Monday, January 9, 2012

A Reminder: A Great Weather Application

Link here.

Follow global warming in Williston at this site. Enjoy.

4Q11 Earnings

All 4Q11 earnings will be reported at this page; link will be on sidebar at the right, under "Earnings Central."

Earnings Calendar
AXAS: 3/14; 2011 production update;


BHI: ANI for calendar year 2011 was $4.20/share vs $2.06/share for CY 2010.

CHK: profit more than doubles; 58 cents vs 59 cents estimate; hedging offset lower nat gas prices; conference call transcript;

CLR: 2/22 (after mkt close); production press release; transcript here;

COP: Beats expectations; snaps losing streak; profit up 66% despite production drop; SeekingAlpha transcript; Phillips 66 to start trading "when issued" April 12, 2012

CVX: largest earnings decline in two years;

DBLE: 3/8; 2011 reserves announced, 19% increase in proved reserves;

DNR: 2011 production and reserves; replaces 367% of 2011 production; 19% increased production in the Bakken, year-over-year; record quarterly earnings; transcript;

ENB:  from 3Q11 earnings conference call: updating our guidance for 2011 to be near or slightly above the top end of the original guidance range of $1.38 to $1.48; results here; and that's what it was: $1.48; right on the mark;

EOG: 2/17; 3Q11 results (Rigzone); beats by 28 cents; 4Q11 and full year results; $4.10 CY 2011 vs $0.63 previous year; very, very good year;

EPD: blew past estimates;


GEOI:  beats by 3 cents; end of year production data;

GMXR: operational highlights, 2011; earnings report; missed 4Q estimates (Yahoo!InPlay; from Mike Filloon;

HAL: earnings up 50% due to American shale oil boom;

HES: Loss due to refinery shut-down costs; estimated results; preview; SeekingAlpha transcript

HP: beats estimates;$1.32 vs $1.18; transcript;

KOG: press release here; Reuters: surprise loss (15 cents); analysts expected 9 cent profit;

LINE: earnings press release;

MDU: 4Q11; $1.12 vs $1.27 for the year; 4Q11, 32 cents; 4Q10, 47 cents (natural gas issues); analyst's meeting transcript;

MPC (Marathon Petroleum): under/over? -- depends which number you want to look at -- Zacks;

MRO (Marathon Oil): 2/1

NBL: over/under? depends who you read; InPlay says they beat; others say they missed; a quick read of the earnings release did not impress me

NBR: $150 million loss due to lower nat gas prices vs $50 million profit in 4Q10;

NFX:  huge quarter (doubled profits) but missed estimates; press release; transcript;

NOG: Press release; IBD story;

NOV:  transcript; beats comfortably; stellar quarter - Zacks; $1.37 vs $1.30 (expected) and $1.05 (last year)

OAS: preliminary data; earnings press release;

ONEOK: $1.09 vs $0.76; raises guidance; announces split

OXY: Beats by 8 cents (not trivial); profits up 35%; higher oil prices and increased production; transcript

QEP: beats street but swings to a loss; transcript;

RIG: transcript;

SLB: Earnings up 31 percent; earnings transcript; 4Q11, $1.11; an increase of 13 cents sequentially, and 26 cents yoy.
SM: earnings; transcript;  WLL:  earnings at Reuters; transcript here;

SRE: hits new high; raising dividend;


USEG:  3/12 - 3/15

VOG: 3/12 - 3/18

WFT: earnings up 27%; fourth quarter revenues of $3.71 billion were the highest in the company's history;

WHX: reserves, distribution, and termination forecast;

WMB: earnings, 2011; transcript;


XOM:  Beats/misses (depending to whom you listen); focus on natural gas is interesting; strategic vision articulated two years ago; correct strategy?

From A Reader: Luxury Suites Coming To Downtown Williston? -- The Bakken, North Dakota, USA


December 4, 2012: for some reason we were led to believe the Winterton Suites were going to be in downtown Williston. See post below and all the comments. It turns out Winterton Suites is located at 340 26th Street East if I understand the website correctly. This is on the northeast side of Williston, but again, I have been wrong before when trying to locate new facilities on Google maps. Regardless, Winterton Suites says they are now taking reservations for their Williston motel.
Original Post
From a reader:
Has anyone heard of Winterton Suites? They have a luxury suite (small hotel) in Roosevelt,Utah. I see they are planning a downtown Williston hotel...with only 25 rooms and supposed to be ready by spring of 2012, I wonder if it is going to be a rehabilitaded building somewhere downtown? Here is the link announcing the coming soon to Williston.
Does anyone know anything more? Any links to press releases?

Only 25 rooms makes me think they might be renovating the Plainsman Hotel in downtown Williston, an iconic landmark, but sometimes renovating is more expensive and more work than simply putting up a new building.

Luxury suites for CEOs, upper level managers of the many oil and oil service companies in the Williston area?

If this is true, luxury suites downtown, it speaks volumes about where we are in the timeline of this boom.

New Poll At the Sidebar at the Right: Will Events in The Mideast Result in Price Spike in the Near Term?


January 23, 2012: Just when I thought "this" was all going to end -- see story below -- Iran was giving in to the US re-entering the straight. But today, midday here in the US, Iran says it will definitely block the strait. Well, that's what the headline says, but the story is slight less definite. Iran's most recent statement follows EU voting, clearly, to put the Iran embargo in place: all contracts must be null and void within six months. Well, that gives us six more months of negotiations. No link, on purpose.

January 21, 2012: Iran just blinked. Iran's Revolutionary Guards welcome back the US Navy. I guess we plucked so many of their sailors out of the brink, they thought things "go better" with the US Navy in town.

January 17, 2012: I asked readers about a week what they thought the Iranian saber-rattling might mean for the oil markets. Motley Fool is asking/answering the same question.
If analysts are correct, the conflict will pass without a conflict because the effect on Iran would be far greater than on the U.S. or its allies. But the impact of sanctions is already being felt, and it may not be affecting the world in the way you would think.

There's no surprise that oil has traded higher recently on fears that Iran will retaliate. But the move has been subtle and hardly the kind of spike you might expect if threats were actually going to occur. That's partly because traders don't think the threats are going to lead to action and partly because this kind of geopolitical risk is already baked into the price of oil.
With worldwide oil supply relatively constrained, that will put more pressure on domestic oil companies and offshore drillers outside of the Middle East. Statoil, Whiting Petroleum, Continental Resources, and Kodiak Oil & Gas have more than a million combined acres in the Bakken shale play, the fastest-growing oil production play in the U.S. and higher potential prices could mean even more drilling. [COMMENT: way more than a million combined acres; CLR, by itself, has almost 1 million acres; WLL - 680,000; BEXP (Statoil) -- 380,000; and, KOG -- 150,000 which is another million.]

Growing production in the Gulf of Mexico, off the Atlantic, and even in Alaska could be keys for U.S. oil production as well if the Iranian fallout spreads. The Obama administration is opening new locations in the Gulf and Alaska for future sales, but rising oil prices or production disruptions in the Middle East could put pressure on the government to speed up the process.

No matter how you look at it, increasing domestic oil production both on and offshore will be critical if this dance with Iran goes on much longer.
January 12, 2012: price of oil slips below $99 on word EU gets cold feet about Iranian embargo.

Original Post

I had no interest in blogging about this because I thought it was a non-story.

Two weeks ago, I truly felt that Iran would not do anything that would result in a spike in the price of oil.

And I felt that way even as recently as an hour ago.

But with this article in Rigzone, I'm beginning to wonder.

It's not the article per se that makes me doubt my initial thoughts, but it's the number of articles and where those articles are posted that make me wonder.

I guess if I were a betting man, I would still bet that nothing is going to happen in the Mideast in the next six months that will cause a spike in the price of oil, even temporarily.

But, I'm curious. What do others think? Is the current Iran threat to close the strait just political theater, and nothing will happen, or is there some substance to this? Is there a reason the President of Iran Mahmoud Ahmadinejad is visiting Venezuela at this particular moment? Is Ahmadinejad looking for advice, or is he looking for support from Chavez? Will Chavez tell Ahmadinejad to "go for it": block the strait. Chavez, with cancer, doesn't have much to lose. 

I've put up a new poll on the sidebar at the right. Will events in the Mideast result in a spike in the price of oil, no matter how temporary, within the next six months?

I'm going to vote "no." I think it's all political theater for Ahmadinejad's followers back home.

I could be very, very wrong. But, wow, I just don't see it.

Poll Results: Does It Bother You That The Boom is Unfair?

The poll will be closing shortly. A much more interesting poll will be posted momentarily.

The results of the "Bakken boom is unfair. Does it bother you?"

55%: no -- life is unfair
41%: no -- it does not bother me that the boom is unfair
4% yes -- it does bother me that the boom is unfair

My Sweet Lord, George Harrison

Ten (10) New Permits -- An Eye-Popping 1-Million-Bbl-Madison Well -- The Bakken, North Dakota, USA

A week or so ago someone asked me my prediction for the number of new permits in calendar year 2012. I suggested less than 2,000 (or about 2,000) but permits for multi-well pads could change things dramatically. Today, "we" see exactly what I was talking about. Dakota-3 (WMB) has six new permits: but only two new pads.

Daily activity report, January 9, 2012:

Operators: Dakota-3 (6), EOG, Petro-Hunt, CLR, BR

Fields: Clear Water, Tree Top, Van Hook, Stoneview

Eight wells were released from "tight hole"status (four were not completed/fracked), including:
  • 20184, 2,033, Whiting, Snyder 21-11H, Sanish (Mcountrail), t7/11; cum 368K 6/16;
  • 20275, 2,924, Oasis, Kline Federal 5300 11-18H, Sanish (McKenzie), t7/11; cum 369K 6/16;
  • 20926, 2,682, KOG, Skunk Creek 12-10-11-9H3, Baker (Dunn); t7/11; cum 215K 6/16;
Those are incredible IPs by anyone's criteria, and to see three IPs like this of four wells reporting, makes it even more incredible. "Eye-popping" for me. Maybe not for others.

I was not familiar with the Tree Top oil field. It is located in the north end of Billings County, one of the southwestern counties in North Dakota's oil patch. There are a lot of old, abandoned wells in this field, but here are some vertical wells (160-acre spacing for the most part?) that are still active in the Tree Top (these were not screened before selecting; I simply put down a few wells that were still active in one area in the Tree Top):
  • 7349, 361, Petro-Hunt, Fritz 2, s11/79, t3/80; cum 862K 7/17; Madison
  • 7352, 116, Petro-Hunt, Fritz "A" 1, s2/80, t5/80; cum 336K 6/16; Madison
  • 7353, PA/473, Petro-Hunt, Fritz "A" 2, s1/80, t4/80; cum 428K 5/09; Madison
  • 7934, IA/331, Petro-Hunt, Anna Osadchuk B-1, s12/80, t7/81; cum 543K 5/16; Duperow
  • 8116, 926, Condor Petroleum, Federal 2-28, s2/81, t3/81; cum 1.030921 million bbls 7/17, Madison; it appears "they" are up to something on this well; it has been on-line for only one day each month since 3/11; prior to that a consistent 600 bbls/month. [Update: starting December, 2011, this well is now back on line and can still produce about 600 bbls/month.]
  • 10106, 127, Petro-Hunt, Dorothy Osadchuk D 1, s3/81, t5/83; cum 450K 6/16; Madison
  • 10189, 90, Encore, Federal 5-27, s5/83, t7/83; cum 316K 6/16; Madison
  • 13871, PA/162 (Duperow); 152 (Madison); Petro-Hunt, Fritz 5, s10/95, t12/95; cum 104K 6/14, Madison, Duperow
All of these wells were drilled by an operator other than Petro-Hunt. Petro-Hunt acquired these wells after they were drilled (I did not check to see when).

So, would one rather own 10 acres on 1280-acre spacing with a 1-million-bbl-Bakken well, or 10 acres on a 160-acre spacing with a 1-million-bbl-Madison well? Wow.

CNBC Talking Head to Discuss $200 Oil


January 10, 2011: see additional comments suggesting KEG is a fracking company.  And now this link from 2011:  Key Energy buys fracking companies for $300 million
Key Energy Services, Inc. has reached a definitive agreement to acquire Edge Oilfield Services, L.L.C. and Summit Oilfield Services, L.L.C. for a consideration of approximately $300 million.

Edge primarily rents frac stack equipment used to support hydraulic fracturing operations and the associated flow back of frac fluids, proppants, oil and natural gas. It also provides well testing services, rental equipment such as pumps and power swivels, and oilfield fishing services. Following the close, Edge's results will be reflected within Key's existing Fishing & Rental Services line of business, which is included in its U.S. reportable segment.
Same day: See comment re: KEG -- whether or not it's a fracking company.

Here's the link to Cramer's site:
The Houston-based company is what’s known as a well servicing contractor, meaning it does pretty much everything needed to keep oil wells working, including maintenance or repair. With 787 rigs in operation, It’s actually the largest operator of onshore well service rigs in the U.S.

Cramer likes Key Energy Services because it’s engaged in hydraulic fracking, which is the controversial drilling technique performed in oil-rich shales. Fracking is a crucial part of horizontal drilling, a method that’s more complicated than traditional drilling. The oil wells created by horizontal drilling are up to five times more service intensive than conventional wells and that means more business for Key Energy Services.
So, it appears Cramer was being a bit ingenuous -- KEG might not be a "fracking company," per se, but rather "engaged in hydraulic fracking."

Pending further corporate comments, I will remove KEG as one of the fracking companies in the Bakken, but leave it at the post with an asterisk and an explanation.

Original Post
Segment on CNBC
  • $200 oil if Iran shuts the strait
  • 15 million bopd through the strait
  • scenario to get to $150 to $200/bbl
  • but it won't last long
  • response within 2 weeks
  • would response cause price to go up?
  • talking head says once shooting starts (as part of the NATO response) the price would start to come down
  • assuming no major conflict; short term price, next 3 - 6 months --> the EU is going to embargo imports from Iran; Saudi will make that up; but bullish for the markets --> less spare capacity --> that takes us up to $125; but could get to $150
All in all, a pretty unremarkable segment.

Later: Cramer recommends Key Energy Services (KEG), a fracking company. Cramer says KEG is moving to the Bakken; I haven't verified that.  I will add it to my list of fracking companies until I sort it out.  [Update: yes, indeed, Frac Tech may be in the Bakken -- see this link which I posted some time ago.]

Williston Story: Herman Oil Sold to Texas Company -- The Bakken, North Dakota, USA

Link here.
Herman Oil, a company founded by long-time Williston resident Bob Herman, has been sold to Thomas Petroleum, a company based in Victoria, Texas for an undisclosed amount.

Herman said he had been working on selling the company for a couple years before somebody finally bought it. The deal with Thomas Petroleum took about four months to finalize.

“I started out about two years ago trying to sell the company, but everybody who wanted to buy it wanted me to finance it or something. But Thomas had the financial ability to buy the company. We worked on it probably about four months with them,” Herman said.

Herman arrived in Williston in 1954, when he went to work on oil rigs for 13 1/2 years.

When he first got into selling fuel, he owned a service station on Million Dollar Way.
That's where the name of this blog comes from: Williston's Million Dollar Way -- a four-lane divided highway that I grew up. From the time I learned to ride a bicycle, and could stay up until midnight watching television and advertisements of car dealers on Million Dollar Way, it has been part of my life, and ironically, continues to be a part of my life, albeit for very different reasons.

As noted in my "welcome post," (unless I deleted it, I forget), my hitchhiking trips across the US and in Europe began on the Million Dollar Way.

Colorado's Fracking Rules Praised by Industry, Faux-Environmentalists

Link here.
Colorado adopted hydraulic fracturing fluid ingredient regulations, effective Apr. 1, requiring disclosure of all chemicals and establishing ways to protect proprietary information. The rules drew praise from both oil and gas industry and environmental organizations. The regulations allow disclosure through the FracFocus web site ...

China To Pass USA As Largest Oil Importer In Less Than 36 Months --

Link here -- according to Goldman Sachs:
China is due to overtake the United States to become the world's biggest oil importer within a year and a half, ...
U.S. oil imports have slid by 40 percent over the past several years as technological innovation in areas such as shale gas has boosted output, while demand has soared in China,...
Of course, there are at least three stories in those two short paragraphs.

Oh, at least four stories if you include the story that the Keystone XL 5.0 will be laid east-to-west with terminal on west coast, operated by the Chinese. (For newbies, Keystone XL 1.0 has been killed by the administration/withdrawn by TransCanada; Keystone XL 2.0 will be submitted to the president to review, which will be similarly killed; and, then it will be on to Keystone XL 3.0. Very similar to all the Microsoft Windows upgrades.)

And Number Is ... Drum Roll ... Please .... $360 Million ... Rounded, Of Course -- The Bakken, North Dakota, USA

When last reported, back in the October, 2011, time frame, the value of Williston building permits were on track, but still, well below, to hit $300 million for the calendar year.

"Everyone" was projecting $300 million.

The actual number (probably to be revised): $360 million (off by almost 20 percent, even as late as October)

Data points:
  • Williston: record $360 million worth of building permits in calendar year 2011 (numbers rounded)
  • the amount was more than triple the value issued in 2010 -- I still think of the individual who wrote to tell me the Bakken is no longer exciting; that the Bakken is completely predictable
  • $45 million in building permits in 2009
  • 3Q11: Williston had nearly $725 million in taxable sales and purchases
  • taxable sales in 3Q11 in Williston (pop: 12,000) outstrips Fargo (pop: 100,000) -- population figures in the west entirely unreliable
"Eye-popping" I would say, but then I have a different perspective than some.