After Today's Proceedings In Washington, DC, Time For The Midnight Hour To Begin -- August 3, 2023

Locator: 45326ENNUI. 

That's not the best word, but for now ennui will have to do.

Tonight, after watching today's events in Washington, DC, I find myself thinking about the 60s and 70s. 

He, 77 years old. Did not serve. Medical deferment. Classifications.

For those who did serve, all gave some, some gave all.  

The baby boomers. Gen X. Gen Y. Gen Z. Gen Alpha. The music will be forgotten; Gen Alpha will hear the covers and not know.

Fortunate Son, CCR, link here.

Time to re-read Hunter S. Thompson. 

San Francisco in the middle sixties was a very special time and place to be a part of. Maybe it meant something. Maybe not, in the long run… but no explanation, no mix of words or music or memories can touch that sense of knowing that you were there and alive in that corner of time and the world. Whatever it meant.…

There was madness in any direction, at any hour. If not across the Bay, then up the Golden Gate or down 101 to Los Altos or La Honda.… You could strike sparks anywhere. There was a fantastic universal sense that whatever we were doing was right, that we were winning.…

And that, I think, was the handle—that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn’t need that. Our energy would simply prevail. There was no point in fighting—on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave.…

So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark—that place where the wave finally broke and rolled back.

Perhaps, the midnight hour has arrived an hour early tonight.

Refiners -- Investing -- August 3, 2023

Locator: 45325INV. 

Link here.

Link here.

*************************
A Musical Interlude

Link here.

Six New Permits; Four Permits Canceled; Three DUCs Reported As Completed -- August 3, 2023

Locator: 45324B. 

WTI: $81.72.

Active rigs: 39.

Six new permits, #40091 - #40096, inclusive:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments:
• Whiting has permits for six Sanish Bay W wells, NESE 1-152-93; 
• to be sited 600 FEL and between 1855 SL and 2020 FSL

Four permits canceled:

• WPX: four Skunk Creek permits, lot 4, section 18-148-92; Dunn County.

Three producing wells (DUCs) reported as completed:

• 38981, 431, Murex, TL-Terry Lynn 10-3H MB, Williams,
• 39219, 159, Crescent Point Energy, CPEUSC Charlotte Elizabeth 34-27-159N-100W-MBH, Williams,
• 39220, 61, Crescent Point Energy, CPEUSC Charlotte Elizabeth 2-34-27-159N-100W-MBH, Williams;

FracFocus Update -- August 3, 2023

Locator: 45323FRACK. 

A huge thanks to a reader.

Because of the reader's mild persistence, I felt compelled to keep looking. 

I never thought of checking "FracFocu" because it always seemed that "FracFocus" data was "old."

Wow, wow, wow!

The link remains the same but the site looks completely different ... and much better.

The link to FracFocus.

Advanced search here.

I don't know how long this new "look" has been around. I haven't checked "FracFocus" in a long time.

But, here we are.

A Reader Was Ahead Of Me On This One -- This Well Has Been Fracked -- August 3, 2023

Locator: 45322B. 

Updates

October 12, 2023: a reader alerted me that this well is now producing --

• 39540, drl, WPX, Two Shields Butte 16-8-7-13H3U, spud date, 2/3/23; stim 5/20/23; t--; cum --; 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2023	29	34410	34284	34627	26691	26691	0
BAKKEN	7-2023	27	30850	30949	31435	19936	19936	0
BAKKEN	6-2023	30	10242	9970	10327	6888	6888	0

Four wells on that pad:

• 39539, drl/drl, WPX, Two Shields Butte 16-8-7-13HA, Heart Butte, t--; cum 44K two months;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2023	29	24905	24922	25787	21055	21055	0
BAKKEN	7-2023	28	18620	18324	27054	13649	13649	0

• 18022, IA/711, WPX, Two Shields Butte 16-8-16H, Heart Butte, t6/09; cum 292K 10/22; off line; ignore this one; it goes south; does not parallel the other three
  

• 17981, IA/1,666, WPX, Two Shields Buute 16-8-7H, Heart Butte, t6/09; cum 503K 10/22; off line; this is the important one to check up on in about six months for a halo effect?
  

