Sempra -- 2Q22

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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.

Currently I am on the road: my notes will be less frequent, perhaps shorter. I will not get to my e-mail as often and I will not be able to post comments as often or in a timely manner.

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San Diego 

City will phase out / eliminate natural gas. Link here.

SRE boss says he is okay with that. We'll just move to Texas and Mexico.

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SRE

Nasdaq: Sempra beat revenue estimates by 18% -- 2Q22.

Markets Insider. Zacks.

Sempra Energy:

• Sempra Energy’s SRE second-quarter 2022 adjusted earnings per share (EPS) came in at $1.98, which beat the Zacks Consensus Estimate of $1.82 by 8.8%.
• The bottom line also increased by 21.5% from $1.63 in the prior-year quarter.
• Barring one-time items, the company generated GAAP earnings of $1.77 per share compared with $1.37 in the second quarter of 2021.
• In the quarter under review, Sempra’s total revenues of $3,547 million increased 29.4% year over year on higher contributions from the Natural Gas business (up 33.3%) and Electric businesses (up 2.9%). 
• Moreover, the top line exceeded the Zacks Consensus Estimate of $3,006.9 million by 17.9%.
• Sempra Energy Price, Consensus and EPS Surprise 
• Quarterly earnings amounted to $176 million compared with the year-ago quarter’s $186 million.
• Southern California Gas Company(SoCalGas): 
• The segment’s earnings came in at $87 million in the second quarter of 2022 compared with the $94 million reported in the prior-year quarter.
• Sempra Texas Utility: 
• Earnings in this segment came in at $186 million in the reported quarter compared with $138 million in the year-ago quarter.
• Sempra Infrastructure: 
• The segment recorded earnings of $183 million compared with $53 million in the year-ago quarter.
• Parent and Other: 
• The quarterly loss in this division increased to $73 million from the year-ago quarter’s loss of $47 million.
• Financial Update
• As of Jun 30, 2022, Sempra Energy’s cash and cash equivalents totaled $1,931 million compared with $559 million as of Dec 31, 2021.
• The long-term debt and finance leases amounted to $24,661 million as of Jun 30, 2022 compared with $21,068 million at the 2021-end.
• Cash flow from operating activities was $2,364 million during the six months ended Jun 30, 2022, up from $2,255 million in the year-ago period.2022 
• GuidanceSempra Energy tweaked its adjusted EPS guidance for 2022. 
• The company now expects to generate earnings to the high end of its earlier reported guidance range of $8.10-$8.70 per share. 
• The Zacks Consensus Estimate for full-year earnings stands at $8.55 per share.
• The company however reiterated its 2023 EPS guidance. 
• SRE continues to expect adjusted earnings in the range of $8.60-$9.20 per share for 2023. 
• The Zacks Consensus Estimate for 2023 earnings stands at $8.95 per share, higher than the midpoint of the company’s guided range.
• Zacks RankSempra Energy currently carries a Zacks Rank #2 (Buy).

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CenterPoint Energy, Inc.

Same link as above.

• CNP reported second-quarter 2022 adjusted earnings of 31 cents per share, which beat the Zacks Consensus Estimate of 28 cents per share by 10.7%.
• In the second quarter of 2022, CNP generated revenues worth $1,944 million, up 11.6% from the year-ago figure. 
• CenterPoint Energy expects to generate adjusted EPS in the range of $1.37-$1.39.

RMD Rules Update -- August 9, 2022

RMDs: new rules, update; issues still being worked -- RMD rules are tracked here.

• August 9, 2022: changing age to age 75 years old?
  

• August 9, 2022: the "new" rules, still up in the air --
  
• Forbes: not yet finalized, but likely they will be;
• gobankingrates: "horribly complex"
• Yahoo!Finance: a real mess;

• April 4, 2022: Investopedia -- the rules now.

• December 14, 2021: Forbes -- the rules now.
  

• March 30, 2021: tea leaves suggest the "72" age will be increased to 75. The only question is whether Congress will get it done this year or next. This year is mid-term elections; now or never. 
  

Enerplus With Six New LK-Bice Permits; Twenty-Three Permits Renewed -- August 9, 2022

Pet peeve: all the Biden headlines that say the price of gasoline has dropped for 56 consecutive days, while I'm paying $4.69 / gallon for gasoline here in Portland, OR. The good news: if the Oregonians still vote to keep the incumbents in this November, it tells me they are fine with expensive gasoline. 

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Back to the Bakken

WTI: $90.39.

Natural gas: $7.847.

Active rigs: 45.

Six new permits: #39143 - #39148, inclusive.

• Operator: Enerplus
• Field: Big Gulch (Dunn County)
• Comments:
• Enerplus has permits for six LK Bice wells, lot 7 section 6-147-96; 
• to be sited between 117 FSL and 265 FSL and between 426 FWL and 519 FWL
• the LK Bice wells were acquired from Hess; see this post; 
  

Twenty-three permits renewed:

• XTO (14): three Bjarne Federal permits; six Cindy Blikre permits, two Michael State Fderal permits; and, three Roust permits, all in Williams County;
• Crescent Point (8): eight Riley Anne permits, all in Williams County;
• NP Resources: one Audrey permit in Golden Valley County;

Two dry holes:

• 29264, dry, Oasis, Harrier 5401 44-23 T2,
• 38540, dry, Whiting, Richard Olson 31-1H,

Berkshire Hathaway Continues To Accumulate OXY -- August 9, 2022

Updates 

September 12, 2022: Buffett adds to his OXY position. 

