Six New Permits; WPX With Four More MHA FBIR Permits; Four DUCs Reported As Completed -- July 31, 2024

Locator: 48283B.

Updates

Oh, never mind. There's an election this year. 

Original Post

In the news today:

Weekly EIA petroleum report, link here:

• oil in commercial storage: 4% below historical norm;
• refiners: 90.1%;
• airlines: 1.2%.

Gasoline demand, link here:

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Back to the Bakken

WTI: $77.91.

Active rigs: 40.

Six new permits, #40983 - #40988, inclusive:

• Operators: WPX (4); MRO, BR
• Fields: Heart Buttte (Dunn County); Wolf Bay (Dunn); Lone Butt (Dunn)
• Comments
• WPX has permits for four MHA FBIR wells NENW 18-149-91;
• to be sited between 1190 FNL and 1236 FNL and between 1993 FWL and 1916 FWL
• MRO has a permit for a Smith USA well, NENW 16-146-92, 
• to be sited 966 FNL and 2480 FWL;
• BR has a permit for a Tilton well, SENW 18-147-97, 
• to be sited 2242 FNL and 2494 FWL

Four producing wells (DUCs) reported as completed:

• 40111, 1,770, CLR, Lundberg Federal 5-8H1,
• 40243, 3,128, MRO, KGC 31-6H,
• 40278, 756, CLR, Cuskelly 5-7H,
• 40279, 647, CLR, Thorvald 5-6H,

QCOM Earnings And Ticker --July 31, 2024

Locator: 48282INVESTING.

Markets about an half-an-hour after the close: 

QCOM:

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BRK-B

On a day the entire surged:

Live: Katie Ledecky -- 1500-Meter Freestyle Final -- New Olympic Record -- July 31, 2024

Locator: 48281LEDECKY.

Tag: swimming, Katie.

NBC.

At 200 meters: up 3.4 meters.

At 400 meters: up  5.5 meters.

At 600 meters: up 7.0 meters; about 5 seconds.

At 800 meters: up 8.0 meters; about 6 seconds.

At 1,000 meters: up 10.0 meters; about 8 seconds.

At 1,200 meters: up 11.6 meters; about 9 seconds.

At 1,400 meters: up 14.3 meters; about 11.5 seconds.

At 1,500 meters: up 14.3 meters; about 12 seconds.

New Olympic record. 

Now, more Olympic medals than anyone in history.

Market Surges / Surges -- Fed Maintains Rate -- July 31, 2024

Locator: 48278INV.

Goldilocks economy:

• full employment;
• inflation less than 2% in many cases; exceptions -- housing; 
• in fact, in some areas, risk of deflation
• favors the consumer
  
• spouses happy with high-interest-bearing money market funds;
• investors happy with the market -- really happy today;
• lending rates are not unusual rates based on historical data.

Fed rate unchanged. In line with expectations.

• long, long explanation in Q&A period following prepared remarks which were very short;
• explanation in a nutshell:
  

"The US is experiencing a 'Goldilocks economy.' Anything the Fed does could disrupt this finely balanced machine running well on all eight cylinders. We -- the Fed members -- have nothing to lose by making no change, and everything to lose if we do. A rate change of 25 basis points would have no material effect on the economy but would push the market into even frothier territory."

• having said that, JPow's remarks practically confirmed a rate cut in September unless something "negative" happens that even a caveman could see.

Market following announcement:

Hess: 2Q24 earnings -- Alex Kimani over at oilprice --

Hess Corp. has posted an impressive second-quarter earnings report with its stake in prolific Guyana helping it exceed estimates. Hess reported Q2 2024 non-GAAP EPS of $2.62, beating the Wall Street consensus by $0.07 while revenue of $3.26B was good for a robust 40.5% Y/Y growth although it missed the consensus by $30M.

The company saw a large increase in profits: Q2 net income was $757 million, or $2.46 per share, compared with net income of $119 million, or $0.39 per share for Q2 2023 while adjusted net income clocked in at $809 million, or $2.62 per share, compared with $201 million, or $0.65 per share, in the second quarter of 2023.

