Toll Free: 1-855-219-6008

Drilling Down: Exxon Mobil awakens [Houston Chronicle]

Oil and Gas Invoice FactoringAug. 5–Exxon Mobil is preparing to drill dozens of new oil wells across the Permian Basin and Eagle Ford Shale. Over the past week, the supermajor filed for 53 drilling permits with the Railroad Commission of Texas, the state agency that regulates the oil and gas industry.

Exxon’s shale drilling arm XTO Energy is targeting the Eagle Ford geological in eight new horizontal wells planned for La Salle County in South Texas. Out in the Permian Basin, XTO is targeting the Spraberry formation on 33 new horizontal wells planed in Martin County, another eight in Midland County and three more in Upton County.

A directional well planned in the Permian Basin’sAndrews County targets the Fullerton field.

With some 10,450 leases across the state, Exxon Mobil, headquartered in Irving, is ranked as the top driller in Texas in terms of drilling permits. The company’s wells produced nearly 44.3 million barrels of crude oil and more than 591.6 billion cubic feet of natural gas in 2018.

Permian Basin

Top 10 Drillers in Texas

Denver oil company Felix Energy plans to drill 21 horizontal wells in on its Smoking Joe lease in Loving County. Located about 12 miles west of Wink, 16 of the wells target the Phantom field of the Wolfcamp formation while remaining five target the Two Georges formation of the Bone Spring formation.

Eagle Ford Shale

British oil major BP is planning to drill 17 horizontal wells on South Texas leases it recently bought from BHP Billiton. The company is targeting the Eagle Ford Shale with10 wells planned for Karnes County. BP is targeting the Austin Chalk formation with six wells in Karnes County and one in neighboring DeWitt County.

Haynesville Shale

The recently formed Austin oil company Eagle Valley Development is preparing for its first drilling project in East Texas. The company is seeking permission to drill a horizontal well on its Moss Creek Unit lease in Nacogdoches County. Located about five miles west of Chireno, the well targets the Carthage field of the Haynesville Shale down to a total depth of 15,000 feet.

Barnett Shale

Houston oil company Lime Rock Resources is planning to drill four horizontal wells on its Shifflet lease in Denton County. Located about 5 miles northwest of Ponder, the wells target the Newark East field of the Barnett geological formation down to a total depth of 8,700 feet.

Conventionals

Midland exploration and production company Unitex Oil & Gas is preparing drill four vertical wells on its Howe lease in Winkler County. Located about four miles northwest of Kermit, the wells target the Kermit field down to a depth of 5,000 feet.

sergio.chapa@chron.com

twitter.com/sergiochapa

___

(c)2019 the Houston Chronicle

Visit the Houston Chronicle at www.chron.com

Distributed by Tribune Content Agency, LLC.

Ohio House members now can get reimbursed for their hotel bills: Capitol Letter [Advance Ohio Media, Cleveland]

Aug. 2–Rotunda Rumblings

Overnight stay pay: Ohio House members now are able to get up to $65 of their hotel costs reimbursed, as long as they’re staying in Columbus for a committee meeting or voting session, and live more than 60 miles away, cleveland.com‘s Andrew Tobias reports. The change, announced by House leaders on Wednesday, could be worth around $3,100 per member, according to our back-of-the-envelope calculations. Sorry state senators — you still have to pay your entire hotel bill yourself.

Trump rallies Cincinnati crowd: President Donald Trump mostly stayed away from racial politics as he hosted a Thursday night rally at the US Bank Arena, cleveland.com‘s Laura Hancock reports. He hit on a number of topics that played well with his supporters, including his trade fight with China and illegal immigration.

Follow the money: Trump has collected far more money from Ohio political donors than any other presidential candidate, with the campaign of Ohio congressman Tim Ryan getting the most cash from the state of any Democrat, reports cleveland.com‘s Sabrina Eaton. Although former Vice President Joe Biden led other Democratic contenders in a recent poll of Ohio voters, his fundraising in the state ranks sixth among his party’s presidential candidates.

Take a flyer on this: Here in Ohio, we’re part of what coastal elites condescendingly refer to as Flyover country. But guess what? The Heartland is going to decide the next presidential election, and we’re going to wear the label proudly. Let us introduce you to The Flyover, a weekday newsletter we’re launching this week to highlight the issues that matter to us, to examine the shared identity of the heartland states and to unify our voice and demand that candidates put our issues at the forefront of their campaigns. Chief politics writer Seth Richardson will be your pilot. You can subscribe for free here.

Deal or no deal? Mahoning Valley officials “working to find a company for the idled General Motors Lordstown complex don’t know what Vice President Mike Pence is talking about when he said Workhorse Group Inc. and an affiliated entity have the money in place to buy the plant,” the Youngstown Vindicator’s David Skolnick reports. Pence made the remark Tuesday in Ohio. As you might recall, in May, Trump tweeted as if the deal was already sealed for Workhorse, an electric truck maker, to buy Lordstown, prompting a note of caution from Gov. Mike DeWine.

Not on the same page: Rep. Tim Ryan during the Democratic presidential debate this week said Medicare for All is against union interests, framing the issue as causing workers to “lose their health care because Washington is going to come in and tell them they have a better plan.” But Vox’s Tara Golshan found union leaders, including Randi Weingarten from the American Federation for Teachers and Sarah Nelson, president of the Association of Flight Attendants, who support Medicare for All. Nelson called Ryan’s suggestion “offensive to me.”

If only we could think of a pun for this: Douglas J. Swearingen, of Huron, is the newest member of the Ohio House of Representatives following his swearing-in ceremony yesterday. Swearingen is a business and probate attorney and chairman of the Erie County Republican Party. He’s replacing Steve Arndt, who retired from the legislature with plans to sail around the Great Loop of North America.

Road show: House Minority Leader Emilia Sykes has launched her “Ohio Promise” tour of Ohio, plugging Democrats’ efforts in Columbus at stops across the state. She launched the tour in Akron Wednesday and stopped in Canton Thursday. Further events are planned this month in Ravenna, Whitehall, Solon, Cleveland, Cincinnati, Toledo and more.

Preempt the purge: Ohio voters can now search a database to find out if their registration is at risk of being purged from the rolls next month, Tobias reports. Secretary of State Frank LaRose’s office put together the database.

For the record: A Franklin County judge has authorized moving records from the closed online charter school ECOT to a new computer server to preserve them for litigation and investigations, reports the Dispatch’s Catherine Candisky. The data from the controversial Electronic Classroom of Tomorrow is “now stored on a failing server with components up to 15 years old,” Candisky writes.

Ruling bumped: A state appellate court has ordered a Franklin County judge to re-open a case challenging the city of Columbus’s ban on bump stocks, the Columbus Dispatch’sBill Bush writes. The court ruled Judge David E. Cain erred when he “combined a preliminary injunction hearing with a hearing on the merits of the case, over the city’s objections that it hadn’t been given notice,” according to Bush. The ban, for now, is back in effect, according to City Attorney Zach Klein.

Buckeye Brain Tease

Question: Columbus has served as Ohio’s capital city since 1816, taking the reins from Ohio’s first capital, Chillicothe. But which Ohio city had a brief stint — bookended by Chillicothe before and after — as Ohio’s second capital city?

Email your response to capitolletter@cleveland.com. The first correct respondent will be mentioned in next week’s newsletter.Thanks for responding to last week’s trivia question:The lead singer for which 1970s funk band grew up in Mingo Junction in Jefferson County?

Last week’s answer: Rob Parissi founded Wild Cherry in 1970, not long after he graduated from Mingo Junction High School. Wild Cherry was a rock band that played in the Ohio Valley, Cleveland and Pittsburgh before recording “Play That Funky Music” in 1976 in an attempt to capitalize on the popularity of disco. Beachwood-based Sweet City Records released the song, which turned into a massive hit, leading both the pop and R&B charts at one point. Mingo Junction honored Parissi with a ceremony in 2013 that included a proclamation from then-Gov. John Kasich.

Capitol Letter reader Lt. Gov. Jon Husted was the first to send in the correct answer. Husted, who has correctly answered Buckeye Brain Tease for the third time since it launched in February, told us he gets up at 5:45 a.m. on Fridays to work out, is competitive and enjoys Ohio trivia and history. Thanks to everyone who responded!

Birthdays

Friday, 8/2: Craig Forbes, Ohio Department of Administrative Services chief of staff; Joshua Distel, Buckeye Institute executive assistant and office manager

Saturday, 8/3: State Sen. Bob Hackett; Andy Swaim, Ohio House project manager

Sunday, 8/4: Margaret Basie, Ohio House Higher Education Committee clerk/legislative aide to state Rep Craig Riedel; Gail Crawley, Ohio House Republicans communications director

Straight From The Source

“Oh yeah, of course you are.” — PFT Commenter, the Barstool Sports personality (and past cleveland.com interviewee), after Tim Ryan told him he’s a fan of Dave Matthews Band. PFT Commenter sat down with Ryan — with Ryan more or less holding his own — for an irreverent interview this week in the aftermath of the Democratic debates.

Capitol Letter is a daily briefing providing succinct, timely information for those who care deeply about the decisions made by state government. If you do not already subscribe, you can sign up here to get Capitol Letter in your email box each weekday for free.

___

(c)2019 Advance Ohio Media, Cleveland

Visit Advance Ohio Media, Cleveland at www.cleveland.com

Distributed by Tribune Content Agency, LLC.

Ohio House members now can get reimbursed for their hotel bills: Capitol Letter [cleveland.com]

Rotunda Rumblings

Overnight stay pay: Ohio House members now are able to get up to $65 of their hotel costs reimbursed, as long as they’re staying in Columbus for a committee meeting or voting session, and live more than 60 miles away, cleveland.com’s Andrew Tobias reports. The change, announced by House leaders on Wednesday, could be worth around $3,100 per member, according to our back-of-the-envelope calculations. Sorry state senators — you still have to pay your entire hotel bill yourself.

Trump rallies Cincinnati crowd: President Donald Trump mostly stayed away from racial politics as he hosted a Thursday night rally at the US Bank Arena, cleveland.com’s Laura Hancock reports. He hit on a number of topics that played well with his supporters, including his trade fight with China and illegal immigration.

Follow the money: Trump has collected far more money from Ohio political donors than any other presidential candidate, with the campaign of Ohio congressman Tim Ryan getting the most cash from the state of any Democrat, reports cleveland.com’s Sabrina Eaton. Although former Vice President Joe Biden led other Democratic contenders in a recent poll of Ohio voters, his fundraising in the state ranks sixth among his party’s presidential candidates.

Take a flyer on this: Here in Ohio, we’re part of what coastal elites condescendingly refer to as Flyover country. But guess what? The Heartland is going to decide the next presidential election, and we’re going to wear the label proudly. Let us introduce you to The Flyover, a weekday newsletter we’re launching this week to highlight the issues that matter to us, to examine the shared identity of the heartland states and to unify our voice and demand that candidates put our issues at the forefront of their campaigns. Chief politics writer Seth Richardson will be your pilot. You can subscribe for free here.

Deal or no deal? Mahoning Valley officials “working to find a company for the idled General Motors Lordstown complex don’t know what Vice President Mike Pence is talking about when he said Workhorse Group Inc. and an affiliated entity have the money in place to buy the plant,” the Youngstown Vindicator’s David Skolnick reports. Pence made the remark Tuesday in Ohio. As you might recall, in May, Trump tweeted as if the deal was already sealed for Workhorse, an electric truck maker, to buy Lordstown, prompting a note of caution from Gov. Mike DeWine.

Not on the same page: Rep. Tim Ryan during the Democratic presidential debate this week said Medicare for All is against union interests, framing the issue as causing workers to “lose their health care because Washington is going to come in and tell them they have a better plan.” But Vox’s Tara Golshan found union leaders, including Randi Weingarten from the American Federation for Teachers and Sarah Nelson, president of the Association of Flight Attendants, who support Medicare for All. Nelson called Ryan’s suggestion “offensive to me.”

If only we could think of a pun for this: Douglas J. Swearingen, of Huron, is the newest member of the Ohio House of Representatives following his swearing-in ceremony yesterday. Swearingen is a business and probate attorney and chairman of the Erie County Republican Party. He’s replacing Steve Arndt, who retired from the legislature with plans to sail around the Great Loop of North America.

Road show: House Minority Leader Emilia Sykes has launched her “Ohio Promise” tour of Ohio, plugging Democrats’ efforts in Columbus at stops across the state. She launched the tour in Akron Wednesday and stopped in Canton Thursday. Further events are planned this month in Ravenna, Whitehall, Solon, Cleveland, Cincinnati, Toledo and more.

Preempt the purge: Ohio voters can now search a database to find out if their registration is at risk of being purged from the rolls next month, Tobias reports. Secretary of State Frank LaRose’s office put together the database.

For the record: A Franklin County judge has authorized moving records from the closed online charter school ECOT to a new computer server to preserve them for litigation and investigations, reports the Dispatch’s Catherine Candisky. The data from the controversial Electronic Classroom of Tomorrow is “now stored on a failing server with components up to 15 years old,” Candisky writes.

Ruling bumped: A state appellate court has ordered a Franklin County judge to re-open a case challenging the city of Columbus’s ban on bump stocks, the Columbus Dispatch’s Bill Bush writes. The court ruled Judge David E. Cain erred when he “combined a preliminary injunction hearing with a hearing on the merits of the case, over the city’s objections that it hadn’t been given notice,” according to Bush. The ban, for now, is back in effect, according to City Attorney Zach Klein.

Buckeye Brain Tease

Question: Columbus has served as Ohio’s capital city since 1816, taking the reins from Ohio’s first capital, Chillicothe. But which Ohio city had a brief stint — bookended by Chillicothe before and after — as Ohio’s second capital city?

Email your response to capitolletter@cleveland.com. The first correct respondent will be mentioned in next week’s newsletter.Thanks for responding to last week’s trivia question:The lead singer for which 1970s funk band grew up in Mingo Junction in Jefferson County?

Last week’s answer: Rob Parissi founded Wild Cherry in 1970, not long after he graduated from Mingo Junction High School. Wild Cherry was a rock band that played in the Ohio Valley, Cleveland and Pittsburgh before recording “Play That Funky Music” in 1976 in an attempt to capitalize on the popularity of disco. Beachwood-based Sweet City Records released the song, which turned into a massive hit, leading both the pop and R&B charts at one point. Mingo Junction honored Parissi with a ceremony in 2013 that included a proclamation from then-Gov. John Kasich.

Capitol Letter reader Lt. Gov. Jon Husted was the first to send in the correct answer. Husted, who has correctly answered Buckeye Brain Tease for the third time since it launched in February, told us he gets up at 5:45 a.m. on Fridays to work out, is competitive and enjoys Ohio trivia and history. Thanks to everyone who responded!

Birthdays

Friday, 8/2: Craig Forbes, Ohio Department of Administrative Services chief of staff; Joshua Distel, Buckeye Institute executive assistant and office manager

Saturday, 8/3: State Sen. Bob Hackett; Andy Swaim, Ohio House project manager

Sunday, 8/4: Margaret Basie, Ohio House Higher Education Committee clerk/legislative aide to state Rep Craig Riedel; Gail Crawley, Ohio House Republicans communications director

Straight From The Source

“Oh yeah, of course you are.”

– PFT Commenter, the Barstool Sports personality (and past cleveland.com interviewee), after Tim Ryan told him he’s a fan of Dave Matthews Band. PFT Commenter sat down with Ryan — with Ryan more or less holding his own — for an irreverent interview this week in the aftermath of the Democratic debates.

Capitol Letter is a daily briefing providing succinct, timely information for those who care deeply about the decisions made by state government. If you do not already subscribe, you can sign up here to get Capitol Letter in your email box each weekday for free.

___

(c)2019 The Plain Dealer, Cleveland

Visit The Plain Dealer, Cleveland at www.cleveland.com

Distributed by Tribune Content Agency, LLC.

Natural gas prices plunge 8 percent [Erie Times-News]

Customers of National Fuel Gas Distribution Corp. will head into the fall heating season — at least the early part of it — with the promise of lower gas prices.

Effective Thursday, the cost of natural gas supplied by the utility for the next three months will fall 8.24 percent. The adjustment decreases the monthly bill of a typical customer, one with annual usage of 100,300 cubic feet of gas, by $6.15, from $74.61 to $68.46.

Pennsylvania utilities are required to pass along the cost of gas to consumers dollar-for-dollar without making a profit. Those costs can be adjusted every three months. The next opportunity to adjust gas cost charges is Nov. 1.

Because of expanded drilling and exploration in the Marcellus and Utica shale, much of it in this region, natural gas prices are near an 11-year low.

___

(c)2019 the Erie Times-News (Erie, Pa.)

Visit the Erie Times-News (Erie, Pa.) at www.GoErie.com

Distributed by Tribune Content Agency, LLC.

W.Va. joins 16-states seeking to overturn court ruling on pipeline [Times West Virginian, Fairmont]

Oil and Gas PipelineAug. 1–BRIDGEPORT — West Virginia Attorney General Patrick Morrisey announced Wednesday that the state has joined a 16-state coalition to overturn a ruling that he said brought the Atlantic Coast Pipeline project “to a screeching halt.”

Standing in front of others supporting the move at a Bridgeport press conference, Morrisey said his office filed a brief Monday with the U.S. Supreme Court. He said he was optimistic because he thought the 16 states were “right on the law.”

The 16 states are urging the U.S. Supreme Court “to review, and ultimately overturn,” the ruling that halted construction of the Atlantic Coast Pipeline, according to Morrisey.

“We’re asking for the U.S. Supreme Court to hear this case,” he said. “First, they have to agree to hear it, then they’ll ultimately rule on the merits.”

The coalition’s brief “argues a federal appeals court was inaccurate in ruling the U.S. Forest Service lacked authority to grant the Atlantic Coast Pipeline rights-of-way through forestland beneath the Appalachian National Scenic Trail.”

As designed, the Atlantic Coast Pipeline will transport natural gas through Harrison, Lewis, Upshur, Randolph and Pocahontas counties en route to Virginia and North Carolina.

“Now, in layman’s terms, the folks challenging these actions — the ones challenging the pipeline — they want to make all federal land along the Appalachian Trail an impenetrable barrier,” he said.

If things stand as they are, he said there would be “a significant setback for energy development in our state and our country.”

Morrisey said the 600-mile pipeline crosses the trail at “just one place” that “straddles two slivers of Virginia counties.”

“Most importantly, not only does the pipeline never touch the trail, it goes about 600 feet beneath it using a horizontal directional drill,” he said. “That means there’s going to be zero impact to the trail.”

Morrisey said he loves the great outdoors like others who also feel deeply about it, but said “we also have to ensure there’s energy development in our state and in our country.”

“And if you were to use some of these national trails and set them up as barriers where you effectively can’t go over, under, around, through, that’s a very big problem,” he said. “And it’s a problem for a lot of reasons. It’s a problem for the state of West Virginia. West Virginia’s working overtime to try to grow economically. You hear all the stats about West Virginia being at the bottom of a lot of these lists. I think you’re seeing some movement in recent years. You’re seeing an uptick.”

He said there’s been a lot of work in the energy industry.

“We know that part of the reason for the state budget surplus is because of the gas and the Marcellus region and all the economic activity that’s related to that,” he said. “We need that to continue.”

“It’s also critical because when you have a pipeline, you have a lot of good-paying jobs,” he said. He said people making the high wages are able to feed their families, which he said is critical.

He said West Virginia is at a very critical point in its history.

Morrisey said it’s important that the state grow its “people resources” to make sure it’s not left behind.

“Now, because the 4th Circuit wrongly decided this case, many of the hardworking men and women have left behind their families to find work in other states in the union,” he said.

He said the pipeline is a chance for West Virginia to address the poverty that has affected the Mountain State.

“When you can provide those kind of good-paying jobs, and the revenue to the local counties in the state, that would make all the difference in the world,” he said.

Speaking of the economic impact of the pipeline in terms of not only jobs but revenue from income and property taxes, he gave a concrete example of how local counties could be affected.

“It means that if you’re in Lewis County, and maybe you want to put a little bit more effort into fighting the drug epidemic, you want to hire another deputy sheriff, you want to purchase more cruisers, that extra million dollars or more, depending on what county you’re in, that can make all the difference in the world,” he said.

“The economic activity that will flow from this pipeline, I think, we can’t even quantify here today,” he said.

One of the people speaking after Morrisey, Cindy Whetsell, director of the Lewis County Economic Development Authority, said, “We are West Virginians and we deserve the best.”

“We deserve the Atlantic Coast Pipeline to be built and operational,” she said.

She said Lewis County would be home to nearly 20 miles of the Atlantic Coast Pipeline and a compressor station.

“This is estimated to bring an additional $4 million dollars annually to the county tax base,” she said. “This is revenue that we should have realized this year, but stalls creating idle work sites have robbed our communities and our citizens of opportunity. This is much-needed revenue to ensure a quality of life, to provide future growth and to educate our children.”

While Morrisey touted filing the brief with the U.S. Supreme Court, environmental groups are watching the case move through the courts.

