Tesla Gets CRUSHED

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California Considers Suing Exxon Over Plastic Pollution

Highlights of the Podcast

00:00 – Intro

01:19 – California Considers Suing Exxon Over Plastic Pollution

04:04 – Oil rises as dollar slips, focus shifts to economic data

05:56 – Tesla Investors Brace for Worst Financial Report in 7 Years

08:36 – Halliburton posts highest quarterly revenue in over a decade

10:04 – Matador Resources Company Reports First Quarter 2024 Financial and Operating Results

11:53 – EQT Reports First Quarter 2024 Results

14:36 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:15] What’s going on, everybody? Welcome into the Wednesday, April 24th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up California. Consider suing Exxon over plastic pollution. Absolutely unbelievable. Short news segment will dive then. Really right into what happened with the oil and gas markets. We did see oil and gas prices rise specifically on the crude oil side by about a dollar. We will go ahead then and cover quickly what the API crude oil guesstimate will be. But then we’ve also got for earnings lined up I want to look at Tesla absolutely has a horrendous earnings call. We’ll look at the results of that Halliburton post higher than expected quarterly revenue and the highest they have in over a decade. Now that’s in the oilfield services sector. And then we’ll finish specifically talking about Matador and equity earnings, which drop really just as the bell closed here. So guys great episode I am rocking a solo show today. Stu is out on assignment. So I’m going to go ahead and just kick us off. [00:01:18][63.7]

Michael Tanner: [00:01:19] California considers suing Exxon over plastic pollution I’m reading straight from the article here. California is close to completing a two year investigation into Exxon on allegations of plastic pollution. Once that conclude, the state will then decide whether or not to sue the super major for polluting or not. Okay, according to the State of California, the company, aka Exxon Mobil, has been involved in a, quote, half century campaign of deception and perpetuating myths around recycling. Absolutely unbelievable. Here’s the quote from California’s Attorney General, Rob Bonta. We are soon going to be ready to. We are. Excuse me. We are soon going to be ready to get to a decision based on all our investigation in the coming months. Lies and deceit Exxon used to cover up the truth about non-recyclable plastic is well documented. It’s absolutely unbelievable what’s going on right now. Exxon is spearheading back and basically saying this is diversion from the original problem, which really is pollution, Exxon’s head of product solution, Karen McKee, told the Financial Times. The issue is pollution. The issue is not plastic. This is a interesting side angle they’re trying to get at now. Now all of a sudden, plastic is emissions, which we can have more issues with. Too much plastic, whatever. And I’m not going to get into an argument whether on that. But the fact is that they’re trying to circumvent what they can’t already prove. It’s it’s pretty it’s it’s pretty hilarious. I feel sorry for Exxon. You know, they’re not even the California company, which is hilarious. They are. You know, if anybody Chevron is based in San Ramon right there. So you wonder why they’re going after Exxon and not Chevron. Maybe it’s because Chevron pays taxes in their state, and we might as well piss somebody else off and not the person in our know. So it’s very interesting what’s going on here. But, it’s an absolutely, pretty crazy story. You know, I get California’s going to do what California is going to do, you know, a two year investigation. Absolutely unbelievable. And not really else much else on the news front, us was was still being out. We’ll leave some of the geopolitical stuff, little quiet on the Western Front when it comes to what’s going on in the Middle East right now. So we’ll take that as a win. [00:03:30][131.2]

Michael Tanner: [00:03:30] We’ll go ahead and move over to the finance side. But before we do that, guys, I’ll quickly go ahead and just pay the bills here. As always, thanks for checking us out. EnergyNewsBeat.com The best place for all your energy and oil and gas news. Doing the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business, hit the description below all the links to the articles you can find us even time stamps. Check out dashboard.energynewsbeat.com data news combo again. Energy newsbeat.com. [00:04:02][31.7]

Michael Tanner: [00:04:04] You know from a from an overall market standpoint we saw the S&P 500 actually have a great day. They have about 1.2 percentage point Nasdaq doing a little bit better even without Tesla earnings 1.5 percentage increase. We did see the two year yields drop about three quarters percentage point ten year yield. Stay a hold fairly flat, only down about a 10th of a percentage point dollar index wiped about a half a percentage off of it. And we did see, bitcoin stay steady. About $66,000. Crude oil up about 1.8 percentage points. mainly as the the move in where people are looking at at at at the dollar shifts away from geopolitical what’s going on on Middle East to really here at home again the dollar index really falling to its lowest level in over a week, which is really where the you’re going to see that increase. Obviously there’s an inverse correlation between the dollar index and what’s going on in in oil prices. S&P global kind of showed some some slow business activity going on in April. Basically that marker came in about a four month low on a much weaker demand. And with that cheaper and with that cheaper greenback, as so-called, it is called. All around. You’re going to go ahead and see some of that demand shift internationally, which is going to help obviously, crude oil prices. Great quote from Andrew Lip out here in the article. The market has been under pressure from little to no growth out of the eurozone. So anything showing improvement should be supportive. We also did see a fairly positive API guesstimate on crude oil inventory reserves. As you guys listen to this. Here this morning at about 930, 1030, excuse me, 9:30 a.m., you’ll see crude oil inventories guesstimate out of the API is about a 3.2 million barrel draw, which is up from their forecast of 1.8 million. So this would set an interesting trend of of a draw here. So we’ll see if that’s a either a confirming or deny I’ve got for earnings. [00:05:56][111.7]

Michael Tanner: [00:05:56] I want to cover Tesla absolutely getting crushed. First off you know Tesla reports biggest revenue slide since 2012 and announces renewed push for affordable models. So to give you guys a heads up here, Tesla reported about a 9% drop in revenue in the first quarter, their steepest year over year decline since 2012. That corresponds, to about a stock price that’s down more than 40% year over year since the beginning of the year, which absolutely brings their which is absolutely crazy considering where their valuation was to where that is now. I want to go ahead and bring up this this article. Mr. Producer, if you don’t mind showing up Tesla quarterly revenues by segment. You can see all categories. or excuse me, you can see all categories. They’re mainly total automotive revenues. Take a big hit. Services and energy generation plus storage actually stay relatively the same. We saw Tesla’s automotive revenue decline 7 or 13% relative. So you can see there’s a little bit of growth in the services and the energy generation, which is super interesting. Tesla fans not too happy right now. The Tesla went ahead and did it. Its shareholder decade volume growth rate may be notably lower than the growth rate it achieved in 2023, which is interesting on the back of the fact they didn’t already hit their revenue. Now they’re going to say it may possibly, possibly be lower. Who knows? You know, they also did mention that they’re really looking at, you know, affordable models that quote unquote new vehicles, including more affordable models, be able to produce, on the same quality manufacturing lines. So, I mean, it’s clear with the in, as we’ve seen with the Chinese EVs, as they’ve come into the market and tried to lower that price down, it’s either a race to the bottom on price or a race to the top. And I think Tesla’s being smart and doing both. If I’m going to bet on anybody, it’s Tesla. But I do think there are some rocky. Rocky roads ahead, and it’ll be interesting to see how they go about doing this. As you can see, the quarterly net income, if you scroll down later in the article, we can also just toss that image up here. Tesla quarterly net income hit pretty crazy. In 2024, or in in first quarter 2024. So if you want to talk about, some of a reversion to the mean, you know, absolutely, absolutely unbelievable revenue came in as I, you know, they it was a 9% drop in revenue. You know, they had about 27.1 billion in revenue. Earlier in the year, in the more in the morning, we saw analysts expecting about a 22.3 billion barrel, billion, dollar print. So, you know, I mean, what do you expect to get? I think it’s a race about to be very interesting to see where Tesla goes, but I’m going to bet on anybody. It’s going to be Elon Musk figuring this out. Because he has approved this wrong. [00:08:35][159.2]

Michael Tanner: [00:08:36] Next move over to Halliburton. They go ahead and post higher quarterly revenue in over a decade. Reading straight from the article here, Halliburton posted its highly highest quarterly earnings in over a decade, after bringing total revenues, of about 5.8 billion in the first quarter of 2024. That marks a 2% increase compared to the first quarter of 2023. net income sat at about 606 million, which is actually down compared to the first quarter of last year. But adjusted net income, was actually up. Revenue was increased by 12% growth from the company’s international sales. We we actually talked with Jeff Tremmel on his soon to be released, deal spotlight specifically about this issue, that international sales have continued to rise. It’s one of the things that Schlumberger will probably tout when they go and how announced their earnings and what they also go ahead and announced is that this was balanced by falling North American revenue down 8% year over year. What was interesting, they said, was this was a decline primarily driven by their lower pressure pumping services in U.S. land, along with lower wireline activity. Interesting. So, now that means what does wireline mean? Me probably means, you know, we’re seeing frax come down, and we’ve known that for a little bit. So as the US fracking and really the gas, you know, side of the fracking market, we’re seeing all of these companies lay down completions rigs. That’s going to gain impact because that’s a you know, it’s a high margin service right there. And they’re not cheap trust me. So Halliburton, for all that being said, continues a record quarter good for everybody over Halliburton. We’ll look for Schlumberger here later this week. [00:10:03][87.6]

Michael Tanner: [00:10:04] Let’s move to Matador. They go ahead and and just recently announced their first quarter earnings report I’ll kind of read you the. To top headlines from them. They average production of about 149,760 boe per day. That works out to about 800 or 84,777 barrels of oil per day. So you can kind of see the split there. Net cash provided by operating activities. About $468 million. Adjusted free cash flow, about $26 million. Man, these people love to spend money on CapEx. CapEx in the first quarter came out to be about $350 million. And midstream capital was about 79 million. So you’re talking about $420 million capital. This boy, these people love, love to spend again, 468 million of of net cash flow or net cash provided by operating activities, which is a good metric of how much you’re throwing around there. Super, super interesting. You know, they also did see realized commodity prices of about two, $2 change relative to what they saw in the fourth quarter of 2023. And that’s interesting. I our price is going up. So it’s going to be very we’ll be interested to see their their their guidance was actually higher for CapEx at 385 than when it came in and at $350 million. And they did see a small, small production increase. So, you know, the market will like that. I do find it interesting, though, that they did they did see a drop of about 60 million in actual net income, which is a, a gap, rated accounting relative to quarter over quarter. But it was up from 163 million a year ago. So, I mean, they continue to, to, to obviously people are seeing an issue with, with with what’s going on in the Permian right now in terms of having to shut in and waha gas, differentials. But I think companies are continue to fight back. [00:11:52][108.5]

Michael Tanner: [00:11:53] The next one we see EQT. And I and I want to point out a couple things here. I mean obviously equity being a natural gas generator, natural gas, company, it’s going to you’re going to see a little bit of a hit. You know, they had about 1.1 billion, of net cash provided by operating activities, 400 million of free cash flow, and had about 650 million left on the balance sheet. Losses got down to about 10% or $0.10 per mix. Lowered debt, to about 5.7 billion. That was, down from 5.8 billion. They also went ahead and did some stuff down there in the Texas LNG, by upsizing their, their, liquefaction capacity from 2.5 million tons per annum to two, they went ahead and closed on that equity midstream deal. And they did do an they, they, they had agreement to sell about 40% of their non-operated natural gas assets for about a $1.1 billion, you know, so, I mean, and I mean, being a natural gas producer, guys, we already know their, their their their their their their laying rigs down or excuse me, they’re laying frack rigs down, as we saw from Chesapeake and Southwestern, them announcing the same thing. I, I always like to again go ahead and just look at the, the, the, the, the net income specifically for the, the, the, the year over year. So to give you guys an idea about last year, they had about 1.2 million, 1.2 billion in adjusted EBITDA, for the, the, the, the, the quarter. And we saw, in 2024, we saw about one point only 1.01 billion of adjusted EBITDA. So you seen about a drop of about 200 million there. And then from a, from from the free cash flow perspective, and then the last three months of 2020 are the last three months for, first quarter 2023, excuse me, 773 million of free cash flow. It as we stand today is 401. So about a drop of, about 30%. So you can see 3,040%. You can see where gas prices are really hitting them in their they do a really good job of, of, of hedging. I think their net backs, they, they have them in here, I want to I had them and I, and I just lost them. I think their net backs put them about average real pricing about, you know, $3.22. So that’s, that’s pretty good considering you’re going to come in and have to do a lot of hedging. Obviously the higher that price, needs to be, their total unit property costs about $1.36 there about a 50% margin right now, which is a terrible, but, you know, obviously with higher gas prices, we’re going to yield some, some higher revenue. So you can just kind of see what low natural gas prices are doing. Some interesting to see when they can get this midstream closed. [00:14:35][162.5]

Michael Tanner: [00:14:36] But long show today guys on the finance side. We’ll let you get out of there. It’s earnings season. What can you expect. Appreciate everybody checking us out here on the world’s greatest podcast www.EnergyNewsbeat.com for all your news I’m Michael Tanner. We’ll see you tomorrow folks. [00:14:36][0.0][856.1]

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