The Million Dollar Way (The Bakken Oil Blog): 06/15/23

Thursday, June 15, 2023

Focus On Dividends: Surprisingly (?) Unexpectedly (?) Target Raises Its Dividend -- June 15, 2023

Locator: 44947INV.

The surprise for me: Target (TGT) raised its dividend.

But closer inspection suggests the board discussed this issue at length, opting to raise the dividend "without really raising" the dividend -- but then, perhaps this is just me.

Here is TGT's recent dividend history:

WTI Finally Settles Above $70; No New Permits Except One For Recompletion; Five DUCs Reported As Completed -- June 15, 2023

Locator: 44946B.

EU central bank: rates raised to 22-year high. Oh-oh.

China: cutting rates. See below.

US: whatever.

We live in interesting times.

Most concerning data point: China's youth -- age 16 - 24 at 20% unemployment.

China sees itself as not recovering from economic downturn.

no evidence China will pull out of this economic downturn any time soon;

Peter Zeihan needs to remind "us" how dangerous unemployed youth are.
Taiwan needs to be very worried.
Warren Buffett probably put 1+1 together and got four.

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Back to the Bakken

Active rigs: 37.

WTI: $70.62.

Five producing wells (DUCs) reported as completed:

38829, 3,680, MRO, Prudence 44-32H, Bailey (of course),
38830, 3,912, MRO, Nyle 14-33TFH, Bailey,
38832, 2,700, MRO, Remsing 14-33TFH, Bailey,
39080, 1,661, Hess, RS-State D-155-92-0203H-9,
38203, n/d, CLR, LCU Foster Federal 2-28H,

Of interest:

18681, huge jump in production; previously reported;
17792, unremarkable, but remains off line;
20929, very nice well, but remains off line;
21469, nice well, but otherwise unremarkable;

No new permits except one permit for a recompletion:

15101, 200, Scout Energy, South Fryburg 23-30, Madison formation, Fryburg, t6/01; cum 158K 4/23; I can't read these permits well, but it looks like there might be a short lateral; most recent data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	Vent/Flare
MADISON	4-2023	10	73	213	859	1	1
MADISON	3-2023	6	73	0	433	5	5
MADISON	2-2023	28	409	427	2465	14	14
MADISON	1-2023	31	344	427	2758	19	19
MADISON	12-2022	24	282	207	2113	6	6
MADISON	11-2022	30	480	422	2800	14	14
MADISON	10-2022	29	355	422	2738	14	14
MADISON	9-2022	28	351	426	2568	21	21
MADISON	8-2022	31	275	210	2876	9	9
MADISON	7-2022	26	80	0	2121	16	16
MADISON	6-2022	22	336	422	1827	10	10
MADISON	5-2022	31	507	425	2939	24	24
MADISON	4-2022	29	442	631	2712	20	20
MADISON	3-2022	31	538	415	2960	56	56
MADISON	2-2022	26	397	423	2445	26	26
MADISON	1-2022	31	513	422	2903	48	48

Apple Talk -- CPUs, GPUs, Cores, Ram, And "Memory" -- Part Three -- June 15, 2023

Locator: 44945TECH.
Locator: 44945AAPL.

Part Three

Link to part two.

Now that we know all about cores, let's compare some recent "stats," some recent data points.

Three years ago, Intel (INTC) suggested one looking for a new computer should look for a computer with as many as two cores. The writer said "one-core computers" were everywhere so it was time to start looking at two-core computers.

Two core.

Now, the Apple Mac Pro.

The most recent speed trial, Apple M2 Mac Pro vs Intel-based Mac Pro:

the Intel-based Mac Pro: a 28-core Xeon W processor (2019)

So, after the June, 2023, WWDC, what does Apple have?

Apple's new M2 Mac Pro: link here. Top of the line, two options. If 116 cores are not enough, one can get 132 cores. Versus the Intel chip with 28 cores.

Options at the high end: link here.

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The Twins -- Haircut Day

Apparently The Market Is (NOT) Unhappy With President Biden And His Administration's Policies -- June 15, 2023

Locator: 44944BOOKS.
Locator: 44944MKT.

Updates

2:28 p.m. CDT, thirty minutes before the close -- FOMO --> short squeeze.

Huge short squeeze across the entire market -- I watched one minute of CNBC just one minute ago, and they missed it, based on the questions being asked.

But when the market does this, this fast, it's always FOMO --> short squeeze, which will then turn to profit-taking within one week, usually within 72 hours, and sometimes the very same day. Watch for FOMO --> short squeeze --> profit-taking.

Original Post

Imagine where "we" would be -- today -- if the "debt ceiling" bill had not been passed and "we" -- the United States (plural) -- were in default.

Yeah. Biden, Schumer, McCarthy got that passed. And passed with days to spare. And the morning after it was signed, that was the end of that story. The story simply disappeared.

Did anyone send any of their elected representatives or any of the three individuals named above a "thank you" note? That's what I thought. LOL.

It certainly appears "traders" are happy with the Biden administration today. I am. WTI is up around $2/bbl in late morning trading, and is now above $70 again. CVX? Up very nicely. Thank you, Mr Biden.

For those who sold in May and went to Disney World, sorry. Not sorry. Disney World is awesome. Good for you.

The market surges on "no" action by the Fed. What a great country.

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The Book Page

My library time will be very short today. I have a luncheon engagement.

The book today: A New Literary History of America, edited by Greeil Marcus and Werner Sollors, c. 2009.

I need to get caught up with new authors.

219 entries / 219 authors, covering the period from 1504 AD to 2008, an entry by Barack Obama, the last entry in the book.

I will skip and choose.

This is a great book for a stay-cation. It will not fit in your carry-on or your checked bag. Hardcover, just short of 1,100 pages.

Due to short time in library today will jump ahead to page 973:

"1970; 1972: Anne Koedt publishes The Myth of the Vaginal Orgasm"; and the movie Deep Throat is released.

I have never read the book; I assume it's banned in most schools that I would have attended, and, of course, it was published after I left those schools.

With regard to the movie, I did see bits and pieces (literally and literally) in medical school. I don't recall if we saw the whole movie in class. I'm not sure if Deep Throat was taught during our psychiatry rotation, reproductive rotation, or somewhere else. In hindsight, anatomy was taught in our first year and that would have been most appropriate, I suppose.

I've not see the movie since. I have no idea if it has held up well (or held up at all).

Someday I have to get back to the Amazon Original, the Hugh Hefner documentary. I alluded to it only a few weeks ago.

Gold: Inflation? What Inflation? -- June 15, 2023

Locator: 44943B.

Updates

Later, 10:20 a.m. CDT: two additional thoughts while biking.

First: has inflation in the past two years affected your lifestyle, your quality of life, or your standard of living. If the answer is "yes" to any of the three:

you are not doing something correctly;
you do not live in Texas;
or both.

Second: I forgot to mention in the big expenses below. Except for those living in one of handful of states, state income tax far exceeds any "federal" inflation concerns for the audience to which this blog is addressed. Texas, where I reside: no state income tax.

Original Post

Inflation? Bloomberg's chart of the day: gold. Link here. I'm certainly getting mixed messages here.

Inflation: fairly superficial but excellent summary and explanation. The third wave.

first wave: "demand-led," primary in durable goods

Covid-19;
shortage of chips (computer, not potato);
logistics (west coast ports, truck-drive shortage); and,
that was it
now: durable goods -- outright deflation [where not to invest]

second wave: "supply-led,"

the energy shock coming out of the war in Ukraine
if you don't understand this, you are not alone, neither do I
I think it's a stretch; writer needed three points

third wave: "greedflation" -- wow, wow, wow -- we discussed this quite awhile ago and is part of the reason the "inflation" story has not concerned me much (at all?).

within a reasonable range, "inflation" is "good" for investors (don't take that out of context)

when running from a bear in the woods, you don't have to outrun the bear; you only have to outrun the others trying to outrun the bear

"greedflation": the analyst considers this an unusual profit-led inflation story;
profit-led inflation occurs when consumer-facing companies toward the end of the supply chain persuade shoppers to accept price hikes by pointing to plausible explanations -- such as historically-elevated inflation -- LOL --

exactly what we mentioned on the blog some months ago [think new auto sales and grocers]
compare costs at your local regional grocer with those of Walmart
Target: markets a "better" shopping experience (but not for LGBTQ any more -- but that's another story for another time

"Greedflation":

The true reason for these elevated prices could have more to do with expanding margins and keeping investor sentiment high than with increased input costs.

"It's using excuses," Donovan said. "It's using a cover."

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What Wasn't Mentioned

US debt / US spending (which, by the way, I don't accept as a significant cause of inflation nor do a lot of economists including Nobel laureates -- in other words, I'm in good company.

Government policies mandating expensive alternative energy sources. Huge, unnecessary cost as far as I'm concerned but

Automakers: jacking up prices on ICEs to cover huge costs of EVs.

Grocers: most recent inflation number, 5%. A loaf of bread that cost me 99 cents last year should cost me $1.05 this year. In fact, I'm paying $1.49 for that same loaf of bread at Target or regional grocer. Walmart at $1.29 or thereabouts. One can do the math.

Cereal makers: 50% margins on corn flakes.

