Wednesday, March 4, 2015

Hess To Increase LNG Processing Capacity From 10K To Almost 80K Gallons Per Day, Tioga, North Dakota -- March 4, 2015

There are so many "huge" stories in the Bakken, the all tend to run together. I can't "put my arms around 10,000 gallons of LNG, but when a company announces they will increase production of "anything" from 10,000 units to almost 80,000 units, that has to get the attention of someone. This seems like a pretty big story. is reporting:
The only processing plant in North Dakota that converts natural gas byproducts into motor fuel is planning to increase its capacity.
Located outside Tioga, North Dakota LNG began processing gas last September and is approaching the facility’s second phase of development. The company recently completed an expansion that will increase its processing capacity from the original 10,000 gallons per day up to 76,000 gallons per day.
The plant is located adjacent to Hess Corp’s gas processing facility and utilizes the methane produced there. North Dakota LNG uses a process which cools the methane using extreme temperatures (approximately negative 250 degrees Fahrenheit) to convert the gas into a liquid state. The liquid allows for easier transportation to different locations where it will then be converted back into its gaseous state.
Wouldn't it be a hoot if T. Boone Pickens (Clean Eenrgy Fuels) and Jim Cramer (CNBC) did a newscast from Tioga, oil capital of North Dakota?

Oh, my bad! It's already been done, LOL:

why not?

By the way, look at that 4-well pad in the background: I think there are 16 oil well tanks and two water tanks. Also note: all four pumps are pumping. On a wind farm, maybe 1 of four wind turbines would be turning on any given day.

See disclaimer. This is not an investment site. It is also not a dating site. Nor is it a food recipe site. Nor is it a Hollywood entertainment site. It's simply about the Bakken. Enjoy.

Fifteen (15) New Permits -- March 4, 2015

Active rigs:

Active Rigs114190183207172

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Fifteen (15) new permits --
  • Operators: Whiting (8), XTO (7)
  • Fields: Bear Creek (Dunn), Epping (Williams), Stockyard Creek (Williams)
  • Comments:
Ten (10) producing wells completed:
  • 26065, 2,125, XTO, Arley 21X-18A, Grinnell, 2/15; cum 1K 1/15;
  • 27773, 550, Hess, BL-Iverson B-155-95-0708H-5, t2/15; cum --
  • 28003, 301, Slawson, Cruiser 4-16-9TFH, Big Bend, t1/15; cum --
  • 28004, 470, Slawson, Cruiser 5-16-9TFH, Big Bend, t1/15; cum --
  • 28324, 1,414, Hess, EN-Freda-154-94-2635H-3, Alkali Creek, t2/15; cum --
  • 28614, 745, Samson Resources,  Coronet 2413-8H, Ambrose, t2/15; cum 2K 1/15;
  • 29022, 693, Slawson, Bootleg 8-14-15TF2H, Stockyard Creek, t10/14; cum 1K 1/15;
  • 29725, 2,327, Whiting, Eide 41-13-4H, Timber Creek, t2/15; cum --
  • 29726, 1,220, Whiting, Eide 41-13-3H, Timber Creek, t2/15; cum --
  • 29727, 2,319, Whiting, Eide 41013HU, 4 sections, South Tobacco Garden, t2/15; cum -- 
Dry hole:
21173, dry, Gadeco, Golden 24-13H,

Wells coming off the confidential list Thursday:
23618, conf, Triangle, Rowe 150-101-1-12-2H, Rawson, producing,
27626, conf, Hess, EN-Farhart-156-93-0409H-3, Baskin, no production data,
27668, conf, Petro-Hunt, Overlee 160-94-32A-30-1HS, North Tioga, no production data,
27900, conf, XTO, Van Dyke Federal 44X-19E, Bear Den, no production data,
28588, conf, WPX, Victor Elk 32-39HA, Reunion Bay, producing, a nice well,
28704, conf, MRO, Greider 34-20TFH, Bailey, no production data,
28930, conf, CLR,290 Quale Federal 2-1H, Antelope, producing,
29035, conf, CLR, Stangeland 3-7H1, Crazy Man Creek, no production data,
29201, conf, Corinthian Exploration, Corinthian Berge 12-2-1H,  North Souris, producing,

Section 3-154-99, where eight more Whiting P Earl Rennerfeldt wells will go in Stockyard Creek (all will be sited in section 3; four will run north into Epping oil field; four will run south in Stockyard Creek:

Global Warming
Climate Change
Ice Age Now

Three data points:

$5 Gasoline? -- March 4, 2015

The Los Angeles Times is reporting that gasoline has jumped one dollar / gallon in Los Angeles over the past month.
That's made gasoline much more expensive here than anywhere else in the nation — an average of $3.44 for a gallon of regular as of 7 a.m. Wednesday, according to price-tracker Hawaii is the only other state with an average price above $3 a gallon.
Drivers in Los Angeles are paying an average of $3.54 a gallon to fuel up, more than any of the other 443 metropolitan areas tracked by GasBuddy.
And five days ago, this article:
LONG BEACH, Calif. (AP) — Gas prices are soaring in California in a classic example of supply and demand after an explosion stopped gasoline production at an Exxon Mobil refinery while another remains offline due to labor unrest.
Screenshot, GasBuddy, 1:56 p.m. CT, March 4, 2015:

115 This Morning, Now 114 -- March 4, 2015

Active rigs in North Dakota:

Active Rigs114190183207172

Crude Stock Increases
More than Twice Levels Forecast

Reuters is reporting:
Oil prices fell on Wednesday after U.S. crude stock builds were more than twice levels forecast, although prices held off recent lows after Saudi Arabia's oil minister said he expected prices to recover soon from the selloff of recent months. U.S. crude stocks jumped by 10.3 million barrels last week, the government said, versus a Reuters poll calling for a build of just 4 million barrels. While the Cushing, Oklahoma hub for U.S. crude saw less supply than expected, it was still the eighth straight week of builds and record highs for total inventories. 

She can creep / crawl anywhere she wants; she chose this spot.

Choking Back? -- March 4, 2015

For newbies. I'm seeing this all over the Bakken. Generally speaking, on big wells, the second and third months (or the first and second full month of production are huge, and rising; the decline does not start until the third or fourth full month of production and although it can be significant, is generally not this extreme). In addition, most new wells are on-line the full month (30 days / 31 days). It was unusual -- when oil was priced at $100/bbl -- for a big well like this to go off-line this fast (to 8 days in January, 2015) and produce so little. The specific well is not important. 

Production profile for a well that comes off confidential list today:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Bad Decision

LOL. I rode my bike to Starbucks today. When I left this morning, the temperature was temperate and there was only a bit of mist. Now, rain is pouring down and the weather forecast suggests it will last all morning. Gonna be a very wet ride home. I must have fallen for that global warming hoax today -- thinking it was gong to be warm and sunny all day -- that's what the Agore Weather Channel said.

Someone told me long ago, there's a calm before the storm,
I know, it's been coming for some time --

Have You Ever Seen The Rain, CCR

Did Oasis Just Increase Its Offering Substantially? -- March 4, 2015

Look at the increase, being reported now:
Oasis Petroleum Inc. announced today that it has priced an upsized underwritten public offering of 32,000,000 shares of common stock for total gross proceeds (before the underwriter's discounts and commissions and estimated offering expenses) of approximately $409.6 million. Oasis intends to use the net proceeds of this offering to repay outstanding borrowings under its credit facility and for general corporate purposes.  Oasis granted the underwriters a 30-day option to purchase up to 4,800,000 additional shares of common stock. The offering is expected to close on March 9, 2015.
Earlier this morning, the press release:
Oasis Petroleum Inc. announced today that it has commenced an underwritten public offering of 25,000,000 shares of common stock. Oasis expects to grant the underwriters a 30-day option to purchase up to 3,750,000 additional shares of common stock.  Oasis intends to use the net proceeds of this offering to repay outstanding borrowings under its credit facility and for general corporate purposes.
Or are these two separate offerings? If so, wow? 

With 100 million shares currently outstanding, it seem an additional 40 million shares (rounding) is fairly significant. On the other hand, if these are two separate offerings, 40 + 30 = 70. Almost 70 million more shares being offered? I honestly don't know. More to follow, I'm sure.

$410 million / 32 million = $12.80. Oasis shares were selling for about $13 / share yesterday.

This is just idle chatter, for my use only to help me understand the Bakken. If this information is important to you, go to the source -- perhaps your broker or your astrologer. See disclaimer. This is not an investment site. Do not make any investment, financial, or relationship changes based on anything you read here or think you may have read here. 

Exxon, Also, Raising Cash

Bloomberg is reporting:
Exxon Mobil Corp. sold $8 billion of debt in its biggest bond offering ever and the largest energy-related deal since the plunge in crude prices that began in July.
The world’s largest oil company by market value boosted the deal by about 14 percent after previously marketing $7 billion of debt.
Irving, Texas-based Exxon issued the securities as a combination of fixed- and floating-rate notes in the seven-part sale.
To put this in perspective, Apple raised about $6.5 billion in a bond sale in February, 2015. 

Active Rigs Continue To Drop; Oasis To Issue More Shares -- March 4, 2015

See disclaimer. This is not an investment site.

From the Oasis press release:
Oasis Petroleum Inc. announced today that it has commenced an underwritten public offering of 25,000,000 shares of common stock. Oasis expects to grant the underwriters a 30-day option to purchase up to 3,750,000 additional shares of common stock.  Oasis intends to use the net proceeds of this offering to repay outstanding borrowings under its credit facility and for general corporate purposes.
With 100 million shares outstanding, an additional 25 million shares seems to be significant "dilution."

Active rigs:

Active Rigs115190183207172

RBN Energy: continued NGL infrastructure build-out to continue in the Permian and Eagle Ford.


Jobs watch: ADP adds a dismal 212,000 jobs. Reuters is reporting:
U.S. private employers added 212,000 jobs last month, lower than market expectations as well as January's revised figure (sic), a payrolls processor report showed on Wednesday.
Economists surveyed by Reuters had forecast the ADP National Employment Report to show a gain of 220,000 jobs.
January's private payrolls, meanwhile, were revised upward to 250,000 from the previously reported 213,000.
I guess analysts were counting on the Keystone XL being approved. LOL.

How To Make Money The Buffett Way -- Taking a Cue From Al Sharpton
Delay Paying Taxes As Long As Possible

[Note: after posting the following, a reader sent me a Forbes article that said the same thing: neither Al Sharpton nor Warren Buffett like paying taxes.]

Financial Times is reporting:
Warren Buffett is one of the most famous, and certainly the richest, proponents of raising taxes. What is less often remarked upon is that he is also a leading proponent of delaying tax payments as long as possible.
In the latest and largest example, Mr Buffett’s Berkshire Hathaway has been able to defer $61.9bn of corporate taxes, the company revealed in its annual report. 
We've talked about this before:
This figure — about eight years worth of taxes at Berkshire’s current rate — is a reminder that Mr Buffett understands how putting off the moment when taxes are due gives him more money today to invest elsewhere.
It is also a reminder that a savvy approach to taxes has always been a feature of Mr Buffett’s career, even as Berkshire has grown to become one of the biggest corporate contributors to the US Treasury.
The total of deferred taxes reported by Berkshire for the end of 2014 is more than five times the level of a decade ago, following Mr Buffett’s move into more capital intensive businesses, with the acquisition of BNSF railways and a string of US power companies.
Wait until he finds out about the foreign tax credit. Maybe that's why he's buying a couple of German companies, or considering buying a couple of German companies. I forget the specifics.

Humor For The Day

Reuters is reporting that President Obama sharply criticizes China's proposed rules for "tech control."

President Obama's FCC reins in America's internet; will regulate the internet as a utility using Ma Bell rules from the 1930's.

More Humor

CNN Money is reporting:
The IRS is delaying the refunds of tens of thousands of Obamacare enrollees, said Nina Olson, the National Taxpayer Advocate.
The hold up, she says, is subsidy data from state health exchanges.
What's more, Olson said the IRS told its telephone representatives not to tell callers the reason for the delay.
Obamacare enrollees received subsidies based on their estimated income for 2014. Now that they know their actual income, the IRS has to make sure the initial subsidy amount was correct.
Some enrollees will have to pay back part of their subsidies or receive smaller refunds if they underestimated their incomes. Others may get larger refunds if they earned less than they anticipated.
Warren's advice: owe taxes; don't pay ahead to get a refund.

Tuesday, March 3, 2015

Update On Tax Break Operators Get If Price Of Oil Remains Low; The Magic Number Is $52.95 -- March 3, 2015

Reuters is reporting:
WILLISTON, N.D., March 3 (Reuters) - The clock is still ticking on a potential $5.3 billion, two-year tax break for North Dakota's oil industry after a state-calculated average of February's crude price fell below $52.59 per barrel last month. 
The state waives its 6.5 percent oil extraction tax if the monthly price of benchmark West Texas Intermediate (WTI) crude at the Cushing, Oklahoma, transport hub falls below an inflation-adjusted limit, set at $52.59 per barrel for 2015, for five consecutive months. 
For February, the average calculated price was $50.86 per barrel, according to North Dakota Tax Commissioner Ryan Rauschenberger. The average was an increase from the January average of $47.98 per barrel.The tax break kicks in if the average monthly price is below that $52.59 level for each of the next three months. If it is off even one month, the clock resets.  [The delta between $52.95 and $50.86 = $2.09.]
The tax returns if the average price exceeds that level for a subsequent five consecutive months. The countdown, which has officially entered its second month out of a possible five, holds the promise of crucial financial incentive for oil producers and their contractors in the No. 2 oil-producing U.S. state as they grapple with a roughly 50 percent drop in crude prices since last summer. 
Indeed, many North Dakota energy companies have sharply scaled back drilling and hydraulic fracking. A tax break could encourage activity to pick back up in June, even if oil prices do not rebound. North Dakota legislators designed the tax waiver in 1987 specifically with that very goal in mind. 
Rauschenberger estimates North Dakota will take in $2.9 billion in oil taxes in the next two years without the oil extraction tax. With the tax, the projection is $8.2 billion.

Eight (8) New Permits -- March 3, 2015

Despite the slump in oil prices, at least some of the operators still have a sense of humor. Emerald Oil now has permits for three "Chip Diller" wells along with the Ron Burgundy and other wells. Chip Diller was a character in Animal House Other great Emerald Oil oil well names can be found here.

Target to lay off thousands. More at CNBC. A $2-billion cost-cutting program. It looks like Target sees digital sales where the growth will be. I follow the demise of big box stores here. The company also said it had the capacity to buy back up to $2 billion worth of its own shares this fiscal year, and look to repurchase $3 billion annually from the following year and beyond. Target has to do something: everyone loves going to Target but the stores are always empty as are the parking lots; everyone hates going to Walmart where the stores are always way too crowded and you can't find a parking place.

A state visit without a visit to the White House? What's not to like? It appears Prime Minister Netanyahu's visit to Congress was a resounding success. It will be followed by the Pope speaking to Congress in September. Maybe this should be the focus of the new Congress. It can't get anything done anyway. It might as well host visiting dignitaries on a monthly (or more often) basis. Mr Boehner could invite who he wants (without consulting the White House). The invitee would be a guest of Congress, but could pursue an audience with this majesty over on Pennsylvania Avenue in a big White House if he/she so chose. The big White House is still closed to the American public so there's plenty of room on the schedule for a guided tour.  

Active rigs:

Active Rigs116189184207170

Wells coming off the confidential list today have been posted; see sidebar at the right.

Eight (8) new permits --
  • Operators: WPX (5), Emerald Oil (3)
  • Fields: Reunion Bay (McKenzie), Mondak (McKenzie)
  • Comments:
Ten (10) producing wells completed:
  • 26783, 174, OXY USA, Shuck 2-33-28H-144-97, Little Knife, t12/14; cum 2K 1/15;
  • 27398, 671, OXY USA, State Knopik 2-21-16H-144-97, Little Knife, t12/14; cum 29K 1/15;
  • 27608, 1,440, BR, Bullrush 44-10MBH, Elidah, t2/15; cum 3K 1/15;
  • 28289, 1,643, BR, Shenandoah 34-35MBH, Keene, t2/15; cum 5K 1/15;
  • 28613, 812, CLR, Debrecen 3-3H1, Bell, t2/15; cum --
  • 28640, 801, CLR, Boise 3-24H1, Brooklyn, 4 sections, t2/15; cum --
  • 28641, 878, CLR, Boise 2-24H, Brooklyn, 4 sections, t2/15; cum --
  • 28642, 818, CLR, Boston 3-25H1, Brooklyn, 4 sections, t2/15; cum --
  • 28643, 858, CLR, Boston 2-25H, Brooklyn, 4 sections, t2/15; cum --
  • 28944, 1,049, Whiting, Alison 14-6H, Sanish, t2/15; cum 1K 1/15;
MRO's Mylo Wolding 14-11 well (#18511 is now a SWD well.

Wells coming off the confidential list Wednesday:
  • 27265, 1,418, Emerald Oil, Slugger 3-16-21H, Charbonneau, producing, interesting production profile, t9/14; cum 35K 1/15;
  • 28677, 660, WPX, Roggenbuck 4-9HY, Van Hook, t12/14; cum 21K 1/15;
  • 29037, IA, CLR, Salem 4-6H, Dollar Joe, producing a small amount of oil before it was shut in;
  • 29139, 932, Hess, BW-Stoveland-149-100-1003H-3, Ellsworth, t1/15; cum 24K 1/15;

Sixteen Away From Hamm's Hunch -- March 3, 2015

Active rigs in North Dakota:

Active Rigs116189184207170