Monday, June 3, 2013

GM To Build A New Car Running On Special Grade Of Gasoline; Will Build Out Gasoline Stations Across The US; Only Allow GM Cars To Use These Gas Stations

That's not true of course.

But that's what Tesla is proposing to do: build out an infrastructure to recharge its automobiles AND not allow any other EVs to use their recharging stations.

SeekingAlpha had this to say about that.
What will be a surprise coming from last week's announcement is that investors will eventually realize that Tesla's SuperCharger infrastructure build-out is going to be SuperExpensive when analysts rework their models to account for ALL costs associated with providing "free" charge-ups and building the network to make it viable. 
Not only is TSLA currently a car manufacturer, but they are now becoming an "infrastructure builder." Smart money may have been quick to realize the foregoing new cost concerns. After the Supercharger announcement on Thursday (5/30/13), the stock reacted in classic "buy the rumor, sell the news" style. The stock lost $7.17 to close at $97.76 - a 6.85% loss on Friday. Selling spiraled downward shortly after the buzz died down from Elon Musk's morning interview on CNBC to further market his Supercharger concept to the masses.

Canadian Oil Sands -- Claims That Landlocked Oil Costing Canada Billions In Revenue Are ‘Bogus’, Economists Say -- Financial Post

The Financial Post is reporting:
Politicians call it the “double discount” and it’s supposed to be costing Canada billions of dollars in lost oil revenues.
Last December, Natural Resources Minister Joe Oliver told a New Brunswick audience Canada was losing “$50 million every single day —$18 to $19 billion every year.”
A month later, Doug Horner, Alberta’s finance minister, raised the figure to about $100 million a day in a speech to a Calgary audience. “Right now, Alberta’s bitumen is fetching more than $40 per barrel less than oil in Mexico or Texas,” he told a Calgary audience.  “Some of our oil is fetching about $50 less than oil from the Middle East.”
Many Canadian politicians have invoked the argument that because western oil is landlocked it’s not fetching international prices and therefore is being sold at a discount. If Canada could build more pipelines such as Keystone XL or the proposed Northern Gateway through British Columbia, it would reach tidewater ports where it would attract world prices, the so-called Brent and West Texas Intermediate prices.
The second part of the discount comes from backlogs at U.S. pipeline terminals that can result in lower prices for some Canadian heavy crude oil.
But is there any truth in the “double discount”?
Go to the linked article for rest of the story.

But be careful with the article. Be sure to read the comments. 

The Canadian oil sands story just got curiouser and curiouser.

Water And Fracking -- California

The New York Times is reporting:
Driven by advances in drilling technology and high oil prices, oil companies are increasingly moving into traditionally agricultural areas like Shafter that make up one of the world’s most fertile regions but also lie above a huge untapped oil reserve called the Monterey Shale. Even as California’s total oil production has declined slightly since 2010, the output of the North Shafter oil field and the number of wells have risen by more than 50 percent.  
By all accounts, oilmen and farmers — often shortened to “oil and ag” here — have coexisted peacefully for decades in this conservative, business friendly part of California about 110 miles northwest of Los Angeles. But oil’s push into new areas and its increasing reliance on fracking, which uses vast amounts of water and chemicals that critics say could contaminate groundwater, are testing that relationship and complicating the continuing debate over how to regulate fracking in California.
“As farmers, we’re very aware of the first 1,000 feet beneath us and the groundwater that is our lifeblood,” said Tom Frantz, a fourth-generation farmer here and a retired high school math teacher who now cultivates almonds. “We look to the future, and we really do want to keep our land and soil and water in good condition.”
So, California has two issues:
  • enough water for industrial, agricultural, personal use
  • concern over groundwater and safety of fracking 
And they haven't even started talking about fracking, fault lines, and earthquakes in California.

QEP Operational Update In North Dakota; At $40,000/Undeveloped Acre It May Have Been A Bargain -- Zeits; EURs over 1 Million Bbls

Flashback: here was the deal


Updates

June 7, 2013: Richard Zeits at SeekingAlpha provides more analysis of QEP's operational results.
Yesterday after the market close, QEP Resources (QEP) provided an update on its Bakken operations. The remarkably strong South Antelope results were well worth waiting for and confirm the stand-out quality of this recently acquired property. In retrospect, the company's last year's South Antelope transaction may prove to be one of the most notable "bargain" acquisitions in the Bakken's history, despite the deal's head-turning $1.4 billion price tag (as a reminder, QEP acquired 27,600 net acres for $1.4 billion in what remains one of the highest-valued acreage purchases in North America - the transaction was priced at an implied ~$40,000 per undeveloped acre).
EURS: While it is impossible, this early in the production history, to have a meaningful EUR estimate for QEP's newly reported wells, EURs in the 1.3-1.5 million barrels of equivalent per well certainly cannot be ruled out. As a reminder, at the time of the acquisition, the 32 high-EUR South Antelope wells had EUR averages of 1,160 MBoe for the Middle Bakken completions and 990 MBoe for the Three Forks completions.
Original Post

From the company's press release (dynamic link; it will change / break over time). QEP Resources, Inc. provides an update to operating results for the second quarter 2013:
  • QEP has completed and turned to sales its first four-well pad on the recently acquired South Antelope property in the Williston Basin of North Dakota. The four wells had an average 24-hour gross initial production rate of 3,598 barrels of oil equivalent per day (boepd) per well (3,929 boepd post processing), including the first two QEP-operated Bakken Formation wells completed at South Antelope that had an average 24-hour initial production rate of 4,174 boepd per well (4,584 boepd post processing). 
  • The company has also completed nine new wells (four Bakken and five Three Forks) on two QEP-operated multi-well pads on the Fort Berthold Indian Reservation. The new wells had an average 24-hour gross initial production rate of 2,379 boepd per well (2,573 boepd post processing). 
  • A fifth company-operated rig is currently moving onto location on the South Antelope property and is expected to commence the first well on a multi-well pad by mid-June. With the addition of this rig, QEP will have eight company-operated drilling rigs active in the Williston Basin
  • Construction of QEP Field Services' 10,000 barrel-per-day Blacks Fork fractionator expansion is nearing completion and commissioning and startup is expected to commence in early June. 
Without the permits/well file numbers, I can't confirm the specific wells, but that information will come out over time. I think QEP is talking about the "Helis Grail" oil field QEP recently acquired from Helis. [For newbies: the "Helis Grail" is an inside joke; a play on words. The Grail oil field is a very, very good oil field, "owned" by Helis before bought by QEP. The "Helis Grail" is a very apt name.]

QEP's corporate presentation can be found here.  QEP's "South Antelope" prospect is on western edge of the reservation and includes the Grail oil field.

This gives you some idea how active this area is:



Some of the wells to the west are in the Croff oil field, not the Grail. These wells lie outside the reservation which is immediately to the east, just outside the image.

See also the nice wells QEP reported today.

InPlay Today -- Diluent From Texas To Illinois

Enterprise Products announces results of successful open commitment period: Co announced it will proceed with development of a project to transport diluent-quality natural gasoline from the partnership's Mont Belvieu, Texas, liquids storage complex to several potential delivery points in and around the Chicago area. The positive response from shippers during the recent open commitment period soliciting long-term transportation agreements supported Enterprise's proposed plans to provide access to both the Southern Lights and Cochin pipelines. The new connections are expected to begin service during the fourth quarter of 2013 and the second quarter of 2014, respectively.

MDW tracks advances in diluent transport here.

Natural Gas And Fertilizer

Nice article on fertilizer interest in the US. For archival purposes.

From wiki:
Potassium is the third major plant and crop nutrient after nitrogen and phosphorus. It has been used since antiquity as a soil fertilizer (about 90% of current use). Elemental potassium does not occur in nature because it reacts violently with water. As various compounds, potassium makes up about 2.6% of the weight of the Earth's crust and is the seventh most abundant element, similar in abundance to sodium at approximately 1.8% of the crust.  Potash is important for agriculture because it improves water retention, yield, nutrient value, taste, colour, texture and disease resistance of food crops. It has wide application to fruit and vegetables, rice, wheat and other grains, sugar, corn, soybeans, palm oil and cotton, all of which benefit from the nutrient’s quality enhancing properties.
The fertilizer plants in Jamestown and Grand Forks are for fixing nitrogen using natural gas as the source of hydrogen for making ammonia

I have not heard anything about potash (potassium) mining in North Dakota for a long time. Back in 2011-2012, it was said that potash mining in North Dakota would take another 3 to 5 years. With nothing said since then, one wonders.

Wells Coming Off The Confidential List Tuesday; BR Has A Nice Well In Haystack Butte; 2/5 Wells To DRL Status

Active rigs: 189

Wells coming off confidential list Tuesday:
  • 22719, 632, Petro-Hunt, Syverson 156-99-30A-31-1H, East Fork, t3/13; cum 35K 3/13;
  • 23721, 2,880, BR, Inga 14-21H, Haystack Butte, 2-section spacing; t2/13; cum 27K 4/13;
  • 23767, 1,405, XTO, Mendenhall 12X-18C, Grinnell, t5/13; cum 4K 4/13;
  • 23881, drl, XTO, FBIR Bird 31X-19G, Heart Butte, no data,
  • 23982, drl, Statoil, Samson 29-32 2TFH, Banks, no data,
********************************

22719, see above, Petro-Hunt, Syverson 156-99-30A-31-1H, East Fork:

DateOil RunsMCF Sold
4-2013105480
3-2013144180
2-2013100240

23721, see above, BR, Inga 14-21H, Haystack Butte:

DateOil RunsMCF Sold
4-20132077916158
3-201329460
2-201333610

Eight (8) New Permits -- The Williston Basin, North Dakota, USA; Several Nice QEP Wells; Great Graphic For Newbies

Active rigs: 189 (trending up; nice)

Eight (8) new permits --
  • Operators: Whiting (6), Fidelity, Triangle 
  • Fields: Sanish (Mountrail), Dickinson (Stark), Timber Creek (McKenzie)
  • Comments: Coincidental -- the one Triangle permit is in Timber Creek, the same field where Whiting has 3 permits in today's report
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Six (6) producing wells completed:
  • 25046, 338, Oasis, Sequoia 6093 42-34H, Gros Ventre, t5/13; cum --
  • 21561, 1,731, QEP, MHA 1-31-25H-150-92; Heart Butte, t5/13; cum --
  • 21557, 2,140, QEP, MHA 1-31-36H-150-92, Heart Butte, t5/13; cum --
  • 21558, 2,359, QEP, MHA 3-31-36H-150-92, Heart Butte, t5/13; cum --
  • 21559, 2,032, QEP, MHA 5-31-25H-150-92, Heart Butte, t5/13; cum --
  • 21560, 673, QEP, MHA 7-31-25H-150-92, Heart Butte, t5/13; cum -- 
This is how those QEP wells look, under the Missouri River. All wells are on 4-section (2560-acre) spacing. These roughnecks and engineers can lay a horizontal almost anywhere the boss wants it:


Zooming in on the ten wells on the two 5-well pads in the southeast corner of the above four-section spacing unit:


For newbies:
  • solid black dots: actively producing wells
  • green circles: "DRL" status; have been drilled; waiting to be fracked, tested, and reported

Timing Is Everything: Great Britain Lifts 18-Month Moratorium on Fracking, Determines Fracking Is Safe (And Maybe Even Necessary)

It has been reported that Great Britain came within six (6) hours of running out of natural gas this past winter. It appears the country may have significant natural gas reserves if they choose to go after it.

So this is good news, being reported by Bloomberg:
The government lifted an 18-month moratorium on hydraulic fracturing, or fracking, used to exploit shale deposits in December after the completion of an investigation into two small earthquakes near Blackpool caused by Cuadrilla’s drilling. The company has delayed exploratory testing until next year to carry out environmental assessments. 
Timing is everything.

But confusion still appears to exist: "two small earthquakes near Blackpool caused by Cuadrilla’s drilling."

KOG Pays >$10,000/Acre In The Better Bakken

Updates

Later, 3:37 pm: SeekingAlpha on the KOG-LR deal:
The transaction appears to be reasonably valued, although by no means a "steal" taking into account the quality of acreage being acquired. I attribute approximately $250-$325 million M&A value to existing production and wells-in-progress included in the transaction (based on the very limited operating data disclosed and using certain decline curve assumptions). That implies approximately $335-$410 million paid for the undeveloped acreage and translates to valuation of ~$10,000-$12,500 per undeveloped acre, assuming that 80% of the acreage being acquired is undeveloped.
Conclusion of this particular writer:
Strategic rationale of the acquisition raises some concern, albeit not a major one. Given that Kodiak already has a decade plus-long inventory of drilling locations (which may prove to be even greater as Deeper Three Forks potential is unlocked), the acquisition effectively consumes the liquidity that could be used to accelerate the development of existing high-quality drilling inventory.
Some of the acquired acreage, if of inferior quality, may not be called upon for many years and would represent a "negative carry."
While the company's desire to grow its footprint is understandable, it is hard to expect that many "bargains" can be found in the Bakken's highly competitive and increasingly transparent M&A market. Having said that, it is important to note that Kodiak's management has done a formidable job in building out the company's asset base in what later proved to be the core of the play through acreage acquisition and delivering strong operating results. In the long run, this transaction may prove no different.
Overall, the transaction has neutral implications for the stock value. Some financing-related headwinds would not be a surprise.

Original Post

KOG buys Liberty Resources. Not mentioned in today's presentation at the RBC Capital Markets Conference (a pdf file).

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

First, KOG, from Yahoo!Finance which often lags.
  • operating cash flow (annual): $320 million.
  • total cash: $6 million
  • total debt: $1.2 billion; getting close to $2 billion?
  • market cap: $2.3 billion
The KOG-Liberty Resources deal:
  • $660 million cash / 42,000 net acres = $15,000/acre
  • 6,000 boepd production x $50 = $110 million. $660 million - $110 million = $550 million
  • $550 million / 42,000 net acres = $13,000/acre
  • plus a drilling rig
I've blogged numerous times: one of the problems KOG has -- a Bakken only company. The story continues.

NOTE: This was posted earlier as part of another post. To better follow this story, it was moved here as a stand-alone post.

Who Wudda Guessed? Breaking News From The Supreme Court ....

The Supreme Court held that police can take DNA samples from criminal suspects without probable cause.

One word: wow.

Who Wudda Guessed? Natural Gas Shale Is Hiring -- Demand Far Exceeds Supply, It Appears

Rigzone is reporting:
Since hitting a 13-year low of $1.82 per thousand British thermal units on April 20, 2012, the benchmark Henry Hub natural gas futures contract price has steadily regained momentum. In fact, it has hovered above the $4- mark for much of the period since mid-March of this year. Like the Henry Hub price, hiring in the Marcellus and other shale gas plays appears to be on the rebound after a lull earlier this decade, a Houston-based oil and gas recruitment specialist told Rigzone at the recent American Association of Petroleum Geologists (AAPG) Annual Convention and Exhibition 2013 in Pittsburgh. 
"Everybody's recruiting," said James Bradley, permanent hire recruitment manager with NES Global Talent, at the sidelines of AAPG's annual meeting.
Demand is particularly keen for drilling and well completions engineers, subsurface geologists, geophysicists and geochemists, Bradley said, adding that there are not enough specialists with direct experience developing a shale gas play. As a result, operators are wooing candidates with conventional onshore oil and gas experience "who can jump right into shale work," he noted. He acknowledged this is often easier said than done.

LA Times Links: The Train Wreck; Disneyland Prices Just Went Up

Updates

Later, 4:27 pm: Now, CNBC is reporting that up to 2/3rds of Americans not sure if they will sign up for ObamaCare. If this is not a train wreck, I do not know what it. It is interesting that ObamaCare has been ruled a "tax" by the Supreme Court and therefore constitutional. With the IRS under siege, a lot of folks may simply use this as an excuse not to sign up -- at least for the first year, in which the penalty is pretty light: $95 or 1% of income. (It will be interesting to see "how" income is defined.) Since pre-existing conditions cannot be refused, I assume a lot of folks will go without insurance until/unless they develop a condition in which it makes sense to enroll. But I do think enough informed folks are so upset about the IRS, they won't sign up for ObamaCare for that reason alone. Eventually they will (enroll), but the roll out will be a train wreck.

Original Post

The LA Times is reporting:
Beginning in 2014, nearly everyone will be required to have insurance or face a fine — $95 or 1% of their household income in the first year. Many young adults who are not covered through work or their parents may be eligible for Medicaid or the new state-based insurance market places known as exchanges.
Last week, the state released its rates for health insurance under the exchange. While costs vary based on age and income, young adults with low or middle incomes are likely to receive substantial subsidies — for premiums, deductibles and co-pays. For example, a 21-year-old who earns about $16,000 would pay about $45 each month for the mid-level plan. State officials point out that costs could rise in subsequent years if not enough healthy people enroll.
So many story lines in this article.

"Nearly everyone." Who is exempt? The President? And most likely Congress.

The LA Times is also reporting:
A single-day ticket to either Disneyland Park or Disney California Adventure Park in Anaheim for visitors 10 or older now costs $92, up from $87 -- a jump of nearly 6%.
The cost of the day pass has risen 28% since early 2010, when it was $72. Prices were previously raised in August 2010, June 2011 and May 2012.
The prices of annual tickets went up too. The Deluxe Annual Passport, which allows admission to both Anaheim parks 315 days of the year, now costs $499 -- up from $469. The Premium Annual Passport, which has no blackout dates, now costs $669, an increase of $20.
The company is now nearing the vaunted $1,000 mark for its ultra-pass. The Disney Premier Passport, which allows unlimited admission to the attractions not only in Anaheim but also in Florida, now costs $979, up from $849.
The gap between the "haves" and the "have-nots" continue to widen.

I often wonder why Disney doesn't adjust prices seasonally and/or daily, or even hourly, based on "volume." 

For Investors Only: Cracker Barrel, KOG

Updates

Later, 3:37 pm: SeekingAlpha on the KOG-LR deal:
The transaction appears to be reasonably valued, although by no means a "steal" taking into account the quality of acreage being acquired. I attribute approximately $250-$325 million M&A value to existing production and wells-in-progress included in the transaction (based on the very limited operating data disclosed and using certain decline curve assumptions). That implies approximately $335-$410 million paid for the undeveloped acreage and translates to valuation of ~$10,000-$12,500 per undeveloped acre, assuming that 80% of the acreage being acquired is undeveloped.
Original Post

Cracker Barrel beats by $0.08, beats on revs; raises FY13 EPS, in-line, reaffirms FY13 revs guidance; raises dividend 50%: Reports Q3 (Apr) earnings of $1.02 per share, $0.08 better than the Capital IQ Consensus Estimate of $0.94; revenues rose 5.2% year/year to $640.4 mln vs the $630.56 mln consensus.

KOG buys Liberty Resources. Not mentioned in today's presentation at the RBC Capital Markets Conference (a pdf file).

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

First, KOG, from Yahoo!Finance which often lags.
  • operating cash flow (annual): $320 million.
  • total cash: $6 million
  • total debt: $1.2 billion; getting close to $2 billion?
  • market cap: $2.3 billion
The KOG-Liberty Resources deal:
  • $660 million cash / 42,000 net acres = $15,000/acre
  • 6,000 boepd production x $50 = $110 million. $660 million - $110 million = $550 million
  • $550 million / 42,000 net acres = $13,000/acre
  • plus a drilling rig
I've blogged numerous times: one of the problems KOG has -- a Bakken only company. The story continues. 

*********************

Now, back to Cracker Barrel.

Cracker Barrel is a relatively high-cost choice for interstate travelers. McDonald's, et al, are notably less expensive for the family of four.  Beating expectations, three things come to mind: a) Cracker Barrel customers relatively immune to menu prices; b) Cracker Barrel customers traveling; c) gasoline prices not impacting traveling and/or disposable income while on the road.

If "Arab Spring" Spreads To Turkey ...

.. no link.....all over the news. Easy to find.

For archival purposes.

Sea Levels Rose Due To Faster Melting Of Polar Ice Sheets And Mountain Glaciers

The WSJ is reporting.

16.8 millimeters.

Between 2005 and 2011.

Six years.

16.8 mm/6 years = 2.8 mm/year.

OMG.

The popsicle post is here.

The thickness of an average human fingernail is about 0.3 to 0.5 mm thick. According to wiki, human nails grow at an average rate of 3 mm (0.12 inch) per month.

The thickness of pencil lead varies, but is commonly 0.7 mm. 

KOG Acquires Liberty Resources' Assets; $660 Million Cash; 42,000 Net Acres In Nice Area Of The Bakken

Updates

June 25, 2013: analysis of this deal by Mike Filloon at SeekingAlpha.

June 5, 2013: SeekingAlpha contributor likes the KOG deal. He argues that in the production buildout phase it's better to have "enough" acreage rather than "not enough" acreage.

June 4, 2013: KOG-Liberty Resources could make/break KOG's 2013 -- Mike Filloon. 
Kodiak announced on June 3rd it was acquiring 42000 net acres in Williams and McKenzie counties. This added production of 5700 Boe/d. The acquisitions ups Kodiak's Bakken acreage to 196000 net acres. It will pay $660 million in cash. Kodiak continues to add acreage, and seems willing to pay market value (or a little more). Liberty Resources is a privately held company, and many believed it would be an IPO sometime in the near future. There are no indications Liberty was hurting financially, or was motivated to sell. I would guess Liberty got the deal it wanted, and Kodiak thought there was added value to the purchase. 
Given the infrastructure and daily production, Kodiak received a reasonable deal. I also like the transaction, as Liberty is a very good operator and is on acreage I believe to be outside the top tier, but still very good. I do have some issues with respect to timing and leverage as Kodiak continues to add debt and difficulties for management to execute through 2013. Without the deal, Kodiak was well positioned to grow without worries of raising equity. My biggest worry is how it plans to pay for this deal. Kodiak will probably have to go back to its shareholders in the second half of the year. It probably won't be working with in cash flow for another year or two. Managing the new acreage could also be difficult as there have been difficulties with other bolt on acquisitions.
June 4, 2013: valuation of Oasis based on the KOG-Liberty Resources deal
Another E & P concern in the region I hold is Oasis Petroleum (OAS). It moved up on the Kodiak acquisition news by around 2% to just under $38 a share, but this producer is significantly undervalued as well. I believe this stock will richly reward shareholders over the next few years as it continues to rapidly expand production.
June 3, 2013, 3:37 pm: SeekingAlpha on the KOG-LR deal:
The transaction appears to be reasonably valued, although by no means a "steal" taking into account the quality of acreage being acquired. I attribute approximately $250-$325 million M&A value to existing production and wells-in-progress included in the transaction (based on the very limited operating data disclosed and using certain decline curve assumptions). That implies approximately $335-$410 million paid for the undeveloped acreage and translates to valuation of ~$10,000-$12,500 per undeveloped acre, assuming that 80% of the acreage being acquired is undeveloped.
Conclusion of this particular writer:
Strategic rationale of the acquisition raises some concern, albeit not a major one. Given that Kodiak already has a decade plus-long inventory of drilling locations (which may prove to be even greater as Deeper Three Forks potential is unlocked), the acquisition effectively consumes the liquidity that could be used to accelerate the development of existing high-quality drilling inventory.
Some of the acquired acreage, if of inferior quality, may not be called upon for many years and would represent a "negative carry."
While the company's desire to grow its footprint is understandable, it is hard to expect that many "bargains" can be found in the Bakken's highly competitive and increasingly transparent M&A market. Having said that, it is important to note that Kodiak's management has done a formidable job in building out the company's asset base in what later proved to be the core of the play through acreage acquisition and delivering strong operating results. In the long run, this transaction may prove no different.
Overall, the transaction has neutral implications for the stock value. Some financing-related headwinds would not be a surprise.
Original Post From June 3, 2013

KOG buys Liberty Resources. Not mentioned in today's presentation at the RBC Capital Markets Conference (a pdf file).

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

First, KOG, from Yahoo!Finance which often lags.
  • operating cash flow (annual): $320 million.
  • total cash: $6 million
  • total debt: $1.2 billion; getting close to $2 billion?
  • market cap: $2.3 billion
The KOG-Liberty Resources deal:
  • $660 million cash / 42,000 net acres = $15,000/acre
  • 6,000 boepd production x $50 = $110 million. $660 million - $110 million = $550 million
  • $550 million / 42,000 net acres = $13,000/acre
  • plus a drilling rig
I've blogged numerous times: one of the problems KOG has -- a Bakken only company. The story continues.

NOTE: This was posted earlier as part of another post. To better follow this story, it was moved here as a stand-alone post.
Original Post

The press release is here:
Kodiak Oil & Gas Corp., an oil and gas exploration and production company with primary assets in the Williston Basin, today announced that it has entered into a definitive purchase and sale agreement with Liberty Resources, a Denver-based private oil and gas company, to acquire additional core Bakken and Three Forks producing properties and undeveloped leasehold in the Williston Basin of North Dakota.   
The purchase price for the asset package is $660 million in cash. The purchase price is subject to adjustment including, but not limited to, adjustments for certain title and environmental defects, if any, as well as customary adjustments to reflect the operation of the properties following the effective date and prior to the closing. Net oil and gas production included in the pending acquisition is currently approximately 5,700 barrels of oil equivalent per day (BOE/d), which was the average net production for May 2013.  Production is expected to increase before closing as completion operations are currently underway.  
Upon completion of the transaction, Kodiak would acquire approximately 42,000 net acres located in McKenzie and southern Williams Counties, N.D., bringing the Company's pro forma total lease holdings in the Williston Basin to approximately 196,000 net acres.  The acquired leasehold includes 35 controlled drilling spacing units, based upon 1,280-acre units, and is 90% held by production.  The southern Williams County lands, approximating 14,000 net acres, are adjacent to Kodiak's core Polar area.  An additional 25,000 net acres are located in McKenzie County to the west of the Company's Koala and Smokey areas.  Kodiak will also assume Liberty's contract for one drilling rig, which has 14 months remaining on its term.  
Meanwhile, from last week: Motley Fool on whether the Bakken is viable long term?
So far, billions of dollars have been spent on the region's development and it has yet to return any cash. In its latest quarter, Continental reported an operating cash flow deficit (operating cash flow less capital expenses) of $400 million. Kodiak showed a deficit of $160 million and Northern a cash-flow loss of $21 million.

Monday Morning News And Links

Active rigs: 187 (steady)

RBN Energy: Update on Eagle Ford condensates; a very, very good review, summary

WSJ LInks

Section D (Journal):

Section C (Money & Investing):
Section B (Marketplace):
Section A: