Six New Permits; Two DUCs Reported as Completed - May 9, 2024

Locator: 47108B.

Investing: a DOW gain of 331 points was not on my bingo card today. 

• only sector that lost: tech
• utilities and energy: best sector? Needs to be fact-checked.

Gasoline demand, link here:

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Back to the Bakken

WTI: $79.69.

Active rigs: 38.

Six new permits, #40732 - #40737, inclusive:

• Operators: Kraken (3), True Oil (2), Empire North Dakota
• Fields: Antelope (McKenzie); Red Wing Creek (McKenzie); Starbuck (Bottineau)
• Comments:
• Kraken has permits for three Steen wells, NENE 13-149-101, 
• to be sited 1235 FEL and at 300 FNL, 333 FNL, and 366 FNL;
• True Oil has permits for two Williston Basin State wells, SENW 36-148-101,
• both to be sited 2569 FWL with one 2620 FNL and the other 2618 FNL
• Empire North Dakota has a permit for a Fat Penguin well, SWNE 29-161-78, 
• to be sited 2000 FNL and 2149 FEL;

Two producing wells (DUCs) reported as completed:

• 38010, 240, BR, CC Plymouth 31-29TFH, Dunn County;
• 40066, 3,104, MRO, Taylor 21-2H, Dunn County;

Auction Results -- Posted Without Comment -- A Screenshot Is Worth 1,000 Words -- February, 2024, Auction

Locator: 10001Lease2/24.

Note: this was done quickly; not proofread and not double-checked; there will be content and typographical errors. If this is important to you, go to the source.

North Dakota Trust Lands -- front page; start here.

Link here.

Bonuses: 

• typical bonuses are $2 / acre, no typo $2 / acre
• this is typical, the bonuses paid are in the far right column, per acre:

But then, look at this, this is in Williams County, $10,000 to $14,000 / acre:

The acreage:

• N2NE4 - section 25-155-99 -- 40 acres =     $404,480.00
• NE4 -- section 36-155-99 -- 80 acres =      $1,004,480.00
• NW4 -- section 36-155-96 -- 80 acres =     $1,160,160.00
• SE4 -- section 36-155-99 -- 80 acres =         $960,880.00
• SW4 -- section 36-155-99 -- 80 acres =     $1,022,240.00

            Total: $4,552,240.00 

The maps:

 

Well of interest:

• 20398, 115, Gadeco, Golden 25-36H, Epping, t5/12; cum 267K 8/23; off line;

Does The Bull Market Have Staying Power? CNBC Theme Of The Day -- May 9, 2024

Locator: 47107INV.

This was the big discussion on CNBC -- whether the "bull market" has staying power. And not once -- oh, there it is -- the Bank of America spokesperson -- he's got it exactly right -- said what is said below, posted back in April 7, 2024. Says to look back to the 1990s -- an incredible decade.

Is anyone paying attention to the oil sector and AAPL:

• CVX: up $2.47, up 1.52%;
• AAPL: up almost 1%; up $1.59
• it still boggles my mind what Buffett sold in the past six months.

Re-posting -- Locator: 46941INV -- April 7, 2024

This has been a common and recurring theme on the blog. 

Link here.

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Re-Posting

Locator: 46855INV.

The US market.

• S&P 500 closes at 5,248, a new all-time record.
  
• AAPL: up $3.60 today; up over 2%. See if you can connect the dots with this one below.
  
• This sure doesn't feel like an impending recession. CNBC analysts and talking heads have pushed concerns for a recession out to 2025.

Where's all this money coming from?

• Covid-19 stimulus money;
• Milton Friedman's velocity of money;
  
• my favorite chart;
• IRAs: see below
  
• southern surge: a $7 trillion gift
  
• (this would require a stand-alone blog -- but elevator speech: federal and state aid; a new agency within the Department of Homeland Security?) 
• TSA: $11 billion budget; 60,000 employees
• Citizenship and Immigration: <$1 billion; 4,000 employees
  

Baby boomer age wave theory: link here.

• baby boomers: note the size of this demographic at the link;
• who has all the money? who has all their medical care expenses paid for? whose houses are paid off?
• birth years: 1946 - 1964
• ages (2024): 60 years old - 78 years old; mid-range: 69 years old -- today, 2024
  
• IRS: RMDs -- about 4% annually

• ICYMI: in the box above, it's trillion with a "t." That's even more than Elon Musk's bank account.
  

Addictions:

• baby boomers: booze, cigarettes, gambling, muscle cars, sports, making money, malls, products,
• big families, extended families (inherited money diluted to "barely enough to live on"))
  
• millennials, Gen Zers: tech, travel, home delivery, services
• small families (inherited money remains concentrated)
  

Quick: name a time in the history of the US with the same data points, demographics, and addictions.

Updates

March 27, 2024: one year later ...

• "Max" chart:

Original Post
January 22, 2023

Key dates to remember with regard to IRAs:

• 1970
• 1981
• 1997

When did IRAs truly start to impact the economy? I would argue, 1995, to some extent, but then took off in 2007:

• 1970: traditional IRA introduced
• 1980: folks became comfortable with IRAs
• 1997: IRAs improved by a huge amount with the introduction of Roth IRAs
• 2007: another ten years of traditional IRA / Roth IRA growth in popularity

Now, look at this graph:

 Same chart with markers and comments:

Demographics, US:

Look at this, and no one seems to be mentioning this.

Age when one can start taking distributions from one's IRAs: 59.5 years of age.

IRA RMDs by demographic (note, data is somewhat old):

• silent generation: minimal impact on economy with regard to RMDs
• those who have IRAs are probably using RMDs for nursing home expenses
• baby boomers: biggest impact on economy with regard to RMDs
• those born in 1964: turn 78 years of age this year
• those born in 1946: turn 60 years of age
• in other words, every -- repeat, every baby boomer can now take RMDs
• my wife has been taking distributions before they were required and now RMDs for maybe ten years and despite the withdrawals year-after year, her IRA continues to grow
• I start taking my first RMDs this year 
  
• almost all baby boomers can now tap into their social security benefits
• almost all baby boomers are covered by Medicare. Medicare benefits got even better in 2024 (thank you, Mr Biden), seniors will spend less money on healthcare (all things being equal)
  
• 529s: a lot of baby boomers (GRANDPARENTS) are going to look for tax-advantage accounts to place RMDs they don't need for current expenses
• 529s have vastly improved starting this year (or last year?) making these investment vehicles look even better -- I'm having trouble finding a better place to re-invest my RMDs
• interestingly, one can argue that 529s are even better than IRAs
  
• generation X: will start to make impact this year but not much, but it will continue to grow every year for the next decade or so
• those born in 1980: turn 44 years old this year; no impact on economy with regard to RMDs but starting to hit max income / max productive years of their lives
• the younger Xers, now in the best years of their lives, financially, are now more likely to fund IRAs and that will help set a floor for the equity market; 
  
• those born in 1965: turn 59 years old this year!
  
• this is the biggie
• starting this year, generation X folks can start tapping their IRAs; it doesn't mean that they will but it means that if they don't, they have enough other income to offset any need for IRA distribution (meaning strong financial status for those folks)
  
• again, this is huge
• Roth IRAs have been around 27 years and the last 27 years have been great for investors, but
• even better: the way the market behaved last year and how the market is now behaving in the second half of January, 2024, a lot of folks are getting excited
• my hunch: a lot of folks are taking some / all of their RMDs this month; if not their entire RMD, taking a fourth to half of their annual RMD
• only a few more years and Xers will also be able to access social security benefits, also 
  

On top of all this, this "RMD story" is not going to go away. Year-after-year RMDs will increase in dollar amounts, but whether they increase or not, they will never quit.

And we haven't even begun to talk about "inherited RMDs":

• "inherited RMDs"? Reminder, oldest baby boomers turn 78 years of age this year -- IRS life expectancy for IRAs tend to trend toward 100 years of age -- taking only minimal RMDs, the vast majority of IRAs will still be funded and growing when their own dies.
  
• unlike owners of IRAs who can spread their RMDs over a life expectancy (26 years or longer), beneficiaries (those who inherit IRAs) must deplete those IRAs in ten years.
• one word: wow.

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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.

Amazon Hits An All-Time High -- May 9, 2024

Locator: 47106INV.

Despite the headwinds: 

• the Fed
• Cash 'n carry: suggests a rate hike is back on the table;
• likely: meaningless rate cuts, if any, in calendar year 2024
• Biden vs Trump
• war in the Mideast
• Putin talking nukes (again)
• China

But does this look like an impending recession?

Josh Brown: still the best stock-picker on CNBC.  One can see him almost every day on "Half-Time Report." Noon EDT. 

Utilities on an incredible bull run for the past several months.

AMZN is the new AAPL.

• AWS: at $100 billion = S&P 50. No typo. S&P 50.

Binary decisions: A most important consideration for investors: making binary decisions. 

Example: 

• NVDA vs Treasuries?
• ENB vs Treasuries?
• BRK-B vs any of the Mag 7?

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.

Fentanyl: if folks want to understand the Fentanyl story, one couldn't do better than to follow the "Fentanyl scanner" story. CNBC broke the story. Posted for the time-stamp. I may or may not post more about this. Reminds me of the ventilator stories in NY during the early days of the Covid pandemic. Conspiracy stories: the MAGA folks are following all the false conspiracy stories. It becomes tedious when there are so many "true" conspiracy stories out there. If that makes sense.

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The Book Page

Wow, what an incredible story teller, Howard M. Sachar, c. 1993, A History of the Jews in America, or as I would re-title it: Morris and Katherine Myers: A History of American Capitalism and Exceptionalism.

Wow, what an incredible story teller. Without calling it an epilogue, but rather a short "afterword," pp. 933 - 936, Sachar completes the 936-page narrative with the Myers' three sons, Stanley, Albert Jr and James. All three had served in the US military during WWII: Stanley, a lieutenant in the US Navy; the other two in the Army Air Force, one a lieutenant colonel and the other a major. 

Following WWII, the three brothers returned to Springfield, IL, to resume their executive responsibilities at the department store. However, for one, something was missing. He wanted to farm, he wanted to get married, and he wanted to go to Israel. Following his return to Springfield after WWII, James got his graduate degree, University of Illinois, Springfield, School of Agriculture. He farmed the family's farm purchased in 1938 as a family investment, married a Jewish step-cousin, and had three children.

The oldest of the three ended up in Israel, was married and had three children. The family returns often to Springfield. Life in Israel is "hard." By comparison, they have it very, very easy in America.

Their middle child, age eleven, speaks Hebrew albeit rather haltingly now. But Adam, when queried, makes it plain he wants to return to Israel, the place he remembers and craves. His father, James, and grandfather Morris listen thoughtfully, saying nothing.

I picked up this book for $7 at a used bookstore on the edge of Nashville, TN, some months ago. The "store," using the term guardedly, was so musty that my asthmatic wife was unable to stay as soon as she entered. I had 30 seconds to pick something out. I doubt I could have found a better book even with hours of looking.

With current events, this book is incredibly timely. My thoughts: American Israelis will be re-invigorated; synagogues will be filled. Particularly on the American coasts.

The Big Energy Story Today -- EVs -- May 9, 2024

Locator: 47105EVS.

EVs are tracked here on the blog.

Both from Mercedes.

Ouch.

Double ouch.

Link to The WSJ.

Link here. Twitter and then Bloomberg. 

 

From The WSJ lede:

Executives at truck leasing company Ryder System spent years listening to some of their biggest customers say they wanted to switch to battery-electric big rigs.

Now that the heavy-duty trucks are available, the company says, few customers want to pay for them.

“The economics just don’t work for most companies,” said Robert Sanchez, the chief executive of Ryder, which manages 250,000 trucks and vans for tens of thousands of retailers and manufacturers.

Ryder’s experience illustrates the challenges facing state and federal governments as they try to push truckers out of heavily polluting diesel rigs and into zero-emissions vehicles. It suggests that truck makers will need to make significant advances in battery weight, range and charging times if battery-electric trucks are to seriously challenge diesel rigs in a highly competitive freight sector that runs on thin margins.

“Quite frankly, demand has not been as strong as what we would like,” said Rakesh Aneja, head of eMobility at Daimler Truck North America, which released its Freightliner eCascadia battery-electric semi truck in 2022.

Just how much more expensive? Gasp:

The Ryder analysis found that converting a typical mixed fleet of 25 commercial vehicles, including about 10 heavy-duty trucks, from diesel to battery power in California would raise a fleet’s annual operating costs 56%, or $3.4 million a year. The same transition in Georgia would raise annual operating costs 67%, or $3.7 million.

The company found that light-duty, battery-electric vans raise annual operating costs by several percentage points. As trucks get heavier the cost difference becomes more pronounced, according to Ryder’s analysis, with annual costs of operating battery-electric big rigs about twice as expensive as diesel trucks.

And something everyone should know by now:

Penske Truck Leasing, which is running pilot programs with battery-electric trucks, has found that because battery-electric rigs are heavier than diesel trucks their tires wear out faster. The company has also found some maintenance costs are more expensive than diesel trucks because parts are rarer and so more expensive.

And this is just the tip of the iceberg, as they say down under.

Update On Enbridge And Texas (The Permian) -- RBN Energy -- May 9, 2024

Locator: 47104INV.

Investing:

• from yesterday on the blog: unless the apple cart is upset by global geo-politics, everything suggests 2024 - 2027 could be a great few years for investors.
• today, from 247wallstreet: 

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Back to the Bakken

WTI:

Friday, May 10, 2024: 14 for the month; 78 for the quarter, 277 for the year
40268, conf, Eagle Operating, Skaufel 5-10,
40118, conf, Neptune Operating, Heen South 5-8-17 6H, 

Thursday, May 9, 2024: 12 for the month; 76 for the quarter, 275 for the year
40117, conf, Neptune Operating, Heen 35-26 5H,
39468, conf, Hess, EN-Bakke-LE-157-93-1522H-1,
37107, conf, BR, Carlsbad 3B MBH,

Comment: someday it would be interesting to see a fairly long essay comparing the Mideast energy sector -- the entire Mideast energy sector -- with Texas-Louisiana-Gulf.

RBN Energy: how Deepwater crude export projects may impact Corpus pipelines, terminals. Archived.

The Corpus Christi crude oil market is pulling as much volume as it can from the Permian Basin via pipelines that are running nearly at capacity. That explains why two midstream companies are responding with plans to boost the capacities of their respective pipelines from the Permian to refineries and export terminals in the Corpus area. But the situation is complicated by the very real possibility that one or more deepwater export facilities capable of fully loading a Very Large Crude Carrier (VLCC) may be built off the Texas coast. In today’s RBN blog, we’ll examine current and proposed pipeline takeaway capacity out of the Permian and the potential for proposed offshore export facilities to impact pipeline flows from West Texas to the coast. 

Before we get into this topic, let’s recap the highlights in Part 1 of this series. In that piece, we emphasized that producers must have sufficient takeaway capacity to handle their rising volumes of crude oil and associated gas. Gas takeaway constraints are already here, and the industry is eagerly anticipating the ramp up of a new pipeline: the 2.5-Bcf/d Matterhorn Express, which will come online later this year. However, still more gas takeaway capacity will be needed to keep up with the Permian’s growth trajectory and several projects are in the running to provide that.

Enbridge: