Thursday, January 31, 2013

Recap -- New Permits: January 2013 -- The Williston Basin

217 permits in January, 2013 (annualized: 2,555)  There were 146 permits in January, 2012.

Selected operators:
  • BEXP: 15
  • CLR: 39
  • EOG: 2
  • Fidelity: 3
  • Hess: 15
  • KOG: 13
  • Oasis: 9
  • OXY USA: 8
  • Petro-Hunt: 15
  • Slawson: 6
  • Triangle: 8
  • Whiting: 22
Selected Counties:
  • Dunn: 31
  • McKenzie: 65
  • Mountrail: 33
  • Williams: 49

Random Look At Two More EOG West Clark Wells in Clarks Creek -- the Bakken

EOG reported two producing wells that were completed in Clarks Creek; see today's daily activity report.

Just out of curiosity, checking to see status of two more EOG Clarks Creek wells:

22962, conf, EOG, West Clark 5-2425H, Clarks Creek:

DateOil RunsMCF Sold

22963, conf, EOG, West Clark 102-2413H, Clarks Creek:

DateOil RunsMCF Sold

In addition to these looking like nice oil wells, note that both are already hooked up to natural gas pipelines.

Rail Will Be The Way Bakken Oil Is Moved: Pipeline to Move Oil to Crude-By-Rail Terminals -- Spokesperson

The second of two very interesting stories sent in by a reader: Tesoro Logistics could reverse a pipeline system in North Dakota as quickly as March of this year, so it could move oil output from southern drilling areas of the Bakken formation to rail terminals in the north of the state -- Argus Media.
The company estimates most North Dakota takeaway capacity has been built out north of Lake Sakakawea, but oil output has been almost equal on both sides of the lake. That means there will be “a lot of demand in the future” to move barrels from south to north in order to access outbound infrastructure, Tesoro vice-president of logistics Rick Weyen said today at the Bakken Product Markets and Takeaway Capacity conference in Denver, Colorado.

Crude producers are continually looking for feasible ways to reach more outbound capacity, he said. Tesoro's High Plains pipeline system, which currently moves crude from north of the lake to its 70,000 b/d refinery in Mandan, North Dakota, via a 12-inch line could be that solution.
“A lot of rail companies are awfully close to our pipeline. We're working hard with a lot of rail facilities to come up with connection agreements,” Weyen said, adding Tesoro could make announcements on rail facility connection agreements over the next couple of months.
We think rail is long term, it's going to be the way Bakken crude is moved…the pipeline is there to serve and help the shippers get the crude from the production area to the rail facilities,” he said.
I have no idea how this will all end, but I do remember some folks commenting that once the pipeline is all in place, it's all over for rail. Here is a very different opinion. I find this very, very intriguing, to say the least.

Barges to Carry Bakken Crude to West Coast (California, Washington) Refineries

First of two very interesting stories sent in by a reader (thank you): barges will soon carry Bakken crude to West Coast refineries -- Platts.
US barge owner Kirby said Thursday that Bakken crude oil would soon find a rail route to the West Coast, where vessels would pick it up to deliver to California and Washington refineries.

"There are investments being made to facilitate that as we speak," CEO Joe Pyne told analysts during a fourth-quarter earnings call.

While Kirby executives have previously considered the possibility of West Coast routes for Bakken oil, it was the first time they sounded confident that the trades would happen.

Pyne did not go into detail about what share of that market Kirby hopes to snag or how soon the shipments might start.

North Dakota's booming oil production has shaken up midstream markets, with railroads, river barges, coastal barges and a few Jones Act tankers picking up the slack while pipelines get built.

Pyne said those dynamics for crude oil transportation will keep shifting for several years before a more permanent trend takes hold.

Thirteen (13) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 185

Thirteen (13) new permits --
  • Operators: KOG (6), BR(3), Oasis (2), CLR, Whiting
  • Fields: Hawkey (McKenzie), Pembroke (McKenzie), Corral Creek (Dunn), Willow (Williams), Banks (McKenzie), Cow Creek (Williams), Bonnie View (Golden Valley)
  • Comments:
Wells coming off the confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 22977, 944, SM Energy, Holm 14-12HA, Siverston, t12/12; cum 17K 12/12;
  • 23328, 1,598, Whiting, Bartleson 13-18XH, Sanish, t12/12; cum --
  • 23565, 935, Whiting, McNamara 41-26XH, Sanish, t12/12; cum --
  • 22360, 1,394, Whiting, Garpon Federal 21-4-1H, Twin Valley, t12/12; cum--
  • 20334, 1,324, EOG, West Clark 1-2413H, Clarks Creek, t10/12; cum 54K 12/12;
  • 20333, 449, EOG, West Clark 2-2425H, Clarks Creek, t9/12; cum 32K 12/12;
  • 22772, 968, Hess, EN-Skabot Trust 155-93-0631H-3, t12/12; cum --

$12 Million Not Enough for Dickinson's Infrastructure


February 1, 2013: see comment below regarding possibilities for Dickinson:
Calumet is proposing a diesel plant for the South Heart area. Also more natural gas plants in local area. Potential for Carbo Ceramics proppant plant further east. Dickinson has a big tank fabricator that needs to expand. Watford City, with 20,000, and Killdeer, with 5000+, will need a regional center to shop at and get services, as retail and consumer services can't get labor or housing for labor. Dickinson will be the Minot for the Bakken south of the river. 
Original Post
Link here to The Dickinson Press.
An additional 22,000 people are expected to settle in Dickinson over the next seven years, further stretching the city’s infrastructure as it struggles to keep up with water supply, wastewater and other issues.
At the end of the current biennium, the city is looking at $42.1 million of debt incurred from borrowing from the state’s revolving fund loan program for infrastructure costs, and could add $40.5 million of debt more on top of that if the state doesn’t step in to help.
Under a bill sponsored by Rep. Robert Skarphol, R-Tioga, $12 million would be granted to Dickinson to help fund water infrastructure needs through a change in the state’s oil and gas production tax allocation and impact aid program.
But Dennis Johnson, president of the Dickinson City Commission, said that is not nearly enough.
I can never keep track of the North Dakota budget, but at this link, posted back in May, 2011:
  • Total state budget, 2011 - 2013, $9.92 billion, an increase of 12.2 percent

Long Article in NY Times on the Bakken Boom -- "North Dakota Went Boom"

A huge "thank you" to the reader who alerted me to this NY Times article on the boom.

"North Dakota went boom."

Record Paid for North Dakota Oil and Gas Mineral Acre -- $19,500/Acre

Results of the BLM Montana/Dakotas lease sales yesterday (January 30) in Billings, MT, as reported in The Dickinson Press. [This was the "federal" auction -- the BLM auction. I believe the next North Dakota state auction is February 5, 2013.]

Data points of the BLM auction:
  • Total bonuses to be shared by the federal government and the states: $11.4 million
  • Acreage: 3,000 acres
  • BOE calc: $3,800/acre
  • North Dakota: 2,831 acres (94% of the acreage)
  • Highest single tract: Slawson, 80 acres in Mountrail County; $1.6 million; $19,500/acre
  • North Dakota: will receive almost 50% of the proceeds ($5.5 million); the federal govt the rest; both entities will get 12.5% royalties on production
  • Next auctions: May, July, and October
  • Leases are good for ten (10) years or as long as they continue to produce oil
From the story:
Thanks in part to the development of the Bakken play, the U.S. currently is importing less than 50 percent of the oil consumed nationwide, according to BLM statistics. Those same statistics also show that the price drilling companies are willing to pay for onshore parcels has more than tripled in the past three years, roughly the time period when the Bakken began to explode on the scene.
Ah, yes, I do remember the naysayers. Opportunities missed.

The Links

In a few minutes we will start with the WSJ links, where I assume the headline story with be the contracting GDP.

