Thursday, November 21, 2013

Montana Update; Oasis Reports A Great Well For Montana Bakken

Richland County, CLR reports completion of three Bakken wells:
  • Staci-Linnea, TD 20,134; 300
  • Earl-Reimann, TD 20,558; 220
  • Collins 1-28, TD 13,720; 176
Roosevelt County, Oasis reports completion of one Bakken well:
  • Chokecherry, TD 20,175; 1,303
From the Fairfield SunTimes

Seventeen (17) new permits -- The Williston Basin, North Dakota, USA; Statoil And MRO Each Are Reporting A Nice Well

Active rigs: 184

Seventeen (17) new permits -- 
  • Operators: BR (6), Hess (5), WPX (3), HRC (1), Hunt (1), Mountain Divide (1)
  • Fields: Johnson Corner (McKenzie), Fortuna (Divide), Spotted Horn (McKenzie), Robinson Lake (Mountrail), Otter (Williams), Sioux Trail (Divide)
  • Comments: it looks like the BR permits are for a 6-well pad;
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Eight (8) producing wells were completed:
  • 25375, 511, Sequel, 11-15H-1522-147101-MB, 
  • 25377, 407, Sequel, Moe 24-31H-3031-147102-BTF,
  • 24967, 197, CLR, Tangsrud 9-1H,
  • 24964, 390, CLR, Tangsrud 6-1H2, 
  • 25772, 425, Whiting, Littlefield 14-13XH,
  • 25730, 939, Whiting, Locken 43-8XH, 
  • 25771, 411, Whiting, Littlefield 14-13-2XH,
  • 24750, 361, SM Energy, Mosser 2-30HNA,
Statoil renewed five (5) M Olson 20-29 permits in Williams County.

HRC renewed the Fort Berthold 148-94-17C-08-4H well, #24417, in Dunn County.

Petro-Hunt canceled one permit:
  • 25950, PNC, Estby 159-94-26A-25-1H PNC, East Tioga, Burke County

Pacer will target the middle Bakken rather than the Three Forks:
  • 23355, conf, Bakken Hunter, Pacer 3427-2MBH, Ambrose, Divide County
Wells coming off the confidential list Friday:
  • 24319, 53 (no typo), Hunt, Bowline 1-1-12H, Little Tank, t9/13; cum -- 
  • 24494, A, CLR, Stedman 5-24H2, Hebron, no production data,
  • 25102, 1,398, MRO, Ruth Martin 21-14TFH, Reunion Bay, t8/13; cum 24K 9/13;
  • 25440, drl, QEP, Kummer 6-7-5-8LL, Grail, no production data,
  • 25488, 2,563, Statoil, Stubbs 28-21 1H, Briar Creek, t8/13; cum 33K 9/13;
  • 25518, drl, SM Energy, Walla 13X-19H,  Poe, no production data, 

The Ground Game: Slow To Begin; Exemptions; And Sticker Shock

Updates

December 9, 2013: what did he know and when did he know it? Apparently, not very much, and certainly not soon enough.
Obama himself reportedly didn’t know the extent of the problems until at least one week into the launch. [One word: incredible]. It took the administration nearly two weeks to fully realize that the woes went beyond volume and start adjusting their message.
It wasn’t until more than three weeks after October 1, 2013, -- an eternity in crisis management, experts said – that Obama conceded during an address in the Rose Garden that there was “No excuse for these problems” and took responsibility for what had happened. [For a guy who flew the first helicopter into get/kill bin Laden, this was a pretty bad failure.]
The president did not help himself when his repeated claims of “if you like your health care plan, you can keep it” turned out to be incorrect. [A lie.] The administration tried to push back by saying that those with cancelled policies could sign up for new and better plans. [Another lie.] But not until November 7, 2013, did Obama issue a mea culpa for the cancelled policies and attempted a quick fix to let people stay on their plans. [By December 9, 2013, in the big scheme of things, not much has changed.]
And no one's head will roll. 


December 5, 2013: Young people, upon which the whole scheme is predicated on, are not buying into ObamaCare. [Of course, technically no one is: that module -- the module to actually pay the premiums -- has not yet been written.]
Here’s Obama aiming his comments at young people this Wednesday: “The product is good. It’s affordable. This is a big deal, to quote Joe Biden. And if you’re a student-body president, set up a conference on campus. If you’re a bartender, have a happy hour.”
Happy hour?

Affordable?
The average subsidy for a 21-year-old who makes $30,000 will be $454, the study found. But a 61-year-old in the same income bracket will get a subsidy of $4,018.
As a result, the 21-year-old will pay an average $1,635 in premiums for the Bronze plan, the cheapest, while the 61-year-old will pay just $867.
$1,635 / 12 months = $136/month. Actually I don't find $136/month all that expensive for a comprehensive health care plan, but, of course, that does not include co-pays and deductibles.

Original Post

California's early experience with ObamaCare: predictable. CNBC is reporting:
California's enrollment numbers are being closely watched because of its huge population, and because the state is running its own Obamacare exchange. Thirty-six other states are letting the federal government sign up their residents through HealthCare.gov.
As of Monday, 79,891 people had so far signed up for insurance through the Covered California exchange. Thursday was the first time The Golden State released a breakdown of who was enrolling, and the initial picture shows a lot more gray hair than surfer blonde.
For example, 10,387 people between the ages of 55 and 64 enrolled in Obamacare insurance in California in October, which was a whopping 34 percent of all individuals enrolled in that month. But that age group comprises just 11 percent of the state's overall population.
In second place, 22 percent of the total number of individuals enrolled were adults between the ages of 45 and 54, who only represent 14 percent of the state's total population.
The president "needs" seven (7) million to enroll (and paying premiums, I assume) by March 31, 2014. The ten most critical and closely watched states and projected enrollment:
  • California: 1.3 million
  • Texas: 629,000
  • Florida: 477,000
  • Washington State:  340,000
  • Oregon: 237,000
  • New York: 218,000
  • Pennsylvania: 206,000
  • Georgia: 204,000
  • North Carolina: 191,000
  • Ohio: 190,000 
Grand total: slightly less than 4 million

