-offs in Argentina;
2Q20: first three months of global lock down (Covid-19)

imagine if we are at the beginning of a super-cycle in crude oil;

Other data points:

crude oil selling price:

crude oil selling price, CVX, 4Q21:
crude oil selling price, CVX, 1Q22:

production guidance, CVX:

reports that CVX could increase production by 35% in CY22; need to fact check; clearly CVX will increase production significantly in CY22
Chevron will produce the equivalent of about 725,000 barrels of oil daily in the Permian Basin this year, a 15% increase from 2021, the company said in an investor presentation on Friday. That’s up from the previous plan for a 10% increase in the region. Rigzone link here.

issues with CPC seem to have been resolved
inflation

to drill, inflationary costs are high in the US
to drill inflationay costs are flat in the reest of the world

capex:

20% of CVX capex, stateside
80% of CVX capex, overseas

dividends

Buffett doesn't like paying dividends
Buffett loves receiving dividends
yield at time of purchase the yield was well above market average
recent dividend hikes more frequent than annual

Energy transition:

see the last bullet by Buffett in the very first "graphic" above;
this was like a light going on
the Peter Zeihan theme

And we haven't even gotten to current geopolitical events, the two most relevant being:

EU will agree to ban all Russian energy by end of this year:
Russian oil sector will falter when lack of western technology impacts the drilling

OXY: one wonders how much "inside information" (knowledge, understanding, "buzz") with his relationship with OXY's CEO.

Later, some data regarding the Berkshire Hathaway portfolio.

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

Berkshire Hathaway holdings: we will get an update later this month for 2Q22. This is Berkshire's information for 1Q22, updated March 24, 2022, before the annual meeting yesterday, April 30, 2022. BRK's top holdings:

AAPL:

47.6% of BRK's portfolio; $157.5 billion
one billion shares
pays 0.56%
from above, May 2, 2022

$600 million additional shares during a three-day decline
current value: $159.1 billion
now about 40% of his equity portfolio

BofA:

13.6% of BRK's portfolio; $45 billion
one billion shares;
pays 2.35%

AMEX:

7.5% of BRK's portfolio; $24.8 billion
151.6 million shares
pays 1.19%

72% of BRK's portfolio; $23.7 billion
400 million shares;
pays 2.72%

Kraft Heinz

3.5& of BRK's portfolio; $11.7 billion
325.6 million shares
pays 3.75%

Now, in 2Q22:

CVX:

$25.9 billion
160 million shares
pays 3.63%
if accurate, would make CVX BRK's third largest holding, dropping KO to fifth, and Kraft Heinz out of the top five.

Initial Production Of Wells Coming Off The Confidential List This Next Week -- May 1, 2022

The wells:

38360, conf, CLR, Springfield FIU 10-8H1, Brooklyn, no production data,
37702, conf, Whiting, Lacey 43-2H, Sanish,

Date	Oil Runs	MCF Sold
2-2022	16666	13077
1-2022	24305	18667
12-2021	19500	15080

38240, conf, Ovintiv, Kramer 150-97-18-19-1HLW, Siverston, no production data,
38239, conf, Ovintiv, Kramer 150-97-18-19-11HLW, Siverston, no production data,
34236, conf, Oasis, Borden Federal 5300 34-36 6BX, Camp,

Date	Oil Runs	MCF Sold
2-2022	18435	23716
1-2022	26754	28206
12-2021	28965	20088
11-2021	18989	19598

38361, conf, CLR, Springfield FIU 9-8H, Brooklyn, no production data,
38241, conf, Ovintiv, Kramer 150-97-18-19-12H, Siverston, no production data,
34235, conf, Oasis, Borden Federal 5300 34-36 7B, Willow Creek,

Date	Oil Runs	MCF Sold
2-2022	28147	34876
1-2022	31618	31957
12-2021	35633	26714
11-2021	31030	33192

