Another Reason To Love Amazon -- June 26, 2024

Locator: 48046AMAZON.

Tell Me Again The Bakken Is Slowing Down -- MRO Reported This DUC Today -- McKay -- Killdeer -- June 26, 2024

Locator: 48045B.

Disclaimer: in a long note like this, there will be content and typographical errors. If this is important to you, go to the source.

The well:

• 40025, 4,084, MRO, McKay 11-13H, Killdeer oil field, Dunn County; production data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2024	29	42137	42492	67646	28563	26397	2065
BAKKEN	3-2024	31	46535	46957	101680	30248	27813	2023
BAKKEN	2-2024	6	9750	8879	20942	5571	4897	589

The maps:

The other wells sited in this section:

• 40025, see above;
• 40026, drl/A, MRO, Dunrud 11-13TFH, Killdeer oil field, Dunn County; production data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2024	30	16057	16186	32889	13215	12201	967
BAKKEN	3-2024	25	17073	16908	51439	10688	9830	713

• 17608, 120, MRO, Nanette Strommen 21-13H, Killdeer oil field, Dunn County; t1/09; cum 258K 4/24; jump in production; production data:

• 21962, IA/793, MRO, Vance Strommen 21-113TFH, Killdeer, t8/12; cum 151K 4/24; huge jump in production;
• 21961, IA/1,084, MRO, Elizabeth Strommen 24-12TFH, Killdeer, t7/12; cum 188K 4/24;
• 21960, 1,220, MRO, Vance Strommen 21-13H, Killdeer, t8/12; cum 286K 4/24; huge jump in production;
• 21959, 1,200, MRO, Elizabeth Strommen 24-12H, Killdeer, t7/12; cum 324K 4/24; huge jump in production;

• 17509, 169, MRO, Nanettte Strommen 41-13H, Killdeer, t2/09; cum 260K 4/24; cum 278K 5/24;
  
• 40288, drl/drl, MRO, Bower 31-13H, Killdeer, t4/24; cum 33K first month; 28K second month;
  
• 40290, drl/drl, MRO, Grayson 31-13TFH, Killdeer, t4/24; cum 14K first month; 19K second month;
  
• 40289, drl/drl, MRO, Madsen 41-13H, Killdeer, t4/24; cum 26K first month; 25K second month;
  
• 40287, drl/drl, MRO, Serum 34-12H, Killdeer, t4/24; cum 33K first month; 37K second month;
  
• 40231, drl/drl, MRO, Lillebridge 44-12, Killdeer, t4/24; cum 39K first month; 33K second month;
  
• 40286, drl/drl, MRO, Noreen 44-12TFH, Killdeer, t4/24; cum 30K first month; 34K second month;
  
• 40284, drl/drl, MRO, Kellogg 14-7TFH, Killdeer, t4/24; cum 7K over 7 days; 29K second month;
  

Some production data:

• 17509, look at jump in production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2024	27	34525	34467	101784	21095	19508	1513
BAKKEN	3-2024	2	1896	1877	14236	1291	1186	87
BAKKEN	2-2024	0	0	0	0	0	0	0
BAKKEN	1-2024	0	0	0	0	0	0	0
BAKKEN	12-2023	0	0	0	0	0	0	0
BAKKEN	11-2023	0	0	0	0	0	0	0
BAKKEN	10-2023	0	0	0	0	0	0	0
BAKKEN	9-2023	22	342	528	136	378	216	59
BAKKEN	8-2023	31	538	630	179	608	343	81

•  40290: 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2024	19	13832	13801	42952	7903	7311	564

• 40288:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2024	27	32920	32847	76984	17417	16122	1234

Micron Earnings After Hours -- June 26, 2024

Locator: 48044TECH.

Link here. 

We'll follow Micron / MU after-market and see who got the "early release." LOL.

All three indices close in the green.

Immediately after the close: MU drops 10.09%; drops $14.36.

So, does someone know something or simply anxiety, taking profits? 

Yup, the numbers are out and CNBC will report as soon as they see the numbers.

Must be bad.

Wow.

Now, down 6.93%; down $9.86.

EPS of 53 cents are the expectation. And, again expectation, revenue of $6.67 billion, up 77.9% y/y.

Here are the numbers:

•  a beat on top and bottom lines.

Oh, give me a break.

• And guidance roughly in line.

Good. 

• revenue: 6.81B vs $6.67B
• EPS: 0.62 vs 51

"In-line" guidance is the "new miss" for tech stock. 

Oh, give me a break. This is awesome. 

As minutes go by, clawing back initial losses.

From CNBC:

Amazon: $2 trillion market cap for first time today. And growing. Fast.

Speaks volumes:

• BRK: 40% is AAPL;
• AAPL surges today -- one of the best days in weeks; and, yet,
• BRK ends up closing well in the red:

Summit: still a long way to go but the map is cool. Link here. The regulators okay'ed it but now it will end up in court.

**************************
Gasoline Demand

Link here.

EIA weekly petroleum report: unremarkable.

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

Active rigs: 36.

WTI: $80.65.

Three new permits: #40875 - #40877, inclusive

• Operator: Oasis
• Field: Indian Hill (McKenzie)
• Comments:
• Oasis has three Barnes Federal permits, SWSE 11-152-102, 
• to be sited 2389 / 2390 FEL with one 420 FSL, 387 FSL, and the third 321 FSL

Ten permits renewed:

• Crescent Point (6): Manchuk (2); Campbell; Chase Douglas; and Holmes (2); Winner and Blue Ridge, Williams County;
• Zavanna (4): four Collie permits, Stony Creek, Williams County

Two producing wells (DUCs) reported as completed:

• 40025, 4,084, MRO, McKay 11-13H, Killdeer oil field, Dunn County;
• 40091, 455, Whiting, Sanish Bay W 5293 34-1 3T, Mountrail, County;

Legacy Fund -- Deposits -- Jun, 2024, Data

Locator: 48043LEGACYFUND.

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Legacy Fund: June, 2024, Deposits
Posted June 16, 2024

Legacy Fund

Monthly deposits.

Legacy Fund data here. 

North Dakota budget: probably easiest to read is at Ballotpedia.

North Dakota state office of management and budget.

Deposits:

• May, 2024: 75,868.669.61
• June, 2024: 74,815,226.02
  
• delta: -1,053,403.59
• percent decrease, m/m: a 1.39% decrease, month/month

LNG -- Can The LNG Story Get Any Bigger? June 26, 2024

Locator: 48042LNG.

From multiple sources, Saudi wants 25% interest:

SRE: down a bit today; pays 3.3%; probably pays a whole lot for long-term investors.

Batteries = arbitrage, link here.

Connecting a lot of dots:

"Utilities now report that arbitrage is the primary use case for 10,487 MW of battery capacity, making it the most reported primary use," the EIA said.

"In arbitrage, utilities charge batteries by buying electricity during low-cost periods and then sell that electricity when electricity prices increase." 

The California Independent System Operator and Electric Reliability Council of Texas accounted for almost three-fourths of US capacity at the end of 2023.

Batteries are most useful whenever and wherever solar capacity accounts for a significant share of load. Solar? Think Texas and southern California. See: does Texas have it all?

CAISO leads the nation in battery-storage capacity with 8.479 GW, or 42.8%, of total US capacity.

However, the Electric Reliability Council of Texas is quickly catching up and added the most capacity in the first quarter 2024 with 1.2 GW, or 55.3%, of all US installation.

CAISO and ERCOT are projected to account for 70% of battery storage capacity in EIA data.

*****************************
The Book Page

If you feel comfortable with 5th-century Athens, and interested in more, I highly recommend Peter Green's The Greco-Persian Wars. His history of the region from northwest India / Afghanistan across Egypt to Macedonia prior to the story of 5th-century Athens is incredible. In just a few pages, he provides a breathtaking review of events leading up to the Greco-Persian wars.  

But don't even attempt to read it until your mind is ready to read this history again.

*****************************
North Texas -- Morning -- Wednesday, June 26, 2024

VW-Rivian Deal -- June 26 2024

Locator: 48041EVS. 

Updates

August 27, 2024, in The Atlantic, July 8, 2024: 

From the linked article:

Volkswagen is partnering with Rivian not because it wants access to the company’s manufacturing expertise or even its EV technology. It’s doing so because it wants access to Rivian’s software. What this deal represents is an admission by Volkswagen that it needs help, and that its attempt to go it alone with EVs has stalled. But that’s progress. As they say, the first step to solving a problem is admitting that you have one.

On the face of it, the deal may look almost like an act of charity by Volkswagen. VW is investing $1 billion up front in Rivian itself, another $1 billion later this year in the joint venture (which will focus on developing software and electronics for EVs), and a further $2 billion if certain financial goals are met, plus an additional $1 billion loan to Rivian down the line. The EV maker, meanwhile, isn’t putting up any cash; all it’s contributing is its knowledge and intellectual property.This is unquestionably a good deal for Rivian, because it’s getting what it most needs right now: money. 

Running a car company is very expensive, especially in the early stages when the company needs billions in plant and equipment, and it has no economies of scale because it isn’t making that many vehicles. (Rivian is supposed to sell 57,000 of its models this year. Volkswagen, in contrast, delivered more than 9 million vehicles worldwide last year.) Even though Rivian’s SUV and pickup truck have gotten glowing reviews and are very popular among high-end car buyers, the company is still losing more than $38,000 per vehicle. So VW’s billions will come in handy, which is why Rivian’s stock—which had been bumping along at about 10 percent of its 2021 IPO price—jumped 50 percent when the deal was announced.

What’s interesting, though, is that this could turn out to be an even better deal for Volkswagen. That’s because it could solve one of the biggest problems VW has faced in recent years: making software for its electric vehicles that actually works. When VW rolled out its ID.3 model, which was supposed to be its flagship electric sedan, the vehicle’s software was glitchy, the touch screen was unreliable, and some drivers complained that the traffic-detection technology was so erratic that their cars were braking suddenly for no reason.

Even more frustrating for owners, VW was unable to consistently update the software wirelessly in real time, something Tesla has been doing for years. At one point, ID owners had to drop their car off at the dealer to get a hardware update that was supposed to improve the software updates—an unofficial recall, in effect. Software problems also led to delays in the release of the ID.4 and actual recalls after its launch, as well as coding issues with vehicles from VW’s luxury brands Audi and Porsche.

Original Post 

Today, one day after the deal was announced: the Rivian deal starts to make more sense; speaks volumes about what's going on in Germany; spoiler alert: not much -

• the deal likely saved Rivian; The WSJ calls the cash infusion a "lifeline."
• Rivian is burning through $1 billion / month
• had $9 billion in cash before deal announced
• VW cash infusion: simply buys five more months at current cash burn
• production absolutely flat
• but the big story -- VW needs an American EV company; can't make EVs profitably in Germany; energy costs too high; US now exporting more “energy” than it consumes — EIA.
• VW shareholders not happy: Volkswagen down 2%;
  

Barron's: link here. Be sure to read comments at the article.

From yesterday, June 25, 2024, the day the deal was announced:

Later, 3:18 p.m. CDT: Volkswagen thinks different. Just announced. VW takes a $1 billion stake in Rivian. For the moment, the cash infusion likely saves Rivian from an alternative outcome. I have no idea what VW gains from this deal. It's not as if Rivian is doing something VW can't do, and it's not as if Rivian has a global dealer network selling EVs. My hunch: VW needs Rivian to meet California EV standards due to go into effect in 2035 or thereabouts. Sort of like buying forest land to pay for carbon credits. Rivian is nowhere near making a profit, according to Phil Lebeau, June 25, 2024.

Hump Day -- Wednesday, June 26, 2024

Locator: 48040B.

Updates

Later, 11: 26 a.m. CDT: holy mackerel! All three indices are now green.

Later, 9:45 a.m. CDT:

• AAPL surging on Rosenblatt upgrade; up almost $4 at one point today, now back a little
• even with AAPL surging, BRK-B down in early trading;
• speaks volumes about how much Warren's legacy stocks are costing him when AAPL, 40% of his portfolio, surges, and his stock price is still down 
• something I did not know until recently: BRK required to hold huge cash amounts because of its huge insurance holdings; required by regulators (?).
  
• most interesting though: Stephen Weiss on CNBC yesterday

Later, 8:46 a.m. CDT:

• NASDAQ turns green, but Micron goes negative
• AAPL:  up $2.86; trending toward $212.
  

Later, 8:31 a.m. CDT: all three US major indices open in the red; at the open:

• MU: p 1.8%; up $2.51.
• AAPL: up 1.1%; p $2.28
  
• GM: down 6.4%;
• NVDA: flat to slightly red
• QCOM: down 1%;
  
• AVGO: up $15, up 1%;
  

Original Post 

Wow, it's going to be a busy day. Cramer on a roll.

• AAPL upgraded! Wow!Rosenblatt
• consumers want privacy in AI (Apple's strong point)
• Apple immune to costs: hyperscalers will pay what it takes
• interestingly, I didn't put "hyperscalers" in same conversation as Apple
  
• reminder: drinking game continues -- a shot every time "hyperscalers" is mentioned on CNBC
• one word: Micron; reports after market close today 
• should get boost from AI servers and PCs; Barron's. 
  
• the Rivian deal starts to make more sense; speaks volumes about what's going on in Germany; spoiler alert: not much
• FedEx: amazing. Simply amazing. Beats expectations; up 14% in pre-market trading.
• all tech stocks, with some exceptions, look they are bouncing back; did I mention MU reports after-hours today?
• Putin-North Korea may have unintended consequences; South Korea, so far neutral, may now start providing arms to Ukraine; South Korea already huge global arms dealer; new Putin-North Korea deal gives them green light -- Peter Zeihan
• T: hit a new 52-week high yesterday; who wudda thought; 
• Amazon: could crush Walgreens, CVS
• same day, less expensive, and at your door; no longer necessary to stop by Walgreens, CVX on way home to pick something up
• Cramer doesn't mention Target but in our geographic area it seems Target could also be significantly challenged by Amazon -- 
• Target - Amazon: same target audience
• Walmart: a difference consumer group altogether
• long article on fast food over at Barron's today
• Cramer trying to justify his enthusiasm for Ford
• long article on fast food chains over at Barron's; mostly about McDonald's; very, very bullish; my hunch: the $5-value-meal marketing deal is a gimmick; short-lived; high-risk; consumers won't be happy when the $5-value-meal reverts to $10 next month;
• airlines: Delta becoming a luxury liner competitive prices; Southwest starting to look like a Spirit Airlines discounter -- my thoughts; Cramer didn't say this but certainly showed his enthusiasm for Delta, not LUV
  

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Back to the Bakken

WTI: barely green, but that's a change from overnight; $80.88.

Thursday, June 27, 2024: 75 for the month; 139 for the quarter, 338 for the year
39517, conf, Hunt Oil, Smoky Butte 160-100-33-28H 2,
39516, conf, Hunt Oil, Smoky Butte 160-100-33-28H 1,

Wednesday, June 26, 2024: 73 for the month; 137 for the quarter, 336 for the year
39228, conf, Hess, BL-Domy-156-95-2932H-2,

RBN Energy: Light Louisiana Sweet (LLS) hasn't lost its Mojo, but headwinds may be coming.

The Light Louisiana Sweet (LLS) crude market has evolved in recent years, due largely to the reversal of the Capline pipeline as well as limited production growth from the offshore fields that contribute to the LLS market. Yet the LLS premium against other U.S. grades remains strong, a sign that refiners aren’t ready to give up on it just yet, given its attractive yields of high-value transportation fuels like gasoline, jet fuel and diesel. In today’s RBN blog, we will revisit LLS and examine its production and demand outlook.