Rotisserie chicken:

Costco: $4.99.
Regional grocer: $9.99.

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Inflation Vs The Real World

Personal net worth: "everyone" seems to worry about inflation impacting quality of life, standard of living, investment returns, whatever.

Don't take this out of context, but within a reasonable range inflation has little impact compared to other factors:

First, inflation is only a factor if you buy inflated goods.

Example: the cost of US stamps and the cost of mailing packages has surged. For me, it could "break the bank." But, my overall postage has come to almost $0.00 -- e-mail has replaced mail. And I "never" mail packages any more -- Amazon does it for me -- and one can get true free mailing from Amazon without paying for Amazon prime.

Second, high cost items. In general:

state income taxes in most states (added later)
twenty years ago, I was paying college tuition: one, a private college; another, out-of-state tuition -- huge expenses; I don't have those any more
a new car every three years? Nope.
a McMansion? Nope.
a boat? Nope.
an RV that is seldom (if ever used after the first six months)? Nope.
swimming pool maintenance? Nope.
unexpected need for new air conditioner? Nope.
need for cruises, Disney vacations? Nope.

Break, break: a family of four could forego this year's Disney vacation and with one stroke, offset all other inflation "stuff" this year.

Second, more high cost items. Family, personal.

"big family"
divorce
medical care, inconsequential: age 65 -- Medicare; supplement paid by prior employer
not working, no job, temporary / permanent:

redundant, laid off;
medical condition;
lack of skills, education
drug addiction

Second, more high cost items. Telecommunication, entertainment.

way more "smart phone" than you need
way more cable, streaming than you need
way more computer than one needs: buy Chrome, not Apple

Break, break: cancel all subscription-streaming this year. That will more than offset all the rest of one's inflation for the year.

Third, transportation costs.

I'm retired, so daily driving almost unnecessary
warm-weather, dry state, urban, in good health: can bike almost anywhere.

Fourth, utilities: inconsequential.

small footprint
warm weather, highly competitive sector

Fifth, offset --

for savers and investors: getting higher return on savings, investments
best example: dividend-paying utilities, others need to increase dividends to compete with bank rates

So, yes, I get it. Inflation.

But the country has much bigger problems than this focus on inflation by the mainstream media -- it gets tedious. One needs to ask why the mainstream media focuses on inflation. I have thoughts on that, also, but time to move on. The market opens in fifteen minutes and I haven't even gotten to Bud yet -- another non-story -- but a great opportunity for savvy investors. Which I am not. LOL.

WTI Struggles To Get Back To $70; Only One Well Coming Off Confidential List; NOG Acquires More Acreage In The Permian -- June 15, 2023

Locator: 44943B.

NOG: what a great way to start the day! Link here.

northern Delaware Basin
5,600 net acres
flowing 13,000 boepd
one-third stake for $500 million cash
Eddy County, NM and eastern Culberson County, TX
operator: Earthstone
I could have this wrong, but it's the only way the numbers "work":

$500 million / 5,600 acres = $89,285 / acre
$500 million / 13,000 boepd = $38,500 / boepd

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Other

World econ in three data points, central banks:

China: cutting rates
EU: raising rates
US: the Goldilocks solution -- no change in rates.

BTW: China's unemployment is soaring.

for those aged 16 - 24: 20% are unemployed
one way to solve this problem: war
let's see? any thoughts?

101 days of summer: day 19.
biking weather on scale of 1 - 10: an eleven

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Back to the Bakken

WTI: $68.95.

Friday, June 16, 2023: 33 for the month; 141 for the quarter, 396 for the year
39397, conf, Krakken, Wiseman 31-36-35-34 3H,

Thursday, June 15, 2023: 32 for the month; 140 for the quarter, 395 for the year
39302, conf, CLR, Skachenko Federal 10-31H1,

RBN Energy: as US oil production and exports rise, midstream players seek an edge. Archived.

Only 20 years after Colonel Edwin Drake drilled the first commercial oil well in Titusville, PA, in 1859, the U.S. was responsible for 85% of global crude oil production and refining.

But over the next century, the country became increasingly dependent on oil imports — concerningly so at times.

Thanks to the Shale Revolution, the U.S. is now on the verge of a sea change in the supply-and-demand dynamics for crude oil, gasoline, diesel, jet fuel and other petroleum products.

In the coming years, as U.S. crude production continues to increase, essentially all incremental barrels will flow to export markets, possibly through one or more of the new offshore terminals under development off the U.S. Gulf Coast. Export growth — and the midstream infrastructure needed to facilitate it — was one of many topics covered at our recent xPortCon 2023 and the subject of today’s RBN blog, which also announces the availability of videos from last Thursday’s packed-to-the-gills conference.