38362, conf, CLR, Springfield FIU 8-8H1, Brooklyn, no production data,
38310, conf, Hess, EN-Zunich-156-94-3328H-9, Manitou,

Date	Oil Runs	MCF Sold
2-2022	24248	40887
1-2022	14973	37341
12-2021	24398	33616
11-2021	44738	36833

34336, conf, Oasis, Borden Federal 5300 14-36 9B, Willow Creek,

Date	Oil Runs	MCF Sold
2-2022	22253	30899
1-2022	30841	32863
12-2021	29501	20106
11-2021	18906	19296

38242, conf, Ovintiv, Kramer 15-97-18-19-12H, Siverston, no production data,
37845, conf, Hess, EN-Zunich-156-94-3328H-8, Manitou,

Date	Oil Runs	MCF Sold
2-2022	20143	40806
1-2022	14218	30924
12-2021	25927	33765
11-2021	38765	38668

34234, conf, Oasis, Borden Federal 5300 34-36 8B, Willow Creek,

Date	Oil Runs	MCF Sold
2-2022	35392	45532
1-2022	33238	35377
12-2021	36893	27514
11-2021	30685	30929

30259, conf, Hess, EN-Madisyn-LEE-154-94-0705H-1, Alkali Creek, no production data,
38363, conf, CLR, Springfield FIU 7-8H, Brooklyn, no production data,
38243, conf, Ovintiv, Krameer 150-97-18-19-2H, Siverston, no production data,
37728, conf, Enerplus, Seal 151-94-33D-28H, Antelope-Sanish,

Date	Oil Runs	MCF Sold
2-2022	41634	76323
1-2022	19165	31350
12-2021	3	0
11-2021	24322	33085

37668, conf, Whiting, Lacey 14-3-2XH, Sanish,

Date	Oil Runs	MCF Sold
2-2022	26252	18730
1-2022	11648	8922
12-2021	26418	20791
11-2021	15884	10811

30260, conf, Hess, EN-Madisyn-LE-154-94-0705H-2, Alkali Creek, no production data,
37727, conf, Enerplus, Otter 151-94-33D-28H, Antelope-Sanish,

Date	Oil Runs	MCF Sold
2-2022	26960	49428
1-2022	33634	55019
12-2021	6210	9029
11-2021	5271	7170

37599, conf, Whiting, Littlefield 41-2HU, Sanish,

Date	Oil Runs	MCF Sold
2-2022	16850	0
1-2022	35280	25003
12-2021	34168	24609
11-2021	18723	12149

30261, conf, Hess, EN-Madisyn-LE-154-94-0705H-3, Alkali Creek, no production data,
38135, conf, CLR, Flint Chips Federal 9-5H1, Cedar Coulee, no production data,
37915, conf, Oasis, Fraser Federal 5300 11-35 4BR, Willow Creek,

Date	Oil Runs	MCF Sold
2-2022	18344	17960
1-2022	28258	10580
12-2021	23690	13882

37477, conf, Liberty Resources, McGinnity E 159-95-31-30-1MBH, Northwest McGregor,

Date	Oil Runs	MCF Sold
2-2022	14611	26341
1-2022	25014	35549
12-2021	27663	35504
11-2021	28065	33329
10-2021	0	69

36104, conf, CLR, Gordon Federal 4-5H1, Haystack Butte,

Date	Oil Runs	MCF Sold
2-2022	18170	32019
1-2022	27952	45350
12-2021	30177	45452
11-2021	37925	54000

30262, conf, Hess, EN-Madisyn-LE-154-94-0705H-4, Alkali Creek, no production data,
38136, conf, CLR, Flint Chips Federal 9-5H1, Cedar Coulee, no production data,
37914, conf, Oasis, Fraser Federal 5300 11-35 3BR, Willow Creek,

Date	Oil Runs	MCF Sold
2-2022	16194	15198
1-2022	28916	11217
12-2021	28516	15566
11-2021	60158	29646
10-2021	2910	724

37726, conf, Enerplus, Otter 151-94-33D-28H, Antelope,

Date	Oil Runs	MCF Sold
2-2022	33891	62121
1-2022	46456	75992
12-2021	43156	62745
11-2021	25810	35092

36523, conf, Hess, BB-State A-151-95-1615H-4, Blue Buttes,

Date	Oil Runs	MCF Sold
2-2022	11325	18898
1-2022	25379	40045
12-2021	29362	47240
11-2021	41413	66157
10-2021	2481	3744

Wells Coming Off The Confidential List This Next Week -- May 1, 2022

Monday, May 9, 2022: 28 for the month, 93 for the quarter, 253 for one year
38360, conf, CLR, Springfield FIU 10-8H1,
37702, conf, Whiting, Lacey 43-2H,

Sunday, May 8, 2022: 26 for the month, 91 for the quarter, 251 for one year
38240, conf, Ovintiv, Kramer 150-97-18-19-1HLW,
38239, conf, Ovintiv, Kramer 150-97-18-19-11HLW,
34236, conf, Oasis, Borden Federal 5300 34-36 6BX,

Saturday, May 7, 2022: 23 for the month, 88 for the quarter, 248 for one year
38361, conf, CLR, Springfield FIU 9-8H,
38241, conf, Ovintiv, Kramer 150-97-18-19-12H,
34235, conf, Oasis, Borden Federal 5300 34-36 7B,

Friday, May 6, 2022: 20 for the month, 85 for the quarter, 245 for one year
38362, conf, CLR, Springfield FIU 8-8H1,
38310, conf, Hess, EN-Zunich-156-94-3328H-9,
34336, conf, Oasis, Borden Federal 5300 14-36 9B,

Thursday, May 5, 2022: 17 for the month, 82 for the quarter, 242 for one year
38242, conf, Ovintiv, Kramer 15-97-18-19-12H,
37845, conf, Hess, EN-Zunich-156-94-3328H-8,
34234, conf, Oasis, Borden Federal 5300 34-36 8B,
30259, conf, Hess, EN-Madisyn-LEE-154-94-0705H-1,

Wednesday, May 4, 2022: 13 for the month, 78 for the quarter, 238 for one year
38363, conf, CLR, Springfield FIU 7-8H,
38243, conf, Ovintiv, Krameer 150-97-18-19-2H,
37728, conf, Enerplus, Seeal 151-94-33D-28H,

Tuesday, May 3, 2022: 10 for the month, 75 for the quarter, 235 for one year
37668, conf, Whiting, Lacey 14-3-2XH
30260, conf, Hess, EN-Madisyn-LE-154-94-0705H-2,

Monday, May 2, 2022: 8 for the month, 73 for the quarter, 233 for one year
37727, conf, Enerplus, Otter 151-94-33D-28H,
37599, conf, Whiting, Littlefield 41-2HU,
30261, conf, Hess, EN-Madisyn-LE-154-94-0705H-3,

Sunday, May 1, 2022: 5 for the month, 70 for the quarter, 230 for one year
38135, conf, CLR, Flint Chips Federal 9-5H1,
37915, conf, Oasis, Fraser Federal 5300 11-35 4BR,
37477, conf, Liberty Resources, McGinnity E 159-95-31-30-1MBH,
36104, conf, CLR, Gordon Federal 4-5H1,
30262, conf, Hess, EN-Madisyn-LE-154-94-0705H-4,

Saturday, April 30, 2022: 65 for the month, 65 for the quarter, 225 for one year
38136, conf, CLR, Flint Chips Federal 9-5H1,
37914, conf, Oasis, Fraser Federal 5300 11-35 3BR,
37726, conf, Enerplus, Otter 151-94-33D-28H,
36523, conf, Hess, BB-State A-151-95-1615H-4,

Pages

Sunday, May 1, 2022