Hess's production increased 27.6% to 494,000 barrels of oil and gas per day (boepd), thanks in large part to a 75% year-over-year increase in Guyana to 192,000 bpd, up from 110,000 boepd in the prior-year quarter.

The company’s Bakken shale output was 212,000 boepd, up 17% from 181,000 boepd in the second quarter of 2023. Hess, however, reported it expects a fall in current-quarter production due to planned downtime in Guyana and Southeast Asia.

Hess owns a 30% stake in the Guyana oilfield while Exxon Mobil Corp. and China’s CNOOC own 45% and 25% stakes, respectively.

Meanwhile, messy, messy, messy: 

Back in May, Hess shareholders signed off on its proposed $53B merger with Chevron Corp. despite the deal being challenged by Exxon Mobil Corp. .

Exxon is trying to stop the merger with the future of the deal resting on whether the transaction would involve a change of control of Hess' Guyana subsidiary. Exxon claims Hess should have first given it the opportunity to purchase its stake in the prized Guyana asset, and that Chevron structured the deal in a way to bypass Exxon’s right of first refusal if it’s triggered by a change of control in Guyana.

Market caps:

• XOM: $540 billion
• CVX: $300 billion
• HES: $50 billion

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Hess
Earnings, 2Q24

Link here.

Insight On The Demise Of The Keystone XL Project -- A Minority View? -- IEEFA -- July 31, 2024

Locator: 48279XL.

Link here.

IEEFA's bottom line: the pipeline was not necessary and not in the public interest, and in fact, the operator / developer did better in the long term, and, oh, by the way, Canadian resources were never that great to begin with. 

The AI Revolution Marches On -- July 31, 2024

Locator: 48277TECH.

Background:

• Tech is tracked here.
• Chips are tracked here.
• The importance of knowing the difference between GPUs and CPUs.  I forget who asked but someone on  CNBC -- "Half-Time Report? -- actually picked up on this. I was impressed.  It's also important to know who different assemblers "deal with" GPUs, CPUs, FPUs, neural engines. See System on a chip (SOC): link here.

Updates

Historical, revenue, link here:

July 31, 2024: if you view one thing today, it. needs to be the interview between Jim Cramer and AMD CEO Lisa Su. I started my position in AMD after reading the Barron's article in the issue that featured Lisa Su on the front page -- many months ago. She seems to be a lot like the OXY CEO Vikcy Hollub.

July 30, 2024: never quit reading. Link here.

July 31, 2024: CNBC practically giddy over the amount of money META and MSFT are going to be spending on Nvidia chips. Apparently META is Nvidia's biggest customer, and MSFT is going to spent $85 billion on Nvidia chips this year. Needs to be fact-checked -- heard in passing.

Link here.

I simply don't think folks / investors understand how big a deal the AI revolution is.

AMD: long interview with CEO on CNBC today. Shares up 7% today.

MSFT: link here.

From the linked article:

On the face of it, Microsoft had a decent quarter. Yet the stock fell, and that reveals a lot about what markets expect with updates from the Magnificent 7 technology stocks, and earnings more generally, these days.

On the one hand, traders are looking for reasons to sell the big technology companies that have driven the overall market’s gains for a while now, as Barron’s has pointed out previously. Now the Great Rotation into other sectors is taking hold, the easiest way to invest in beaten-down stocks is to sell the shares that have already done well.

On the other hand, the money these companies are spending on AI is going to the balance sheets of chip makers like Nvidia . Despite its shares dropping almost 20% over the past month, Nvidia got a decent boost from peer Advanced Micro Devices ’ solid earnings report Tuesday. Others in the chip sector are also getting a lift from a report that President Joe Biden’s next round of restrictions on exports to China will exempt some key allies.

When it comes to AI hype, the divide between chip makers and the rest appears to be widening. It comes down to who’s already making money from it, and those who have aspirations to make money from it one day.here’s another dynamic, too. While Microsoft says its artificial intelligence business is doing great, traders are paying more attention to the mounting costs of investing in the new technology. AI may hold the key to big profits in the future, but for now, it’s still an expense on the income statement. The same is true for other tech giants like iPhone maker Apple, retailer Amazon, Facebook-parent Meta Platforms, and Google-parent Alphabet.

