The Million Dollar Way (The Bakken Oil Blog): 07/11/23

Tuesday, July 11, 2023

Oil Shares -- How Fast Prices Can Change -- July 11, 2023

Locator: 45091INV.

This blows me away, but this is what consistent investing, month-in, month-out, DRIP programs over fifty years of investing can yield.

I've told this story many, many times, how I "stumbled into" CVX. I won't re-tell it now. It was pure lock. I made a conscious decision to buy the shares with no advice from any advisor. It was one of my first investment decisions.

But after my first few shares back in 1988 or thereabouts, I added to that holding through DRIPS. Later in life, I occasionally added more shares, but the bulk of CVX in my portfolio is from dividend reinvestment.

I never once sold a share of CVX over (2023 - 1988 = ) 35 years.

There are not many things I need in life that I could have (not) bought today with the jump in price of CVX by almost $3 / share. Does that make sense? I don't know that for sure, but I bet I'm correct.

Anyway, whatever.

Then I noticed that today's closing price was $158 / share.

And I noticed that the 52-week high was $188 / share (actually higher, but $188 works better wiith $158 when telling the story).

This is within the last 52 weeks. The low in that same period of time was $132.

Throughout this period. (35 years), I assume CVX has paid around 3% most of that time.

But if "we" ever hit a new 52-week high ($188) -- wow, wow, wow -- I'll be able to buy Sophia a new Jiu Jitsu robe. A jump of $30 / share.

I have no idea how many shares of CVX (or for that matter the number of shares of 99% of the rest of my holdings) I have but I can only imagine. I don't look at number of shares or specific holdings unless I plan to sell something. If I don't plan on selling something, why should I bother checking in on the holding?

Don't take that out of context; there's a bit of hyperbole there but not much.

In 1988, shares were selling for $10 apiece.

I could have done better with so many other investments, but I have no complaints.

I won't tell you about the huge losses I've had over the years: I could start with Lucent. LOL.

ERCOT -- July 11, 2023

Locator: 45090TX.

Lots of headlines about Texas heat.

ERCOT -- the Texas grid -- not even close to failing.

On another note, link here:

Maximum (?), wind and solar:

Texas: 16 terrawatts produced
California: 5 terrawatts produced

And then this. I honestly have no idea what this means. Link here.

By the way, North Dakota, 1Q23:

ranked #1 in fastest growth in GDP, quarter / quarter
ranked #3 behind NY and MA in GDP per capita.

That I understand.

Oil and agriculture.

Wow, Wow, Wow -- Despite API Inventory Rise, Price Of Oil Surges After Hours -- WTI Breaks Through $74 -- Trends Toward $75 -- July 11, 2023

Locator: 45089WTI.

WTI: $74.83; up 2.52%.

Brent: $79.40

Bakken proxy: $79.91.

API weekly release:

Crude oil inventories in the United States increased this week by 3.026 million barrels, the American Petroleum Institute data showed on Wednesday, July 11, 2023, after falling by 4.382 million barrels in the week prior.
Analysts were expecting a much smaller build of 200,000 barrels in U.S. crude-oil inventories. The total number of barrels of crude oil gained so far this year is nearly 35 million barrels, according to API data, although the net draw in crude inventories since April is more than 12 million barrels.

Market after-hours:

AAPL: up slightly;
CVX: down slightly;
COP: down slightly;

Grayson Mill With Two New Permits -- July 11, 2023

Locator: 45088B.

Active rigs: 35.

WTI: $74.83.

Two new permits, #40028 - #40029, inclusive:

Operator: Grayson Mill
Field: Briar Creek (McKenzie)
Comments:

Grayson Mill has permits for two Sponheim wells, NWSW 32-152-104,

one to be sited 1606 FSL and 323 FWL, and
the other to be sited 1606 FSL and 353 FWL

Two permits reneewed:

Lime Rock: two Robert Sadowsky permits, SWSW 2-142-96; Manning oil field, Dunn County;

Updating An Old Whiting Sanish Well -- July 11, 2023

Locator: 45087B.

