CVX -- This Is Getting Exciting -- March 31, 2025

Locator: 48403CVX.

TG Natural Resources: a company "indirectly owned by" Tokyo Gas CO -- "Tokyo Gas" Natural Resources is the buyer along with Castleton Commodities International LLC; CVX the seller. Both are headquartered in Houston. CVX moved its HQ from northern California to Houston a year ago. 

Link here. And here.

Chevron U.S.A. Inc. announced that it has closed on a transaction to sell a 70% interest in its East Texas gas assets to an affiliate of TG Natural Resources LLC  a company indirectly owned by Tokyo Gas Co., Ltd. and Castleton Commodities International LLC, for $525 million, with $75 million paid in cash and $450 million as a capital carry to fund Haynesville development. 

Chevron will retain a 30% non-operated working interest in a joint venture with TGNR and an overriding royalty interest in the assets. Tokyo Gas and CCI own an approximate 93% and 7% interest in TGNR, respectively. 

The transaction is anticipated to generate over $1.2 billion in value to Chevron at current Henry Hub prices. Chevron expects to maintain future upside through the joint venture structure while accelerating development of a non-core asset through a capital efficient approach. 

This transaction supports Chevron’s previously announced plans to divest $10-15 billion of assets by 2028 in order to optimize its global energy portfolio.

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Palantir

This tells me all I need to know about the stock market. Much could be said, but this is not an investment site. A p/e of 450.

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Disclaimer
Brief Reminder 

 Briefly:

• I am inappropriately exuberant about the Bakken and I am often well out front of my headlights. I am often appropriately accused of hyperbole when it comes to the Bakken.
  
• 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 something appears wrong, it probably is. Feel free to fact check everything.
  
• 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 Bakken, 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. Nvidia is a metonym for AI and/or the sixth industrial revolution.
• I've now added Broadcom to the disclaimer. I am also inappropriately exuberant about all things Broadcom.
• I've now added Oracle to the disclaimer. I am also inappropriately exuberant about all things Oracle.
  
• Longer version here.      

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A Musical Interlude

The best ballad ever? The best "band" ever? Headphones on. Loud.

Number Of Active Rigs In North Dakota Jumps To 36 -- March 31, 2025

Locator: 48402B.

Texas, going nuclear. Link here. Dow and X-energy. 

At the link, "X-energy is a private American nuclear reactor and fuel design engineering company. It is developing a Generation IV high-temperature gas-cooled pebble-bed nuclear reactor design. It has received funding from private sources and various government grants and contracts, notably through the Department of Energy's (DOE) Advanced Reactor Concept Cooperative Agreement in 2016 and its Advanced Reactor Demonstration Program (ARDP) in 2020."

Wyoming, nuclear update, link here.

TerraPower is the first advanced reactor company in the U.S. to move from design to construction, breaking ground on its first plant near a former coal site in Kemmerer, Wyoming in the summer of 2024. The company aims to start dispatching power by the end of 2030 to Warren Buffett’s PacifiCorp.

TerraPower’s Natrium reactor operates at atmospheric temperature, a feature that Levesque says will reduce construction costs.

The U.S. currently relies on reactors that operate at about 300 Celsius (572 degrees Fahrenheit) and are cooled by water. The system operates under high pressure — water boils at 100 degree Celsius — to keep the coolant liquid, and the plants need heavy, expensive components to contain the pressure.

TerraPower uses sodium, rather than water, as a coolant. Liquid sodium boils at 900 Celsius, much higher than the Natrium reactor’s operating temperature of around 500 Celsius. That means the plant does not need to be pressurized, Levesque said.

Japan buying shale assets in Texas. Link here. Will acquire Texas shale assets from Chevron. Tokyo Gas is Japan's biggest city gas provider, will be worth tens of billions of yen. Whatever that means?

• 100 billion yen = $667 million. So, $10 billion = $67 million?

Investing in the US, 2024, source:

• EU holdings of US equities (stocks): $5.3 trillion;
• US holdings of EU equities (stocks): $3.4 trillion.
• I wonder if that "balances" out the balance of trade differential?

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Back to the Bakken

WTI: $71.48.

Active rigs: 36. Significant jump from the 30 wells we generally saw during the winter.

Four new permits, #41755 - #41758, inclusive:

• Operator: KODA Resources
• Field: Fertile Valley (Divide County)
• Comments:
• KODA Resources has permits for three Stout wells, SESW 13-160-102, 
• to be sited 660 FSL and 2581 / 2645 FWL; a fourth Stout well, SWSE 13-160-102, will be sited 460 FSL and 2531 FEL.  

One permit renewed:

• 36271, Hess, AN-Double Bar V-152-95-0106H-5, NENE 11-152-95, Antelope oil field, McKenzie County.

Tech -- LDCs: ARM-Based CPUs And Nvidia GPUs -- March 31, 2025

Locator: 48401TECH.

This really isn't worth a stand-alone blog but I already posted it and nothing else to add, so will leave it here and add more later if there's anything to add. 

I think this has been talked about before, pairing the following in LDCs:

• ARM-based Grace CPUs; and,
• Nvidia-based Blackwell GPUs.

• Link here.
• This link might be even better.

SIR: link here. If I'm reading this correctly, ARM says its share of LDC CPU market will be 50% -- they didn't say it would be "50% growth" but rather, in toto, 50% of all CPUs in LDCs will be ARM-based. 

According to wikipedia --- see below the fold ---

This is what LDCs look like with regard to ARM-based CPUs. Even this wiki entry suggests that it's already almost all ARM-based.

Note:

WTI Jumps Above $70 -- March 31, 2025

Locator: 48400B.

US oil production: sets new all-time January record; twelfth consecutive month above 13.1 million bopd, field production. Link here.

Shale: agree 1,000%. Brilliant insight. Link here. The question is whether the Bakken revolution is being driven by economics or geology. Obviously it's a bit of both, but if push comes to shove, economics will win out in the short term. That is, price WTI at $100 and let's see what shale does.

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Back to the Bakken

WTI: $71.49. Whoo-hoo. Up 3.07%. Up $2.13 / bbl.

New wells:

• Tuesday, April 1, 2025: 3 for the month, 3 for the quarter, 200 for the year,
• 41186, conf, Murex, LA-Emma Rose 30-31H LE MB,
• 40154, conf, Hess, EN-Engebretson-157-94-1003H-4,
• 39320, conf, Grayson Mill, Marilyn 31-33 4H, 
• Monday, March 31, 2025: 86 for the month, 197 for the quarter, 197 for the year,
• None.
• Sunday, March 30, 2025: 86 for the month, 197 for the quarter, 197 for the year,
• 41131, conf, Murex, LA-Riley Kyle 25-36H MB,
• 40155, conf, Hess, EN-Schroeder-157-94-1102H-2,
• 39693, conf, Hess, TI-Beauty Valley-158-95-1423H-6,
• Saturday, March 29, 2025: 83 for the month, 194 for the quarter, 194 for the year,
• 41020, conf, CLR, Alfsvaag Federal 7-31H,
• 40857, conf, BR, West Kellogg 4A UTFH-B,

RBN Energy:  new natural gas pipes and LNG terminals shake up Texas / Louisiana gulf coast. Archived.

Over the next couple of years, six new pipelines and expansion projects will bring 11.8 Bcf/d of incremental natural gas supplies to the Texas/Louisiana Gulf Coast. During the same period, more than 8 Bcf/d of new LNG export capacity will move that gas to international markets. The impact of this onslaught of gas flows will be anything but orderly. Inflows will never equal outflows. Pipes will arrive early with supplies, with LNG terminals coming along later. Gas flows will shift from west to east, and north to south, in chaotic patterns that will upend historical price relationships. Is there any way to make sense of all this? There sure is, as we discuss in today’s RBN blog. All you need is the right arrow pointing the way.

Fast-rising gas production in the Permian, growth potential in the Haynesville and Eagle Ford, and the rapid buildout of new gas pipelines and LNG export capacity make this a particularly exciting — and challenging — time for gas market players in Texas and Louisiana. One thing is clear: With so much going on, it’s never been more important to have a solid understanding of how the market will evolve, month by month and year by year, as all this new infrastructure comes online. Why? Because the new pipeline capacity and liquefaction trains will have continually changing impacts not only on gas flows throughout the two-state region but on gas basis at every hub.

With all that in mind, RBN has developed — and now made available for our subscription customers — the Arrow Model, which (1) aggregates gas production, demand and net outflows or inflows for each market hub over time; (2) quantifies the degree to which gas is pushed/pulled between and among hubs, again over time; (3) anticipates gas flows on each corridor (and the need for incremental pipeline capacity); and (4) forecasts the basis differentials that underlie and support the aforementioned flows of gas.

We’ll get to the details in a moment, but first a quick summary of where things stand today — and how much things will change over the next two years or so. Permian gas production exceeds 21 Bcf/d, Haynesville and Eagle Ford E&Ps are poised to increase their output, and new pipelines (and pipeline expansions) from production areas to the Gulf Coast (and along the coast) are in the works, including the 2.5-Bcf/d Blackcomb Pipeline (dashed red-and-black line in Figure 1 below) from Waha to Agua Dulce, the 1.5-Bcf/d Hugh Brinson Pipeline (dashed blue-and-black line) from Waha to the Dallas/Fort Worth area, and the 1.5-Bcf/d Trident Pipeline (dashed orange-and-black line) from the Katy, TX, hub to Sabine Pass. And that’s just the supply side of the equation. After a pause in LNG capacity additions last year, Plaquemines LNG is increasing its output and several new LNG export projects are slated to come online, starting with Corpus Christi LNG Stage III (the first element of which is already sending out LNG) and followed in short order by Golden Pass LNG (Sabine Pass), Rio Grande LNG (Brownsville, TX) and Port Arthur LNG (see dash-bordered diamonds). These projects will add 6.9 Bcf/d of gas demand by mid-2027 and another 4.1 Bcf/d by 2030, dramatically altering regional gas flows as they do.

Figure 1. Selected Gas Pipelines and LNG Terminals in Texas and Louisiana. Source: RBN 

Auto Tariffs -- Random Note -- March 31, 2025

Locator: 48399TARIFFS.

No comment.

The story speaks for itself.

Mazda: