SharperDingaan

People will complain no matter what. However, they will complain a lot more when their home is flooded, or burnt out from forest fire. Rising sea levels breach the dyke walls, the Netherlands flood, and a great many people starve. Will it happen ? when will it happen ? what can we really do about it ? Nobody really knows. But if we can collectively do something about it, and it works - we still all have a dry house. A lot better than praying it will never happen, and tossing around beads and holy water every now and again. An individual can always leave, or relocate to the top of a mountain; but for most, that just isn't an option. Sure, your leadership may be utter scum, but it's still a lot better than trying to do this by yourself. SD

Pretty sure that the powers that be, know what they need to do. The reality is that for 'legal' oil, in the short-term there are no production fixes, large enough to move the dial net of existing depletion; drill baby, drill is not an option when there just aren't the people, and supplies required. To get more oil they need a deal with Iran, moving their 3.5M bbl/day+ from 'illegal' to 'legal'. There is lots of gas, and more every day as the gas cut continues to rise in the US shale fields. But with the limited infrastructure, in the short-term it's landlocked and largely stranded. New infrastructure takes a while to build, hence the difference in US vs European gas prices. The reality is that additional production is limited to existing facilities, and a flatter curve for the next 12-24 months just isn't enough to warrant the rebuild/revamp required. In 24 months there could well be a new administration, and a wholly new energy policy, that strands whatever you do today. The rational thing is to extract greater efficiencies from what you already have, and leave the rebuild/revamp alone. The irritant is the extreme cashflows the industry is throwing off, and its 'win' status in the economy. The presence of energy costs in most inflation components, is an additional problem. Politically, a windfall tax is inevitable, and as soon as it is imposed - goodwill goes out the window. Short of some kind of 'war time' nationalization, if you want lower o/g prices, the global economies need to go into recession. If everyone wants to keep working, the cost is higher o/g prices for the foreseeable future. SD

Sucks when spot-futures parity doesn't hold up Futures Price = Spot price *(1+ rf )– d https://zerodha.com/varsity/chapter/futures-pricing/ The reality is that in this market - the spot market, not the futures market, is driving the show. If you needed evidence of that - SA raising the price of crude by $2.80/bbl, on the same day that futures decline $10.00/bbl+. Either the folks producing the stuff are very wrong, or its the paper traders. A physical product that paper traders know squat about producing/delivering, in what is an already obviously tight market, that is clearly getting tighter ? Many would suggest that this is really governments attempting to use the futures market, to drive the spot price down, and lower prices at the gas pump. Basically, if you cant get the price down via OPEC pumping more, try using the futures market instead ? So what does it tell you - when both approaches have resulted in failure ?? We live in interesting times. SD

Your broker could collapse tomorrow, taking your money and certs with it. If the broker was regulated, the industry would subsequently collectively step in to make you whole again, but it could take years until you can access your wealth again. However, for most applications, this is adequate. If you want the greater protection you need the encrypted wallet, and it is where the bulk of your portable wealth should be kept, inclusive of your block certs, bullion receipts, NFT's, etc. In the Ukraine example, digital versions of your school and university certificates, property deeds, will, asset provenances. etc. Each document stored in a block, requiring a Smart Contract to open it, with the private keys stored in the wallet. SD

The great thing with an o/g engineering background, is the foundation it gives you. That ability to easily assess, synthesize, optimize solution/risk, and comfort with developing/evolving technology, is a massive advantage. Compound that with practical field experience amongst the roughnecks, and the typical 'office' experience, and your people skills are up there as well. Of course, you're still an engineer ... so a man/women has to know his/her limitations ! As your spouse will remind you !! We routinely think of GPS as devices linked to geo-stationary satellites. I would suggest that not that long from now, it will also be drill-heads (in very hostile environments) linked to in-ground acoustics, and directional drilling with the ability to make multiple directional changes. Simply because if you are going to sequester CO2 efficiently, you need a grid of fracked holes in the pay zone, drilled from as few platforms as possible. 3D awareness of where the drill-bit is at all times, and an accurate map of hole in the pay-zone - so that you ONLY frack in YOUR pay-zone. Versions of the same technology being used for fishing, undersea drilling, methyl-hydrate production, and robotic asteroid mining for water components. Obviously .... the future is bright. SD

