Intel -- April 16, 2024

Locator: 47019TECH.

Before we get started, all this is a mix of factoids, facts, opinion, rambling, and all of it hard to tell one data point from another with regard to veracity / accuracy / relevancy. It's for me to try to sort out what's going on with Intel. I remarked earlier that it appears Intel does not know what business it is in. That's the first opinion.

Don't quote me on any of this. Read at your own risk. If it's important to you go the source. Start with the hyperlinks.

"Below the fold," is something I posted earlier today. Now I have time to go back to take a better look at the notes taken from the Intel webinar earlier in April that was the subject of the post.

Again, the link.

April 3, 2024: Intel reorganizes:

The reorg will see Intel report results from the following divisions:

• Intel Products
• CCG: client computing group
• DCAI: data center and AI
• NEX: network and Edge
• Intel Foundry
• All Other
• Altera, an Intel company, formerly Intel's programmable solutions group;
• Mobileye;
• other

But look at this, which seems very, very strange:

Foundry will charge Intel Products to make stuff, at what Intel has described as "a market-based price." Intel thinks it will also improve margins at Intel Products, in part because the true cost of requests for expedited manufacturing of certain wafers was hidden from product teams. Gelsinger said since Intel made those costs transparent, requests for expedited production fell by 95 percent.

Is that like one GM division charging another GM division for parts at market prices? Or like Harold Hamm's frack team charging Harold Hamm's drilling team to frack the well at market prices?

Is this taking Jack Welch's hiring / firing plan to the nth degree?

Intel's Gelsinger and CFO Zinsner said that the Foundry will turn the corner in 2027 with $15 billion in annual external revenue -- plus revenue from Intel Products. Not quite "to rob Peter to pay Paul" but there do seem to be similarities.

That will be quite a turnaround. Intel's rejigged set of financial filings (PDF) revealed:

The Foundry's 2023 revenue of $18.9 billion was well down on the $27.5 billion generated in 2022, while losses measured by operating income slipped from 2022's $5.17 billion to $6.95 billion. Gelsinger said things could deteriorate further in 2024, which will be Foundry's worst year. But he also predicted profitability in 2027.

And 2023 was an incredible year for the "magnificent seven," the year that Intel's revenue went from almost $30 billion to $20 billion.

On the day this was all announced, "Intel shares plunged from $43.94 apiece to finish the day at $42.11, suggesting investors are not keen on this plan."

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Intel

From TipRanks: "don't touch." Although the full story is behind a paywall, from the little we get, we can google the rest. For now:

Last week was a bad week for Intel. 

The shares took a heavy beating, falling by 8% after, for the first time, the company released separate financials for its semiconductor manufacturing segment, what is known as its foundry business, or Intel Foundry.

The numbers didn’t look great.

The segment lost $7 billion in 2023, widening from 2022’s $5.2 billion loss, while sales dropped from $27.5 billion in 2022 to $18.9 billion last year.

To discuss its new reporting segment, the company held a webinar, during which it offered a timeline for the Foundry Operating Margin reaching breakeven.

This is the report, April 3, 2024, after the webinar, April 2, 2024, was held. 

I'm still not convinced Intel knows what business it is in, other than "tech," and "chips." Unlike Micron which knows exactly what business it's in.

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. 

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.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple. 

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The Music Page

Technology and a little sleuthing is absolutely amazing. 

Tonight, watching an episode of "White Collar" from season five, I heard a snippet of a song that Mozzie was listening to. It took less then thirty seconds to find the song through an internet search. I thought it was Japanese -- it wasn't -- it was French.

Link here.

EVs: It Gets Tedious -- April 16, 2024

Locator: 47018EVS.

Earlier today:

Tesla:

• in a world of its own
• lays off 10% of its workforce;
• cancels updated Model Y;
  
• delays delivery of Cybertruck without comment — reported today; came with no warning;
• if you’re losing money on each delivery, does one continue to deliver?
• Gary Black: great analysis of current state of Tesla -- looking for silver linings among the clouds; unlikely to find any;
• NYTimes: EV sales are slowing; Tesla's are slumping;
• Sandy Munro: this did not age well;
• Brad Munchen: Tesla sold only 6,000 vehicles last week, down 52% y/y
• same level of volumes as small local EV makers like Li and Aito (of which I've never even heard)
• quarter-to-quarter: Tesla's local sales are. 7,907 vehicles, down 59% y/y from 19,473 in 2023
  

Several months ago, this post: bottom line, "Americans don't want EVs."  And more, "Americans don't like mandates."

The reason this comes up again: I just spent the last half hour going through the thread started by Gary Black at the above.  My recommendation: TLDR. Too long, don't read. Same arguments that we've heard ad nauseum for the past decade.

Bottom line: "Americans don't want EVs. Americans don't like mandates."

I get such a kick out of this. If EVs were so great, we wouldn't see charts that look like this after decades of folks trying to sell them:

 

May And June, 2024 -- Hearing Dockets

Locator: 47017DOCKETS.

May And June hearing dockets.  

Link here.

The NDIC hearing dockets are tracked here.

As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source. These are cases, not permits.

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Tuesday and Wednesday
June 11 - 12, 2024
Six Pages

All cases have to do with the Summit Carbon Storage Project, Broom Creek formation, in Mercer, Morton, and Oliver counties.

Cases: 30869 - 30880, inclusive.

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Friday, May 31, 2024
Two Continued Cases

 

Three New Permits; Eight Permits Renewed; And Grayson Mill Reports Two Dry Holes -- April 16, 2024

Locator: 47016B.

Mideast: talk was rampant on Tuesday that an Israeli attack on Iran was imminent; some news outlets openly forecast a military response to occur tonight, Tuesday night. 

In fact, late in the day, "the Israeli war cabinet puts off third meeting on Iran's attack to Wednesday." Meanwhile, Iran has shut down its nuclear facilities in anticipation of a military strike.

Analysis: meanwhile, over at Politico:

From the linked article:

Like many Americans, Richard Haass is still trying to understand why Iran decided to attack Israel directly over the weekend with a barrage of more than 300 missiles and drones, most of which were shot down.

The attack was a retaliation for an airstrike by Israel earlier this month that killed a top general with Iran’s Islamic Revolutionary Guard Corps in Damascus.

But Haass believes Tehran has miscalculated and will come to regret its decision to shift from its longtime strategy of using proxy forces in places like Syria and Iraq into launching a direct attack on civilian areas in Israel, which has only rekindled sympathy for Israelis.

“The Iranians have lost control of the narrative,” Haass says.

The interview / article is much more nuanced than what the lede might suggest. 

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Back to the Bakken

WTI: $85.36.

Active rigs: 37.

Three new permits, #40676 - #40678, inclusive:

• Operators: WPX, Slawson, Grayson Mill
• Fields: Heart Butte (Dunn); Big Bend (Mountrail); and, Siverston (McKenzie)
• Comments:
• WPX has a permit for an FBIR MHA well, NENW 18-149-91, 
• to be sited 1251 FNL and 1890 FWL;
• Slawson has a permit for a Shad Rap Federal well, NENE 11-151-91, 
• to be sited 949 FNL and 1152 FEL,
• Grayson Mill has a permit for a Scott well, NWNE 13-150-99, 
• to be sited 290 FNL and 2315 FEL;

Eight permits renewed:

• SOGC (Sinclair): six Forest USA permits, and two Diamond permits, all in Lone Butte, McKenzie County; SESE 3-147-98

Two dry holes:

• Grayson Mill, two Scott wells (#40424 and #40425), McKenzie County;

RBN Energy, Enbridge, The Permian, Natural Gas, And The Bat Cave -- April 16, 2024

Locator: 47015NATGAS.

From RBN Energy, today: new JV's focus is moving Permian natural gas to LNG export terminals. Archived here.

Projects already approved / permitted by the US government ...  expected to increase U.S. LNG export capacity to about 25 Bcf/d from the current 14 Bcf/d.

Of that 11 Bcf/d of incremental capacity, more than 8 Bcf/d will be sited along the Texas coast. These projects include Cheniere Energy’s 1.4-Bcf/d Stage III at Corpus Christi LNG, which is scheduled to begin starting up late this year; QatarEnergy/ExxonMobil’s 2.4-Bcf/d Golden Pass LNG in Sabine Pass, TX, which will start coming online in the first half of 2025; NextDecade Corp.’s 2.3-Bcf/d Rio Grande LNG in Brownsville, starting up in 2027; and Sempra and ConocoPhillips’s 2-Bcf/d Port Arthur LNG, coming online in 2027-28. 

While each of these liquefaction/LNG export facilities will receive feedgas ....

With the gas supply needs of these projects top of mind, WhiteWater/I Squared, MPLX and Enbridge on March 26 announced plans for a JV to develop, build, own and operate gas pipeline and storage assets connecting Permian supply to LNG export terminals and other Gulf Coast and south-of-the-border demand.  

White Water / I Squared will hold a 50.6% stake in the JV to be formally created later in Q2 2024, while MPLX, a master limited partnership (MLP) formed by Marathon Petroleum, will own 30.4%, and Enbridge will own 19%.

Figure 1. Gas Pipeline and Storage Assets Included in Joint Venture. Source: RBN 

As shown in Figure 1 above, the JV will start out with four main assets:

• The 450-mile, 2.5-Bcf/d Whistler Pipeline (green line) from the Waha Hub in West Texas to the Agua Dulce Hub near Corpus Christi. It will connect to the Midland Basin.
  
• The planned 137-mile, 4.5-Bcf/d Rio Bravo Pipeline (dashed yellow line) from Agua Dulce to Rio Grande LNG.
• A 70% interest in the ADCC Pipeline (dashed pink line), a planned 40-mile, 1.7-Bcf/d pipeline from Agua Dulce to Corpus Christi LNG that is expected to come online in Q3 2024.
• A 50% stake in Waha Gas Storage (orange icon), a 2-Bcf/d underground salt-cavern facility near the Waha Hub in West Texas with extensive connections to inbound and outbound gas pipelines in the Permian.

We should note that upon the closing of the JV transaction, Enbridge will contribute its wholly owned Rio Bravo Pipeline project and $350 million in cash to the JV; Enbridge also will fund the first $150 million of the project’s post-closing capex and retain a 25% economic interest in the pipeline. WhiteWater, which over the past several years has become a top-tier midstream player in the Permian, will operate the JV’s pipeline and storage assets, including Rio Bravo.

The JV puts all three participants — WhiteWater, MPLX and Enbridge — at the center of one of the largest gas delivery opportunities of the next quarter century, namely, moving massive volumes of Permian-sourced gas to existing and planned LNG export terminals along the Texas coast that will, in turn, supply LNG to key international markets, especially Europe and Asia.

The JV also gives WhiteWater, MPLX and Enbridge more direct, Permian-to-LNG-terminal access; enables its partners to better manage gas flows .... 

The JV also may find itself involved in an expansion of the Waha Gas Storage (WGS) facility ...

As we see it, the WhiteWater/I Squared /MPLX/Enbridge JV is in keeping with a growing trend — in the U.S.  generally and the Permian especially — to build and/or assemble midstream networks that move crude oil, natural gas or NGLs through their entire value chains, from production areas to end-users...

The recently announced WhiteWater/I Squared/MPLX/Enbridge JV brings together three of the most accomplished midstreamers in Texas. Given everything that’s happening regarding Permian production and LNG export project development, it will be interesting to see what their new partnership does next. ... new Permian-to-Gulf-Coast capacity will be needed beyond the 2.5-Bcf/d Matterhorn Express Pipeline (slated to come online later this year), and it’s a good bet the incremental capacity will be pointed at LNG export terminals along the Texas coast.

Just one of the reasons I continue to add to my Enbridge holdings, a position I began decades ago and have never sold, just kept adding. It's been a pretty lousy investment in the big scheme of things, but my heirs will love it -- or at least I hope they love it.

I bought some more Enbridge today. Pays 8%. If the folks in Michigan, or Wisconsin, or wherever it and in Minnesota want to close down the Enbridge pipelines there, that's fine with me. The Permian will keep me happy. 

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. 

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.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple. 

ENB now pays 8%. Because the price of shares have dropped so much. Years ago, I automatically reinvested all ENB dividends back into ENB. No more. I use the dividends to invest in other equities, but I occasionally add more ENB shares to my position.

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Bat Cave

Every investor needs a Bat Cave.

Allows the investor a place to think without interruption.

And watch classic movies on TCM. Without interruption. So far today, three great movies. All black and white.

But having said that, I'm really, really excited about adding more ENB to my position today.

GDPNow 1Q24 Estimate Jumps Again — From Yesterday To Today, From 2.8 To 2.9 — April 17, 2024

Locator: 47014ECONOMY.

Next estimate: next week.

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Daimler Truck --
Update On North Carolina Strike Talk

Link here. 

Contract ends midnight April 26, 2024.

EVs: 2024 Could Be A Watershed Year -- April 16, 2024

Locator: 47013EVS. 

The headlines (links to these screenshots are below, in the narrative):

 

The players:

• Tesla: in a world of its own
• lays off 10% of its workforce;
• cancels updated Model Y;
  
• delays delivery of Cybertruck without comment — reported today; came with no warning;
• if you’re losing money on each delivery, does one continue to deliver?
• Gary Black: great analysis of current state of Tesla -- looking for silver linings among the clouds; unlikely to find any;
• NYTimes: EV sales are slowing; Tesla's are slumping;
• Sandy Munro: this did not age well;
• Brad Munchen: Tesla sold only 6,000 vehicles last week, down 52% y/y
• same level of volumes as small local EV makers like Li and Aito (of which I've never even heard)
• quarter-to-quarter: Tesla's local sales are. 7,907 vehicles, down 59% y/y from 19,473 in 2023
• all the rest 
• EVs are dead; fake EVs grow in popularity but they, too, will be a fad unless prices come way down
• Charles Kennedy: BP cuts jobs as the supermajor scales back EV charging unit;
• if there's any doubt, just check tickers of
• F:
• GM:
• RIVN:
• Polestar:
• Lucid:
• ignore China

From the link above, these writers are brilliant (or they know their average reader reads at the 8th grade level of middle school and their math skills are even worse):

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Intel

From TipRanks: "don't touch." Although the full story is behind a paywall, from the little we get, we can google the rest. For now:

Last week was a bad week for Intel. 

The shares took a heavy beating, falling by 8% after, for the first time, the company released separate financials for its semiconductor manufacturing segment, what is known as its foundry business, or Intel Foundry.

The numbers didn’t look great.

The segment lost $7 billion in 2023, widening from 2022’s $5.2 billion loss, while sales dropped from $27.5 billion in 2022 to $18.9 billion last year.

To discuss its new reporting segment, the company held a webinar, during which it offered a timeline for the Foundry Operating Margin reaching breakeven.

This is the report, April 3, 2024, after the webinar, April 2, 2024, was held. 

I'm still not convinced Intel knows what business it is in, other than "tech," and "chips."

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Music Streaming

From MacRumors, this doesn't sound good for Spotify: 

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US Economy

Schwab market perspective: Liz Sonders, others.

US: pivots from "rolling recessions" into "rolling recoveries."

Everything Seems To Be In A Holding Pattern -- April 16, 2024

Locator: 47012B. 

Later: JPow has put doubts in any further cuts this year in statements made today. Analysts will interpret his statements many, many wasy; for me, it's very clear -- no more cuts this year. An increase? Always possible.

Original Post 

EU: don't let the European Central Bank's managing director Christine Legarde about lowering their union's lending rate fool you. 

ECB recognizes that the EU economy is in recession territory and needs a boost; completely different situation in the US.

EVs: everything suggests this could be the watershed year for EVs.  

US economy: continues to surprise on the upside.

Personal investing, adding to my positions in the following today (already have):

• TSM, by rule
  
• MU, by rule
  
• ENB
• no recommendation; see disclaimers
  

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Back to the Bakken

WTI: $85.14.

Wednesday, April 17, 2024: 37 for the month; 37 for the quarter, 236 for the year 
40140, conf, CLR, Veigel 7-9H1,
39466, conf, Hess, EN-Erickson-157-93-1003H-3,

Tuesday, April 16, 2024: 35 for the month; 35 for the quarter, 234 for the year
40139, conf, CLR, Veigel 6-9H,
40073, conf, Neptune Operating, Britt 4-9 6H,
39548, conf, Petro-Hunt, Terres 144-98-13B-24-1H,
39070, conf, Whiting, Safely Federal 32-7-3H,
37516, conf, BR, Mazama 4A UTFH,

RBN Energy: new JV's focus is moving Permian natural gas to LNG export terminals. Archived here.

The U.S. may be in a monthslong pause in approving new LNG exports but that doesn’t change the fact that U.S. LNG export capacity will nearly double over the next four years, that most of the new liquefaction plants are being built along the Texas coast, and that their primary source of natural gas will be the Permian Basin. That helps to explain why three big midstream players — WhiteWater/I Squared, MPLX and Enbridge — recently formed a joint venture (JV) to develop, build, own and operate gas pipeline and storage assets that link the Permian to existing and planned LNG export terminals. In today’s RBN blog, we examine the new JV and discuss the ongoing development of midstream networks for crude oil, natural gas and NGLs. 

The Biden administration’s announcement in late January that the Department of Energy (DOE) would be taking ”a temporary pause” on pending decisions on exports of LNG to non-Free Trade Agreement (FTA) countries cast a dark cloud over what has become a blockbuster business — namely, liquefying many billions of cubic feet of natural gas every day and shipping that LNG to Europe, Asia and other global markets. But while the pause is likely to set back a few LNG export projects and may derail others, a number of projects that already have their needed approvals from the DOE (and the Federal Energy Regulatory Commission, or FERC) in hand are advancing toward commissioning and full operation over the next one to four years. Together, they are expected to increase U.S. LNG export capacity to about 25 Bcf/d from the current 14 Bcf/d.