For the record, and for the archives.
Tuesday, July 19, 2022
For Investors Only -- This Is Not An Investment Site -- This Is For My Own Amusement -- July 19, 2022
I am trying, with great difficulty, to re-balance my portfolio. It's over-weighted in oil and I'm trying to move out of energy.
I have a very good monthly revenue stream and I invest twice a month, during the first week and during the third week, or thereabouts.
I remain fully invested.
I prefer dividend-paying stocks for a specific reason.
My current allocation:
- Buffett-like, blue-chip, Fortune 500, value: 50%.
- tech, mostly semi-conductors, chips, growth: 30%
- energy (oil and gas); dividends and free cash flow: 20%.
I am looking for big manufacturers of which I started with very little (or, better said, none).
In that category, I'm looking for "vehicle" manufacturers.
Automobile companies: I won't invest in.
- these companies are going to spend inordinate amounts of money to move to "all" EV
- expenses are only going to get much, much worse
- automobile companies will look for market share; they will sacrifice margins and profit to get there
- CEOs, deep down, know that EVs will kill their companies, but group think will not allow them to say that, or change direcction
- I think Ford recognizes that which explains their new 700-hp Raptor.
So, the question is where, what industry, will not spend money on a losing proposition, EVs?
That was answered by a reader, this past week, unbeknownst to the reader:
- US farm equipment; and,
- heavy construction
Why:
- neither industry can move to EVs
- not that they "won't"; they can't;
Lots of heavy industry manufacturers overseas, especially Germany and South Korea, but they're going to be crushed by high energy prices.
The one exception: the US. Lots of cheap energy.
A lot of manufacturing is going to move from Europe to the US.
Quick: name any heavy manufacturing that can outperform .... Deere and Caterpillar.
That's what I thought.
Deere (DE):
- P/E: 16
- pays: 1.5%:
- 52-week high: $450
- 52-week low: $280
- today, after a 4% rise: $310
- quick: who wouldn't buy?
- a $450-stock now going $310
Caterpillar (CAT):
- P/E: 15
- pays: 2.7%:
- 52-week high: $237
- 52-week low: $167
- today, after a 4% rise: $179
- quick: who wouldn't buy?
- a $240-stock now going for $180
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.
On another note, spend some time on this post. I accumulate shares in BRK but his 52-ticker portfolio does not impress me.
A Reader Has Questions On Kraken Wells Sited In Burg Oil Field, Sited In Section 20-159-99 -- July 19, 2022
Yesterday a reader asked me:
Question:
On Friday Kraken opened a permit: #39095 - KRAKEN OPERATING, LLC, SIDNEY LE 29-32 #12TFH, SE SE 20-159N-99W, WILLIAMS CO., 665’ FSL AND 671’ FEL, DEVELOPMENT, BURG, ‘CONFIDENTIAL’, 2123’ GROUND, BOTTOM HOLE LOCATION: SE SE 32-159N-99W, API – 33-105-05810.
As far as I know, there is one producing well, 3 other permits which were recently renewed.
This one is showing: SIDNEY LE 29-32 #12TFH. I'm confused about the #12 part. Where are #5-#11?
I suspect it has to do with Kraken expanding the spacing units from 2 sections to 4, covering sections 28,29, 32 and 33.My quick reply:
1. You are so correct. It's so difficult for me to sort out things without the GIS map. Very, very difficult.
2. The short answer to "where are #5 - #11?"
This happens frequently. I think it works like this: the CEO or VP for operations or both visit/visits the geologist's office and tells the geologist to develop plans for wells in a specific drilling unit. The geologist comes up with twelve wells, and numbers them consecutively, #1 - #12, before starting the work to put together the siting for the permit application. And note: these are for wells in a specific drilling unit. If a new overlapping drilling unit is added, a new numbering system.3. Then, days, weeks, months, years, later, the VP for operations gets around to drilling that particular drilling unit, but picks out which wells he/she wants to drill first. So, they don't do them in order and they may not do all of them.
4. Generally, CLR is the only one that really drills them all (and maybe MRO in the Bailey oil field).
5. So, it's not a bit surprising that Kraken is picking and choosing which wells to drill, and not necessarily doing them in order. I don't think it has to do with 1280 vs 2560 acre spacing units.
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Now, more.
This was done quickly, not double-checked, and likely to have errors. If this is important to you, go to the source.
Without the NDIC GIS map it's very difficult to tell / guess what's going on the Bakken.
The map has not been available for over a year, and it appears another year will go be before we see the map.
Here's what I'm working with now:
The writer noted that these wells will be sited in SESE 20-159-99 and at least for that well noted above will have the bottom hole in 32-159-99.
It looks like there is a mixture of 1280-acre spacing units and 1920-acre spacing units. When I see "LE" I suspect a 2560-acre spacing unit, but in the file information below, the "LE" well shows only two sections, but ...?
The wells, sited in section 20:
- 34515, 623, Kraken, Lyman Tracy 20-17 1TFH, Burg, t6/18; cum 214K 5/22; drilling unit, sections 20/17
- 34516, 629, Kraken, Deacno 19-18 1H, Burg, name suggests drilling unit, sections 21/16/9, running north; t--; cum 223K 5/22;
- 39092, conf, Kraken, Lyman 20-17-8 3H, Burg, name suggests drilling unit, sections 20/17/8, running north;
- 39093, conf, Kraken, Lyman 20-17-9 4H, Burg, name suggests drilling unit, sections 21/17/8, running north;
- 39094, conf, Kraken, Elias 21-16-9 2H, Burg, name suggests drilling unit, sections 21/16/9, running north;
- 39095, conf, Kraken, Sidney LE 29-32 12 TFH, Burg, name suggests drilling unit, sections 29/32;
- 39096, conf, Kraken, Jenna 28-33 2H, Burg, name suggests drilling unit, sections 28/33;
Sited in section 21:
- 30275, 367, Kraken/CLR, Elias 1-21H, bottom hole location not noted on December 18, 2014, daily activity report; however, scout ticket shows this well runs north from section 21 into section 16-159-99 t3/15; cum 190K 5/22;
- Other wells in section 16-159-99: none.
Sited in section 17: none.
Sited in section 19: Crescent Point Energy.
Sited in section 29: none.
Any corrections to this or my thinking process is welcome.
No Wells Coming Off Confidential List Today; WTI Down -- July 19, 2022
Keystone force majeure: cuts flow to the US. I doubt this will turn into much of a story. Later: back up and running in less than a week or thereabouts.
- EPS grew 88% in 2Q22
IBM: link here.
- forecast: Second-quarter revenue is expected to come in at $15.18 billion, up 6.9% sequentially but down 19.0% year over year. Adjusted EPS are forecast at $2.29, up 63.5% sequentially and 1.7% lower year over year. The current full-year estimates call for EPS of $9.76, up 23.1%, on sales of $60.93 billion, up about 6.3%.
- actual: $2.31 per share
JNJ: link here.
Stranded: scores of fuel ships off Mexico as Pemex debt mounts. Link here.
An estimated 60-plus vessels carrying imported gasoline, diesel and fuel are stranded off the coast of Mexico due to storage bottlenecks.
Unable to unload due to a backlog reminiscent of the height of the COVID pandemic when Mexico declared force majeure, fuel importers are paying some $40,000 a day per vessel in the waiting line, while Mexican state-run Pemex struggles in the red.
The vessels stuck in this holding pattern presently contain approximately 60% of Mexico’s monthly fuel demand. At the same time, oil exports by Mexico’s state-run Pemex continue to plummet.
********************************
Back to the Bakken
Far Side: link here.
WTI: $101.40.
Natural gas: $7.212.
NDIC GIS map: remains in-op.
Active rigs: 42 or thereabouts.
No wells coming off confidential list today.
RBN Energy: the combined impact of Russia and China on global products markets.
As the world economy tries to dust itself off after COVID, increased demand for transportation fuels coupled with tight supplies has become a pain. The shortage escalated to crisis levels this spring and summer when, in response to Russia’s invasion of Ukraine, sanctions eliminated Russian exports of crude oil and intermediate feedstocks to the U.S. and severely reduced flows to Europe. While Russia has been able to find some alternate markets, its overall product exports are down significantly. Adding to these product-supply reductions are policy decisions by Putin’s allies in China to reduce their product exports to a trickle. Chinese exports had been an important part of regional supply in recent years, but authorities there have decided to decrease the number and size of export quotas issued, leaving many refineries in China operating at rates well below their capabilities. In today’s RBN blog, we take a closer look at how developments in Russia and China have played a major role in the current global shortage of refined products.
Mind The Gap -- July 19, 2022
The official "family" photo: I noticed this last night -- these two guys really hate each other.
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