Monday, November 5, 2012

Vern Whitten Photos of the Oil Patch

Link to Vern Whitten photography.

Incredible aerial photos of the Bakken, including construction of the new rec center in Williston, beautiful Lake Sakakawea, and rigs.

On Tap for Tuesday; Wells Coming Off the Confidential List; Hess With a Huge Well in Alkali Creek

RBN Energy: NGL storage facilities in Arizona

A reminder: Montana Headlines here.  

Wells coming off the confidential list:
  • 19698, 622, Fidelity, Kuchynski 12-1H, Dutch Henry Butte, t7/12; cum 26K 9/12; 
  • 21962, 793, MRO, Vance Strommen 21-13TFH, Killdeer, t8/12; cum 5K 9/12;
  • 22092, 1,073, QEP, MHA 2-05-04H-148-91, Heart Butte, t10/12; cum --
  • 22105, 451, Hess, GO-Perdue 157-97-0112H-1, Ray, t6/12; cum 34K 9/12;
  • 22256, 60, Hunt, Lee 2-8-5H, Parshall, t8/12; cum 6K 9/12;  Bakken, 24 stages; 2.3 million lbs; low gas units; and no flare at any time; this well is on the eastern edge of that part of the Parshall that is productive; another confirmation that wells this far east in the Parshall won't be as good as others to the west; BUT the well 100 feet to the west in the same section (#18254) is a very good well; and, the well just 700 feet to the southwest (#18076), a short lateral, has produced 125K since 6/09;
  • 22474, 420, American Eagle, Coplan 1-3-163-101, Colgan, Three Forks; 26 stages; t7/12; cum 20K 9/12;
  • 22476, 1,179, Denbury Onshore, Grimestad 34-33NWH, Charlson, t7/12; cum 33K 9/12;
  • 22551, 1,041, Hess, EN-Labar 154-94-0310H-3, Alkali Creek, t9/12; cum 37K 9/12;
  • 22591, 115, CLR, Bakke 1-17H, Wildrose, t8/12; cum 1K 9/12;

Rise of the Natural Gas Vehicle; Fall of the Electric Vehicle -- Seeking Alpha

Link here to SeekingAlpha.com.
Based on its huge investments in battery and electric car related companies and research, the President and Congress have obviously chosen to support EVs. I have written for years now that this is not only terrible economic policy, but also terrible energy policy. My reasoning was simply that EVs cannot reduce foreign oil imports at the scale and pace we need to because there are several major disadvantages of the fully electric EV:
  • battery and total vehicle costs
  • battery reliability
  • range
  • recharging station availability and recharging time
  • environmental concerns
The U.S. government has ignored these hurdles and put its heft and investment behind the EV. Why? Because Congress is controlled by special interests, and there are none more powerful than the gasoline refiners, the railroads that transport coal, the electric utility industry, and the oil producers. These are a handful of the most powerful companies in America today. Combined, they have been very successful in pushing the EV as a major distraction to keep us addicted to gasoline and coal and the status quo. How has this strategy worked, and where do we stand today on EVs?
I don't know if I agree with the author's premise, but there is no doubt that the EV has failed to live up to its hype. 

Sixteen (16) New Permits; Whiting Reports Five (5) More Wells -- Four With Great IPs; BEXP Has Six New Permits In The Heart of The Bakken

Bakken Operations

Active rigs: 189 (steady, but up; nice to see)

Sixteen (16) new permits
  • Operators: BEXP (6), CLR (5), QEP (2), Hess (2), Baytex
  • Fields: Beaver Lodge (Williams), Frazier (Divide), Oliver (Williams), Robinson Lake (Mountrail), Antelope (McKenzie), Banks (McKenzie), Heart Butte (Dunn)
Comments: No OXY USA or Newfield well; the six BEXP permits are in the same section in Banks  field, McKenzie -- section 35-153-98; these are two neighboring wells that have report:
  • 21543, 3,203, BEXP, Knight 35-26 1H, t9/12; cum 20K 9/12; in section 35, running north;
  • 21508, 3,288, BEXP, Maston 34-27 1H, t9/12; cum 31K 912; one mile east of 21543, running north;
Wells coming off confidential list were reported earlier, see sidebar at the right.