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Federal judge rules on side of Cahtolic Diocese: Catholic groups exempt from ObamaCare
At least for now; the Supreme Court may take up the issue. The headline suggests all Catholic institutions are exempt. -- November 21, 2013

Sticker Shock

USA Today:
Sweeping differences in health care exchange pricing among states and counties is leading to sticker shock for some middle-class consumers and others who aren't eligible for subsidies under the Affordable Care Act.
The average prices for the most popular plans are twice as high in the most expensive states as those with the lowest average prices, according to a USA TODAY analysis of data for 34 states using the federal health insurance exchange.
PPOs, the most popular type of health care plan, carry monthly premiums that range from an average of $819 a month in the most expensive state to $437 in the least expensive. Plans on the federal and state exchanges are grouped into four categories that cover 60% to 90% of out-of-pocket costs. USA TODAY looked at the pricing of PPOs and HMOs across these bronze, silver, gold and platinum categories.
It's the bronze-level plans folks need to avoid:
The premiums for bronze-level plans are generally the least expensive, but "the deductibles are simply not affordable," says Laura Stack, a former financial analyst looking for full-time work and using her 401k to pay for health insurance. "Many will not be able to afford the per person deductibles before insurance begins to pay. What are you really paying for?"

North Dakota Oil Production Hits New All-Time High In October, 2013; 55,000 BOPD From One Million BOPD Milestone

The Director's Cut for October, 2013, will not be out until December 15, 2013, based on previous releases. However,

Platts is reporting:
Crude oil production from North Dakota hit all-time high of 945,000 b/d in October, jump of 26.2% y-o-y: API.
The Director's Cut for September, 2013, data showed production in that month to be 931,940 bbls which was an all-time record at that time. 

A jump from 931,940 to 945,000 represents a 1.4% percent increase, month-over-month.

At this post (click on that in blue), I track projections at 1%, 2%, and historical changes over the past two years. 

Huge Drop In Unemployment First Time Claims Benefits

The AP is reporting:
The number of people applying for U.S. unemployment benefits fell 21,000 to a seasonally adjusted 323,000 last week, the lowest since late September and further evidence of an improving job market.
The Labor Department said Thursday that the less volatile four-week average fell for the third straight week to 338,500. Both figures are near pre-recession levels.
That "323,000" number is interesting: it is identical to the "323,000" number reported September 5, 2013. At that time, the four-week moving average was a much better 328,500. The headlines today on the jobs report were exciting but the numbers are still moving up and down within a range. 

The May 9, 2013, figure was also 323,000. But one has to admit, the "300-thousand" figures are a lot better than the "400-thousand" figures we were seeing back in early 2011.

It will be interesting to compare the current "downward" trend with the trend a year from now as ObamaCare starts to kick in for all Americans.

What You Will Be Talking About One Week Before Christmas ...

... impossible to find the Retina iPad mini -- Apple is getting farther and farther behind in being able to keep up with demand ... MacRumors is reporting.

AMZG Is Now Trading On The NYSE; WPX To Form MLP To Expedite The Piceance Basin In Colorado

Link here.

Disclaimer: this is not an investment site; do not make any investment decisions based on what you read here or what you may have read here. 

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WPX will form a master limited partnership in 1H14 -- Zacks.
Independent oil & gas operator, WPX Energy Inc. has decided to form a master limited partnership (MLP) in the first half of 2014.
MLP as an investment vehicle is seeing a revival among independent oil & gas operators – worth mentioning here are names like Spectra Energy Corp. and Enbridge Inc. among others which have opted for such a structure.
An MLP enables operators to unlock true value of their natural resource holdings. In addition, an MLP also generates funds needed to develop assets.
After receiving the necessary permission to form an MLP, WPX Energy plans to issue common units representing limited partner units in the MLP. These units will hold working interests in mature, producing natural gas properties located in the Piceance Basin in Colorado. WPX Energy will initially contribute to the development of natural gas properties in the Piceance Basin and will then utilize the proceeds from the issue of the MLP units.
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I assume investors all have their favorite sites to access news of the companies they are interested in. What I find amazing is all the information that brokers provide easily, free-of-charge, and without logging in for some of the data (most of the data at some of these sites requires one to log in). Ameritrade is just one of many examples I assume. I've used Yahoo!Finance "forever" to get some of this data, but the new Yahoo!Finance layout has become more tedious, less user-friendly. I now prefer other sites similar to the linked site. It's particularly useful tracking dividend pay dates and following specific news.

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I've posted this video earlier, but I will post it again. It is amazing how mainstream it feels now and how avant-garde it was back "in the day." It is amazing how some of the songs are all "The Mamas and The Papas."

Surrealistic Pillow, Jefferson Pillow

Fracking Without Water In Texas

Reuters via Rigzone is reporting:
At a dusty Texas oilfield, Apache Corp has eliminated its reliance on what arguably could be the biggest long-term constraint for fracking wells in the arid western United States: scarce freshwater.
For only one well, millions of gallons of water are used for hydraulic fracturing, or fracking, the process that has helped reduce U.S. reliance on foreign oil over the past five years by cracking rock deep underground to release oil and gas. In Irion County, where Apache is drilling dozens of Wolfcamp shale wells in the Permian Basin, the company is meeting its water needs for hydraulic fracturing by using brackish water from the Santa Rosa aquifer and recycling water from wells and fracking using chemicals.
The company's approach could have broader significance for areas prone to drought. Apache, which has the most rigs running in the Permian, the oil-rich region that spans 59 Texas counties, says the model can cut costs and truck traffic rattling small towns stretched by the country's drilling boom.
Water is not an issue, in the big scheme of things, in the Bakken. Folks can make it an issue if they want. 

Was Delta Airlines An Energy Play?

Shares triple in past year.

Dots to connect:
  • George Soros buys stake in Delta Airlines
  • Delta Airlines buys refinery
  • refinery buys $71 Bakken oil; WTI at $94
Yes, I know: prices of oil I use are "suspect."

Disclaimer: this is not an investment site. See "disclaimer" and purpose/mission statement of the blog. Do not make any investment decisions based on what you read here or what you think you may have read here.

Years ago there was an article in Forbes or some other magazine that correctly identified Southwest Airlines as an "energy play," and not an "airline play." History repeats itself.

Speaking of Southwest Airlines, according to Bloomberg Businessweek, page 126 of the current "special edition," there are only four national airlines, and the regionals (most of which are linked with the Big 4: United, Delta, American-US Airways, and Southwest. And of those four, only three have intercontinental flights.

On the lucrative intercontinental flights, US consumers have only three US carriers to choose from. After that it's Singapore Airlines, Turkish Airlines, etc. Speaking of which, whatever happened to KLM-Northwest? Northwest was absorbed by Delta back in 2008 to become the largest airline at the time.

Output = Stroke Volume x Strokes/Minute; US Rig Counts Increased For Third Week In A Row

Output = stroke volume x strokes/minute.

That's the formula for cardiac output.

It works for any "output" being measured.

So, this is interesting to see. Yahoo!Finance/MarketRealist is reporting that rig counts increased for the third week in a row:
Rig counts represent how many rigs are actively drilling for hydrocarbons (oil and gas). Baker Hughes, an oilfield services company, reports rig counts weekly. The company notes that rig count trends are “governed by oil company exploration and development spending, which is influenced by the current and expected price of oil and natural gas.” So rig counts can represent how confident oil and gas producers feel about the drilling environment. As rig counts show one measure of oil and gas drilling activity, the figure can also be a useful indicator to gauge the activity levels of oilfield service companies such as Baker Hughes, Halliburton, Schlumberger, and Weatherford.
MarketRealist looks at this data point from an investment opportunity standpoint.

I look at it from the Bakken potential standpoint.

Output=stroke volume x strokes/minute. The more rigs, the more strokes/minute across the Bakken.

It's been reported several times now, most recently by EIA, that Bakken rig efficiency (I prefer "effectiveness") is getting better, and is the best of all shale plays in the universe. And the number of rigs in the North Dakota Bakken is at 185. This is not a record, but it's off it's lows, and trending upward. I haven't done the rig-by-operator breakdown recently, but for the past two years there has been only one rig in the "EOG-owned" Parshall oil field. Today there are five, with a sixth right on the line, also operated by EOG.

The Next Big Thing

Note: "updates" are farther down. 

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The Next Big Things

Immigration: we may not know the full story until 50 to 100 years from now, but it will be an interesting follow-up study to see what happens to the people coming to America via the early 21st century southern surge. My hunch: it will turn out just fine. Posted April 26, 2019. At the time of the post, upwards of 2,000  illegal immigrants were being released daily inside the interior of the US. 

Airline seating: the airlines will find some way to force passengers to pay for larger size seats if passengers don't fit "comfortably" in "standard-size" seats. Link here. Posted April 23, 2019.

Late night music: we'll never see it but one wonders if the "Letterman" music segment might not work if done "right"?

Alexa: control your television set. Right now (2/19) I can make phone calls from Alexa/Echo Dot without lifting a finger; and I can listen to news and music from Echo Dot without lifting a finger. Why can I not select channels, control volume, and move from streaming to DVD to live television via Alexa/Echo Dot. 

Amazon / EV delivery. Link here

Tailgates. The American pickup truck tailgate is now defined by the tailgate. Expect to see a lot of new versions, modifications of the standard tailgate.

NOT the next big thing: waste-free / packaging-free grocery stores. At the linked article, the concept store went broke and closed after five days. October 21, 2018.

"Smart-sign" advertising on sides of 18-wheelers. The two companies that need to tie up to do this: 3M and Google. Link here. Posted October 19, 2018.

Your iPhone will be your (only) computer. Link here. Posted August 23, 2018.

Personal television networks. Individuals literally design their own daily / weekly television schedules. 

EV battery recycling: winners and losers

Aisle view (think google's "street view"). Someone (Target? Walmart?) needs to provide a 21st century virtual shopping experience -- i.e., a much improved GUI with optional artificial reality (3-D). When folks (physically) shop, they walk down aisles arranged by "subject": bread; soda; canned vegetables; condiments. This encourages price comparison; product comparison; and, most important, impulse buying. Right now folks type in what they specifically want; someone needs to figure out how to make virtual shopping like the real thing. July 6, 2018.

Prosthetics. It is becoming increasingly common to see lower extremity artificial limbs -- the aluminum cylinders generally from below the knee to the foot (inclusive). The next big thing will be really, really good synthetic "coverings" for these artificial limbs which will make it nearly impossible to realize that there is an artificial aluminum limb "inside." June 17, 2018.

SmartPhone companies are going to offer multiple phones using same telephone number. Right now, only one SmartPhone per telephone number. In the future, one will be able to have as many phones as one wants per telephone line, but only one will be active at a time. That way, for women going out for a social event, they can take a small slim-line cell phone that color coordinates their outfit, but when they go into work on Monday, they can take a larger cell phone for easier web work. Same idea in the car. One phone while in the car; another phone while in the office. June 6, 2018.

LSD, micro-dosing, 24/7: yes, actually happening in Silicon Valley. The story "broke" in 2017, but is now hitting mainstream media, posted April 18, 2018.

Mini-hospitals: already here, March 4, 2018.

Robots will start taking annual inventory for retail grocery, pharmacy stores. Posted October 29, 2017. See this post.

Private museums as "anchor destinations" in dying malls. Posted May 14, 2017. See this article in The Dallas Morning News

Grocery products: upstream (production); midstream (distribution centers); downstream (retail stores). To cut costs, Kellogg will eliminate midstream (distribution centers), instead delivering directly to retailers' warehouses. I assume other producers/wholesales will follow suit. February 9, 2017.

Airline terminal upgrades, infrastructure CNBC had nice segment on need for larger, more modern airline terminals. Posted January 31, 2017.

Jobs: drones. Operators: law enforcement; weather channels; news agencies; logistics; marketing; advertising; tabloid; city planners; military; IRS, tax assessments; insurance adjusting (hail crop damage); farming. Posted January 10, 2017.

Drones. Start here

Last mile delivery: Amazon delivers within two hours in 30 cities across the US, noted December 22, 2016. From Business Insider, July, 2016.  Last mile logistics: Amazon vs FedEx vs Startups.

Gigantic tablets -- anything bigger than iPad Pro -- anything greater than 13 inches for a tablet

3.5 mm headphone jack: 1950s technology. Apple removed the headphone jack with the iPhone 7 release, September, 2016. Steve Jobs would have removed the jack two iPhone iterations earlier. Ten years from now, folks will have forgotten all about the headphone jack in Apple products.

Data centers / power consumption: here

Uber, Lyft: here

Magazine ad pages: here

Cuba: I'm a year late on this one. I don't know how much, if anything I will blog on this one, but Cuba is going to be the big "money" story of 2016 - 2017. -- Posted March 19, 2016. [Updated, January 18, 2017: it looks like I was way, way, way wrong on this one. Cuba didn't want to play along.]

Storage units as pied-à-terre: in The Wall Street Journal, March 2, 2016; I had thoughts on this but never posted until I saw this; missed it. Storage units, now with space to cook, relax and entertain. Traditional industrial park-style storage facilities are giving way to customized spaces with kitchens, reclaimed wood and stylish seating areas. [Plural is same spelling as singular.]

Batteries. Start here. The war over lithium. This may have been the shot across the bow

Amazon and/or Facebook will get into the flight reservation business (one or the other will buy Travelocity, Orbitz, or start fresh). October 23, 2015. Three stories converge: Amazon reports surprise profit 3Q15; Facebook introduces universal search across entire social network; and, airlines try to win customer loyalty by keeping fliers informed

Yield cos: another way to invest in solar energy, May 9, 2015.

Truck stops: national shortage of truck stops even as US mandates more frequent rest stops for truckers; posted January 21, 2015.

Update on Netflix: global rollout and subscriber growth surprise Wall Street; stock surges 20%; posted January 21, 2015. 

National EV charging grid: see this post for background; posted January 14, 2015
  • the blueprint is already there: the US interstate system and major federal highways
  • government/private sector need to establish commonality in charging stations
  • government/private sector need to fund
NG corridors could have used this help but we are somewhat beyond this as the "next big thing"

Same-Day Delivery -- Original Post

Back on March 21, 2013, I posted a long note that I really enjoyed writing: "the next big thing."

I was thinking about that again, as I was pondering ObamaCare. There are tectonic changes occurring. ObamaCare is just one of them (by the way, I've buried a note on ObamaCare for the time-date stamp). Mobile entertainment is another. The US energy revolution is another, and that's pretty much what I think about at "the big stories."

But there are other big stories.

I can't do it now because I'm at Starbucks, but if I recall, I might reproduce page 76 in the most recent issue of Bloomberg Businessweek to talk about "the next big thing." It's not being talked about at the moment, but I expect to see a story in TWSJ sometime in the next six months on this very story. The story: same-day package delivery.

Some dots to connect:
  • eBay is now incorporating Toys "R" Us; Target; Home Depot; Office Depot; GNC; RadioShack; Walgreen's; Best Buy; and, others into its website
  • Wal-Mart hopes to generate more sales from its web operations,
  • Amazon now has two-day delivery; will go to same-day delivery
  • USPS has contract with Amazon to make Sunday deliveries
I haven't delivered pizza and I haven't ordered delivered pizza so I don't know what the delivery charge is, but I believe it's almost nil, incorporated in the price of the pizza, and the majority of the delivery cost might be in the "tip." Are we talking a buck, two bucks?

How much is Amazon charging for same day delivery? $8.99 on top of the $79 annual fee.

How much is Wal-Mart charging for same day delivery? $10.00.

Page 76 of the Bloomberg Businessweek "special issue" has at least a dozen hard-to-read little dialogue boxes; I doubt many readers have read any of them. Hidden in the lower right-hand corner is this note:
In some cases, Wal-Mart uses third-party couriers to send items from one of its 4,700 stores. Wal-Mart employees sometimes deliver products by car.
The interesting thing: Bloomberg Businessweek fails to mention the new USPS-Amazon Sunday delivery contract.

Yesterday, I was talking to a CEO of a trucking company here in the Ft Worth-Dallas metroplex. He now contracts with FedEx and UPS to deliver.

Companies wishing to deliver same day have the same problem telecom and cable television providers have: the last mile. Within a couple of years there will be a start-up, "last-mile same-day delivery" company. Trust me. It's not rocket science. It's possible it might be a spin-off or a division of UPS. [Update, March 25, 2017 -- here in DFW area, we have a "last-mile, same-day delivery company." It is called Lone Star Logistics.]

Nuts and bolts:
  • 0600 - 0800: same days orders placed by consumer on-line
  • 0800 - 1000: LMSDD trucks do the milk-run circuit (neighborhood Wal-Mart, Target, Albertsons, Toys "R" Us, Walgreen's, Best Buy, etc).
  • 1000 - 1200: sort, re-route at neighborhood LMSDD sorting center
  • 1200 - 1800: same day delivery; high school kids could do the 1500 - 1800 runs
If pizza makers can make money on a one-dollar delivery charge, think how LMSDD will do on $10/neighborhood delivery.

Updates

Augsut 26, 2018: "Why no one can catch Netflix. Streaming service is so far ahead of the competition and knows how to please its customers." -- WSJ, August 25, 2018. A lot of negative comments re: Netflix hiring the Obamas.


April 23, 2018: in my original post re: Netflix, I said it was all about technology/accessibility/easy of use and nothing to do with content. Wow, was I wrong. From Yahoo!Finance today:
In the span of 20 years, Netflix has gone from a (super convenient) Blockbuster knockoff to one of the most powerful players in media. Partially, that's credited to Netflix's technology, bringing streaming content to the mainstream. But Netflix's success is also owed in part to its willingness to invest in its content library.
April 18, 2018: Netflix absolutely crushed earnings, revenue expectations. But more than that, crushed new subscriber estimates. Stories everywhere. One link here.

March 25, 2017: Netflix: the monster that's eating Hollywood -- WSJ.

January 18, 2017: Netflix smashes expectations; shares surge

November 15, 2016: NASA, ATT to build national drone tracking system. Huge.

May 26, 2016: Apple interested in Netflix? Rumors.

April 16, 2015: Netflix surges on huge subscriber growth -- up 16% / $76 dollars today. 

July 24, 2014: the next big thing -- mobile payments

January 22, 2014: Netflix surges almost $60 as soon as earnings announced. Almost 20% surge.

December 12, 2013: Today we learned that Netflix earned more Golden Globe nominations than CBSNCBABC combined -- at  least that's the Drudge link; no reason to doubt it, but I'm not going to check. I'm not a detail person; I'm more interested in the big picture.

November 21, 2013: same-day package delivery.

October 21, 2013: Subscriber growth; beats estimates -- Netflix beats by $0.03, reports revs in-line; guides Q4 EPS above consensus.: Reports Q3 (Sep) earnings of $0.52 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.49; revenues rose 22.2% year/year to $1.11 bln vs the $1.1 bln consensus. Co issues upside guidance for Q4, sees EPS of $0.47-0.73, excluding non-recurring items, vs. $0.44 Capital IQ Consensus Estimate. Up about $55 for the day.

August 20, 2013: Netflix grabs multi-year deal --
... first-run rights to Weinstein films after they appear in theaters will bring new content to Netflix to help the company gain subscribers and compete with cable channels such as HBO and Showtime. 
July 22, 2013: today's earning's headline --incredible -- the next big thing --
Netflix gains 630K subscribers as 2Q earnings soar Netflix's 2nd-quarter earnings quadruple as 'Arrested Development' attracts more subscriber. The story at CNBC:
Netflix's second-quarter earnings more than quadrupled as the revival of the comedy series "Arrested Development" attracted more subscribers.
Despite the financial gains, the report released Monday flopped on Wall Street because the return of new "Arrested Development" episodes after a seven-year absence didn't add as many U.S. subscribers as many investors had been hoping. Netflix's high-flying stock sank $20.96, or 8 percent, to $241 in extended trading after the numbers came out.
June 17, 2013: DreamWorks becomes a television company; inks exclusive deal with Netflix; Netflix soars. 

June 15, 2013: kiosk ordering in fast-food restaurants, perhaps in sit-down fancy restaurants; employers don't have to buy health care insurance for iPads

May 26, 2013: Netflix continues to soar. Now, with "Arrested Development." 
April 22, 2013: Netflix soars 20% after earnings beat.

Netflix shot up more than 20 percent after the movie-rental company reported earnings that beat expectations.
The company posted first-quarter earnings excluding items of 31 cents a share, up from a loss of 8 cents a share in the year-earlier period.
Revenue increased to $1.02 billion from $870 million a year ago.
Analysts had expected Netflix to report earnings excluding items of 19 cents a share on $1.02 billion in revenue, according to a consensus estimate from Thomson Reuters.
March 28, 2013: Netflix: S&P 500′s Best Stock of 2013 (So Far)

March 22, 2013: I mentioned Apple's iPhone in the original post. It has just been announced (no links, story easily found):
For the ninth time in a row, iPhone ranks “Highest in Customer Satisfaction with Consumer Smartphones” by J.D. Power and Associates. iPhone ranked highest in a study that looked at the following categories: performance, physical design, features, and ease of operation. In fact, iPhone has ranked highest in each of these studies since the first iPhone was introduced.
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Housekeeping

Everything below is a cut-and-paste from the original "next big thing." Nothing below this line will be updated; all the updates are above.

Original Post 
First Posted March 21, 2013 
I think everyone enjoys trying to predict the "next big thing." Or at least "a" next big thing.

I was reminded of that at your school's book fair earlier this afternoon. I happened to see "Lego Crazy Action Contraptions" by Klutz.

Thirty years ago I started a Lego collection that eventually took on a life of its own. Our older daughter, your mom, never enjoyed Legos. Our younger daughter loves them as much today as she did then. For awhile, it looked like Lego might not survive (maybe ten, fifteen years ago). And then, with some incredible marketing efforts the company has thrived. Klutz's "Lego Crazy Action Contraptions" was another reminder of folks thinking outside the box.

At the book fair, I saw that Skippyjon Jones has a new book, Cirque de Ole. I happened to run across Skippyjon Jones some years ago, when it first came out, and could tell it was going to be huge, and it appears that it has. Good for Judy Schachner.

Years ago, before it was available, I saw a story in some now-defunct news magazine and told my wife that the "PT Cruiser" would be a huge hit. And it was.

Likewise, before the first episode of "30 Rock" aired, I knew that Tina Fey would be big; I just never imagined that BIG. I didn't think the show would do all that well (I was wrong) but that Tina Fey would do well.

I knew the iPad was going to be huge; I don't recall thinking much about the iPhone, but I knew the iPad had more uses than skeptics realized. The iPad has yet to live up to its potential but that's just a matter of time.  (I knew the "netbook" was doomed the minute I saw it. I think the "Surface" is likewise doomed.)

Back in 2007, when I started the milliondollarway blog, I knew the Bakken was going to be big. I didn't think it would be that BIG, but for North Dakota, I thought it would rank right up there with the last boom. Wow, was I wrong. The Bakken is much bigger than I ever imagined.

By the way, I deleted that first blog in a fit of insanity one night, and then started all over. I think the current milliondollarway blog dates back to 2009. I could be wrong. Haven't checked lately.

With regard to the Bakken, the biggest surprise: multi-well pads and rail.

My son-in-law thinks Vudu will be the next big thing. Perhaps in time. But not for awhile. Our discussion began with Apple and iTV. I suggested that "it" was all about "content," and, of course, that brought us to Netflix, Vudu, and Hulu. Vudu and Hulu have access to new movies sooner than Netflix. Yet Netflix is still well ahead of anyone else in that sector.

That made me question my assumption that "it" was all about "content." I think I'm wrong. "Content" is important, but within a month of release, new movies are available everywhere, so "content" alone is not the discriminator. "Content" is quickly becoming a commodity (with notable exceptions: NFL network, "made-for-Netflix" movies, as prime examples). Once "content" is a commodity, then something else drives the sector.

So, if it's not "content," what is it? "Accessibility." Accessibility includes "ease" of accessibility. All demographics can reach Netflix. Even my parents, well into their 80's and 90's can use snail mail to order Netflix DVDs, but unless it has to do with fishing, my dad would have no idea what "streaming" is,  much less be able to access it.

So, we'll see. For $7.99/month I have unlimited and "easy" access to Netflix; for $5.99 I can stream one movie from Vudu or pay "Target-" or "Wal-Mart-price" for the DVD itself. US mail and $7.99 / month / unlimited still beats the alternative. So we'll see. Vudu might be the next big thing but I don't see that for a few years. At least.

Back packs will become "a" next big thing. They already are in urban settings, not so much in rural areas.

I think LNG corridors will be "a" next big thing.

I think Facebook will surprise us; it will be "a" next big thing but only after it evolves to the next level to include a) gaming; b) better search; c) a music module; d) a YouTube-like video module; and, e) easier "home page" development.

All-electric vehicles as family cars are "dead." Hybrids aren't dead but it will be a long, steady slog for them to become mainstream.

Free wi-fi everywhere is just a matter of time. I don't know if one would call "free wi-fi everywhere" "a next big thing" but within a few years coffee shops won't stay in business if they don't offer free wi-fi. I do think that someone could yet come up with with a Barnes and Noble bookstore-coffee shop-internet cafe business plan that would work.  Except for college-centric Starbucks, most Starbucks coffee shops are pretty quiet after 6:00 pm. Just the opposite for most retail when they are very, very quiet before 10:00 am.

That brings us to a "cashless" society. Cyprus may be a "cashless" society by next Monday. Apple stores are cashless [update, April 16, 2015: according to Apple employee this past week, Apple retail stores will take cash]. I do think someone big is going to go cashless and that will change everything. Could Wal-Mart go cashless?  For those who don't have a credit card, or some type of mobile payment (SmartPhone, for example), they pay for a company cash card at customer service when they come in the door. 

The Permian, An Update, Seeking Alpha; And A Note On The Bakken

Before I get to the main post, just a bit of trivia. At the moment, a headline story over at Yahoo!Finance is the story that ONEOK will be building a new natural gas processing plant in western North Dakota. It's about the 7th story down, between the Lance Armstrong story and the Russian plane crash story.
An Oklahoma energy company said it will build its biggest factory yet in western North Dakota to help capture and bring to market more of the natural gas that currently is being burned off as a byproduct of soaring oil production.
Oneok Partners LP, a subsidiary of Tulsa-based Oneok Inc., and Gov. Jack Dalrymple announced Tuesday that the company intends to invest up to $780 million on projects that include infrastructure upgrades, an expansion of a pipeline and a new factory capable of processing about 200 million cubic feet of natural gas daily, or double the amount of any of its existing plants in the state.
Oneok officials made the announcement at the state Capitol in Bismarck with Dalrymple, who thanked the company and called its plans a needed and "remarkable capital investment."
Oneok already operates four natural gas processing factories in North Dakota, and has two more under construction that are slated for completion late next year and early 2015. The seventh, called the Lonesome Creek plant, will be located 12 miles west of Watford City, in McKenzie County. 
Now, for the original reason for this post: on the Permian, over at SeekingAlpha.
Recently, Permian producers have highlighted their activities in the Cline Shale play, recognizing more of the varied options of production offered by the prolific Permian Basin. The Cline Shale, located in the eastern part of the Permian Basin, extends 140 miles long and 70 miles wide. The depth of the Cline ranges from 5,000 feet at the Eastern Shelf to 9,500 in the Midland Basin. Initially the Cline was expected to have the reserve capacity of the Eagle Ford, but the jury is still out on reserves. The Cline play was expected to hold between 30 - 35 billion boe, but the issue is what portion is economically recoverable. The eastern bits of the Cline have higher clay content, and toward the western parts, less clay. Halliburton and other services companies are working to find ways to deal with complications arising from clay.

Did Devon Pay As Much As $60,000/Acre In The Eagle Ford? If So, The Bakken Is Way, Way Undervalued

I posted this just a few minutes earlier: record paid for Eagle Ford shale -- Richard Zeits over at SeekingAlpha.
The per-acre valuation is a blended average for the higher-valued DeWitt County leases, which are located in the play's most productive sweet spot, and relatively lower valued Lavaca County acreage. Taking the value differences into account, the per-acre valuation attributable to the DeWitt County acreage exceeds $60,000 per undeveloped acre. The price is a new record in the play and is particularly high given that the acquired properties are mostly non-operated (BHP Billiton is the operator in DeWitt County).
Devon indicated that there are approximately 1,200 drilling locations remaining on the properties. This implies a price of ~$2.7-$3.2 million per remaining drilling location. Assuming that the properties will be fully developed in about five-six years, the acquisition price, including a 10% annual cost of carry on undeveloped acreage, translates into approximately $3.5-$4.0 million average add-on to the already high $9-$10 million total well cost. The acquisition burden is, obviously, quite significant and negates a significant portion of what otherwise should be very strong drilling returns.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or what you think you may have read here, but this story certainly reassures me that my recent investments in operators working in the various shale plays across the US was not ill-placed. Wow, $60,000/acre.

iBeacon

This is taking off a bit quicker than I would have guessed.

MacRumors is reporting:
Shopping app Shopkick has teamed up with Macy's to deliver the first retail-based iBeacons, allowing customers to find location-specific deals, discounts, and recommendations in the Shopkick app while in a participating Macy's store, located in Herald Square, New York and Union Square, San Francisco.

Apple's iBeacon microlocation APIs, first introduced at WWDC, are designed to access location data through the Bluetooth Low Energy profile on iOS devices, interacting with physical transmitters.
For more on iBeacon at an earlier post, click here.  

Near field communication (Android): 4 cm

iBeacon: 160 yards; scalable.

Annual EIA Report On Drilling Production, 2012 For Key US Regions

Don sent me this. An incredible link. I will link it on my "data links" pages.

When you get to the link, scroll down. Interestingly enough, "The Bakken" is listed first.

They Will Simply Go Without; For The Archives -- ObamaCare Will Ultimately Succeed

FoxNews is reporting:
While millions of Americans are watching their individual polices get canceled due to ObamaCare regulations, the new health care rules are also having a major impact on college campuses. For decades, universities and colleges have offered students bare-bones policies. 
But because of the Affordable Care Act, those policies no longer cut it – and universities are forced to decide whether to offer significantly higher-cost plans or cancel coverage altogether. The new rules affect a broad swath of American schools, especially the small ones. 
At Bowie State University in Maryland, the cost of student health insurance policies went from roughly $100 a year to $1,800 a year. 
The cancelled plan offered $5,000 worth of medical coverage to students for just $54 per semester. University administrators said an acceptable replacement under the Affordable Care Act would have cost $900 per semester, a 1,500 percent increase.
This is a challenging subject. I bought those "cheap" (as opposed to "inexpensive") college policies for my daughters when they were in college. I knew they were fairly worthless, did not cover much. I bought them for one purpose: when they showed up at the emergency room or clinic, they would not be turned away for lack of insurance. That "cheap" policy was their ticket to the waiting room. I knew I would have to figure out how to pay for their medical care, but at least they were getting it and not getting turned away. But the policies covered almost nothing; had high co-pays; and high deductibles.

They were a scam but we all bought into it. Some of us bought into it because we were ignorant; others bought into it so our students would at least have access. At a cost of $54/semester it was worth it.  But anyone who thought $54/semester way going to guarantee them comprehensive medical care would have been in for a colossal shock if they had actually needed it.

*******************************
For The Archives
For The Date-Time Stamp

An unedited note to a reader:
ObamaCare will fail in its present form, but one cannot put the genie back in the bottle. Obama will leave in disgrace, but he will be vindicated several years (maybe a decade) after he leaves office. It will take a few years (maybe a decade), but gradually his vision of ObamaCare will be in place.

ObamaCare will fail in its present form, but one cannot put the genie back in the bottle (repeating).

Consumers will love the benefits (as military members love Tricare benefits); providers (hospitals, clinics, and physicians) will love getting paid for everything (right now they write off about 20% of patients who cannot pay/don't have insurance) which ObamaCare will pay; and insurers would go broke (they're holding the bag) but they will be bailed out.

The "bail out" will be the way the US funds the American Health Service, exactly like British National Health Service, but the taxpayer money will be laundered/funneled through the insurance companies. Insurance companies will still be needed, because they will eventually be given permission to write "ultra-gold" policies for the elite and the super-rich.
The transition will be painful and extremely costly but there will be winners.

The only major thing that needs to be changed: the deductibles will be lowered, and it's possible they will be lowered based on income.

The biggest winners will be investors in large corporations. Starting next year, corporations will transition their health care costs to someone else. IBM, Time Warner, all the rest have already started. 

Good News For The Bakken: Gasoline, Diesel Supplies Fell Way More Than Expected Last Week

The Wall Street Journal is reporting:
Gasoline and diesel prices rose Wednesday after government data showed strong demand for the petroleum products for this time of year, while stockpiles fell more than expected last week.
The amount of crude distillates, such as diesel and heating oil, stored in the U.S. fell by 4.8 million barrels in the week ended Nov. 15, according to the Energy Information Administration.
Analysts polled by The Wall Street Journal had predicted a decline of only 500,000 barrels. [These must be the same analysts that do the weekly unemployment claims projections.]
In the same week, implied demand for distillate fuel rose 14% from the previous week to 4.3 million barrels. It was a six-year high for that week in November. Refiners have been producing large amounts of diesel for export to Europe and Latin America, where it is more widely used.
"Demand for distillates was pretty high last week, and even though gasoline demand dipped below 9 million barrels a day, it's unseasonably high for this time of year," said Carl Larry, president of Oil Outlooks and Opinions, a trading newsletter.
Gasoline use in the U.S. usually tapers in November as early-winter weather in some parts of the country keeps motorists off the road. Stockpiles of gasoline fell by 345,000 barrels last week, more than the 100,000-barrel decline analysts had expected.
This is a huge story. In the recent special issue of Bloomberg Businessweek there is a graphic of the amount of diesel being exported overseas. The graphic looks like the graph of Bakken oil production: straight up.

Update On Devon Deal In The Eagle Ford: Did Devon Overpay? $25K To $34K/Acre? $60,000/Acre

Updates

Later, 7:04 a.m. CT: now, over at SeekingAlpha, Richard Zeits suggests Devon may have paid $60,000/acre. If so, the Bakken is way, way undervalued. 
 
Original Post

The Wall Street Journal  is reporting:
Devon Energy Corp. DVN -0.03% said its $6 billion purchase of a big stake in Texas' Eagle Ford Shale is only the first step in a move from its natural-gas roots to become a fast-growing oil company.
The purchase of GeoSouthern Energy Corp.'s existing wells and 82,000 acres for future drilling will increase Devon's overall output 9% next year and add 20% to earnings per share, Devon said Wednesday.
The Oklahoma City company will sell what it considers to be its noncore businesses throughout the U.S. and Canada, including 30% of its natural-gas output.
Investors will "find that the new Devon is a significant North American oil producer capable of delivering high rates of growth in high-margin oil production while generating free cash flow," Chief Executive John Richels said in a conference call.
Devon's shares fell two cents to close at $62.75 Wednesday on the New York Stock Exchange after the acquisition was announced.
The stock jumped 5% Tuesday after The Wall Street Journal reported that the deal was in the works. Analysts said the deal price seemed high. International Strategy and Investment Group LLC calculated the cost of the undrilled sites at about $34,000 an acre, while previous high-water marks for Eagle Ford acreage were closer to $25,000.
Compare with Bakken acreage here.

Thursday: On Deck -- The Fake Unemployment Numbers; The Lost Decade (The Obama Legacy And It's Not ObamaCare); Apologizing In Triplicate; UN Climate Meltdown An "Epic Fail"

Active rigs: 185

RBN Energy: Part 2 -- MRO's strategy for the Ohio Utica.
Increasing production of naphtha range material such as condensates and natural gasoline in the southeastern Ohio section of the Utica shale will soon exceed the capacity of local refineries to process such light hydrocarbons. Midstream logistics companies like MPLX are developing infrastructure to transport condensate, natural gasoline and the more limited supplies of crude produced in the Utica to refineries further afield. There is also demand for condensate and natural gasoline to be used as diluent to reduce the viscosity of Western Canadian heavy crude bitumen. Today we describe MPLX and its sponsor Marathon Petroleum Corporation’s (MPC) recently announced long term takeaway transportation plans.
The Wall Street Journal

With all my cross-country traveling, I've always wondered about these toll roads. Today TWSJ has an article on these roads are doing. Not so well.  
Global investment firms such as Australia's Macquarie Group Ltd. and Spain's Ferrovial SA assembled toll-road deals, often financing them with heavy debt based on assumptions that rising toll receipts would cover payments.
But the financial crisis and recession defied assumptions. U.S. driving peaked at 3 trillion miles in 2007, then started on its largest decline since World War II, federal data show. The housing bust crimped development plans along new roads, helping render traffic forecasts inaccurate.
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Health insurance policy roll backs are not going to happen. No matter what the president promised. Period. Do. That train has left the station.
Many people whose existing health-insurance policies were canceled due to the new federal health law won't be able to extend them, despite President Barack Obama's request that insurers allow them to do so. Some carriers say they may not or won't reinstate canceled policies because of a lack of time to make changes and other obstacles. Others say the one-year extensions would come with higher rates. At least five states—New York, Washington, Massachusetts, Minnesota and Rhode Island—have rebuffed Mr. Obama, meaning insurers can't reinstate policies there even if they do so elsewhere.
The states are tracked here.



The fact that the president even suggested this (and that journalists lapped it up) tells me that neither (the president, nor the journalists) know how the insurance industry works nor what the insurers have learned from the roll out debacle.

Meanwhile, small firms are going to get killed with ObamaCare. I've been blogging about this from day 1.
When Patrick Norris renews his small business's health-care plan in March, he'll need to switch to a costlier plan that complies with the Affordable Care Act.
But that isn't the only reason why Mr. Norris, co-owner of a manufacturing company in New Iberia, LA, expects the premiums he pays on behalf of his 100 employees to be significantly higher in 2014.
Starting next year, small businesses are among those poised to bear the brunt of a little known tax created by the Affordable Care Act that will impose an annual "fee" on health-insurance companies. The fee is expected to bring in a total of $8 billion next year and as much as $14.3 billion by 2018, according to the legislation, and will be spread out among insurers based on the percent of the market they cover.
But the Congressional Budget Office and industry experts say the expense will largely be passed on to small businesses and consumers who buy their own policies in the form of higher premiums.
Well, duh, of course, the insurance companies are going to pass this "tax" on to the consumer. This is not rocket science.

But small businesses will listen to their CPAs and cost-shift their employees to the individual mandate. Doing so will solve several problems, as I've posted before.

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Update on Devon deal in Eagle Ford here.

Folks are missing the diesel export story. It's a huge story.

Op-Ed from TWSJ:
The ObamaCare train wreck is plowing through the White House in super slow-mo on screens everywhere, splintering reputations and presidential approval ratings.
Audiences watch popeyed as Democrats in distress like Senators Kay Hagan, Mary Landrieu and Mark Pryor decide whether to cling to the driverless train or jump toward the tall weeds.
The heartless compilers of the Washington Post/ABC poll asked people to pick a head-to-head matchup now between Barack Obama and Mitt Romney. Mitt won. This is the most amazing spectacle of mayhem and meltdown anyone has seen in politics since Watergate. No question, it's tough on Barack Obama. But what about the rest of us?
For many Americans, the Obama leadership meltdown began five years ago. In fall 2008, the U.S. suffered its worst financial crisis since the Depression. That wasn't Barack Obama's fault.
But five years on, in the fall of 2013, the country's economy is still sick. Unemployed middle-aged men look in the mirror and see someone who may never work again. Young married couples who should be on the way up are living in their parents' basement. Many young black men (official unemployment rate 28%; unofficial rate off the charts) have no prospect of work.
Washington these days kvetches a lot about what Healthcare.gov is doing to the Obama "legacy." Far worse than ObamaCare, though, is that the 44th president in his second term presides over a great nation that is punching so far below its weight that large swaths of its people have lost heart.  
Time Magazine: Piling On

From Time:
A good President needs a big comfort zone. He should be able to treat enemies as opportunities, appear authentic in joy and grief, stay cool under the hot lights. But humility doesn't come naturally to those who decide they are qualified to run the free world. So the sign that the Obama presidency had reached a turning point came not when his poll numbers sank or his allies shuddered or the commentariat went hunting for the right degree of debacle to compare to the rollout of Obamacare.
It happened when he started apologizing. In triplicate. For not knowing what was going on in his own Administration. For failing to prevent his signature achievement from detonating in prime time. For not telling the whole truth when he promised people that Obamacare would not touch them without permission: "If you like your health care plan, you can keep your health care plan."
Obama's supporters can decry a "feeding frenzy," but this is a critical moment for a President whose agenda for a second term amounted to little more than being not as lame as the other guy. The HealthCare.gov website may or may not get fixed on deadline, the senior staff may be booted and rebooted, but it is already too late to avoid a pageant of media scrutiny, Republican merriment, a rebuke even from Bill Clinton and a host of existential questions: Can this policy be saved? What is left of Obama's second term if it is consumed by fixing an unpopular policy from the first? How could a White House appear so confident and incompetent at the same time?
Catching Up From Yesterday

UN climate meltdown yesterday. Ends in disarray. The Daily Caller reports "epic fail."
Poor countries pulled out of the United Nations climate talks during a fight over transferring wealth from richer countries to fight global warming.
The G77 and China bloc led 132 poor countries in a walk out during talks about “loss and damage” compensation for the consequences of global warming that countries cannot adapt to, like Typhoon Haiyan. The countries that left claim to have the support of other coalitions of poor nations, including the Least Developed Countries, the Alliance of Small Island States and the Africa Group.
Poor countries have demanded that the developed world give them $100 billion annually by 2020 to prepare for the impacts of global warming, such as heat waves and droughts. Brazil even put forward a proposal last week that would have made rich countries pay for historical greenhouse gas emissions.
$100 billion annually. What a scam.