An early guest on CNBC this morning was not impressed with the "spin" that others had regarding the explanation for the first quarterly contraction since 2009. Bottom line, end of the day, end of the month: a bad report. He mentioned that some were attributing the contraction to a decrease in defense spending. Okay. No one has asked the question: how did the analysts get it so wrong? One report: analysts said the decrease in defense spending knocked 2.5 points off the GDP, and analysts had expected a GDP of around 2.0%. Defense spending is an open book. That's the one thing the analysts should have had access to; consumer spending is the challenge, and consumer spending was healthy.

WSJ links.

The story for the day: BlackBerry
The non-story of the day: BlackBerry
Boeing: "business as usual"
Some unions wary of ObamaCare which they backed

Section D (personal journal): maybe later, not enough time right now.

Section C (money and investing): 
BlackBerry release is no perfect 10. In fact, reading between the lines: a disaster.  Spending millions on Super Bowl ads in early February (almost January) and of the two phones, one won't be available until mid-March; the other won't be available until April. By that time, those Super Bowl ads are all but forgotten (unless they are really, really good and they end up going viral on YouTube).

Section B (marketplace): and there it is again -- huge front page, headline story: finally, a BlackBerry -- but more delays. No link. Easy to find if interested.

Chesapeake investors tired of the 'Aubrey discount.'

Boeing plays down 787 woes; net falls 30%. The company says it is "business as usual." Something tells me they will regret that "que sera sera" attitude. Oh, by the way, from CNBC this a.m.: the term for Boeing 787  lithium batteries that start on fire: "non-passive failures."

And yet another story (an interview) about RIM/BlackBerry. Won't read.

Chrysler's aging cars pose hurdles.

Section A:

Recovery shows a soft spot. The contraction. Foreshadowing the Great Recession of 2013.

Cue up Connie Francis: some unions grow wary of health law they backed. This may be the only WSJ story I read thrice today. Cue up Connie Francis.
Labor unions enthusiastically backed the Obama administration's health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.
Union leaders say many of the law's requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents' plans until they turn 26.
To offset that, the nation's largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.
This is so much fun. I am helping my older granddaughter with cursive writing. Bless her teacher: the latter takes cursive writing seriously. On the front page of the WSJ: the new script for teaching handwriting is no script at all.

Her teacher, by the way, introduced her to no less than three different ways to multiply multi-digit numbers (not using the abacus, calculator, or computer), including lattice multiplication of which I was completely ignorant. Very interesting. Will be interesting to look at the origin of that method. Probably Indian.

Page 3 and we've talked about page 3 often: Illinois yanks bond amid pension woes. OH, OH.
Illinois took the rare step Wednesday of postponing a bond auction just hours before it was expected to launch, as concerns grew among investors over the state's deep pension hole.
While Illinois still has ready access to capital markets, state officials feared a jump in interest costs to attract buyers if they went forward with plans to sell $500 million in bonds for school and transportation projects. Bond investors have become increasingly leery of the state because of a deadlock in the Illinois Legislature over how to fill a $96.8 billion pension shortfall, considered by researchers as the worst among U.S. states.
"It's the first real market indication that, because of our fiscal condition, we couldn't sell bonds," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago, referring to his home state. His firm had no role in the Illinois bond sale. 
This story I might read thrice, also. Fits into David Graeber's book that I am reading: Debt: The First 5,000 Years. It also explains why Geithner's idea of getting rid of the debt limit makes sense to some folks.

More from the Illinois story:
The potential jump in borrowing costs is the latest sign of growing fiscal challenges in Illinois. The state already is paying the highest interest rates—at about 3.2% on its 10-year bonds, according to Thomson Reuters Municipal Market Data—among U.S. states, and the Illinois government is behind on its bills to hospitals, doctors and pharmacies by an estimated $8.4 billion, according to the state comptroller's office.
Standard & Poor's Ratings Services on Friday downgraded the state's debt, aligning Illinois and California as the lowest-rated states. But while California's rate outlook is positive, the credit-rating firm warned of further downgrades of Illinois if the pension issue isn't addressed.
The decision by Gov. Pat Quinn, a Democrat, to delay Wednesday's bond sale sparked renewed calls for immediate action among lawmakers who have been debating potential fixes for more than two years. "The governor's delayed bond sale should direct our attention to the indisputable truth about pensions," said Illinois Senate President John Cullerton, a Democrat.

France takes aim at jobless payouts. Wow, under Hollande? This speaks volumes about how bad things are in France. Wait for the strikes to begin this summer.
The euro-zone debt crisis has ground growth in France to a halt, pushing unemployment to a 13-year high and driving up state-backed jobless-insurance payments. The system is set to post a €5 billion ($6.71 billion) deficit this year, bringing its total debt to €18.6 billion, according to a report published last week by the Cour des Comptes, the country's national auditor.
The pension system is straining France's finances, too. In 2010, when the then-government passed a law to increase the minimum retirement age to 62 from 60, it hoped to balance the pension system's budget by 2018. But a state agency said in December that the pension system will show a shortfall of around €20 billion in 2020 if nothing more is done. This year, the deficit is estimated to reach €12 billion.
Op-ed: when hospitals become killers.
In 2011, the lethal germ known as CRK—short for carbapenem-resistant Klebsiella—raced through the National Institutes of Health Medical Center in Bethesda, Md. Antibiotics couldn't stop it. Infection-control precautions recommended by the Centers for Disease Control and Prevention could not contain it. Six patients died because of it, including a 16-year-old boy.
Last week, public-health researchers released alarming data in the journal Infection Control and Hospital Epidemiology showing that the same germ that swept through the NIH is invading hospitals across the country. Researchers writing this month in another medical journal, Emerging Infectious Diseases, warn that CRK poses "a major threat to public health."
Since the discovery of CRK in 2000, it has been found predominantly in New York City and the mid-Atlantic region. But Los Angeles County, one of the few places where CRK is being tracked, detected 356 cases in the second half of 2012. "Upwards of fifty percent" of patients who contract CRK die, according to NIH researchers. 
Op-ed: As contractions go ... zero growth in the fourth quarter, but don't worry, the Fed is here....exactly what I said yesterday: Ben has marching orders to spend as much as he needs to prevent a second consecutive quarter of contraction which is the definition of "recession" in some people's books. 

Op-ed: Worried about federal fracking regulations? America's growing minerals deficit. The US is now tied for last, with Papua New Guinea, in the time it takes to get a permit for a new mine.

Why Do We Even Bother? -- Jobs Report -- Flirting With The Highest Number in Five Weeks; Rise In American Income Almost Triples Expectations


Later, 8:26 pm: original post and subject line corrected. A huge "thank you" to three readers who noted the error. I assume the other readers noticed the obvious error and assumed it was just a typo.

Later, 3:19 pm: jobless claims go higher, income surges, spending up. -- CNBC
The number of Americans filing new claims for unemployment benefits last week stayed in a range consistent with job growth and incomes rose in December by the most in eight years, mildly positive signs for a still-fragile economy.
And that's the spin: the headline is correct -- jobless claims surge, and the story says the "number of Americans filing new claims for unemployment benefits last week STAYED in a range consistent with job growth ...."

First of all, they didn't STAY anywhere; they surged 38,000! Thirty-eight thousand increase. And this new number, CNBC says, the huge increase, is CONSISTENT WITH JOB GROWTH. The WQ: "Why, sometimes I've believed as many as six impossible things before breakfast."

And now on CBNC, from the Aetna CEO: we won't hire as many people this year as we normally would due to health reform [ObamaCare]. Cue up Connie Francis.

Later, 10:31 am: as my daughter would text, "ROTFLMAO." I've been so busy updating the blog,  I haven't been able to get to the Drudge Report until just now. And now I see Mr Obama had the same thought: "Oh, why do we even bother?" On the other hand, as Mr Drudge has noted: "Mission Accomplished!"  Mr Obama has disbanded the administration's "job council." Council, I believe includes "to talk," something this group has not done for a year. And, of course, it hasn't done anything it was tasked to do, which was to ... oh, why do we even bother?