Worth A Stand-Alone Post -- July 31, 2024

Locator: 48276CASH.

Link here.

So, what do we do?

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Watching My Weight: Eating Salad

Cramer's First Hour -- July 31, 2024

Locator: 48275INV.

Tag: Corning, GLW, California DMW.

Update

Later, 11:12 a.m. CDT: CNBC practically giddy over the amount of money META and MSFT are going to be spending on Nvidia chips. Apparently META is Nvidia's biggest customer, and MSFT is going to spent $85 billion on Nvidia chips this year. Needs to be fact-checked -- heard in passing.

Later, 10:51 a.m. CDT:

Later, 10:48 a.m. CDT:

Original Post

Chicago PMI: 45.3 vs 45.5. Whoo-hoo!

Household cash:  link here.

Opening:

Hope you all bought on the dip: Nancy Pelosi.

AMD: long interview with CEO. Shares up 7% today.

NVDA: up 7.5% at the open. Hope you all took advantage of the dip yesterday, or actually this past week.

INTC: up 1.5% today. Down 14% for one full year.

F: pain continues. Down at the open. Trading at 11.78. Down 15% past month.

GM: down 6% past month.

Boeing’s losses astounding. Not likely over even with new CEO. “Kitchen-sink” quarter yet to come.

Delta’s CrowdStrike problem.

OXY vs S&P 500: excruciating.

MSFT investors upset: Azure growth only 31%.

TMUS: huge beat; shares surge. Our carrier. Whoo-hoo! Fiber vs fixed wireless. Five million subscribers in three years. Fan of Apple. Looking for an interesting rollout. Cable streaming.

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Working On Their Aeroplanes

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Painting By Sophia

Acrylic on canvas, perhaps my favorite medium.

A lot of subtleties in this painting for a ten-year-old.

Wednesday, July 31, 2024

Locator: 48274B.

The big investing story today: AMD.

The big Bakken investing story: Hess. Link here.

• Bakken net production was up 17% q/q
• net income: $2.46 / share vs 39 cents, 2Q23
• net income increase reflects higher production volumes and realized selling prices

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Back to the Bakken

WTI: $76.88. Up $2.15 but very, very temporary unless ...

Thursday, August 1, 2024: 61 for the month; 61 for the quarter, 387 for the year
40411, conf, CLR, Anheluk 4-26H,
40263, conf, Stephens Williston, Cabot 15591-0112-3H,
40089, conf, Phoenix Operating, Jean Ferari 26-35-2 4H,
40088, conf, Phoenix Operating, Jean Ferrari 26-35-3H,
39604, conf, Hess, BL-Iverson B-LN-155-95-0807H-1,

Wednesday, July 31, 2024: 56 for the month; 56 for the quarter, 382 for the year
40412, conf, CLR, Anheluk 5-26HSL,
40176, conf, Slawson, Cyclone 5-21-16H,
40086, conf, Phoenix Operating, Jean Ferrari 26-35-2 1H,
39514, conf, Liberty Resources, Haley E 158-93-29-32-4MBH,

RBN Energy: could more NGL pipeline capacity help break the Bakken's production-growth logjam? Archived.

Crude-oil-focused production in the Bakken still hasn’t fully recovered from its pre-COVID high, partly because the western North Dakota shale play continues to face takeaway constraints, especially for natural gas and NGLs. A couple of NGL pipeline projects in the works will certainly help, but will they be enough to enable the Bakken’s increasingly consolidated E&P sector to ramp up its crude oil production? And one more thing: How will the incremental NGLs flowing south on Kinder Morgan’s soon-to-be-repurposed Double H Pipeline find their way to fractionation centers in Conway and Mont Belvieu? In today’s RBN blog, we’ll look at the Bakken’s complicated production-vs.-takeaway conundrum and the ongoing efforts to address it.

No Special One-Time Items? July 31, 2024

Locator: 48273HESS.

Link here.

F-35 Strike — July 31, 2024

Locator: 48272MIDEAST.

Link here.

Absolutely Predictable -- And It's Just The Beginning -- Just Wait Until Trucks Need To Be Electric --

Locator: 48271CALIFORNIA.

