Reminder:This Is Not An Investing / Investment Site — July 18, 2023

Locator: 45161B. 

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. 

Latest GDP Estimate Rises Again. Now At 2.4. Easily Outpacing China. July 18, 2023.

Locator: 45160ECON. 

Latest GDP estimate is up again. 

Latest estimate: 2.4.

Link here.

Outpacing China. Great Britain facing severe recession. Germany in a recession.

Think Biden’s CHIPS Act and Biden’s Inflation Reduction Act.

Charlie Munger says we’re in a mild recession.

Link here. 

Consumers More Resilient Than Anticipated -- Big Banks -- July 18, 2023

Locator: 45159INV.

This is just a snapshot in time; it may change tomorrow.

But.

But.

But.

Remember all that hand-wringing that Americans were starting to run out of that money they had saved during the Covid-19 lock down?

It looks like consumers are more resilient than experts predicted or imagined. If I recall correctly, two-thirds of consumer spending makes up US GDP. Fact-check me on that. 

Well, add that to all that recession talk and move "running out of money" to the right.

You know, there is a story out there that wages are also showing increases over the past year. As just one example: United Airlines pilots -- a 40% increase in pay over over four years. Not trivial.

It's not as if Americans aren't still making money. In fact, a lot of Americans -- albeit, probably a small percent, have their money in securities paying four percent or better.

Oilfield Service Providers Enjoying Huge Profits -- Source -- July 18, 2023

Locator: 45158INV.

Link here.

Companies mentioned:

• Baker Hughes
• Halliburton
• Schlumberger

• combined, set to post a combined second-quarter profit of $2.04 billion compared with $1.27 billion in the year-ago quarter.

Norwegian energy intelligence firm, Rystad Energy, has predicted that offshore oil production will surge 35% in the current decade

According to Rystad, offshore production will jump to 3.3 billion barrels per year by the turn of the decade from 2.5 billion in 2021.

Surging offshore production in Brazil has significantly improved the utilization of shuttle tankers, with activity soaring by 55% from 695 million barrels in 2013 to 1.07 billion in 2021. A further increase of 72% is forecast by the end of 2030, when total volumes handled by shuttle tankers in the country will hit 1.84 billion barrels.

3.65 billion / 365 days = 0.01 = 10 million bopd.

XTO Marilyn Wells

Locator: 45157B.

The wells:

Today, July 18, 2023, producing wells (DUCs) reported as completed:

• 36539, 2,431, XTO, Marilyn 21X-23C, Capa, t--; cum --
• 36540, 1,991, XTO, Marilyn 21X-23G, Capa, t--; cum --
• 36541, 1,977, XTO, Marilyn 21X-23A, Capa, t--; cum --

Others:

• 36537, loc/NC, XTO, Marilyn 21X-23D, Capa, t--; cum --
• 36538, loc/NC, XTO, Marilyn 21X-23H, Capa, t--; cum --

Wells of interest:

• 36217, drl/A, XTO, Allie 31X-24EXH, Capa; to the east of the Marilyn wells; t--; cum --:

• 17813, IA/448, XTO, Tubie 21X-23, Capa, same section as the Marilyn wells, t4/09; cum 100K 2/23;

Combined Daily Activity Reports -- Monday / Tuesday -- July 17 - 18, 2023

Locator: 45156B.

Active rigs: 38.

WTI: closed at $75.82.

• Murban crude: $80.85.

Monday, July 16, 2023

Five new permits, #40047 - #40051, inclusive:

• Operator: CLR
• Field: Antelope (McKenzie)
• Comments:
• CLR has permits for five new Harms East Federal wells, SENW 1-152-94; 
• to be sited between 2213 FNL and 2345 FNL and between 2341 FWL and 2464 FWL

Five BR permits renewed:

• five Three Rivers permits in Charlson oil field

Three producing wells (DUCs) reported as completed:

• 38502, 1,640, MRO, Odermann 24-10TFH,
• 38503, 3,051, MRO, Rice 14-10TFH,
• 38790, 4,588, MRO, Dunford 4-10H,