Later, 10:14 am: one of the themes MDW has expressed since the beginning was that the spread between the "haves" and the "have-nots" was widening. The Reuters story also noted that:
In a separate report, the Commerce Department said American incomes rose 2.6 percent last month. That was the biggest increase since December 2004 and well above analysts' expectations for a 0.8 percent gain.
However, much of the increases in personal incomes over the last two months have been due to special dividends and accelerated bonuses to beat tax increases that were due to begin this month.
The big rise in incomes suggests total consumer spending power entered the new year on a stronger footing, even if the gains may not have been distributed evenly throughout the workforce.
The report also foreshadowed the possibility of another recession later this summer. 
The economy faces the threat of across-the-board spending cuts scheduled for March, as well as the possibility the government might default later this later year and trigger another recession.
Ben Bernanke's marching orders: spend, spend, spend.

Original Post

Remember: the magic number is 400,000

I'm sure it's just "one of those things," but it certainly seems the unemployment numbers are being a) manipulated; b) reported before all the data is in on; and/or, c) the analysts are really confused.

Regardless, the spin is incredible.

Look at this Reuters lede and see if you can figure out what the writer was trying to say:
The number of Americans filing new claims for unemployment benefits bounced off five-year lows last week, pulling them back to levels consistent with modest job growth.
Last week, the numbers were outstanding, though no one believed them. But had they been accurate, it would have suggested the economy was turning around, at least in terms of unemployment.

But today, the lede reads as if things have gotten even better: "Bounce" is usually associated with good news. In this case, the "bounce" referred to an increase in joblessness. Bad. "Bounce" now means "bad." [Hey, Dad, remember that 'D' I got in math last quarter. Good news, I've bounced off that low. It's now an 'F'."]

Then this: a return to "levels consistent with modest job growth."

When you actually read the report one finds that the numbers were awful -- unless you are an investor and then it's great news. As long as joblessness stays high, the Fed will keep interest rates low, making it nice for borrowers and investors in equities.

And continued lousy reports suggest to me that a) there are tectonic shifts in the economy that the mainstream media is not talking about; and, b) manufacturers (and farmers) have gotten more productive with fewer workers.

So, back to the numbers: "Economists polled by Reuters had expected claims to increase to 350,000."

In fact, drum roll. ....  the number is back to a number consistent "more modest job growth." In other words, first time claims jumped well past 350,000, jumping 38,000 to .... 368,000.

Jumping 38,000. And no unexpected holidays. No Hurricane Sandy. No nothing to blame it on. But the story at the link will relate the "crazy" patter to the zodiac the calendar of 2008.

Initial claims for state unemployment benefits increased 38,000 to a seasonally adjusted 368,000, the Labor Department said on Thursday. The prior week's claims figure was unrevised.
As noted at the top of the post, this is consistent with the government releasing figures before the data is finalized and/or "adjusted." The prior week's claims figure was unrevised. Did they ever revise it?

Back on January 10, 2013, just a few weeks ago (yes, January 10 of this year):
First time claims benefits (unemployment) jumped to the highest number in five weeks (371,000) and the four-week moving average jumped significantly to 365,750, an increase of almost 7,000. 
Let's see what the four-week rolling average was:
The four-week moving average for new claims, a better measure of labor market trends, gained 250 to 352,000, suggesting a steady improvement in labor market conditions.
Look at that, again.  New claims up by 250. Two observations: first, that's an incredibly small number for an economy the size of the US. That number sounds like it came from a New York City suburb. And then the "roundness" of that number. Not 249, or 251, but 250 exactly. Lots of rounding going on.

Wednesday, January 30, 2013

Earnings Thursday; Wells Coming Off the Confidential List Thursday -- The Williston Basin, North Dakota, USA

RBN Energy: coordinating regional gas and electric utilities.

Earnings to be reported before market opening, Thursday:
  • Carbo Ceramics (CRR) (86 cents): Carbo Ceramics reports EPS in-line, beats on revs
  • Enterprise Products (EPD) (65 cents): Enterprise Products beats by $0.02, misses on revs
  • Occidental (OXY) ($1.66): $1.83; press release here.
  • Helmerich & Payne beats by $0.11, beats on revs:
  • COP: beats by a penny; but guidance down; share price hit; 
OXY hasn't been a stand-out in the Bakken, but it certainly is doing well in "the market." Looks like it will be up nicely today.
Wells coming off the confidential list Thursday:
  • 22955, 836, Whiting, Talkington 11-30PH, Bell, t8/12; cum 38K 11/12;
  • 23155, 570, CLR, Homer 1-14H, Corinth, t10/12; cum 13K 11/12;
  • 23169, 173, WPX, Sarah Yellow Wolf 22-27HC, Heart Butte, t10/12; cum 17K 11/12;
  • 23233, 133, Hunt Oil, Sioux Trail 1-8-5HTF 1, wildcat; (a true wildcat, up in Divide County; not much going on up in this area); t133, cum 823 bbls; 11/12; 

Compare the WPX Sarah Yellow Wolf well with other wells in the Heart Butte.

22955, 836, Whiting, Talkington 11-30PH, Bell:

DateOil RunsMCF Sold

23169, 133, WPX, Sarah Yellow Wolf 22-27HC, Heart Butte,

DateOil RunsMCF Sold

Peak Oil? What Peak Oil? Now We Have The Cline Shale

November 3, 2014: in the middle of an oil price slump, in which Saudi Arabia has just announced it will lower the price before cutting production, is suggesting that the next big thing is the Cline:
While the Permian Basin is known as the U.S.’ largest oil producer, operations seem to be shifting from the western side of the basin to the eastern side, and the shift has a lot of people preparing for another boom.
The Cline Shale formation, also known as the Lower Wolfcamp or Wolfcamp D, is located on the eastern edge of the Permian Basin.  The formation runs about 140 miles north to south and is around 70 miles wide.  Counties included in the Cline Shale are Mitchell, Coke, Fisher, Glasscock, Howard, Irion, Nolan, Reagan, Scurry and Sterling.  Other reports also mention Upton, Tom Green, Crockett, and Schleicher counties.  The formation is said to run 200 to 550 feet deep.
With the Cline Shale becoming more and more popular, many oil companies are moving in and setting up shop.
Some of those companies are Apache Corporation, Laredo Petroleum, Firewheel Energy, LLC and Pioneer Natural Resources. With these large companies moving into the area, Greg Wortham, mayor of Sweetwater, didn’t want the same problems that happened in Midland, Odessa and surrounding towns that weren’t prepared for the oil boom, to occur in towns around him. Worthham formed the Cline Shale Alliance in hopes of bringing together the area’s small towns to start preparing for the next oil boom.
April 19, 2014: there are reports that Devon has pulled out of the Cline --
One of the most surprising events is that Devon has all but pulled its operations out of the Cline Shale, predominantly due to "a lot of variability" in production at test sites. While this has tempered expectations for some, supporters of the play say not to be swayed, as larger energy companies have been known to divert their attention from unconventional or unproven plays. Just last year, Royal Dutch Shell disclosed that it would be pulling out of the fastest-growing formation on the planet, the Eagle Ford.
June 27, 2013: random update on the Cline. -- 30 billion bbls recoverable -- current estimate

May 25, 2013: update on a "whale of a shale."
The Cline Shale is about 140 miles long, 70 miles wide, and 200-550 feet thick stretching through the Permian Basin and southward. Test wells are exceeding expectations and indicate the shale could contain 3.6 million barrels of recoverable oil per square mile or as much as 30 billion barrels in total. Yes, billion. That's multiples of the likely production from other well-known shales such as the Bakken up north or the Eagle Ford here in Texas.
Fact check, compared to the Bakken:
  • the better Bakken: 6 wells/section x 600K EUR/well = 3.6 million bbls/square mile
  • middle Bakken: 60 feet thick; Three Forks: 300 feet thick
  • CLR: estimates of 24 billion to 48 billion bbls of recoverable oil
  • Williston to Dickinson: 130 miles
  • Williston to Stanley: 70 miles
  • 30-second sound bite: the Cline is probably another Bakken
April 29, 2013: update from Sweetwater, TX, 100 miles ENE of Midland, where it appears they are getting ready to drill the Cline.

