Saturday, January 19, 2013

For Investors Only: Another Energy/Utility Trading At 52-Week High

SRE is trading at a 52-week high. In fact, it appears to be trading at an all-time high (see Yahoo!Finance).

For archival purposes.

Disclaimer: this is not an investment site. Make no investment decisions based on what you read at this blog.

Crude-By-Rail Out Of The Bakken

Great story on crude-by-rail in the Minneapolis Star-Tribune.
Two years ago, Gabe Claypool had nothing to do with oil and railroads.
Today, he is CEO of a Wayzata-based company that ships 3.5 percent of North Dakota's oil to East Coast and other refineries in railroad tank cars.
The company, Dakota Plains Holdings, is part of a revival of the old way of shipping crude oil -- via rail -- that last flourished during World War II. And it's another case of North Dakota's oil boom igniting spinoff businesses.
"If the capacity to move oil isn't there by pipeline, the only alternative is to get it out by rail -- or you stop producing oil until the pipelines catch up," Claypool said in an interview.
Claypool, 37, who grew up on a farm in Hampton, Iowa, was living in Minnesota in 2011 when investors in Wayzata and Minneapolis approached him to run their start-up crude-oil-to-rail business. At the time, he was a manager at a networking company and had spent nearly a decade at AT&T.
He was puzzled initially that anyone would ask him -- a farm kid working in the technology industry -- to run an oil business, he said. Then someone explained that the business model "is remarkably similar to a farmers' elevator," he said.
Dakota Plains in 2010 opened a crude-oil-to-rail loading terminal in New Town, N.D., in the Bakken oil region. The company was among the first to see that pipeline capacity would be insufficient to ship all of the region's oil.
Go to the link for the full story, and many, many data points regarding the crude-by-rail story. It's quite phenomenal. 

For Whiners Only: Where Men Are Many, Women Are Hounded, and East Coast Reporters Are Idiots


January 28, 2013: this is way cool! I posted the story below (ND struggles with its prosperity) yesterday, and today it's at the top of the page on the Drudge Report. No link because "Drudge" is dynamic and the link there will be gone in a few days.

January 27, 2013: I guess I will use this page for linking "whining" stories. Here's another one, this time from the Minneapolis Star-Tribune: North Dakota struggles with its prosperity. Starting wages at Wal-Mart: $17/hour. Starting. As in beginning. No experience necessary. No high school degree.

Really? This is a news story? North Dakota struggles with "its prosperity"? If I recall, the agriculture industry is still bigger in North Dakota than the oil industry. If anything, four counties in North Dakota, or thereabouts, face many challenges with huge growth opportunities. And, oh by the way, the men and women in these counties seem to be doing an incredibly good job.

Only one thing caught my attention, the lede: "... life there can be frustrating and lonely..."

It almost sounds as if the reporter, or at least the headline writer, would like to see the prosperity for his/her state without having to put with the work or the struggle. I think if I were the editor, this would have been my response to the reporter: "That was the best you could do? That's a "dog bites man" story. Certainly there were more interesting stories coming out of the oil patch than workers are frustrated and lonely. In fact, you almost had it, but you let it go. This could have been the story: men and women using their ingenuity to solve difficult problems under harsh conditions. My hunch is roughnecks like to be known for their skills and hard work, not for being whiners about long hours and loneliness."

The reporter needs to read Giants in the Earth by Ole Rolvaag to get an idea of "frustrating" and "lonely."  Or he can read Tim O'Brien's novels on the Vietnam War, for example, The Things They Carried. That might put his lede into perspective.

I have all the respect in the world for the roughnecks in the oil patch, and I have nothing but good things to say about them, but for a reporter to say that North Dakota is struggling with its prosperity .... well, I guess folks know my feelings about some of these stories.

If anyone working in the oil patch in North Dakota feels frustrated or lonely, he can think about the American soldier, male and female, in Afghanistan tonight, earning a whole lot less, on duty 24/7, except when out of the combat zone, and with a whole lot more to lose. As the US ambassador to Libya found out last year; the first US ambassador to be killed in the line of duty in 35 years.

Original Post

Faith Hill

This post, I can already tell, is not necessary. Probably not even "appropriate" for lack of a better word.

My thoughts keep coming back to the two stories about concurrent events a world apart. One headline: "All Hostages Dead." Another headline: "An Oil Town Where Men Are Many, and Women Are Hounded."

Both stories sit in my temporal lobe separated by a neuron or two. I didn't read past the first few paragraphs of the latter story, and I've read almost nothing of the former story. I know enough about the "all hostages are dead" to know that it was in Algeria, involved an oil/gas facility, and wasn't operated by any American company. (And I could be wrong on all that.)

