Independent Stock Analysis.
RBN Energy: Propane 101 -- The propane molecule from discovery to delivery. Quite a story. Another great post from RBN Energy. One could put together an entire oil and gas course for an engineering school with RBN's essays. It amazes me such professional, well-written, unbiased information is provided for free. Thank you, RBN Energy.
I see oil is up almost $2.00. I would have thought this is due to rising tensions in the Mideast and "Syria spiraling out of control" (the administration), but if folks are really worried about the Mideast imploding, would the market in equities be up as well? I don't know, but add this to the announcement that first time unemployment claims "surged" and tie that in with all "green" at the top of Yahoo!Finance and it's very confusing. I haven't watched CNBC in weeks, so I have no idea what the talking heads there are saying, though I don't miss them.
I see KOG released 2Q12 sales volumes: almost 400% year-over-year increase in sales volume. Sequentially, quarter-over-quarter, a 20% increase. I don't know about you, but for those who have built their own business (which apparently no one has -- President Obama), a 20% increase in growth, year-over-year is not trivial. I wonder if Apple is growing its business 20% quarter-over-quarter, or 400% year-over-year. Of course, Apple would not be where it is today had it not been for the government building a) the internet; and, b) the chips. I see there's a new website out there: "You Didn't Build It."
Also, I see Newfield is raising its production forecasts, but doesn't mention the Bakken. "Newfield said it had encouraging results from Uinta's
Central Basin, the Cana Woodford in the Anadarko Basin of
Oklahoma and the Maverick Basin Eagle Ford." Is this new, or did I miss this, "Maverick Basin"?
Someone commented earlier today that takeaway in the Bakken will probably get "worse," before it gets better. This is going to be a rambling paragraph so hang on, but through an analogy, it will be explained by takeaway is going to get worse in the Bakken. First, a given: the pipelines currently cannot handle all the oil that is being produced. Another given: up to 75% of all Bakken oil (if not all ND oil) is handled by truck at least part of the journey to pipeline or rail -- NDIC comment this past year. The pipelines follow the same layout as "street heirarchy" in suburban traffic planning. The net result in "street heirarchy" is that at peak traffic/rush hour traffic, there are significant bottlenecks at the through streets. The local streets all feed into a through street which feed into the boulevards and/or major thoroughfares. The relatively good news for suburbanites, these bottlenecks are only felt a couple times each day and are predictable. Leave for work a few minutes early and one can miss the bottleneck. Now, oil pipelines. The "local pipelines" are (at best) taking oil from a string of wells right now, one well in each spacing unit. But look at the daily reports from Monday and Tuesday of this week. On Monday, WPX announced it will have 14 wells in one section, and those 14 wells will feed into a local pipeline. Forget the bottleneck at Cushing, or the bottleneck were the local pipelines feed into a regional pipeline, imagine the takeaway that will be required for 14 wells in one section. Then on Tuesday, the same thing, QEP will have 12 wells in one section. It doesn't matter what spacing unit the horizontals go to, the oil will all end up at the same place. So, that's problem number one: the choke point of 14 wells feeding into a "local pipeline." There's another problem. Pause. Think. Have another cup of coffee. This is the second problem: they aren't drilling those 14 wells or 12 wells where the return is likely to meager. They are drilling where production is likely to be at the high end for the Bakken. The devil is in the details. When one looks at all those graphs in which the state and the operators talk about pipeline takeaway capacity, exactly what pipelines are they measuring? A "Keystone XL" pipeline will arithmetically handle all the oil the Bakken could produce, but if the "local pipeline" infrastructure is not in place, it won't matter, will it? So when one sees 14 wells on one section, and then 12 wells on a neighboring section, the next question should be: do you see backhoes out there laying bigger-diameter local pipelines?
Speaking of "the business you didn't build," -- which I wasn't (but I was thinking about it) -- it looks like the biggest business that you truly didn't build -- it was built by the US government -- the quasi US-government-operation, the US Post Office is technically out of money. Postal employees should not be concerned; the US Congress is not -- they're getting ready for their August recess.
Now to some stand-alone postings. Good luck to all.
No comments:
Post a Comment