Tuesday, January 22, 2013

DOA? Nebraska's New Keystone XL Routing At the State Department?

The governor's ink was hardly dry before the US State Department said, "Whoa! Hold your horses. We don't anticipate disapproving this new route before the end of the first quarter."

Actually, they didn't exactly say that.

But the President's #1 or #2 or #3 priority (apparently) is climate control.

And all that heavy oil coming down the middle of the US complicates things. It addition this extra-large pipeline literally cuts the US in half (not my phrasing):
In October 2011, Lisa Jackson reiterated those concerns in an appearance at Howard University in Washington.
This isn’t a little tiny pipeline, this is a pipeline that cuts our country literally in half,” she said.
According to Reuters, this is what the State Department had to say about the new route:
The Obama administration has delayed a decision on TransCanada Corp's rerouted Keystone XL oil pipeline until after March, even though Nebraska's governor on Tuesday approved a plan for part of the line running through his state.
"We don't anticipate being able to conclude our own review before the end of the first quarter of this year," said Victoria Nuland, a spokeswoman at the State Department, which had previously said it would make a decision by that deadline.
She said the department would take into consideration approval of the line by Nebraska Gov. Dave Heineman."
"Take into consideration?" Wasn't his review what this delay was all about? Now, the State Department will simply "take his approval into consideration." Well, that's nice of them.

I see one of three possible outcomes regarding the pipeline as of March 31, 2013:
  • having expedited the review process, the State Department recommends approval, and President Obama concurs
  • having expedited the review process, the State Department recommends changes, and the President concurs, delaying the decision for at least another six months
  • having slowed the process down, John Kerry says he sees merit in the pipeline, and if it were up to him, he would vote for it before ultimately recommending a vote against it; decision delayed
If I were a betting man, and I'm not, the new Keystone XL Pipeline Nebraska route will not be disapproved on/before March 31, 2012.

Outlook for US Oil Producers Looks Rosy -- Barron's

Link here to Barron's.
With the deadly terror attack in Algeria putting a newfound focus on threats to energy supplies, crude oil prices are expected to move higher.
There is speculation that futures contracts for the U.S. benchmark oil contract, West Texas Intermediate or WTI, could top $100 per barrel. WTI closed last week at $95.96, and the front-month contract was trading at $95.69 Tuesday.
Brent crude, which trades at a premium to WTI, set a new record in 2012 and is trading above $112 per barrel.
And the spread between WTI and Brent may be narrowing.

And WTI and Bakken is practically at parity at Clearbrook, MN

Cool: Delta Bets on Bakken To Boost Refinery Results


December 6, 2013: Delta Airlines refinery returns a profit
Original Post
Link here to Reuters.com.
Delta Air Lines Inc plans to run cheaper domestic crude at its newly-acquired Trainer, Pennsylvania refinery to improve profits at the plant, becoming the latest U.S. company to cash in on the burgeoning shale oil boom.
After losing $63 million at the refinery in the fourth quarter, the Atlanta-based airline will receive its first crude shipments there from North Dakota's Bakken shale in the first quarter, the company said during its earnings call Tuesday.
Delta's subsidiary, Monroe Energy LLC, was forced to slow production at the 185,000 barrels-per-day plant in November and December after Hurricane Sandy damaged regional pipelines and terminals, leading to the losses, Paul Jacobson, the company's senior vice president and chief financial officer said during the call.
However, the Trainer refinery will bounce back to a modest profit in the first quarter, Jacobson added.

Only Two Wells Coming Off the Confidential List Today

Two nice wells:
  • 22786, 747, MRO, Irene Kovaloff 11-18H, Murphy Creek, t10/12; cum 14K 11/12;
  • 23212, 1,656, CLR, Hartman 4-28H< Chimney Butte, t12/12; cum 3K 11/12;

Primary Petroleum in Alberta Bakken: Joint Venture Partner is OXY USA; OXY USA Owns 32.5% of Primary Petroleum

Link to Fairfield Sun Times:
It has been one of the worst kept secrets in the Oil Patch, and has led to all types of speculation on the world wide web, in both blogs as well as online reports by “respected” analysts within the industry.

For the first time, The Sun Times is able to report that the “JV” or “Joint Venture” partner that now owns 32.5 percent of Primary Petroleum Company is OXY USA Inc.

The Sun Times uncovered details of the transaction two weeks ago when researching documents related to oil and gas exploration in Teton County. Since the deal took place last year, the rumor mills have been rampant. For the most part, the speculation was close, but not on target.

When the agreement was made last year, The Sun Times was advised by reliable sources that Occidental Petroleum Corporation, based in Los Angeles, California was the new partner. However, the California headquarters refused to confirm the deal when contacted, so it was decided not to go with the story.
I track Primary Petroleum at "other producers."

For newbies: the Alberta Bakken is NOT the same thing as the Williston Basin Bakken.

Several Incredible Wells Reported; OXY USA Has A Nice Well; A Corral Creek Well Reported; Five XTO Wells; Eleven (11) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations
Bakken Operations

Active rigs: 188 (very, very nice, surprising, up another two rigs)

Eleven (11) new permits --
  • Operators: Petro-Hunt (5), Whiting (3), QEP (2), BEXP
  • Fields: East Tioga (Mountrail), Marmon (Williams), Grail, (McKenzie), Sanish (Mountrail), Park (Billings), Little Knife (Dunn), Buford (Williams)
  • Comments: notice all the various fields
Wells coming off the confidential list were reported earlier; see sidebar at the right.

Producing wells completed (these are really some incredible wells, based on IPs):
  • 17308, 2,545, BR, CCU Meriwether 44-19TFH, Corral Creek, t7/12; cum 3K 11/12;
  • 22678, 1,291, OXY USA, State 2-16-21H-143-96, Fayette, t1/13; cum --
  • 22978, 603, XTO, Tong 34X-9B, Midway, t12/12; 900 bbls 11/12;
  • 20582, 1,645, XTO, Ames 31X-13C, Grinnell, t11/12; cum 21K 11/12;
  • 23104, 397, XTO, Hartsoch 15-35-1H, Midway, t12/12; cum --
  • 22870, 1,894, XTO, Flatland 11X-2B, Sand Creek, t12/12; --
  • 22869, 971, XTO, Flatland 11X-2A, Sand Creek, t11/12; cum 700 bbls 11/12;
  • 19726, 559, OXY USA, Delvin Dukart 1-31-30H-143-95, Manning, t12/12; cum --
  • 22771, 1,372, Hess, EN-Skabo Trust 155-93-0631H-2, Alger, t12/12; cum --
  • 23688, 2,448, Whiting, Lioneld Fladeland 12-12H, t12/12; cum --
  • 23904, 2,004, Whiting, Ness 41-31XH, t12/12; cum --

Surprise, Surprise, Surprise: CNBC Certainly Seemed Surprised: CNBC Reporting (Breathlessly) That Nebraska Governor Approved New Keystone XL Route

CNBC talking head suggests US State Department won't approve Keystone XL until after the "first quarter." She did not mention "first quarter" of which year.  Color me surprised if John simply rubber stamps this plan.


Currently, according to Weatherspark, assuming I am reading the graphic correctly, it is currently 22 degrees F. Average for Boston area this time (January 19) of year: 35.6 degrees.  Just sayin'.

Oooh, it's cold out there. And on the bike to minimize my carbon footprint.

Production numbers for 22910:

NDIC File No: 22910     API No: 33-061-02134-00-00     CTB No: 122910
Well Type: OG     Well Status: A     Status Date: 10/9/2012     Wellbore type: Horizontal
Location: NENE 13-151-93     Footages: 350 FNL 1100 FEL     Latitude: 47.904456     Longitude: -102.518081
Current Well Name: PEARL 41-13TFH
Elevation(s): 2123 KB   2098 GR   2098 GL     Total Depth: 20328     Field: BIG BEND
Spud Date(s):  7/21/2012
Casing String(s): 9.625" 1970'   7" 10892'  
Completion Data
   Pool: BAKKEN     Perfs: 10892-20328     Comp: 10/9/2012     Status: F     Date: 10/18/2012     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 38938     Cum MCF Gas: 4504     Cum Water: 11775
Production Test Data
   IP Test Date: 10/18/2012     Pool: BAKKEN     IP Oil: 1430     IP MCF: 1227     IP Water: 733
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

WTI/Brent Spread; WTI and Bakken Light Sweet Nears Parity At Clearbrook, MN


Later, 3:14 pm: CNBC is suggesting that oil is up a solid 50 cents today because the Nebraska governor has approved the new Keystone XL route. Even if President Obama approved the pipeline today, it would have no effect on earnings of any oil company for at least a year, except possibly negative earnings for TransCanada who is paying to build it. The price oil went up today for reasons completely unrelated to the Keystone. A lot is going to happen between today and the day the first Alberta oil sees Cushing via the extra-large Keystone pipeline. TransCanada is actually trading lower after the announcement. TransCanada investors are aware this is going to be a huge expense of TransCanada and there are at least two more environmental fights left to go.

Original Post
WTI: $95.70
Brent: $112.07

Bloomberg. Dynamic. 9:38 est Tuesday. Spread: $16. So much for the huge change that some folks predicted with the Seaway expansion AND reversal.

I track the spread here.

However, the spread between WTI and Bakken light, sweet oil narrows, now down to $3.25, which in the big scheme of things is parity. And that's probably a direct effect of increased takeaway out of the Bakken.

So, how's the market doing at midday? Wow, the price of oil keeps melting up, up another $0.60 and solidly above $96, and as noted above, WTI and Bakken near parity at Clearbrook.
  • Union Pacific Railroad trading at new 52-week highs. In fact, all-time highs.
  • BRK-B also hits another high.
  • CVX up a bit, approaching its 52-week high.
  • SRE hits another all-time high.
  • EPD hits an all-time high. EEP is up almost 2% on a day that Keystone XL route is approved by Nebraska governor.
  • COP and PSX not at new 52-weeks high but doing very well.
  • The Bakken-centric operators flat to down, most likely due to expected decreased production during cold December month. Later, it looks like OAS hit an all-time high.
  • An exception: EOG hit a new 52-week high, but but a significant pullback; and I don't see any news regarding EOG except it was one of Cramer's six sixty-second stocks, which some associate with "the kiss of death."
  • T and VZ both up despite announcing huge write-offs in 4Q12 for pension-related costs.  
  • BAX flirting with all-time highs.

Tuesday Links -- For Those Coming To Read About The Bakken, Please Skip This Post; All Bakken All The Time Is The Sidebar At The Right

Wells coming off confidential list have been posted; scroll down; a few other unrelated posts are also up. Just scroll down until you start seeing stuff you saw yesterday. Good luck to all.

I apologize: a fair amount of typos today. Typing in the dark. Long story.

RBN Energy: gas processing economics, part V.

Cold day in Boston, but no wind, so riding a bike was not an issue; a very nice bike, in fact; actually quite nice; bright, sunny day. The weatherperson predicted 3 -5 inches overnight. We got maybe a quarter inch. None on the streets due to the fast work of the "salters."  The weatherperson who predicted 3 - 5 inches of snow overnight was the same weatherperson who predicts a 1.7 degree increase in global temperature over the next century. If there's anything I've learned about weather and climate forecasting, weather is a lot more difficult to forecast, and one sees results a whole lot sooner. Climate forecasting is really, really, easy, as long as one has a TRS-80 or better.

But I digress. What's going on in the world? Boston Globe: the president's emphasis going forward -- climate control, gay rights, and something else. I forget the third. Something similar. I'm reading a great biography of Jeannette Howard Foster (b. 1895; leader in lesbian rights); fascinating story; used the word "gay" in her poetry, she says, but always associated it with joyful / mirthful in the early days. I'm not far enough in the book to know when/if she "modernized" the word. Her preference was lesbian. The author: Joanne Passet. I assume most folks coming here for the Bakken aren't interested in this, so I will alert them in the subject line.... and then move on to the Wall Street Journal.

WSJ Links

Section D (Personal Journal): Sports page -- prepare to be harbaughed. A new word. Nice.

If you get the print edition, consider cutting out this article and hanging it on your refrigerator door; should do wonders for your relationship with that significant other: "Put a Stop to 'Do I Look Fat?'"

Section C (Money & Investing):  
Just what is working on the railroad? One railroad not listed on the list at that link: BRK-B, a regional monopoly serving the Bakken and Warren Buffett. Surprisingly, a railroad I associate with coal is leading the list of EPS growth estimates at almost 60% -- Genesee & Wyoming.

Oh, by the way, nothing to do with the WSJ, but along with the biography mentioned above that I am reading, I am also reading Debt: The First 5,000 Years by David Graeber. I read about ten pages every night before I fall to sleep. That's a keeper. I understand better why Tim Geithner and others suggest the debt ceiling is "so yesterday." I'm starting to agree. More on that later, perhaps.

Back to the WSJ.

Section B (Marketplace):
More bad news for Boeing. No links; it's all over the news. Those lithium batteries. If this is a design defect, "B" is for Bad news. Or Burning Batteries.

Huge article: deal trips up Caterpillar in China. Maybe a speed bump, but I don't think "tripped." As in stumbling, falling to the ground. That I would reserve for HP and Autonomy.

Section A:
This was my wife's mother's favorite piece of sculpture: the Manneken Pis in Brussels. My mother-in-law was Japanese, born not too far away from ground zero; not in the area at the time, obviously. Immigrated to America. Loved America. Really amazing. Really, really bright, smart. Came over when she was eighteen years old, or so, maybe twenty. "Disowned" by her family for marrying a non-White American, though even a white American would have been beyond the pale. Never looked back. Reconciled with her family after her first child (to be my wife many years later, but, of course, that was not in the tea leaves back in 1947, or whenever it was). Visited Japan almost yearly in her adult life; she paid for her trips back to Japan from Los Angeles with "tip money" earned as a waitress in a .... Japanese restaurant. When we went for drives, I was only allowed to buy gasoline at the Chevron station that was owned by a Japanese family. The line she once used I will never forget while driving in Los Angeles: "Take a reft at the next right." [Translation: take a left at the next light. I figured that out fast enough to make a lane change, but it was close.]

So, front page, at the bottom, the WSJ has a story on the Brussels Mannekin Pis, my mother-in-law's favorite piece of sculpture. It appears the link is "blocked" but you can probably find the story elsewhere.

How interesting. Up above I mentioned HP and Autonomy. Now, on the first page, bottom right, I see this: inside H-P's missed chance to avoid a disastrous deal.

Stan Musial, I see, died Saturday, age 92. In a place far away and long ago, I had a significant other who would talk to me about "Stan the Man." Two completely different men in the headlines in the op-ed section today: Lance Armstrong and Stan Musial. There's a picture of one of them smiling. I will let you guess which one. A hint: he's holding a baseball bat.

Okay, that's it. Forward. To the Bakken.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here. The stuff about the Japanese restaurant was not an inside tip to invest in Asian Fusion. 

Phil Moving To Belgium? -- Even a Bakken Connection


January 23, 2013: Another honest opinion on taxes -- Tiger admits he left California because of high taxes. Remember, he was a Stanford man. It would be interesting to know how many Hollywood A list actors claim another state as residents. Tommy Lee Jones lives in Texas, as far as I know, unless he has moved.

January 22, 2013: This shows how crazy the discussion about Phil has become. The talking heads are focusing on "the number." CNBC heads say there is no way he is paying 62% in taxes as someone said he said. At most, he's "only" paying 52% according to these talking heads. Wow! Only 52%. And the talking heads don't even seem to realize that 52% is more than your income going to taxes. And, he certainly could be paying 62%. Maybe he doesn't take any advantage of loopholes, being a loyal, patriotic American who wants to pay his fair share. Except that after 61%, it's becoming slightly more than "fair share." It sounds like the CNBC talking heads are suggesting to Phil, he needs to take advantage of more of those tax loopholes, like investing in wind turbines. I can't make this stuff up.

Original Post

[Wells coming off confidential list will be reported have been posted; WPX with a gusher.]

There is nothing in this story about "Phil" moving to Belgium.

The link is to a story about Phil Mickelson complaining about his taxes. He said his taxes have increased so much he is considering retiring from the game. It sounds like he is remorseful about going public, but it doesn't sound like he's changing his tune.

I don't think his ObamaCare taxes have rolled in yet.

And so it goes. I don't even know what would make me think that "Phil" would consider moving to Belgium.

Oh, the Bakken connection: 3.8% surcharge on oil and gas royalties for ObamaCare. It's nice to see other bloggers have their own thoughts on this.


Meanwhile, former French prime minister Sarkozy is moving to London to avoid the new, high taxes in France.  Good for him. And his girlfriend.

For Investors Only: SLB, WMB -- Dividend Increase Announced

From last Friday: WMB and SLB announce dividend increases.

Disclaimer: this is not an investment site. Simply news.

WPX With a Gusher; Wells Coming Off Confidential LIst Today; Corinthian With a Nice Spearfish Well

Active rigs: 186 (nice)

  • 22282, 898, Whiting, Tomchuk 21-30PH, Green River; t7/12; cum 27K 11/12;
  • 22804, drl, Hess, LK-Dukart 145-97-0310H-4, Little Knife,
  • 22938, drl, BEXP, Banks State 16-21 4TFH, Banks,
  • 22969, 105, Corinthian Exploration, Corinthian Berge 13-25 1H, North Souris, Spearfish; t10/12; cum 7K 11/12;
  • 23021, 495, WPX Energy Williston, LLC, Independence 2-35HC, Mandaree,  Three Forks; 50K in  two months; t10/12; cum 51K 11/12;

22282, conf, Whiting, Tomchuk 21-30PH, Green River:

DateOil RunsMCF Sold

22969, conf, Corinthian Exploration, Corinthian Berge 13-25 1H, North Souris, Spearfish

DateOil RunsMCF Sold

23021, conf, WPX Energy Williston, LLC, Independence 2-35HC, Mandaree, 50K in less than two months;

DateOil RunsMCF Sold