And with regard to the latter story, having read so little of the New York Times about hounded women, it's very possible I'm taking the story out of context.

But what little I read, suggests the reporter is surprised what a "boom town" is all about. I would be surprised if men weren't many, and women weren't hounded in a boom town. What surprises me is this: that was about all he/she (I don't know who or what wrote the story) could find to write about: that men were many, and women were hounded.

No drugs. Or at least not much. I haven't seen one article in the regional newspapers out of Dickinson or Fargo suggesting that drugs are out of control in Williston. Or homicides. There have been one or two unfortunate killings, early on, and crossmyfingersitwon'thappenagain but I haven't seen one article in the regional newspapers out of Dickinson or Fargo suggesting shootings are out of control in Williston. And guns are easily available (and with idiots for reporters from the East Coast, perhaps highly advisable).

About the only thing the reporter could find to write about: teenage voyeurism. Apparently not even a wardrobe malfunction. Women offered huge amounts of money to take their clothes off. Shocked, I'm shocked. Hugh was very successful at that a long time ago, starting back in 1951 with MM, if I recall correctly: offering women huge amounts of money to take their clothes off, and finding any number of women who would do that. One can see it in Hollywood movies that get PG ratings. What is surprising is this: the women make more money in Williston than what they could make taking their clothes off for some reporter. In fact, it sounds like the women putting tattoos on oil workers are making more money in a month than New York Times reporters make in a year, assuming these reporters still have a job when they get back home (with all the layoffs at the Times). [The reporter should check out Hollywood and Vine where transvestites are many, LGBT are hounded, and East Coast reporters are still idiots.]

Where men are many. You have got to be kidding me. That's the nature of a boom town. The '49er's gold rush. The Klondike.

Where men are many. You have got to be kidding me. Has the reporter ever read anything about the US Navy? I assume he/she has never been on an American aircraft carrier where men are many. I assume he/she has never been on an American US Navy submarine where men are many, and until recently where submariners were only men. It is a credit to the US military that the military woman is not hounded (at least not enough to catch the attention of the New York Times).

Some time ago I listed the reasons why working in the Bakken was so much better than working in Saudi Arabia. It might have been a comment; regardless, I can't find it. But that's what took me to the headline "All Hostages Dead."

That's something oil workers in North Dakota don't have to worry about. Terrorists. Or 125-degree heat in the summer. Or sand so fine it would gum up the sophisticated machinery. Or 24-hour flights back to the states if / when they got time off. The women oil workers in North Dakota can go to work without wearing hoodies in the summer. The women oil workers in North Dakota can go to work driving their own Cadillac Escalades, and then when they get to the pad, they can operate heavy machinery on their own. Or they can sit in a warmedinthewinter/cooledinthesummer office managing men. Managing men in an industry where men are many.

And, you know, 10-to-1, the men offering the woman $7,000 to take off her clothes or whatever it was (that's as far as I read) were probably bantering in a teen-age fashion that is considered hostile by some, immature by others. But I can guarantee that any woman working in North Dakota, or raised in Williston, can handle anyone that hounds them. My hunch is that the women in North Dakota have more fortitude and self-reliance and self-esteem than the reporter who wrote the story.

I have nothing but respect for the roughnecks working in a very tough environment in North Dakota, where men are many and women are hounded. But 10-to-1, it beats Algeria, especially when the terrorists are storming the compound.

P.S. Within minutes after posting the above, I got a nice comment reminding me this has been said before, but much better:
Lake Wobegon is characterized as "the little town that time forgot, and the decades cannot improve," and as the town "where all the women are strong, all the men are good looking, and all the children are above average."
And that's why Garrison is rich and famous, and I'm not.


48 Crash, Suzi Quatro

One day later: normally I post updates at the top, but I want to hide this. I don't want to divert readers' attention from the more serious subjects of the Bakken. But the NY Times article still hounds me. I thought it was because the NY Times was unable to find the story he really wanted to report on in the Bakken.  But I don't think so. Then I thought the story hounded me because stories about the challenges of drilling in North Dakota paled in comparison to drilling in the Middle East and other overseas oil fields. That is probably part of the reason.

But the more I thought about are article, the more irritated I got. I came across (and bought) a most interesting book at Harvard Book Store earlier today: the 2008 biography by Joanne Passet. While paging through that biography it dawned on me why I was so appalled by the NY Times article. It was yet another article suggesting women are the "weaker" sex, unable to take care of themselves. I alluded to this in my original post:
My hunch is that the women in North Dakota have more fortitude and self-reliance and self-esteem than the reporter who wrote the story.
I detest men who treat women poorly and shabbily. But I don't view women as the "weaker" sex, unable to take care of themselves. I am intrigued by women who can give it as good as they can take it. I am intrigued by women who go into the oil patch, knowing the challenges before they go, and yet willing to face those challenges straight on. The women succeeding in the Bakken are incredibly wonderful role models for my granddaughters. I wish these women all the success in the world. It appears to me they are handling the challenges just fine, thank you.

I Hate Myself For Loving You, Joan Jett

Where Did All The Jobs Go?

This might be a good starting point for a stand-alone post. I might come back to it. For now, enjoy this perspective at (via "anon 1").
While the boom in Oil & Gas jobs that is so clear in the chart above, it would appear that whether through regulation, market pricing, or 'over-fishing' the growth in rig-counts (as proxied by Baker Hughes below and noted by Reuters late last year) is now falling year-over-year (though well counts are rising) - it seems we need another 'price' boom in Oil and NatGas to get things going again - but of course that will hurt the consumer and implicitly the mainstay of the US economy.
Many, many story lines. Again, from my perspective, all things being equal, using "rig count" as the only data point is unhelpful. 

For Investors Only: SM, EOG, NGLS, GRGP Undervalued -- Barron's

From lede at Google; paid subscription might be required for full story, but the link worked for me:
We found two exploration companies, SM and EOG, and two MLPs, NGLS and TRGP, poised to reward investors over the coming year.
At the link when it worked:
SM's $1.5 billion spending plan for 2013 is focused on developing productive resources in the Eagle Ford Shale in Texas, the Bakken/Three Forks in North Dakota, and emerging-oil formations in the Permian Basin in Texas. In the Eagle Ford, with construction of new pipelines and processing facilities planned, and a partnership with well-funded Anadarko Petroleum, production should grow by nearly 20% this year ...
A larger exploration name that also should benefit from the domestic shift to oil and liquids projects: EOG Resources , once part of Enron. While its natural-gas reserves are significant, it invested early and at a low cost in the Eagle Ford and has considerable oil acreage there.
"This is a stock that could easily appreciate 20% a year for several years because of the investments they have made," .... "At some point, the market will price it appropriately."
While EOG shares have risen 21% over the past 12 months, outperforming many E&Ps, Capital One Southcoast believes shares can jump another 18% to $148. 
Also, this, which I had forgotten about but posted earlier:
Targa is in the growing business of gathering and processing natural-gas liquids, mostly in West Texas and along the Gulf of Mexico coast. And Targa recently announced a $950 million acquisition in the Bakken Shale, which adds a crude oil pipeline and terminal system, as well as natural-gas gathering and processing assets. [See Million Dollar Way, November 16, 2012]
Gregory Reid, the senior portfolio manager at MLP-focused Salient Partners, likes Targa Resources Partners, which could boost distributions by 10% to 12% this year, strengthening its already attractive 6.7% yield.
Disclaimer: this is not an investment site. These are not recommendations.

NYT Story On the Bakken (Too Many Men, Not Enough Women) Vs AP News: All Hostages Dead in Algerian Natural Gas Complex

At least the NY Times continues to do what it does best.

We now know why the NY Times reporter was in Williston, and not in Algeria. Safer. Nicer weather. Easier to fly into.

Williston Basin Montana Bakken: A Dud? Part IV

Highlights ERF and MDU.

Week 3: January 13, 2013 -- January 19, 2013

Well density
Eight wells on section in Banks oil field
Ten wells on section in Antelope oil field
Samson Oil & Gas: four wells on 160-acre spacing unit
CLR with permits for a 7-well pad
KOG with permits for eleven wells in one Pembroke oil field section
CLR's 14-well-site in one corner of a 2560-acre spacing unit
Graphics of well density

Natural gas in the Bakken
Plan B for ONEOK
Single-well comparison among the oil and gas fields
ONEOK to add a fifth natural gas gathering and processing facility, near Watford City
Flaring concerns? Lots of opportunities for investors
Using natural gas to power drilling rigs in the Bakken
Screenshot of natural gas production in North Dakota

Takeaway in the Bakken
CLR sees excess of takeaway capacity, in both rail and pipeline
Pipeline companies investing in rail terminals: best link for that day 
Pipelines will be the energy story of 2013

Rig Count
Rigzone musings on falling rig count

Bakken operations
Denbury buys COP field in the Williston Basin, a Red River field
Boston-area company shipping Bakken oil to east coast refinery
LTR strengthens position in the Bakken

For investors only
Takeover talk: EOG

Economic development
Williston will need $625 million over six years for infrastructure to support surging population
New/expanded lumber year, east of Minot
North Dakota's school land permanent trust now nearing $2 billion
Hiring at the Port of North Dakota

Narrowing of the WTI/Brent spread
Breakeven price for EOG in Eagle Ford: $37/bbl
Canadian Sands Oil in a World of Pain
Spread narrows with Seaway reversal and expansion
PSX refinery using Western Canadian Select ($40/bbl)

Saturday Morning

Quite cold in Boston area; bright sunny day, no precipitation; almost no snow on ground, and what there is dirty and left over from earlier snowfall.

WSJ Links

Section D (Off Duty): later

Section C (Review): 
Book review, The Fall of the House of Dixie, Bruce Levine -- uprooting the plantations. This would have been of little interest to me except our older granddaughter is reading several books on the Civil War and this would be "right up her alley," as we used to say.

Section B (Business & Finance):

"Cosmopolitan readers can get their first year's subscription to the print magazine for $10. But if they want the digital edition on their iPads, they will have to fork over $19.99." The WSJ writer seems surprised. Not surprising at all. One would think a business reporter would get it. Perhaps that's just the lede to get your attention. I will finish the article later.

US oil sector notches historic annual gusher.
U.S. oil production grew more in 2012 than in any year in the history of the domestic industry, which began in 1859, and is set to surge even more in 2013. 
Daily crude output averaged 6.4 million barrels a day last year, up a record 779,000 barrels a day from 2011 and hitting a 15-year high, according to the American Petroleum Institute, a trade group. 
It is the biggest annual jump in production since Edwin Drake drilled the first commercial oil well in Titusville, PA, two years before the Civil War began. 
The U.S. Energy Information Administration predicts 2013 will be an even bigger year, with average daily production expected to jump by 900,000 barrels a day.
And folks said the Bakken was hyped. A lot of opportunities were missed by some who thought that.

Disney's Igor's pay to >$40 million; I believe the JP Morgan CEO pay was cut in half, to around $11 million (from memory; could be way wrong).

Cattle prices decline on Cargill move.
Live-cattle prices fell to a two-month low, extending a selloff after Cargill Inc. unveiled plans on Thursday to close a major beef-processing plant amid tight supplies.
Cargill's decision to shut its Plainview, Texas, facility is a sign of weakened demand for cattle in the face of record prices stemming from drought in the central U.S.
Claiming the home-office deduction just got a whole simpler: $5.00/square foot. 

Intel's spending may not compute. It will be interesting to look back a year or so from now, and see whether the decline in PC sales was temporary or a new trend.

Section A:
The all-important page 3: Another example of ObamaCare defining the new US standard for a workweek: health law pinches colleges; some schools cut hours of hard -pressed adjuncts to avoid rules on insurance. The official work week in the US: 29 hours. Next: more articles on outsourcing. From the linked article:
The federal health-care overhaul is prompting some colleges and universities to cut the hours of adjunct professors, renewing a debate about the pay and benefits of these freelance instructors who handle a significant share of teaching at U.S. higher-education institutions.
The Affordable Care Act requires large employers to offer a minimum level of health insurance to employees who work 30 hours a week or more starting in 2014, or face a penalty. The mandate is a particular challenge for colleges and universities, which increasingly rely on adjuncts to help keep costs down as states have scaled back funding for higher education. 
Most of these folks, I'm sure, were Obama supporters and ObamaCare supporters.

Cue up Connie Francis.

Backlog of gun checks stalls Colorado buyers.

Bones of contention over final resting place of Richard III.

Boeing's flying laptop needs a reboot.
An Aviation Week blogger said it most precisely: The Federal Aviation Administration is requiring fixes to be made to the Dreamliner's battery system before Boeing's state-of-the-art jet will be allowed to fly again. The only problem is that neither the FAA nor Boeing has identified a problem or a way of fixing it.
I remember when their reports of some Toyota models having problems with unexplained acceleration: "everyone" finally agreed to accept the "poorly designed floor mat" as the problem. Maybe Boeing and the FAA will find something analogous with the Dreamliner. But at least we're still all turning off our electrical devices when taking off/landing on a commercial airliner.

The sports page: yet another article on Lance Armstrong. Considering all the "good" news out there and all the uplifting sports stories out there, this seems trivial. Huge photo of Armstrong on bike. Most interesting: one has to give credit to the phlebotomists and other medical personnel over the years who administered to Lance Armstrong and the other bikers. They wear very little clothing (unlike football players, NASCAR drivers) and it's pretty much impossible to hide bruising in the antecubital fossae and other places on the body where they would be accessing veins. I don't recall any band aids or bandages over any of their extremities when the races began. I suppose some of the doping was done well in advance to allow the bruising time to go away, but still, with all the photographers 24/7 one would think that someone would have caught something. So, lots of credit to the medical personnel for their skill in minimizing bruises when administering the drugs.