The Million Dollar Way (The Bakken Oil Blog): February 2023

Tuesday, February 28, 2023

Seven Wells Coming Off Confidential List Today; Lori Lightfoot Out As Chicago Mayor -- February 28, 2023

SRE: whoo-hoo -- SRE is up over 4% pre-market -- although that's after a drop yesterday -- this $124-stock is trading for $154

dividend increase, from $1.145 to $1.19; pays 3.17%; link here.

SRE beat EPS estimates, but revenues fell y/y
link here:

SRE fourth-quarter 2022 adjusted earnings per share (EPS) came in at $2.35, which beat the Zacks Consensus Estimate of $2.06 by 14.1%. The bottom line also increased 8.8% from $2.16 in the prior-year quarter.
Barring one-time items, the company generated GAAP earnings of $1.39 per share compared with $1.90 in the fourth quarter of 2021.
For 2022, the company reported an adjusted EPS of $9.21, which increased 9.3% year over year. Earnings surpassed the Zacks Consensus Estimate of $8.90 per share by 3.5%.
In the quarter under review, Sempra’s total revenues of $3,455 million decreased 10.1% year over year on lower contributions from Energy-related businesses (down 88.7%) and the Electric business (down 0.8%). Moreover, the top line missed the Zacks Consensus Estimate of $3,815 million by 9.4%

Inflation and the Fed: a really, really nice interview on CNBC this morning with a former Fed governor -- went a long way to explain why inflation was not transitory and why the Fed misunderstood that and why the Fed pivoted and explained why inflation is persistent. The former Fed governor's explanation really does support supply and demand, "too many dollars chasing too few goods."

And other headlines:

Comments:

Watch the US market when the Fed starts to hint that a 4% inflation rate is "perfectly reasonable" to consider. Talking heads today on CNBC seem to be suggesting as much.

Tea leaves: one and done in March. Another 25 basis points and that’s it for the year as long as core inflation continues to trend down.

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Back to the Bakken

Active rigs: 45.

Peter Zeihan newsletter.

WTI: $76.57.

Natural gas: $2.749.

Thursday, March 2, 2023: 10 for the month; 172 for the quarter, 172 for the year
39083, conf, CLR, Woodrow 2-32H,
38747, conf, Ovintiv, Sorenson Federal 153-96-9-4-13H,
38346, conf, Enerplus, Court 149-92-31D-30H,

Wednesday, March 1, 2023: 7 for the month; 169 for the quarter, 169 for the year
39160, conf, Resonance Exploration, Resonance Huber 13-1H,
39085, conf, CLR, Woodrow 4-32H,
39084, conf, CLR, Woodrow 3-32H1,
39056, conf, Lime Rock, Yellowstone 14H,
38746, conf, Ovintiv, Sorenson Federal 153-96-9-4-4H,
38745, conf, Ovintiv, Sorenson Federal 153-96-9-4-12H,
38417, conf, Liberty Resources, AZ W 158-93-13-24-1MBH,

RBN Energy: with sanctions in place, Russia's oil-and-refining sector faces a slow, steady decline. Archived.

Russia’s invasion of Ukraine in February 2022 set off a wave of repercussions in energy markets and economies the world over. The hope of the U.S. and its allies has been that international pressure and mounting sanctions would cause Russia to swiftly end the war — or at least make it very difficult to finance. But while the war rages on and Russia seems to be coping with the short-term impacts reasonably well, the long-term effects on its energy sector could be much more significant. In today’s RBN blog, we look at how Russia’s twin challenges — finding buyers for its crude oil and its refined products — are more different than they might seem and why Russia’s oil-and-refining sector is in the early stages of a sustained slowdown.

Movie Night -- Tuesday, February 28, 2023

Without question, I'm a sucker for ... good story-telling. And when it comes to classic movies no one does it better than TCM. And I'm a sucker for TCM.

There's a lot more to TCM than I bet most folks realize.The presenters are first rate and they keep getting better. Alicia Malone has perhaps changed the most (for the better) over the year. Eddie Muller is in his element, and, of all the presenters, probably is the most cognizant of the importance of TCM, though I wouldn't want that taken out of context.

Tonight was the first time I read closely the history of TCM over at wiki. It makes me love it even more. What a gift Ted Turner left us.

The first ninety seconds of "The Major and The Minor" and I'm already hooked. LOL. Preceded by "The Palm Beach Story" which I loved.

Inflation And The Price Of Tattoos -- February 28, 2023

One can start here. Or here -- originally written in 2018 but updated in 2023.

Inflation Watch -- February 28, 2023

Wow, wow, wow -- eggs!

Eggs:

had been running at $5.59 for the past several weeks (months);
today, at Target: $3.29 for a dozen white eggs
wow
on February 23, 2023, an article in The WSJ predicted this (LOL)

Eggs:

by the way, speaking of eggs, from 2015:

McCormick crushed red pepper, for pizza:

$6.15 for a huge bottle, 3x their normal size, 1.5 oz
store brand: 1.5 oz for $1.19 (or $3.58 vs $6.15)

Soft drinks, 2-liter:

my favorite drink at McDonald's: Diet Dr Pepper
at home, Diet Coke
makes no sense? Don't ask, I don't know.
Diet Coke: $2.99 at Market Street;
Diet Coke: $2.59 at Target
Diet Dr Pepper: $2.19 at Target
from now on, Diet Dr Pepper at home;
$2.99 vs $2.19 per 2-liter bottle; that's almost a dollar/bottle savings

Bread:

brand name $3.99 or more
white, no-name bread: $1.49

Canola oil:

Crisco: $5.29 for one of those 48-oz bottles
store brand, same size: $3.89

Frozen turkey: Walmart

98 cents / lb

Spirits (at Total Wine and More -- I didn't buy either scotch/vodka -- just noting; was there to buy sake)

scotch: the price I would pay if I bought scotch: $35 -- it's rare for me to buy scotch any more; too expensive
Texas vodka (Tower): normally $12.99 for typical size bottle (750 ml); $5 off; now $7.99 -- I don't drink vodka either with very rare exceptions.

21st Century: America's Century -- February 28, 2023

21st Century -- America's Century! US LNG: link here.

China: being reported at Fox News today. Huge story. I first read about it in Peter Zeihan's new book. This is quite remarkable. Last month, January, 2023, it was not viewed as a crisis: some now see it as a crisis. What is the fastest way for Beijng to solve this problem? If only.

********************************
Back to the Bakken

Active rigs: 45.

WTI: $77.05.

Natural gas: $2.747.

One new permit, #39689:

Operator: WPX Energy
Fields: Moccasin Creek (Dunn County)
Comments:

WPX has a permit for an Augustus well, SENE 26-148-93;

to be sited 1333 FNL and 528 FEL.

Four DUCs reported as completed:

38657, 1,176, CLR, LCU Ralph 10-27H1X,
38660, 993, CLR, LCU Reckitt 10-22H1X,
38661, 1,311, CLR, LCU Reckitt 11-22HX,
34771, n/d, XTO, Lonnie Federal 31X-3D, drilled in 17 days; reached TD, on June 6, 2019; the MB seam was 32' thick; the horizontal was within the target zone 100%; FracFocus has not yet posted frack data;

Well of interest:

16328, IA/313, XtO, Marmon Hahn 44X-3, Hofflund, t1/07; t1/07; cum 354K 10/22; off line 11/22;

NovaVax Tanking -- February 28, 2023

Link here.

a Covid-19 vaccine maker
enough cash to last another year

Here's the rub:

companies need to change their vaccine each year to match circulating strains as required by regulatory agencies, including the U.S. Food and Drug Administration.
protein-based vaccines like Novavax's take longer to produce than their messenger RNA-based competitors.

Peter Zeihan noted this some time ago.

Will we see similar headlines for EV manufacturers over the next two years? EV manufacturers have other constraints but cash burn is the common bottom line.

Rivian: 4Q22 -- Maybe Someone Else Can Find Some Good News In The Numbers

Updates

Later, 11:04 p.m. CT: Now that money is no longer free, one wonders if that’s the death knell for a lot of these hobby horses and/or science experiments.

Original Post

Numbers are out. The headlines don't even begin to reflect how badly these numbers are:

Link here.

Letter to shareholders here.

We experienced a loss from operations in the fourth quarter of 2022 totaling $(1,795) million, as compared to $(2,454) million in the same period last year. For fiscal year 2022, we recorded a loss from operations of $(6,856) million as compared to $(4,220) million in 2021.

Good luck with the newsletter.

Let's see what analysts have to say.

But first, the market.

RIVN: down 8% after hours.

Link here.

Rivian Automotive Inc on Tuesday forecast 2023 production well below analysts' estimates as it grapples with lingering supply chain bottlenecks, and announced a recall of more than 12,700 vehicles.
Rivian said its recall announcement, its third since going public in Nov. 2021, was due to an issue with a sensor in the front passenger seat-belt system.
In October, it recalled about 13,000 cars due to a potential issue that could cause a driver to lose control of the steering.
The company said it is targeting production of 50,000 cars this year, compared with analysts' estimate of 67,170 units.
The Irvine, California-based company also reported lower-than-expected fourth quarter revenue as the electric-vehicle firm delivered far fewer vehicles than it produced.

Rivian produced 24,337 vehicles in 2022, slightly short of its target of 25,000 units.
However, it delivered only 20,332 cars last year.

Revenue for the quarter ended December 31, stood at $663 million, compared with analysts' estimate of $742.4 million.
The company reported fourth-quarter net loss of $1.72 billion, or $1.87 per share, compared with $2.46 billion, or $4.83 per share, a year earlier.
Rivian reported cash and cash equivalents of $11.57 billion, down from $13.27 billion at the end of the preceding quarter.

Probably Needs To Be Fact-Checked -- February 28, 2023

It's unreliable, unpredictable, and non-dispatchable, but it's relatively inexpensive, and if you don't think critically about it, it's 1,000% pollution-free.

And, 100% of the electricity I use in Texas is generated by the wind. It is priced at 15.5 cents/kWh for the first 2,000 kWh. Last year it was priced at 14 cents/kWh (eleven percent inflation) but will be guaranteed at that rate for two full years. I could have gotten four years at 15 cents but worried if I moved -- but the small print said there would be no penalty for moving, so I should have gone for the four years. But, the rate might be lower in two years; who knows? And I'm not going to quibble over 0.5 cents/kWh.

A lot of that needs to be fact-checked but that's what my utility company is telling me, and my total utility costs run less than $100 / month, ten months of the year.

Link here.

Reading -- Nothing About The Bakken -- February 28, 2023

If you came here looking for the Bakken, scroll down or scroll to the sidebar at the right.

A little diversion today, while fact-checking something.

From bibleref.com:

Currently reading The Rise and Reign of the Mammals: A New History, From the Shadow of the Dinosaurs to US, Steve Brusatte, c. 2022. where I first came across the reference to hyraxes in the bible.

As mentioned earlier, for a high school junior or senior going on to college to major in one of the life sciences, the three books that should be summer reading:

The Rise and Reign of the Mammals: A New History, From the Shadow of the Dinosaurs to US, Steve Brusatte, c. 2022.
The Mistaken Extinction: Dinosaur Evolution And The Origin Of Birds, Lowell Dingus And Timothy Rowe. c. 1998
The Mind of a Bee, Lars Chittka, c. 2022. Princeton University Press. A scientific treatise.

***********************
Pop Quiz

Fill in the blank:

One out of every five mammal species alive right now is a ______________ -- some fourteen hundred total species -- a diversity exceeded only by rodents.
Not only are there more ______________ species, but they are aces at coexisting: in the tropics, more than a hundred species are known to inhabit the same ecosystems.

Later, answer: bats.

Link: https://www.guinnessworldrecords.com/world-records/78145-largest-group-of-mammals.

CHIPs Comes With Strings Attached -- I'm Shocked! Shocked -- February 28, 2023

A reader sent me this link:

Companies receiving money to build domestic semiconductor facilities under the $53 billion Chips Act will have to meet a series of requirements imposed by the government to ensure billions of dollars in taxpayer funding is protected and its national security goals are met.

Such conditions include financial requirements to share part of their profits with the government and restrain stock buybacks and dividends.

Companies are also expected to use union workers for the construction of facilities and provide child care for construction and factory workers. In a move that could limit their business potential for one of the world’s largest chip markets, the government puts tough limits on the expansion of companies’ operations in China for a decade

My not-ready-for-prime-time reply

Yes, it was very, very disheartening to see the strings attached.

Everything suggests that the semiconductors are going to have a very, very tough year (or years) and I would strongly suggest folks not invest in these companies if they want to sleep well at night.

Obviously, when Buffett sold all his TSM he saw something very concerning. Maybe he saw the strings attached to the CHIPS bill or maybe he felt he was way over-weight with tech (AAPL comprises more than 40% of his portfolio).

My "new money" allotment remains the same with 20% going to the semiconductor space but I have a long time horizon. I will never see the end result and that amount being invested in semiconductors does not affect my quality of life.

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.

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.

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Buffett: A Time Line -- 1936 To 2013

On the way to looking up something else I ran across this timeline of Warren Buffett's career, 1936 to 2013.

Link here.

GDP Forecast Keeps Rising -- February 28, 2023

Link here.

The "inflation" meme? It gets tedious.

CNBC this morning: high transsporation costs
regular gasoline here in north Texas today -- $2.58.

***********************
Historical Inflation Rates, 1914 - 2023

Link here.

This was pretty much the majority of that part of my adult life in which I was earning a living and raising a family, for me, 1977 - 2007. Pay particular attention to 1973 to 1976, and then again, 1977 - 1982. The year 1977 was relatively good compared to what came before and what came after:

Now, on a fixed income:

And for those who prefer the alternative, 1929:

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Global Inflation

Seven Wells Coming Off Confidential List Today -- February 28, 2023

CVX buybacks: link here.

Chevron raises share buyback guidance to $10 billion to $20 billion per year
reaffirms higher returns,
touts lower carbon objectives

Buffett's letter: agree completely. His letter pretty much centered around KO dividends. Huge disappointment.

Every year, investors await Warren Buffett’s annual shareholder letter with excitement, hoping for the insights and flair that make it a must-read. This year’s was a disappointment. Buffett took just two pages of the relatively brief 11-page letter to go over events of the past year and there wasn’t a lot of insight. The eagerly anticipated missive released Saturday didn’t address some key issues, including the slowdown in stock buybacks at Berkshire Hathaway, the troubles at Geico, and succession.

Ghana: link here.

Russian oil to be stashed in Ghana as pool of buyers shrinks.

**********************************
Back to the Bakken

Active rigs: 44.

Peter Zeihan newsletter.

WTI: $77.44. Up nicely.

Natural gas: $2.671.

Tuesday, February 28, 2023: 91 for the month; 162 for the quarter, 162 for the year
39089, conf, CLR, Colette 6-18H,
38934, conf, Kraken, Claire Rose LE 31-30-1H,
38744, conf, Ovintiv, Sorenson Federal 153-96-9-4-3H,
38416, conf, Liberty Resources, AZ W 158-93-13-24 1MBH,
38345, conf, Enerplus, Serve 149-92-31D-30H,
38344, conf, Enerplus, Volley 149-92-31D-30H,
36049, conf, Oasis, Foley Federal 5301 12-13 2B,

RBN Energy: Permian crude oil flows shifting from Corpus Christi to Houston. Archived.

For several years now, almost all the Permian’s incremental crude oil production has moved to export markets along the Gulf Coast. Due to new pipeline capacity and shipping cost advantages, Corpus Christi has enjoyed a disproportionate share of those volumes. But the market is shifting. Pipelines to Corpus are filling up, and that is pushing more oil to Houston for export — and to Beaumont for ExxonMobil’s new 250-Mb/d refinery expansion. Unless the pipes to Corpus expand their capacity, much more oil supply will be targeting Houston, with important implications for pipeline capacity, dock capacity, and regional price differentials. In today’s RBN blog, we explore these issues and what could throw a curveball into the whole Gulf Coast crude oil market.

SRE: Mixed -- 4Q22

Link here.

Sempra press releasee: Q4 Non-GAAP EPS of $2.35 beats by $0.31.
Revenue of $3.46B (-9.9% Y/Y) misses by $330M.
Affirming 2023 EPS Guidance Range: Sempra is reaffirming its full-year 2023 earnings per common share (EPS) guidance range of $8.60 to $9.20 vs $9.00 consensus.
The company is also reiterating its long-term projected EPS compound annual growth rate of approximately 6% to 8% based on the midpoint of 2023 EPS guidance range.

SRE: drops 3% pre-market; drops almost $5 / share; trading at $150.

Rivian: 4Q22 — February 28, 2023

Rivian is expected to post another big loss for the fourth quarter, while staff turnover and consumer demand for its EVs in this economic climate pose other concerns.

Pre-market: still green; up a bit more than 1%.

*********************
Later

Numbers are out.

Link here.

Letter to shareholders here.

Good luck with the newsletter.

Let's see what analysts have to say.

But first, the market.

RIVN: down 8% after hours.

Link here.

Rivian Automotive Inc on Tuesday forecast 2023 production well below analysts' estimates as it grapples with lingering supply chain bottlenecks, and announced a recall of more than 12,700 vehicles.
Rivian said its recall announcement, its third since going public in Nov. 2021, was due to an issue with a sensor in the front passenger seat-belt system.
In October, it recalled about 13,000 cars due to a potential issue that could cause a driver to lose control of the steering.
The company said it is targeting production of 50,000 cars this year, compared with analysts' estimate of 67,170 units.
The Irvine, California-based company also reported lower-than-expected fourth quarter revenue as the electric-vehicle firm delivered far fewer vehicles than it produced.

Rivian produced 24,337 vehicles in 2022, slightly short of its target of 25,000 units.
However, it delivered only 20,332 cars last year.

Revenue for the quarter ended December 31, stood at $663 million, compared with analysts' estimate of $742.4 million.
The company reported fourth-quarter net loss of $1.72 billion, or $1.87 per share, compared with $2.46 billion, or $4.83 per share, a year earlier.
Rivian reported cash and cash equivalents of $11.57 billion, down from $13.27 billion at the end of the preceding quarter.

TGT: Huge Beat — February 28, 2023

Target earned $1.89 per share in the fourth quarter, compared to estimates of $1.40 per share.

