Thursday Links -- No WSJ Links Today

RBN Energy: tank cars. CBR.

Petroleum News:  Pushing margins. CLR continues successfully testing Three Forks benches and downspacing. A huge "thank you" to a reader for sending me the link. Much is said in this article, but this is of interest:

As is the trend in the Williston Basin, Continental is exporting most of its crude oil from the basin via rail.

Bott said in the first quarter of 2013, approximately 80 percent of the crude oil from its operated wells were railed out of the basin, and said the narrowing of the price spread between Brent and West Texas Intermediation has brought rail transport into “rough parity” with pipeline transport, but he added that the company is keeping its options open in terms of future commitments.

“If Brent/WTI spreads continue to converge, we will look at pipeline evacuation opportunities and we’ll need to see rail carriers reduce their costs to stay competitive.”
Bott added that Continental is also evaluating how it sells it oil.

“We have also begun to diversify how we sell our oil, balancing spot, selling with short-term agreements to commit set volumes of oil to specific refining customers,” he said.

Hamm said that production in the basin simply grew too fast and pipeline capacity couldn’t keep up as price differentials “blew out” some 15 months ago. Not only did Continental see opportunities with rail transport, but also advantages of east and west coast markets rather than always taking oil to the Gulf.

News from Canada -- for Canada -- does not look good (a PDF file -- you might get a dialog box asking you to link to another website; if you do, that's fine, no problem, but of no use either. I would just cancel that link.)

It's going to be a long haul for those in the oil and gas sector in the North (Canada) with the Conference Board of Canada predicting continued decline in the industry.

A four-and-a-half per cent decrease in the sector every year until 2025 is the grim forecast and the reason is a lack of wells moving into production in the foreseeable future.

And that begs the question, "why?"

I didn't have time to do the math, but from Don:

At an annual 4% decrease for 12 yrs: assume 100% at end of 2013, then with a 4% compounded  yearly decrease, one arrives at 61% at the end of 2025.

The word "grim" might be an understatement.