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Thursday, February 22, 2024

Two New Permits; Eleven DUCs Reported As Completed; MRNA, PXD, EOG, NOG -- February 22, 2024

Locator: 46877B.

MRNA: up 14% for the day. Will have to go back and look at this one.

PXD: link here. Also here.

EOG: mixed results; shares down 2.7% after earnings report; down $3.15; trading at $113.25. The one-year chart is atrocious. The darling of Wall Street -- under Mark Papa -- during the Bakken boom is no longer the darling ...  paid about 5% in 2023.

NOG: better report; trades up after-hours.  

  • production surge: Q4 production increased by 45% year-over-year, reaching 114,363 Boe per day.
  • financial performance: full year 2023 GAAP net income soared to $923.0 million, with a 31% increase in adjusted EBITDA.
  • capital efficiency: capital expenditures were tightly managed at $260.0 million for Q4, excluding non-budgeted acquisitions.
  • dividend growth: NOG declared a $0.40 per share common dividend for Q1 2024, marking an 18% increase from Q1 2023.
  • 2024 guidance: anticipates 20% production growth with total capital spending projected between $825 - $900 million.
  • reserve expansion: total proved reserves increased by 3% year-over-year, with a pre-tax PV-10 value of $5.0 billion.

*******************
Back to the Bakken

WTI: $78.61

Active rigs: 37.

Two new permits, #40541 and #40542:

  • Operators: Hunt Oil, Hess
  • Fields: Clear Water (Mountrail); Robinson Lake, (Mountrail County);
  • Comments:
    • Hunt Oil has a permit for a Clearwater well, NWNE 23-157-90; 
      • to be sited 300 FNL and 1701 FEL;
    • Hess has a permit for a EN-Horst well, SWSE 34-155-93; 
      • to be sited 479 FSL and 1540 FEL.

Eleven producing wells (DUCs) reported as completed:

  • 39362, 4,726, Grayson Mill, Williston 25-36F 3H,
  • 39363, 3,257, Grayson Mill, Williston 25-36F 4H,
  • 39364, 2,731, Grayson Mill, Williston 25-36F 5H,
  • 39367, 4,482, Grayson Mill, Williston 25-36F 2H,
  • 39620, 660, Crescent Point Energy, CPEUSC Clermont 2 19-18-158N-100W-MBH,
  • 39621, 753, Crescent Point Energy, CPEUSC Farthing 2 30-31-158N-100W-MBH,
  • 39622, 696, Crescent Point Energy, CPEUSC Ruby 5 20-17-158N-100W-MBH,
  • 39624, 825, Crescent Point Energy, CPEUSC Ruby 4 20-17-158N-100W-MBH,
  • 39772, 1,970, CLR, North Tarentaise Federal 2-18H, the Tarentaise wells are tracked here;
  •  39814, 1,151, CLR, North Tarentaise Federal 1-18H2, the Tarentaise wells are tracked here;
  •  40048, 1,972, CLR, Harms East Federal 3-33H, the Harms Federal wells are tracked here;

Wells of interest:

  • 19232, 1,423, CLR, Quale 1-1H, Sanish-Antelope, t2/12; cum 605K 10/23; the Quale wells are tracked here;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH12-20230000000
SANISH11-20230000000
SANISH10-20232614371625998400136700
SANISH9-202330189018701493532349180
SANISH8-202331213721431598539049710
SANISH7-202331206820801599399835790
  • 18311, 2,769, Grayson Mill, Williston 25-36 1H, Catwalk, t12/09; cum 369K 6/23;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20230000000
BAKKEN11-20230000000
BAKKEN10-20230000000
BAKKEN9-20230000000
BAKKEN8-2023002400000
BAKKEN7-20239306439420110101101
BAKKEN6-2023308751096933301502915
BAKKEN5-202331133211551405349903375
BAKKEN4-202330632491890206401944
BAKKEN3-2023319549681107348503361
BAKKEN2-20232711219801299384603738

Did Today's Market Action Finally End All The Whining About Fed Rates? LOL -- February 22, 2024

Locator: 46878INV.

Updates

February 24, 2024, link here:

Original Post

Happening right now: moon landing. On the surface. Transmitting.

My hunch: winners today didn't obsess about the Fed rate, but just kept on truckin' on -- kept on investing day in, day out. Nvidia had the same "interest-rate" challenges everyone else had -- in fact, coming out of the pandemic, they were in much worse shape than most of their competitors but that didn't stop them. 

Same thing with AMD. 

Activity Report From February 21, 2024

Locator: 46876B.

From February 21, 2024

Active rigs: 39.

Nine new permits, #40532 - #40540, inclusive:

  • Operator: Marathon
  • Fields: Bailey, Killdeer (Dunn)
  • Comments:
    • MRO has permits for nine wells, NWNE 15-145-94: Stella, Durkee, Decorah, Prince, Franklin, Chandler, Ellestad, Framstad, and Rex, to be sited between 401 FNL and 402 FNL and between 1490 FEL and 1810 FEL

    Two permits canceled:

    • Liberty Resources, a Tucson permit and a Rice permit, Mountrail County;

    Five producing wells (DUCs) reported as completed:

    • 39365, 3,641, Grayson Mill, Williston 25-36H, Williams;
    • 39366, 4,007, Grayson Mill, Williston 30-31F XE 1H, Williams County;
    • 39773, 1,542, CLR, North Tarentaise Federal 3-18H1, McKenzie County;
    • 39916, 3,672, MRO, Arnew 41-22H, Dunn County;
    • 40126, 5,224, MRO, Erbe 41-22H, Dunn County;

    Tell Me Again, The Fed Needs To Cut Rates -- February 22, 2024

    Locator: 46875INV.

    The Fed needs to cut rates but not to appease investors.

    At the close:

    From a post on February 15, 2024:

    • the question: has the Fed waited too long to cut rates? The answer: yes.
    • the two observations:
      • the gap between Wall Street and Main Street is widening; and,
      • the gap between Main Street and Oak Street is also widening.

    We'll talk about this later tonight if we have time, but I think anyone paying attention can see what I'm seeing.

    WTI: up over half a percent; closed at $78.45.

    • Chevron down one cent today, but up 9% this past month:

    Enbridge: my problem

    • I've held it forever
    • cost basis is so low, not worth calculating
    • for the longest time, I had automatic dividend reinvestment
      • I stopped that a few years ago
    • dividend: just declared 68 cents / share; historic high
    • according to Google charts, cost basis for ENB bought in 2001 = $7.00 / share
    • that's as far back as Google charts go; I would have started accumulating ENB back in the 1990s
    • so, let's say, cost basis is $5
    • annual dividend at 68 cents / quarter = $2.72 annual
    • 2.72 / 5 = 54% (yeah, I know, there's more to it than that)
    • Enbridge may or may not have much appreciation in its future, but it tends to raise its dividend on a "more than" regular basis; and, 
    • then, of course, there's the capital gains tax if I were to sell

    Essay On EVs -- Part 1 -- February 22, 2024

    Locator: 46876EVS.

    Part 2 here.

    This is Part 1.

    Mercedes: link here. Just think, if Mercedes, et al, source their lithium from China, their EVs won't qualify for tax credits.



    Ferrari: you can do the research, but my hunch is that Ferrari isn't having a stellar year based on EVs, but rather conventional ICEs. Their business is about making fast cars, making money, and not keeping Greta happy.



    Rolls Royce:

    Ford, Stelllantis, GM: they've all walked back their EV plans. And profits are surging. But look how much they're spending on lithium. Just think, if GM, et al, source their lithium from China, their EVs won't qualify for tax credits.

    VW:

    Tesla: recently slashed prices on old 2023 models; can't get them sold without slashing prices (speaks volumes); they need to move them, 2024 production models starting to be delivered.

    Facts / factoids / observations:

    • EVs are luxury vehicles
    • EVs have been around for a long time and  still struggling;
      • Tesla
        • forgetting about the Roadster, the first Tesla was introduced in 2009
        • three models, not including the rusting Cybertruck, as of 2024
        • three models over fifteen years; prices slashed
    • first adopters have finished adopting
    • automakers are stepping back with regard to EVs

    The question is "why?" Why have automakers stepped back from EVs?

    Two reasons:

    • folks aren't buying them; and,
    • the margins suck (in fact, most American EVs are being sold at a loss

    So, auto manufacturers have two challenges:

    • get folks to buy their cars; and,
    • increase their margins.

    Fact:

    • when one is talking margins in the automobile business one is talking $50K+ cars / pickups; and preferably $75K
    • so, we can spend a lot of time talking cost, margins, supply chain, China lithium, etc, but that doesn't interest me
    • what interests me is the second question: other than price, how are auto manufacturers going to get Americans to buy EVs (not as their third car, or even their second car, but their first car and only car(s)?

    Why aren't Americans -- other than price -- not buying EVs?

    This is what's interesting. No one wants to say the real answer out loud so they make up all these other reasons.

    Reasons:

    • range anxiety
    • short range
    • too long to fully charge
      • 30 minutes for a full charge when "on the road" or overnight when home
    • lack of infrastructure: charging points few and far between; when one finds a charging point, a risk of a waiting line; a risk that the charging point is inoperable

    So, we can go through a litany of similar reasons why Americans aren't buying EVs, but they're not "reasons," they're excuses.

    Excuses:

    The Phil LeBeaus of the world and the auto CEOs of the world and EV apologists have a long list of "reasons" why EVs aren't being bought by Americans, but they're simply "excuses."

    Even if the range issues and the price issues and the infrastructure issues were all resolved overnight, Americans would not buy EVs to any meaningful degree.

    How do I know that?

    Look at the stories above regarding Rolls Royce, Ferrari, Mercedes Benz.

    If money was to be made in EVs, these manufacturers would be marketing them. Their customers can afford two, three, four or more ICE vehicles and drive their luxury EVs when and where they want -- local and within the 250-mile range.

    The fact is, even the rich and famous don't like EVs. And therein likes the problem.

    Enough for now. I'll complete this later, but I think folks can connect the dots from here.

    But to help those who can't connect the dots, let's say Taylor Swift started an advertising campaign to convince folks not to buy EVs .... 

    And then this: imagine a salesman trying to explain charging to a prospective buyer.

    But this post just blows me away:

    ******************************************
    Understanding EV Charging

    Re-posting.

    Locator: 45415B. 

     Updates

    December 10, 2023: F-150 Lightning update.

    December 10, 2023: EV chargers -- nice update.

    August 27, 2023: tech writer for The WSJ buys an EV for the family. The "buying experience" here at "YouTube." Exactly why EVs will not catch on for a long, long time. 

    Original Post

    I know very little about cars or car engines, but when shopping for a new car, all I need to know is mpg. One number. Okay, two: city / highway.
    • I never ask about range
    • I never ask about the kind of pump I need to use
    I know nothing about electricity and nothing about EVs, but when shopping for a new car, I need to know:
    • type of connector
    • type of charging station 
    • the size of the tire which affects range
    • range on a fully charged battery (see below)
      • a very cold day
      • a “normal” day
      • a very hot day
    • level charging station: level 1, 2, or 3
    • how long does it take to fully charge the vehicle
    • how do I know when it is optimally charged? What is the optimal charging range?
    • advertised range vs actual range (this is more relevant than you will ever realize until after you’ve bought the car);
    This is how I understand it (right, wrong, or indifferent) now. This is how I would explain it to Sophia, subject to editing, correcting, and adding more information as I get a better understanding and as technology, batteries, charging stations evolve over time.

    The links:
    This is the most important graphic. It doesn't require any understanding of anything; just keep the graphic in you mind. 


    What to note in the graph:
    • the left side of the graph/chart: 
    • the charging stations you see in parking lots around town
    • measured in kW (you don't even have to know what a kW is -- just know that's how EV charging station ports are "rated;
    • in the example: one charging port is rated at 7.5 kW; the other charting port is rated at 60 kW
    • some existing ports are now rated higher than 60 kW
    • as time goes on, the ratings will increase in size (power)the right side of the chart:
      • this is your car, your EV
      • when you talk to your dealer or to you friend, you will ask about / talk about the "size of the battery" or the "battery's energy" -- or whatever the phrase is
      • if you don't have much money, the EV you buy will have a battery with a lower energy rating, such as 15 kWh in this example;
      • if you are rich, you will be able to afford an EV with a "bigger battery" -- such as 120 kWh in this example
      • like most things in life (but not golf scores), bigger is better
      • buy the "biggest" EV you can afford
    Charging: in the graph above -- 
    • when you pull into a charging station, the greater the rating of the charging station, in this case 7.5 vs 56, the faster you can charge your EV
    • so, why doesn't everyone just plug into the the charging port / station with the higher / highest rating, 56 in this case
    • you can't plug your cheap little EV into a charging station that has too much power for your little pathetic EV
    • so, in the example above, if your pathetic little EV is rated at 15 kWh, it cannot plug into a charging unit with a higher rating. 
    • so, in the example above, you can only plug your 15-kWh-rated pathetic little EV into the 7.5-kW-rated charging port / station
    And that's all you need to know.

    Except for this, in the graph above: the small print.
    In the graphic above, the bigger car rated at 120kWh pulls up to the charging unit rated at 60kW. The car takes a charge for two hours. Two (2) hrs x 60 kW = 120 kWh which is what the bigger car in the graph above is rated. 
    So, a "big" car with a rating of 120 kWh can be fully charged in two hours if plugged into a charger rated at 60 kW.

    If that "big" car with a rating of 120 kWh pulls into a charging station rated at 7.5 kW, it will take .... 120 / 7.5  = 16 hours to fully charge.

    Okay, so that's all you need to know.

    But there's a lot more one can know if one is interested.

    We shouldn't have to say this but an EV rated at 120 kWH can "last longer" (longer range, all things being equal) than a pathetic little EV rated at 15 kWh.
     
    *******************************
    Charging Stations

    Level 1 vs level 2 vs level 3 charging stations
     
    Level 1
    • 120 volts — AC
    • your garage
    • absolutely worthless
    Level 2
    • 240 volts — AC
    • can be installed in your garage
    • In the Target parking lot
    • at 60 kW, two hours to “achieve” 120 kWh, so four hours to fully charge a soccer mom’s SUV
    Level 3
    • 480 volts — DC
    • not at your house, ever

    ************************
    Connectors
     
    Connector type: non-Tesla
    • J1772: level 1 and level 2
    • CCS1: level 3
    NCAS for all Tesla modelslink here.

    ***************************
    Miscellaneous

    Other facts / factoids / opinions / comments:
    • hybrids are fake EVs -- they are the worst thing one can buy in the "EV family" but Ford is now transitioning to hybrids ... more on that later. Ford will sell a lot of hybrids, as well as Toyota will sell a lot of hybrids. That's good for the car companies but bad for you; really bad for the roads (but you won't care about that); and really, really, bad for the environment (again, something you won't care about. You will be happy just knowing that you are part of the EV community).
    • Ford is "going all out" with hybrids. Link here.
    • charging stations prone to “breaking down”; generally, outside of big cities, if the charging station you visit is “out of order,” you are really “out of luck.” If you thought running out of gas is bad, you haven’t experienced the seventh level of hell until you experience a dead battery and a broken charging unit.

    Tell Me Again, The Fed Needs To Cut Rates -- February 22, 2024

    Locator: 46875INV.

    The Fed needs to cut rates but not to appease investors.

    GDP Now -- 1Q24 Estimate -- 2.9% -- Unchanged -- February 16, 2024

    Locator: 46874ECON.

    With the UK, Japan, and German slipping into recession, or recently in recession, a 2.9% doesn't look all that bad. Relationship between GDP and government deficit.

    Link here



    Legacy Fund -- February, 2024, Deposits

    Locator: 46873B.

    WTI: up another dollar today; trending again toward $80 despite huge build.

    Link here




    TILT: BRK And ABBV -- February 22, 2024

    Locator: 46872INV.

    NVDA: added $246 billion in one day. $245 billion = Netflix ($254 to be more exact).

    BRK: record cash horde: $152 billion. 

    • PARA: selling down Paramount. Josh said "buying PARA was a huge disaster." I said the same thing at the time. 
    • a reminder: BRK was also very, very late to APPL.

    **************************
    Supermicro (SMCI)

    Market:

    • up 30% today -- in one day, up 30%
    • up 225 points; trading at $961

    If one reads 10-Ks all day long, how was this one missed? Or was it missed?

    • market cap: $55 billion; isn't that about the amount BRK paid for BNSF years ago?

    Probably a lot has to do with a short squeeze.

    **************************
    Rivian

    Rivian: being destroyed today. 

    Down 25% today. Are you kidding me?

    We'll get back to EVs later. The fog is starting to clear.

    ******************************
    Abbvie

    Need we say more?

    ***************
    LNG 

    Why two analysts on "Half-Time Report" don't like LNG:

    • it's hard enough to make money on oil due to it's volatility; LNG is even worse;
    • the US is awash in LNG -- sure, big markets (Asia and Europe) but those markets exist now, and US LNG is selling for $1.50

    Taking A Break -- So Much News This Morning -- Need To Take A Break -- February 22, 2024

    Locator: 46871INV.

    S&P and NASDAQ on track for best day since November 14, 2023.

    Tech stocks on the crawler:

    • NVDA: could overtake AAPL
    • AMD
    • SMCI
    • ASML
    • TSM
    • ARM

    Others:

    • Salesforce
    • MRNA: up $8 on a stock selling for less than $100
    • Chord Energy: now down $5 / share

    Others:

    • CAT: up $5; up almost 2%:
    • The big story, of course, this week is NVDA and the other chip companies with some exceptions.

    But the other big story: "weaker EV demand.

    I'll come back to this later, but this is a bigger story than most folks realize.

    There are a couple of questions with regard to "weaker EV demand" that CNBC analysts are not asking. I've had trouble answering those same questions, but the fog is starting to clear. When I get my energy back, I'll come back to this.

    Hint: to "understand" the EV "problem," start with Ferrari, Porsche, Mercedes Benz, and Rolls Royce.

    Phil LeBeau: Rivian is a "luxury-priced EV." And it's not selling. Their guidance is 57,000 vehicles. Will shut down their plant in Normal, Illinois, for "a couple of weeks in the second quarter to make production changes.

    Rivian R2 will be unveiled March 17, 2024, but the R2 won't go into mass production until the Rivian plant in Georgia is completed in 2026. They will burn through a lot of cash with that new Georgia facility. Market cap a few years ago,$160 billion; now about $10 billion. I think at some point questions will be raised whether Rivian will remain a going concern. Certainly, another cash infusion will be needed. Stock dilution?

    Weekly EIA Petroleum Report -- Februay 22, 2024

    Locator: 46870EIA.

    Link here.

    Weekly petroleum data for week ending February 16, 2024:

    • US inventories now at 2% below five-year average despite a build of 3.5 million bbls
    • imports of US crude oil were almost 5% below historical average
    • refiners: 80.6% -- historic lows
    • distillates: a whopping 10% below five-year average
    • jet fuel supplied was up 1.4% compared to a year ago

    Bakken DUCs -- Data For January, 2024

    Locator: 46869DUCS.

    From a reader. Thank you very much. 

    Numbers continue to drop.

    Month/Year

    Bakken






    Drilled

    Completed

    DUC

    Dec-13

    --

    --

    603

    Jan-14

    174

    143

    634

    Feb-14

    214

    158

    690

    Mar-14

    216

    218

    688

    Apr-14

    220

    207

    701

    May-14

    216

    208

    709

    Jun-14

    237

    225

    721

    Jul-14

    257

    243

    735

    Aug-14

    229

    207

    757

    Sep-14

    250

    232

    775

    Oct-14

    186

    243

    718

    Nov-14

    209

    202

    725

    Dec-14

    224

    194

    755

    Jan-15

    198

    193

    760

    Feb-15

    230

    151

    839

    Mar-15

    183

    170

    852

    Apr-15

    143

    127

    868

    May-15

    125

    139

    854

    Jun-15

    110

    135

    829

    Jul-15

    103

    124

    808

    Aug-15

    111

    101

    818

    Sep-15

    99

    92

    825

    Oct-15

    118

    84

    859

    Nov-15

    100

    89

    870

    Dec-15

    98

    78

    890

    Jan-16

    71

    80

    881

    Feb-16

    61

    41

    901

    Mar-16

    68

    45

    924

    Apr-16

    43

    39

    928

    May-16

    47

    59

    916

    Jun-16

    42

    54

    904

    Jul-16

    45

    56

    893

    Aug-16

    53

    82

    864

    Sep-16

    49

    66

    847

    Oct-16

    59

    85

    821

    Nov-16

    61

    86

    796

    Dec-16

    53

    49

    800

    Jan-17

    62

    52

    810

    Feb-17

    51

    58

    803

    Mar-17

    78

    71

    810

    Apr-17

    78

    104

    784

    May-17

    94

    82

    796

    Jun-17

    76

    105

    767

    Jul-17

    95

    103

    759

    Aug-17

    99

    110

    748

    Sep-17

    98

    97

    749

    Oct-17

    105

    110

    744

    Nov-17

    93

    86

    751

    Dec-17

    77

    65

    763

    Jan-18

    107

    72

    798

    Feb-18

    74

    74

    798

    Mar-18

    95

    90

    803

    Apr-18

    109

    110

    802

    May-18

    125

    131

    796

    Jun-18

    108

    118

    786

    Jul-18

    134

    155

    765

    Aug-18

    108

    138

    735

    Sep-18

    108

    122

    721

    Oct-18

    121

    118

    724

    Nov-18

    110

    99

    735

    Dec-18

    108

    70

    773

    Jan-19

    121

    71

    823

    Feb-19

    108

    56

    875

    Mar-19

    111

    110

    876

    Apr-19

    118

    112

    882

    May-19

    127

    127

    882

    Jun-19

    118

    149

    851

    Jul-19

    123

    122

    852

    Aug-19

    123

    144

    831

    Sep-19

    110

    88

    853

    Oct-19

    116

    108

    861

    Nov-19

    96

    88

    869

    Dec-19

    94

    86

    877

    Jan-20

    99

    98

    878

    Feb-20

    94

    100

    872

    Mar-20

    94

    108

    858

    Apr-20

    69

    33

    894

    May-20

    33

    14

    913

    Jun-20

    18

    11

    920

    Jul-20

    18

    22

    916

    Aug-20

    19

    27

    908

    Sep-20

    18

    51

    875

    Oct-20

    19

    41

    853

    Nov-20

    20

    31

    842

    Dec-20

    20

    51

    811

    Jan-21

    20

    41

    790

    Feb-21

    19

    24

    785

    Mar-21

    25

    45

    765

    Apr-21

    27

    47

    745

    May-21

    29

    62

    712

    Jun-21

    31

    33

    710

    Jul-21

    32

    66

    676

    Aug-21

    39

    69

    646

    Sep-21

    42

    79

    609

    Oct-21

    43

    78

    574

    Nov-21

    47

    68

    553

    Dec-21

    52

    50

    555

    Jan-22

    53

    35

    573

    Feb-22

    64

    49

    588

    Mar-22

    67

    68

    587

    Apr-22

    58

    39

    606

    May-22

    75

    61

    620

    Jun-22

    75

    81

    614

    Jul-22

    75

    89

    600

    Aug-22

    76

    93

    583

    Sep-22

    78

    82

    579

    Oct-22

    77

    95

    561

    Nov-22

    79

    78

    562

    Dec-22

    80

    40

    602

    Jan-23

    80

    88

    594

    Feb-23

    80

    83

    591

    Mar-23

    80

    88

    583

    Apr-23

    79

    101

    561

    May-23

    74

    99

    536

    Jun-23

    70

    113

    493

    Jul-23

    70

    111

    452

    Aug-23

    68

    105

    415

    Sep-23

    64

    108

    371

    Oct-23

    67

    85

    353

    Nov-23

    67

    82

    338

    Dec-23

    66

    80

    324

    Jan-24

    62

    65

    321