Pre-market: down $1.11.

Monday, February 27, 2023

OKE — 4Q22 — Mixed

Link here.

Laser-Focused On Dividends -- CHRD -- February 27, 2023

Somewhere along the line I missed this one.

Chord Energy -- CHRD -- has increased its quarterly dividend, from $3.67 to $4.80.

Look at that dividend yield: almost 11%.

Chord Energy is the new company, through the merger of Oasis / Whiting.

No New Permits But Five DUCs Reported As Completed -- Febriuary 27, 2023

Active rigs: 45.

WTI: $75.68.

Natural gas: $2.731.

No new permits.

Five producing wells (DUCs) reported as completed:

38926, 2,761, Grayson Mill, Timber Creek 13-24 3H,
38928, 3,665, Grayson Mill, Timber Creek 13-24 5H,
38715, 1,232, Ovintiv, Calhoun 149-98-3-10-15H,
38717, 352, Ovintiv, Calhoun 149-98-3-10-14H,
38722, 3,641, Ovintiv, Calhoun 149-98-3-10-4H,

Wells of interest:

20538, IA/352, Ovintiv, Calhoun 1-3H, Pembroke, t8/11; cum 381K 7/22; off line 8/22;
23302, IA/1,602, Grayson Mill, Timber Creek 13-24 1TFH, Alexander, t7/13; cum 205K 5/22; off line 6/22;

Electricity Statement -- North Texas -- February 27, 2023

This is our entire utility bill. We only have electricity, no natural gas.

This past month my wife and I made no effort to conserve energy / electricity. We used what we wanted, and we kept the house warmer than usual during the February cold spell.

Had we worked hard to conserve energy, we could have probably trended toward $75 for the month. I don't find a huge difference between $75 and $115.

Our base rate is 14 cents / kwh for the first 2,000 kwh.

This past month; 793 kwh.

793 x 0.14 = $111.02.

Our rate has been increased to 15.5 cents / kwh for the next two years.

793 x 0.155 = $122.92.

So, we'll see.

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Poolside

6:28 p.m. -- sun below the horizon, or at least behind the buildings. Beautiful weather and it will be even warmer tomorrow. I'll try getting into the pool tomorrow. LOL. Looking a little scruffy in the photo below.

Oh, Oh -- OXY Misses On Top And Bottom Line -- February 27, 2023

EPS: $1.60-something vs $1.81 estimate.

Declares a healthy dividend increase. Raises dividend to 18 cents / share. Was thirteen cents / share, and as recently as 2021, was a single penny.

5 / 13 = a 38-percent increase in its dividend.

OXY preview here.

The fact that OXY missed both on the top line and the bottom line should be very, very concerning. Very concerning. I'm sure we will get reassuring guidance.

PEMEX — Staggering Loss — Mexico: The Poster Child For Peak Oil -- February 27. 2023

There’s only one explanation for a loss like this.

Link here to Charles Kennedy.

Mexico’s president Andres Manuel Lopez Obrador (AMLO) campaigned on promises of reviving Pemex for the national interest; however, while oil companies the world over raked in windfall profits on the back of Russia’s war on Ukraine and sanctions last year, Pemex has moved sharply in the opposite direction

Government intervention, in the form of $45 billion in capital injections, tax breaks and other machinations has failed to move the needle and the plan to boost production by moving offshore production to shallower waters and focusing more attention on onshore plays has likewise met with no success.

So, what was the loss?

Pemex, for 4Q22, reported $9.4 billion in losses in a single quarter, more than triple the losses of the previous quarter.

Pemex output fell to 1.62 million barrels per day in 2022, the third year that Pemex has reported a decline.

As of April, 2022:

From National Gas Intelligence:

The company reported a fourth-quarter net loss of 172.4 billion pesos ($9.4 billion) after a 52- billion peso loss in the third quarter.

In 4Q2021, Pemex reported a loss of 124 billion pesos.

On the bright side, Pemex managed to turn a profit of 23 billion pesos, or about $1.25 billion, over the course of 2022. It was the first positive annual result in a decade

In 2021, Pemex reported a loss of 295 billion pesos.

During an earnings call on Monday, executives also highlighted work to lower the company’s debt burden. Total debt fell to around $107 billion, from $109 billion at end-2021. Production also was up. Natural gas output in the fourth quarter was 3.91 Bcf/d, compared to 3.72 Bcf/d in the year-earlier period. In 2022, gas production averaged 3.87 Bcf/d, compared to 3.69 Bcf/d in 2021.

The improved result was mainly due to new fields in the southeast, such as gas-rich Quesqui. Executives also highlighted improved drilling times.

Biden Laying Down Markers And Reminders -- February 27, 2023

Updates

February 28, 2023: wow, wow, wow, I hit the nail on the head. It's now being reported that China's Xi is warning Elon Musk not to release the DOE report on Xi's involvement in release of the Covide virus from a Wuhan lab. Remember, of all the countries affected most by the virus, it's hard to imagine a people hit worse than the Chinese. Wow, wow, wow. Link here: https://www.foxbusiness.com/business-leaders/china-warns-elon-musk-covid-lab-leak-comments. Let's see if any other media outlet picks up this story. Xi is on extremely thin ice; it may not take much for a coup d'état. Let's see: Nordstream and now this. US intel community doing well.

Later, 3:42 p.m. CT: if indeed, the Biden administration was successful in having China walk back plans to provide "lethal" aid to Russia, this speaks volumes. China knows what sanctions could do to China's economy. Donating "lethal" aid won't help China's economy. If Russia does not get Chinese, that pretty much cements Russia as the global outcast.

Original Post

Posted earlier:

Covid, WSJ, DOE: well played.

obviously "no one" read past the headline; LOL.
P. T. Barnum comes to mind

Saudi Arabia fell in line immediately; Saudis aren't known for swift action but not only did they donate $400 million in aid but the prince did it in person. For the photo op. Not to be outdone by America, but more importantly, send a strong message to China.

And it worked. Biden has a stronger hand.

See this:

*******

Inside The the ER On The Eve of Covid

Link here: https://lithub.com/inside-the-emergency-room-on-the-eve-of-the-covid-19-pandemic/?utm_source=Sailthru&utm_medium=email&utm_campaign=Lit%20Hub%20Daily:%20February%2027%2C%202023&utm_term=lithub_master_list.

It might have been worse but fortunately America had 330 million virologists.

************************
A Personal Note

USAF physicians. In progress.

The Small Print: Starting Price -- February 27, 2023

Link here.

WSJ Front-Page Op-Ed On Fracking In 2023 -- February 27, 2023

Link here.

Frackers are set to plow more cash into oil fields this year compared with last, but it isn’t expected to unleash the flood of crude that past spending binges in the shale patch have.

EOG Resources Inc. said it would spend about $1.4 billion more than last year, but that its oil production would rise by only about 3% in 2023. Pioneer Natural Resources Co. said it would augment its budget by nearly $1 billion, but its production would increase by less than 7% from 2022. And Marathon Oil Corp. MRO said that although its expenses would jump by up to 35%, its production would remain flat.

The disconnect between spending and production gains makes for a murky outlook for oil and gas producers in 2023, analysts said. It comes after many producers rode high oil prices following Russia’s invasion of Ukraine to record profits in 2022, but suggests their ability to grow is limited.

"EOG Resources Inc. said it would spend about $1.4 billion more than last year, but that its oil production would rise by only about 3% in 2023."

absolutely no analysis
mixing CAPEX dollars with production change in percent;
what percent does the CAPEX increase represent?
how does the production increase translate to the bottom line in dollars?
can companies execute their CAPEX plan with free cash flow while still paying regular dividends and variable dividends?

What if that 3% translates into $10 billion dropping to the bottom line versus the $1.4 billion allocated. LOL. Obviously that's hyperbole but again, without analysis using real numbers no one knows what $1.4 billion means and/or what a three percent increase in production means.

The rest of the article reads like an op-ed without any analysis.

Devon says they can fund their 2023 program requiring no outside funding all the way to $40-WTI.

EOG's $1.4 billion CAPEX increase will likely pay for itself by the end of 2023.

Without Comment -- Home Sales And Apartment Rents -- February 27, 2023

Link here.

The National Association of Realtors’ index of pending home sales climbed 8.1% to 82.5 in January, higher from the projected estimate of 1.0% by Bloomberg economists.

On a yearly basis, however, pending transactions plunged by nearly 24%.

Meanwhile, it's also being reported that apartment rents are falling.

Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.

Renters with new leases in January paid a median rent that was 3.5% lower than they would have paid last August, according to estimates from listing website Apartment List.

It was the first time in five years that rent fell every month over a six-month period.

No comments, just one question: what's the definition of "transitory"?

OXY To Report -- What To Expect -- February 27, 2023

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Zacks link here.

The Zacks Consensus Estimate for fourth-quarter crude oil production is pegged at 656 thousand barrels of oil per day. For natural gas, the Zacks Consensus Estimate for the quarter is pegged at 1,754 thousand cubic feet per day.

Occidental expects total production of 1,200-1,260 thousand barrels of oil equivalent per day (MBOE/d) and 556-590 MBOE/d output from Permian Resources.

