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Friday, January 20, 2023

Week 3: January 15, 2023 -- January 21, 2023

The single best story:


Top story:

  • Joe Biden is still president; 
    • changes stories numerous times regarding classified documents stored at home; 
    • press secretary remains mum

Top international non-energy story:

  • Russian-Ukraine war continues
  • China's population drops for first time in decades;
  • China quits testing for Covid-19 as a public health policy
    • Covid surges in Asia

Top international energy story

  • Back to offshore drilling in the Mideast
  • Norway replaces Russia as Germany's top natural gas supplier

Top national non-energy story:

  • New York starts banning natural gas stoves/ovens
  • Apple releases new hardware with powerful new M2 chips;

Top national energy story

  • SLB: record profits; raises dividend;
  • WTI closes above $81 to end the week;
Javier Blas:

Focus on fracking: most recent edition.

Top North Dakota non-energy story:


Top North Dakota energy story:

  • Bakken: operators moving to Tier 2 and Tier 3; drilling more 3-mile laterals;

Geoff Simon's top North Dakota energy stories:

Bakken economy:

Commentary:

Entertainment:

GDP -- 3Q22 -- By State -- North Dakota Fifth In Nation

Number one: Alaska!

All except three states showed an increase in GDP.

Top five:

1. Alaska -- 8.7% growth -- somewhat of a surprise;
2. Texas -- 8.2% growth;
3. Oklahoma -- 5.5
% growth;
4. Wyoming --5.3% growth;
5. North Dakota -- 5.2% growth;

Only three states with declines:

  • Mississippi, off 0.7%:
  • South Dakota, off 0.5%; focused on Fourth of July fireworks for Mount Rushmore;
  • Indiana, off 0.3% -- hmmm?

Link here.

California, as always, has the nation’s No. 1 GDP at $3.6 trillion, 14% of the U.S. total. Business output statewide grew at a 3.8% annual pace in the third quarter. California’s surge also topped the nation’s 3.2% growth pace.

Only 11 states fared better. And those top-performing states were big energy providers. Remember how gasoline prices soared for much of 2022?

No. 1 was Alaska with 8.7% growth, followed by Texas at 8.2%, Oklahoma at 5.5%, Wyoming at 5.3% and North Dakota at 5.2%. Only three states had declines: Mississippi, off 0.7%, South Dakota, down 0.5%, and Indiana, off 0.3%.

The summertime gains were a quick reversal from a weak spring. California’s GDP shrank at a 0.5% annual rate in the second quarter; the U.S. fell 0.6%. Forty-one states had declines.

The best included Texas, which grew by 1.8%, then Florida at 1.6%, West Virginia at 1.4%, Delaware at 1.2% and Nevada at 1%. The worst were Wyoming, off 4.8%, then Connecticut, down 4.7%, Indiana, off 3.3% and Arkansas and Louisiana, down 3%.

Florida at 3.8% is disappointing.

US Bureau of Economic Analysis: link here.

GDPNow -- Looking Good -- January 20, 2023

Link here.

Estimates:

  • 4Q22: final estimate, released today, remained unchanged, at 3.5%.
    1Q23: first estimate to be released next Friday, January 27, 2023.

More importantly, the Blue Chip consensus continues to rise.

WTI Closes Above $81To End The Week; Hess With Five New Permits -- January 20, 2023

Dividend news:

  • NRG: increases dividend; 37.73 cents/share; record date, 2/1/23; payable date, 2/15/23;
  • ED: increases dividend; 81 cents/share; record date, 2/15/23; payable date, 3/15/23:
  • ENLC: increases dividend; 12.5 cents; record date, 1/30/23; payable date, 2/13/23;
  • KMI: maintains dividend;
  • ONE: increases dividend; 95.50 cents; record date, 1/30/23; payable date, 2/14/23;
  • QCOM: maintains dividend;

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

Active rigs: link here.

WTI: $81.31.

Natural gas: $3.174.

Six new permits, #39577 - #39582, inclusive:

  • Operator: Hess (5); Prima Exploration
  • Fields: Capa (Williams); Ft Buford (Williams)
  • Comments:
    • Prima with one permit for an Elzy Lay well, NENE 27-153-104; 
      • to be sited 745 FNL and 170 FEL;
    • Hess with permits for five CA-Anderson Smith wells, NWNW 26-155-95; 
      • to be sited 606 FNL and between 254 FWL and 386 FWL;

Three permits renewed:

  • Sinclair: three Porcupine permits, Dunn County;

Three producing wells (DUCs) reported as completed:

  • 36748, 2,072, XTO, FBIR Lawrence 24X-26G, Heart Butte, minimal production, the wells are tracked here; not being much reported yet;
  • 37565, 520, Petro-Hunt, Johnson 158-94-14A-23-2H, East Tioga, no production data,
  • 38862, 3,023, Sinclair, Hovden Federal 2-20H, Little Knife, no production data,

Huntington Hunting For Common Sense -- January 20, 2023

Link here.

As California goes, so goes the nation, or so they say. If that rings true, the nation is set for a reversal of some of its strictest renewable energy plans, after the Huntington Beach City Council voted to dump its plan for 100% renewable energy.

Huntington Beach, California, is changing the plan it had in place with the Orange County Power Authority (OCPA)—a nonprofit offering clean energy. But its recent history in a rather unfavorable media limelight has given the city council pause.

And Huntington Beach wasn’t the first municipality to pull out—Orange County bailed on the green power authority, citing transparency concerns and a series of ugly audits, and allegations that the authority failed to inform the public that their electricity bills were increasing.
Orange County was set to begin receiving green power from the authority by the end of this year. The cost of having the county pull out is estimated to be around $65 million
For Huntington Beach, there were three plans before it when considering a change in plan: to keep the 100% renewable energy plan as is, to go with a “Smart Choice” plan offering 69% renewable energy, or the “Basic Choice” plan that offered 38% renewable energy. They opted for the Basic Choice plan in a vote of 4-3....

.... Huntington Beach’s change of plans follows the launch of the Department of Energy’s $50 million project to help communities transition to clean energy systems—the C2C program.

“With C2C...” said U.S. Secretary of Energy Jennifer M. Granholm in a statement earlier this week.

Link here.

Link here.

Al Gore seems to have lost it in Davos this week. He must be following the same stories.

Is Anyone Paying Attention -- January 20, 2023

Updates

January 21, 2023: link here.

Original Post

Is anyone paying attention? China has officially quit testing to track Covid. This is getting very, very little attention. And it's a very, very big deal. 

Something is happening here but you don't know what.

Highly recommend: Chip War: The Fight For the World's Most Critical Technology, Chris Miller, c. 2022. See below.

Meanwhile, Covid in the rest of Asia continues to surge:





*************************
The Chip War

Chip War: The Fight For the World's Most Critical Technology, Chris Miller, c. 2022.

Chapter 21: The Potato Chip King -- The story of Micron

The chapter begins:

Micron made "the beset damn widgets in the whole world," Jack Simplot used to say.

The Idaho billionaire didn't know much about the physics of how his company's main product, DRAM chips, actually worked. 

The industry was full of PhDs, but Simplot hadn't finished eighth grade.

His expertise was potatoes, as everyone knew from the white Lincoln Town Car he drove around Boise [Idaho].

"Mr Spud, the license plate declared

Yet Simplot understood business in a way Silicon Valley's smartest scientists didn't. As America's chip industry struggled to adjust to Japan's challenge, cowboy entrepreneurs like him played a fundamental role in reversing what Bob Noyce had called a "death spiral and executing a surprise turnaround.

Later:

Micron, the DRAM firm that Simplot backed, at first seemed guaranteed to fail. When twin brothers Joe and Ward Parkinson founded Micron in the basement of a Boise dentist office in 1978, it was the worst possible time to start a memory chip company.

Japanese firms were ramping up production of high-quality, low-priced memory chips. Micron's first contract was to design a 64K DRAM chip for a Texas company called Mostek, but like every other American DRAM producer, it was beaten to the market by Fujitsu.

Soon Mostek -- the only customer for Micron's chip design services -- went bust. Amid an onslaught of Japanese competition, AMD, National Semiconductor, Intel, and other industry leaders abandoned DRAM production, too.

Facing billion-dollar losses and bankruptcies, it seemed like all Silicon Valley might go bankrupt. America's smartest engineers would be left flipping burgers [and asking "french fries with that?"]. At least, the country still had plenty of french fries.

... [At this time, Micron founders] first met Simplot at the Royal Café in downtown Boise .... a potato farmer like him saw clearly that Japanese competition had turned DRAM chips into a commodity market. He'd been through enough harvests to know that the best time to buy a commodity business was when prices were depressed and everyone else was in liquidation.

Simplot decided to back Micron with $1 million. He's later poured in millions more.

Many, many lessons there. One wonders if Simplot was worried about quarterly returns; one wonders what his time horizon? One wonders if Harvard Business School uses the Simplot-Micron story as a case study?

Later, we'll look more closely how this relates to China's chip problem right now, but first we have to look at how Russia failed. But that, too, is later. And I think Japan is taking note, also.

By the way, Trump made it possible for Biden to get credit for passing the "Chips" bill, one of three huge bills Biden passed in 2022. 

See this post. January 19, 2023: is anyone paying attention?

***************************
A Musical Interlude

Bob Dylan, changing tracks:

Kraken's Wilhelm Wells In Lone Tree Lake

The wells:

  • 21432, 519, Kraken, Wilhelm 1-21H, Lone Tree Lake, t1/12; cum 160K 11/22;
  • 39015, conf, Kraken, Feller 15-22 7H, Lone Tree Lake,
  • 39014, conf, Kraken, Wilhelm 16-21 1H, Lone Tree Lake,
  • 39013, conf, Kraken, Wilhelm 16-21 5H, Lone Tree Lake,
  • 39012, conf, Kraken, Wilhelm 16-21 4H, Lone Tree Lake,

Production:

21432, since mid-2019:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-2022236224971115326
BAKKEN10-202231652807145011316314
BAKKEN9-2022306845111622119069317
BAKKEN8-2022317578321315102276738
BAKKEN7-202231810804152697268174
BAKKEN6-20223081710451830776391175
BAKKEN5-202262122255042020155
BAKKEN4-2022199761023131792715684
BAKKEN3-2022281251111320891226237653
BAKKEN2-2022826909372730157
BAKKEN1-20220000000
BAKKEN12-20210000000
BAKKEN11-20210000000
BAKKEN10-2021277838931500795288241
BAKKEN9-2021239128131923926150605
BAKKEN8-2021281190118124021249111070
BAKKEN7-20210000000
BAKKEN6-20216236269477307108160
BAKKEN5-202131137714922690179111557
BAKKEN4-20218700993105021
BAKKEN3-20210000000
BAKKEN2-20210000000
BAKKEN1-20210000000
BAKKEN12-20200000000
BAKKEN11-20200000000
BAKKEN10-20200000000
BAKKEN9-20200000000
BAKKEN8-20200000000
BAKKEN7-2020348010573060
BAKKEN6-202030584101210848760666
BAKKEN5-20203162633511859400707
BAKKEN4-20203064566111259680623
BAKKEN3-202031709661128410640692
BAKKEN2-20202969860812351047444226
BAKKEN1-202031880950160013210871
BAKKEN12-201928779613155611680766
BAKKEN11-201916177229443265058
BAKKEN10-201930467551894699107228
BAKKEN9-20193045532179268143422
BAKKEN8-20193154461410278155917

Property Taxes: California Vs Texas -- 2022

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.    

House value:


Property tax rate:



Property taxes:
  • Texas:
    • $390,000 x 1.6% = $6,240
  • California:
    • $863,000 x 0.0071 = $6,127.

Electricity:



Maintenance costs:

  • Common sense can figure this one out.

Pool costs:


Car registration:

  • Texas: $50
    • interesting to say the least
    • my three cars, a 2005 minivan; a 2007 minivan; a 2011 Honda Civic: each $75
    • I have no idea how "they" get Texas average to $50 -- wow
  • California: $45

State income tax (numbers rounded):

  • Texas: $0.
  • California:
    • married, filing jointly
    • nine brackets
      • lowest bracket, 1% begins on income of $1.00
      • mid-range bracket: 9.3% on $130,000: $12,090 -- annual state income tax bill
        • and talk about regressive: 
        • that 9.3% extends all the way up to $677,000 annual income
        • $130,000 is probably a reasonable income to consider for a married couple interested in investing and interested in the Bakken
      • 10.3% kicks in at $673,000 annual income
      • so, if you earn $130,000 (married, filing jointly) you pay the same rate as a couple earning $650,000 / year
      • 12.3% on incomes greater than $1.4 million

Note: this was the first time I really paid any attention to the tax brackets in California. I'm appalled. To say California state income taxes are progressive it complete bullshit.

Five Wells Coming Off Confidential List -- WTI At $81 -- LLS At $84 -- SLB Raises Dividend Forty-Five Percent -- January 20, 2023

Schlumberger: earnings. And name is officially changed, from Schlumberger to SLB.

The Far Side: link here.

Active rigs: link here.

WTI: $80.90.

Natural gas: $3.365.

Monday, January 23, 2023: 51 for the month; 51 for the quarter, 51 for the year
38998, conf, Hunt, Alexandria 161-100-24-13H-3,
38997, conf, Slawson, Blizzard Federal 1-13H,
38732, conf, Hess, EN-Neset-156-94-1819H-1,
31325, conf, Oasis, Slagle 5101 41-12 2B,

Sunday, January 22, 2023: 47 for the month; 47 for the quarter, 47 for the year
None.

Saturday, January 21, 2023: 47 for the month; 47 for the quarter, 47 for the year
39012, conf, Kraken, Wilhelm 16-21 5H,
30868, conf, Prima Exploration, Smokey Bear State 3H,
27898, conf, CLR, Jersey FIU 15-6H,

Friday, January 20, 2023: 44 for the month; 44 for the quarter, 44 for the year
39013, conf, Kraken, Wilhelm 16-21 5H,
38733, conf, Hess, EN-Anderson-LW-156-94-1819H-1,
38014, conf, Petroshale, Laverendrye Federal 5TFH,
34526, conf, Slawson, Armada Federal 6-14-18TFH,
27897, conf, CLR, Jersey FIU 14-6H2,

RBN Energy: US outlines criteria for direct air capture hubs, part 2.  DAC = direct air capture.

If the world is going to reduce greenhouse gas (GHG) emissions to net-zero levels by 2050, a lot of things need to go right, with the success of the International Energy Agency’s (IEA) long-term plan balancing on three different pillars. First, there are emissions reductions from improvements to fossil fuels and processes, such as power generation and industrial production. Next, there are advancements in bioenergy, a category that includes biofuels like ethanol, sustainable aviation fuel (SAF), and renewable diesel (RD). And then there’s direct air capture (DAC) — a minor factor so far, but one with the potential for significant growth, especially given the billions in U.S. funding already set aside for it. In today’s RBN blog, we look at U.S. plans to develop four regional DAC hubs, how those proposals will be evaluated, and the likely timeline for their development.

Creation of a strategy to achieve net-zero GHG emissions has been an important goal of the Biden administration, with long-term decarbonization efforts at the heart of its two most significant legislative achievements to date. The first of those bills to pass, 2021’s Infrastructure Investment and Jobs Act (IIJA), better known as the Bipartisan Infrastructure Law, set aside $3.5 billion for the creation of the DAC hubs we will explore in greater detail today. It also included $65 billion in funding for clean energy transmission and the power grid, and $7.5 billion to build a nationwide network of electric vehicle (EV) chargers, along with a host of other clean-energy priorities. Further, the IIJA provided the Department of Energy (DOE) with $8 billion to support the development of several regional hydrogen hubs — an initiative similar to the DAC hubs which are the focus of today’s blog.

Laser-Focused On Dividends -- SLB -- January 20, 2023

SLB

Link here.



One link here, to Reuters

Dividend:

Separately, the company raised its quarterly dividend to 25.0 cents a share from 17.5 cents a share, with the new dividend payable April 6, 2023, to shareholders of record on February 8, 2023.
Earnings:
  • pre-tax operating margins and per-share earnings: highest since 2015
  • net income:
    • 71 cents / share; forecast: 68
  • revenue:
    • jumped 27%, in North America
    • jumped 26% internationally