Producing wells that were completed:
  • 22425, 1,677, Whiting, Norgard 41-13H, Ellsworth, t10/12; cum --
  • 23012, 1,257, Whiting, Smith 34-1TFH, Sanish, t9/12; cum 5K 9/12;
  • 23011, 1,519, Whiting, Smith 34-1H, Sanish, t19/12; cum 5K 9/12;
  • 23076, 1,320, Whiting, Littlefield 13-31H, Sanish, t9/12; cum 10K 9/12;
  • 22659, 530, Whiting, Cvancara 12-14TFH, Alger, t9/12; cum 1K 9/12;
  • 22258, 141, Hess, AV-A and S Trust 162-94-17H-1, Larson, t10/12; cum1K 9/12;
  • 20934, 1,112, Petro-Hunt, Anderson 152-96-35C-26-3H, Clear Creek, t10/12; cum --

Another Bakken-Related Start-Up in Belle Fourche, South Dakota Area

Link to Dickinson Press here.
Construction is under way on a plant near the northwestern South Dakota city of Belle Fourche that will make fiberglass tanks and other products for the North Dakota and Montana oil fields.
The company: Black Hills Fiberglass.

At start-up: about two dozen workers; could double in the near term.

This is the second company to announce new Bakken-related activity in the Belle Fourche area. Very, very interesting. Wonderful.

Inergy Midstream To Purchase Rangeland Energy -- The COLT CBR Terminal Near Epping

Link here to Oil and Gas Journal.
Inergy Midstream LP, Kansas City, agreed to a $425 million purchase of Sugar Land, Tex.-based Rangeland Energy LLC, which owns and operates the COLT open-access crude oil rail terminal, storage, and pipeline complex to handle unconventional Bakken oil production near Epping, ND, in Williams County.
A 21-mile, 10-in. pipeline connects the COLT hub to the Enbridge and Tesoro pipelines at Dry Fork terminal near Tioga, ND.
Data points:
  • 720,000 bbl storage at the COLT site
  • two 8,700-ft rail loops; accommodates 120-car unit trains
  • capacity: 120,000 bopd by railroad
Also, the Houston Chronicle's take on this story.

Duplexes

A reader just sent me this note as a comment which has been posted. Since folks may not read the comments, here it is, along with the link:
Good news for Williston! The Willistonnd.com site for building permits. Williston has surpassed the $400 million mark and they still have 2 months to go! Fargo will beat out Williston this time around though...they have a $500 million hospital out for bids...my guess the building permit has been submitted, so Fargo will probably be in the $800-900 million range.
http://www.cityofwilliston.com/DepartmentContent.aspx?DeptID=WND.CW.BNP&PageID=116

One big difference between 2011 and 2012: duplexes.
As of September 30, 2011: there were no permits for duplexes, accounting for about $12 million.

As of September 30, 2013: there were 35 permits for duplexes (70 units), $12 million. ($12 million/35 --> $350,000/duplex --> $175,000 home.)

I do not have any more information than this, but it certainly suggests the same thing that is very, very obvious in the suburbs of Boston: the huge number of duplexes. One almost gets the feeling that folks are paying for their home by renting out the other duplex unit. Very, very clever.
There has also been an increase in permits for apartments (numbers rounded):
As of September 30, 2011: $90 million for 725 units ($125,000/unit).

As of September 30, 2013: $135 million for 1,000 units ($135,000/unit).

The Cloud

Updates

November 6, 2012: see note below Apple pushing the envelope -- about Apple making tectonic changes that may be unpopular at first, but then becomes the gold standard and others follow. Apple announces in last 48 hours that it may dump Intel and go exclusively with ARM processors. Now, there are rumors that Microsoft will do the same.

Original Post
Apple continues to push the envelope. Apple was the first to push any number of "things" that folks were dead set against at first, but have since become industry standards.

It is my worldview (myth) that Apple was the first to truly push the Cloud. And now we see this:
Of those stores that still had some iPad mini stock available, the 16GB in Black & Slate and White & Silver were 100% sold out, while 90% of the 32GB in Black & Slate were sold out and 76% of the White & Silver 32GB were sold out. Finally, only 14% of the 64GB of the Black & Slate were sold out at those stores with stock available and just 10% for the 64GB White & Silver.
Memory inside one's digital devices is becoming less and less important. Flash drive will eliminate hard drives.

It was also interesting to see differences between black/slate and white/silver but that may have more to do with allotment than demand.

