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Thursday, August 4, 2022

EOG Earnings -- 2Q22

EOG: earnings.

  • link here;
  • revenue: $7.41 billion; vs $6.64 billion
  • EPS: adjusted, $2.74 vs $2.99 / share; whisper, $3.21

Press release here.

  • declares $1.50 special dividend

Wow, look at these numbers:

  • total revenue:
    • 2Q21: $4,139 million
    • 1Q22: $3,983 million
    • 2Q22: $7,407 million
  • adjusted net income:
    • 2Q21: $1,012 million
    • 1Q22: $2,346 million
    • 2Q22: $1,614 million
  • net income:
    • 2Q21: $907 million
    • 1Q22: $390 million
    • 2Q22: 2,238 million 
  • adjusted net income per share
    • 2Q21: $1.73
    • 1Q22: $4.00
    • 2Q22: $2.74

EOG Misses; Iron Oil With Three New Permits; Three DUCs Reported As Completed; WTI Falls Below $90; Drill, Baby, Drill Is Working -- Plenty Of Oil; Gasoline Prices Should Keep Dropping -- August 4, 2022

ISO-NY, link here:

  • at 5:26 p.m. ET
  • 8th decile across Long Island, NYC metro area: over $300 / MWh

EOG: earnings.

  • link here; more here;
  • revenue: $7.41 billion; vs $6.64 billion
  • EPS: adjusted, $2.74 vs $2.99 / share; whisper, $3.21.

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Back to the Bakken

WTI: $88.54.

Natural gas: $8.122.

Active rigs: 47

Three new permits, #39133 - #39135, inclusive:

  • Operator: Iron Oil Operating
  • Field: Sather Lake (McKenzie County)
  • Comments:
    • Iron Oil Operating has permits for three Antelope wells in lot 1 section 1-148-102, 
      • to be sited between 328 FNL and 360 FNL and between 500 FEL and 1699 FWL;

Three producing wells (DUCs) completed:

  • 36248, 217, BR, Stortroen 2D MBH,
  • 37539, 176, BR, Faye 3A-UTFH,
  • 38821, 3,032, Grayson Mill, Ron 28-33 3H, Camp, no production data,

Name changes to four wells, all CLR wells:

  • 25165, Micahlucas 5-5ND, from/was Micahlucas 5-5H, Jim Creek, Dunn County; scout ticket shows status as PNC
    • either something new or I missed it from before
    • it was my experience that a PNC well changed name to have PNC at the end; now, at least for CLR, they append ND (not drilled) to a well that was not drilled and the permit canceled.
    • we had another example not too long ago, within the last six weeks
  • 37485, Gibb 2024H1, from/was Gibb 2-24H, Beaver Lodge, Williams County
  • 37487, Gibb 4-24H1, from/was Gibb 4-24H, Beaver Lodge, Williams County
  • 38699, Gibb 8-24HSL, from/was Gibb 7-24HSL, Beaver Lodge, Williams County

Rambling Thoughts While Waiting To Take Sophia To Local Lego Store -- August 4, 2022

I remember when I was in training we were taught to "treat the patient, and not the lab results."

It seems Americans are more fixated on treating the lab results now, and not the patient. 

I see Peter Zeihan is preparing for a backpacking trip. It looks like Mr Zeihan and I are starting our August vacation about the same time. 

I wonder if our paths will cross in Glacier National Park?

Wow, great news just as Sophia and I start our annual road trip: GasBuddy suggests we might see sub-$3-gasoline on our trip. 

I don't know if this is new or just old news, but apparently "they" are still finding "polio" in wastewater in New York state, near NYC. 

I never did get back to a "most perplexing energy story," but it keeps popping up. Link here. I lost interese in the story when remarks from readers suggesting they ... whatever ..

Could the Dow turn green at the finish today? After the huge rally yesterday?

As far as I'm concerned, I would like to see the Fed raise "the rate" another 75 basis points:

  • the market doesn't seem to care; and,
  • I have a 30-year horizon.

Disclaimer -- Abbreviated

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. Full disclaimer at tabbed link.

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
.

Streaming Wars -- Warner Bros Discovery Kills Batgirl (The Movie, Not The Character) -- August 4, 2022

Streaming: link here. Streaming wars

Updates

Later, 8:12 p.m. CT: post-Covid pivot? WBD wants to get big movies back on the big screen?

Later, 7:15 p.m. CT: for investors, this is getting good. The fog is starting to life. For streamers and streaming and investing, Q: what's the moat?

  • A: deep pockets
  • for the past two decades, many players, with a few stand-outs: Netflix and HBO
    • but with Apple in the mix, things have changed
    • all of a sudden, it's the "catalogue" vs "new content

Later, 7:01 p.m. CT:

  • 2Q22 earnings: could it get any worse?
  • first quarterly report since the merger;
  • shares sink on $3.42 billion loss; actually they "plummeted" (link here)
  • HBO Max restructuring plan revealed
  • highlights:
    • revenue: $9.82 billion vs $11.91 billion forecast
    • subscribers: 1.7 million net additions vs 1.65 million expected
    • total number of subscribers: 92.1 million
    • expects to see 130 million global streaming subscribers by 2025
  • the company estimated that EBITDA for global streaming will hit $1 billion by 2025 with the streaming business breaking even by 2024. It expects peak EBITDA loss in streaming by this year.
  • comment: 
    • catalogues are over-rated
      • after watching "Only Murders In The Building" I am convinced streamers only want to watch new content
      • some exceptions: I can name two:
        • Casablanca
        • Blade Runner

Original Post

Earlier this morning I noted that Warner Bros Discovery killed the $90-million "Batgirl" movie. My thinking was wrong (again, not unusual).

Background here.

This is absolutely fascinating. The lede:

On Tuesday, Warner Bros. announced its plan to not move forward with the release of Batgirl, a movie that cost an estimated $90 million to produce, along with the less expensive film Scoob! Holiday Haunt, a property based on the cartoon about crime-solving dog Scooby-Doo. 
The decision came as a surprise to many, as the movie had already finished production in March of this year and featured an all-star cast including actress Leslie Grace in the lead role, providing significant Latinx representation in a major motion picture. 
Directed by Adil El Arbi and Bilall Fallah, the film was also meant to feature Michael Keaton as Bruce Wayne—a return of the Golden Globe–winning actor to a role he hadn’t played in 30 years. 
Keaton was the first big-screen Batman in two Tim Burton–directed movies in 1989 and 1992 that ascended to cultural phenomenon status and set the stage for the coming decades’ superhero blockbuster boom. 
So why throw away tens of millions in investment and the return of a legendary actor? According to Warner Bros., now under new leadership since a merger with Discovery was finalized, it cut Batgirl because the release no longer made sense within the company’s broader business strategy.

Prior to the Warner Bros. spinoff from ATT and merger with Discovery:

  • led by Jason Kilar and Ann Sarnoff
  • pioneered a COVID-era streaming-first model on its subsidiary HBO Max
  • the new model: release every movie it produced in 2021 at one time
  • purpose: to quickly gain subscribers.

Now, with Warner Bros spinoff from ATT with merger with Discovery:

  • new boss: David Zaslav
  • cleaning house (read: CNN+  and CNN)
  • new streaming model
  • turning the company back toward a theatrical release structure, with a focus on individual high-budget blockbusters instead of simultaneous streaming releases of less expensive products;
  • has removed a number of films from streaming on HBO Max
  • but he won't sell these movies to others; doesn't want to lose these franchises

WTI Drops Below $90 -- August 4, 2022

CPI next week? Calendar.

RBOB today; $2.92.

Retail gasoline, average, US, at the pump: 80 cents to one dollar spread.

Average US gasoline price at pump: $3.82 to $3.92?

Road trip:

  • 4,500 miles
  • 25 mpg
  • 180 gallons x $4 = $720
  • cents / mile = 16 cents / mile

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Days US Supply Crude Oil

Link here.

Increases.

Now 26.3 days; previous week, 25.8 days.

Three most interesting data points in past 24 hours.

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Saudi Arabia OSP

Initial Jobless Claims -- August 4, 2022

Initial jobless claims:  265,000

Earlier in the week, an analyst suggested an initial jobless claims of 275,000 or greater would be a huge concern regarding the economy going forward.  

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AMZN: An Open-Book Test

On May 24, 2022, just days before the 20 - 1 split, AMZN was trading for $104, on a split-adjusted basis.

Today, less than three months later, AMZN will be trading at $140.

What To Watch Today: ISO-NE And ISO-NE -- August 4, 2022

Forecast for 104°F in NYC today. 

ISO-NE.

ISO-NY. Prices already starting to move up.

ERCOT.

  • forecast peak at 5:00 p.m. CT
  • demand peak: 79,956
  • committed capacity at that time, 5:00 p.m CT: 85,733
  • available capacity at that time, 5:00 p.m. CT: 85, 893

I posted a screenshot of the ERCOT graph yesterday. It's probably one of of the most straightforward / easy-to-read graphs of all the graphs I post. A reader sent me a note asking if I could "explain" the graph. Truly amazing.  

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Woke Goes Broke

Warner Bros shelves $90 million "Batgirl" film.

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The Book Page

Must read. "How one middle-aged novelist single-handedly invented the look of the classic sex scene."

Link here.

Every cliché has its origin story. Many of the over-familiar visual signposts of the modern romance began with an eccentric middle-aged British sex novelist with flaming red hair and a fondness for cats. During the 1920s, while Prohibition roared, Elinor Glyn (1864-1943) created the mold for how the modern love scene looked. Glyn invented, and then literally staged, these and many other familiar scenes. 
Her dozens of “trashy” bestsellers drove the romance novel in a more explicitly erotic direction, adding the special sauce that would make it the 20th century’s bestselling genre. Later, on movie sets, she taught the founders of the Hollywood movie colony that they could make the display of sex tasteful—just acceptable enough to the moralists—by making it glamorous. Madame Glyn (as she insisted on being called when she came to Los Angeles) personally styled Hollywood’s first sirens and Don Juans, teaching them how to walk, dress, talk, make love, and—most importantly—manage the attention that they courted and feared in equal measure.

Inventing the It Girl: How Elinor Glyn created the modern romance and conquered early Hollywood, Hilary A. Hallett, July 26, 2022.

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The Golf Page

LIV and PGA go to court.

Tiger Woods turned down $750 million to join LIV.

The Three Most Interesting Economic Data Points In Past 24 Hours -- August 4, 2022

Days US Supply Crude Oil

  • Link here.
  • Increases. This excludes the SPR.
  • Now 26.3 days; previous week, 25.8 days.

US gasoline demand.

Jet fuel supplied as reported by the EIA, weekly petroleum report. 

From the EIA report, released yesterday for previous week data:

MDU To Spin Off Knife River -- August 4, 2022

Press release.

To spin off Knife River: link here.

Earnings: press release.

  • EPS: 35 cents/share vs 49 cents estimate
    • GAAP EPS misses by 11 cents; link here.
    • full year guidance, $1.75 to $1.90 vs estimate of $2.01
  • revenue: xxx vs $1.52 billion estimate

SRE -- 2Q22

Link here.

Beats.

  • EPS: $1.98; beats by 21 cents; pretty impressive, I would say.
  • revenue: $3.55 billion; beats by $550 million
  • updating full-year 2022 guidance

Press release.

COP -- 2Q22

Link here. And, here. And, here.

Transcript here.

Profit pops past $5 billion; hikes planned return of capital by $5 billion. 

Beats:

  • EPS: $3.91; beats by 6 cents
  • increases $5 billion buyback
  • declares dividend: 46 cents; in line with previous; forward yield: 2.1%;
    • payable September 1, 2022
  • also, a VROC of $1.40 / share 
    • payable October 14; record date: September 29, 2022 
    • VROC: variable return of cash

From Michael Fitzsimmons at SeekingAlpha:

  • After two sizeable acquisitions in the Permian Basin last year, more than half of ConocoPhillips' production now comes from its Lower 48 shale acreage.
  • However, COP also has significant production coming from Alaska, Australian & Qatari LNG, and Libya (just to name a few) - all of which realize Brent-based pricing.
  • Brent oil typically trades at a premium to WTI. Indeed, at pixel time, that premium is ~$5.81/bbl. And that is the advantage COP has over its pure-play US shale peers.
  • That advantage was on full-display during Q2 - at least from a realized price perspective.
  • However, ConocoPhillips has the potential to become a much more efficient organization when it comes to free-cash-flow generation.

 

Again, CLR With Only Wells Coming Off Confidential List -- August 4, 2022

Germany car production. Link here -- 

iPhone pricing: holding the line:

  • forthcoming iPhone base model: $799
  • same price as last year's iPhone 13: $799
  • second year running that the price of Apple's base flagship 6.1-inch iPhone model has remained the same.
  • the base iPhone 12 launched in 2020 with the same $799 price tag

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Back to the Bakken

Far Side: link here.

WTI: $91.54.

Natural gas: $8.397.

Active rigs: 46

Friday, August 5, 2022: 4 for the month, 35 for the quarter, 374 for the year

  • 37008, conf, CLR, LCU Reckitt Federal 4-22H,

Thursday, August 4, 2022: 3 for the month, 34 for the quarter, 373 for the year

  • 38170, conf, CLR, LCU Foster Federal 7-28H, 

RBN Energy: Can the carbon-capture industry grow as quickly as it needs to? Part 10

It’s one thing if you’re 25 or 30 years old and your 401(k) is just getting started — you’ve got time to build it up, so don’t sweat it — but it’s quite another if you’re 60 or 65 and you’ve still got to sock away a lot of money before calling it quits. It could be argued that the environmental community is facing a quandary very similar to that of an aging boomer short on retirement savings. 
The fact is that the International Energy Agency’s (IEA’s) target of achieving net-zero man-made carbon emissions globally by 2050 in order to blunt the human impact on climate change will require massive new investment and a complete and well-coordinated transformation of the world’s energy complex. In the near-term, progress along that path must include an extraordinarily rapid ramp-up in the use of carbon capture and sequestration (CCS). And like an aging worker whose late discipline may be thwarted by an unforeseen health challenge, as we’ve seen with the recent energy crisis, there’s a lot that could derail progress toward those goals. Is the IEA's goal achievable? Maybe. But, as we discuss in today’s RBN blog, it won’t be easy.