Friday, August 10, 2012

Wow, Wow, Wow -- Fareed Suspended!

Over at ramblings, here's the story, posted earlier today.

Now, tonight I read that Fareed has been suspended. Wow, that was fast.

Interesting Trading Activity Today Re: OAS

This is not an investment site, but this was an interesting comment that was sent my way, linking this story:
Oasis Petroleum (OAS) saw wild options trading in the last hour of the session on Friday, and finished the day trading 8,861 calls, or roughly 25X daily average.  Even more impressive was the surge in Implied Volatility with IV30 jumping to 64.2%, climbing more than 50% on the day, and this type of late Friday options activity and IV surge reminds we of a few occurrences in the past three years that took place before a weekend takeover announcement, one that comes to memory is Massey Energy (MEE) which I spotted late on a Friday and highlighted on Twitter allowing many to cash in on the deal.
Again, I'm just posting this / linking this as information, nothing more, nothing less. Make no investment decisions based on what you read at this blog. 

I can hardly wait until Monday.

LNG Export -- Main Page


January 28, 2013: Royal Dutch Shell Plc aid it will tie up with Kinder Morgan Inc to export liquefied natural gas (LNG) from a terminal near Savannah, Georgia. El Paso Pipeline Partners LP, a Kinder Morgan unit, and Shell will form a limited liability company to develop a natural gas liquefaction plant at Southern LNG Co LLC's existing terminal. Recent drilling innovations have unlocked vast shale oil and gas reserves, placing the United States in a position to be a major exporter. A number of companies, including Exxon Mobil Corp, have lined up to get permission to sell the country's cheap abundant natural gas overseas, where it can fetch much higher prices.

The terminal is the Elba Island, Georgia, terminal

Original Post 

See first comment -- I don't know about you, but I am very, very enthusiastic about the coming energy decade for the entire US. It really could turn out to be quite a story.

Cheniere website.

I believe this is the Sabine Pass Liquefaction project, but if I have it wrong, I will correct it.

Seaway Reversal, WTI-Brent Spread, Revisited

There's an article at revisting the Seaway Reversal. Like me, the author thought that the Seaway Reversal would be completed sooner than later.

The author at the linked article above concentrates on one issue: the Bakken exceeded expectations.

There was less written about the Seaway Reversal itself. RBN Energy provided a great update on the pipeline reversal which explains the other half of the problem.

There is a tag at the bottom of the blog, "Seaway," which aggregates articles concerning this issue.

For newbies, this is where I track the spread

CLR To Raise CAPEX Significantly in the Bakken

Link here. (At the link, scroll to August 10, 2012, date.)

Original CAPEX: $1.75 billion
In May, 2012: revised upward to $2.3 billion
Now, August, 2012: revised, again, to $3 billion

Earlier in 2012, CLR had planned to drill 249 net wells; will now drill 330 net wells in 2012.

When the going gets tough, the tough get going.

Back of the envelope calculations:
  • $1.75 billion/249  --> $7 million/well
  • $3.00 billion/330 --> $9 million/well

Random Note on Whiting's Starbuck Prospect in Montana

A reader sent this in as a comment. For those folks who don't read comments [also the transcript is linked here]:
Whiting Petroleum made some interesting comments on Starbuck. It is currently shooting 3-D in the area and believes this area is not only prospective of the middle Bakken, but also the Red River. Whiting states this pay zone could be much like it is in Big Island (South of the Bakken), which would produce EURs of roughly 350 MBoe at a well cost of $3.5 million.

This is also important for companies like Triangle, Samson, Brigham, EOG and Continental to name a few. Missouri Breaks right now will produce EURs of 300 M to 400 MBoe, with the reservoir improving from west to east. Whiting has begun adding more acid to the frac, which has and should continue to improve result.
Snapshot of Whiting's prospects (accurate when originally posted; some data may have changed):
  • Sanish / Parshall Prospect: 83,011 net acres; 99 wells in 2010; 106 in 2011; EURs 450 - 950 (middle Bakken) and 400 mboe for upper Three Forks in the Sanish.
  • Lewis and Clark: 128,370 net acres; Lewis & Clark NW of Belfield; 1 rig;
  • Pronghorn: 121,403 net acres; Belfield area; TFS Exploration Drilling; Pronghorn is between Belfield and Dickinson;  5 rigs in the Pronghorn;
  • Hidden Bench: 30,036 net acres; middle Bakken, TFS;
  • Tarpon: 6,359 net acres; Watford City area; middle Bakken, TFS; Tarpon Federal 21-4H -- record IP in the Bakken
  • Starbuck: 91,497 net acres; Montana, west of Williston; Middle Bakken; [prev 88K net acres];
  • Missouri Breaks: 57,762 net acres; Montana, west of McKenzie County;
  • Cassandra: 13,794 net acres; Ray area, east of Williston; Middle Bakken;
  • Big Island: 121,673 net acres; Golden Valley County, southwest corner of ND; multiple objectives; earlier presentation 120K

Update of ONEOK's Bakken Projects From the CEO

Bakken-related notes from ONEOK's 2Q12 earnings conference call, update on Bakken projects
First, all of our previously announced internal growth projects are within the forecasted project cost and timeline ranges.

Second, last week we announced more internal growth projects totalling approximately $1 billion that now bring our 2011 to 2015 internal growth program from $5.7 billion to $6.6 billion. Our contractual dedications in the Williston Basin have grown to 2.7 million acres which is supporting the building of a new 100 million cubic feet per day natural gas processing facility, the Garden Creek II plant and related infrastructure. Upon completion, our processing capability in the Williston Basin will be approximately 500 million cubic feet per day.

We will also be installing additional pump stations on the Bakken NGL pipeline to increase its capacity to 135,000 barrels per day from an initial 60,000 barrels per day to take away liquids generated by our plants.

Third, an update of our plan to build the 1300 mile Bakken Crude Express Pipeline. Discussions with crude oil producers indicate they project crude oil production to increase to well over 1 million barrels per day within the next five years requiring additional crude oil takeaway capacity. At the moment, we are in advanced stages of negotiations with two large anchor shippers who represent a majority of the 200,000 barrel per day initial pipeline capacity. We are also negotiating with multiple other producers for additional capacity. We expect to have committed in the near-term well before construction all the pipeline’s capacity that’s available for commitments. Final negotiations with the anchor tenants, as well as the open season results could increase the current pipeline capacity beyond 200,000 barrels. For obvious competitive reasons we are not disclosing the proposed rates at this time. However, it will be advantageous to rail with producers able to lock in rates for longer term compared with a contract for typical rail capacity.
Much, more more at the link.

Friday Links; Christmas in August: Twenty-Three (23) New Permits; Several Nice Wells, Including Three (3) Nice CLR Wells -- The Williston Basin, North Dakota, USA; Waterless Fracking Update

I may have to do a stand-alone post just to curb my enthusiasm: 23 new permits in the Williston Basin.
  • Operators: Hess (6), Surge Energy (5), CLR (5), WPX Energy (4), Oasis (2), Marquis Alliance
  • Fields: Antelope (McKenzie), Truax (Williams), Souris (Bottineau), Upland (Divide), Elm Tree (McKenzie), Squires (Williams), Blue Buttes (McKenzie), Sanish (Mountrail -- a salt water disposal)
Five (5) producing wells completed:
  • 21585, 1,210, CLR, Roadrunner 2-15H, Dunn,
  • 21583, 1,087, CLR, Roadrunner 3-15H, Dunn,
  • 21584, 1,081, CLR, Clover 3-10H, Dunn,
  • 22495, 805, Liberty Resources, Borrud 156-101-1-12-1H, Williams,
  • 20029, 792, Fidelity, Krables 22-15H, Mountrail

For a few minutes this was lead story at CNBC website; it's now dropped a notch but still on first page: Oil companies desperately seek water amid Kansas drought.

Independent Stock Analysis energy links.
RBN Energy: ethanol -- crushing pain and mandate madness.  Yup.


These wells come off confidential list on Friday:
20739, 826, Hess, HA-Thompson-152-95-1720H-2, Hawkeye oil field; t5/12; cum 23K 6/12;
20990, 209, Petro-Hunt, Berg 157-100-7D-6-1H, Marmon oil field, t5/12; cum 7,4595 bbls 6/12;
21079, 1,218, Petro-Hunt, Fort Berthold 148-94-19D-18-2H, Eagle Nest; t6/12; cum 6,962 bbls 6/12;


Just so I don't forget. There has been a lot of chatter about oil companies losing their leases because they can't get to their permitted/leased sites fast enough. From NOG 2Q12 press release:
Northern Oil currently controls approximately 865 undeveloped net acres that are prospective for the Bakken and Three Forks and could potentially expire in the remainder of 2012, representing approximately 0.5% of Northern Oil's overall Williston Basin position.
I can only assume operators are as well positioned. Lots of chatter about a non-issue. 


Off-shore permitorium continues. From Oil and Gas Journal:
The Obama administration did not properly consult with coastal states as it prepared its 2012-17 US Outer Continental Shelf management program, seven governors from coastal states charged. “In the plan, the administration fails to expand adequate access to resource-abundant areas in the Arctic and fails to establish leasing in the Mid- and South-Atlantic,” they said in an Aug. 8 letter to US President Barack Obama.

For investors only:
Houston-based oilfield service company National Oilwell Varco Inc. (NOV) will acquire Robbins & Myers in an all-cash transaction valued at approximately $2.5 billion, NOV said Thursday.
Fracking without water?
Chimera Energy Corp [website] announced Thursday that they have executed a Memorandum of Understanding with PEMEX regarding the utilization of CHMR's revolutionary exothermic Non-Hydraulic Extraction method throughout Latin America. The Non-Hydraulic Extraction method is a revolutionary Shale Oil extraction technology designed to safely and economically replace hydraulic fracturing without negative environmental impacts. The new process uses no water.
But does it use diesel?

A Note for the Granddaughters

A tradition for our summer in Los Angeles: taking the granddaughters to Griffith Park in Los Angeles where they can ride the ponies/horses (just part of all we do in Griffith Park).

So, today, we started off with pony riding in Griffith Park. Both of them are familiar with the routine, and very comfortable around horses, but it was fun to watch them hold hands as they got closer to the horses, quietly giving each other a bit of support.

This will turn out to be one of my all-time favorite photos of the granddaughters:

Olympic Medals for Ideas Gone Bad -- Actually, Bad Ideas Gone Worse

Gold Medal: Food for fuel. Corn to ethanol. Crazy idea from the beginning. Now it really looks like a bad idea. UN asking US to suspend ethanol program immediately. Case in point: Guatamalans will starve so large industrial growers can convert corn to ethanol. -- NY Times, January 6, 2013.

Silver medal: Killing Keystone XL.

Bronze medal: Slicers and dicers.

Copper medal: Solyndra.

Honorable mention:
  • $26 diesel for US Navy via biofuels -- what were they thinking? Coal would be cheaper
  • Permitorium following the 2010 Gulf of Mexico spill -- what were they thinking?
New category: bad ideas that can only get worse with time  

Bakken reality show 

France bans office lights after 1:00 a.m. to cut down CO2 emissions; crime will run rampant

Tesla charging stations good for Tesla only; Leaf and Volt -- you're out of luck. Actually, it's worse than that: Tesla is a car company. Now it's becoming an infrastructure company. This is like GM building its own gas stations but only allowing GM cars to refuel there.

California mandates that 15% of all cars sold in the state must be "emission-free" by 2025