Original Post 

See this post, and the comments at that post.

The reader is correct. This well has been fracked / completed.

Fracked May 20, 2023 -- within six months of that date (this fall, 2023) we should start seeing production data. Royalties, I suppose, could start flowing (no pun intended) maybe even as early as August, 2023?

Frac Data here.

Wow, wow, wow ...

The well:

• 39540, drl, WPX, Two Shields Butte 16-8-7-13H3U, spud date, 2/3/23; stim 5/20/23; t--; cum --; 

Another All-Time High — BRK — Oil Holdings -- August 3, 2023

Locator: 45321INV. 

BRK reports earnings this Saturday, August 5, 2023. 

OMAHA, Neb.--(BUSINESS WIRE)--Aug 3, 2023--

(BRK.A; BRK.B) – Berkshire Hathaway Inc.’s second quarter earnings release and its quarterly report on Form 10-Q will be posted on the Internet on Saturday, August 5, 2023, at approximately 7:00 a.m. Central time where it can be accessed at www.berkshirehathaway.com.

See previous note on same.

Today, even more definitively, BRK-B was up.

BRK-B up 0.75%; up $2.62; trading at $353.81 and notching another new high. Down minimally after hours.

Helping: OXY was up; AAPL’s big decline occurred after hours.

Buffet's oil holdings, IBD, August 3, 2023, Warren Buffett And His Energy Plays: 

On July 10, Warren Buffett upped his bet on liquefied natural gas, agreeing to buy the Dominion Energy share of the Maryland-based Cove Point LNG export plant in a $3.3 billion deal. Berkshire already owns a stake.

Meanwhile, on June 28 Buffett announced Berkshire purchased an additional 2.14 million shares of OXY over three days. Berkshire bought Occidental Petroleum stock at prices between 57.01-57.17. The OXY purchases brought Berkshire's total stake in Occidental Petroleum to 25%.

Buffett sold around $6 billion worth of Chevron stock in the first quarter, according to Berkshire's Q1 financial report. Buffett's outfit reported reducing CVX holdings to $21.6 billion as of March 31. Warren Buffett began buying the Dow Jones stock in 2020. Prior to Buffett's Q1 decision to sell, Berkshire Hathaway amassed a stake totaling 167 million CVX shares, worth around $29 billion.

Several Ford Links -- August 3, 2023

Locator: 45320EVS. 

CNBC link. 

The Detroit News link. 

Fox Business. 

Denbury Reports 2Q23 Earnings

Locator: 45319DEN. 

Link here.

This will be Denbuury's final earnings report.

Denbury is now a wholly-owned subsidiary of XOM.

EOG Earnings -- 2Q23

Locator: 45318EOG.

Released. Dividend unchanged.

PDF.

Presentation.

Market reaction:

Apple Earnings -- 2Q23 -- Beat On Top And Bottom Lines

Locator: 45317AAPL.

Beat on top and bottom lines.

• per share: $1.26 vs $1.19
• revenue: $81.80 vs 81.69.
• services: a new record. Up 8% y/y.  $21.21 billion vs $20.76 billion. -- second largest source of revenue for Apple.
  
• iPhone sales: minimally down; 39.67 vw $39.91 billion
  
• iMacs: up nicely; $6.84 billion vs $6.62 billion.
  
• iPad sales: down significantly; 5.79 vs 6.41.
  
• gross margin: 44.5% vs 44.2%.
• cash: $166.5 billion
  
• other products: down a bit from forecast; $8.28 billion vs $8.39 billion
  

Market reaction. Shares down fractionally -- down 0.5 to 0.75% down. Trading just below $190.

Me? Greatly relieved. These are awesome, for those paying attention.

Link here.

That Was A Short Correction -- Markets Just Turned Green -- Looks Like The Traders / Movers / Shakers Made Their Money -- Back To Where We Were -- August 3, 2023

Locator: 45316MARKET.

As Jamie Dimon, et al, said: Fitch's AA+ doesn't matter.

Oil and natural gas:

• WTI: up 2.69%; up $2.14; trading at $81.63
• Brent: up 2.25%; just went over $85
• Murban (the "one in demand" right now): up 1.42%; at $86.29
• natural gas: up 3.75%; trading at $2.570

Market:

• CVX: up 1.18%; up $1.88; trading at $161.61.
• BUD: up 1.69%; up 95 cents; trading at $57.16.

*************************

For The Archives

Link here.

March 16, 2020. Slightly more than three years ago.

Let's say, average price for oil when "they" were drilling Tier 1: $60.

Let's say, average price for oil when majority of new wells are Tier 2: $120.

1000 bbls at $$60 = $60,000.

700 bbls at $120 = $84,000.

 

My reaction:

A Closer Look At A CLR LCU H1 Well -- August 3, 2023

Locator: 45315B.

The well:

• 36761, drl/A, LCU Jessie 6-24H1, drl status noted 9/13/19; first production, 4/21; t--; cum 111K 6/21; 43K in 31 days; a big well; cum 135K 7/21; cum 177K 11/21; cum 189K 1/22; cum 203K 5/22; cum 206K 6/22; cum 219K 11/22; cum 224K 2/23;

From the well file:

• TD: 22,080 (a two-section lateral)
  
• Geologic tops:

• KO point: 11,118
• Completion details:
• drilling unit -- acres: 6,399 (unitized)
• stimulated: August 18, 2022
• formation: First Bench, Three Forks
• volume: 137,345 bbls
• proppant: 7,372,071 lbs (small to moderate)
• stages: 38

Application for permit:

• surface: 23-153-99
• bottom hole: 26-153-99
• spacing unit: unitized, but a two-section lateral;

Reuters Tech Roundup -- August 3, 2023

Locator: 45314TECH.

Did MDU Just Cuts Its Dividend In Half -- Since 1995 Never This Low -- Needs To Be Fact-Checked -- August 3, 2023

Locator: 45313DIV. 

Link here.

And, here.

MDU is down more than 3% today, trading below $22.

0.125 x 4 = 50 cents / $22 = 2.27% dividend? It was paying over 4%. Needs to be fact-checked.

Since1995 never this low, though with the spin-off, MDU paid a huge -- really huge cash / stock dividend.

MDU did spin off one of its units this past year, so the cut in dividend makes sense.

But this is the kind of thing that catches widows off guard.

High-Sulphur Fuel Oil -- Update -- August 3, 2023

Locator: 45312OIL. 

High-sulphur fuel oil: priced at a premium to ICE Brent for the first time since at least 2005 and probably ever. Link here. Do you remember all those stories some years ago that cargo ships were mandated to convert to cleaner fuels, like LNG?

*********************

The Book Club

The Black Hole War: My Battle With Stephen Hawking To Make The World Safe For Quantum Mechanics, Leonard Susskind, c. 2008.

Notes.

Absolutely fascinating. Easy to read; great style; lots of humor; the type of article one might find in The New Yorker on a lucky day.

This is an incredibly interesting book. Any high school junior or senior interested in astronomy, chemistry, physics, or history of astronomy / physics should read this book.

Space-time, which we talked about yesterday in another book club selection, is talked about here again, page 56. Minkowski: "Henceforth (1908), space by itself and time byh itself are doomed to fade awway into mere shadows, and only a kind of union of the two will preserve an independent reality." Minkowski's flat or uncurved version of space-time became known as Minkowski space.

The concept of world line. Even a "stationary" particle moves "through" time.

The new measure of world line distance: proper time.

The book's narrative is 446 pages long. The first 116 pages are devoted to a review of physics, which most folks reading this book could skip through very quickly, though the author really explains things very well and an effort should be made not to go through the first five chapters too quickly.

Parton Theory.

By 1972, physics at Columbia University (NYC) was in decline. The author was a professor at Yeshiva University's Belfer Graduate School of Science.

1968: John Wheeler coined the term black hole.

Wheeler had been Richard Feynman's thesis adviser.

About this time, Stephen Hawking was revolutionizing thee classical theory of black holes.

To be continued elsewhere.

Charlie Munger On Diversification -- Another Worn-Out Meme -- August 3, 2023

Locator: 45311INV. 

Munger on diversification. 

His example:

Munger went on to share a story from the 1930s about a wealthy widow who invested $300,000 in just five stocks, including General Electric Co., Dow Inc. and DuPont. By the time she died in the 1950s, her wealth had grown to $1.5 million without incurring costs or expenses.

GE? Her heirs were lucky she died in the 1950s. Hopefully, her heirs got out of GE. My hunch: they did not.

Meanwhile, this in reply to Charlie:

So Charlie's example of a widow making 5x her money in 20 years from the depression low 1930s to a post-war high in 1950s equals to a 8.4% annual return.

With regard to BRK: diversification, according to the linked article, is "qualified." BRK owns shares in a hundred (?)) different companies, many of them Japanese, and then another hundred or so companies owned outright, like BNSF, Geico, See's Candy.

And that story of the widow -- I wonder what her $300,000 was worth before the panic and the depression. My hunch: she inherited her money from her husband who knew what he was doing and then she just HOFDL.

More.

For diversification, these same guys recommend index funds and ETFs.

Here's "QQQ" and this is just the 54 or so; I believe the entire ETF has more than 100 ticker symbols:

Enterprise's NGL and Petchem Distribution and Export Machine -- RBN Energy -- August 3, 2023

Locator: 45310NGL. 

RBN Energy: Enterprise's NGL and petchem distribution and export machine. Archived.

Enterprise Products Partners doesn’t just extract mixed NGLs from associated gas at processing plants, transport that Y-grade to the NGL hub at Mont Belvieu, and fractionate NGLs into “purity products” like ethane, propane and butanes. The midstream giant also distributes purity products to Gulf Coast steam crackers and refineries, converts propane to propylene at its two propane dehydrogenation (PDH) plants, distributes ethylene and propylene, transports propane and butane to wholesale markets across much of the eastern half of the U.S., and exports a wide range of products — ethane, LPG, ethylene and propylene among them — from two Enterprise marine terminals on the Houston Ship Channel. (Another export terminal in Beaumont, TX, is in the works.) Talk about a value chain! In today’s RBN blog, we continue our series on NGL networks with a look at Enterprise’s NGL and petrochemical production, distribution and export assets. 

This blog series is about the select group of U.S. midstreamers that own and operate entire, soup-to-nuts NGL networks that take NGLs from the wellhead to either their ultimate domestic consumer — petchem plants, refineries, wholesale markets, etc. — or to waterside terminals that load purity products (and, in Enterprise’s case, ethylene and propylene too) onto ships for transport overseas. In Part 1, we looked at Energy Transfer’s NGL-related assets in Texas and in Part 2 we shifted our focus to the company’s network in the Northeast. Next up was Targa Resources — in Part 3 we looked at the company’s gas gathering and processing assets, Grand Prix NGL pipeline system, fractionators in Mont Belvieu, and the Galena Part LPG export terminal.

Last time, in Part 4, we started our examination of Enterprise’s NGL network, which includes:

• More than 10 Bcf/d of net gas-processing capacity, about three-quarters of which is located in the Permian, the Eagle Ford, the Piceance and the Green River production areas (the latter in Colorado and Wyoming, respectively). Within the Permian, Enterprise owns 13 plants with a combined capacity of 2.9 Bcf/d, with another three plants totaling 900 MMcf/d under construction. In the Eagle Ford, it owns eight plants with 2.2 Bcf/d, and in the Rockies, it has another 3.6 Bcf/d.
• An array of pipelines to move mixed NGLs (Y-grade) from processing plants to Mont Belvieu, including the Shin Oak Pipeline (67% owned by Enterprise) and the Chaparral Pipeline system, both of which run from the Permian. (An expansion of Enterprise’s Y-grade pipeline capacity from the Permian to Mont Belvieu is in the works, but it remains to be seen if that will involve a looping of Shin Oak, the repurposing of other pipelines and/or some other approach.) There’s also the Rocky Mountain portion of Enterprise’s sprawling Mid-American Pipeline (MAPL) system, which transports Y-grade from the Rockies to Enterprise’s Hobbs NGL hub near the Texas-New Mexico border. From Hobbs, NGLs can flow east to Mont Belvieu on the company’s Seminole NGL Pipeline. (Enterprise owns all or part of several other Y-grade pipelines too, as well as the long-distance, ethane-only Appalachia-to-Texas Express pipeline, better known as ATEX — see Part 4 for details.)
• Thirty-eight underground salt caverns at Mont Belvieu with a combined capacity of 130 MMbbl (yes, 130 MMbbl!) for Y-grade, purity products and other commodities — more than half of the total storage capacity at the NGL hub. It also owns either 100% or 75% stakes in 12 fractionators at Mont Belvieu with a combined capacity of more than 1.2 MMb/d; Enterprise’s net plant capacity there is just over 1.1 Mb/d. The company also owns (or in one case, leases) NGL and related product storage capacity at other locations, including a total of 12.4 MMbbl at Almeda (southwest of Houston) and Markham, TX; and 11 MMbbl of Enterprise-owned storage in Louisiana.
• A number of pipeline systems that transport purity products long-distance to markets far from Mont Belvieu. These include the Dixie Pipeline, which moves propane and butane to markets in the Southeast U.S.; the Enterprise Products Pipeline System (better known as TEPPCO), which runs from the Gulf Coast to various points in the Midwest and Northeast and, among other things, transports LPG and natural gasoline (the latter to the Chicago area for eventual use as diluent); and portions of the MAPL pipeline system known as the North System and Conway South that move purity products — mostly propane, but also ethane/propane mix and butane — from the NGL hub at Conway, KS, to refineries, petchem plants and propane markets in the Midwest and Great Plains states. (Again, see Part 4 for details.)

Much, much more at the link with great graphics, as usual. 

Ford Is Reorganising Its E-Mobility Approach In China -- Electriv.Com -- August 3, 2023

Locator: 45309EVS. 

Earlier: "Most interesting story we might see today: link here. Stand-alone later." Archived.

Here's the story. Read every line of this story very, very closely. No sugar-coating from what I can see. 

This is in the world's biggest EV market and where EVs have been sold for quite some time now.

Ford has adjusted its electric car strategy for the Chinese market. The core of the reorganisation is that the company Ford Electric Mach Technologies (FMeT) for the development of electric vehicles will no longer operate independently in the future.

The subsidiary FMeT was founded in China less than a year ago and was not only responsible for the development of new electric cars, but also for the distribution of the currently only e-model – the Chinese version of the Ford Mustang Mach-E. In the meantime, the independence of Ford Electric Mach Technologies is already history again: 

As first reported by the portal Yicai Global and later confirmed by Ford, FMeT was integrated into Changan Ford, Ford’s general China joint venture with Changan Automobile, on 1 August 2023.

This means that Changan Ford will take over sales of the Mustang Mach-E electric model with immediate effect, with nearly 300 dealers in 70 Chinese cities. The sales network for the electric car is thus almost tripled. 

According to insiders, the reason for the change in strategy is the weak sales of the electric car. The sales figures of the Mustang Mach-E in China are so bad that it is difficult for the separate company to accept losses in the long run. An article from China even reported that only 60 units were sold from January to April. Officially, the integration into Changan Ford is due to “Ford’s strategic transformation and business realignment in China”.

Last October and this spring, Ford reduced the prices of the Mustang Mach-E in China in two stages by a total of 68,000 yuan (about 8,700 euros). In the meantime, the E-SUV was available at prices starting at 209,900 yuan, which is equivalent to about 28,600 euros. However, the discount campaign apparently did not boost sales sufficiently. 

According to Yicai Global, 33 Mustang Mach-Es were sold in China in April (i.e. during the price reduction, which lasted until 30 April). This means that more than half of the modest total sales from January to April can be attributed to the discount campaign.

Together with the realignment, a step that has so far been rather unusual in the car industry was also announced: 

Changan Ford will replace and upgrade the processor for the digital cockpit free of charge in all Mustang Mach-Es delivered in China so far. Until now, the older Qualcomm Snapdragon 820A chip was installed. This will be replaced with the Snapdragon 8155, which is now standard in many mainstream models in China.

The Mustang Mach-E for China has been built by Changan Ford at its Chongqing plant since October 2021. In China, Ford relies on battery cells from CATL. 

The Mustang Mach-E for North America and Europe is built in Mexico and uses battery cells from LG Energy Solution’s Wroclaw plant in Poland.

Globally, Ford’s electric vehicle business also continues to post large losses. Therefore, the target of building 600,000 electric cars globally has been pushed back by one year from the end of 2023.

Unmitigated disaster.

The next question: will Ford do the same for its North American operations?  In fact, they already have, but Ford reports EV sales and earnings separately from the parent company, though Ford's quarterly earnings include both, if that makes sense (the way I wrote it).

Earnings Rolling In; Enterprise Products -- RBN Energy -- August 3, 2023

Locator: 45308B. 

Saudis extend their current production cut for another month, through September. Link here.  More interesting thread here.

Oh-oh: Saudi's Sabic, world's largest chemical firm, reports a profit drop of 86%. Link here.

High-sulphur fuel oil: priced at a premium to ICE Brent for the first time since at least 2005 and probably ever. Link here. Do you remember all those stories some years ago that cargo ships were mandated to convert to cleaner fuels, like LNG?

WMB: nice. Reports a 2.5% beat. Earnings came in at $1.61 billion vs $1.57 billion.

BUD: nice. Predicted on the blog. LOL. Earnings beat expectations. CEO keeps his job.

AA: talking to Airbus and Boeing about ordering more jets. Now, they just need more pilots.

Rolls-Royce: really nice. Fivefold increase in profit.

SRE: really, really nice. EPS beat by 13 cents; $1.88. Revenue miss by $200 million; $3.34 billioon.

Most interesting story we might see today: link here. Stand-alone here.

*****************************

Back to the Bakken

WTI: $80.27. On back of Saudi news to extend cuts through September.

Friday, August 4, 2023: 9 for the month; 211 for the quarter, 466 for the year
39570, conf, Challenger Point Energy, Jacobsen 13-6, 
39539, conf, WPX, Two Shields Butte 16-8-7-13HA,
39480, conf, CLR, Meadowlark 12-6HSL1, 
39472, conf, Ovintiv, Newman 150-97-21-16-1H,
35018, conf, BR, Lillibridge 1C MBH,

Thursday, August 3, 2023: 4 for the month; 206 for the quarter, 461 for the year

39540, conf, WPX, Two Shields Butte 16-8-7-13H3U, 

RBN Energy: Enterprise's NGL and petchem distribution and export machine. Archived.

Enterprise Products Partners doesn’t just extract mixed NGLs from associated gas at processing plants, transport that Y-grade to the NGL hub at Mont Belvieu, and fractionate NGLs into “purity products” like ethane, propane and butanes. The midstream giant also distributes purity products to Gulf Coast steam crackers and refineries, converts propane to propylene at its two propane dehydrogenation (PDH) plants, distributes ethylene and propylene, transports propane and butane to wholesale markets across much of the eastern half of the U.S., and exports a wide range of products — ethane, LPG, ethylene and propylene among them — from two Enterprise marine terminals on the Houston Ship Channel. (Another export terminal in Beaumont, TX, is in the works.) Talk about a value chain! In today’s RBN blog, we continue our series on NGL networks with a look at Enterprise’s NGL and petrochemical production, distribution and export assets.