August 20, 2022: Buffett, OXY, memes and moats. 

August 19, 2022: FERC gives green light to Berkshire Hathaway to buy up to 50% of OXY. A reader asked about my thoughts. My reply at this post.

August 9, 2022: OXY surges on news that Berkshire Hathaway continues to accumulate shares of OXY. 

August 9, 2022:

"Yesterday, Warren Buffett's Berkshire Hathaway bought 6.68 milllion OXY shares worth $390.68 million."

July 11, 2022: From TipRanks:   

"Warren Buffett has been steadily accumulating OXY stock for quite some time now, and if speculations are to be believed, Berkshire Hathaway may end up buying the oil and gas major."

Original Post
Previously Posted
July 19, 2022

Walking back from the pool today, I had this thought.

Take a look at the Buffett portfolio. Without question, this is a most boring, incredibly ugly-looking portfolio of any I've seen. Sure, it has 52 stocks but only two or three will move the needle. [Later, 2Q22: wow, look at this -- that portfolio is horrendous. For 2Q22: 

Berkshire Hathaway (BRK-A / BRK-B) slipped to a loss of over $43.7 billion in the second quarter versus a profit of over $28 billion in the same quarter of 2021.

Then look at this, a "fantasy" energy ETF. 

Right now, at this point in time, what portfolio would you rather have, the Buffett portfolio or the fantasy energy ETF?

Previously posted:

My hunch: Buffett thinks about this every waking moment and in his dreams:

• in round numbers, he owns 20% of OXY, and possibly more if one throws in warrants, etc; and,
• despite owning all that OXY, it still represents only 2.8% of his total portfolio (not including BRK shares)
• in other words, for all the OXY he has bought and all the ink spilled on his obsession with OXY, it doesn't amount to a heck of a lot in the big scheme of things (yet);
  
• he could sell forty of his "non-exciting" tickers and buy all of OXY at a huge discount right now

More than a hunch:

• next Monday morning we're going to read in the morning paper that Warren Buffett has bought OXY
• for all the reasons above
• in addition, this is his last "hurrah" -- he's nearing the end of his life and he wants to do one more big deal;
•  energy is going to be the "story" of the 21st century
• like the railroads, there's only a handful of majors -- practically monopolies
  
• Vicki Hollub has been an outstanding CEO and is ready to do another big deal also
• Warren is a great guy to work for; he owns the company but allows the company to be pretty autonomous; certainly Buffett is not going ot personally run OXY
• he and Ms Hollub certainly have a great relationship

So, that's what I was thinking. I wouldn't have posted that, but when I got home I checked my twitter feed and lo and behold, link here:

From the linked article:

July 19, 2022: BRK purchased another 1.94 million shares of OXY giving the company (BRK) an $11.4 billion stake and putting it nearer a threshold where it could record some of the oil company's earnings with its own.

Tuesday, August 9, 2022

Devon: to buy Validus Energy for $1.8 billion.

• Eagle Ford operator.
• Hedge fund Elliott Management invested in Validus last year to help it buy assets in Eagle Ford, Texas from Ovintiv Inc for $880 million. 
• one year ago: Validus purchased these assets from Ovintiv for $880 million.
  
• the deal: 42,000 net acres in Eagle Ford
• adjacent to Devon's current holdings in Eagle Ford
• back-of-the-envelope: $1.8 billion / 42,000 net acres = $43,000 / acre
• pre-market trading: DVN up $1.12
• DVN up 87 cents at close yesterday

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Back to the Bakken

WTI: $90.37.

Natural gas: $7.840.

Active rigs: 46.

Wednesday, August 10, 2022: 8 for the month, 39 for the quarter, 378 for the year

• 38004, conf, Hess, CA-E Burdick-155-95-2932H-7,
• 37012, conf, CLR, LCU Ralph Federal 5-27H1,

Tuesday, August 9, 2022: 6 for the month, 37 for the quarter, 376 for the year

• 37925, conf, BR, Lone Beaver 1-1-17MTFH,

RBN Energy: the impacts of banning US exports of crude oil and refined products.

U.S. gasoline and diesel prices have been sliding the past couple of months, but there's still a lot of angst among politicians and the general public about the cost of motor fuels — and who's to say prices at the pump won't soar again, spurring another round of proposed "fixes" to the markets for crude oil and refined products. 

Among the proposals floated when prices spiked this spring were bans on the export of U.S.-sourced crude, gasoline and diesel, the idea being that suspending exports would increase the supply available to domestic markets and thus bring down prices. 

If only it were all so simple! In today's RBN blog, we discuss the complicated ins and outs of oil, gasoline and diesel imports and exports, and the many effects of putting the kibosh on shipments to international markets.

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For The Archives

Road trip.

Currently I am on the road: my notes will be less frequent, perhaps shorter. I will not get to my e-mail as often and I will not be able to post comments as often or in a timely manner.