Tuesday, December 31, 2013

More Active Rigs In North Dakota Today Than One Year Ago; No Rigs On Federal Land In The Dakota Prairie Grasslands; I Knew The Market Was Good -- I Didn't Know It Was This Good -- The Best Since 1995; North Dakota To Have More Drones Than California? Frigid Temperatures Fueling Natural Gas Prices; What A Great Way To End 2013

Frigid temperatures fuel natural-gas prices -- The Wall Street Journal, section 3.
Natural-gas prices gained on expectations that continued colder-than-normal weather in the central and eastern U.S. will keep demand for the heating fuel high.
Natural gas for February delivery rose 5.9 cents to $4.427 a million British thermal units on the New York Mercantile Exchange. The 1.4% gain was the largest one-day rise since Dec. 19.  
Active rigs:

Active Rigs18718319715673

RBN Energy: provides a look back at the top RBN blogs this past year. The top blog -- Utica and NGLs.  
Number 2: Detailed survey of rail loading terminals in the Bakken.  Explores the impact of new terminals on crude markets and pipeline throughput
Number 5: CBR -- the year of the tank car
This certainly was not well publicized. I would not have known about it had a reader not told me. The Williston Herald is reporting that President Obama signed the bill to streamline the oil and gas permitting process on BLM land.
The bill allows BLM offices in Montana and other less stressed states to review and approve permits. Currently, as of the December report by the North Dakota Department of Mineral Resources, there are no drilling rigs in North Dakota on federal land in the Dakota Prairie Grasslands.
If that's the extent of the pilot project -- my hunch is one year from now, we will not see much difference in number of rigs in the Dakota Prairie Grasslands.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read or think you may have read here. 

PSX is on a tear the last day of the calendar year. PSX is up over 2% and trading at yet another high. It was announced earlier this week that Warren Buffett, in a deal worth about $1.4 billion, will be buying a specialty chemical unit from PSX. There are many story lines here, but anything related to pipelines is not one of them. It will be interesting to see if The WSJ has a story; I will be looking at The WSJ in a few minutes. Yes, here is The WSJ story.

By the way, Batton's pointed out something that is very interesting regarding this deal:
PSX has had a huge run-up (before Warren Buffett bought a PSX unit with 19 million shares  of PSX / $1.4 billion).

Buffett is incredibly smart and is well-known to be tax-averse. Here he has 19 million shares of PSX (probably more) and PSX has had a huge gain. Time to sell; lock in that profit. The problem: huge capital gains tax on that gain.

So, what does he do? He simply exchanges the PSX shares he owns, to take control of a PSX unit.
  • eliminates the capital gains tax consequences of selling PSX 
  • 19 million shares of PSX goes back to PSX -- retired, and amounts to a PSX buyback which increased the value of existing PSX shares (some of which he probably still owns) 
  • he sees value in the "parts" of PSX and takes advantage of this unit being worth more than what might be reflected in the PSX share price.
If he turned around and sold that unit for exactly what he "paid" for it: no capital gains tax; in fact, there might be some things he could off as a loss against other capital gains. But, I'm sure he bought the PSX unit for a long term investment. 

The Wall Street Journal

Winners of 2013: boring investors
In the best year for U.S. stocks since 1995, the smart way to play the markets has been to follow the dumb money. So-called dumb-money strategies, which involve buying and holding a plain-vanilla portfolio of U.S. stocks, did much better than the more complex approaches employed by hedge funds and other professional investors.
Fueled by easy money from the Federal Reserve and signs of improvement in the economy, the Dow Jones Industrial Average goes into the final day of 2013 with a gain of 29% once dividends are included, while the S&P 500 index has climbed 32% with dividends.
Those gains far outpace the rally predicted by even the most bullish Wall Street strategists.
Many hedge funds were left in the dust, alongside investors who use "tactical" timing of the markets' ups and downs and those who spread their bets among a wide variety of assets such as commodities, emerging markets and exchanged-traded funds.
"The more colorful your pie chart, the worse you did," said Lawrence Glazer, managing partner at Boston's Mayflower Advisors, which oversees $1.5 billion.
My pie is pretty much one color: the color of crude.


The train derailment and subsequent crude oil crash in North Dakota.

This is why immigration reform is just a matter of time: US population grew at a snail's pace.

FAA authorizes commercial drone testingThe WSJ mentioned North Dakota first:
The winning applicants were the commerce department of North Dakota; the state of Nevada; a public airport some 250 miles north of New York City; the University of Alaska; Texas A&M University in Corpus Christi; and a partnership between Virginia Tech and Rutgers University. The first site is expected to begin operating within six months. California was NOT selected; see story below.
Show me the money.
Millions of new insurance policies purchased under the federal health-care law officially take effect on Wednesday, but many enrollees won't be able to use them to visit doctors or get prescriptions filled for days or weeks, insurers say.
Because problems with the online marketplaces forced the government to extend deadlines for enrollment to Christmas Eve, insurers are hustling now to complete those enrollments, to process payments and to issue membership cards. They say they won't be able to reach everyone by Jan. 1.
Small businesses anticipate breakout year ahead. Most of them will get health care premiums off their books, as they cost-shift employees to ObamaCare. (No, the story does not mention ObamaCare.) But this article does: the three obstacles facing small businesses in 2014: accessing capital, health-care costs, and 'Beltway' battles.

The Los Angeles Times

Air Force member (male) alleges that blowing the whistle on a "consensual" relationship with a male superior has brought him nothing but grief. A gazillion story lines in this article, starting with the tattoos. I found it refreshing that the male superior was given a weak slap on the wrist. (If you have trouble accessing the entire article, google key words.)


Incredible. Drone giant California loses bids for federal testing sites.
Disappointed California officials were at a loss to explain their failure to land a test site, though some suggested the state didn't do enough to win in the fierce nationwide competition.
The state lost out to Alaska, Nevada, New York, North Dakota, Virginia and — adding salt to the wound — longtime rival Texas.
Not only that but California was the only state with two groups submitting bids — one based in Ventura County and the other in Kern County.
"How California was left off the list, I haven't got a clue," said Bill Buratto, who, as president and chief executive of the Ventura County Economic Development Assn. helped pitch a bid for a test site in California. "It would seem to me that the FAA would look favorably on California." 
My hunch: the FAA didn't need a bunch of crap from activist Californians screaming about privacy issues


Back to paper. Remember all those paper bags you got for free at grocery stores. In Los Angeles, starting tomorrow, they will cost you 10 cents apiece. Supermarkets are going to be the big winners here.  I'm sitting here in Starbucks, and looking at the cutest looking little puppy, patiently waiting while its master finishes his coffee so they can resume their walk. But I digress.
Starting Wednesday, it will be illegal for big grocery chains, including retailers such as Target and Wal-Mart that sell groceries, to distribute disposable plastic bags. In July, smaller markets will have to comply with the ban as well. Customers will have to bring their own reusable bags or pay a 10-cent fee for each paper bag requested, according to the ordinance that Los Angeles City Council members passed in June.
As of Jan. 1, L.A. will be the largest city in the U.S. to ban plastic grocery bags. The ban was passed to prevent billions of plastic bags from clogging landfills, waterways and the ocean, where they kill marine life. Council members have said they hope to send a message to state lawmakers by enacting the law.
World's hottest pepper hits 2.2 million Scoville units.
Until recently, the Trinidad Moruga Scorpion was known as the world's hottest chile pepper. But according to the Guinness Book of World Records last month, it's now the Carolina Reaper grown by Ed Currie of PuckerButt Pepper Co. in South Carolina.
The pepper rates an average of 1,569,300 Scoville heat units, as tested by Winthrop University in South Carolina throughout 2012, says the Guinness entry.
A story by the Associated Press says the record is for the hottest batch of Currie's peppers tested, code named HP22B, which stands for "Higher Power, Pot No. 22, Plant B." The hottest individual Carolina Reaper came in at 2.2 million Scoville heat units. Last year, New Mexico State University's Chile Pepper Institute named the Trinidad Moruga Scorpion the hottest chile in the world, with a mean of more than 1.2 million Scoville heat units and individual plants with a heat of more than 2 million units.

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