Original Post

A reader alerted me to the Cline Shale in Texas which was news to me. From multiple sources:

Investor site StreetAuthority is gushing over the potential of other shale fields in the United States. It says one shale formation in particular now being explored in Texas could hold as much as 30 billion barrels of recoverable oil and fuel, dwarfing the estimated 4.3 billion barrels in North Dakota's Bakken shale.
Street Authority writes: "Devon's wells show that the formation contains 3.6 million recoverable barrels of oil per square mile. As the Cline is roughly 9,800 square miles in size, this works out to estimated reserves in excess of 30 billion barrels.
The website

The Cline Shale oil play lying at roughly 9,250 feet below the surface along the eastern flank of the Midland Basin could possibly be a key component for energy independence for the U.S.  The play area runs roughly 140 miles north-south and about 70 miles wide through Howard, Glasscock, Reagan, and Sterling Counties.  
Devon and Chesapeake recently reported impressive test well results.  Devon’s wells show the formation contains 3.6 million barrels of recoverable oil per square mile.  A rough approximation, taking into account the 9,800 square mile area of the Cline, indicates over 30 billion barrels of recoverable oil.  This exceeds both the Bakken and Eagle Ford by far.  
The USGS estimates the Bakken Shale to hold up to 4.3 billion barrels of recoverable oil, and the Eagle Ford has estimates at as much as 7 to 10 billion barrels of total recoverable reserves.  John Richels, president of Devon, gave an expected type curve value of 570 MBOE for a Cline Shale well, with 85% being oil and NGLs.

Seven (7) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 186

Seven (7) new permits --
  • Operators: Slawson (2), BEXP, XTO, Surge, Whiting, Liberty Resources,
  • Fields: Briar Creek (McKenzie), Haystack Butte (McKenzie), Souris (Bottineau), Glass Bluff (McKenzie), Sanish (Mountrail), Big Bend (Mountrail)
  • Comments:
Wells coming off confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 20726, 289, EOG, Vanville 19-1213H, Thompson Lake, t10/12; cum 6K 11/12;
  • 20727, 661, EOG, Vanville 20-1201H, Thompson Lake, t10/12; cum 12K 11/12;
  • 21702, 1,261, XTO, Nygaard Federal 13X-5A, Lost Bridge, t1/13; cum --
  • 22435, 648, CLR, Rodney 3-29H, Cedar Coulee, t12/12; cum --
  • 22611, 638, Denbury, Gilbertson 31-16SWH, Siverston, t1/13; cum --
  • 22975, 951, SM Energy, Holm 14-12HB, Siverston, t12/12; cum 20K 12/12;
  • 22976, 665, SM Energy, Holm 14X-12H, Siverston, t12/12; cum 12K 12/12;
  • 23432, 178, Triangle Petroleum, Steen 149-101-13-24-1H, Antelope Creek, t1/13; cum --
  • 23812, 519, Triangle Petroleum Steen 149-101-13-24-3H, Antelope Creek, t1/13; cum --

The following permits were cancelled by Denbury Onshore:
  • 18832, Fettig
  • 18917, Jorgenson
  • 18919, Jorgenson
  • 18920, Jorgenson, 
  • 19545, Gilbertson,
  • 19625, Charlson, 
  • 19657, Mariner,
  • 19659, Mariner,
  • 19855, Dennis,
  • 23442, Thompson,
  • 23443, Thompson,
  • 23511, Saxon,
  • 23657, Erickson,
  • 23843, Dvorak,
  • 24098, Martin,
  • 24099, Martin,
  • 24100, Martin,
Slawson cancelled:
  • 23868, Caper, 

Agriculture Profits: Hitting Records Despite Droughts

Link here to Bloomberg.
A U.S. farm boom showing few signs of a let-up isn’t translating into more opportunities in one of the most robust areas of the economy. Farmers, ranchers and other agricultural managers will see the steepest decline of any employment category by 2020, losing a projected 96,000 jobs this decade out of 1.2 million positions, part of a broader trend toward less labor in the sector, according to the Bureau of Labor Statistics.
The drop comes even as agricultural managers have the highest median wage of any of the top 20 declining categories, at more than $60,000 a year. Farm owners like the Liefers are able to manage larger tracts of land without hiring overseers. Full-time farm managers hired by others can handle more property for more clients, said Jerry Warner, a past president of the American Society of Farm Managers and Rural Appraisers, a farm- management organization based in Denver.
A chicken and egg problem. Lack of enough farm workers --> need to innovate/automate? Or did innovation/automation --> to decrease in farm workers?

About 2,051 Oil and Gas Wells On The Confidential List

January 30, 2013

All numbers subject to error. Numbers will change over change. 

2,051 wells on confidential list
37 of those are salt water disposal wells
So, 2,014 oil and gas permits/wells on confidential list

February: 175
March: 180
April: 173
May: 169
June: 153

Foreshadowing the Great Recession of 2013 -- Wednesday - The Year of the Pipeline -- RBN Energy -- Frigid in GB

Foreshadowing the Great Recession of 2013? See archival link posted November 14, 2012, which is now where these stories will be aggregated.

Analysts expected meager growth of 1%. Couldn't even get that. Economy UNEXPECTEDLY contracts 0.1%. And, gee, everything was going so well.

The WSJ story. And, of course, Steve Liesman of CNBC is able to spin this into gold.

But the Obama administration is already spinning the news (see third paragraph in bold), an AP story:
The U.S. economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The decline occurred despite faster growth in consumer spending and business investment.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter and the first contraction since the second quarter of 2009.
Economists said the surprise decrease in the nation's gross domestic product wasn't as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.
Does that mean excluding these one-time cuts, GDP would have almost tripled analysts' expectations, from 1% (analysts' expectations) to 2.5% (estimates by Obama-friendly economists)? First we had the government publishing unemployment numbers based on estimates from states who never forwarded the data; now we have a new way of measuring GDP: forgeddaboutdaonetimefactors.

My hunch is a) Ben has marching orders to spend as much money as necessary to prevent a second month of contraction in GDP; and, b) failing that, the definition of two consecutive months of recession = a recession will be changed (the definition will be changed; in fact, there is no hard and fast rule defining a recession). The scary part is that this was a huge drop: from 3% ballpark to -0.1%. Can't recall when I last saw that "unexpectedly."

And so it goes. Happy days are here. The economy grew by 2.5%, almost tripling estimates, except for one time factors. Cue up Connie Francis.

Oh, by the way, "they" say much of this drop was due to huge decrease in defense spending. Think what will happen when "sequestration" kicks in. Sequestration will effect the entire government, not just defense spending.


Scroll down for wells coming off confidential list; earnings.

From RBN Energy: huge increase in storage capacity along the Gulf Coast -- tectonic shifts?
Over the next three years seven Gulf Coast region terminal operators will build an estimated 19 MMBbl of new crude oil storage capacity. Those storage expansions are being made in preparation for as much as 3.1 MMb/d of new crude supplies expected into the Gulf Coast refining region over the next two years from new pipeline projects. Today we summarize the efforts that terminal operators are making to get ready for the flood.
WSJ Links

Section D (Personal Journal):

Microsoft: "more control for annual fee" -- one doesn't have to read much more than this to know this ... Microsoft is now "renting "Office."
The company on Tuesday started offering consumers a new version of Office—the widely used bundle of personal-computer applications—that for the first time arrives along with a version that can be "rented" for a monthly fee, similar to how people subscribe to cable or to Netflix Inc.'s movie service.
Microsoft is pushing hard to get most people to opt for Office 365, as the subscription version is known, for an upfront annual fee of $99.99, or $9.99 a month for a pay-as-you-go option. (People buying Office along with a new computer can pay a $79.99 annual subscription for Office 365.) 
For no cost, Apple pushes updates of its operating system for free, and almost seamlessly (only asking whether I want to install the update). Of course, operating systems and applications are very different but I don't think average users are going to fall for this. MSFT is hoping DOD falls for it. DOD is going to have make a huge decision on whether they want to spent $99/employee/year for upgrades that almost never matter. In fact, the only reason some folks upgrade is so they can share information with others who have upgraded. MSFT "Office" is generally not backward-compatible.

So, if you like to pay a subscription for a big company to control your "office," you will love this newest revenue stream idea that MSFT has dreamed up.

Section C (Money & Investing):

Page C14: don't back up the truck with Hess

Section B (Marketplace): 

Can gas undo nuclear power?

Chesapeake CEO to exit.

Even Facebook must change to be relevant on Apple's mobile devices.

Investors agitate in oil patch.

Section A: 

Egypt is warned of collapse. No link. Story is everywhere. First linked at Drudge yesterday. [Later, February 1, 2013: in the LA Times -- a photograph of "westernized" males who obviously have no interest in an Islamic society. Cue up Connie Francis. They can thank President Obama.]

Coal is dead? Not in Mexico. Texas gives okay to coal mine on the border that will provide coal for a Mexican utility -- faux environmentalists must be going nuts.  Location, location, location.

Other links, stories

Satellite photo of Great Britain covered in snow; one of the coldest, snowiest periods in British history
Unusually frigid and snowy conditions blanketed much of the island of Great Britain in snow earlier this month. The winter wonderland was spotted from above by NASA's Terra satellite on Jan. 26.
The snow started falling mid-month when a storm system blowing in from over the North Atlantic combined with unusually chilly conditions ushered in by a pattern called the Scandinavian Block, according to This high-pressure pattern sits in place over Scandinavia and funnels cold air toward the United Kingdom from over the Baltic and western Russia, according to the U.K. Met Office.

Hess 4Q11 Earnings

From Yahoo!In-Play:
Hess beats by $0.40, beats on revs. 

Earnings of $1.66 per share, $0.40 better than the Capital IQ Consensus Estimate of $1.26; revenues rose 9.9% year/year to $9.7 bln vs the $9.59 bln consensus.

Exploration and Production earnings were $517 mln in the fourth quarter of 2012, compared with $527 mln in the fourth quarter of 2011. Fourth quarter oil and gas production was 396,000 barrels of oil equivalent per day, up from 367,000 barrels of oil equivalent per day in the fourth quarter a year ago, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya, partly offset by the shut-in of the Valhall Field in Norway for the quarter due to the redevelopment project. Net production from the Bakken oil shale play averaged 64,000 barrels of oil equivalent per day in the fourth quarter of 2012, an increase of 68% from 38,000 barrels of oil equivalent per day in the same period last year.

During 2012, the Corporation added 214 mln barrels of oil equivalent to proved reserves and sold 83 mln barrels of oil equivalent of proved reserves through asset dispositions. The additions, which are subject to final review, replaced approximately 141 percent of the Corporation's 2012 production, resulting in a reserve life of 10.3 years.

Tuesday, January 29, 2013

Random Video of the BHI Complex West of Williston

A reader alerted me to this video of the new Baker Hughes complex west of Williston. This was an impressive building when it was going up; probably the biggest construction job in the Bakken at the time.

The first "new" BHI complex west of Williston

Unfortunately the video does not do the complex justice. I wish they had taken more video of the complex while it was being built and/or more of it now.

The reader noted, as have others, that BHI is putting up another complex "across the street." Apparently, this second complex is even bigger and more impressive.

Another Look At The Liberty Wells/Permits in Otter Field


May 19, 2014: a very nice well reported today --
  • 26342, 2,706, HRC, Miller 157-101-12D-1-2H, Otter, t2/14; cum 17K 3/14;
Original Post

In today's daily activity report: Triangle USA Petroleum with six permits in Otter field. They must like something they've found in that area.

Triangle has two wells sited in section 21-157-101, Otter field. One well is active and producing, the other is still on the confidential list:
  • 22296, 463, Triangle, Larsen 157-101-21-16-1H, Bakken, 31 stages; 4 million lbs sand and ceramic; excellent hydrocarbon show; high gas units, up to 2,000 and 3,000 units;  Otter, t8/12; cum 88K 3/14;
  • 22297, 207, Triangle, Larsen 157-101-28-33-1H, Bakken, 28 stages; 3.6 million lbs sand/ceramic;  moderate to excellent hydrocarbon shows; gas 500 - 3,500 units; Otter, t1/13; cum 56K 3/14;
The new permits (four Three Forks and two middle Bakken):
  • 24877, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-2H, Three Forks, Otter, 
  • 24878, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-3H, Bakken, Otter,
  • 24879, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-4H, Three Forks, Otter,
  • 24880, conf --> loc, Triangle, Larsen 157-101-21-16-2H, Three Forks, Otter,
  • 24881, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-21-16-3H, Bakken, Otter,
  • 24882, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-21-16-4H, Three Forks, Otter,
A non-Triangle well in this field, one mile to the east:
  • 22506, 509, Petro-Hunt, Rossland 157-101-22C-15-1H, Otter, t5/12; cum 31K 12/12;
So, it looks like a good field, but not yet a great field.

Otter field is in a relatively small field, only 24 sections (and won't get any bigger; hemmed in by fields on all borders) in the far northwest corner of Williams County. It is immediately north of Tyrone oil field, which means it is pretty much straight north of Williston, no more than 15 miles away.

Wells Coming Off Confidential List on Wednesday; Companies To Report Tomorrow

Here we go:

Two refiners now mention "less expensive domestic oil" as a huge deal.

Hess Corp,
under pressure from an activist investor to break up the company, reported a fourth-quarter profit on Wednesday as production from its wells in North Dakota's Bakken oilfield soared. Hess posted a profit of $566 million, or $1.66 per share, compared with a loss of $131 million, or 39 cents per share, a year earlier. Revenue rose 10 percent to $9.69 billion, Hess said.
Marathon Petroleum Corp (MPC) 
on Wednesday reported a quarterly profit as the U.S. refiningcompany processed higher amounts of cheaper domestic crude oilin its plants, helping lift refining margins.
The company reported a fourth-quarter profit of $755 million, or $2.24 per share, compared with a loss of $75 million, or 21 cents per share, a year earlier.
The refiner more than doubled its fourth-quarter dividend to 35 cents per share and said its board approved an additional $2.65 billion share buyback program.
announces fourth-quarter earnings of $708 million and adjusted earnings of $1.3 billion. This compares with earnings of $2.0 billion and adjusted earnings of $379 million during the fourth quarter of 2011. Eleven cents per shares; adjusted: $2.06/share.


It will be a busy day tomorrow with these five companies reporting earnings:
  • COP ($1.42) after market close:
  • Hess ($1.22) before market open:
  • Marathon Petroleum (MPC) ($2.10) before market open:
  • Murphy Oil (MUR) ($1.34) after market close:
  • Phillips 66 (PSX) ($0.69) 8:00 a.m. ET:
Wells coming off confidential list on Wednesday:
  • 21141, 1,108, Liberty Resources, Anna 156-100-8-5-1H, East Fork, t8/12; cum 71K 12/12;
  • 21429, 1,140, Hess, BB-Eide 151-95-3328H-2, Blue Buttes, t12/12; cum 4K 11/12;
  • 23059, drl, Hess, LK-M Elisabeth 147-97-1522H-3, Little Knife,
  • 23143, 189, Corinthian, Corinthian Skarphol 16-28 1H, North Souris, a Spearfish well; t10/12; cum 12K 1/13;
  • 23321, 496, Crescent Point, CPEUSC Aldag 36-35-164N-100W, West Ambrose, a Bakken well; t11/12; cum 6K 1/12;
Newbies may want to look at Blue Buttes oil field. This is going to turn out to be a nice field. There is some evidence that operators are getting better at delaying the "dreaded Bakken decline." I think the general consensus is that the "dreaded Bakken decline" is inevitable, but ...

