Thursday, January 24, 2013

Williston, #6, On Forbes' Fastest Growing "Small Towns"


January 25, 2013: I just noticed -- this is last year's list -- this list was posted back in January, 2012

Original Post

Link here to Forbes.

Someone noted this list is quite a bit different than an earlier list from another source earlier this month. The difference in the list has to do with the size of the towns. In the earlier list, Williston did not make the cut due to size of the city; Fargo and Bismarck both made the cut.

This newest list from Forbes appears to be of towns with smaller populations.
The West Texas community of Pecos comes in at No. 2 on our list with a 23.2% increase in population to 13,783. Some of those people aren’t there voluntarily: The MSA is home to the Reeves County Detention Complex, a privately run inmate facility with a capacity of 3,760. In 2007, the complex entered into a contract with the Federal Bureau of Prisons to house up to 2,407 criminal aliens for at least four years.
Another factor in Pecos’ expansion: a boom in oil and gas drilling enabled by fracking.
“We’ve had 39 drilling rigs running at a time in the county, with motels running at 100% occupancy—and four new hotels built in three years,” says Bill Ogelsby, head of the Pecos Economic Development Corporation. Temporary residents who come for work sometimes bunk at hotels for months at a time, he says, which may have contributed to higher population counts.

Expanded oil drilling is also driving the economy in North Dakota—especially in small towns like Williston, which comes in at No. 6 on our list, where the population jumped by 14.6% to 22,398. The area’s unemployment rate is a shockingly low 0.9%, with a median income of $55,396.

Seaway Update and Pricing; Chinese Manufacturing Expanding At Fastest Rate In Two Years

To the best of my knowledge, there has been no change in the cutback in Seaway's flow, back to 175,000 bopd just after expansion to 400,000 bopd had been completed. Within hours of that announcement, WTI fell about $1.50, but recovered quickly the next day (today), perhaps due to this from
Yet, the downside movement seen today may be limited as crude is finding support from China’s upbeat manufacturing data that improve the outlook for global growth and fuel demand from the world’s second largest oil consumer.

Manufacturing in China is expanding at the fastest rate in two years, providing signs of further economic rebound. The preliminary reading of HSBC’s Purchasing Managers’ Index was 51.9 in January from 51.5 final reading in December.
More on the background/reason to decreasing flow on the Seaway can be found at Fox News (sent in by a reader). 
Enterprise Products Partners LP (EPD) cut its Seaway pipeline oil deliveries by more than half after a major refinery in Sweeny, Texas, reduced demand while it undergoes maintenance, an Enterprise spokesman said Thursday.
Enterprise reduced the flow of its newly expanded 400,000 barrel-a-day pipeline Wednesday to 175,000 barrels a day because its Jones Creek storage terminal was filled to capacity.
The reduction was not because of technical problems with Seaway, or with the terminal, but because customers were not taking enough oil out of the terminal, Enterprise spokesman Rick Rainey said.

Only One Well Coming Off Confidential List Friday -- The Bakken, North Dakota, USA

22757, drl, BR, Iron Horse 21-2MBH, Union Center,

Terrorist Attack in Algeria Could Increase Statoil (BEXP) Activity in the Bakken

Link here to The Dickinson Press.
Last week’s terrorist attack on an Algerian oil facility could divert Norwegian oil giant Statoil to increased oil production in safer regions, including North Dakota’s Bakken and Three Forks formations, where the two-thirds government owned Statoil already has made a heavy investment.
Five Statoil employees are among the missing after terrorists took hostages and Algerian forces stormed the facility. At least 23 hostages died.
Bloomberg News reported this week that security problems in Algeria and elsewhere in North Africa could prompt Statoil “to focus even more on shale oil and gas in the U.S. and deepwater fields off Brazil, where most of the company’s production growth is expected to occur in this decade.”
The news service quoted Trond Omdal, a securities analyst, as saying the Algeria attack will “reinforce a trend … away from high-risk areas.”
A common theme of the Million Dollar Way.

Ten (1) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 188 (steady, down 2)

Ten (1) New Permits --
  • Operators: XTO (3), BEXP (2), EOG (2), WHiting (2), Fidelity
  • Fields: Siverston (McKenzie), Alger (Mountrail), Parshall (Mountrail), Sanish (Mountrail), Grinnell (Williams), Bell (Stark)
  • Comments: None
Wells coming off confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 22436, 1,060, CLR, Gale 3-32H, Cedar Coulee, t1/13; cum --
  • 22922, 2,907, BEXP, Syverson 1-12 2TFH Stony Creek, t12/12; cum --
  • 21441, 182, Oasis, Orcas State 5601 13-16H, Tyrone, t12/12; cum 290 bbls 11/12;

Union Membership In The US At A 76-Year Low

Union membership at 76-year low.
Almost half the losses in the last year were in the industrial Midwest -- Indiana, Wisconsin, Ohio and Michigan....
... and so it goes. 

In All The Noise: Record-Breaking Quarter for AAPL; One Half Billion iTunes Subscribers; Picking Up The Pieces -- AAPL -- Apple, Inc -- Nothing About the Bakken

This is just idle chatter. I don't invest in AAPL, never have, never will (actually, I'm beginning to think different on that).

Record-breaking quarterly revenue and profit.

Apple shares tumbled: Apple's losses in market cap today were roughly equal the value of two Research in Motions and two Nokias (at the link).

Overall revenue in China is up almost 70%.

iPhone sales came in line with expectations; if anything, on the high end. Apple sold 47 million iPhones in most recent quarter compared to 37 million in the year-ago quarter, but Apple saw the most significant growth in China, which is said to be up more than 100% year over year -- and that was despite a "late" launch. Apple opened four new stores in "Greater" China in 2012 and plans to add "many, many more stores to the elven it currently has in China.

iPad sales came in line with expectations.

Apple TV sold more than 2 million units in the past quarter, an increase of 60% year over year.

1Q13 numbers for Apple: another record-breaking earnings report; sold over 75 million iOS devices i that holiday quarter

Services are being overlooked by folks. In 2012, the number of iCloud users grew from 85 million to over 250 million.

iTunes subscribers have topped 500 million. The population of the US is 312 million. [The more important number is "active subscribers. I am a subscriber but haven't spent a dollar on iTunes in two years. I have $1.76 credit in my iTunes account. I also have a Facebook account but haven't visited the page in days, weeks; I've certainly never looked at any ads on Facebook.]

This was one comment regarding iCloud:
Cloud works perfectly for me. My household runs four (4) iPhones, two (2) iPads, one (1) iPad Mini, three (3) Apple TV's, an iMac, Macbook Pro, and three (3) PC's. Four (4) iCloud email accounts (were .Mac, then MobileMe) and iTunes Match. All cabling is gigabit and connected to an Airport extreme and Airport Express linked to a 100Mb cable service. 
This may be somewhat out of the norm now, but it will become the norm going forward.

The Yahoo!Finance numbers are probably delayed, but:
  • AAPL: $137 billion in cash; XOM: $13 billion in cash
  • p/e of 10 for AAPL (a utility stock in CA has a p/e of 20 today and is setting new highs
  • AAPL market cap still exceeds XOM's
  • AAPL pays 2.1%
  • XOM pays 2.5%
  • profit/operating margin around 30% for AAPL; around 10% for XOM
  • AAPL debt: 0; $12 billion for XOM
  • operating cash flow for AAPL: $50 billion; XOM - $50 billion
As noted, this is not an investment site; I don't invest in AAPL (never have, never will, but reconsidering)....but in idle chatter:
  • Tim Cook should be very, very happy with what he sees for the company
  • the retail investors are being played like a fiddle by the pros
Apple may or may not be a growth company any more; but certainly in terms of volume, I don't see XOM as a growth company either. That California utility hitting new highs today, with a p/e of 20 is no growth company either in the "usual" sense of the word.

It certainly is a topsy-turvy world.

Nice Short Piece on EOG in Motley Fool

Motley Fool has a nice story on EOG/CEO.
.... First, EOG's focus on cutting costs, specifically with regard to its purchase of a sand mill that cuts out the high markups associated with sand purchases, is saving the company around $1 million per well. [See MDW, January 20, 2013, point #2.]
Second, rather than shipping oil to Cushing, Okla., or selling oil directly from the well and accepting the West Texas Intermediate price, EOG and peers Hess  and Continental Resources have been shipping their Bakken-drilled oil by rail to Louisiana and are being paid a handsome $20-$25 premium at the Brent crude spot price. Even with the added costs of shipping, these companies earn significantly more than if they were selling their product locally. Continental, for instance, is shipping 65% of its daily production to Louisiana. 
But, as Joel also notes, EOG has been able to increase its liquids production volume at a faster rate than any other U.S. producer since 2010, giving it the edge over all of its peers. Looking ahead, EOG's Papa upped his company's oil and liquids forecast in its most recent quarter to 40% and 38% from 37% and 35%, respectively, and pumped EOG's production forecast to 10.6% growth from 9%.
There's a lot more one could add. Some of the additional data points are at the second link above.

Seaway Capacity Back to Pre-Expansion Levels: 175,000 BOPD

Details sketchy as to why. Easy to find many links, but not much information. Here is one link.

Four data points:
  • CNBC reported increase in crude oil supples
  • CNBC is reporting decrease in gasoline supplies
  • the link above, with two more data points:
WTI’s drop “was triggered by the Seaway headlines,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “There will be less oil getting to the Gulf. Some refineries might have to cut back runs, which will hurt demand for WTI.”
Enterprise Products Partners LP and Enbridge Inc. limited capacity, owners of the pipeline, advised shippers that Seaway’s capacity limit is due to “unforeseen constraints in outbound takeaway.”
For whatever reason, WTI has bounced back today, now up over a dollar/bbl.

Thursday Links -- Chesapeake and EPA Close to Announcing Interesting Partnership

I'm sick in bed, so I will be watching a bit of CNBC, reading the WSJ, and updating my will. 

And if my eyes hold out, reading more of Debt: The First 5,000 Years, by David Graeber, a very, very interesting book. The book has give me a new outlook on investing. 

Talk about a great day, in one of my better moods: I was able to attend our granddaughter's band concert earlier this morning at a school assembly but then back to bed. 

Crude oil inventories: very interesting -- supplies of US crude oil rose in latest report, and yet price of WTI continues to go up. Combination of weaker dollar and narrowing of WTI/Brent spread. I thought I saw this yesterday and now CNBC is reporting that the Seaway operators are decreasing the flow from 400,000 bopd to 175,000 bopd. Prior to the expansion, the daily capacity was 150,000 or 175,000 bopd if I recall correctly; the expansion took the Seaway to 400,000. And now I see WTI is up over a dollar -- very interesting. Possibly a third factor: folks are optimistic about a better global economy later this year.

First time unemployment benefit claims down significantly, and down surprisingly. Huge. Great news. 
So, oil is up; several stories on global warming; market hitting new highs in some areas; unemployment report surprisingly good; and, the Bakken is as busy as ever. What a great day.

WSJ Links

Section D (Personal Journal): nothing today, except a long article on how to save money on air flights by buying two discounted tickets for a long haul flight with one connecting flight, rather than buying "one" ticket for the entire flight.

Section C (Money & Investing):
Cocoa hits 6-month low as Europe cuts back! Great news -- our granddaughters love a) hot chocolate; and, b) Ghiradelli brownies.

Section B (Marketplace): 
Page 3 (and we've talked about page 3 many time), big story: Chesapeake to host EPA in study of fracking risk.  Three column-wide story; a big deal. Several other companies mentioned, including Denbury and Range Resources.

Several stories throughout the Journal (and on CNBC today) regarding AAPL. I have never invested and AAPL and I have said I never will. But it is getting very, very tempting. Again, this is not an investment site; just idle chatter. Do not make any investment decisions based on anything you read here.

Section A: 
Combat ban for women to end, page 1. Op-ed: the reality that awaits women in combat.

Even for Minnesota, it's cold, page 2.
The lowest air temperature so far this week was 38 below zero Tuesday morning in Babbitt, Minn., Mr. Tentinger said. It warmed up Wednesday, but Thursday morning's lows were expected to reach 40 below in the area.
"It's finally winter," said Christine Mackai, a 39-year-old stay-at-home mom with three kids who lives in Embarrass, a township with a population of 600. Ms. Mackai steels herself with long johns, several layers on top and boots. She said that when she sits down in the car, it is "like sitting on a board."
Once it gets colder than 20 degrees below, it all feels the same. At least that's what I recall growing up in North Dakota during the 50s and 60s.

Op-ed: climate-change misdirection

Op-ed: The RomneyCare bill comes due -- Deval Patrick proposes a large tax increase on the middle class. Cue up Connie Francis.

Op-ed: the myth of a stagnant middle class.

Thursday Morning

The Bakken: just what the US economy needs --
CNBC is reporting that the S&P has hit 1500 for the first time since 2007.

CNBC with long interview with Union Pacific CFO; huge 4Q12 for UNP; one US railroad with access to all six Mexican railroads. CNBC actually mentioned the Bakken, and then UNP mentioned unit oil trains and supporting the Bakken. UNP 4Q12 earnings beat expectations; recent highs, but pulling back a bit on stock market today. BNI was one of my longest-held holdings; bought it decades ago; reinvested dividends; when Warren Buffett bought BNI, I replaced BNI with UNP. Idle chatter. This is not an investment site; do not make any investment decisions based on anything you read here.

RBN Energy: Part 5 of Ethane Economics

Active rigs in North Dakota: 190

Wells coming off confidential list have been posted; scroll down or see sidebar at the right. KOG with another nice well. 

WTI/Bakken spread at Clearbrook, MN: $3.25
WTI/Brent: $96/$111 -- spread -- $15

Fargo Jet Center expanding in to Williston -- The Bismarck Tribune
Data points:
  • will build a 6,400-sq ft facility next to main terminal at Williston airport
  • will offer a/c fueling, a/c maintenance, flight instruction, a/c charter  mgmt, a/c sales
  • will compete with Western Edge Aviation; already operates at the airport
Initial jobless rates: decrease 5,000 to 330,000. This is a huge surprise. Analysts had expected an increase to 360,000 -- at least that's what CNBC is reporting. They sounded genuinely surprised at this "incredibly" good number. 

Elephant oil field discovery in Australia?
Brisbane company Linc Energy yesterday released two reports, based on drilling and seismic exploration, estimating the amount of oil in the as yet untapped Arckaringa Basin surrounding Coober Pedy ranging from 3.5 billion to 233 billion barrels of oil.
At the higher end, this would be "several times bigger than all of the oil in Australia", Linc managing director Peter Bond said.
This has the potential to turn Australia from an oil importer to an oil exporter.
Whole Foods founder: "global warming not that big a deal."
I’ve been smeared quite a bit in the media about it – all of a sudden, I’m a climate change denier. I mean, climate change is obviously occurring. So -- it's gotten a little bit warmer. I guess my position on it is that I don't think that's that big a deal. Actually, humanity’s flourished usually when temperatures gradually warmed. And humans gradually adapt to it,” he told Off the Cuff.
CNBC reporting the weather in the northeast much colder than the average over the past several years (as part of the energy report). And speaking of which, the energy market today is very bullish.