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Friday, September 16, 2022

Whiting With Four New Permits In The Sanish -- September 16, 2022

WTI; $85.11. Maintaining.

Natural gas: $7.764. Sliding.

Active rigs: 45

Four new oil and gas permits, #39247 - #39250, inclusive:

  • Operator: Whiting
  • Field: Sanish (Mountrail)
  • Comments:
    • Whiting has permits for four S-Bar wells, NESE section 1-153-93; 
      • to be sited 2079 FSL and between 295 FEL and 385 FEL

One producing well (DUC) reported as completed:

  • 38617, 911, Whiting, Isabella TTT 41-26HU, t--; cum 14K over 25 days;
    • three neighboring wells off line;

FedEx And Wise Gals -- September 16, 2022

But if you have a 40-year horizon, does it matter?

In a sidebar to a reader:

When the market gets this crazy, I don't follow it very closely but via Twitter I see that FedEx plunged, maybe 25%.

The CEO blames the global economy.

One needs to ask whether USPS, UPS, DHL, Amazon are "eating FedEx' lunch"?

For shipping small packages, FedEx is incredibly expensive. When it positively, absolutely has to get there overnight, this is no longer much of a slogan when Amazon delivers in two hours.

The other problem with FedEx -- a one-trick pony? Amazon probably makes more money off services, streaming, and the cloud (AWS) than it makes on selling books.

I don't invest in FedEx. 

But if I did, I would have had 1,000 shares of FedEx yesterday.

And I would still have 1,000 shares of FedEx today.

And Sophia is going to inherit 1,000 shares. 

Doesn't bother me a bit. 

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Speaking Of Amazon

Published September 13, 2022 (or maybe September 15, 2022, I forget).

Ordered September 15, 2022.

Arrived today.

Winds — September 16, 2022

Tropical depression from yesterday has either dissipated or moved south. 

All we have today is a very minor depression east of the Lesser Antilles. [Later: a tropical storm. See first comment.] [Friday night: forecast now to be a hurricane. Strength and US landfall not specified.]

Link here. Link here.

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The Book Page

First drafts published; need to be edited, which will be done over time.

CCR: notes on the book.
CCR: the book.

Parting Shot -- Off The Net -- Away From Keyboard -- September 16, 2022

I've still not seen a good explanation tying this altogether.

Generally, inflation associated with "hot economy."

We have inflation (rent, used cars, groceries), but GDP does not suggest a "hot economy." Quite the opposite. A struggling economy. And the fed response: take actions to further depress the economy. I don't know.

  • inflation
  • gasoline demand cratering
  • US GDP: negative x two quarters; possibly a third-consecutive negative quarter
  • and the Fed is fast-cycling "Fed rates" -- despite struggling economy
  • tight, tight, tight labor market;
  • labor market: lagging indicator -- something we've been told for the past year

  • my thesis, not yet disproved: US inflation -- tipping point -- the Biden administration gaslighting and keystoning America

BLS: link here. Generally, folks follow U-3. With current situation, U-1 makes a lot more sense. 

Sriracha -- September 16, 2022

Sriracha: link here.

Tesla: gassing with propane.

Bogus graphic: link hereHere. Here.

  • small print: "highest growth year/year" -- not favorite restaurant
    • but, a wake-up call for Whataburger, 
    • which sold out to Chicago investing group in 2019
  • parameters not well spelled out
Streaming:
  • iPad
  • Hulu + Amazon Prime + Firestick TV
  • Apple TV
  • linked: Pluto TV

Streaming:

  • absolutely incredible
  • Apple ecosystem
  • can seamlessly move from iPad to huge desktop Mac monitor to large, flat-screen Philips monitor (the latter with Firestick TV)

NFL: Thursday Night Football -- link here:

Although the game will be available on television in the home markets of any team that plays on Thursdays, everyone else will have to watch the game on Prime (This means that tonight's game will be on over-the-air television in both Los Angeles and Kansas City). 

  • Amazon, TNF: an-eleven-year deal
  • announcers: two of the biggest names -- Al Michaels and Kirk Herbstreit
  • incredible TNF schedule this year
    • we talked about this before
  • mixing metaphors: Amazon hit a home run with NFL TNF
  • Bezos (Amazon) sitting with Goodell (NFL commissioner) at game.

  •  Seamlessly watched game from iPad to Philips monitor (Amazon Prime, Firestick TV)

Predicted:

  • I predicted the Chiefs by two TDs over LA Chargers
  • I was almost correct
  • should have said, Chiefs by two possessions (TD + FG)
  • that's about how it ended, except for a last minute TD by Chargers when it no longer mattered

Other:

  • Justin Herbert; incredible; played in more pain than Zak
  • rookie from Washington State: hero
  • could be one of the most competitive NFL seasons ever
  • compared to Belichick: Patrick Mahomes / Andy Reid -- world-class orators; rank right up there with Rory McIlroy

Brittney Griner:

  • things not getting any better;
  • my hunch: with US considering long-range missiles for Ukraine, Putin has quit negotiations over Griner
  • continuing that conversation: long-range missiles in Ukraine -- a game-changer; not exactly sure what Putin can do; there are no military targets in Ukraine worthy of tactical nuclear strike.

The book page:

Weights: benefits of lifting weights. My daily exercise regimen includes:

  • treadmill: 70 - 75 minutes / day  -- generally 0800 - 0930; six days / week;
    • Duolingo during warm-up on treadmill, or
    • book, summer reading program
  • rowing: 10 - 15 minutes / day -- generally right after treadmill; but often skip;
    • although getting better; will replace swimming with rowing when weather doesn't permit swimming
  • swimming: 40 minutes / day -- weather-permitting -- only during four - five months of the year
  • weights: 15 minutes / day -- almost every day; upper body only
  • biking: 40 minutes / day -- good weather only, now; used to bike every day, but have gotten lazy; in addition to 40-minute hilly circuit; bike everywhere for errands

TGIF -- September 16, 2022

Germany: going the full monty
  • overnight: seized Rosneft assets; Bloomberg;
    • includes three oil refineries
  • considering nationalizing three of the country's largest natural gas companies
    • Uniper
    • VNG
    • Gazprom Germania (now DBA as Securing Energy for Europe
  • to avoid collapse of its domestic energy market;
  • the need for action is [said to be] urgent with Uniper losing 100 million euros a day as it tries to replace Russian gas with more expensive alternatives.

Turkey: with Russia collapsing in the Ukraine, the elephant in the room: Turkey; from Peter Zeihan:

There is an elephant in the room in many of these scenarios... and that's Turkey. 
Whatever their current economic headaches, the Turkish state under Erdogan has maintained a constant march toward realizing a populist, Islamist-tinged, pan-Turkic nationalism that has played out in several ways. 
One of the most recent has been Turkey's arming and not-so-tacit support of Azerbaijani aggression against Armenia. 
Even with Turkey's erstwhile EU aspirations and current NATO membership, Ankara has been equally at ease in pursuing its own priorities during the bloc's conflict with the Russians over Ukraine. 
But perhaps nowhere will see the full unfurling of Turkish geopolitical ambition in the wake of Russian strategic senescence more than Syria
The Alawite regime in Damascus relies (relied?) heavily on its Russian and Iranian backers, and with Moscow out of the way Ankara faces little opposition. Squashing Kurdish ambitions, redrawing borders, setting up a puppet state, coordinating with Israel to counter Iran--all are on the table for a would be neo-Ottoman Turkey without strong pushback from Russia and Iran.

Pat on the back: I mentioned this in a sidebar with a reader just a few days ago -- Russia has little appetite/capability for Mideast mischief right now.  

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Gasoline Demand

When I saw the gasoline demand numbers being reported a month ago, I was skeptical, very skeptical. It was not what I was seeing in north Texas. But I'm no longer skeptical. One can only "manipulate" the data so long, and now it's been a month, and the data continues to get worse. 

If one feels strongly that gasoline demand correlates with economic well-being of the US, it's hard not to see more talk of a recession. GDP forecast has just been slashed and is now barely positive. Latest estimate: 0.5 percent; down from 1.3% just one week ago.

Link here.

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

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Back to the Bakken

The Far Side: link here.

WTI: $84.90. A very real concern that WTI could collapse, taking US oil sector with it -- Biden administration.

Natural gas: $8.070

Monday, September 19, 2022: 29 for the month, 79 for the quarter, 418 for the year

  • 38727, conf, Slawson, Sauger Federal 4-22H,

Sunday, September 18, 2022: 28 for the month, 78 for the quarter, 417 for the year

  • None.

Saturday, September 17, 2022: 28 for the month, 78 for the quarter, 417 for the year

  • 29784, conf, Zavanna, Galloway 18-30 4H,
  • 29292, conf, Slawson, Phoenix 3-18H,
Friday, September 16, 2022: 26 for the month, 76 for the quarter, 415 for the year
  • 29783, conf, Zavanna, Galloway 18-30-3TFH,
  • 29293, conf, Slawson, Vixen Federal 3-19-30H,

RBN Energy: a new perspective on RINs -- the tax-and-subsidize interpretation, part 4.

What has been the most controversial topic in the U.S. refining industry over the last 10 years? Well, it’s a matter of opinion but, judging from time spent in earnings conference calls, law offices, courtrooms, congressional committees, the White House, and other forums of business and political debate, Renewable Identification Numbers — or RINs — would have to be a top contender for that prize. In today’s RBN blog and the final episode of this series, we consider two differing viewpoints on the effects of the RIN system and specific disagreements — or are they misunderstandings? — about the financial consequences of RINs that have dominated the debates and legal cases.

Permian Resources -- Centennial, Colgate Merger -- From Hart Energy -- September 1, 2022

Posting September 16, 2022.

Link here.

Hart Energy September 2022 - Permian Resources Corp Debuts Upon Closing of Centennial Colgate Merger - combined asset map
Permian Resources is currently operating an eight-rig drilling program and expects to reduce to a seven-rig program in November. Pictured is the a map of Centennial Resource Development and Colgate Energy acreage. (Source: Investor Presentation)
Data points:
  • largest pure-play E&P company in the Delaware Basin
  • 180,000 net acres: southeastern NM and west Texas
  • the deal
    • merger completed September 1, 2022
    • merger valued at Colgate at $3.9 billion
    • Centennial: 269.3 million shares
    •  $525 million cash
    • assumption fo $1.4 billion Colgate's outstanding debt
  • guidance: $1 billion free cash flow in 2023
  • operations
  • currently: 8 rigs
  • will reduce to 7 rigs in November, 2022
  • 150,000 boepd, 52% oil, 4Q22
  • could reduce rig count further assuming expected operational efficiencies
  • ownership
  • Permian Resources co-CEOs Hickey and James Walter own approximately 6% of total shares outstanding, representing one of the largest CEO ownership levels in the industry. Furthermore, Permian Resources employees together own over 13% of the company.
  • shareholder return: dividends plus share buybacks
  • initial dividend 5 cent/share supported below $40/bbl WTI
  • should be announced 4Q22
  • ticker: PR (NASDAQ); then PR (NYSE)

Ticker:

  • PR: link here.
  • appears to be chart for CDEV
  • market cap: $2.26 billion
  • p/e: 8.40
  • div yield: n/a

PR: Yahoo!Finance.

  • market cap: $4.453 billion
  • p/e: 6.15
  • EPS: $1.30
  • div: n/a
  • trading at $8.00
  • one-target, estimate: $10

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JP Morgan

SeekingAlpha contributor: JPM -- overweight EOG, Permian Resources; upgrade from neutral; also upgraded Vermillion Energy (VET)

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Alex Kimani

Over at oilprice.com, September 15, 2022

  • three strong buys in the oil patch
  • for contrarians
  • Tamarack Valley Energy, Ltd
    • market cap: $1.33 billion
    • Calgary, Canada
    • will acquire Deltastream Energy in a $1.425 billion deal
    • Clearwater play
    • Tamarack: will become Clearwater's largest operator
    • current share price could drop 50%
  • Devon Energy Corp
    • market cap: $47 billion
  • APA Corp
    • market cap: $13 billion
    • uptrend following investment in Egypt
    • announced significant discovery offshore Suriname

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
.

From a reader

Take a look at the DVN ten-year bond.

DVN ten-year bond: 7.950 interest rate

The demand for this five-month-old BAA3 is in so much demand, one must pay $116.048 for a $100 face-value bond. 

So if you hold this bond until maturity 04/15/32 this instrument would net yield you 5.746 interest rate. 

So if one thinks of all the stuff DVN has bought in last year or so, and the rising interest rates. the folks must think DVN is a pretty strong company to have their bonds sell at sixteen percent over par.