Wednesday, January 30, 2013

Earnings Thursday; Wells Coming Off the Confidential List Thursday -- The Williston Basin, North Dakota, USA

RBN Energy: coordinating regional gas and electric utilities.

Earnings to be reported before market opening, Thursday:
  • Carbo Ceramics (CRR) (86 cents): Carbo Ceramics reports EPS in-line, beats on revs
  • Enterprise Products (EPD) (65 cents): Enterprise Products beats by $0.02, misses on revs
  • Occidental (OXY) ($1.66): $1.83; press release here.
  • Helmerich & Payne beats by $0.11, beats on revs:
  • COP: beats by a penny; but guidance down; share price hit; 
OXY hasn't been a stand-out in the Bakken, but it certainly is doing well in "the market." Looks like it will be up nicely today.
Wells coming off the confidential list Thursday:
  • 22955, 836, Whiting, Talkington 11-30PH, Bell, t8/12; cum 38K 11/12;
  • 23155, 570, CLR, Homer 1-14H, Corinth, t10/12; cum 13K 11/12;
  • 23169, 173, WPX, Sarah Yellow Wolf 22-27HC, Heart Butte, t10/12; cum 17K 11/12;
  • 23233, 133, Hunt Oil, Sioux Trail 1-8-5HTF 1, wildcat; (a true wildcat, up in Divide County; not much going on up in this area); t133, cum 823 bbls; 11/12; 

Compare the WPX Sarah Yellow Wolf well with other wells in the Heart Butte.

22955, 836, Whiting, Talkington 11-30PH, Bell:

DateOil RunsMCF Sold

23169, 133, WPX, Sarah Yellow Wolf 22-27HC, Heart Butte,

DateOil RunsMCF Sold

Peak Oil? What Peak Oil? Now We Have The Cline Shale

November 3, 2014: in the middle of an oil price slump, in which Saudi Arabia has just announced it will lower the price before cutting production, is suggesting that the next big thing is the Cline:
While the Permian Basin is known as the U.S.’ largest oil producer, operations seem to be shifting from the western side of the basin to the eastern side, and the shift has a lot of people preparing for another boom.
The Cline Shale formation, also known as the Lower Wolfcamp or Wolfcamp D, is located on the eastern edge of the Permian Basin.  The formation runs about 140 miles north to south and is around 70 miles wide.  Counties included in the Cline Shale are Mitchell, Coke, Fisher, Glasscock, Howard, Irion, Nolan, Reagan, Scurry and Sterling.  Other reports also mention Upton, Tom Green, Crockett, and Schleicher counties.  The formation is said to run 200 to 550 feet deep.
With the Cline Shale becoming more and more popular, many oil companies are moving in and setting up shop.
Some of those companies are Apache Corporation, Laredo Petroleum, Firewheel Energy, LLC and Pioneer Natural Resources. With these large companies moving into the area, Greg Wortham, mayor of Sweetwater, didn’t want the same problems that happened in Midland, Odessa and surrounding towns that weren’t prepared for the oil boom, to occur in towns around him. Worthham formed the Cline Shale Alliance in hopes of bringing together the area’s small towns to start preparing for the next oil boom.
April 19, 2014: there are reports that Devon has pulled out of the Cline --
One of the most surprising events is that Devon has all but pulled its operations out of the Cline Shale, predominantly due to "a lot of variability" in production at test sites. While this has tempered expectations for some, supporters of the play say not to be swayed, as larger energy companies have been known to divert their attention from unconventional or unproven plays. Just last year, Royal Dutch Shell disclosed that it would be pulling out of the fastest-growing formation on the planet, the Eagle Ford.
June 27, 2013: random update on the Cline. -- 30 billion bbls recoverable -- current estimate

May 25, 2013: update on a "whale of a shale."
The Cline Shale is about 140 miles long, 70 miles wide, and 200-550 feet thick stretching through the Permian Basin and southward. Test wells are exceeding expectations and indicate the shale could contain 3.6 million barrels of recoverable oil per square mile or as much as 30 billion barrels in total. Yes, billion. That's multiples of the likely production from other well-known shales such as the Bakken up north or the Eagle Ford here in Texas.
Fact check, compared to the Bakken:
  • the better Bakken: 6 wells/section x 600K EUR/well = 3.6 million bbls/square mile
  • middle Bakken: 60 feet thick; Three Forks: 300 feet thick
  • CLR: estimates of 24 billion to 48 billion bbls of recoverable oil
  • Williston to Dickinson: 130 miles
  • Williston to Stanley: 70 miles
  • 30-second sound bite: the Cline is probably another Bakken
April 29, 2013: update from Sweetwater, TX, 100 miles ENE of Midland, where it appears they are getting ready to drill the Cline.

Original Post

A reader alerted me to the Cline Shale in Texas which was news to me. From multiple sources:

Investor site StreetAuthority is gushing over the potential of other shale fields in the United States. It says one shale formation in particular now being explored in Texas could hold as much as 30 billion barrels of recoverable oil and fuel, dwarfing the estimated 4.3 billion barrels in North Dakota's Bakken shale.
Street Authority writes: "Devon's wells show that the formation contains 3.6 million recoverable barrels of oil per square mile. As the Cline is roughly 9,800 square miles in size, this works out to estimated reserves in excess of 30 billion barrels.
The website

The Cline Shale oil play lying at roughly 9,250 feet below the surface along the eastern flank of the Midland Basin could possibly be a key component for energy independence for the U.S.  The play area runs roughly 140 miles north-south and about 70 miles wide through Howard, Glasscock, Reagan, and Sterling Counties.  
Devon and Chesapeake recently reported impressive test well results.  Devon’s wells show the formation contains 3.6 million barrels of recoverable oil per square mile.  A rough approximation, taking into account the 9,800 square mile area of the Cline, indicates over 30 billion barrels of recoverable oil.  This exceeds both the Bakken and Eagle Ford by far.  
The USGS estimates the Bakken Shale to hold up to 4.3 billion barrels of recoverable oil, and the Eagle Ford has estimates at as much as 7 to 10 billion barrels of total recoverable reserves.  John Richels, president of Devon, gave an expected type curve value of 570 MBOE for a Cline Shale well, with 85% being oil and NGLs.

Seven (7) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 186

Seven (7) new permits --
  • Operators: Slawson (2), BEXP, XTO, Surge, Whiting, Liberty Resources,
  • Fields: Briar Creek (McKenzie), Haystack Butte (McKenzie), Souris (Bottineau), Glass Bluff (McKenzie), Sanish (Mountrail), Big Bend (Mountrail)
  • Comments:
Wells coming off confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 20726, 289, EOG, Vanville 19-1213H, Thompson Lake, t10/12; cum 6K 11/12;
  • 20727, 661, EOG, Vanville 20-1201H, Thompson Lake, t10/12; cum 12K 11/12;
  • 21702, 1,261, XTO, Nygaard Federal 13X-5A, Lost Bridge, t1/13; cum --
  • 22435, 648, CLR, Rodney 3-29H, Cedar Coulee, t12/12; cum --
  • 22611, 638, Denbury, Gilbertson 31-16SWH, Siverston, t1/13; cum --
  • 22975, 951, SM Energy, Holm 14-12HB, Siverston, t12/12; cum 20K 12/12;
  • 22976, 665, SM Energy, Holm 14X-12H, Siverston, t12/12; cum 12K 12/12;
  • 23432, 178, Triangle Petroleum, Steen 149-101-13-24-1H, Antelope Creek, t1/13; cum --
  • 23812, 519, Triangle Petroleum Steen 149-101-13-24-3H, Antelope Creek, t1/13; cum --

The following permits were cancelled by Denbury Onshore:
  • 18832, Fettig
  • 18917, Jorgenson
  • 18919, Jorgenson
  • 18920, Jorgenson, 
  • 19545, Gilbertson,
  • 19625, Charlson, 
  • 19657, Mariner,
  • 19659, Mariner,
  • 19855, Dennis,
  • 23442, Thompson,
  • 23443, Thompson,
  • 23511, Saxon,
  • 23657, Erickson,
  • 23843, Dvorak,
  • 24098, Martin,
  • 24099, Martin,
  • 24100, Martin,
Slawson cancelled:
  • 23868, Caper, 

Agriculture Profits: Hitting Records Despite Droughts

Link here to Bloomberg.
A U.S. farm boom showing few signs of a let-up isn’t translating into more opportunities in one of the most robust areas of the economy. Farmers, ranchers and other agricultural managers will see the steepest decline of any employment category by 2020, losing a projected 96,000 jobs this decade out of 1.2 million positions, part of a broader trend toward less labor in the sector, according to the Bureau of Labor Statistics.
The drop comes even as agricultural managers have the highest median wage of any of the top 20 declining categories, at more than $60,000 a year. Farm owners like the Liefers are able to manage larger tracts of land without hiring overseers. Full-time farm managers hired by others can handle more property for more clients, said Jerry Warner, a past president of the American Society of Farm Managers and Rural Appraisers, a farm- management organization based in Denver.
A chicken and egg problem. Lack of enough farm workers --> need to innovate/automate? Or did innovation/automation --> to decrease in farm workers?

About 2,051 Oil and Gas Wells On The Confidential List

January 30, 2013

All numbers subject to error. Numbers will change over change. 

2,051 wells on confidential list
37 of those are salt water disposal wells
So, 2,014 oil and gas permits/wells on confidential list

February: 175
March: 180
April: 173
May: 169
June: 153

Foreshadowing the Great Recession of 2013 -- Wednesday - The Year of the Pipeline -- RBN Energy -- Frigid in GB

Foreshadowing the Great Recession of 2013? See archival link posted November 14, 2012, which is now where these stories will be aggregated.

Analysts expected meager growth of 1%. Couldn't even get that. Economy UNEXPECTEDLY contracts 0.1%. And, gee, everything was going so well.

The WSJ story. And, of course, Steve Liesman of CNBC is able to spin this into gold.

But the Obama administration is already spinning the news (see third paragraph in bold), an AP story:
The U.S. economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The decline occurred despite faster growth in consumer spending and business investment.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter and the first contraction since the second quarter of 2009.
Economists said the surprise decrease in the nation's gross domestic product wasn't as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.
Does that mean excluding these one-time cuts, GDP would have almost tripled analysts' expectations, from 1% (analysts' expectations) to 2.5% (estimates by Obama-friendly economists)? First we had the government publishing unemployment numbers based on estimates from states who never forwarded the data; now we have a new way of measuring GDP: forgeddaboutdaonetimefactors.

My hunch is a) Ben has marching orders to spend as much money as necessary to prevent a second month of contraction in GDP; and, b) failing that, the definition of two consecutive months of recession = a recession will be changed (the definition will be changed; in fact, there is no hard and fast rule defining a recession). The scary part is that this was a huge drop: from 3% ballpark to -0.1%. Can't recall when I last saw that "unexpectedly."

And so it goes. Happy days are here. The economy grew by 2.5%, almost tripling estimates, except for one time factors. Cue up Connie Francis.

Oh, by the way, "they" say much of this drop was due to huge decrease in defense spending. Think what will happen when "sequestration" kicks in. Sequestration will effect the entire government, not just defense spending.


Scroll down for wells coming off confidential list; earnings.

From RBN Energy: huge increase in storage capacity along the Gulf Coast -- tectonic shifts?
Over the next three years seven Gulf Coast region terminal operators will build an estimated 19 MMBbl of new crude oil storage capacity. Those storage expansions are being made in preparation for as much as 3.1 MMb/d of new crude supplies expected into the Gulf Coast refining region over the next two years from new pipeline projects. Today we summarize the efforts that terminal operators are making to get ready for the flood.
WSJ Links

Section D (Personal Journal):

Microsoft: "more control for annual fee" -- one doesn't have to read much more than this to know this ... Microsoft is now "renting "Office."
The company on Tuesday started offering consumers a new version of Office—the widely used bundle of personal-computer applications—that for the first time arrives along with a version that can be "rented" for a monthly fee, similar to how people subscribe to cable or to Netflix Inc.'s movie service.
Microsoft is pushing hard to get most people to opt for Office 365, as the subscription version is known, for an upfront annual fee of $99.99, or $9.99 a month for a pay-as-you-go option. (People buying Office along with a new computer can pay a $79.99 annual subscription for Office 365.) 
For no cost, Apple pushes updates of its operating system for free, and almost seamlessly (only asking whether I want to install the update). Of course, operating systems and applications are very different but I don't think average users are going to fall for this. MSFT is hoping DOD falls for it. DOD is going to have make a huge decision on whether they want to spent $99/employee/year for upgrades that almost never matter. In fact, the only reason some folks upgrade is so they can share information with others who have upgraded. MSFT "Office" is generally not backward-compatible.

So, if you like to pay a subscription for a big company to control your "office," you will love this newest revenue stream idea that MSFT has dreamed up.

Section C (Money & Investing):

Page C14: don't back up the truck with Hess

Section B (Marketplace): 

Can gas undo nuclear power?

Chesapeake CEO to exit.

Even Facebook must change to be relevant on Apple's mobile devices.

Investors agitate in oil patch.

Section A: 

Egypt is warned of collapse. No link. Story is everywhere. First linked at Drudge yesterday. [Later, February 1, 2013: in the LA Times -- a photograph of "westernized" males who obviously have no interest in an Islamic society. Cue up Connie Francis. They can thank President Obama.]

Coal is dead? Not in Mexico. Texas gives okay to coal mine on the border that will provide coal for a Mexican utility -- faux environmentalists must be going nuts.  Location, location, location.

Other links, stories

Satellite photo of Great Britain covered in snow; one of the coldest, snowiest periods in British history
Unusually frigid and snowy conditions blanketed much of the island of Great Britain in snow earlier this month. The winter wonderland was spotted from above by NASA's Terra satellite on Jan. 26.
The snow started falling mid-month when a storm system blowing in from over the North Atlantic combined with unusually chilly conditions ushered in by a pattern called the Scandinavian Block, according to This high-pressure pattern sits in place over Scandinavia and funnels cold air toward the United Kingdom from over the Baltic and western Russia, according to the U.K. Met Office.

Hess 4Q11 Earnings

From Yahoo!In-Play:
Hess beats by $0.40, beats on revs. 

Earnings of $1.66 per share, $0.40 better than the Capital IQ Consensus Estimate of $1.26; revenues rose 9.9% year/year to $9.7 bln vs the $9.59 bln consensus.

Exploration and Production earnings were $517 mln in the fourth quarter of 2012, compared with $527 mln in the fourth quarter of 2011. Fourth quarter oil and gas production was 396,000 barrels of oil equivalent per day, up from 367,000 barrels of oil equivalent per day in the fourth quarter a year ago, primarily reflecting an increase in production from the Bakken oil shale play and the resumption of operations in Libya, partly offset by the shut-in of the Valhall Field in Norway for the quarter due to the redevelopment project. Net production from the Bakken oil shale play averaged 64,000 barrels of oil equivalent per day in the fourth quarter of 2012, an increase of 68% from 38,000 barrels of oil equivalent per day in the same period last year.

During 2012, the Corporation added 214 mln barrels of oil equivalent to proved reserves and sold 83 mln barrels of oil equivalent of proved reserves through asset dispositions. The additions, which are subject to final review, replaced approximately 141 percent of the Corporation's 2012 production, resulting in a reserve life of 10.3 years.