Monday, October 7, 2013

Wells Coming Off The Confidential List Tuesday

  • 24360, drl, Statoil, Knight 35-26 2H, Banks, no production data,
  • 24993, drl, BR, Cleo 41-1TFH, Croff, no production data,
  • 25162, drl, CLR, Raymond 1-21AH, Oliver, no production data, 
It appears that the vast majority, if not all, wells going to "drl" status are due to operational reasons, not because the frack teams are unable to keep up with drilling.

There are suggestions that some frack teams are sitting idle waiting for pad drilling to be completed on some pads.

Pad drilling will cause some hiccups:
  • mismatch between drilling and fracking (as noted above)
  • increased time from spud to first delivery 
Over time, these issues will be resolved.

Seven (7) New Permits -- The Williston Basin, North Dakota, USA; Statoil, Hess With Nice Wells

Active rigs: 182

Seven (7) new permits --
  • Operators: Emerald Oil (2), OXY USA (2), Cornerstone, HRC, Hess
  • Fields: Moline (McKenzie), Little Butte (Burke) McGregory Buttes (Dunn), South Tobacco Garden (McKenzie), Willmen (Dunn), Little Knife (Dunn)
  • Comments: Emerald averages about two new permits every other month or so
Wells coming off the confidential list were posted earlier; see sidebar at the right.

MRO cancelled the following well:
  • 24078, PNC, MRO, Vorwerk USA 34-24H, Deep Water Creek Bay,
Seven (7) producing wells completed:
  • 25384, no data, Whiting, Hartstrom 224-33H, Sanish,  
  • 23945, 1,130, Statoil, Sanders 34-27 3TFH, Ragged Butte, t9/13; cum --
  • 24086, 2,285, Statoil, Sax 25-36 4TFH, Banks, t9/13;
  • 24443, 831, Hess, EN-State B 155-93-1609H-4, Alger, t9/13; cum 5K 8/13;
  • 23183, 564, Hess, SC-Tom 153-98-1514H-2, Truax, t8/13; cum 5K 8/13;
  • 23502, 1,035, Hess, BB-Burk-151-95-0718H-5, Blue Buttes, t9/13; cum 7K 8/13;
  • 24726, 1,250, Hess, HA-Nelson 152-95-3328H-3, Hawkeye, t9/13; cum --

Signing Off For Awhile

President O'Bama has ordered views of Mount Rushmore to be "removed."

This is truly bizarre. Really, really bizarre. 

And with that, I'm signing off for awhile. Good luck to all. I won't be following the market today.

List Of Premature Deaths

One might want to add King Coal to wikipedia's list of "premature deaths." Bloomberg is reporting:
Coal will replace natural gas as the dominant fuel for producing electricity in Southeast Asia as the region almost doubles its energy consumption in the next two decades, according to the International Energy Agency.
The 10 members of ASEAN, with energy demand growing at more than twice the global average, will get 49 percent of their power from coal by 2035, up from 31 percent in 2011, the IEA said today in its Southeast Asia Energy Outlook. The share from gas will drop to 28 percent from 44 percent. 
“Coal is emerging as the fuel of choice because of its relative abundance and affordability in the region,” Maria Van der Hoeven, executive director for the IEA, said today in Bangkok. “As long as fuel-price differentials continue to favor coal over gas by a significant margin, Southeast Asia’s incremental power generation is set to be dominated by coal.”
While the trends support plans by Indonesia, the world’s top exporter of thermal coal, to almost double output by 2035, emissions linked to climate change will increase at the same rate, the IEA forecasts. Coal, which emits about twice as much carbon as gas, is the fuel source for about 75 percent of power-generating capacity being built by members of the Association of Southeast Asia Nations, the IEA said. 
"Emissions linked to climate change will increase at the same rate." Considering there has been no increase in global temperature for the past 17 years, I'm at a loss to explain what that "increase" means.

It is very possible, as Don has noted, "Asian coal" emits no CO2 when burned. LOL.

Another Wall Street Recommendation In The Bakken

Flashback, November, 2010: Hess acquires 167,000 net acres in the Bakken from privately-held TRZ Energy, LLC for $1.05B in cash.

Why a Hess flashback today?

Last week:
  • Goldman Sachs names Oasis as top energy pick.
  • Sun Trust Robinson names Whiting as top energy pick.
  • Merrill Lynch recommends Hess as (a) top energy pick. 
Data points from a recent Merrill Lynch note:
  • ML team recently spent three days on the ground in the Bakken
  • buy recommendation; target: $115 (currently $80)
  • Hess transitioning into pure E&P play, led by the Bakken
  • price target based on potential of the Three Forks
  • Hess' "flagship" -- its Bakken play
  • "We maintain our view that Hess is amongst the most attractive value stocks of the large cap US oils - and with the catalysts to release value over the next year."
This was just one piece of a very exiting 27-page report on Hess:
Bakken upside adds $10/sh: 140,000 boepd realistic by 2018
If there was one key message from management, we believe it is that the Bakken, and in particular the Three Forks, is both bigger and more productive than previously thought. Hess is already drilling 100% of wells on pads; but recognizing the potential of the TF, management looks poised to step its drilling pattern to levels that increase resource potential by 1/3rd and NAV by ~$10/sh. Separately, we believe a stable/growing international asset base sets Hess apart from international E&P peers with Norway the single asset that is materially underrepresented within consensus expectations. 

Can Fracking Save The US Economy?

That's the question being asked over at MarketWatch.

All the journalist had to do was read CarpeDiem and she would know that fracking SAVED the US economy.
America’s government may be closed, but its energy sector is open for business. We are overtaking Russia as the world’s largest oil and gas producer.
Other countries with large reserves of natural resources have governments that are functional, yet their institutions and technology limit their production. Russia’s Kremlin is open, Saudi Arabia’s King Abdullah reigns supreme, and Chinese president Hu Jintao has his country firmly under control.
But America is producing more oil because private sector brains trump government bureaucracy — and much of America’s oil is on private lands.
Despite delays over permits, the oil and gas industry has been able to outperform its foreign counterparts. 
A huge "thank you" to the reader who sent me this link: thank you.

Much, much more at the link. 

Who's Got The Best Wells In The Eagle Ford?

They will tell you over at SeekingAlpha.

Let me guess. EOG? Nope.

I'll get back to this article later.

A Bit Of Snow, Western South Dakota

This is a photo of Exit 10 off I-90, western South Dakota.

I don't know if folks can get to that link; it's a photograph on Facebook.

I don't know if folks on the east coast are aware that law enforcement out west puts up barriers on the interstate when the roads are impassable due to snow. I am curious if the government was able to send out folks to put up the necessary barriers despite the government shutdown.

Monday Morning: Why We Avoid The Robotic Checkout At The Supermarket

Active rigs: 183

RBN Energy: update on the CBR unloading terminals on the west coast; another must read post. Part 2 in the series.

The Wall Street Journal

I agree 100% -- "US shutdown creates investment opening. As they sift through the Washington mess, some money managers think it could be a blessing. Any stock sell-off, they say, would be a buying opportunity."

Heard on the street: a known unknown for oil prices.
Among other inconveniences, Washington's shutdown could make it harder to keep track of what is going on in a place just over 1,000 miles away from it: Cushing, OK.
Cushing, where several major pipelines meet, is where oil futures are settled physically.
So stock levels there are watched closely. The Energy Information Administration releases those figures once a week, but the shutdown could soon prevent it from doing so, leaving the market in the dark.
Here's betting, though, that Cushing's tanks are going to empty out some in coming weeks. All else equal, that is bullish for benchmark West Texas Intermediate oil prices.
Regular readers know what we are talking about.  Remember the numbers: 5/35.

Some years ago, the big automakers and car dealers gave a resounding "no" to on-line (web) sales. Now, Government Motors opens doors to web sales.


This has been an interesting phenomenon to watch. I love technology but I avoid do-it-yourself checkout counters at the grocery story. I could list the reasons, but The Wall Street Journal has done it for me. Fascinating article:
Computers seem to be replacing humans across many industries, and we're all getting very nervous.
But if you want some reason for optimism, visit your local supermarket. See that self-checkout machine? It doesn't hold a candle to the humans—and its deficiencies neatly illustrate the limits of computers' abilities to mimic human skills.
The human supermarket checker is superior to the self-checkout machine in almost every way. The human is faster. The human has a more pleasing, less buggy interface. The human doesn't expect me to remember or look up codes for produce, she bags my groceries, and unlike the machine, she isn't on hair-trigger alert for any sign that I might be trying to steal toilet paper. Best of all, the human does all the work while I'm allowed to stand there and stupidly stare at my phone, which is my natural state of being.
There is only one problem with human checkers: They're in short supply. At my neighborhood big-box suburban supermarket, the lines for human checkers are often three or four deep, while the self-checkout queue is usually sparse. Customers who are new to self-checkout might take their short lines to mean that the machines are more efficient than the humans, but that would be a gross misunderstanding.

My wife is eagerly awaiting to go to "Gravity." The first opening on our busy, busy schedule is Wednesday. "Gravity" soars to number 1 over the weekend. Science-fiction thriller "Gravity" set an October box-office record and showed that audiences still will choose 3-D screenings for movies they believe are worth the higher price. My wife doesn't like 3-D, saying its distracting, so we will go to the regular screening, I suppose. It costs seniors $6.00 at one of the nicest theaters in the US. What's not to like.

I still don't have television (or internet at home) so I didn't see the President's Cup, but I see "Tiger Woods clinches the Cup for the Americans." Good for him. I'm a fair weather fan of Tiger.


So, now the front page. Yup, we've moved on to the debt ceiling crisis. The government shutdown will simply fade away. Bringing back the military civilians essentially leaves the national monuments and national parks closed as the only tangible evidence of a government shutdown. Everyone will get back pay, meaning furloughed workers are on paid vacation. What's not to like. [However, buried on page 6: Nearly a week into the shutdown, signs of economic damage are mostly limited to stalled contracts and lost tourism revenue. But the risk of a long closure is raising concerns among economists and executives. The numbers don't add up: 90% of the government is still working -- probably more when one considers what is on auto-pilot -- and folks are worried about the shutdown's effect on GPD. Perhaps a few government contracts and lots of government contractors are at risk, but that's not particularly unusual.]

According the WSJ, "The federal government acknowledged for the first time it needed to fix design and software problems that have kept customers from applying online for health-care coverage." SecTreasury Lew was asked a simple question over the weekend about the on-line exchanges but he was unable to answer. The question was: how many Americans have signed up for ObamaCare? SecTreasury Lew was unable to answer. It was originally reported that one -- yes, one, that is not a typo -- person was able to sign up but that turned out to be bogus. My hunch: the on-line exchanges will be the number one targeted site for hackers. The Chinese will be responsible but George Bush will get the blame.

What is being overlooked in this trainwreck: a) even if folks can get to the second page of the on-line health exchange, they will be shocked by the prices; and, b) if one is "too poor," they are not eligible for ObamaCare. Say what? My hunch: very few folks eligible for the steepest discounts will actually sign up unless they have significant medical bills that need to be paid. The math doesn't work out otherwise. The co-pays and deductibles will exceed the monthly premiums in most cases even for healthy young adults.

By the way: the government has defined, for the first time, the age one becomes an adult: 26. Up to age 26 one can remain on one's parents' health insurance policy. Twenty-six. That's the US official age for an adult. Sort of like the new official US work week: 30 hours. And the official size for a business: 50 employees. That third data point is a stretch, but threes are necessary.


Who made money off the financial crisis some years ago? Warren Buffett's crisis-lending haul has reached $10 billion. Warren Buffett tossed lifelines to a handful of blue-chip companies during the financial crisis. Five years later the payoff on those deals is becoming clear: $10 billion and counting. I was upset when Warren bought BNSF -- that was my best investment ever -- but the exchange (BNI for BRK-B) has worked out better than expected. The best deal: I'm not paying taxes on BNI dividends each year which were getting pretty excessive. The taxes, not the dividends.


This is awesome: Washington, DC, skateaboarders may be the real winners. The monuments are "closed" with barrycades but few guards for all the squares and parking lots -- from The WSJ, "The government shutdown has given skateboarders in Washington new life, as plazas empty and enforcement chills."


Meanwhile, soldiers are racing to get tattoos before Army brass tighten rules that are now the least restrictive in the armed forces. The new set of regulations, now under final review, would ban tattoos below the knee or elbow.


And then this bizarre story to finish The WSJ today:
Argentine President Cristina Kirchner's surprise decision to take a month's rest for health reasons sparked political uncertainty in the South American country, as her absence will sideline her from politics just weeks before her ruling Victory Front coalition faces a key test in midterm Congressional elections.
During a routine cardiovascular examination Saturday, Mrs. Kirchner was diagnosed with a chronic subdural hematoma—the gradual buildup of blood between the outermost layers of tissue that envelope the brain. Mrs. Kirchner's hematoma was discovered after she suffered a head injury Aug. 12, a government spokesman said.
She has pretty much destroyed the country anyway, so her absence won't make much difference, I suppose:
In recent weeks, Mrs. Kirchner has pledged to continue policies that emphasize the redistribution of the country's wealth through taxation and spending on social programs. Those same policies have fueled one of the highest rates of inflation in the Americas, which private sector forecasters peg at between 20% and 25%.