Big Pharma Page -- December 11, 2022

Focus on Fracking has posted: http://focusonfracking.blogspot.com/2022/12/us-oil-supplies-now-at-36-year-low.html.

Energy: the big energy story this week — Great Britain is freezing.

NASDAQ shuffling: https://www.investors.com/news/rivian-globalfoundries-joining-nasdaq-100-index-apple-chipmaker-china-stocks-falling-off/.

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AMGN

Amgen is in advanced talks to buy Horizon Therapeutics. 

Sanofi dropped out of the running, announced earlier today; J&J had dropped out earlier, leaving only Amgen.

The takeover, valued at well over $20 billion, would mark the largest healthcare merger of the year. 

And, yes, Horizon Therapeutics, is publicly traded; ticker HZNP. It closed at $97.29 on Friday, December 9, 2022, but rose to $98.25 in after-hours trading. 

Story at The WSJ. 

The company is Nasdaq-listed, but based in Ireland and has operations in Dublin; Deerfield, IL; and, a new facility in Rockville, MD.

Winter Storm Update -- December 11, 2022

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The Book Page

At Amazon.

Mrs Paine's Garage: And the Murder of John F. Kenney, Thomas Mallon, November 10, 2003.

Area Under The Curve -- December 11, 2022

Locator: 43800B.

The area under the curve: 

What was the area under the curve? Glad you asked. 

The above is the "personal saving rate," somewhat related to "household wealth" which increased by $13.5 trillion for Americans during the pandemic.

Link here.

The "rich get richer."

In fact, "investors get richer."

So, what's the denominator? What is total American household wealth?

Also, from FRED:

Recent stock market losses and losses in the housing market have tempered these gains. I don't have a dog in the housing market fight, but I'm buying a lot of shares on the equity market at significantly depressed prices.

Chord Energy -- CHRD -- Devon Of The North? November, 2022

Don't let the fact that CLR  out-produces Chord Oil in the Bakken confuse you. The two companies have different operating styles.

Link here.

Peer-leading return of capital program:

• 85% of FCF in 3Q22
• expect 75% of FCF at current leverage levels

Pure-play Bakken:

• 972,000 acres
• 92% operated
• 68% working interest

Breakeven Prices For New Shale Wells: $30. Oil Companies Supporting The Biden Mandate: No More Drilling -- December 11, 2022

I told a reader: 

By the way, I don't know if I will bother to post it or not, but Biden's energy tsar, over the weekend, is telling shale operators it's their patriotic duty to drill more wells -- despite the Biden policy: "no more drilling." I guess the word he used was "un-American." 

For an administration that killed the Keystone XL; continues to ban drilling; and slow-rolls the industry on approving permits -- that's pretty rich -- calling guys like Harold Hamm, "un-American."

"Political posturing" and "talking to your base" have little to do with reality.

But this is the real reason by the Biden folks are so upset. 

First, one has to remember, the entire left wing loathes -- absolutely loathes -- Big Oil. There's only one thing they loathe more: every-day oil folks making more money while drilling fewer wells. LOL.

So, what's the real reason oil companies aren't drilling more? Certainly they're not listening to the Biden administration. LOL.

Here's why:

As to why they weren't drilling more, oil executives blamed Wall Street. Nearly 60% cited "investor pressure to maintain capital discipline" as the primary reason oil companies weren't drilling more despite skyrocketing prices, according to the Dallas Fed survey. Only 11% cited environmental, social or governance issues; 8% said they had difficulty getting financing; 15% cited other reasons. 

What price WTI to drill more [spoiler alert: $300]:

Asked what level the price of West Texas Intermediate oil would need to hit to get publicly traded oil and gas companies back into growth mode, 29% of executives said that their expansion plans weren't dependent on price. Another 9% named a price above $120 a gallon.

"Forty percent of respondents don't think that a price of $120 a barrel, which is very profitable from what we know about the marginal cost of shale production, is enough to increase output," said Paul Ashworth, chief North America economist for Capital Economics.

Investor pressure:

Many companies are choosing to enjoy their high profits rather than increase the supply of oil. That's despite the relatively low oil price they would need to turn a profit.

On a different Dallas Fed question, executives said oil prices between $23 and $38 a barrel, on average, would cover the cost of drilling new wells.

