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.

*****************************
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:

*****************************
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.

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,

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.

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.

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.