21141, conf, Liberty Resources, Anna 156-100-8-5-1H, East Fork:

DateOil RunsMCF Sold

23143, conf, Corinthian, Corinthian Skarphol 16-28 1H, North Souris:

DateOil RunsMCF Sold

23321, conf, Crescent Point, CPEUSC Aldag 36-35-164N-100W, West Ambrose:

DateOil RunsMCF Sold

Valero's Earnings: How Did Investors React? Share Prices Surge 13% After-Hours


Later, 8:20 pm: be sure to note the first comment -- back in 1997, "they" were concerned with a glut of oil from Canada, when they noted that the WTI/WCS spread had doubled to $7. That was back in 1997. They were concerned about adequate pipelines back in 1997. Fast forward to 2013: the WTI/WCS is now as much as $40. And the Keystone XL is still not approved.

Original Post

I was so busy, I completely missed the news when the Valero earnings came out. I was taking my granddaughter to gymnastics. A huge "thank you" to a reader for reminding me.

I think this article says it all:|headline|quote|text|&par=yahoo
"In other words, because of the Bakken and the Eagle Ford shales and so many other terrific domestic prospects, one of our major refinery powers no longer needs to import expensive oil from other countries to feed its refineries, and this trend is only going to get stronger," Cramer explained.
I thought the easy money had been made in the Bakken but it looks like for investors, still opportunities. I'm thinking of Hess, as another example.

Anyway, back to Valero, this from their press release:
Valero reported net income attributable to Valero stockholders of $1.0 billion, or $1.82 per share, for the fourth quarter of 2012 compared to net income attributable to Valero stockholders of $45 million, or $0.08 per share, for the fourth quarter of 2011.  Included in the fourth quarter 2012 results was a noncash asset impairment loss of $37 million after taxes, or $0.06 per share. For the year ended December 31, 2012, net income attributable to Valero stockholders was $2.1 billion, or $3.75 per share.
So, how did investors react to the news?

Up a whopping 13% in after-hours and continuing to rise.

Warren's Answer To The Keystone XL While Nebraskans Dither, Washington Delays

This is a "biggie" for Warren Buffett -- his answer to the Keystone XL -- a multi-grade crude oil loading terminal -- the first in the Rocky Mountain oil region; will support the Bakken. Huge thanks to Don for this link to the Fairfield Sun-Times.
Eighty-Eight Oil LLC announced today its plans to construct and operate a unit train facility on BNSF Railway’s mainline near the Guernsey crude oil pipeline hub. The facility will be directly connected to EEOLLC’s existing Guernsey crude oil terminal which has two million barrels of storage and currently receives crude oil from Butte Pipeline, Belle Fourche Pipeline, Platte Pipeline, and the Rocky Mountain Pipeline System
The Guernsey terminal also maintains truck unloading facilities. The facility will be the first rail transloading terminal capable of loading multiple crude types including those from the Williston Basin (e.g. Bakken), the Powder River Basin (e.g. Niobrara), Southwest Wyoming, Big Horn Basin and Canada. 
“Because this terminal is being designed to handle multiple crude types, we are confident of its long term viability,” says Jerry Herz, Superintendent of EEOLLC. “Further, by connecting our terminal to BNSF’s expansive railway system, we can provide producers of the Rocky Mountains and Canada further flexibility in adding value to their production and transporting it to markets throughout the United States.”
This is a huge story.

For folks who want a job but don't want the harsh climate of Williston, North Dakota, and love the sound of the name "Cheyenne" now have yet another opportunity to find wealth and happiness, even as the reporters from the Minneapolis Star-Tribune note the struggle North Dakota has dealing with its prosperity. To those reporters: "Go west, young woman!"

Guernsey, Wyoming, population, 1,200, is about an hour and a half north of Cheyenne, WY, just east of I-25. Cheyenne: home of the world-famous frontier days.

I have hitchhiked that area more than once in my cross-country hitchhiking days, summer and winter, and it is beautiful country.

Eighteen (18) New Permits -- Triangle Pete With Eight New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

This is a "biggie" for Warren Buffett -- his answer to the Keystone XL -- a multi-grade crude oil loading terminal -- the first in the Rocky Mountain oil region. Will get its own stand-alone post later. -- huge thanks to Don. 

Active rigs: 187 (heading back down)

Eighteen (18) new permits --
  • Operators: Triangle (8), Slawson (2), BEXP (2), Murex (2), Surge (2), Corinthian, Fidelity,
  • Fields: Van Hook (Mountrail), Haram (Bottineau), Otter (Williams), North Souris (Bottineau), Stanley (Mountrail), Strandahl (Williams), Spring Creek (McKenzie), Beaver Lodge (Williams), West  Bank (Williams)
  • Comments: Surge has a permit in Bottineau County;
Wells coming off the confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 22934, 518, CLR, Salem 2-6H, Dollar Joe, t12/12; cum --
  • 23698, 781, Murex, MacKenzie Joy 3-10H, t1/13; cum --
  • 23696, 612, Whiting, Evy June 18-19H, t12/12; cum --
  • 22434, 738, CLR, Gale 2-32H, Cedar Coulee, t1212; cum --

A P/E of 3,099 And Shares Jump --- Not An Energy Story

Here's the headline: misses earnings forecast; downbeat on guidance; shares jump after hours. P/E earlier in the day: 80. P/E now at 3,099 according to Yahoo!Financial.

Profit margin is 0.07% (about the same as the forecast rise in global temperature over the next 100 years).

No debt. No dividend.

King of the Road, Roger Miller

Tops Well Services --

This was sent in as a comment to another post. For those who may not see the comments.
Tops Well Services
115140 49 T Way NW
They have all new equipment and look like they are ready to do business.

New Poll

Time for a new poll. Actually today, it will be an open-book test, one question. Good luck.

Results of the current poll: Earlier there was talk of EOG as a possible takeover candidate. Two companies were suggested as possibly interested in and able to buy EOG: ChevronTexaco (CVX) and Statoil/BEXP (STO). The question: which would you prefer?
  • CVX: 51%
  • STO: 49%
I would have voted for CVX to increase the international exposure of the Bakken.


Now, the open book test:
Within a few months of production, even if gas is flared, mineral rights owners are paid for the flared gas at market rates.
  • True
  • False

On a completely different note, I see "Skeeter" is back in the news: birthers, truthers, and now skeeters.

So, for your listening pleasure:

The End of the World, Skeeter Davis

A note to the granddaughters
Long overdue, but puts into perspective the thoughts of some folks in the US and/or Canada during the time in which I blogged about the Bakken

These are observations of a Canadian being circulated on the net. I assume this is all "made up" by a non-Canadian but it doesn't matter. The comments are meant to be inflammatory, but it's hard to argue with these observations. Most of the observations are factual; some probably fall into "general consensus" but up for discussion.

1. The folks in America who pay 86% of all income taxes are accused by some of not paying their "fair share." Approximately 50% of Americans do not pay any income taxes. Many Americans are eligible for income tax credit, meaning that if they work they will be paid additional money from the US government. Some of the richest Americans say the "rich" should pay even more, but go to court to keep from paying taxes imposed upon them by the IRS.

2. The mainstream media and television talking heads continue to beat the drum that the US government discriminates against black Americans despite the fact the two men tasked with dealing with discrimination in the US are black: the US president and the attorney general. In addition, almost 20% of the federal workforce is black while just slightly more than 10% of the US population in general is black. In fact, by the time I being my "long rest," the white component (not including Hispanic) may be a minority in the US.

3. The two folks currently most responsible for our tax code, Timothy Geithner, the head of the US Treasury, and Charles Rangel, who once chaired the US House Ways and Means Committee, both turn out to be tax cheats who are in favor of higher taxes.

4. Terrorists kill people in the name of Allah and the US media primarily reacts by fretting that Muslims worldwide might be harmed by the backlash.

5. Congress is currently discussing amnesty for 11 million illegal aliens while ignoring those who have waited legally in their home countries and have paid tens of thousands of dollars while waiting and applying.

6. Folks who argue that balancing the budget and sticking by the country's constitution are often referred to as "extremists" by the mainstream media.

7. In America, during my entire adult life, I have had to show an ID to buy cigarettes, buy alcohol, get into an "R"-rated movie, even to look at a house for sale, and yet I've never had to show an ID to vote. I even have to show an ID to get on a commercial aircraft or a private aircraft departing a commercial airport.

8. The margins on selling gasoline are significantly less than the margins on computers, and the oil companies are investigated for gouging Americans for the price of gasoline -- even though it's a fraction of what it would cost in England. And we never seem to run out of gasoline.

9. The US is collecting more money from its citizens than any other country in the world; the country is $16 trillion in debt; the country is spending at the rate of $7 million/minute; the country continutes to fund Mideast dictatorships; and, economists still say the government is not collecting and/or spending enough money.

10. Politicians regularly talk about the greed of the rich at $35,000/plate-campaign fund-raising events. It is never reported how much the waiters and waitresses are paid at these fund-raising events, and even if they are US citizens. [Two days after posting this note, this shows up on the internet: the richest US Senator, Senator John Kerry, rails against evil of money in politics. I wonder if he will throw his money over the fence like he did with his Vietnam medals?]

Tuesday Links -- Average Oil Prices Had Their Best Year Ever in 2012 -- WSJ

Active rigs: 189 (down a couple)

The Market: all green. Even oil is up a bit. The Bakken/WTI spread at Clearbrook, MN, hasn't changed in the past few days; still $3.25; for the average "Joe" -- parity. The WTI/Brent spread still about the same: $16. Energy is doing very well. I was surprised to see that the average price of oil was the best ever last year (2012; see story below). AAPL is now a momentum stock; up $12 in past two days. Retail investors and mutual funds will now be worried about missing this train. Oasis Petroleum is now larger (market cap) than S&P 500 component Allegheny Technologies. [Later, oil hits a four-month high. Why? Signs of global growth? Short squeeze? Easy money?]

Apple: just announced. Will launch a higher-storage iPad -- 128GB -- for a $100 premium; retinal display, fourth generation. Will launch February 5. This company is simply blowing away the competition. I had a short conversation with a real estate broker/agent the other day: he was new to the iPad. Said real estate agents can't survive without the iPad. I predicted that -- and blogged on it -- about 5,690 posts ago. I doubt if I could ever find that post. That will be true of several other "industries" -- depending on the iPad. By the way,  have you ever seen the Apple product placement in "30 Rock"? Something tells me Tina Fey has more revenue streams than one might imagine. Good for her. Her show is streamed live and for free almost immediately after it air. There's a reason for that, and "product placement" might be one of them.

Hess is up 10 percent today, after a pop yesterday. Pat myself on the back: I posted the Hess story before the market opened yesterday for those who might have been interested.  Disclaimer: this is not an investment site: don't make any investment decisions based on what you read here. The story on Hess is not a recommendation. I own no shares in Hess. Don sent me this link: a push to have Hess spin off its Bakken assets. Implications for others.

WSJ Links

Section D (Personal Journal): 
This is interesting: panel pushes vaccine for pregnant women; amid whooping cough crisis, new guidelines recommend mothers get vaccinated at each pregnancy.

Wow, a huge write-up on one of our favorite museums in New England: The Peabody Essex -- the museum has managed to defy conventional wisdom about museum funding.

Section C (Money & Investing): two interesting stories on "Heard on the Street":
A new foreign policy for Gazprom and Exxon: making something from nothing. The XOM story is an important one for investors. I might come back to it, but this pearl: Average oil prices had their best year ever in 2012. I would not have guessed that.

Section B (Marketplace): 
Another important article for investors: Chinese machines, US doubt -- an article on the world's sixth-largest construction-equipment company.

Patriot Coal seeks trust to limit retiree health costs: the trust would have a lifetime limit of $200 million, according to union lawsuit documents.

GM to invest $600 million on Kansas factory upgrade. Earlier today I posted a story about Kansas being one of three states looking to eliminate personal and corporate income taxes. Kansas is a right-to-work state. 

Section A:
Front page: This almost deserves a stand-alone post of its own: the web-deprived study at McDonald's. The lede:
Joshua Edwards's eighth-grade paper about the Black Plague came with a McDouble and fries. Joshua sometimes does his homework at a McDonald's restaurant --  not because he is drawn by the burgers, but because the fast-food chain is one of the few places in this southern Alabama city (Citronelle) of 4,000 where he can get online access free once the public library closes. 
Maybe later. There are a lot of story lines in that article.

Company with ties to Senator Reid saw its rival's Medicare payments slashed. Shocked. I'm shocked. Another "dog bites man" story.

Op-ed: to outsmart ObamaCare, go protean. Lots of story lines in this article also. Maybe later.

Op-ed: Courts? Who Listens to Courts? The NLRB tells the DC Circuit to take a hike.

Op-ed: Zero Dark Ethanol. 'Do a good job ... If you fail, we'll fine your customers.' What a great country.

Beautiful Photo of the Bakken

Beautiful photo of the Bakken sent in by a reader:

The photo was taken in section 12-153-100 last spring (2012). The well on the right is the AK Stangeland and the one on the left is either Basey or Kovars (same pad). The picture is taken from the northwest to the southeast.

This photo also has the distinction of being one of three "alternating" photos on the Oasis website

I remember years ago, one of the most famous / most recognized oil well photo of all time was one taken by Willistonite Bill Shemorry, whose photo of an active rig was on the back cover of the ATT telephone book (white pages/yellow pages). I kept a copy of that photo for years; it's possible it's still in a cardboard box of memorabilia somewhere.

Two Wells Coming Off The Confidential List Tuesday

Wells coming off the confidential list Tuesday:
  • 17793, 2,325, Oasis, Nordby 5793-13-13H, Sorkness, t9/12; cum 34K 11/12;
  • 23208, drl, BR, CCU Boxcar 44-22PH, Corral Creek,
17793, conf, Oasis, Nordby 5793-13-13H, Sorkness,

DateOil RunsMCF Sold

The BR well should be interesting: not only is it in the Corral Creek oil field, but it is targeting the Three Forks formation. It is not uncommon for BR wells to come off the confidential list and go to DRL status, so I am not expecting to see the IP for that well today. As expected.


I see Centerpoint raised its dividend. Ever.So.Slightly. I would rather see a dividend hike, no matter how small, rather than a dividend cut, but when the dividends are raised by so little, it seems to be a gimmick. It allows the company to add to their years of uninterrupted dividend increases. Barely.


RBN Energy: Not looking good for natural gas pricing. Winter is over. 

Scandinavia: I see Paul Krugman has added another country to the world's list of nation's: Scandinavia:
Republican governors of Kansas, Nebraska and Louisiana are pushing to eliminate personal and corporate income taxes, setting up a possible fight with the Obama administration, which has already vowed to reform the nation’s tax code this year. To make up the lost revenue, these governors would raise the state sales tax.

Krugman says the Republican plan to hike state sales tax could be modeled after the European nation Scandinavia, a country with very high sales tax rates and a “less progressive tax system” than the U.S. The revenue generated by the high taxes are used to provide Scandinavian citizens with a “very good social safety net” and more financial security, according to Krugman. 
Scandinavia. A European nation. I can't make this stuff up. My hunch is that before the day is over, that story will be corrected. One can only hope so. Screenshots are sure nice.


Wow, Europe is hurting. Ford reported better-than-expected earnings. This was due to North American operations. Ford expects losses in Europe to widen (as in "get worse").


Message from Wall Street to Washington, DC: solve the debt problem now. Cut spending now.  -- CNBC reporting. When pigs fly.

Monday, January 28, 2013

Monday Evening -- Potpourri and Daily Activity Report To Follow - Eight (8) New Permits -- Williston Basin, North Dakota, USA

I missed this earlier today: Toyota took back the top spot in car sales worldwide, moving GM to #2.

Nice headline story at Yahoo!Finance: ride the rails.
(Interestingly, Warren Buffett's Berkshire Hathaway Inc.  these days trades more like a train stock than anything else, owing to its Burlington Northern railroad division acting as the its biggest source of profits and most of Berkshire's cyclical exposure. Any serious selling in Berkshire based on a cooling railroad sector would be a gift to investors looking to grab this unrivaled collection of assets at an even slimmer premium to book value than it currently commands.)
Yes, Berkshire is a railroad stock right now -- and the article failed to mention the Bakken.

Hess announcement to get out of the refining business? Investors loved it. Share price popped from $59-range to $63 at the opening. EPD at an all-time high today; a solid jump.

Active rigs in North Dakota: 190.

I've added another Bakken link to the sidebar at the right:

Eight (8) new permits --
  • Operators: Whiting (4), Hess (3), True Oil
  • Fields: Red Wing Creek (McKenzie), Park (Billings), Timber Creek (McKenzie), Robinson Lake (Mountrail), Zenith (Stark)
  • Comments:
Wells coming off the confidential list over the weekend were reported earlier; see sidebar at the right.

Producing wells completed:
  • 21698, 181, XTO, Flatland 11X-2F, Sand Creek, t10/12; cum 488 bbls 11/12;
  • 22788, 366, Crescent Point Energy, CPEUSC Szarka 25-36-159N-100W,  wildcat, t9/12; cum 12K 11/12;
Dry Hole:
  • 22413, DRY, Hess, AV-Claire 163-94-211H-1;  Forthun; 

Filloon On Triangle Petroleum -- SeekingAlpha

Link to

Disclaimer: this is not an investment site. I post links to Mike Filloon's articles on a regular basis for his information on the Bakken.

Road Trip: March 7 - 8, 2013 -- Houston, TX -- 2nd Annual Bakken Crude Oil Logistics Conference

From the webpage / ad:
This conference is in response to the sudden challenge being faced by U.S. petroleum companies who are pumping crude out of the Bakken shale in North Dakota and Montana. The sudden increase in volume has resulted in the problem that the companies are having problems shipping the crude to the refineries. Truck and rail are being used and the volume has put an enormous strain on the supply of tank cars and available tank trucks. This conference is a follow up to our highly successful 2012 Bakken Crude Oil Logistics Conference, where we had over 135 attendees, numerous sponsors, and a great lineup of speakers. This event is organized to help bring together the crude producers, the rail companies, truckers, barges, and those who provide technology solutions to help develop a more efficient supply chain.

EPD Hits An All-Time High; Goes Ex-Dividend Tomorrow

Link here to The Street.

Disclaimer: this is not an investment site. This is not a recommendation to buy, sell, hold or otherwise trade. It is simply an observation. Idle chatter, so to speak. Paying 4.8%.

Five Percent of Three Percent of Three Percent of Two Degrees Works Out To Not A Whole Lot -- Nothing About the Bakken -- Okay -- I'll Put the Word Flaring In At the End

Assuming the premise is correct, and, of course, I don't, the story is still irrelevant.

CO2 makes up 3% of green house gases (the number one greenhouse gas is water vapor, about 95 to 97%). An inconvenient truth.

It is claimed that man-made activity contributes about 3% of that 3% of that "greenhouse gas" CO2. I don't know if that includes "breathing." The rest of the 97% of the 3% "greenhouse gas" CO2 is from non-man made sources. So, now we're down to 3% of 3%. [Don't confuse the percent of greenhouse gas with the actual amount of CO2 in the atmosphere: CO2 exists in Earth's atmosphere as a trace gas at a concentration of 0.039 per cent by volume -- wiki, or any good science textbook.] [By the way: 0.039 percent --> 0.00039 ml/ml of air.]

Then, this, at the linked NY Times article,
Though air travel emissions now account for only about 5 percent of warming, that fraction is projected to rise significantly, since the volume of air travel is increasing much faster than gains in flight fuel efficiency. (Also, emissions from most other sectors are falling.) 
I assume when the NY Times says "5 percent of warming" they are converting CO2 emissions to warming. If they are not, it's even more ridiculous. It is estimated that global warming will result in a one to two-degree increase in global temperature over the next century. Let's say five degrees, just to get way outside the range of argument. Five percent of five degrees is ... 0.25 degree; a fourth of a degree.

A fourth of a degree over the next 100 years.

And that's the filler we get in the NY Times: New Yorkers who don't own a car, live in a small apartment, and listen to Al Gore, are now distraught that they fly five times a year.
So if you take five long flights a year, they may well account for three-quarters of the emissions you create. “For many people in New York City, who don’t drive much and live in apartments, this is probably going to be by far the largest part of their carbon footprint,” says Anja Kollmuss, a Zurich-based environmental consultant. 
Meanwhile, I assume Anja is on the ski slopes today laughing at the crazy Americans who actually worry about these things. Five percent of three percent of three percent of two degrees over the next century. New Yorkers -- some of the highest taxed folks in the world -- who worry about this, or take Anja seriously -- need to move to an income-tax-free state ASAP.

Now, add this to your data base: the number of people taking five long flights/year is minuscule compared to the number of folks on the planet, so any one individual contributing to that 5% of 3% of 3% of 2 degrees over 100 years is ... well, that's why we have calculus. Knowing that most readers are not interested in the math behind the linked article, I have completed the calculus in the margins of another one of my blog sites.

The NY Times writes this and is taken seriously; bloggers .... well, that's another story.

Disclaimer: The NY Times story was accessed through The Drudge Report or something like that; I've now forgotten how I dragged myself over to the NYT.

Note: the article did not state a) the optimal global temperature; and, b) who/what sets the global thermostat each day. I assume the optimal global temperature varies from organism to organism. And I assume the Hubble telescope was really sent up to look for the thermostat.


By the way, it was the NY Times that said the cellulose-to-diesel fuel may be gaining momentum: it cited a cellulose-to-diesel fuel company that in December sold 1,000 gallons of diesel fuel made from cellulose. Yes, a 1,000 gallons of diesel sold in one month and the NY Times suggests this could mean that the industry is taking off. I can't make this stuff up.

A Note to the Granddaughters

I continue to enjoy David Graeber's Debt: The First 5,000 Years. In chapter seven he talks about honor and degradation, and discusses the legal system in Ireland during the Middle (Medieval) Ages at length. It turns out that ...
... the Irish material is all spelled out so clearly. This is partly because Irish law codes were the work of a class of legal specialists who seem to have turned the whole thing almost into a form of entertainment, devoting endless hours to coming up with every possible abstract possibility. Some of the provisos are so whimsical ("if stung by another man's bee, one must calculate the extend of the injury, but also, if one swatted the bee in the process, subtract the replacement value of the bee") that one has to assume they were simply jokes.
Something tells me that Anja's five percent of three percent of three percent of two degrees over one hundred years is not a joke. But maybe, then again, it is.

I'm beginning to think we've come full circle back to the Irish Medieval jurists: the New York Times is turning articles on global warming into a form of entertainment.