The Zacks Consensus Estimate for fourth-quarter earnings per share and total revenues are pegged at $1.83 per share and $8.65 billion, reflecting a year-over-year increase of 23.7% and 8%, respectively.

Financial Times. Archived.

Oxy and Anadarko: how the "dumbest deal in history" paid for for Vicki Hollub. Behind a paywall.

The article begins:

When Vicki Hollub flew Occidental Petroleum’s Gulfstream V jet to Omaha for a meeting with billionaire investor Warren Buffett in April 2019, she needed cash to place a bet.

The $10bn cheque with which she emerged allowed her to outbid rival Chevron in an epic corporate battle to acquire Anadarko Petroleum, doubling Occidental, better known as Oxy, in size.

But the takeover saddled the company with debts totalling almost $50bn.

For the gamble to pay off, oil prices needed to remain elevated. Things quickly started to go wrong.

A little over six months later, as the Covid-19 pandemic upended the global economy, oil prices began a collapse in which the US benchmark would trade below zero — down as much as 177 per cent from the price on the day the Anadarko deal closed. Oxy’s stock was demolished by a market that had already soured on an industry that had burnt through investor cash in a series of debt-funded drilling sprees with little to show in the way of returns.

Critics panned Hollub for recklessness in ploughing ahead without regard for cost.

“It was the dumbest deal in history,” said one senior oil executive.

Almost four years later, Oxy is not only back from the dead, it is thriving. The company was the best performer on the S&P 500 in 2022, with its stock rising 119 per cent, as it reaped the rewards of elevated oil and gas prices in the wake of Russia’s invasion of Ukraine.

At noonish today

NVDA - February 27, 2023

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

A double in the last six months?

UNP -- February 27, 2023

Last night, I said the stock to watch Monday morning: UNP.

The Real Question Is Why? February 27, 2023

Ford, China: a disaster. Link to WSJ.

there's a reason Ford doesn't publish a detailed breakdown of its China sales
the market share for Ford’s largest joint venture in China, with Changan Automobile Co., shrank to 1% from 4% between 2016 and 2022, according to industry data and Changan-Ford’s company filings.

why?

Geo-Pollitical Photo Of The Year? February 27, 2023

Link here.

Investing -- Buffett -- Apple -- Oil -- February 27, 2023

Re-posting.

It appears a lot of folks missed this the first time around.

In addition, a certain reader might see another example of where earnings exceed revenues.

At the link:

Without question, this was the most interesting story this quarter; it has been posted previously but it looks like few are following it: link here.
Buffett also owns an under-the-radar stock portfolio worth $5.9 billion through Berkshire Hathaway. The portfolio is managed by New England Asset Management, which provides investment management services that are tailored to insurance companies.
New England Asset Management was acquired by General Re in 1995. Then, in 1998, Berkshire Hathaway acquired General Re for $22 billion, making New England Asset Management a wholly owned subsidiary of Buffett's conglomerate.
While Buffett has no influence over the $6 billion portfolio managed by New England Asset Management, the portfolio does have some striking similarities to Buffett's $300 billion stock portfolio.
For one, it's extremely concentrated, with its top 10 positions making up 92% of the portfolio. The top 10 holdings of Berkshire Hathaway's main stock portfolio make up 87% of its assets.
The top ten:
Cisco: $9 million
JP Morgan: $11 million
Bank of New York Mellon: $12 million
Microsoft: $13 million
Diageo: $39 million
HP: $410 million
Chevron: $638 million
US Bancorp: $668 million
Bank of America: $687 million
Apple: $2.84 billion
When one looks at that holding, one understands why Buffett sold what he sold from BRK in most recent quarter. It also shows that Buffett owns even more AAPL than most might think.

Although $3 billion AAPL in this portfolio pales in comparison to Buffets overall $140 billion AAPL.

Investing -- Fifteen Visuals -- February 27, 2023

Fifteen visuals: link here.

Legacy Fund Deposits -- February, 2023

Legacy Fund. Legacy Fund financial statements.

The Race to Debottleneck U.S. LNG Feedgas Routes -- RBN Energy -- February 27, 2023

RBN Energy: the race to debottleneck US LNG feedgas route. Archived.

LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years.

After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year.

Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market

The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, we begin a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast.

Sixteen Wells Coming Off Confidential Over Weekend; Might WTI Open "Green" Today? February 27, 2023

Top story of the day: Saudi, Ukraine.

geopolitics
Covid, WSJ, DOE
China, Russia, Saudi, US
photo of the day.

Covid, WSJ, DOE: well played.

obviously "no one" read past the headline; LOL.
P. T. Barnum comes to mind

Coal:

energy transition is dead; we just don't know it yet -- Peter Zeihan;
China: link here.

the numbers are staggering
thumbing their nose at Kyoto, Paris, Biden, Kerry

Credit card debt: the saga continues.

lots of graphs (yes, we get it, enough with the graphs already): where's the analysis?