So, what's the real reason oil companies aren't drilling more? Certainly they're not listening to the Biden administration. LOL. Actually this is the irony:

Oil companies are so incredibly patriotic supporting Biden's policy: no more drilling.

Average Cost To Complete A Bakken Well -- Hess' Experience -- December 11, 2022

A reader asked about the cost to drill and complete a Bakken well. This brought me to this: Hess ramping up, January 26, 2021 -- almost a year ago.

First to answer the question:

$5.6 million.

In 2021, the firm’s drilling and completion cost per Bakken well averaged $5.8 million, 6% lower than in 2020. Hess sees the company offsetting anticipated inflation “through lean manufacturing and technology driven efficiency gains.” He sees drilling and completion costs

remaining flat in 2022.

More data points from the linked article:

• Hess Corp. expects production from its Bakken Shale assets to grow 6-9% in 2022 to 165,000-170,000 boe/d;
• added a third rig last September, 2020;
• Bakken net production was 159,000 boe/d in the fourth quarter compared with 189,000 boe/d in the prior-year quarter, primarily due to the impact of lower drilling activity
• the company can generate “attractive returns” in the Bakken at $60/bbl for West Texas Intermediate (WTI) oil, executives said. 
• the Bakken is a “cash engine.” In 2022, Hess will drill 90 Bakken wells and bring approximately 85 new wells online.

3Q22 estimated results:

Bakken:

Net production from the Bakken was 166,000 boepd compared with 148,000 boepd in the prior-year quarter, primarily due to increased drilling and completion activity and a curtailment of production in the third quarter of 2021 resulting from a planned maintenance turnaround at the Tioga Gas Plant.

Hess added a third drilling rig in September 2021 and a fourth drilling rig in July 2022.

During the third quarter of 2022, the Corporation drilled 20 wells, completed 20 wells, and brought 22 new wells online.

Bakken net production is forecast to be in the range of 165,000 boepd to 170,000 boepd in the fourth quarter and approximately 155,000 boepd for the full year 2022.

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Christmas Spirit

Sophia at the Bass Performance Hall, downtown Ft Worth, TX: The Nutcracker. 

This continues a decade-long Christmas tradition. For more than ten years, Sophia's grandmother has taken the three granddaughters to The Nutcracker -- in Boston, and, now, Ft Worth.

Ford -- The Business Model -- December 11, 2022

See talking autos, December 9, 2022. 

Updates

December 13, 2022: to increase F-150 production.

Original Post

I find this so incredibly interesting.

By the way, a lot of smaller SUVs look a lot like the bigger sedans. Technically Ford discontinued the "sedan," but a lot of SUVs function a lot like sedans. 

Initially I was concerned about Ford losing entry-level products (Fusion, Escort, Focus-like, etc) but with the smaller SUVs, Ford has that segment easily covered.

Ford sales in 2018

• down 3.5% over 2017 but records across the board
  
• top-selling car brand in the USA
• total vehicle sales, including Lincoln brand,: 2,497,318
• top-selling car brand in the USA
• 2,393,731 vehicles sold (-3.3%)
• F-Series: America's favorite truck
• top seller of commercial vehicles
• SUVs: at record sales
• traditional car sales were down by nearly a fifth

2018: US economy: a banner year -- White House

• The U.S. economy grew at a rapid rate of 3.1 percent, the fastest pace for any calendar year since 2005, with output rising by $560 billion over the four quarters of the year.
• Gross private domestic investment, just 17 percent of GDP at the start of the year, accounted for 36 percent of the growth in real GDP in 2018. 
• Real investment in intellectual property products, up 10.8 percent, and grew at its fastest pace since 1999.

Ford to stop selling sedans at the end of the 2019 model year. Link here.

Why Ford stopped selling sedans. May 17, 2021. Link here.

And here we go, the "footprint rule." 

In 2011, the car industry in the United States won a change to the EPA’s calculation of Corporate Average Fuel Economy (CAFE) standards.

The “footprint rule” refers to the area between all four wheels of a vehicle and is what the EPA uses to calculate the vehicle’s fuel economy, based on a function of its size.

This rule change incentivizes manufacturers to build larger vehicles, holding them to looser standards.

Results of this are larger vehicles that rake in profit.

It should come as no surprise that most new vehicles on the road are more prominent than their previous generation due to this loophole. [This was no loophole. LOL.]

Taking Ford’s own Explorer SUV as an example, the latest generation is 4.9 inches longer and 5.2 inches wider than the previous model.

The “footprint rule” is not the only reason for model growth. Bigger cars feel better, you quite literally get more for your money, but it is also cheap value for the manufacturers. Margins are higher per inch, making a bigger vehicle easier to squeeze profit out of. After an announcement from EPA administrator Scott Pruitt stating the rollback of 2025 standards outlined by the agency, Ford’s team mapped out what they needed to meet CAFE standards.

Outcomes showed that Ford no longer needs mileage offsets from smaller, less profitable vehicles.

Initial Production Data For Wells Coming Off Confidential List This Next Week -- December 11, 2022

The wells:

• 37893, conf, Enerplus, Tin 147-93-17B-20H, Moccasin Creek,

Date	Oil Runs	MCF Sold
10-2022	22840	17273
9-2022	26688	19542
8-2022	29902	23471
7-2022	34994	32237
6-2022	10243	6323

• 38985, conf, CLR, Kiefel 2-36HSL, West Capa, no production data,
• 37700, conf, BR, Ole 5-1-29TFH, North Fork, no production data
• 39021, conf, Kraken, King LE 8-5-32 11H, Oliver,

Date	Oil Runs	MCF Sold
10-2022	2131	221

• 39004, conf, Slawson, Cannonball Federal 3 SLH, Big Bend, no production data,
• 38935, conf, CLR, Roxy 9-31HSL1, West Capa, no production data, 
• 39022, conf, Kraken, King 8-5-32 4H, Oliver,

Date	Oil Runs	MCF Sold
10-2022	1767	187

• 39003, conf, Slawson, Lunker Federal 7-33-4TFH, Big Bend, no production data, 
• 38936, conf, CLR, Roxy 8-31H, West Capa, no production data, 
• 37895, conf, Enerplus, Gallium 147-93-17A-20H, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
10-2022	17976	15169
9-2022	19430	17455
8-2022	24742	16451
7-2022	33577	26647
6-2022	17217	10628

• 37894, conf, Enerplus, Osmium 147-93-17B-20H, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
10-2022	27362	23655
9-2022	24128	18657
8-2022	33497	23414
7-2022	56883	36022
6-2022	23287	14375

• 39023, conf, Kraken, King 8-5-32 3H, Oliver,
  

Date	Oil Runs	MCF Sold
10-2022	1490	15

• 39002, conf, Slawson, Lunker Federal 6-33-4TFH, Big Bend, no production data, 
• 38937, conf, CLR, Roxy 7-31H1, West Capa, no production data, 
• 38862, conf, Sinclair, Hovden Federal 2-20H, Little Knife, no production data, 
• 38932, conf, Slawson, Lunker Federal 3-33-4H, Big Bend, no production data, 
• 36900, conf, Bowline/Nine Point, Shaffer 155-102-27-22-6H, Squires,
  

Date	Oil Runs	MCF Sold
10-2022	14875	13095
9-2022	18867	18970
8-2022	24282	22475
7-2022	21576	19594

• 36178, conf, BR, George 2D TFH, Pershing, no production data, 
• 38938, conf, CLR, Roxy 6-31H, West Capa, no production data, 
• 38931, conf, Slawson, Lunker Federal 5-33-4TFH, Big Bend, no production data, 
• 38214, conf, WPX, Two Shields Butte 13-21 10H, Heart Butte, no production data, 
• 38930, conf, Slawson, Lunker Federal 4-33-4TFH, Big Bend, no production data, 
• 38863, conf, Sinclair, Hovden Federal 3-20H, Little Knife, no production data, 
• 36899, conf, Bowline/Nine Point, Shaffer 155-102-27-22-7H, Squires, no production data, 
• 35527, conf, WPX Energy, Two Shields Butte 13-21-32-16H3U, Heart Butte, no production data, 
• 38486, conf, Hess, GO-Johnson-156-98-2635H-4, Wheelock, no production data, 
• 38216, conf, WPX Energy, Two Shields Butte 13-21 11TFH, Heart Butte, no production data, 
• 38215, conf, WPX Energy, Two Shields Butte 13-21 9H, Heart Butte, no production data, 
• 36898, conf, Bowline/Nine Point, Shaffer 155-102-27-22-13H, Squires, no production data, 
• 38898, conf, CLR, Bonney 8-3H, Jim Creek, no production data, 
• 38411, conf, Whiting, Kannianen 11-5HU, Sanish, no production data, 
• 35528, conf, WPX Energy, Two Shields Butte 13-21-17-1H3U, Heart Buttee, no production data, 
• 38487, conf, Hess, GO-Johnson-156-98-2635H-5, Wheelock, no production data, 
• 38897, conf, CLR, Bonney 7-3HSL1, Jim Creek, no production data,
  

Wells Coming Off The Confidential List This Next Week -- December 11, 2022

Wednesday, December 21, 2022: 55 for the month, 164 for the quarter, 708 for the year.
37893, conf, Enerplus, Tin 147-93-17B-20H,

Tuesday, December 20, 2022: 54 for the month, 163 for the quarter, 707 for the year.
38985, conf, CLR, Kiefel 2-36HSL,
37700, conf, BR, Ole 5-1-29TFH,

Monday, December19, 2022: 52 for the month, 161 for the quarter, 705 for the year.
39021, conf, Kraken, King LE 8-5-32 11H,
39004, conf, Slawson, Cannonball Federal 3 SLH,
38935, conf, CLR, Roxy 9-31HSL1,

Sunday, December 18, 2022: 49 for the month, 158 for the quarter, 702 for the year.
39022, conf, Kraken, King 8-5-32 4H,
39003, conf, Slawson, Lunker Federal 7-33-4TFH,
38936, conf, CLR, Roxy 8-31H,
37895, conf, Enerplus, Gallium 147-93-17A-20H,
37894, conf, Enerplus, Osmium 147-93-17B-20H,

Saturday, December 17, 2022: 44 for the month, 153 for the quarter, 697 for the year.
39023, conf, Kraken, King 8-5-32 3H,
39002, conf, Slawson, Lunker Federal 6-33-4TFH,
38937, conf, CLR, Roxy 7-31H1,
38862, conf, Sinclair, Hovden Federal 2-20H,

Friday, December 16, 2022: 40 for the month, 149 for the quarter, 693 for the year.
38932, conf, Slawson, Lunker Federal 3-33-4H,
36900, conf, Bowline/Nine Point, Shaffer 155-102-27-22-6H,
36178, conf, BR, Geeorge 2D TFH,

Thursday, December 15, 2022: 37 for the month, 146 for the quarter, 690 for the year.
38938, conf, CLR, Roxy 6-31H,
38931, conf, Slawson, Lunker Federal 5-33-4TFH,
38214, conf, WPX, Two Shields Butte 13-21 10H,

Wednesday, December 14, 2022: 34 for the month, 143 for the quarter, 687 for the year.
38930, conf, Slawson, Lunker Federal 4-33-4TFH,
38863, conf, Sinclair, Hovden Federal 3-20H,
36899, conf, Bowline/Nine Point, Shaffer 155-102-27-22-7H,
35527, conf, WPX Energy, Two Shields Butte 13-21-32-16H3U,

Tuesday, December 13, 2022: 30 or the month, 139 for the quarter,  683 for the year.
38486, conf, Hess, GO-Johnson-156-98-2635H-4,
38216, conf, WPX Energy, Two Shields Butte 13-21 11TFH,
38215, conf, WPX Energy, Two Shields Butte 13-21 9H
36898, conf, Bowline/Nine Point, Shaffer 155-102-27-22-13H,

Monday, December 12, 2022: 26 for the month, 135 for the quarter, 679 for the year.
38898, conf, CLR, Bonney 8-3H,
38411, conf, Whiting, Kannianen 11-5HU,
35528, conf, WPX Energy, Two Shields Butte 13-21-17-1H3U,

Sunday, December 11, 2022: 23 for the month, 132 for the quarter, 676 for the year.
38487, conf, Hess, GO-Johnson-156-98-2635H-5,

Saturday, December 10, 2022: 22 for the month, 131 for the quarter, 675 for the year.
38897, conf, CLR, Bonney 7-3HSL1,