Such Great News, We'll Post It Again -- May 1, 2023

Locator: 44517B.

Re-posting:

Alaska: how some saw this news being reported yesterday -- link here:

The Biden administration on Thursday, April 13, 2023, approved exports of liquefied natural gas from the Alaska liquefied natural gas project, a document showed, prompting criticism from environmental groups over the approval of another “carbon bomb.”

The US energy department approved Alaska Gasline Development Corp’s project to export LNG to countries with which the United States does not have a free trade agreement, mainly in Asia.

Backers of the roughly $39bn project expect it to be operational by 2030 if it receives the required permits.

The project, for which exports were first approved by the administration of Donald Trump, has been strongly opposed by environmental groups.

“Joe Biden’s climate presidency is flying off the rails,” said Lukas Ross of Friends of the Earth. Ross pointed out this was the second US approval of a “fossil-fuel mega-project” in as many months.

Reuters link. How I saw it: 

Foreign Exchange Reserves: Russia And Saudi Arabia

Locator: 44516B.

Link here. 

Link here. 

Drilled Twelve Years Ago, And Better Than Ever -- What Was That Theory Again? -- May 1, 2023

Locator: 44515B.

This will also be true in the Permian. And that's what scares Saudi. They knew this from the beginning. This does NOT happen in conventional wells and that's all Saudi has (so far). But what we see below is pretty common in shale.

The well:

• 20206, 954, CLR, LCU Truman 1-23, Long Creek, t11/11; cum 407K 2/23; full production here.
  

Note:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2023	28	6375	6382	10587	32704	32528	176
BAKKEN	1-2023	31	8648	8641	14670	41668	39962	1706
BAKKEN	12-2022	31	13737	13745	20798	54622	52964	1658
BAKKEN	11-2022	28	16731	16762	22947	48406	47752	654
BAKKEN	10-2022	31	25328	25349	33061	54120	52895	1225
BAKKEN	9-2022	30	24494	24425	46495	40615	40091	524
BAKKEN	8-2022	29	11986	11951	53876	18653	17974	679
BAKKEN	7-2022	0	0	0	0	0	0	0
BAKKEN	6-2022	5	0	0	8503	0	0	0
BAKKEN	5-2022	0	0	0	0	0	0	0
BAKKEN	4-2022	0	0	0	0	0	0	0
BAKKEN	3-2022	0	0	0	0	0	0	0
BAKKEN	2-2022	0	0	0	0	0	0	0
BAKKEN	1-2022	0	0	0	0	0	0	0
BAKKEN	12-2021	0	0	0	0	0	0	0
BAKKEN	11-2021	0	0	0	0	0	0	0
BAKKEN	10-2021	0	0	0	0	0	0	0
BAKKEN	9-2021	0	0	0	0	0	0	0
BAKKEN	8-2021	0	0	0	0	0	0	0
BAKKEN	7-2021	0	0	0	0	0	0	0
BAKKEN	6-2021	0	0	0	0	0	0	0
BAKKEN	5-2021	0	0	0	0	0	0	0
BAKKEN	4-2021	0	0	0	0	0	0	0
BAKKEN	3-2021	0	0	0	0	0	0	0
BAKKEN	2-2021	0	0	0	0	0	0	0
BAKKEN	1-2021	0	0	0	0	0	0	0
BAKKEN	12-2020	0	0	0	0	0	0	0
BAKKEN	11-2020	0	0	0	0	0	0	0
BAKKEN	10-2020	0	0	0	0	0	0	0
BAKKEN	9-2020	0	0	0	0	0	0	0
BAKKEN	8-2020	0	0	0	0	0	0	0
BAKKEN	7-2020	0	0	0	0	0	0	0
BAKKEN	6-2020	0	0	0	0	0	0	0
BAKKEN	5-2020	0	0	0	0	0	0	0
BAKKEN	4-2020	0	0	0	0	0	0	0
BAKKEN	3-2020	0	0	0	0	0	0	0
BAKKEN	2-2020	0	0	0	0	0	0	0
BAKKEN	1-2020	24	1059	1223	411	2255	1944	0
BAKKEN	12-2019	31	1474	1551	603	3211	2806	0
BAKKEN	11-2019	30	1494	1703	602	3211	2806	0
BAKKEN	10-2019	29	1680	1659	660	3359	2980	0

My Michelob Weekend -- My Montana Lot Overlooking Flathead Lake -- May 1, 2023

Locator: 44514M.

On which I will never build ... 

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

Active rigs: 42.

WTI: $75.66.

Natural gas: $2.307.

Two new permits, #39868 - #39869, inclusive:

• Operator: CLR
• Field: Jim Creek (Dunn)
• Comments:
• CLR has permits for two Micahlucas wells, 
• one to be sited 250 FSL aand 302 FWL; and, 
• one to be siteed 250 FSL and 347 FWL

Five producing wells (DUCs) reported as completed:

• 39264, 3,022, Grayson Mill, Field 18-19F 6H, Todd,
  
• 38404, 917, Kraken, Sidney 32-29 2TFH,
• 38405, 905, Kraken, Sidney 32-29 3H,
• 38406, 612, Kraken, Sidney 32-29  4TFH,
• 38934, 935, Kraken, Claire Rose LE 31-30 1H,

Apple Savings -- May 1, 2023

Locator: 44513A.

Apple Savings: $1 billion in first four days after launch. This is an interesting story. There's no way millennials and Gen Z will invest in I-bonds -- and now they have Apple savings. Apple savings is so much more flexible and millennials and Gen Z are already familiar with the Apple iPhone. 

I've invested in I-Bonds over the years, and, wow, what a hassle. What a pain. I will never invest in I-bonds again, simply because of all the wickets to access one's account.

Apple Savings: face recognition or fingerprint and that's it. 

Speaking of which, Schwab's facial recognition technology is the beset I've seen.

At 4.15% APR, Apple Savings competes head-to-head with US I-bonds.

Alerus banking, Grand Forks, ND: $3 billion in assets.

US Crude Oil Exports -- April, 2023 -- Hits Record High

Locator: 44512B.  

Link here. 

All the hand-wringing -- and then this ...

U.S. crude oil exports for the month of April have surpassed forecasts, hitting a record 4.5 million barrels per day in March thanks to rising fuel demand in China.

U.S. crude exports grew 22% last year from 2021 after Russia's invasion of Ukraine led the U.S., the EU, and Canada to ban imports of Russian oil and dramatically altered global flows.

China is the world’s second largest oil consumer, and has recorded an economic resurgence ever since it rolled back its strict zero-Covid policies.

April exports to China surged to ~850,000 barrels per day, the highest level since May 2020.

The Bakken's Not Dead Yet -- NOG Increases Quarterly Dividend By Nine Percent -- May 1, 2023

Locator: 44511B. 

Story here, but headline says it all.

From 3 cents to 34 cents in less than two years. 

*****************************
Duolingo

One of the best things I ever did -- Duolingo, Spanish, for both Sophia and me.

I've now had 935 days -- unbroken streak.

Amazing how often I see / hear Spanish here in north Texas -- and now understand it. 

I don't speak it; I don't understand spoken Spanish very well, but reading, I'm getting better and better, simply plugging along.

Movers And Shakers, Traders On Wall Street -- Anticipating The Recession -- May 1, 2023

Locator: 44510I.  

Tech:

Infrastructure:

*****************************
Construction Boom

Frustrating the Fed. Link to The Wall Journal.

“Macroeconomic cycles take years to play out.” 

Even when construction employment declines, the effects might not be felt immediately in the broader economy.

During the relatively fast-crashing 2008 financial crisis, the number of people working in residential construction peaked in April 2006 and had fallen roughly 15% before overall employment began to drop about two years later.  

The 2008 crash kicked off a deep recession and a yearslong home-building slump that left the U.S. severely short of housing. [So, let's do it again!]

Meanwhile, millions of homeowners are locked into historically low mortgage rates, which is keeping existing homes off the market and stoking demand for new construction.

New-home sales climbed 9.6% in March.

**********************************
The States That Did Not Revolt

Real estate ... borrowing.

Story here: https://www.foxbusiness.com/politics/27-states-ask-biden-end-his-disaster-policy-forcing-good-credit-borrowers-subsidize-risky-mortgages.

The states that did not revolt:

• the entire west coast and New Mexico
• Minnesota, Montana
  
• New York and all of New England (which includes the primary state, New Hampshire)
  
• most interesting: Georgia.

The states that did revolt (27): 

Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming.

Includes three swing states: Pennsylvania, North Carolina, South Carolina, Florida. Also includes a huge primary state: Iowa.

Rambling On Investing Before I Take A Long Bike Ride -- May 1, 2023

Locator: 44509I.  

Updates

Later, 7:34 p.m. CT: link here. 

Original Post

Since the US will pretty much ban all crude oil by 2035, I am now re-looking at my rolling-30-year investment strategy as I start to "unload" all my energy holdings in an orderly fashion over the next five years. 

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. 

I have a 40-30-20-5-5 investment strategy (BRK-Energy-Tech-Big Pharma-Daimler Truck). 

The "30" energy will now transition to: UNP, CAT, DE, which unfortunately make the 40-30 more like 70-20-5-5. We'll have to see. On the other hand, I've expanded well beyond just 20 holdings in my portfolio and maybe I need to get back to that. 

In addition, IRA RMDs are going to be a "killer." Lots of taxes but also an opportunity to re-allocate.

Maybe I need to talk to my nephew about his thoughts on tech over the next 30 years.

• The Street, 2021.
• Forbes, May, 2023.
• InvestorPlace, December, 2022.
  

I said I would never invest in GE, but the recent news out of Los Angeles regarding the ports of Los Angeles and Long Beach may change my mind. No hurry, but will watch closely.

Most interesting? T at InvestorPlace -- December, 2022, link above.

VMC is also interesting. The dividend yield is uninteresting, and the company has no moat from what I can tell but I will add VMC to the short list.

Later, in reply to a reader regarding the above note, not ready for prime-time:

1. Oil is already a commodity but will morph into what the "regulated" utilities do, or the cigarettes. No growth but great dividends for quite some time. 

2. China, for whatever reason, is already transitioning to EVs. Much faster than the rest of the world (Norway will be 100% EV but it's so small it won't matter). 

3. EU made the decision to go with EVs a long time ago, with or without Biden. 

4. Africa is a non-player. 

5. India is clearly moving to EVs. 

6. That leaves North and South America. I have no idea what South America is doing but it certainly doesn't seem good economically. 

7. So, North America. The west coast and the northeast have decided to go all in with electricity, again, with or without Biden. Texas, despite all the talk about oil, is putting in more and more wind. 

8. So, oil is not going away, it's just not a growth sector. Again, it's like a regulated utility or a tobacco company. 

9. If that is incorrect, and we go back to ICE and junk EVs completely, GM and Ford are doomed. GM is still playing both ICE and EV, but Ford has said it's going all in with EVs. 

10. That's why I suggested an "orderly" way of unloading oil; over several years, maybe a decade -- nice dividends but not much growth. If I'm wrong, I haven't bet the farm by unloading all oil all at once. 

11. There a lot of "open book tests" out there to watch: a. the EU's position on natural gas and EVs b. China's EV growth c. US west coast, northeast, and Texas.

12. I'm good with oil for another 30 years, but again, it's not going to be a growth sector. 

13. Everything changes if oil goes back to $100 on fundamentals and not geo-political risks or market manipulation by the Saudis.

PSA: UNP Declared An Increase In Its Regular Dividend One Year Ago -- May 1, 2023

Locator: 44508I.  

The declaration date was May 12, 2022.

The record date was May 31, 2022. 

 Five-year:

This is really, really cool. To understand the price-action of UNP this past year, look at "US Ports."

I have a 30-year rolling horizon. 

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.

A Whiting Wold Well Updated -- May 1, 2023

Locator: 44507B. 

 For newbies, the very nice Whiting Wold well, #19468, updated here.

MRO Wells In Reunion Bay Oil Field Updated -- May 1, 2023

Locator: 44506B. 

For newbies, these phenomenal MRO wells in Reunion Bay oil field have been updated. Many have gone over 500K bbls cumulative, and many are still flowing, no pump.

I-Bonds Vs Enbridge -- Idle Ramblng -- May 1, 2023

Locator: 44505D. 

JPM Surges In Pre-Market — “Buys” First Republic — May 1, 2023

Locator: 44505D. 

JPM / First Republic.

• The  rich get richer.
• Well done, Mr Dimon.
• Wow.

Opportunity, link here:

Valuation: link here.

According to analysts, the U.S. supermajors, ExxonMobil and Chevron, are valued on the market at around six times their cash flows, while TotalEnergies is valued at around 4x the cash flow, with UK-based BP and Shell valued even lower, at around 3 times their cash flows. 

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

MRO's Carlson well in Bailey oil field just went over 500,000 bbls cum. Link here.

Active rigs: 40.

Peter Zeihan newsletter.

WTI: $75.27.

Natural gas: $2.368.

Tuesday, May 2, 2023: 54 for the month; 54 for the quarter, 309 for the year
37176, conf, Hess, EN-Davenport-156-94-1003H-5,

Monday, May 1, 2023: 53 for the month; 53 for the quarter, 308 for the year
31212 (no typo), conf, BR, Gladstone 5-1-13TFH,

Sunday, April 30, 2023: 52 for the month; 52 for the quarter, 307 for the year
39183, conf, Ragnar, Dagny 1-2H,
38523, conf, Oasis, Rilynn Federal 5201 41-2 2B,
31213 (no typo), conf, BR, Gladstone 4-1-13MBH,

RBN Energy: Federal incentives, rising demand spur a slew of US clean ammonia projects, part 2. Archived.

The global push to decarbonize power generation, shipping and other energy-intensive sectors of the economy and the Biden administration’s efforts to heavily incentivize the development of low-carbon energy sources have resulted in a growing list of big clean ammonia projects in the U.S. Almost all of these proposed multibillion-dollar production facilities are located along the Texas-Louisiana coast, a region that offers easy access to natural gas supply, carbon sequestration sites, and export markets. In today’s RBN blog, we continue our look at the burgeoning market for “green” and (especially) “blue” ammonia with a review of the largest production facilities now under development.

Most interesting: OCI / Beaumont, TX

OCI, a chemical company based in the Netherlands, broke ground in December 2022 on a $1 billion, 1.1-MMtpa clean ammonia plant in Beaumont, TX (yellow-outlined box), that is expected to come online in 2025. The project’s site is adjacent to the company’s existing 1.4-MMtpa methanol-ammonia production facility and a 1.8-MMtpa methanol plant owned by Natgasoline, a 50-50 joint venture (JV) of OCI and Proman USA. OCI has said that area already has extensive hydrogen-related infrastructure (H₂ pipelines and H₂ storage) and the site and its planned utilities are sufficient to support a doubling of the new clean ammonia plant’s capacity to 2.2 MMtpa when demand warrants it. The company has also indicated that at least 95% of the CO₂ generated during the production of the clean hydrogen for the new plant will be captured and sequestered. An engineering-procurement (EP) contract for the facility was awarded to Maire Tecnimont in March 2022.

Linde announced in February 2023 that it will build, own and operate an ATR and an air separation plant at the same Beaumont site and has signed a long-term agreement to provide blue hydrogen and nitrogen to OCI’s new clean ammonia plant. Linde’s $1.8 billion in new facilities will be capable of supplying blue hydrogen, nitrogen and other industrial gases to other customers in the area. Also, South Korea’s Lotte Chemical said in March 2023 that it has signed a memorandum of understanding (MOU) under which OCI will supply unspecified volumes of clean ammonia from the new Beaumont plant to Lotte. Further, the companies plan to co-develop a global ammonia bunkering network to supply ammonia-fueled ships.