Ford, China: a disaster. Link to WSJ.

there's a reason Ford doesn't publish a detailed breakdown of its China sales
the market share for Ford’s largest joint venture in China, with Changan Automobile Co., shrank to 1% from 4% between 2016 and 2022, according to industry data and Changan-Ford’s company filings.

Investing:

graphs

Buffett:

the knives are out.
has BRK become a meme stock?

Energy: among top ten stories of the year.

WTI subsumes Brent;
this is a biggie
eleven -- count 'em -- eleven US Gulf Coast terminals --> WTI to Brent
Dated Brent: WTI, Brent, Forties, Oseberg, Ekofisk, Troll.

********************************
Back to the Bakken

Active rigs: 44.

Peter Zeihan newsletter.

WTI: $76.43 (green).

Natural gas: $2.597 (green, by 2%).

Monday, February 27, 2023: 84 for the month; 155 for the quarter, 155 for the year
39088, conf, CLR, Colette 5-18H,
39019, conf, Lime Rock, Yellowstone 12H,
38743, conf, Ovintiv, Sorenson Federal 153-96-9-4-11H,
38404, conf, Kraken, Sidney 32-29 2TFH,
36050, conf, Oasis, Foley Federal 5301 12-13 3B,

Sunday, February 26, 2023: 79 for the month; 150 for the quarter, 150 for the year
39087, conf, CLR, Colette 4-18H,
39018, conf, Lime Rock, Yellowstone 11H ,
38693, conf, Enerplus, Lob 149-92-31D-30H-LL,
38428, conf, Whiting, Nesheim 11-24HU,
38405, conf, Kraken, Sidney 32-29 3H,
38343, conf, Enerplus, Ace 149-92-31D-30H,
36048, conf, Oasis, Achilles 5301 12-13 3BX,

Saturday, February 25, 2023: 72 for the month; 143 for the quarter, 143 for the year
39017, conf, Lime Rock, Yellowstone 10H,
38742, conf, Ovintiv, Sorenson Federal 153-96-9-4-10H,
38406, conf, Kraken, Sidney 32-29 4TFH,
8029 (no typo), conf, Empire North Dakota, Romsos 1-21,

RBN Energy: the race to debottleneck US LNG feedgas route. Archived.

LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years. After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year. Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market. The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, we begin a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast.

Sunday, February 26, 2023

Sunday Night -- February 26, 2023

Focus on Fracking: posted.

UNP: reminder to watch tomorrow.

Earnings tomorrow, according to Yahoo!Finance:

BRK-A; GOEV; RRC; TGT; FSF (Fisker); OKE (Oneok);
RIVN: reports Tuesday, February 27, 2023

WTI: if WTI opens even one penny "in the green," this will be the first Monday in a "month of Mondays" in which WTI opens "in the green." LOL.

**********************
Focus On Fracking

Link here.

Lede:

natural gas hit $2 for the first time in 29 months;
lower 48 oil production at a 33 month high;
commercial crude oil inventories are at a new 20 month high as oil supplies that cannot be accounted for tops two million barrels per day (see below);
DUC backlog at 4.9 months after largest increase since June 2020

Also: the "fudge factor" seems a bit larger than usual:

To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [+2,073,000] barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil,” thus suggesting there was an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed....

However, since most everyone treats these weekly EIA reports as precise, and since these weekly figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...

... (for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

***************************
Pool Time

An Old Enerplus Well Goes Over 500K Bbls Crude Oil Cumulative -- February 26, 2023

The well:

18809, 753, Enerplus/Peak North Dakota, Baker 20-34H, Heart Butte, Bakken, t8/11; cum 461K 4/19; cum 503K 5/21; cum 531K 12/22;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2022	20	1275	978	540	1071	794	0
BAKKEN	11-2022	27	1586	1468	955	1350	1041	0
BAKKEN	10-2022	31	2001	2382	1036	2195	1838	0
BAKKEN	9-2022	21	1355	1168	680	969	625	0
BAKKEN	8-2022	31	1813	1870	1248	2095	937	219
BAKKEN	7-2022	29	1954	2057	851	1356	867	0
BAKKEN	6-2022	27	1699	1561	742	1174	816	0
BAKKEN	5-2022	31	2018	2017	896	1368	937	0
BAKKEN	4-2022	20	1306	1569	572	965	598	0
BAKKEN	3-2022	31	2155	1929	939	2279	1844	0
BAKKEN	2-2022	28	1978	1919	857	2793	2539	0

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