The well:

17158, 4,184, Whiting, Richardson Federal 11-9H, Sanish, t10/08; F; cum 995K 10/21; see this post; cum 1.000125 million bbls 6/22; just came off line 7/22;

Last update

drilled in late 2008;
a standard Bakken long lateral; 19,936 TD; two sections;
still flowing, no pump according to the NDIC
just went over one million bbls cumlative; but then taken off line 6/22; now back on line, see below.
open hole frack; 1.24 million lbs 20/40 mesh and 600,000 #100 mesh sand; total fluid: , 19,246 bbls;

Most recent:

after being off line for about one year, appears to be coming back on line
still flowing, no pump according to the NDIC
91.000982 million bbls cumulative; recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2023	22	857	693	340	715	672	0
BAKKEN	4-2023	0	0	0	0	0	0	0
BAKKEN	3-2023	0	0	14	0	0	0	0
BAKKEN	2-2023	0	0	0	0	0	0	0
BAKKEN	1-2023	0	0	0	0	0	0	0
BAKKEN	12-2022	0	0	0	0	0	0	0
BAKKEN	11-2022	0	0	0	0	0	0	0
BAKKEN	10-2022	0	0	0	0	0	0	0
BAKKEN	9-2022	1	1	64	0	0	0	0
BAKKEN	8-2022	0	0	0	0	0	0	0
BAKKEN	7-2022	5	44	42	46	352	343	0
BAKKEN	6-2022	30	522	536	91	4504	4444	0
BAKKEN	5-2022	31	695	724	123	4660	4598	0
BAKKEN	4-2022	21	485	437	69	3373	2297	1037
BAKKEN	3-2022	31	623	643	157	3497	3435	0
BAKKEN	2-2022	28	562	570	234	3087	3010	22
BAKKEN	1-2022	31	711	714	241	4195	4133	0
BAKKEN	12-2021	31	779	768	265	4566	4504	0
BAKKEN	11-2021	30	698	713	137	4791	4731	0
BAKKEN	10-2021	31	691	613	117	5072	5010	0

Updating An Old XTO Charlson Well -- July 11, 2023

Locator: 45086B.

The well.

May 16, 2016:

XTO updated the name from Charlson 14X-35H to Charlson Federal 14X-35H.

17113, 3,030, XTO/Denbury, Charlson Federal 14X-35H, Charlson, t10/08; cum 882K 3/21; F; subtle jump in production; cum 890K 6/21; still F; cum 891K 9/21; still F; cum 921K 10/22; F;

Last update

drilled in late 2008;
a short lateral; 15,150 TD; one section;
still flowing, no pump according to the NDIC
trending toward one million bbls cumulative
NDIC did not post frack data; and FracFocus has no record (fracked before required by FracFocus); most likely an open hole frack with minimal fluid, proppant;

Most recent:

still flowing, no pump according to the NDIC
929,864 bbls cumulative; recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2023	31	3955	3723	526	5263	5044	0
BAKKEN	4-2023	18	984	1604	78	1209	1057	96
BAKKEN	3-2023	20	2717	2062	578	3344	1858	1302
BAKKEN	2-2023	2	0	0	0	197	196	0
BAKKEN	1-2023	26	232	226	5	473	317	0
BAKKEN	12-2022	27	641	697	7	828	608	0
BAKKEN	11-2022	30	366	223	30	700	378	0
BAKKEN	10-2022	31	1838	2254	117	2813	2480	0
BAKKEN	9-2022	30	2533	2221	261	3560	3340	0
BAKKEN	8-2022	31	1820	1968	247	2789	2555	0
BAKKEN	7-2022	31	2762	2876	238	4318	4091	0
BAKKEN	6-2022	30	3488	3545	380	5581	5354	0
BAKKEN	5-2022	31	3830	3880	458	5535	5317	0
BAKKEN	4-2022	29	3886	3658	502	4780	3206	1381
BAKKEN	3-2022	13	1456	1081	629	1791	375	1328
BAKKEN	2-2022	18	222	450	0	215	63	0
BAKKEN	1-2022	31	1743	2043	140	2142	1731	115
BAKKEN	12-2021	30	2760	2254	265	3394	3068	17
BAKKEN	11-2021	30	3269	3301	290	4019	3622	81
BAKKEN	10-2021	31	302	448	5	462	129	0
BAKKEN	9-2021	30	302	212	0	378	67	84
BAKKEN	8-2021	31	398	443	2	489	145	110
BAKKEN	7-2021	31	449	656	3	594	235	130

Clearing Out The In-Box -- July 11, 2023

Locator: 45085MISC.

I was gone for ninety minutes and my in-box filled with news items.

Recession? Sure. Not. Late afternoon surge:

Volume

average: 305 million shares traded on NYSE
today: 282 million shares traded

Courts:

it's my impression the US Supreme Court doesn't like getting involved in cases like this, but "someone" better get this sorted out before we start seeing headlines with "banana republic" in The WSJ.
by the way, this is why I disagree with the SCOTUS ruling on college student debt repayment (I flip-flopped on this after reading comments alleged to have been made by ACB).

