Thursday, September 26, 2024

Deep Dive: Look At The Amount Of Money Forecast To Electrify The Permian -- September 26, 2024

Locator: 48406PERMIAN.

This story can be found everywhere. The trick is to find a source with no paywall. Here's one.


From the linked article:

HOUSTON (Reuters) - A Texas commission unanimously on Thursday approved the Permian Basin Reliability Plan, which is designed to expand power grid infrastructure in the United States' largest oilfield to accommodate rapidly growing demand from the oil and gas industry.

The Public Utility Commission of Texas (PUCT) directed the Electric Reliability Council of Texas (ERCOT) to compile the plan in December last year, two months after ConocoPhillips, ExxonMobil, Pioneer Natural Resources, Diamondback, Chevron and Devon Energy submitted a report with financial information company S&P Global warning the commission of a significant increase in electric load demand in the Permian basin in the coming years.

Electrifying oilfield operations can reduce emissions and eliminate pollution and noise associated with diesel-powered rigs and fracking equipment.

The Texas power grid has come under significant strain, with the state home to some of the most energy-intensive industries, including data centers, cryptocurrency mining and oilfield operations.

Surging population growth and sweltering heat have also increased stress on Texas' vulnerable electrical grid, last month driving demand to a record high.

ERCOT estimates that the required transmission upgrades to meet the jump in demand could range between $12.95 billion and $15.32 billion.

Transmission upgrades only? What about new power production plants? I don't know, just thinking out loud.

Nuclear? Link here.


Just for electrical upgrades. Quick! Name the electric utility that will be tapped to provide the infrastructure. 

Link here.

Maps:



Oncor is a subsidiary of SRE.

Ticker: SRE.


 

 
SRE was the second or third stock I ever bought once I started investing outside of mutual funds. At the time it was known by a different name and subsequently bought Oncor. SRE has become one of my biggest holdings. For the longest time, I used DRIPs for automatic SRE reinvestments. Under $60/share I kept adding to my position. Now, it "depends" whether or not I add to my SRE position. It depends on Sophia's input. It belongs to her now.

Dividend history:

GAP

Ramblings On A Thursday Night -- September 26, 2024

Locator: 48405ARCHIVES.

Tag: private finance

When I listen to the talking heads on "Fast Money" and similar CNBC I am always negatively impressed with how little they seem to "tap into" the huge amounts of money .... there's no way anyone can get their heads around this immense amount of wealth. A lot of its paper wealth -- market value  -- electronic entries in someone's spreadsheet x (times) number of shares. But a lot of it is also cash flow, free cash flow and otherwise.

My dad loved investing. He was in the market during the 80s and 90s and absolutely loved it, but the companies that were in the news then had market values (I suppose) in the hundreds of millions and maybe late in his life in the hundreds of billions, but never trillions. 

And yet analysts are trying understand companies that are so unlike "traditional" companies in so many ways, not least of which their market value. 

I don't even care about the investing story: I'm simply fascinated by what we're seeing. An average congressman or US senator can't fathom what's going on. Readers get irritated with Nancy Pelosi in the market, and we're talking one million, five million, ten million dollars, whatever, and she's investing in companies with a market value of $3 trillion. 

These companies are going to build data centers that will require so much energy they're going to go nuclear. We have simply never seen anything like this before. 

First Industrial Revolution. Real.

Second Industrial Revolution. Real.

Third Industrial Revolution. A book. AKA, The Information Age. Onset: development of the transistor: 1947.

Fourth Industrial Revolution. Real. Current. Now. 

Klaus Schwab. 2016. Rapid technological advancement in the 21st century: AI, gene editing, advanced robots, blurring the lines between the physical, digital, and biological worlds.

What comes next? 

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Trillions

Investors have never seen anything like this before.

Market value today:

  • AAPL: $3.46 trillion
  • NVDA: $3.04 trillion
  • AMZN: $2.01 trillion
  • META: $1.44 trillion
  • BRK (A&B): $0.980.6 trillion

 

  • LLY: $0.864 trillion
  • AVGO: $0.832 trillion
  • TSLA: $0.797 trillion
  • WMT: $0.642 trillion
  • XOM: $0.501 trillion
  • ORCL: $0.466 trillion
  • COST: $0.400 trillion
  • QCOM: $0.192 trillion


  • DIS: $172 billion -- parks
  • PFE: $164 billion -- retail pharmacy
  • SBUX: $110 billion -- coffee
  • GM: $51 billion -- cars
  • RIVN: $11 billion -- vans
  • US Steel: $8 billion -- specialty steel

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Existential Questions

Why hasn't Russia, in Ukraine, gone nuclear yet?

Why hasn't Iran gone nuclear yet?

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Presidential Politics

No matter who the next US president is, it's going to be the most interesting US administration the world has ever seen. Neither candidate has a moral compass nor a Jeffersonian vision.

Never has this been more concerning: "That which does not kill us makes us stronger.”

And unless it's an "obvious" electoral landslide, we may not know for weeks, even months after November 5th. We have any number of circuit courts that could get involved. And the US Supreme Court may not get involved until the lower courts rule. The requirement to hand count all ballots in Georgia  is  insane ... and then the recounts. Unless, of course, it's a landslide. This, too, will be fascinating. 

And, of course, the polling and the reporting on the polling, is a joke. The Hill says Trump leads in Georgia; tied in North Carolina. The lead in Georgia? One point. And that's a poll.

KODA Resources With Five New Permits; Five Permits Renewed; Four Permits Canceled; And Two DUCs Reported As Completed -- September 26, 2024

Locator: 48404B.

WTI: $67.45.

Active rigs: 35.

Five new permits, #41181 - #41185, inclusive:

  • Operator: KODA Resources
  • Field: Fertile Valley (Divide County)
  • Comments:
    • KODA Resources has permits for five more Stout wells, lot 2, section 6-160-102, 
      • three to be sited 365 FNL and 2377, FEL; 2343 FEL; and, 2307 FEL; and, 
      • two at 565 FNL and at 2343 FEL and 2307 FEL.

Five permits renewed:

  • Oasis (4): four MHA permits in Heart Butte, Dunn County;
  • Enerplus: one Queen permit, Antelope, McKenzie County.

Four permits canceled:

  • Slawson (4): four Shad Rap Federal permits, Mountrail County.

Two producing wells (DUCs) reported as completed:

  • 37580, 5,307, BR, Mathistad 2A MTFH, Croff, npd, Mathistad wells are tracked here;
  • 40168, 3,479, MRO, Andie USA 12-20H, Four Bears, see this post for some incredible production numbers:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2024303917439275509865143650960355
BAKKEN6-202415266442647345200361283596910

Foreign Exchange Reserves -- Russia -- August, 2024, Data -- Posted September 26, 2024

Locator: 48403RUSSIA.

For a country at war and with global sanctions, Russia certainly seems to be doing well for itself. This speaks volumes. Imagine what a country like the US could do under the right leadership.

Russia Foreign Exchange Reserves:


The US Consumer -- Retail -- Costco Earnings -- EPS Easily Beat The Whisper Number -- September 26, 2024

Locator: 48402RETAIL.

Tag: COST, Costco.  

Ticker after results: down 1.5%.  

Observations:

  • P/Es -- this is hard to believe:
    • COST: 56
    • NVDA: 58
  • Dividends: both pay minimal dividends, thought COST is much higher;
  • Share price:
    • COST: $900 / share
    • NVDA: $125 / share

Which would you rather own? Last year. Three years ago I had a position in neither of these companies. Shortly after that I started building a position in one of these two companies. If you bought both either of these companies one year ago:

Margins? I can only guess. 60% vs 7%. Use your own numbers.

Results, link here. Easily beat "whisper number," also.

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Original Post

Link here.

COST earnings after close, the expectation from the WhisperNumber community is $5.14, 6c ahead of analyst estimates. Earnings came in $0.01 ahead of the whisper last quarter. 45% beat rate. Implied move +/-3.7%.

Earnings pending.

Sara Eisen's First Hour, Part 2 -- LCD -- September 26, 2024

Locator: 48402CRAMER.

Before we get started: the market, today, again, is incredibly volatile. The Dow, flat/slightly positive earlier today, is now up 250 points.  S&P 500 hits a new high.

Deep pockets: everything suggests a food-fight among the Titans that will be obvious to all NLT 2026. The top ten largest large data centers (LDCs) linked earlier are incredibly small compared to what the magnificent 7 are talking about now. There will not be enough black boxes / blades to go around. At least not the black boxes / blades that "everyone" wants. 

Size counts:

Shortage, already: even among operations / divisions / companies run by the same Titan, in this case, Elon Musk:

CEOs: generally young (or young in spirit); huge competitors.

Titans: here's one Titan now. Another is Oracle (Larry Ellison and Safra Catz).


Another Titan: Jeff Bezos.

Tim Cook is a Titan but he's not in this fight ... yet. Apple designs its own SoC. 

Tipping point: will be the first new modular nuclear reactor goes live to provide power for a million-square-foot LDC. 

 "Picks and shovels" to watch: Dell. Corning. Copper.

  • SCCO is up another 7% today. Same with FCX.

**********************************
Disclaimer
Brief 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. 
  • And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia.

 

Sara Eisen's First Hour -- September 26, 2024

Locator: 48401CRAMER.

WOW, WOW, WOW: data shows there was "no official recession" at any time in 2022.

  • last recession, an anomaly, an incredibly brief downturn, Covid-lockdown: 1Q20 - 2Q20
  • period under discussion:
    • 4Q21: $21,960,388
    • 1Q22: $21,903,850 (down)
    • 2Q22: $21,919,222 (back up)
  • last clear-cut recession
    • 2Q08 - 3Q09
    • didn't get back to 2Q08 number until 3Q10
  • growing economy since 2Q08 with one very, very short period of slowness due to Covid lockdown

Strong economy: weekly first time jobless claims --

  • forecast: 218,000
  • actual: 223,000

Food inflation:

CAT:

Cramer's first hour: a mix of fact, factoids, opinions from various sources -- often not cited -- while listening to Cramer's first hour on CNBC.  

Most telling: CNBC's home is NYC. Not mentioned in Cramer's first hour -- the indictment of their mayor. Yes, it's not a business story, but ... 

Personal investing: Sophia added to her position in Palantir.

Cramer's been off this week. Sitting in for Jim Cramer: Sara Eisen. 

On a day that the market surges, BRK-B opens lower. BRK-B's one-month chart looks horrendous when compared to what has been going on in the market. That's what happens when you avoid tech.

MPC? Not on my bingo card this morning -- up 3%; up $4.50.

Back to Sara's first hour

First item: surging US equity markets.

Second item: Micron -- could open as much as 20% higher this morning. 

Micron is not part of the magnificent 7. Micron is an interesting company. One wouldn't think Micron would be doing this well -- one needs to remember, however, Micron is down 20% in the last six months, and much, much worse during certain time periods. One might want to listen to the CNBC interview this morning with the Micron CEO. Absolutely tied to growth of large data centers.

Ten largest data centers in US: link here (2023).

USA Data Centers: link here.

Metrics: now we need to sort out the metrics needed to compare LDCs, apples-to-apples. Start with: 

  • physical size: footprint, square feet -- anything less than 1,000,000 square feet no longer gets my attention;
  • energy demand: 100 MW is the new bar
  • number/size of transformers: need to explore; start with 480V transformers
  • number of black boxes

Meta: getting a lot of press.

Solid economic data: both Dow and NASDAQ up over 200 points at the open. S&P 500 up 36 points at the open:

GOP: growing tired of shutting down the government as a political strategy. US Congress overwhelmingly passes bill to extend funding through December 20, 2024. US Congress now goes on extended break and won't be back to Washington, DC, until after the election in early November.

*********************
Sidebar With Reader

A reader sent me a note and link regarding commercial property values in Minneapolis. My reply which might lead to a stand-along post later. Not ready for prime time:

It's interesting to look at population of cities in major cities Ohio to Minnesota -- comparing 1990 through 2022.

Detroit, of course, is a disaster.

Pittsburg, Cincinnati, Cleveland, all doing poorly. Chicago, not as bad as Detroit, but still bad.

Madison, WI, is an exception. Significant growth.

Minneapolis/St Paul fairly level.

The problem is that at the population decreased and major corporations / businesses moved out, the cities and the states did not spend less money. Their budgets continued to increase and to pay for those budgets -- fewer people and fewer businesses.

It is incredibly difficult for many folks to move -- emotionally it's a huge challenge, if you've lived somewhere for forty years and have family their -- very difficult to move, so it takes time, but gradually over time, it will only get worse for the cities from Ohio to Minnesota.

And it's a death spiral. There is nothing to suggest that any of these cities can reverse the trend.

On the other hand, just the opposite here in Texas and west to/through Arizona. Plano is no longer the fastest growing in Texas, but it went from 128,000 in 1990 to 290,000 in 2022. 

But look at this, Frisco, just north of Dallas and neighboring Plano, a population of 6,000 in 1990 and the population is now 220,000 in 2022 and still growing, though more slowly. 

Collins County, north of Dallas, and Denton County, north of Ft Worth, both went from 70,000 in 1990 to 1,000,000 in 2022, and still growing. 

And no state income tax. Gasoline relatively cheap. Housing expensive but no worse than much of the US. Property taxes supposedly high but that's become a meme. California has both a high property tax and a high state income tax plus very, very high gasoline prices.

Nashville, though not growing as quickly as one might expect, but the county has grown from 500,000 to 700,000 since 1990, but I think Nashville / Davidson County is about ready to take off in population. Southwest Airlines just announced yesterday they are increasing number of flights from Dallas to Nashville, while cutting flights from Dallas to Atlanta, GA. 

It will take another fifty years but the gap between Texas-California-Florida-Arizona corridor and the Pennsylvania-Ohio-Illinois-Minnesota corridor will look a lot like the gap between India and Bangladesh.

California has its challenges but has too much going for it to really get into a death spiral like Michigan or Minnesota.

**********************************
Disclaimer
Brief 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. 
  • And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia.

WTI Drops Below $68 -- Thursday, September 26, 2024

Locator: 48400B.

Helene: Cat 5? Will affect all of Florida; extend across entire southeast; as far north as Nashville to feel the storm.

Irresponsible: Disney says parks will stay open.

Intel: top story over at Yahoo!Finance. Long story; fails to report CPU failures. Great trading opportunities for nimble, brave traders. 

Oracle-Nvidia pump: Motley Fool. Video: epic event October 10, 2024. Share price surging. P/E insane. MI325X accelerator. Google, AWS will be the ones to watch. Turin: CPU. Network solutions could be catalyst. Long term bullish. I think it’s fascinating. But right now it looks look AMD share price hinges on news from AWS and Google. 

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Back to the Bakken

WTI: $67.89. Despite a major escalation of hostilities in the Mideast, a significant drop in US crude oil storage, and a category 4 hurricane bearing down in the Gulf (though the latter will miss the oil wells and refineries in Texas / Louisiana and will pretty much shut down commerce in Florida for several days). OPEC says it it scrapping $100-oid strategy to improve market share. Headline: oil price "dip" on talks of ceasefire.

Friday, September 27, 2024: 57 for the month; 185 for the quarter, 509 for the year
40280, conf, Hess, EN-Lonetree Farm-156-94-0805H-7,
39936, conf, Hess, RS-Feldman-LW-156-92-1423H-1,

Thursday, September 26, 2024: 55 for the month; 183 for the quarter, 507 for the year
40522, conf, Slawson, Fisherman 5-21 28TFH,
39935, conf, Hess, RS-Juma-156-92-1131H-2,
37827, conf, Enerplus, Swift 149-93-10A-15H, 

RBN Energy: diversified E&Ps rebalancing portfolios to crude oil as natural gas revenues sink

The recent bankruptcy filing by Tupperware, once a staple of nearly every kitchen, is yet another reminder that long-term corporate success depends on managing through the ever-changing business environment. Many blogs have been written about the ultimate impact on oil and gas producers of the decades-long shift to lower-carbon energy sources, but E&Ps face short-term challenges as well, one of which is the recent plunge in natural gas prices. In today’s RBN blog, we analyze the effect of lower gas prices on the revenues, cash flows, investment, leverage and cash allocation of producers with a rough balance of oil and gas production and discuss how these Diversified producers are adapting.

**********************************
Disclaimer 
Brief 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. 
  • And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia and large data centers.