Link here.

I assume Pete Buttigieg is all over this.

From the linked article:

The Port of Los Angeles’s transition to green technology is on the blink.

The private companies that handle containers at the crucial seaport say power surges and lulls are knocking out cranes and other cargo equipment just as container terminals are relying more on the electric grid to power their operations.

The terminal operators are asking how the port expects to achieve a mandate to phase out diesel-powered machinery by 2030 when today’s power supply is so unreliable. Their frustrations highlight the gap in energy infrastructure that complicates moves toward zero-emission technologies even as companies invest big sums in the transition.

Thomas Jelenić, a vice president at the Pacific Merchant Shipping Association, which represents the terminal operators, said so far this year there have been at least nine power-related outages that have affected one or more terminals.

Jelenić said the dips and surges in voltage can be brief but can cause ship-to-shore cranes to reset. “That’s a big deal because it stops the flow of cargo from the ship to the terminals,” he said.

Several executives said the power issues are knocking out not just cranes but also the automated gates that accept and deliver boxes to trucks and the computer systems that manage the location of containers. The terminal operators must then recalibrate machinery and sometimes replace fried circuit cards before they can resume operations.

Another One Taken Out -- It Looks Like Israel Is Getting Serious -- Taken Out At An Inauguration Ceremony IN TEHRAN! -- July 30, 2024

Locator: 48270ISRAEL.

Updates

Original Post

It looks like Israel is getting serious.

Rumors: bullets grazed Iran's new president's right ear. Apparently sniper on top of mosque rooftop not seen. Iranian counter-snipers not trained to fire from slanted roofs. Inshallah.

A CLR Cuskelly Well -- A DUC Is Reported As Completed -- July 30, 2024

Locator: 48269B.

The CLR Cuskelly / Thorvald wells are tracked here.

From today's daily activity report:

One producing well (a DUC) reported as completed:

• 29708, 2,440, CLR, Cuskelly FIU 8-7HSL, Jim Creek (sited in Rattlesnake Point), Dunn County

The map:

From the NDIC website:

• Cuskelly 5-7H2, Three Forks, September 2, 2014
• Gas capture plan, July 5, 2015
• Cuskelly 3-7H1
• Cuskelly 4-7H
• Cuskelly 5-7H2
• Permit: Cuskelly 5-7H2, Three Forks B2, date approved, October 15, 2014
• Sundry form: Cuskelly 5-7H (perhaps typographical error, but used multiple times), December 11, 2014
• Sundry form received December 15, 2014: request to change formation and name to Cuskelley 5-7H (middle Bakken)
• October 10, 2017: planning form, Cuskelly 5-7H2 (again)
• Sundry form, October 11, 2017: request to change name back to Cuskelly 5-7H2
• Sundry form, October 2, 2019: request to cancel permits for Cuskelly 5-7H2
• Sundry form: name changed from Cuskelly 9-7H1 to the Cuskelly 8-7HSL, and from a Three Forks well to a middle Bakken well; August 31, 2023

The scout tickets:

Question Of The Day -- US Debt -- July 30, 2024

Locator: 48268US.

The US, for the first time, reaches $35 trillion in debt.

Story buried on business pages if reported at all.

Not talked about on CNBC.

Why not? Why is "nobody" talking about the US debt? Why does no one seem worried about US debt? 

Question of the day.

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Corollary

Is US spending "doing anything" for quality of life? Since 1951?

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Maybe This Is Where We Need To Start

And then there's the "brand name." Certainly the "US brand" is worth a few trillion dollars. One wonders if the total worth of the United States includes the dozen or so old Apple computers stored in the garage and never used any more. Certainly they have some resale value. No?

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US GDPNow

Link here.

July 26, 2024: 2.8% estimate for 3Q24.

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Comment

Maybe these are two questions that can be discussed some day.

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How Good We Have It

This is "the club" in Southlake, TX.

This is where Sophia is going this week for her chess camp.

Link here.

If This Is Verified, So Many Story Lines -- Makes Me Sick -- July 30, 2024

Locator: 48267IDF.

WTI Drops Below $75 -- July 30, 2024

Locator: 48266B.

Market: unless you've been adding to your technology position in the past six months, today's market action is absolutely awesome. What a huge buying opportunity. Things are starting to shake out. Things are starting to make sense.  

Most surprising: BRK-B. 

Copper: one of the most interesting stories right now?

Lessons learned: "we're" in the process of providing a "personal financial planning" for the two older granddaughters. Big, big change: no longer do I call it "retirement planning." I call it "financial independence (by age 57)."

Lessons learned: everyday I "study/review" math, vocabulary, and a multitude of other subjects with Sophia, age 10, going into fifth grade. My lessons learned:

• vocabulary: important, important, important -- we will move through the fifth grade workbook quickly and begin the sixth grade workbook within the next month or so;
• math: word problems. Sophia has to set up the word problems on her own. The current word problems are multiplying 3-digit and 4-digit numbers. She knows how to multiply 3-digit and 4-digit numbers. Now, it's just busy work. In the future, she won't be multiplying large figures by hand. She will use her mobile device. More importantly, she needs to set up the problems and move on. If she needs a multiple-guess answer, rounding / estimations will generally work.
• writing: she keeps a journal; no ChatGPT
  
• conversions: time (seconds, minutes, hours, days, months, years); baking (teaspoons, cups); commodities (gallons, barrels); distance / time; etc.
  
• 15-minute binder with dozens of subjects; more on this later.

AMD: one word. Wow! Folks might remember my thoughts on AMD about a year ago. Relative to Nvidia. After the earnings call, after-hours, AMD is up over $9 / share.

Intel:

Intel: this happened in the first month of the third quarter; damage will continue through the second month of the third quarter; we will see results 3Q24 and perhaps 4Q24 and perhaps full year 2024. This has the potential of being a bigger story than the CrowdStrike / Microsoft story. CrowdStrike after recovering a bit from the debacle, fell $25 today! Wow! Cathie Wood bought a huge position in CrowdStrike the day after the original sell off, immediately after the debacle. It looked like a great bet. It looks like she could have waited.

So, who makes chips that directly compete with Intel? AMD was one of the few tech companies that did well today after reporting earnings.

Nvidia: the "pain" has not quit. The stock price will continue to fall. -- Cramer. But Cramer has an interesting take on this. I agree.  NVDA is up 121% from one full year.

Texas oil, a nice problem to have. Link here. In fifty years of following the oil industry, I've never seen this headline in this context. Wow.

In our backyard: The Thirsty Lion is our favorite restaurant -- but we seldom go any more. Eating out has simply become way too expensive. 

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Back to the Bakken

WTI: $74.73.

Active rigs: 39.

Five new permits, #40978 - #40982, inclusive:

• Operator: Hess
• Field: Sorkness (Mountrail)
• Comments:
• Hess has permits for five EN-Starla permits, SESW 9-157-93; 
• to be sited between 594 FWL and 571 FSL and between 2028 FWL and 2192 FWL;
• these four EN-Starla permits will be added to the existing EN-Starla well already on the pad
• 40399, conf/loc, Hess, EN-Starla-157-93-0904H-4, Sorkness, t--; cum --;
  

Four permits canceled:

• Whiting: two permits in McKenzie County; two in Mountrail County; remember: Whiting is now part of Chord (Oasis - Whiting -Enerplus): permits for Wold, Green, Jeffery, Gayne.

One producing well (a DUC) reported as completed:

• 29708, 2,440, CLR, Cuskelly FIU 8-7HSL, Dunn County

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Disclaimer Briefly
Reminder

• I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple. 
• See disclaimer. This is not an investment site. 
• 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.
• Reminder: I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple.

NOG: 2Q24 Earnings And Guidance -- July 30, 2024

Locator: 48265NOG.

NOG, link here:

The ticker:

 

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Decorated By Sophia

 Good luck to all.

Wisconsin's Occupied Bald Eagle Nests -- July 30, 2024

Locator: 48267EAGLES.

Tag: Lesbos, Sappho

Wisconsin's occupied bald eagle nests in 1974 and 2019. Absolutely amazing. Link here.

Meanwhile, we're still seeing a lot of Swainson's hawks overhead in the DFW area. See this post from 2020. 

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The Book Page

Link here.

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Wind Power

Link here.

Tesla And Regulatory Credits -- Re-Posting -- July 30, 2024

Locator: 48266TESLA.

How regulatory credits work -- CNBC -- May 18, 2021. NOTE THE DATE!

Cornering the market: one of the talking heads mentioned in passing that Ford was complaining that Tesla was cornering the market on EV regulatory credits.

EV woes: link here.

Time to get back to this story: link here, July 24, 2024. One of two under-reported stories for Tesla, carbon credits, regulatory credits, income from other auto manufacturers:

Links, blog only:

• April 29, 2021.
• April 28, 2021.
• April 26, 2021.
• September 8, 2020.
• July 23, 202.
• February 10, 2013.

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Reuters

Link here.

Buried in that article, perhaps the most important data point of which folks are not paying attention:

Regulatory credits -- income:

• CY2023: a record, $1.79 billion
• 2Q24: a record, $890 million; annualized 4 x 0.890 billion = $3.56 billion

Where's that money coming from: Ford, GM, Stellantis, others.

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Other Media Links

This whole story reminds me of the business models of car rental companies like Hertz.

Teslarati, February 9, 2024:

Tesla’s 2023 regulatory credits generated an additional $1.79 billion in revenue, according to its 10-K filed last week.

The money Tesla makes due to other carmakers needing assistance to reach emissions standards continues to accumulate, and since 2009, it has made almost $9 billion in revenue because of the system.

Bloomberg reported this morning that Tesla’s $9 billion in revenue due to the sale of regulatory credits has helped the company obtain what is basically pure profit. Former Tesla Chief Financial Officer (CFO) Zachary Kirkhorn, who left the company last year, said the credits would eventually go away as other automakers caught up to emissions standards.

However, that was in 2020. Tesla has brought in over $1.7 billion in credits in both 2022 and 2023, while 2020’s total was $1.58 billion.

Although many large automakers have pledged to transition to EVs, it has been a much more difficult road than initially imagined.

Volkswagen and General Motors are two companies mentioned in the report that have had trouble reaching EV goals and have, in turn, needed help meeting emissions standards.

GlobalFleet, March 27, 2024:

One year after the release of its first electric vehicle (EV), the Roadster, Tesla began selling carbon credits to various automakers. While Tesla enjoyed high profits as the pioneer of all-electric passenger cars, the balance in the carbon credit market is about to change. Tesla is no longer the top all-electric producer, and major automakers are changing their strategy from just buying time to updating their zero-emission strategies.

Selling carbon credits has always been a lucrative business for Tesla. In Q4 2020, according to CNBC, Tesla generated $270 million in net income by selling $401 million in regulatory credits. In Q1 2021, Tesla generated $518 million from selling regulatory credits.

Profits continued to grow. According to Tesla's financial reports, revenue generated from carbon credits was $1.46 billion as of the fiscal year 2021, representing 3% of the brand's total revenue. Revenue peaked in 2023, hitting $1.79 billion, according to the brand's Q4 2023 report. Tesla has generated $9 billion from selling carbon credits to other electric vehicle (EV) manufacturers since 2009.

We shall look at the figures from Q3 2023 to note how profitable selling carbon credits is. That quarter, Tesla generated $554 million from selling carbon credits, representing 29% of the company's net income. Notably, carbon credit revenue jumped 94% in that quarter, year-on-year. 

CarbonCredits, February 13, 2024:

Elon Musk’s Tesla generated a substantial $1.79 billion from carbon credit sales last year, as revealed in their Q4 2023 and annual financial report, bringing its total earnings from such credits since 2009 to nearly $9 billion. This revenue comes from trading regulatory credits to other automakers unable to meet emission regulations in the US, Europe, and China. 

Tesla continues to profit from the need of its rivals to meet emissions standards. It is a lucrative business that was initially expected to diminish. Since the EV giant incurs minimal additional costs to earn these credits, the sales represent almost pure profit.

Ticker: Tesla has become a stock for traders, not necessarily investors: