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Thursday, June 30, 2022

Down And Dirty -- I'm All In -- June 30, 2022

If one reads Peter Zeihan, c. 2022, and at the same time one is following world events, it's time to panic.

I haven't watched CNBC in months. Tonight while looking for "streaming" sports, I spent 120 seconds or thereabouts on Jim Cramer.

I don't recall ever seeing Jim Cramer so pessimistic. What a doofus.

Worse, his interview with the VP of IBM. Talk about a depressing interview. IBM is begging for government help to jump-start the semiconductor industry. Say what? IBM begging for government help? LOL. You won't see TSM, AAPL, or NVDA doing that. In this environment, IBM needs help from the government? Oh, give me a break.

Cramer said he took his huge profit in CVX and sold "some" from his charitable trust. 

With two consecutive quarters of negative growth, most folks would say we are in a recession.

A lot of folks disagree.

I could(n't) care less. 

What would you prefer, a recession that lasts six months, or Turkish inflation of 20% that lasts three years?

No hurry. Take your time.

 Biden says high gasoline prices are not transitory

Cramer is afraid to go all in on oil. Why? Windfall profits tax.

 Yes, it may happen, but two things.

First, only Congress can legislate windfall profits tax. Not gonna happen.

Second, every Biden initiative vis a vis the price of oil is a misstep. Or deliberate.

A windfall profits tax: bullish for oil. Counterintutive. 

Oil companies, to minimize the impact of a windfall profits tax, will simply cut back on production.

But I digress. Good, bad, or indifferent, I remain fully invested. 

No market timing for me. 

Bottom line: I'm betting the farm. As they say. 

I'm fully invested. And staying fully invested. 

But ATT (T) paying almost 6%! Are you kidding me?

AAPL at $134 or thereabouts. Are you kidding me?

This Is The Bakken -- June 30, 2022

These wells have paid for themselves at the wellhead. Don't take that out of context. 

Two wells off confidential list today:

  • 38178, drl/A,  Hess, AN-Norby-152-94-0409H-9, Antelope-Sanish, first production, 1/22; t--; cum 148K 5/22;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH5-20222921448214449460000
SANISH4-20222920229202396960303323024152
SANISH3-2022312664426688961040989399111028
SANISH2-20222834470344421824844007422471702
SANISH1-202231419934189920999546803643218183
SANISH12-2021228852855163679667160782
  • 37144, conf, Hess, BL-Olson-155-96-0310H-4, Beaver Lodge, first production, 1/22; t--; cum 99K 5/22;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-202230127231274619433000
BAKKEN4-2022231129511250159394238341846537
BAKKEN3-20223117588176131852351479464255054
BAKKEN2-2022241953819635270064505844340718
BAKKEN1-20223137685374535281569452662933159
BAKKEN12-202113747214259625942

Koda Resources With Two New Permits -- June 30, 2022

WTI: $105.90.

Active rigs: 44

Two new permits, #39062 - #39063, inclusive:

  • Operator: Koda Resources
  • Fields: Daneville (Divide); Fertile Valley (Divide)
  • Comments: 
    • Koda Resources has permits for two Bock wells, SESE 32-161-102; 
      • to be sited between 409 FSL and 439 FSL and 375 FEL

Two wells off confidential list:

  • 38178, conf,  Hess, AN-Norby-152-94-0409H-9,
  • 37144, conf, Hess, BL-Olson-155-96-0310H-4,

Market Rambling -- This Is NOT An Investment Site -- Usual Disclaimer Applies -- June 30, 2022

ATT (T) maintained its dividend and is yielding over 5%, and doing fairly well in a "down" market. 

I have a reader who keeps talking about Disney as an investment. We are yet to see  DIS's low.

Perhaps.

But it seems folks are making this too difficult. 

Very different sectors and different businesses, but in the big scheme of things, DIS is a lot like T. 

Instead of obsessing about whether or not to buy DIS, simply park your money in T while deciding whether to buy DIS or not.

Park it in DIS and get 0% yield. Park it in T and get a 5%+ yield while waiting.

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CLR

On another note, remember that Harold Hamm "tease" about taking the company private.

No news in several weeks.

I'll do the math later, but imagine how much free cash flow Harold Hamm must have if he is able to buy the rest of his company.

Now, think about all the other shale companies NOT going private and how much free cash flow they must have. 

Instead of taking their companies private, their boards are going to authorize increased dividends and share buybacks. 
 
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Sailing School

End of day. Ninth day of sailing school.

Century Aluminum In Kentucky Shuts Down Due To High Energy Prices -- June 30, 2022

I'll be off the net in a few minutes for about two hours, but I will leave you with this, sent to me by a reader the other day.

This is in Hawesville, KY, USA, where energy prices are probably a third of what they are in Germany.

From Manufacturing Business Technology:

The Century Aluminum plant in Hawesville, Kentucky, is shutting down production due to rising energy costs.

In a statement, the company says the plant idling is the "direct result of skyrocketing energy costs," specifically blaming the Russian war in Ukraine for the dramatic increase.

The production stoppage will impact some 628 workers, who will be laid off at the second-largest employer in the area, according to the Messenger-Inquirer.

The company will close the smelter for nine to 12 months, beginning Monday, until energy prices return to normal levels. The company only gave employees about three days' notice, informing them of the closure last Wednesday. 

Is "recession" spelled with one "c" or two?

US Congress Sets Laws, Not Unelected Bureaucrats -- SCOTUS -- June 30, 2022

One assumes this is more far-reaching than this single ruling. 

The take-home message: US Congress sets law, not the bureaucracies. 

Link here

In a blow to the fight against climate change, the Supreme Court on Thursday limited how the nation’s main anti-air pollution law can be used to reduce carbon dioxide emissions from power plants.

By a 6-3 vote, with conservatives in the majority, the court said that the Clean Air Act does not give the Environmental Protection Agency broad authority to regulate greenhouse gas emissions from power plants that contribute to global warming.

The court’s ruling could complicate the administration’s plans to combat climate change. Its proposal to regulate power plant emissions is expected by the end of the year.

President Joe Biden aims to cut the nation’s greenhouse gas emissions in half by the end of the decade and to have an emissions-free power sector by 2035. Power plants account for roughly 30% of carbon dioxide output.

The justices heard arguments in the case on the same day that a United Nations panel’s report warned that the effects of climate change are about to get much worse, likely making the world sicker, hungrier, poorer and more dangerous in the coming years.

The power plant case has a long and complicated history that begins with the Obama administration’s Clean Power Plan. That plan would have required states to reduce emissions from the generation of electricity, mainly by shifting away from coal-fired plants.

EVs today, the market on the last day of the quarter:

  • TSLA: down 3.3%; down $21; trading at $664
  • RIVN: down 5.3%; down $1.38; trading at $24.92
  • RIDE: down 6.7%; down 12 cents; trading at $1.62
  • GOEV: down 6.2%; down 12 cents; trading at $1.90
  • F: down 3.4%; down 39 cents; trading at $11.13
  • GM: down 4.3%; down $1.43; trading at $32
  • ELMS: of course, under bankruptcy protection
  • PLUG: I haven't look at PLUG in months; down 3.2% trading; nears it 52-week low; trading at $16, down from its 52-week high of $46

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

Link here.

Excerpted from Cosplay: A History by Andrew Liptak. Copyright © 2022 by Andrew Liptak. Available from Saga Press, a Division of Simon & Schuster, Inc.

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Second To Last Day Of Sailing Camp

Corky stays home.

S&P Futures Falls 1.5% -- Nears Worst First Half Since 1970 -- So, We've Been Here Before? June 30, 2022

Walgreens: beats.

Gazprom:

  • suspends dividend
  • first time dividend not paid since 1998
  • shares plunge 27%

US economy:

  • May inflation rate: mixed note; link here.
  • May, 2022, reading: 4.7% over last year
  • forecast: "around 4.8%"
  • monthly basis: up 0.3% month/month
  • forecast: 0.4%, Dow Jones estimate
  • headline inflation:
  • rose 0.6%, month-over-month
  • much faster than the 0.2% in the preceding month, April's month-over-month
  • year-over-year inflation: 6.3%
  • down slightly from March reading of 6.6%
  • 6.6% is highest reading since January, 1982; so we've been here before?

SCOTUS:

  • states' rights vs Native Americans
  • reverses 2020 ruling
  • states' rights strengthened
  • narrow ruling; considered significant
  • 5-4 ruling:
  • 2020: RBG was in majority for Native Americans
  • 2022: ACB in majority for Oklahoma ruling
  • links everywhere, here's one.
  • Gorsuch fumes. After all, this was settled law, wasn't it, set by SCOTUS just two years ago?

SCOTUS:

  • one justice retires; one to be sworn in today

SCOTUS:

  • set to issue its final two rulings

Putin's War:

  • Russian abandons Snake Island: key for Ukraine wheat shipments

Maxwell:

  • sentenced 20 years for sex trafficking teens to no one

North Korea:

  • likely culprit behind $100 million crypto heist; link here;
  • unless I missed, date of heist not reported

Japan:

  • industrial output, May, 2022: drops 7.2% month/month
  • forecast: a minus a 0.3%

China:

  • will subsidize refiners if oil > $130, link here;
  • if one reads Zeihan's c. 2022, this is not a bit surprising
  • Saudi Arabia may raise August crude prices to Asia too near-record levels; links everywhere, here's one
  • OPEC basket price;

Refiners:

  • mid-June, 2022: Biden accuses refiners of holding back
  • June 22, 2022: Biden's EIA delays weekly refinery report
  • June 26 - 28, 2022: G-7 meeting where oil prices huge agenda item
  • June 29, 2022: EIA reports refinery utilization after G-7 meeting ends
    • refiners operating at record levels
    • most crucial PADD 3 refinery utilization was an incredible, whopping 97.9%;
  • link here.
  • Biden administration on EIA refinery data: crickets
  • now, on to Saudi Arabia

Texas pipeline:

  • link here;
  • brownfield expansion
  • Permian Highway Pipeline
  • to increase natural gas capacity by 550 MMcf/d
  • Kinder Morgan-XOM
  • target in-service date: November 1, 2023

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Back to the Bakken

Far Side: link here.

WTI: $108.50

No wells coming off  confidential list.

RBN Energy: western Canada gas storage faces very low starting point for next winter

Canadian gas storage levels concluded the most recent heating season at multi-year lows, especially in the western half of the nation, which hit a 16-year low at the end of March. Though storage sites have been refilling at a steady rate so far this summer, storage in the west, a region vitally important for balancing the North American gas market during high winter demand, remains unusually low for this time of year. In today’s RBN blog, we examine the latest developments in Canadian natural gas storage and explain why storage levels in Western Canada may start the next heating season at critically low levels.