Texas:

I've often mentioned Hilcorp in my blogs; didn't know much about the company;
here's a must-read article on Hilcorp in The WSJ.

Ukraine: F-16s.

Peter Zeihan.

"Greedflation": US moms know how to manage "greedflation."

link to Bloomberg via MSN.
for the past week or so, starting before July 4th, Target has cut the price of potato chips by almost 50%;
sale lasting longer than expected;

Turkey: bad news for Putin.

link here to The WSJ.

Mexico: becoming an also-ran in field of oil and natural gas; nice for US to have Mexico has a neighbor;

Peter Zeihan.

WTI: happy days are here again?

Josh Young: link here.
what do investors want?

fastest growing US (global?) oil company
trading at $50
52-week high: $80
pays 9%
guess the company

S&D? I'll believe it when I see it. Link to Staunovo.
before anyone gets too excited, we're not even at $80, much less $100!

If you know, you know:

UAE sets stricter emission target; link to Bloomberg;
photo;
Staunovo;

Trans Mountain: will never be profitable?

link here to Staunovo.

Oil Is Starting To Move -- Bear Trap? Or Real? July 11, 2023

Locator: 45084WTI.

WTI: at $74.81, is up 2.5%; up $1.82 and trending toward $75.

Bakken proxy: $78.90.

E&Ps moving;

PSX: up 0.7%; trading at $101.
CVX: up 1.53%; trading at $158.
COP: up 2.8% -- whoo-ho -- trading t $107|
DVN: up an astounding 3.1%; trading at $51; pays 8.9% but for those who bought earlier, pays over 9%;
SRE: up 0.8%; trading at $145; the 52-week high, $176, pays 3.3%
OKE: up a nice 1.7%; is the MMP deal getting closer?
BRK: trading near its 52-week high

Among EVs:

FSR (Fisker): down 3%; trading at $6.82.

UK Ditches Hydrogen Heating Trial -- Brits Concerned About Safety -- They Remember The Hindenburg -- July 11, 2023

Locator: 45083HYDROGEN.

Link here.

And that's the problem:

And that's the problem with EVs: would you / do you park your EV in your attached garage?

MAGA -- Again, And Again, And Again -- July 11, 2023

Locator: 45082TRAINS.

Apparently the Re-Elect Biden Campaign is up and running.

Link here.

Once a leader in passenger rail, the U.S. has since fallen behind many industrialized nations in rail funding and ridership — but investment is picking up.

Investment in passenger rolling stock across North America, which includes high-speed rail, light rail, metro, passenger coaches and locomotives, is expected to increase 4.7% per year between 2021 and 2026, according to a projection from McKinsey & Co.

A significant boost to the rail industry comes from the Infrastructure Investment and Jobs Act (IIJA), which was passed in 2021 and designates $66 billion to improve the nation’s rail system. [Thank you, Mr Biden.]

Federal investment is also pushing companies to establish a domestic supply chain. At its facility in Hornell, New York, train maker Alstom is working on fulfilling an order for Amtrak, the federally owned U.S. passenger train operator, to upgrade its fleet of Acela trains.

Aside from the government, private companies are also working on beefing up passenger rail in the country. Brightline has already built out its passenger rail service in Florida, and its sister company, Brightline West, is working on a high-speed passenger rail line between Las Vegas and Southern California.

Amazon Deals -- July 11, 2023

Locator: 45081AMZN.

Link here.

Some deals pop up and disappear quickly.

Third party vendors may be the big standouts today and tomorrow.

Might the Apple sites or the Amazon sites go down today?

As a reminder:

Apple: Is It Just Me? July 11, 2023

Locator: 45080APPLE.

Apple seems to have raised the bar in the past six months.

Just noting this for the archives, for the date-time "bragging rights" stamp when the mainstream press starts reporting it.

It began with Vision Pro, but that's down the road.

Farther down the road: some (one, two, or three) very large-screen iMacs.

the largest, the 27" has been discontinued for quite some time (that's the one I have; long story)
the largest, now, is only 24" -- doesn't do it for me
coming: 30" almost for sure
but also, a 33"?

But right now? The MacBook Air 15.

Back to school sales are going to set new records for Apple.

By the way, for investors, the margins on these new computers are going to be huge.

Disclaimers:

I am Apple Fanboy #3.
This is not an investment site.
No recommendations except one: if your daughter -- age 15 to 25 is shopping for a new computer, your choices are two: the MacBook Air 13 or the MacBook Air 15. [I ordered a new MacBook Air some months ago; I haven't opened the box [Amazon]; can't remember -- but I assume it's an M1 chip).

MacBook Air 15 -- One For The Ages -- July 11, 2023

Locator: 45079APPLE.

I am very, very, very surprised.

I knew the MacBook Air 15 was going to be huge, but I never expected "it" to be this huge.

I'm such a Fanboy that I assumed my "feelings" for the "15" were out of place. I thought I had jumped the shark but apparently not.

Link here.

In addition, it appears Apple has spared no expense in marketing this computer:

Time To Add Bakhmut To Afghanistan (Twice), Vietnam? July 11, 2023

Locator: 45078UKRAINE.

Updates today:

Recommend: https://www.newsweek.com/map-reveals-russias-progress-during-ukraine-counteroffensive-1812076.

Dialing For Dollars: Buffett, Biden, Manchin, Dominion, Cove Point, Et Al -- July 11, 2023

Locator: 45077LNG.

This story deserves a bit more "ink."

Earlier:

Cove Point:

In reply to a reader I wrote:

Long storied history between Buffett and Dominion ... it's a great story. It shows the tenaciousness of Warren Buffett. When he wants something, he takes the long view.

This was a deal long in the making.

To what extent Manchin -- FERC -- Biden -- Buffett got together on this one, no one will ever know but we do know that Buffett is a Democrat, and one assumes he backs the party financially. But I wouldn't know. And I don't care.

I just think it's another great American story, and obviously a win for Buffett, Biden and Manchin. I'm not sure this deal would have gone through with Trump in office. But that's just me.

But this story is a lot, lot, lot older than this. This easily goes back ten years, an update, here from 2018. This must be driving Amy Mall nuts. LOL.

Go through that very, very long blog. Absolutely amazing. A great blog. And my hunch: Warren Buffett has been watching closely for ten years.

And just a few weeks ago, over at RBN Energy:

If Not Now, When? July 11, 2023

Locator: 45076EVS.

A reader sent me this link just a few minutes ago:

My not-ready-for-prime-time reply:

I generally don't follow Breitbart as you know, but this fits my theme from the other day:

https://themilliondollarway.blogspot.com/2023/07/if-not-now-when-july-8-2023.html.

Coming out of the pandemic lockdown, Americans had the most money saved that they had ever had, and the EV shortage had come to an end.

More than enough EVs to go around. And yet, sales were awful. If they aren't buying EVs now, when will they buy?

The Axios link.

On Top Of 206 Points Yesterday -- The Dow -- July 11, 2023

Locator: 45075INV.

AAPL: just went green.

Sold in May, went away. Sorry. Not sorry.

Rivian, link here.

Rivian is having a moment. It needs to seize it.

Shares in the electric-vehicle maker are up an astonishing 84% in just eight trading days to levels last seen in December. If they rise again on Monday, as premarket trading indicates, it will make a record-breaking streak of consecutive gains from a stock better known for losing streaks. Even after the latest rally, Rivian has lost more than two-thirds of the market value at which it went public in November 2021.

There has been some news to justify more optimism, but not much. A week ago, the company reported better-than-expected production and delivery numbers for the second quarter and, importantly, reiterated its guidance for the full year. Amazon.com, Rivian’s top shareholder, also said it is about to receive some of the vehicle maker’s delivery vans in Europe.

Then came bullish commentary from stock analysts. Brokers often revamp their price targets and recommendations after big stock moves for fear of appearing behind the curve. Some media outlets then pointed to broker upgrades as a justification for Rivian’s share-price moves, completing the positive-feedback loop that can improve “sentiment” toward a stock.

On the buy side, individual investors have suddenly piled into Rivian, according to data provider Vanda Research. After Tesla’s rally last month, some may have decided to broaden their bets on the EV sector, including through exchange-traded funds, in the hope of catching the next wave.

Shares in Lucid, Rivian’s closest peer and another recent beneficiary of retail buying, have risen 36% since hitting a low in late June. The rally started after Lucid announced a partnership with British sports-car brand Aston Martin that should bring it at least $450 million in fees and parts sales. Unlike Rivian and Tesla, the company didn’t report second-quarter deliveries.

With retail buying comes the risk of retail selling. “Retail investors often rotate between themes as they get excited by short-term trends,” note the analysts at Vanda Research.

The next wave of news about the companies’ operations will likely come in August, when they report second-quarter earnings. The supply pressures that tripped up car manufacturers last year are easing across the whole industry, so it wouldn’t be a surprise if Rivian and Lucid can talk about getting a better handle on production.

The bigger question now is just how many consumers want their expensive EVs. Both companies now say on their websites that vehicles are available in two weeks or less, pointing to short order books.

A wild card for Rivian is market leader Tesla’s long-delayed Cybertruck. To date, Rivian has sold its products into a less competitive category than Lucid, whose luxury sedans compete directly with Tesla’s Model S. But that might change next year as Tesla likely increases output of its quirky take on a pickup truck, due to launch in the coming months.

The reason why Rivian hasn’t faced much competition to date is that cost-effective electric pickups are hard to engineer. There is a reason why most EVs are aerodynamic sedans or small eco-cars: Trucks require a lot of expensive batteries to shift. The vehicles Rivian sold in the first quarter for roughly $83,000 on average cost it about $150,000 each to manufacture.

Rivian might be wise to tap the market while the appetite for its stock is so strong. It raised almost $12 billion in its IPO and sold $1.5 billion worth of convertible notes in March, topping up its cash balances, but it will need more. It has already burned through roughly $10 billion in its short life as a public company, and analysts don’t expect its quarterly free cash outflow to fall below $1 billion until at least the end of next year.

Much more at the link.

****************************
Soap

The Greatest Reindustrialization Process In US History -- Peter Zeihan -- July 11, 2023

Locator: 45074ECON.

A bit of hyperbole, because there were two others periods of much great industrialization:

1941 - 1945; and,
1946 - 1956.

Link here.

*********************
Sophia's Art Room

The art room, recently refurbished, is upstairs. Her bat cave is ... well ... in an undisclosed location.

On-Going Stories -- If I Had To Name One Investing Debacle -- Worse Investment Story Of 2023? July 11, 2023

Locator: 45073DIS.

Updates

July 12, 2023:

Bob Iger to stay until 2026, two years longer than expected.

Original Post

This is what makes the Disney story so compelling:

literally millions of American investors have accumulated lots of DIS over the years

if not directly, through passively managed IRAs, Roths, pension plans, BRK

literally every analyst over the years saw DIS as a no-brainer
millions of Disney employees over the years accumulated DIS
following Covid-19 lockdown, theme parks should have been huge beneficiaries
what went wrong:

perceived high ticket cost?
failure to understand OTT or failure to act? Failure to capitalize on brand name, on library?

Others have noted the same thing:

I haven't watched CNBC in a month of Sundays, but if Jim Cramer isn't talking about this, it tells me all I need to know about Jim Cramer. Today. I'll flip-flop tomorrow. LOL.

See this link.

Disney:

Bob Igor returned November 20, 2022
stock price 92 on November 18, 2022
rose to $113 on Feb 2, 2023
since then, steady fall
May 8, $103
WSJ article how bad theme parks are doing
yesterday, $88 falling 0.6% when DOW gained 206 points or 0.6%.

Talk about a wispy-washy article that sounds like it was written by a robot to ChatGPT:

https://finance.yahoo.com/news/4-measures-indicate-walt-disney-110055339.html

Link here.

Is Bob confused? Link here.

From MSNBC:

The Walt Disney Company, plagued by trouble in its streaming business, TV networks, and studios, now faces problems at its mighty theme parks. According to The Wall Street Journal, "Data from a travel company that tracks line-waiting time at Walt Disney World in Orlando, Fla., shows that the Independence Day weekend was one of the slowest in nearly a decade." The deep problems CEO Bob Iger faces grow more troubling by the month.

Disney’s stock has been down 50% in the last two years while the market is flat. Iger replaced Bob Chapek in November 2022, but the two-year-old slide covers the period during which Iger restructured Disney.

In the most recently reported quarter, Disney segment operating revenue rose 8% to $21.8 billion. This rise was because of theme parks, the revenue of which rose 17% to $7.8 billion. Operating segment income for Disney was $3.4 billion, down 11%. Theme park operating income rose 25% to $2.2 billion.

Disney described the health of its theme parks by announcing, “The increase in operating results at Disneyland Paris was due to volume growth, which was attributable to higher attendance, and increased guest spending, partially offset by higher costs.” If theme park activity at locations outside Orlando is weak, Disney cannot make up for the problem financially.

So much more at the link.