Tuesday, July 17, 2023

One new permit, #40052:

• Operator: Crescent Point Energy
• Field: Blue Ridge (Williams)
• Comments:
• the CPEUSC Chase Douglas well will be sited in lot 4 section 5-158-100

Four BR permits renewed:

• four Lincoln Hill permits in Killdeer oil field, Dunn County;

Six producing wells (DUCs) reported as completed:

• 39274, 714, Kraken, Sumner 12-13-24 4H,
• 39276, 951, Kraken, Sumner 12-13-24 6H,
• 36539, 2,431, XTO, Marilyn 21X-23C,
• 36540, 1,991, XTO, Marilyn 21X-23G,
• 36541, 1,977, XTO, Marilyn 21X-23A,
• 36425, no ip, XTO, Linda 41X-22H,

Smoking Engine -- Car Problems -- Cross-Country Trip -- July 18, 2023

Locator: 45155FAMARCH.

I couldn't start the narration earlier in the filming because I knew it would interrupt Levi and Judah working on their car.

Twins, just turned three years old a couple of months ago.

Levi operates a small garage just outside Portland, Oregon.

Judah's car developed problems while driving cross-country. He was able to get to Levi's garage, where they noted a "smoking engine."

The initial problem turned out to be bigger than what Levi's small garage could handle, so they called a tow truck to bring Judah's car to a larger garage with more capability.

Apparently the bigger garage did not solve the problem so they brought the car back to Levi's garage where they were able to fix the problem the second time around.

The work completed, Judah gets back into his car, thanks Levi and drives off. Levi closes the garage and waits for his next customer.

Bidenomics -- July 18, 2023

Locator: 45154ECON.

I'm curious if the previous president has anything to say on / about this. 

I know he talked a lot about the stock market when he was president.

It's just a snapshot in time. Things could change tomorrow.

[CNBC was being conservative/generous: the Dow “popped” almost 400 points.]

The SPR Meme -- July 18, 2023

Locator: 45152SPR.

SPR: much ado about nothing.

• wow, not only a "nothing-burger" but incredibly irrelevant.
• consider the source;

This has been discussed before but not in depth.

The SPR issue -- OMG -- it took decades to fill, the Biden administration drained it in days and now it will take decades to fill.

To be continued.

************************
Data Points

Demand:

• US crude oil demand: max to date -- about 21 million bopd -- and that's on a good day.
  
• US crude oil demand, lowest point during Covid-19 lock down, link here:
• approximately 14 million bopd, January - March, 2021; 
• if that's the average, maybe down to as much as 13 million bopd

US crude oil production:

• 13 million bopd

US crude oil in storage:

• crude oil in the SPR in 1H2023: 350 million bbls.
• crude oil in commercial storage in 1H2023: 460 million bbls; link here.

Narrative: 

• during Covid-19, which was a voluntary lock down for the most part, demand dropped to less than 14 million bopd
• US production under a "unhelpful" administration and with WTI unable to sustain a price greater than $75 is producing about 13 million bopd
• at worse, just using those two data points, the net delta for oil demand / oil supply: a shortage of one million bopd
• commercial crude oil: 460 days
• SPR: 350 days
• total: 810 days

US crude oil production with a helpful administration, $100-oil, and/or a geo-political emergency:

• minimum: 16 million bopd; link here.
• my hunch: max production could trend toward 20 million bopd within 365 days under "max-case" scenario.

So, where's the choke point?

• upstream
• midstream
• downstream (out-the-door)
• downstream (last mile)

Other comments

• some say selling oil from the SPR was done for financial reasons (deficit, debt, budget imbalance, additional Congressional spending, whatever)
• this is the story as being reported by Reuters, June 30, 2023, link here
• US to buy 3.2 million bbls of oil from four companies to continue refilling the SPR
• bought at an average price of $72 / bbl
• originally sold at $95 / bbl
• paper profit: $23 / bbl = $74 million
• fiscal year spend, 2023: $4.81 trillion
• = 13,178,082,192 = $13 billion / day
• $74 million / $13 billion = 0.0569 = 5.75% on a daily basis.
• the entire SPR at a $25 / bbl paper profit: $8.75 billion
• the entire SPR at a $25 / bbl paper profit = $8.75 billion = 1.8% of the total US budget

At one time I might have argued the same point. If I did, I was wrong.

The real reason to release crude oil from the SPRR was a political decision as noted by Reuters and had nothing do with the deficit. The funny thing: American CPAs are calculating the paper loss and profit. The average American doesn't care.

The average American cares not what the US deficit and no one knows what the true US deficit is at any one moment in time. But sixty percent of Americans know what they pay for gasoline on any given day.

To recap:

• way more oil in storage than we need; SPR is irrelevant (don't take that out of context)
• releasing oil from thhe SPR was a political decision to warn OPEC about the cartel's attempt to raise oil prices (and hence gasoline prices just before the mid-term elections)

But there's more.

Am I being too sanguine?

No, the "new" SPR is shale, the unconventional oil.

To be continued.

Bidenomics! Let's Go, Brandon -- July 18, 2023

Locator: 45152ECON.

Clearing Out The In-Box -- July 18, 2023

Locator: 45151ECON.

SPR: much ado about nothing.

• wow, not only a "nothing-burger" but incredibly irrelevant.
• consider the source;

Laser-focused on dividends

• BK: from 37 cents to 42 cents; a 13.5% increase

LNG:

• US has supplied roughly 50% of the LNG that western Europe imported last year. Link here.

Earnings:

• big banks crushing earnings expectations
• BNY Mellon beats;
• Bank of America: profits rise 19%;
• Costco shares pop;
• profit growth for retail giant Costco Wholesale (COST) has risen sharply the last couple of quarters, from 4% three quarters ago to 18% last quarter, link here. 

Economy?

• recession -- what happened? Ten reasons 
• all you nedd to know:

• "Goldilocks" -- GS
• global economes:
  
• risk of recession in US lowered:
• UK on brink of severe recession
• Germany in mild recession
• US in mild recession (Charlie Munger)
• retail sales: underwhelm but positive m/m
• retail sales: rose in June as inflation eased! 
• Wow! Let's go Brandon.

AI:

• Nvidia more than triples in 2023.
• Citi: target price raised from $420 to $520 -- Barron's --  link here.
• Nvidia is dominant in chips; forget the competition -- Barron's, link here.

Taylor Swift:

• first female artist to have four albums on Billboard's top 10 at once. Wow.
• actually moves the needle on regional GDP when she comes to town; source: Federal Reserve

Apple:

• finally, Apple Maps!

EVs:

• Ford cuts prices, $6,000 - $10,000
• Ford's shares slump;
• the phrase EV-makers don't want to hear: "rising unsold inventories"
• Tesla announces Cybertruck coming off production line: VIN: TSLACT000000001 released.

A bridge too far:

• Zeihan.

Putin: destroyed his economy:

• Russia went from "bad" to "worse" in only months; let's go Vlad!

California, update, Peter Zeihan:

California has been one of the most successful states in the US, primarily because of things outside its control. Large-scale inward international immigration has enabled California to continue its population growth. The millennial desire for an urban coastal experience has brought a constant influx of people in their 20s and 30s, which has helped with taxes and a steady labor force. Now combine all these people with a rich capital environment and boom...Silicon Valley. 

Ideas flow from the tech startups in the valley to factories in China, Japan, Taiwan, etc., making California the gateway to East Asia. And when those products get imported back to the States, their first stop is the Long Beach Port along CA's coast. This is just another external element contributing to California's solid economic model. But now, all of the factors that have propped up California are flipping. Immigration is stalling. The capital situation is upside down. The cost of living is through the roof, so the labor force is moving to places like Texas. Rising tensions with Asia are causing reshoring and nearshoring. The only thing California can do now is reinvent itself.

Can Anyone Challenge Cheniere As The King Of U.S. LNG? RBN Energy -- July 18, 2023

Locator: 45150LNG.

RBN Energy: can anyone challenge Cheniere as the king of US LNG? Archived.

U.S. LNG development has seen a resurgence in the post-COVID world, with five projects with a combined 61.1 MMtpa (8.1 Bcf/d) of new LNG export capacity reaching a final investment decision (FID) in the past 18 months and one additional project closing in on that milestone. Five of these six projects are from the “Big Three” of U.S. LNG — Cheniere, Sempra and Venture Global — leading some to wonder if there’s room for anyone else. But while all three companies are big in U.S. LNG and have projects under development, only one is a behemoth. In today’s RBN blog, we continue our look at the pre-FID projects under development by the Big Three, focusing on the king of U.S. LNG, Cheniere.

In Part 1, we took a closer look at the projects under development by Sempra, because at the time, Sempra had the project most likely to take FID next: Cameron Phase 2, a 7-MMtpa (0.93-Bcf/d) expansion of its existing terminal in Louisiana. The expansion includes a fourth train as well as 1 MMtpa (0.13 Bcf/d) of additional capacity from debottlenecking at the existing terminal. The project is being developed in conjunction with existing offtakers, although Sempra has elected to market some of the capacity itself as well. The project is currently completing front-end engineering design (FEED) work, which is expected to be complete later this summer, with an FID following later this year.

Cheniere currently operates 45 MMtpa (6 Bcf/d) of LNG export capacity at its two terminals — Sabine Pass (yellow boxes in Figure 1) and Corpus Christi (green boxes) — and is by far the largest U.S. producer. Globally, Cheniere ranks as the second-largest LNG producer, behind only QatarEnergy. Cheniere has an additional 10 MMtpa (1.3 Bcf/d) of capacity under construction at Corpus Christi with its Stage III expansion (purple-dotted boxes). As that project was closing in on FID, Cheniere began to sell offtake capacity from an as-yet-unnamed Corpus Christi expansion. It quickly announced three deals totaling 2.8 MMtpa (0.37 Bcf/d) of LNG, then later announced that this would be an expansion of Stage III, adding an additional two mid-scale trains (8 and 9, blue-striped boxes) for a total of 2.9 MMtpa (0.38 Bcf/d) of capacity. The expansion was sold out before it even had a name or had filed any regulatory applications. In March, Cheniere made its formal application with FERC and Cheniere will likely take FID on the project once it receives its regulatory approvals. Cheniere has said it is planning a continuous construction process, basically tacking the expansion onto the end of the initial Stage III construction, which began last year.

Figure 1. Cheniere LNG Terminals and Projects. Source: RBN

Several Wells Coming Off Confidential List -- WTI Edges Up -- July 18, 2023

Locator: 45149B.

WTI: $75.27. Up 1.6%; up $1.19.

Wednesday, July 19, 2023: 76 for the month; 184 for the quarter, 439 for the year
39391, conf, Crescent Point Energy, CPEUSC Matilda 4-29-32-158N-100W-MBH,
39358, conf, CLR, Vance 5-14H,

Tuesday, July 18, 2023: 74 for the month; 182 for the quarter, 437 for the year
None.

Monday, July 17, 2023: 74 for the month; 182 for the quarter, 437 for the year
39392, conf, Crescent Point Energy, CPEUSC Ruby 3-20-17-158N-100W-MBH,

Sunday, July 16, 2023: 73 for the month; 181 for the quarter, 436 for the year
39351, conf, CLR, Clyde Hauge 2-13H,
37921, conf, BR, Parrish 2B TFH,

Saturday, July 15, 2023: 71 for the month; 179 for the quarter, 434 for the year
39393, conf, Crescent Point Energy, CPEUSC Matilda 3-29-17-158N-100W-MBH,
39352, conf, CLR, Clyde Hauge 3-13H,
38684, conf, Hess, GO-Ron Viall-156-98-2513H-3,
37922, conf, BR, Boxstone 1A TFH-ULW,

RBN Energy: energy industry finds strength, better credit ratings in post-pandemic consolidation.

For years, oil and gas companies struggled to win over investors, largely because of the energy sector’s notoriously volatile history — marked by boom-and-bust cycles and sometimes scary levels of indebtedness. You might think the pandemic and the subsequent upheaval in energy markets would only make matters worse, but the chaos actually forced energy companies to get their finances in better order and, in many cases, to either acquire other companies or be acquired themselves. Financial discipline and consolidation provided another benefit: sharply improved credit ratings, which have the knock-on effect of making companies even more attractive. In today’s RBN blog, we discuss the forces behind, and the importance of, the improved credit ratings that resulted from this massive wave of consolidation.

RBN Energy: can anyone challenge Cheniere as the king of US LNG? Archived.

U.S. LNG development has seen a resurgence in the post-COVID world, with five projects with a combined 61.1 MMtpa (8.1 Bcf/d) of new LNG export capacity reaching a final investment decision (FID) in the past 18 months and one additional project closing in on that milestone. Five of these six projects are from the “Big Three” of U.S. LNG — Cheniere, Sempra and Venture Global — leading some to wonder if there’s room for anyone else. But while all three companies are big in U.S. LNG and have projects under development, only one is a behemoth. In today’s RBN blog, we continue our look at the pre-FID projects under development by the Big Three, focusing on the king of U.S. LNG, Cheniere.

In Part 1, we took a closer look at the projects under development by Sempra, because at the time, Sempra had the project most likely to take FID next: Cameron Phase 2, a 7-MMtpa (0.93-Bcf/d) expansion of its existing terminal in Louisiana. The expansion includes a fourth train as well as 1 MMtpa (0.13 Bcf/d) of additional capacity from debottlenecking at the existing terminal. The project is being developed in conjunction with existing offtakers, although Sempra has elected to market some of the capacity itself as well. The project is currently completing front-end engineering design (FEED) work, which is expected to be complete later this summer, with an FID following later this year.

July, 2023, Dashboards Have Posted — Bakken, Again, Shows Biggest Jump

Locator: 45149B.

EIA dashboards:

• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

The snapshots:

Initial Production Data For Wells Coming Off Confidential List This Next Week -- July 17, 2023

 Locator: 45148B.

Tbe wells:

• 39509 conf, CLR, Vance 4-14H, Dollar Joe, no production data,
• 39476 conf, Ovintiv, Newman 150-97-21-16-6HR, Siverston, no production data,
• 39508 conf, CLR, Vance 3-14H, Dollar Joe, no production data,
• 38949 conf, Hess, BW-Rolfson-151-98-2116H-16, Sivertson,

Date	Oil Runs	MCF Sold
5-2023	23122	64582
4-2023	29234	84118
3-2023	29855	70792
2-2023	55224	72883
1-2023	17683	23146

• 37178 conf, Hess, EN-Davenport-156-94-1003H-7, Big Butte,

Date	Oil Runs	MCF Sold
2-2023	2	106
1-2023	215	254

• 39507, conf, CLR, Vance 2-14H, Dollar Joe, no production data,
• 39135, conf, Iron Oil Operating, Antelope 2-33-28H, Sather Lake,

Date	Oil Runs	MCF Sold
5-2023	17552	16415
4-2023	17850	15214
3-2023	16980	15960
2-2023	15386	8052
1-2023	3849	0

• 39357, conf, CRL, Vance 6-14H, Dollar Joe,

Date	Oil Runs	MCF Sold
5-2023	15884	33872
4-2023	20836	41237
3-2023	13312	21736
2-2023	36940	75448
1-2023	18445	22309

• 38685, conf, Hess, GO-Ron Viall-156-98-2513H-2, Wheelock, no production data,
• 35020, conf, BR, Lillibridge 1A MBH, Blue Buttes,

Date	Oil Runs	MCF Sold
5-2023	0	162

• 39391, conf, Crescent Point Energy, CPEUSC Matilda 4-29-32-158N-100W-MBH, Church, no production data,
• 39358, conf, CLR, Vance 5-14H, Dollar Joe, no production data,
  39392, conf, Crescent Point Energy, CPEUSC Ruby 3-20-17-158N-100W-MBH, Winner, no production data,