Thursday, November 1, 2012

On Tap For Friday; BEXP With Two Nice Wells; OXY Reports Another Well; Apple Sells Out Of iPad Minis at Flagship Boston Store; Unemployment Edges Up; Robust Hiring Past Month; Futures Up


November 5, 2012: contractors without "permission slips" are being turned away from tree-clearing work in Sandy-savaged New Jersey. Unlicensed homeowners are using unlicensed teenage children to clear downed limbs, trees, ... possibly even raking leaves. I can't make this stuff up. When you get to the linked story, there's only a video, but it's the comments that are a hoot and worth reading. "Nanny state" comes to mind.

November 3, 2012: see comments regarding union / non-union worker issues in New Jersey. I think it's becoming clearer. In fact, it probably occurred: union workers threatening non-union workers about entering the state of New Jersey. The "official" line from the companies is that they are not turning back "non-union workers" but that's at the home office, not in the trenches, where it is likely occurring. It is interesting that the governor has threatened to invoke his powers under the "Disaster Control Act" to preclude this from happening, but apparently to date he has not invoked those powers.  The fact that the governor has made this threat, but stopped short, speaks volumes.

Later, 4:54 pm: the only question regarding the new Apple iPad mini? White/silver or black/slater? One has to actually hold the iPad mini to believe it. It is absolutely incredible. Superficially, it resembles the look and feel of the Kindle and/or the Barnes and Noble Nook but there's something about the iPad mini that seems to be so much more ... shall I say, solid? It certainly is more robust in what it can do. And it makes the MDW blog look stunning.

Original Post

I arrived at the Apple Store on Boylston Street, Boston, at 8:43 a.m. The line was about 30 people long, and they had closed it to any more coming in to look at/buy the iPad mini.  They had been letting folks in at two or three at a time. They had already sold out the allotment of iPad minis (wi-fi version only) for today. But they will open at 10:00 a.m. for regular business. I will be there. Now at Starbucks down the street. Beautiful, beautiful day in downtown Boston.

Update: the iPad mini is incredible.

iPad mini promo

Drudge Report: unemployment higher today than when the president took office; what do we have to show for it? $16 trillion in debt. But markets look robust; futures up. Disclaimer: this is not an investment site. Oil down slightly. Americans are content/satisfied.

CVX: earnings drop by a third

The following wells come off the confidential list:
  • 11502, PNA --> loc (5/2/2012), Encore, Wegman 2-30, Horse Creek, a Red River well;
  • 20689, drl, Zenergy, Patsy 5-8H, Siverston,
  • 21468, 2,522, KOG, Koala 14-32-29-4H3, Poe, t9/12; cum 25K 9/12;
  • 21505, 349, OXY USA, State Watkins 1-26-35H-143-95, Murphy Creek, t5/12; cum 20K 9/12;
  • 21543, 3,203, BEXP, Knight 35-26 1H, Banks, t9/12; cum 20K 9/12;
  • 22362, 593, CLR, Kolstad 1-28H, Corinth, t7/12; cum 16K 9/12;
  • 22461, 3,545, BEXP, Liffrig 29-20 4H, Alger, t7/12; cum 53K 9/12;

On a completely different note, one certainly gets the feeling that the lack of gasoline and electricity outage in NYC is going to become a much bigger story than most folks initially realized. Drudge always gets it right. He reports that non-union crews were turned away from New Jersey; then recalls the president's "no-red-tape" pledge. Sounds like his "all-the-above" energy policy. Wow. [Update: on CNBC moments ago, 1:20 p.m., November 2, 2012: some union spokesmen are unhappy that the Jones Act was suspended during this emergency, because it might mean some work might not go to Americans during this recovery effort. Wow.]

And from CBS:
“Red Cross is here with hot chocolate and cookies. We need blankets, we need pillows, we need clothing. We can get hot chocolate and cookies, we need help!” resident Jodi Hannula said.
It was almost too much for Hannula to bear. She said she had 30 years of memories washed away by flood waters.
And with no flood insurance, she said she’s been pleading for help, but finding little.
“You hope that the government does the right thing and steps in and helps us out. We have been looking for FEMA, [but] FEMA has not been here,” Hannula said.
At least the Red Cross showed up. FEMA? They will be there next week with clipboards.

RBN Energy: propane

Waiting for GMXR to report (I think they report today November 6?). I believe I may have posted this or linked this earlier; it was released earlier this month, GMXR update of two of their Bakken wells:
The Akovenko 24-34-2H (#21544), in which the Company has a 92% working interest, is the first Company-drilled well with oil-based mud. The well is located in Sections 27 & 34, Township 146N, Range 99W in McKenzie County North Dakota. The well reached total depth in less than 30 days and drilling costs were $4 million, in line with our estimates. The plug and perf completion is targeting the Middle Bakken, and we expect oil production to be in early November. This well will be the first plug and perf completion in McKenzie County for GMXR in the Middle Bakken and in a lateral drilled with oil-based mud. Fracture stimulation of the 40-stage well began this week. [Note, Akovenko 24-34-1H, GMXR, had an IP of 1,409, file #21545; it runs to the south, whereas "2H" runs to the north. "1H" had a nice IP but it's production has been lousy, and it has been off-line much of the time since being completed.]
The Lange 44-31-2H (#23634) in which the Company has a 89% working interest, is located in Sections 30 & 31, Township 147N, Range 99W in McKenzie County North Dakota. We expect the well to take approximately 30 days to reach total depth which will occur in early November. The well will be our second well drilled with oil-based mud and will be completed with a plug and perf fracture stimulation.

KOG: Lots of Ink To Explain Results; Those Darn Hedges

Link here to the press release.
For the third quarter 2012, the Company reported net income of $3.5 million, or $0.01 per basic and diluted share, compared with net income of $30.8 million, or $0.15 per basic and diluted share, for the same period in 2011. 
Net income for the third quarter 2012 includes an unrealized loss of $36.7 million related to the mark-to-market of derivative instruments used for commodity hedging and $4.0 million in deferred income tax benefit. 
The net effect of the non-cash hedging activities expense and non-cash deferred income tax benefit decreased Kodiak's reported net income for the third quarter 2012 by $0.12 per basic and diluted share.
When I get caught up, I might come back and post some data points regarding the results. The transcript should be interesting. 

KOG shares traded very slightly lower during the day, but up slightly after hours. It will be interesting to see analysis of the results from Mike or others.

Chesapeake: Biggest Loss in Three Years

Link here to Bloomberg.
Chesapeake Energy Corp., the second- largest U.S. natural gas producer, posted its biggest net loss in more than three years after a plunge in gas prices prompted a $2 billion writedown in the value of gas fields.
Chesapeake reported a net loss of $2.01 billion, or $3.19 a share, compared with profit of $922 million, or $1.23, a year earlier, the Oklahoma City-based company said in a statement today.
Excluding one-time items such as the writedown, Chesapeake earned 10 cents a share, a penny more than the average of 34 analysts’ estimates compiled by Bloomberg.

EPD, Pipeline Story, Incredible

Link here to Reuters.
Enterprise Product Partners, one of the nation's largest pipeline and terminalling companies, sees good prospects for uniting the burgeoning growth of U.S. and Canadian crude oil with the Gulf Coast's refinery row.
Enterprise Product Partners is joint owner of the Seaway pipeline, along with Canada's Enbridge, which was reversed in June to carry oil from the north to the south of the United States.
Speaking to investors and analysts at its third quarter conference call, the company said this means that 150,000 barrels per day of crude is being moved out of the oil hub of Cushing, Oklahoma, and down to the Gulf Coast where it will be able to access 7.5 million barrels per day of refining capacity.
The pipeline, one of several the company is working on to unlock the value of growing domestic crude oil by connecting with refineries, will reach about 850,000 bpd of capacity in 2014.
The company is also in the process of working on three other crude pipelines, the Texas Express, the Rocky Mountain and the Front Range, which will have combined initial capacity of 465,000 barrels per day by the beginning of 2014.
Two thoughts:
Killing the Keystone XL was a godsend for several other pipeline players.

If TransCanada continues with plans to lay Keystone XL 2.0, it boggles the mind how much oil is going to be flowing through the United States. 

500,000 Bbls In One Year?

I hope I am reading this file report correctly.

If so, this is a well that newbies need to see.

This one is on my "Monster Wells" page. 

The Sword of Damocles -- Yes, It's About the Bakken

Link here to Bismarck television. (A big "thank you" to a reader.)
The economy is thriving in western North Dakota. And much of that growth can be attributed to the oil industry. But some fear that could change after November 6.

Hydraulic fracturing is a crucial part of operations in the Bakken oil field. That`s why some in western North Dakota are concerned about the upcoming election. They claim that a certain winning candidate could ban fracking and cause the economy to plummet.

"There`s just a concern, I think, with Obama, that he doesn`t necessarily understand really what`s happening in the oil industry, what is it`s doing for not only the local but the state and the nation. And so you`re finding companies who are saying, `We`re going to just put things on hold until after the election,`" said Williston Mayor Ward Koeser.
A lot of naysayers write me whenever I post anything about risk of federal regulation of fracking. So, this is posted without any comment from me.

Random Photographs of Northeast McKenzie County and Oil Activity

A reader sent me a dozen or so photographs of wells, rigs, and North Dakota countryside in northeast McKenzie County, near Keene, North Dakota. He receives royalties from acreage in these photos. He wrote:
The trip from Sidney [Montana] was pleasant and the new road between Alexander and Watford City was great. Poor Watford was jammed packed, it truly did look like a modern day gold rush.
So, over the next few days, to add a bit of color to the website, I will add some of those photos, one or two at a time. I never get tired of looking at North Dakota panoramic landscapes or oil activity. I hope the roughnecks, particularly, enjoy these photos, and forward them to their parents and/or significant others in their lives. They are doing incredible work.