MDU - 2Q20: After Earnings Release, Shares Up Over 7%; MDU Pays Almost 4%

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.

MDU, link here:

• MDU Resources reported Q2 revenue increase of 4.6% Y/Y to $1.36B, and earnings of $99.7M, an increase of 61% Y/Y.
• construction materials business revenues were $621.1M (+4.2% Y/Y) and backlog of work at June 30 was $875M; Construction services business revenue was $497.2M (+6.9% Y/Y) and backlog of work at June 30 was $1.31B.
• the electric and natural gas utility earned $11.2M vs. $1.2M in 2Q19, benefiting from lower operating costs, higher investment returns and the absence of a write-down on a non-utility investment recorded, and pipeline business earned $9M (+26.7% Y/Y).
• Q2 Operating margin expanded by 268 bps to 10.2%.
• Q2 EBITDA from continuing operations was $219.8M (+35.8% Y/Y), and margin improved by 370 bps to 16.1%.
• net cash provided by operating activities YTD was $261.4M, compared to cash used $22.9M a year ago.
• FY20 Guidance, raised:
  
• EPS of $1.65 to $1.85 (prior $1.50 to $1.70) vs. $1.60 consensus.
  
• Construction services revenues in the range of $1.9B to $2.1B (prior $1.85B to $2.05B) with margins comparable to 2019 and construction materials revenues in the range of $2.2B to $2.4B (prior $2.1B to $2.3B) with margins slightly higher than 2019.

Shares are up 7% and MDU pays almost 4%.

SRE -- 2Q20

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.

Maybe I'm too exuberant regarding SRE or maybe it's too early in the morning or maybe it's the Montana mountain air -- yes, I'm typing in bed -- and the windows are open and it's actually refreshingly cool -- but here's the SRE press reslease, 2Q20 earnings.

• non-adjusted:
• sarnings: $2.239 billion vs $354 million last year
• EPS: $7.61 vs $1.26 last year
• adjusted:
• $485 million, or $1.65 vs $309,or $1.10 million last year
• First six months:
• non-adjusted: $2.999 billion ($9.91/share) vs $795 million ($2.85) a year ago
• adjusted: $1.417 ($4.76) vs $843 million ($3.03) a year ago

From the press release:

Sempra Energy completed the sales of its South American businesses in June, marking the conclusion of its broad, two-year capital rotation plan. The company's investments are now focused on transmission and distribution energy infrastructure in the most attractive markets in North America, including California, Texas, Mexico and North America's liquefied natural gas (LNG) export market.

In total, including the sales of the company's South American businesses and its U.S. renewables businesses and non-utility natural gas storage assets, the company has generated approximately $8.3 billion in total gross proceeds from these divestitures. The recent sale of the company's Chilean businesses remains subject to post-closing adjustments. Proceeds from these transactions are being used to further bolster the company's strong liquidity position, strengthen the balance sheet, support the execution of its robust capital plan and return value to shareholders. 

As part of Sempra Energy's goal of returning additional value to shareholders, the company recently completed a $500 million share buyback program. It also received authorization from its Board of Directors to repurchase an additional $2 billion of shares at future dates. Sempra Energy's capital allocation strategy has enabled the company to return approximately $13 billion to common shareholders since 2000 through cash dividends and common share repurchases.

From Zacks yesterday, link here. 

Sempra Energy price-eps-surprise | Sempra Energy Quote

Moreover, favorable rate base outcomes in recent times might have also contributed to the company’s quarterly revenues. The Zacks Consensus Estimate for second-quarter revenues of $2.66 billion suggests a rise of 19.4% from the year-ago quarter’s reported figure.

Alongside the favorable top-line expectation, reduced operating expenses are projected to have driven the company’s bottom line. Moreover, driven by low natural gas prices amid the ongoing crisis situation, the company can be expected to witness higher earnings from Sempra LNG marketing operations. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.66 per share, implying a 50.9% improvement from the year-ago reported figure.

By the end of June 2020, Sempra Energy completed its business exit from South America, following the sale of its Chilean businesses. The completion of the Chilean transactions concluded Sempra Energy's sales of its South American businesses in both Chile and Peru, resulting in approximately $5.82 billion in combined total cash proceeds. We expect the company’s second-quarter balance sheet to duly reflect these sale proceeds.

SRE has a history of earnings surprises, according to Zacks.

Not yet trading (8:38 a.m. EDT, August 5, 2020).

Three Wells Coming Off Confidential List Today -- August 5, 2020

Stirring the pot: Trump to send high-level diplomatic team to Taiwan. Link to The New York Times.

Item: I don't subscribe to the NYT so I haven't seen a NYT article in a long time. Generally, I can find another source for the same article if I can't get to the NYT. I've always thought it was crazy. Sites like the NYT losing eyeballs because of the paywall. Maybe they've been doing for a long time and I simply had not noticed, but when going to the above link, the NYT said I create a free account to get access to some stories. And, no, I did not register for a free account.

That Beirut explosion, link here:

Lebanon's Prime Minister said the blast was caused by an estimated 2,750 tons of ammonium nitrate, stored in a warehouse at the port unsecured for years. Israeli officials denied they had any involvement in the horrific explosion, which also seemed to be repeated by Hezbollah officials.

The shockwave from the blast was so powerful (triggered a 3.5 magnitude earthquake), it caused widespread damage across the city, leaving tens of thousands of people homeless.

WTI: surges overnight. Up 3.43%; now trading at $43.13.

OPEC basket, link here: $44.27

SRE, Sempra Energy:

• Q2 Non-GAAP EPS of $1.65 beats by $0.10;
• GAAP EPS of $7.61 beats by $6.12. -- I'll be interested in what the analysts have to say, but I don't recall a beat / or miss this huge in a long, long time. EPS of $7.61 and a a beat of $6.12? Say what? Off the record, don't quote me on this, but I think the earnings "miss" is a bit of smoke and mirrors; it's almost as if non-adjusted earnings are being compared with adjusted earnings; SRE sold off ~ $6 billion (?) in South American assets, a one-time gain, and that greatly affected the earnings; be that as it may, it's nice to see an earnings report like this but it's probably not as spectacular as it first seems, but this is well above my "pay grade" as they say.
  
• Revenue of $2.53B (+13.5% Y/Y) misses by $10M.
• press release here;

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.

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Back to the Bakken

Active rigs:

$43.13	8/5/2020	08/05/2019	08/05/2018	08/05/2017	08/05/2016
Active Rigs	12	59	64	58	34

Three wells coming off confidential list -- Wednesday, August 5, 2020: 11 for the month; 82 for the quarter, 528 for the year:

• 37160, drl/NC, Slawson, Motune Federal 1-10-15H, Big Bend,
  
• 36729, drl/A, CLR, Marshall 6-24H, Little Knife, t--; cum 70K 3 months; a 27K month;
  
• 35891, SI/A, Whiting, Sondrol 11-29H, Pembroke, t--; cum 96K 5 months; a 24K month;
  

RBN Energy: jet fuel production starts to recover, but there's a long way to go.

The global effort to stop the spread of COVID-19 brought the commercial aviation sector to its knees, and slashed demand for jet fuel to its lowest level in 50 years. That, combined with lower demand for motor gasoline and — to a lesser extent — diesel, forced refineries in the U.S. and elsewhere to substantially reduce their crude oil input and to make major changes in their operations, all with the aim of bringing refined product supply and demand into closer balance.

After a horrific spring, U.S. jet fuel production and demand have been rebounding somewhat in recent weeks, but getting back to pre-coronavirus levels may take a long time. Today, we review the flight from hell that the jet fuel market has suffered through so far this year, and how it is affecting refineries.

Rimrock Reports Four Nice Completed DUCs; MRO With Five New Permits -- August 4, 2020

API weekly crude oil (link here):

• unexpected draw of 8.6 million bbls
• forecast: a modest inventory draw of 3.3 million bbls

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Back to the Bakken

MDU earnings:

• revenue of $1.36 billion (+4.6% y/y); beats by $60 million (the Bakken is back)
• EPS: 50 cents/share
• shares: up 1.5% after release;

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.

Active rigs:

$41.57	8/4/2020	08/04/2019	08/04/2018	08/04/2017	08/04/2016
Active Rigs	12	58	64	58	33

Five new permits:

• Operator: MRO
• Field: Reunion Bay (Mountrail)
• Comments:
• MRO has permits for a five-well pad (Mabel, Plenty Horns, Little Owl, Perry, and Odell) in lot 1, section 6-150-93, Reunion Bay
• the wells will be 300' FNL and about 900' FEL

Three permits renewed:

• Whiting: three Dwyer permits in McKenzie County

Four producing wells (DUCs) reported as completed:

• 36288, drl/A, Rimrock Oil & Gas, Two Shields butte 3-24-12-3HA, Mandaree, t--; cum 98K 5 months; a 24K month;
• 36291, drl/A, Rimrock Oil & Gas, Two Shields Butte 3-24-12-2H3, Mandaree, t--; cum 41K 3.5 months; a 12K month;
• 36398, SI/NC, Rimrock Oil & Gas, Two Shields Butte 4-24-12-4H3U, Mandaree, t--; cum 61K 4 months; a 17K month;
• 36400, SI/NC, Rimrock Oil & Gas, Two Shields Butte 4-24-12-3H, Mandaree, t--; cum 116K 5 months; a 27K month;

On The Road Again -- August 4, 2020

Market:

• all indices green at the moment;
• Ford CEO Jim Hackett hacked; F up marginally; pays no dividend;
• US factory orders increased more than expected in June, 2020; boosted by motor vehicles; my son-in-law, truck manufacturing, is getting more overtime; still having trouble with logistics; getting parts; stifles production, but that will improve;
• AAPL up another $5 today;
• IMUX: after a huge run, profit-taking today, but off its low for the day

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.

OPEC basket, link here: $44.02.

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Back to the Bakken

Active rigs:

$41.06	8/4/2020	08/04/2019	08/04/2018	08/04/2017	08/04/2016
Active Rigs	12	58	64	58	33

Four wells coming off confidential list today --

Tuesday, August 4, 2020: 8 for the month; 79 for the quarter, 525 for the year:

• 36985, drl/TAI, CLR, LCU Truman Federal 3-23H1,  Long Creek,
• 36758, SI/A, Whiting, John William 14-12HU, Sanish, t--; cum 133K 4.5 months; a 35K month;
• 36348, F/NC, Hess, EN-Thompson Trust-154-94-1930H-3, Alkali Creek, t--; cum 111K 4.75 months; a 30K month;
• 35893, SI/A, Whiting, Rauser 11-29-3H, Pembroke, t--; cum 103K 4 months; a 28K month;

RBN Energy: Canada's propane supply dip, exports to Asia to hit railed volumes, part 2.

The Ridley Island Propane Export Terminal — Canada’s first propane export facility — has been a game changer since it started up in May 2019. Located along the coast of British Columbia, RIPET has been shipping record amounts of propane to Asian markets in recent months, just as Western Canadian propane production has been sagging due to the twin pressures of crude oil price weakness and COVID-19-related disruptions. With production down, RIPET gradually ramping up its export capacity, a second export terminal poised to come online nearby, and Canadian demand for propane holding steady, something has to give, right? Today, we examine the changing supply/demand outlook for Western Canadian propane, and what it might mean for railed exports to the U.S.

Western Canada, the primary source of Canada’s propane supplies and exports, for many years has had a single direct export market for its excess propane supplies: the U.S. That changed 15 months ago, when AltaGas and Vopak’s jointly owned RIPET export facility in Prince Rupert, BC, began operations, providing Canada with its first access to Asian markets from its own shores. As we explained in Part 1 of this series, prior to RIPET’s start-up, Canada did have an indirect means of sending propane to Asia, namely by railing supplies down to the PetroGas-operated export terminal in Ferndale, WA. With firm delivery contracts in place for both of these terminals, propane exports have been running at strong levels in recent months — record levels, in RIPET’s case. The larger volume of propane being sent to Asia appears to have eliminated the typical seasonal excess of propane supply in Western Canada for the first time ever, and to have partly eroded propane-by-rail exports to the U.S., with multi-year lows being recorded in May.