I did my undergrad at UoC in the 70's, and was of those in the first shut down of the Petroleum Engineering program at UoC. Students simply switch to one of the other engineering disciplines, or do something else entirely. I was one of a few who passed through geology on the way to business. Sure, it hurts, but it's cyclical. In my time things were so bad that engineers with 30+ years of experience couldn't get a job, and a great many people were losing their homes to sheriff sale/foreclosure on a weekly basis. Things were so bad that houses were being auctioned under 1930's depression laws. Social scaring akin to the depression era, should have put people off o/g 'forever'; it didn't, it just made them smarter for the next time around. Second time around, folks were better at boom/bust, but lessons were still being learnt. Hence the famed bumper sticker: “Please God, give me one more oil boom. I promise not to piss it all away next time.” This is third time around, and today folks are a whole lot smarter. There is a reason why the WCSB is so much further ahead than most of the US, and why the 'manufacturing' approach is sticking so well. Been to this rodeo, done that, got my head kicked in, twice! It's all third time survivors/family, with very deep experience As o/g technology changes, so does the o/g engineering, and the need for new o/g engineers. There just may not be as many as they were, and the new engineer will look very different from the old. I would suggest that in a few years the UoC petroleum engineering program will be roughly 1/2 robotics and 1/2 o/g engineering. https://calgary.ctvnews.ca/university-of-calgary-suspends-admission-for-oil-and-gas-engineering-program-1.5502133 SD

"If you wish to improve the environment, you need economic growth (Kuznets curve). For economic growth, you need energy. Today, that means oil & gas." Nah. It means you need sustainable growth, evaluated against ESG metrics. Follow the Kuznets curve and we all croak, when we eventually run out of resources (Malthusian). Yeast in a sugar solution either dies from starvation (no more food/resources) or alcohol poisoning (pollution). https://en.wikipedia.org/wiki/Malthusianism Of course if you think you're going to croak well before everyone else .... Then you don't give a sh1te SD

ESG is evolving. The idealist environmentalist wants carbon reduction by either NOT producing carbon, or producing only MINIMAL carbon. Whereas the industry/political approach, is to produce carbon more efficiently, and reduce emissions over time. Energy via more solar, wind, nuclear that doesn't produce carbon - versus energy produced on a carbon/joule basis. Global warming/ESG is accepted fact. Even if you don't agree, mitigation of the growing scale and number of natural disaster impacts simply makes it prudent to follow. The implementation approach is evolving, but ESG itself isn't going away. Not a bad thing. SD

We hold our crypto as an ETF, as direct purchase just isn't worth the cost/wallet/infrastructure risk. ETF's are diversified, professionally managed, and out of our 'mind space' - dentists don't do their own teeth. We want a flyer we either do it using a cash/index pair. or CME options/futures - via a mainstream broker. Could care less which broker, as long as the account is protected under industry regulation. The broker goes under, we're getting our position back - even if it takes a while. SD

This changes quite a bit, once people have taken a course in fintech ..... The token $ investment is primarily just to learn the app's, and how to use them; the $100 in Shite Coin is just for the experience. Little different to paying a monthly fee to Amazon, to access the services Amazon provides, and buying a pair of tickets to some event. The more mature folks buy a crypto ETF, and average into it via a monthly purchase. The intent being either to raise a down payment in 5-10 years, or fund a child's future university education in 15-20 years. Use the time to become comfortable with its evolution, trade the developing opportunities as you see them, and position yourself to have a stake in the changing technology. SD

The Q2 parade of record cashflows is starting ... Not just cashflows, but multi-billion write-down reversals as well. https://www.theglobeandmail.com/business/industry-news/energy-and-resources/article-shell-gets-1-billion-refining-boost-upgrades-oil-and-gas-assets/ " Shell said on Thursday surging demand for oil products that had almost tripled refining profits in the second quarter would boost earnings by up to $1.2 billion. In an update before second quarter results on July 28, Shell also said it would reverse up to $4.5 billion in write-downs on oil and gas assets after it raised its energy prices outlook following Russia’s invasion of Ukraine." SD

As Spec points out, with investors trading trends - a downward trend typically generates a larger change (magnitude) than a positive one does. We often don't see it, as the % change (change/starting price) to both trends is roughly the same. So what? Momentum traders can be exploited - and the more volatility the better. Buy today in expectation of a higher dividend, a share buyback, and greed replacing fear -the $10 share going to $15 (50% more). Sell into the trend after record date, and buy it back at $7.50 (50% less). Collect the dividend plus $12.50 (($15-$10) + ($15-$7.50)). Swing trade producing a gain of 125%+ ($12.50 + div/$10.00 cost). Now an enterprising lad at a GS might choose to do this with options instead and set him/herself up to win the bonus pool this year .... We have an allocation of quality Beluga vodka and caviar to dispose of! Make some money - so that we can shift them through your club of choice !! SD

All I hear, are addicts screaming for the economic put. A recession is coming!, my portfolio is down many % !! I can't handle the volatility! make it go away!! Cut gas prices!, stop the cost of living hikes !!, stop the interest rate hikes !!! GIMME the put !!!! The reality is that a wall of sky high CF is about to be reported, along with massive shareholder distribution. "Exxon could post about $18 billion in profit when it reports second-quarter earnings later this month, according to Wells Fargo. A year-ago second quarter, Exxon earned $4.7 billion, or $1.10 per share, which beat estimates." https://www.barrons.com/articles/exxon-earnings-stock-analyst-51657031089 ... and it's not just Exxon, it's the entire industry Sure, WTI fell $8-10 today. $95-105 is still a very good number, and was pretty much the average for Q2,2022. Record cashflows can absorb a lot of volatility. O/G is volatile, that's why people invest in it - it can go up just as quickly as it can go down. However, I would put if to you that if you did NOT have an o/g exposure in your portfolio, your 2022 YTD return would be a lot closer to the S&P500 return, or -18.9%. Sure, you're down today, but are you down the -18.9% YTD ? Probably not. Take a powder. SD

"If you believe in value investing, it is possible to evaluate profitability, valuation, quality etc and place a bet on price direction. You can be wrong, but iteratively you can learn and improve. " Hate to tell you this, but an investment in crypto is the same process. Value investors are simply trying to put a value on the future stream of tangible cashflows that the investment is expected to generate. Crypto investors are simply trying to put a value on the intangible benefits that the investment is expected to generate. If you think an asset has to generate a future cashflow - or it cannot be valued ... I sadly have news for you ! Almost everyone would agree than an attractive and unattached member of the opposite sex, in a crowded bar, on a Saturday night, clearly has value ! .... and it is entirely intangible !! SD

Most young people aren't going to have much in savings - 50K would be a big number. Blow up and maybe you lose 50% before bailing out at 25K. Win big, maybe you make 100%, before panic selling at 100K. That 100K as a DP would allow you to buy 1/2 an apartment - today. That 25K loss you have your whole working like to recover from. If you have youth, ability to risk, and the risk appetite - it's dumb not to take the risk. Today, BTC is priced at < 1/3 of what it was in November (8-months ago). Most young people would also wait until they saw BTC stabilize for a few weeks (ie: a lower price than today). If that meant a buy at another 1/3 less than todays price? they probably aren't taking much of a risk. Grandpa value investor wouldn't hesitate were this a blue chip, the kid just chooses crypto instead - more in synch with his/her times. SD

Keep in mind there's a big difference between $200 for a few minutes, and $200 for weeks/months ... $200 is just bait, red meat hung out before a pack of dogs to get them to run faster. The dogs here, being the GS, MS, and the many others in a very frothy testosterone fueled environment. Be a stud! make yourself famous as the first one to nail $200 !! .... celebrate it with a case of Crystal afterwards !!! My money is on the testosterone. Nothing to do with whether it is rational or not. SD

Back in the day, before crypto, the get rich quick stock was 'Moose Pasture Inc", and the exchange of choice was the VSE. Holes in the ground, with promoters on top ... selling o/g, mining, weed, etc .... whatever a good story could be spun around. Crypto is just the latest version. Of course it's a crapshoot, most people are going to be wiped out. But if you are one of the few who win, most will win a prize big enough to do something with - deposit on a house, start a business, etc. Whether by pure luck, or skill, same result. However - you must have the maturity to subsequently 'step away from the table'. Of course .... many don't have it. You aren't going to raise a DP, while still a young man/women, by buying 'grandpa stocks'. You have to take risk, and do it when you can best afford to - when young, unattached, and without mortgage and kids to pay for. Coffee servers are just being rational. Oh ... but the dollars involved are HUGE !!!. Bullshit ..... It's roughly the same amount that it was decades ago MULTIPLIED by the compound inflation from your choice of start date through to today. YOU were also utter sh1te when you first started investing, and probably lost your shirt at least once before you finally got your act together. Give someone else the chance ! SD

19,212, and falling. July-02-2022 @ 1:35 AM UTC. Pretty sure we're going down to the 12,000+ level - woo hoo! Sorry, but we're with rkbabang on this one. SD

A lot of smaller companies will hit debt targets in Q2, Q3 2022. Others already have, and Q2 2022 earnings will be their first variable payouts at their newly stated FCF %. WCP will shock, once the market realizes that even with the dividend rising 22%, the recent 1.7B acquisition could be paid off within 12 months. The oil sands sellers have no market, and there is little rush for buyers to make one. Buyers are focused on dividends and buybacks; buying high carbon production is far down the list, and not going to happen unless it improves ESG/unit. Welcome to stranded assets SD

A $200/bbl spike is not unreasonable, but the mystery is for how long ... However, companies are not going to be able to cut back on variable dividend/buyback commitments, and in most cases that is around 60% of FCF once debt has been paid down. At $200/bbl FCF may be spectacular, but only 40% of FCF will go to new drilling - not the more customary 100%+ under drill baby drill. It's going to take a long time to get back to 'normal'. It's also useful to research how DUC inventory works. Uncompleted wells are just wells awaiting fracking, casing, clean up and tie-in, typically coming out of inventory on a LIFO basis. They are mostly horizontal wells, and cannot be fracked until casing is available to hold the hole open. Once fracked, for the cracks to remain open they need to go into production fairly quickly. Because labour, sand, chemical, casing, rigs, pressure pumps, etc. are in short supply, it is taking longer to put wells into service. Hence, DUC inventory is a good 10-20% higher than it ordinarily would be. The inventory IS there - but as supply chain issues unwind ... it is going to shrink quickly. Beware the head fake. SD

This is very quaint A great many people would argue that in the real world, the more of a bastard/thief you are, the wealthier you are. Sure, WEB did well .... but compared to a Putin, MBS, etc. ? ...... WEBs pile is chicken shit !! Always go with the scum of the earth. They stay rich, because they are very good at what they do ! SD

Thing is; that 0.1% are either miners HODLing, or the very unsavory 'hiding' their wealth. Mess with BTC, and they primarily hurt themselves. Sounds like very effective decentralized and distributed incentives to me! SD

It is more along the lines of having secure feedstock (downstream), and raising the value of what comes out the ground (upstream). Control the whole value chain, and it no longer matters whether you are making your money on the upstream or downstream sides of the chain. What matters is that you have control, and the scale to take advantage of opportunities as they arise. SD

Be cautious around refining; it's the obvious place for a 'temporary' windfall tax. Refiners are also often 'vertically' integrated, and not stand-alone businesses - for very good reason. Europe will likely have some kind of residential domestic price cap on gas this winter. Very likely a similar kind of price cap on key items in the CPI calculation as well. Inflation that cannot be reduced through higher interest rates - swept under the rug through price caps financed via long term state debt issuance (ie: tied up in a condom). Energy continues to rip, voters express their thanks, and Ukraine effects sterilized. Tried and tested (AIG), and very German. SD

Part of the charm to a CBDC, is ability to pay daily interest on the CBDC in your wallet ..... Whatever this rate is, if a commercial bank is to entice the user to keep their short term funds at the bank, they must either match this rate or pay higher; the CB gets control over the deposit rate. However, it also means the rate CANNOT be negative; 'cause if it were - you would either just stuff cash in your mattress (avoid paying interest/fees all together), or always pay from a linked LOC with a permanent negative balance in it CBDC is coming, but it's not a straight-forward simple roll out. SD