Crude Oil Super-Cycle Just Beginning; Buffett Buys More OXY -- May 4. 2022

Clearly in a "crude oil super-cycle." 

WTI: tonight, 10:40 p.m. CT, May 4, 2022 -- $108.20. 

Warren Buffett telegraphed this during the Annual Meeting last weekend. 

His "quote" posted on the blog.

Perfect storm:

• energy transition is dead ("everybody" now realizes that)
  
• Putin's War: a lot of Russian oil is taken off the market 
• one-two-three punch: previously posted
  
• we have an administration in Washington (DC) that doesn't understand what's going on and will (purposely or inadvertently) do everything to kill the US oil industry
• this administration in place for three more years; three more years to exacerbate situation 
• windfall profits tax will exacerbate price of gasoline at the pump;
  
• US E&P under-capitalization (multiple reasons)
• financial institutions coordinated moving investments to non-fossil fuel companies
• capital being moved from fossil fuel to renewable energy, tech, healthcare
• fossil fuel out of favor with managed funds
  

Tonight: link here.

Remember: during 1Q22, Warren Buffett / BRK bought enough CVX to make it the third or fourth largest equity holding in the BRK portfolio. Now, more OXY. 

Link here.

What A Day! May 4, 2022

Link here.

MPC Posts Impressive Jump In Profit -- Tom Kool -- May 4, 2022

Link here.

Tom Kool: head of operations, oilprice.com. Majored in international business at Amsterdam's Higher School of Economics.

U.S. refiner Marathon Petroleum Corp was trading up over 4.3% close to close Tuesday after posting Q1 earnings showing an impressive jump in profit on the back of soaring oil prices and post-pandemic economic recovery.

Marathon reported net profit of $845 million ($1.49 per share) for Q1, up from a loss of $242 million for the same quarter a year ago. The refiner also reported revenue gaining 68% on the quarter for #38.8 billion, up from $22.88 billion a year ago.

High margins have been launching U.S. refiners into a “golden age”, and Marathon is no exception, with a refining unit profit margin increase of over $5 per barrel year-over-year and a capacity utilization rate of over 90%.

Up another four percent today.

Pays 2.5%.

Last five days:

I feel sorry for all those investors who invest in funds whose managers won't invest in oil and gas companies. There's a lot of small mom-and-pop retail investors who are going to have a better (investing) year than some managed funds.

Oasis Provides Update Regarding Merger With Whiting; Expects To Close 3Q22 -- May 4, 2022

Closing prices:

• OAS: $142
• WLL: $78
• WLL / OAS = 0.549

Back of envelope:

• 1000 shrs of WLL: $78,000
• at merger / closing: 577 shares of Oasis
• 577 * $142 = $81,934
• $6.25 x 1,000 = $6,250
• $88,184

• 1000 shrs of OAS: $142,000
• at merger / closing: $15 x 1,000 = $15,000
• = $157,000

I often make simple arithmetic mistakes, often misunderstand things.

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.  

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Oasis: 1Q22 Earning

OAS: link here.

• Oasis and Whiting Petroleum Corporation ("Whiting") continue to make progress and expect the merger (the "merger") to close in 3Q22. Oasis and Whiting each filed a premerger notification and report form under the HSR Act, and the waiting periods with respect thereto have expired. Oasis filed a registration statement on Form S-4 (the "Registration Statement") on April 28, 2022.

• DENVER & HOUSTON--(BUSINESS WIRE)--Mar. 7, 2022-- Whiting Petroleum Corporation (NYSE: WLL) (“Whiting”) and Oasis Petroleum Inc. (NASDAQ: OAS) ("Oasis") today announced they have entered into an agreement to combine in a merger of equals transaction. The combined company will have a premier Williston Basin position with top tier assets across approximately 972K net acres, combined production of 167.8 thousand boepd, significant scale and enhanced free cash flow generation to return capital to shareholders.

  This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220307005443/en/

  Under the terms of the agreement, Whiting shareholders will receive 0.5774 shares of Oasis common stock and $6.25 in cash for each share of Whiting common stock owned. 

  In connection with the closing of the transaction, Oasis shareholders will receive a special dividend of $15.00 per share. 

  The combined company will have an enterprise value of ~$6.0B based on the exchange ratio and the closing share prices for Whiting and Oasis as of March 4, 2022. Upon completion of the transaction, Whiting shareholders will own approximately 53% and Oasis shareholders will own approximately 47% of the combined company on a fully diluted basis.

  Upon closing, Whiting’s President and CEO, Lynn Peterson, will serve as Executive Chair of the Board of Directors of the combined company. Oasis’ CEO, Danny Brown, will serve as President and Chief Executive Officer and as a member of the Board. The combined company will be headquartered in Houston upon closing but will retain the Denver office for the foreseeable future. The combined company will operate under a new name and is expected to trade on the NASDAQ under a new ticker to be announced prior to closing.

California Gasoline Prices To Go Higher -- May 4, 2022

Link here. And here.

California approves Marathon's and Phillips 66's refinery to renewable repurposing.

Link here.

US natural gas prices surge above $8 / MMBtu in "irrational" market. LOL. Nothing irrational aboiut this market when California approves Marathon's and Phillips 66's refinery to renewable repurposing.