By the way, that comment about pushing any number of "things" that folks were dead set against at first, but have since become industry standards, also applies to the new lightning connector. Besides being required from an engineering point of view (due to its very small size), it is also very esthetic, very much in line with what Apple is famous for.

Likewise, I have to chuckle when I read complaints that the mini does not have retinal display. Apple, I believe, was the first to promote retinal display and that, too, has become the gold standard. And for most of us, retinal display is more marketing than necessary. Fun to watch the discussions over at MacRumors (linked above).

Component Prices/Retail Prices: iPad Mini, Surface, and Kindle

Apple sold three (3) million iPads in three days. (Apple did not provide separate iPad and iPad mini numbers.)
This was double the first weekend sales of 1.5 million for Wi-Fi only models for the third generation iPad sold in March, Apple said on Monday.
"Demand for iPad mini exceeded the initial supply and while many of the pre-orders have been shipped to customers, some are scheduled to be shipped later this month," Apple said.
"We're working hard to build more quickly to meet the incredible demand," CEO Tim Cook said in a statement.
(When I arrived at the Apple store on Boylston Street in Boston last Friday, 43 minutes after their early opening, they had already sold out their allotment of iPad minis for the day.)

For newbies, the iPad Mini is an Apple product; the Surface is a Microsoft product; and the Kindle is an Amazon product.

The WSJ compares the component prices of these three products (at similar memory level: 16-32-16 gigabytes for the three, respectively).

Link here to: what's in an iPad mini?

Component costs come in at:
  • iPad Mini 16 GB: $188 (retail: $329)
  • Surface 32 GB: $271 (retail: $599 -- wow) -- so, almost twice as much as an iPad mini?
  • Kindle 16 GB: $165 (retail: $199)
Apple's battery at $13.50 is significantly cheaper than Microsoft's at $20.

Apple puts in a much better camera, $11.00 vs $5.00 cheapie for Microsoft and $2.50 for the Kindle. You get what you pay for.

The cost of memory is inconsequential ($15.50, $34, and $23, respectively). Microsoft is twice as much but the article compares Apple's 16GB wtih Microsoft's 32GB.

If anything, the biggest difference is the cost of the touchscreen, $80 for Apple and $101 for Microsoft. Interesting.

Comparing the iPad Mini and the Kindle is comparing an apple (no pun intended) and an orange.

At $599 for the surface, it's hard to complain about the $329 price point for the iPad Mini.

For The US, the New 29-Hour Work Week -- I Can't Make This Stuff Up

On October 9, 2012, I posted a commentary on "unintended consequences of ObamaCare." It looks like I hit the bull's eye!

From today's WSJ: health law spurs shift in hours.
Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.
Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.
The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday's election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.
But Americans are content/satisfied. We will see a Chavez outcome Wednesday morning. I define a "Chavez outcome" elsewhere.

********************

Additional WSJ links of interest today:

For blacks, the Pyrrhic victory of the Obama era:
Today, Asian-Americans are the nation's best-educated and highest-earning racial group. According to a Pew study released earlier this year, 49% of Asians age 25 and older hold bachelor's degrees, compared with 31% of whites and 18% of blacks. The median household income for Asians is $66,000, which is $12,000 more than white households and double that of black households. As with other groups, political clout has not been a precondition of Asian socioeconomic advancement.
There are a handful of prominent Asian-American politicians today, including Govs. Bobby Jindal of Louisiana and Nikki Haley of South Carolina, but Asians have tended to avoid politics compared with other groups. Between 1990 and 2000, for example, the number of elected officials grew by 23% for blacks but only by 4% for Asians. In 2008, Asians were significantly less likely than both blacks and whites to have voted.
The election of Barack Obama four years ago gave blacks bragging rights, but bragging rights can't close the black-white achievement gap in education or increase black labor-force participation or reduce black incarceration rates. A civil-rights leadership that encourages blacks to look to politicians to solve these problems is doing a disservice to the people they claim to represent.
This article reminds me of the joke about two hikers seeing a bear, with one of the hikers putting on his tennis shoes. And that's why I see tomorrow's election as a win-win.

Failure to stimulate: the redistribution recession: book review. "The Obama administration has expanded unemployment and thwarted recovery with unprecedented levels of government spending."

I didn't leave the Democrats. They left me.  "There is an anti-Israel movement among the rank and file, and the party no longer appears to value self-reliance, charity, and accountability."

A referendum on ObamaCare and liberty. "Without an immediate course change, the health-care law will become irreversible." It's already irreversible. There are too many good things about it. Including the 29-hour workweek. If the 29-hour workweek is "legalized," folks can start earning overtime pay at 30 hours. What a great country. Even better than the French 35-hour workweek.

Wireless Charging at Starbucks

I was not a fan of Starbucks some years ago, but I have had a complete reversal in attitude. The change occurred a couple years ago when I started visiting the Starbucks on Harvard Square, Cambridge. Now I am a regular at the Starbucks on Cushing Square in Belmont, about nine miles west of downtown Boston.

Three reasons:
  • very, very customer-oriented
  • great coffee
  • customer reward program
It seems Starbucks has the customer loyalty angle all figured out.

I remember the anxiety of some pundits a few years ago when Starbucks was the "first" to announce unlimited, free wireless in their cafes. Folks said non-paying customers would hang out all day, keeping paying customers away. To some extent that is true: some "non-paying" customers do hang out all day. But hey are not completely "non-paying." They will buy at least one cup of coffee and nurse it all day.

But interestingly enough, in the Starbucks I go to, there is a group of men that hang out almost as long, and they have no wireless gadgets. They are just doing what retired men have done for centuries: hang out, talking about politics and sports.

But I digress.

Over time the "non-paying" customers become "paying" customers, and they start showing up at Starbucks at times when not expected. Which includes me and that's how I know.

Now, not only is Starbucks offering unlimited, free wi-fi, Starbucks is now going to offer free wireless charging of smart phones. One of the challenges at a Starbucks is finding an electric outlet. In fact, that's become a game for some (including me): noting where outlets are in fast food restaurants that I visit.

Over at the Boston Globe:
Bostonians are getting a chance to be the first to try something new while sipping coffee at Starbucks: juicing up their phones with a wireless charging system made by Duracell Powermat.
The caffeine purveyor has chosen 17 Boston-area locations for a “limited time in-store trial for wireless charging,” in the words of chief digital officer Adam Brotman. “We’re building the Powermat technology into some of the tabletops, just to get a sense for how our customers will react, compared to having to plug their mobile devices into the wall.”
If you do not own an accessory for your ­iPhone or Samsung Galaxy that allows it to soak up electricity via inductive charging — the technology that may already be keeping your electric toothbrush powered up — Starbucks may have freebie and loaner connectors.
Talk about customer-friendly. Not only is the electricity free, but they will loan you the "stuff" you need to charge your phone. It should be noted that more and more folks are paying for their coffee at Starbucks using their smartphones, so it makes sense for Starbucks to make sure the phones are charged.

Oprah used to "do" her favorite things. Without question, I am now a fanboy of:
  • Apple
  • Starbucks
  • the Bakken
  • certain companies in the oil and gas industry
  • North Dakota
Not necessarily in that order -- except for Apple which is always at the top of the list. 

For investors, there are two great articles in today's WSJ regarding both Apple and Starbucks.

First Apple: forecasting distant sales from the top of Apple's capital hill

For Starbuck fans: Arabica-coffee, near lowest price since June, could decline further;

Earthquake in New Jersey. NOTE: There Is No Fracking in New York City Metropolitan Area

For archival purposes only: a small earthquake was felt by residents in New Jersey "in the wake of Sandy."
Unless I missed it, the article failed to mention that the earthquake was probably not due to fracking.

Designs for "Free" Airport At Minot Revealed; Boardings Have Increased From 70K to 220K/Year; Also, First Photos of Ground Breaking At New Bowman, ND, Airport

Don sent me the link (and the "free" angle). Thank you.

Link at the Bismarck Tribune.
The Minot International Airport will be three times the size of the current building.
The expansion is needed due to increased travel activity in the region due primarily to the oil boom. The airport that typically had about 70,000 passengers per year is expected to go over 220,000 passengers this year. Preliminary designs show that the terminal would increase from 34,000 square feet to about 115,000 square feet.
The expansion project is expected to cost about $85 million, including $40 million for the terminal.
By the way, on a related note. Someone reported recently that a few years ago, total boardings at the Williston International Airport was 6,000 passengers per YEAR; Williston is now loading 6,000 passengers per MONTH at the airport.

Speaking of airports, here's a view of the "dirt that is being moved" for the new Bowman, North Dakota, about three miles east of Bowman: