Monday, August 6, 2012

30 Centimeters Per Pixel

That's the resolution of a NASA satellite circling Mars: 30 centimeters per pixel.

Does anyone doubt there just might be similar technology orbiting the earth? Just asking.

Think what great photos we would have of the Bakken with 30 centimeters per pixel. 

How Strong Is the Oil Boom in North Dakota?

Note: see first couple of comments before reading.

The Grand Forks Herald has a very nice op-ed piece on the strength of the oil industry in western North Dakota. It follows a conference at the Energy and Environmental Research Center at the University of North Dakota (EERC/UND).  This is incredible library and one I have alluded to many, many posts ago. I have not visited the EERC but it sounds like a state treasure. Visiting the center is on my short list of things to do, although it would take some coincidental scheduling for it to happen.

The author reiterated what readers of this blog have known for quite some time: this oil boom will last decades barring any major geopolitical event that could bring it to a jarring halt. 

But the author also noted a few things that grabbed my attention (direct quotes from the article follow):
  • Electricity needs in some areas are so enormous that officials even are talking about bringing in a modular nuclear reactor to generate power.
  • The drilling rigs’ thirst for water is such that officials also are talking about running a pipe from Devils Lake [to western North Dakota].
  • Paraphrasing: Every town in the western region could double in size. 
I agree with all of that. But I must be missing something with regard to water. Knowledgeable sources say that the water needed for fracking represents less than one percent (or was it one-tenth of one percent) of the flowing Missouri River. "Flowing" is stressed. In addition, General Electric has announced technology that could significantly reduce need for water.

[I never did finish this piece that was started a long time ago but I will post it as is.]

Very, Very Optimistic -- For Investors Only

I am finally caught up with most of the notes I wanted to post for today. I need to go through some new presentations and do some reading, but for the moment, I'm just relaxing.

I'm in a great mood. I have this hunch that we're through the rough patch of the market for the time being. Sure, it could bottom out tomorrow or this week, or next week, but skimming through the headlines, and with most companies having now posted their 2Q12 results, it looks like we've gotten through the worst.

I don't know why I'm in a good mood. Maybe it's the fact that Congress is on a five-week vacation. Or maybe it's the Mideast -- it hasn't blown up yet (sure, Syria's a problem).

The Mideast looks "bad" -- in the near term: Syria, Israel and Iran. In the long term, the entire Mideast, as the Muslim Brotherhood gradually takes control. We may yet see Pan-Arabism that was talked about when President Obama was still a community organizer, or perhaps before that (I can't keep track of the decades). But the Mideast always looks bad, and if one is invested in oil, I don't see "bad news" coming out of the Mideast.

If the Mideast gets through this saber-rattling without a shooting war, one can probably thank the US Marines. And the US Navy.  I assume a few aircraft carriers and supporting vessels off Iran's shore gets their attention.

But back to investing. I find it absolutely amazing the number of great companies that one can invest in that are paying great dividends. I think "easy money" is here to stay for quite some time, and companies are taking advantage of it. Oasis, SandRidge, Enterprise Partners, all announced new issues of senior debt in the last 24 hours or so. And that's just of the companies I tend to follow.

SandRidge Has A New Presentation

In the Bakken, I particularly enjoy watching Whiting and Oasis,

Outside the Bakken, SandRidge has caught my attention. Don tells me SandRidge has a new presentation. I have not seen it yet.

Flirting With 200 Active Rigs in North Dakota -- And It's Time For a New Poll

Down to 203 today; record high was 218 for this boom.

Sounds like it is time for a new poll.

Here are the results of the last poll, in which we asked: "Do you agree with the proposition, that if you've got a business, you didn't build that. Someone else did." 

Overwhelmingly, "are you kidding?" was the #1 response at nearly 60%. About 10% of folks must have misread/misunderstood the question, by answering "yes." Some people continue to think what the president said was taken out of context. Thank you for YouTube running the entire segment, not just the sound bite.

So, for the new poll: The number of active rigs in North Dakota continues to fall. Today "we" are down to 203 from a record high of 218. Many Bakken operators have said they will be cutting back on number of rigs. There are so many ways to look at this and so many questions that could be asked, but I will simply ask: Is this good for "North Dakotans" that the active rig count is decreasing?

Regular Readers Already Know This: Shale Results in Increased Ethylene Exports

RBN Energy deserves a huge "thank you" for all they did to educate readers about ethylene, natural gas liquids, etc.

Here's a link to a story in the Oil and Gas Journal:
A natural gas liquids boom stemming from development of US shale plays will spur investments in export-related petrochemical plans targeting Latin American market, Energy Security Analysis Inc. (ESAI) said in a recent report.

With US demand for ethylene derivatives growing modestly, expanding petrochemical capacity will be export-oriented. ESAI expects the US surplus of ethylene derivatives to expand to over 4 million tonnes/year by 2016, a 40% increase from 2011.

In response to increased liquids production from Marcellus and Utica shales in Pennsylvania and Ohio, Royal Dutch Shell selected a site near Pittsburgh for the potential construction of a petrochemical complex.
The Bakken was not mentioned, but the Bakken is also contributing.

Not That Anybody In Washington (DC) Cares ...

... but at least for the record, the federal government is aware that:
Representatives of the oil and gas industry described federal leasing delays, which they consider unnecessary, on onshore public lands during an Aug. 2 US House Energy and Commerce subcommittee hearing.

Policies enacted after US President Barack Obama took office have made it harder for producers to operate on federal lands, said Kathleen Sgamma, government affairs director for the Western Energy Alliance of Denver, a regional association of independents.

“Producers struggle to navigate additional bureaucratic barriers on federal lands, while many avoid federal lands at all costs because it’s just too difficult to realize any return on investment within a reasonable time frame,” Sgamma said.
I loved the federal government's response:
Federal officials suggested market forces could play as big a role as policies in keeping US onshore oil and gas production on public lands from growing as fast as production on private and state acreage.
I read that response several times, and for the life of me, I cannot figure out what "market forces" could possible differentiate between public land and private land, all things being equal? I can only surmise that Representative Jessie Jackson mailed in that comment.

This may be the most incredible speech I've heard in a long time (except for the president's infamous one-liner).

"Let them eat cake."

It's August. Aren't they all on vacation?

The permitorium continues.

Speaking of vacations. This is a great story at The Atlantic. No-Vacation Nation: Why Americans Don't Know How To Take a Break. 
The United States has no vacation policy -- and neither do families, judging from surveys of workers' time off. Are we doing it wrong?
[I can't make this stuff up. "The United States has no vacation policy." It doesn't? The Federal government most certainly has a vacation policy: 30 days paid leave. Weekends don't have to count. Holidays don't have to count. With careful planning, one can easily work in 60 days of paid leave every year while serving in the military (see exception below). Fridays after Thanksgiving Thursday are generally "down days." The last weekday of the month is a "down day" for fighter squadrons. One week between Christmas and Ramadan (if it fell in January/February) was always a "down week."]
The United States has no vacation policy -- and neither do families, judging from surveys of workers' time off. Are we doing it wrong? 
Another writer who doesn't "get it." The writer asks if the US is doing something wrong? The most productive nation on earth (well, maybe second, or third, or fourth, but well ahead of France) takes the fewest vacations according to "official" data.

I knew from the time I was in second grade that vacations were too long, left us all too exhausted, and Dad too broke -- maybe there's a reason Americans don't take two-week vacations any more. My hunch is that money Americans used to use to finance vacations is now used to pay federal income taxes, social security taxes, and Medicare taxes -- all of which will be going up next year. But I digress.

But, it is interesting that even those who have money left over after paying taxes, choose not to take vacations even if their company provides the opportunity (see the linked article). I don't know if it was the majority of military personnel, but "most" military personnel I served with purposely did not take all their annual vacation. (I am not including those on 6-month, and 12-month deployments in a combat zone.) Everyone had multiple reasons.

But, "work" for many, not all, is no longer the drudgery that it was in the 18th, 19th, and 20th centuries. For many of us today, work is actually a rewarding endeavor; some folks have trouble dealing with weekends. Some folks are rejuvenated after a nice Friday night - Sunday afternoon getaway and don't need a two-week break in which another two weeks is required to recuperate.

I used to subscribe to The Atlantic; it was one of my favorite magazines, and I will read almost anything if it's good writing, but I have to admit, I'm glad I'm not paying for an annual subscription when I see articles like this.

Mercy Hospital To Get $450,000 Grant

Link here to Williston Herald.

Data points:
See also an earlier story regarding another grant from the Helmsley Trusts.

Random Look At North Dakota Oil Production By County

Seventeen counties are producing oil in North Dakota. For May, 2012, for selected counties, production for the most recent month available (total bbls/month):
Mountrail: 5,011,665
McKenzie: 3,941,454
Williams: 2,963,076
Dunn: 2,610,393

Bowman: 760,079
Divide: 704,244

Billings: 381,666
Burke: 296,961
Stark: 210,865

Bottineau: 161,695
McLean: 129,894
There are a number of reasons why this might be interesting (or not). One of the biggest reasons was an "after-the-fact" thought. Yesterday, "anonymous" suggested that 3.8% GDP growth in North Dakota was fairly exaggerated in its importance. With regard to oil, it is but a handful of counties driving that growth. 

Surface area, square miles:
Mountrail: 1,824
McKenzie: 2,742 (largest county in ND)
Williams: 2,148
Dunn: 2,082
Bowman: 1,167
Billings: 1,153 Burke: 1,129
Stark: 1,340
Bottineau: 1,698
McLean: 2,328
Total surface are of those eleven counties: 18,871 square miles.
North Dakota's surface area is 70,762 square miles.

The four counties contributing the most oil production (currently) comprise 8,796 square miles in surface area, or about 12 percent of total surface of North Dakota. If all eleven counties are considered, that works out to about 27 percent.

This data is completely meaningless, and perhaps uninteresting, except to me and one other person, who shall remain nameless.

Wow -- A Truck-Mounted Big Rig in the Bakken

"David" posted this; again, a great post.

A truck-mounted big rig seems to me to be a big deal, but maybe I'm just biased.

Incredibly Nice Update by "David"

Link here to a great update about the Bakken.

On track for 2,800 wells to be drilled in North Dakota this year.

2,000 wells/year for 15 - 18 years (the Bakken/Three Forks).

Monday Morning Links, Several Nice Wells Coming Off Confidential List, Nothing Spectacular -- August 6, 2012

Permitted for re-entry:
  • 16580, CLR, J. H. Skarphol 1-31H, Burke; Stoneview, re-entered the Bakken, 11/12; IP: 544, cum  97K 9/16;
Eleven (11) new permits --
  • Operators: Hess (4), Denbury (3), MRO (2), Fidelity, Sinclair
  • Fields: Charlson (McKenzie), Blue Buttes (McKenzie), Stanley (Mountrail), Little Knife (Dunn), Bailey (Dunn)
Reporting earnings today: CHK, OAS, VOG. Sneak peek for CHK here.
CHK earnings, a pdf; CHK profit rises on asset sale; from Rigzone: profits soar;
Oasis earnings;
Mike Filloon on:
SeekingAlpha: SandRidge -- positive review

Petrobras plunges: breaks 13-year profit streak. I talked about issues with Petrobras some time ago


Wells coming off confidential list today (and from over the weekend)
  • 20883, 724, ERF, Hans 20-21H, McGregory Buttes, t4/12; cum 266K 9/16;
  • 21020, 286, Hunt, King 2-35-4H 2, Ross, t4/12; cum 234K 9/16;
  • 21800, 1,584, Petro-Hunt, Fort Berthold 152-93-9C-10-1H, Four Bears, t11/12; cum 246K 9/16;
  • 21856, DRY, Hess, BL-S Ramberg-155-95-0601H-3, Beaver Lodge,
  • 21953, 2,790, BEXP, Cvancara 20-17 2TFH, Alger, t9/12; cum 194K 9/16;
  • 22021, 1,135, BEXP, Bill 14-23 2TFH, Alexander, t8/12; cum 103K 9/16;
  • 22051, dry, Ballard, Backes 23-4, Wildcat, a Madison well; Renville County
  • 22100, AB/1,317, Oasis, Achilles 5301 41-12B, Baker, t2/12; cum 185K 12/14;
  • 21573, 1,461, MRO, Weninger Cox 44-34TFH, Reunion Bay, t4/12; cum 215K 9/16;
  • 21585, 1,210, CLR, Roadrunner 2-15H, Murphy Creek, t7/12; cum 223K 9/16;
  • 22242, 2,072, Zenergy, Martin 9-4H, Rosebud, t5/12; cum 159K 9/16;
  • 21584, 1,081, CLR, Clover 3-10H, Murphy Creek, t7/12; cum 260K 9/16;
  • 21676, 140, Slawson, Ann Nelson Federal 1-31-30H, Ross, t4/12; cum 145K 9/16;
  • 21741, 558, Hess, GO-State 157-97-2116H-1, Ray, t6/12; cum 114K 9/16;
  • 22043, 332, Hess, MC-Steckler-143-94-0805H-1, t4/12; cum 103K 9/16;
  • 22075, 492, CLR, Lieland 1-10H, Viking, t5/12; cum 138K 91/6;
  • 22131, 502, WXP, Dakota-3 E&P Company, Van Hook, t10/12; cum 220K 9/16;
  • 22231, 751, SM Energy, Torgeson 2-30HNA, West Ambrose, t5/12; cum 204K 9/16;
Energy links at Independent Stock Analysis
RBN Energy: Value-Rich NGLs, Pricing, Ethane, Part III

Notes to the Granddaughters

Last night, the granddaughters and I stayed up late watching Curiosity, the Mars rover, land safely on ... drum roll ... Mars.

They turned 6 years old and 9 years old in early July.

They were mesmerized to see the streaming video coming over my very ancient early version, white, Apple MacBook (the model was first released May 16, 2006. It's hard to believe this 6-year-old laptop does all that it does. It reminds me of another workhorse, the C-130. But again, I digress.). I have to say, the landing was very, very exciting. I think everyone, including the NASA engineers, were completely surprised that after eight months traveling through space, not only did it have a perfect landing, the rover immediately started sending back still photos. Wow, were the girls excited to see those fuzzy gray (grey?) photos of Mars. I'm not sure the 6-year-old knew "what" she was looking at, but she knew it was historic, and important, and something to talk about today.

But while watching, it was impossible to compare the Martian landing last night with the first lunar landing in 1969, the year I graduated from high school. I think Peggy Noonan could write a very, very nice article looking back on the changes baby boomers have seen between 1969 and 2009.

Over the weekend I posted a story about North Dakota's oil tax receipts for calendar year 2011: $1.7 billion. I was going to post a note, asking what $1.7 billion would buy in 2012. Here's the answer: NASA's Mars program.
NASA just released its presidential budget request for 2013 and, as expected, the space agency’s planetary science program takes a big hit. The budget document (summary pdf) is merely the first volley in an often drawn-out exchange between the White House and Congress, but still sets the general direction for the space program. Although the Obama administration’s proposal would slice less than 1 percent from NASA’s current budget, it proposes some major shifts of funds within the agency.
The planetary science program, which received $1.5 billion for 2012, would take a 20 percent cut. NASA would still fly the Mars MAVEN atmospheric mission in 2013 but would back away from two joint missions with the European Space Agency:
NASA is terminating further activity on the formulation activity for the NASA/ ESA ExoMars Trace Gas Orbiter 2016 (EMTGO) mission and planning for the previous NASA/ESA Mars 2018 mission concept.
The latter mission would have included the first direct search for life on Mars since the Viking landers of the 1970s. With NASA bailing out, ESA is now casting around for another partner.
There are a lot of articles written about the decline of American education. Many of the articles note the paucity of engineering students, and challenges with science and math programs. It appears "we" have nothing to worry about. It appears the US will need fewer engineers going forward. At least in rocket science. But I digress.

The granddaughters were enthralled. But the most interesting observation: they carried the laptop around from room to room watching the streaming. It did not seem "magic" to them; they've grown up with wi-fi, streaming, no wires, and longer-life batteries that can be charged while they are sleeping. Their children, I assume, if they are still using batteries, will see batteries charged with "near-field charging," not requiring any cables to even charge electronic devices.

So, we'll see.

Mars Rover Landing -- 10:30 PDT -- Successful Landing!!

Live streaming here at NASA-TV.

Still images here