“The West Virginia Chapter of the Sierra Club is deeply disappointed that Attorney General Patrick Morrisey continues his tradition of wasting state resources in pursuit of legal decisions which would harm the people of West Virginia,” stated Justin Raines, member engagement chair at the West Virginia Chapter of the Sierra Club, via email.

“Today’s attempt to convince the courts to subvert environmental laws in order to ram through fracked gas pipelines is the type of political grandstanding we have sadly come to expect from an Attorney General who is also abusing his office in an attempt to strip 184,000 West Virginians of health insurance,” Raines continued..

“We trust that the courts will uphold the decisions of the Fourth Circuit to require agencies regulating the Atlantic Coast Pipeline to follow environmental law and protect our communities,” Raines said.

In response, Curtis Johnson, Morrisey’s press secretary, said, “This isn’t about the environment. Attorney General Morrisey is a strong advocate of the Appalachian Trail and the national trail system. This pipeline would have no negative implications on the trail as it would be hundreds of feet beneath the surface. It is sad that these groups are misguided and willing to put the jobs of so many hard working West Virginians at risk.”

Other states joining the West Virginia-led brief are Alabama, Alaska, Georgia, Idaho, Kansas, Louisiana, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah and Wyoming.

Eric Hrin can be reached at 304-367-2549, or ehrin@timeswv.com.

___

(c)2019 the Times West Virginian (Fairmont, W. Va.)

Visit the Times West Virginian (Fairmont, W. Va.) at www.timeswv.com

Distributed by Tribune Content Agency, LLC.

Pickups drive Fiat Chrysler to record second quarter [The Detroit News]

Jul. 31–Pickup sales are keeping Fiat Chrysler Automobiles NV trucking, despite a sales slowdown weighing on the broader industry.

The Italian-American automaker on Wednesday reported a 14% year-over-year profit increase and its best-ever second quarter in North America, fueled by the new heavy-duty Ram and Jeep Gladiator pickups. The results prompted FCA to maintain its guidance for the year, even as such rivals as Ford Motor Co. decreased their forecasts for the year.

“Overall I would say we are pleased with our second results, which were in line with our second-quarter expectations,” FCA CEO Mike Manley said on a call Wednesday. “It gives us some strong momentum as we enter the second half of the year, particularly when you consider the significant reduction in dealer stock in the quarter.”

One year after Manley took over the automaker’s helm days ahead of the unexpected death of longtime CEO Sergio Marchionne, the automaker still is looking to get a greater foothold in China, turn around its European business and keep the cash flowing from North America to fund progress on electrification and self-driving technology.

FCA earned $1.7 billion (1.6 billion euros) in North America and posted an 8.9% pre-tax margin, up from 8% a year ago. The automaker’s U.S. vehicle shipments fell 12% from dealer stock reductions, as the company looks to reduce heavy inventory numbers.

North America was again the bottom-line driver, as the region accounted for all of quarterly” pre-tax earnings, CFRA Research analyst Garrett Nelson wrote in a note lowering by $2 the automaker’s price target. FCA’s “performance relative to peers will begin to reflect its product momentum from the Jeep Gladiator introduction and surging Ram pickup sales,” he added.

The automaker’s shares closed up 1.7% Wednesday at $13.19, despite a down day in the markets.

FCA booked an $884 million (793 million euro) net income in the second quarter of the year. The Ram pickup trucks were the only FCA brand to post a sales increase (28%) over the first half of the year. Light-duty trucks, including the new Gladiator, accounted for nearly 92% of sales in the second quarter, which raised the company’s average transaction price more than 8% year over year to $40,456, according to auto resource website Edmunds.com. The Gladiator exceeded expectations, Manley said, notching a 7.7% share of the U.S. segment in June.

The Ram pickup maintained its spot as the No. 2-selling truck in the United States in the second quarter. It surpassed the Chevrolet Silverado in the first three months of the year, though it still trails the Ford F-Series.

To keep it that way, Manley said he expects to continue running the older model Ram 1500 at the Warren Truck Assembly Plant as long as there still is demand. He noted FCA could add updates to the classic version and continue selling it at a lower price.

Meanwhile, high inventories, trade hostilities and decreasing global auto demands will make for greater challenges with investments in future technology and negotiations currently ongoing with the United Auto Workers. Although the automaker has worked to decrease its inventory levels, it on average took 108 days to get vehicles off dealer lots compared to the industry average of 77, according to Edmunds.

“It’s not all good news for FCA, as inventory levels are higher than they should be,” Jeremy Acevedo, senior manager of insights at Edmunds, said in a statement ahead of earnings. “FCA is getting away with not spending as much on incentives right now thanks to strong new truck sales, but as we progress further into the year they’re really going to need to step it up in order to start moving everything else off dealer lots.”

The automaker reported $29.8 billion (26.7 billion euros) in revenue for April, May and June. Its second-quarter results were down 3% from the same period of 2018. FCA also reported $1.7 billion (1.5 billion euros) in adjusted earnings before interest and taxes, a slight decrease from a year ago.

Adjusted diluted earnings per share were 56 cents (0.50 euros), up 14% from the second quarter of 2018. Industrial free cash-flow was down 50% to $840 million (754 million euros) from payments related to alleged cheating on diesel emissions testing and higher capital expenditures.

The company in its second quarter secured state and local support for the expansion of its Mack Avenue Engine Complex on Detroit’s east side for production of the next-generation Jeep Grand Cherokee and a three-row full-size Jeep SUV. It is part of a $4.5 billion investment into five Michigan plants, including the nearby Jefferson North Assembly, which makes the Dodge Durango and Grand Cherokee. The plants will be upgraded to allow for hybrid versions of their vehicles and eventually all-electric models. Production is expected by late 2020 or early 2021.

FCA plans to introduce 17 electric nameplates by 2022. It expects to be fully compliant with European carbon emissions limitations toward the end of 2020 with an up-to 5% electric sales mix with credit purchases, Manley said. The company made agreements costing $2 billion (1.8 billion euros) over the next three years to buy emissions-related regulatory credits in North America and from Tesla Inc. in Europe. Not meeting the requirements could cost the company hundreds of millions of dollars.

“What we’re looking at from where we sit today is a progressive transition,” Manley said, “with the right investments in our electric vehicle fleet to the backend of 2021-22 where we will through our own products be completely compliant.”

FCA lost a potentially major partner in its electrification efforts after FCA revoked its offer last month to merge with French automaker Renault SA over political challenges. Although the automakers’ executives have said they hope to resume talks, the deal appears dead for now, Renault CEO Thierry Bolloré said Friday.

The scale of such a merger that would have created the third-largest automaker in the world remains compelling, Manley said.

“The opportunity was a great opportunity for us and, we believe, a great opportunity for Renault,” he said. “It was not a necessary step for us in how we develop our business going forward. We have a relatively robust business plan that survives without the merger.”

FCA earned $25 million (22 million euros) before taxes in Europe after restructuring in the first quarter. It lost $13 million (12 million euros) in Asia in the second quarter. The company made some leadership changes to its decade-old joint venture with China’sGuangzhou Automobile Group in April to “more rapidly respond to changes in the Chinese market.”

Latin America had pre-tax earnings of $122 million (110 million euros). Stock reductions and sales declines put the Maserati luxury sports-car brand at a loss of $133 million (119 million euros). Manley said he expects a more positive story for the brand next year, when the company begins 10 product introductions through 2023.

Crosstown rival Ford reported its second-quarter profits slid 86% in the second quarter to $148 million. General Motors Co. releases its earnings Thursday.

bnoble@detroitnews.com

Twitter: @BreanaCNoble

___

(c)2019 The Detroit News

Visit The Detroit News at www.detnews.com

Distributed by Tribune Content Agency, LLC.

Fiat Chrysler’s second-quarter profits pushed up by Ram trucks [Detroit Free Press]

Jul. 31–It’s been mostly about Ram at Fiat Chrysler Automobiles this year.

The automaker’s truck brand has been a solid performer for the company in the United States in 2019, and that, along with some help from the Jeep Gladiator midsize truck, has gone a long way toward boosting FCA’s fortunes.

Now, it appears FCA’s leadership could be considering updates to its Ram Classic, the older version of the Ram 1500. The two versions have helped Ram beat the Chevy Silverado in U.S. sales to take the No. 2 spot behind the Ford F-150.

FCA CEO Mike Manley, during a conference call following FCA’s second-quarter earnings release Wednesday, said the Classic would continue to be produced at the automaker’s Warren Truck Assembly as long as it makes business sense.

Manley said the dynamic between the Classic and the new Ram 1500 appears to be working well in showrooms.

The Ram brand figured prominently in boosting the bottom line for the Italian-American automaker in its latest earnings report. The company touted record second-quarter results in North America, despite a drop in sales.

The company reported net profit of $884 million (793 million euro), up 14%, with adjusted earnings before interest and taxes of $1.7 billion (1.53 billion euro), which is flat, and net revenues of $29.8 billion (26.7 billion euro), down 3%, from the same period in 2018.

Earnings per share of 56 cents (.50 euro) were up 14%.

Manley touted the company’s strength in its most profitable market.

“We continue to deliver strong performance in North America and (Latin America). Robust demand for our new products, along with steps we’ve taken to exert discipline across all of our businesses, have generated the momentum to achieve our full-year 2019 guidance,” Manley said in the release.

For North America, the company had adjusted EBIT of $1.7 billion (1.6 billion euro), up from $1.4 billion in the same period in 2018. The company noted that shipments were down 12%, primarily due to dealer stock reductions (down 80,000 units from the first quarter), partially offset by increased Ram pickup truck volumes and production ramp-up of the all-new Jeep Gladiator.

In addition, U.S. dealers started to receive the redesigned Ram Heavy Duty pickups, adding to its updated truck portfolio.

Challenging areas

Europe and Asia remain “works in progress” and Maserati had a “challenging quarter,” although during the conference call, Manley said the luxury brand is expected to return to profitability next year.

Regarding Europe, Manley said the company would need to become less reliant on Italy and improve sales in other major markets in the region.

The company saw its shipments drop worldwide to 1.2 million, down 11%.

The release of FCA’s results follows Ford’s second-quarter earnings by a week. Ford said its profits took a hit on $1.2 billion in special charges primarily related to its restructuring efforts in Europe although its earnings before interest and taxes were flat at $1.7 billion compared to the same period in 2018. GM is scheduled to release its earnings for the quarter on Thursday. The earnings reports come as the Detroit Three begin contract negotiations with the UAW, whose members are in no mood for concessions after strong profits during the four-year contract that expires in September.

Jon Gabrielsen, a market analyst and auto adviser, said FCA faces a similar situation as Ford and GM — strong North American performance and challenges elsewhere — but can also claim a key difference.

“The advantage that FCA has over its Detroit Three siblings is that unlike the other two, FCA has very substantially increased its market share over the current economic/auto cycle driven by its Jeep and Ram brands, while the other two have generally declined in share,” Gabrielsen said. “In terms of current and future earnings in both boom times, and particularly the bust times coming, nothing is better than the rising market share of FCA in North America, and nothing is worse than the opposite. Indeed, FCA’s fitness through the next downturn comes down to the extent that gains in North America can offset the weaknesses in the rest of FCA’s world.”

FCA’s U.S. market share for the first half of 2019 is 13%, up by almost an additional half since 2009.

Jeep’s gains

Jeep, arguably FCA’s strongest brand, has seen a sales slide this year, down 8% through June, but the brand has helped maintain the company’s market share.

Jeep has increased its U.S. SUV market share points by 45% over the last 10 years, since the last downturn trough. It continued to consolidate and maintain those gains in the second quarter of 2019 and the first half. In addition, Jeep continues to export over 40,000 Jeeps per quarter to Europe. Indeed, if it were not for Jeeps built in the USA and exported to Europe and sold there, FCA would have lost market share in Europe over the last decade, rather than being relatively flat due entirely to the addition of more and more Jeeps each year,” Gabrielsen said.

David Kudla, CEO and chief investment strategist for Mainstay Capital Management, pointed to a challenging environment for FCA in both the United States and Europe but noted that other automakers are feeling the heat as well.

“The macro environment is tough for automakers right now. The headwinds in this industry are persistent,” Kudla said in a note ahead of the earnings release. “We are past peak auto and seeing demand contract in the U.S. All major auto companies have pivoted toward Auto 2.0 and the industry is in the midst of a tectonic shift. Until these companies can transform themselves, Wall Street will continue to question their future. Fiat Chrysler is no exception.”

Part of the challenge will be addressing the cost of electrification, one of the key paths to meeting emissions requirements, especially in Europe. Manley indicated that FCA would be compliant with its own vehicles — rather than working with automakers such as Tesla to do so — by 2022.

FCA’s plans include production of a plug-in Jeep Wrangler next year.

However, the “impact of electrification will be significant in terms of overall cost” to the company, said Chief Financial Officer Richard Palmer.

Attempts to address the demands of expensive electrification and autonomous vehicle development have pushed automakers to consider tie-ups, such as the recent failed attempt to merge FCA with Renault.

Manley said FCA remains open to opportunities and the specifics of the Renault deal made sense. However, he said consolidation is not a necessity for FCA, which has a “robust business plan.”

Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Read more Free Press coverage by signing up for our autos newsletter.

___

(c)2019 the Detroit Free Press

Visit the Detroit Free Press at www.freep.com

Distributed by Tribune Content Agency, LLC.

National Oilwell Varco posts nearly $5.4 billion loss during second quarter

Oilfield worker is checking the oilfield equipment

Jul. 30–Houston oilfield service company National Oilwell Varco reported a multibillion loss during the second quarter amid what executives are calling a “generational oilfield downturn.”

NOV reported a nearly $5.39 billion loss on $2.13 billion of revenue during the second quarter. The figures translated into a $14.11 loss per share.

The second quarter earnings were mixed compared to the $24 million profit on $2.1 billion of revenue.

Although NOV beat Wall Street expectations of $2.09 billion of revenue, the company fell far below the expected loss per share of 6 cents.

National Oilwell Varco CEO Clay Williams described the second quarter results as part of a generational oilfield downturn. The company evaluated the carrying value of its long-lived assets amid market indicators hitting new decade-lows. Based on the evaluation, the company recorded a charge of $5.37 billion to write down goodwill, intangible assets and fixed assets — on top of $399 million in restructuring charges and $11 million in other costs.

“Though we are well-positioned to support growth in the offshore and international markets as customers increase activity after years of curtailed spending, severe capital austerity and lower activity in North America are resulting in a rapid change in our business mix,” Williams said in a statement. “This presents NOV with both opportunities and challenges.”

Williams is expected to speak about restructuring and layoffs during an earnings call scheduled for Tuesday morning. The company holds $2.48 billion of debt but has $3 billion of credit and another $1.13 billion of cash.

With historical roots going back to 1862, NOV is headquartered in Houston and has more than 35,000 employees in 65 nations.

NOV reported a $31 million loss on $8.5 billion of revenue in 2018. The company has not made an annual profit since 2014.

Read the latest oil and gas news from HoustonChronicle.com

___

(c)2019 the Houston Chronicle

Visit the Houston Chronicle at www.chron.com

Distributed by Tribune Content Agency, LLC.

U.S. Small Business Administration adjusts small-business size standards for inflation

Small Business Loan

Jul. 30–The U.S. Small Business Administration recently issued an interim final rule that will adjust monetary-based small-business size standards for inflation to allow more small businesses to become eligible for the SBA’s loan and contracting programs. The interim final rule was published in the Federal Register on July 18.

The SBA is adjusting its industry-specific monetary-based size standards by nearly 8.4% to reflect the inflation that has occurred since the last adjustment in 2014. This time, the SBA is also adjusting the revenues-based size standards for agricultural industries, which were previously set by statute. These adjusted size standards will become effective on Aug. 19 and will be reviewed again as part of the second five-year review of size standards mandated by the Small Business Jobs Act of 2010.

Additionally, the SBA is adjusting program-specific monetary-based size standards by the same amount for sales or leases of government property and stockpile purchases. The SBA is not adjusting the tangible net worth and net income based interim alternative size standards that apply to the SBA-guaranteed 7(a) and 504 Certified Development Company loan programs, which were established under the Small Business Jobs Act.

The interim alternative size standards for the 7(a) and 504 loan programs will remain in effect until the SBA establishes a permanent alternative size standard for these programs. The SBA is also not adjusting the tangible net worth and net income based alternative size standard for the Small Business Investment Company program.

The SBA estimates that nearly 90,000 additional businesses will gain small business status under the adjusted size standards, becoming eligible for SBA loan and contracting programs. This could possibly lead to as much as $750 million in additional federal contracts awarded to small businesses and up to 120 additional small business loans totaling nearly $65 million.

Comments can be submitted on this interim final rule by Sept. 16, 2019, at www.regulations.gov, identified with the following RIN number: RIN 3245-AH17. Interested parties may also mail comments to Khem R. Sharma, Chief, Office of Size Standards, 409 Third St. SW, Mail Code 6530, Washington, D.C. 20416.

___

(c)2019 the Reading Eagle (Reading, Pa.)

Visit the Reading Eagle (Reading, Pa.) at readingeagle.com

Distributed by Tribune Content Agency, LLC.

Surf’s Up: Second wave of LNG is here

Liquefied Natural Gas (LNG) Tank Petroleum Refining OperationJul. 26–The long-anticipated “second wave” of liquefied natural gas projects is here as tsunami of final investments decisions get made and construction contracts awarded, executives and analysts said.

With construction of export terminals sanctioned during the first wave nearing completion, a second round of large LNG export projects are planned from the Texas Gulf Coast to Africa to the Arctic Circle. A joint venture between Exxon Mobil made a final investment decision in February on the $10 billion Golden Pass LNG export terminal in the southeast corner of Texas. The Woodlands oil and gas company Anadarko reached a final investment in June for the its $20 billion offshore Mozambique LNG project in southeast Africa.

Earlier this week, Russian natural gas company Novatek awarded a $7.6 billion construction contract to oilfield service company TechnipFMC to build the Arctic LNG 2 export terminal on the Gydan Peninsula of Siberia. The Arctic Circle project follows a contract Anadarko awared to TechnipFMC for the offshore work as part of the Mozambique LNG project.

Those contracts helped TechnipFMC, which has headquarters in Houston, London and Paris, break company records for new orders. Executives said the contracts were proof that LNG’s second wave was underway.

More Information

“Over the last 18 months, there has been considerable market focus on the LNG wave,” TechnipFMC CEO Doug Pferdehirt said during a Thursday call with investors. “The LNG market growth continues to be underpinned by the structural shift towards natural gas as an energy transition fuel helping to meet the increasing demand for energy while lowering greenhouse gases.”

Industry observers agree. A recent report from global energy research firm Wood Mackenzie estimates that the industry will invest more than $200 billion on LNG projects between 2019 and 2025. But challenges remain. Among them: cost overruons.

The LNG industry is notorious for running behind schedule and over budget. Only 10 percent of all LNG projects have been completed under budget, while 60 percent have experienced delays.

“The many projects jostling for final investment decision right now have low headline costs, but in light of the historical reality of LNG construction, some project delays are likely,” said Liam Kelleher, senior global LNG analyst at Wood Mackenzie.

Although many of its competitors build LNG plants from the ground up and entirely on site in a process known in the industry as “stick building,” Pferdehirt said TechnipFMC would use large-scale fabrication of modular components that can be shipped and easily assembled in harsh environments such as Siberia, where the company previously built the Yamal LNG export terminal Novatek using the same approach.

“Many of the LNG projects that are being considered today are still stick built, they are not modularized,” Pferdehirt said. “There is increasing activity in the fabrication yards. Because of the success that we had — not only on Yamal LNG — but on other subsea and onshore/offshore projects where we focused on modularization, I think we have — we have demonstrated experience and we have very good relationships with those yards.”

In a recent report, James West, an analyst with the investment banking advisory firm Evercore ISI, estimated that nearly two-thirds of the costs of building an LNG plant come from construction and equipment, p;roviding business opportunities for oilfield services companies. Athough the coming build out is expected to benefit many firms in the sector, West believes that Baker Hughes of Houston TechnipFMC and Chart Industries of Georgia will benefit from the second wave more than their peers.

Using a fabrication yard in Italy, Baker Hughes makes modular and emissions-reducing turbines that can be shipped to LNG plants being built around the world and easily connected to other equipment. Chart Industries makes equipment widely used by the industry to convert natural gas to a liquid while TechnipFMC is regarded as a top engineering, procurement and construction company.

West said the market is underestimated the impact that TechnipFMC is having in the development of LNG projects.

“The company is driving structural change in both operator efficiencies and cost structure as well as commercial change to how operators develop reserves both onshore and offshore,” West said. “We expect momentum to continue to build in the coming quarters as orders increase for a third straight year, led by major LNG and subsea project bookings.”

sergio.chapa[at]chron.com

[at]SergioChapa on Twitter

___

(c)2019 the Houston Chronicle
Visit the Houston Chronicle at www. chron. com
Distributed by Tribune Content Agency, LLC.