Thursday, April 24, 2014

Huge Slawson Case On Tap; Thursday -- April 24, 2014; Important RBN Energy Post On Flaring In The Bakken

Earnings reports:
  • Carbo Ceramics (CRR): 80 cents; misses by 7 cents; impacted by weather.  
  • CAT: blows through forecast; reports $1.44; forecast $1.24
  • GM: 6 cents; either beat by 2 cents or in-line depending on analyst
  • HP: blows through forecast; reports $1.59, vs $1.48 forecast 
  • New York Times: beats by 4 cents
  • Noble Energy (NBL): 55 cents well below forecast of 75 cents, but excluding certain items, adjusted earnings at 82 cents/share 
  • Verizon: $1.15 in earnings and 84 cents in adjusted EPS vs 87 cents forecast 
  • UPS: big miss; misses by 10 cent; reports 98 cents vs $1.08; though others forecast $1.48
Remember the NDIC hearing today for the huge Slawson case. Link here for details. I don't know the time -- maybe some reader knows the time when the hearing starts. 

Top story in WSJ: Apple moves to reward investors.

I talked about this awhile back: slowing train traffic will have huge repercussions. Auto industry being hurt by slow train traffic. Big story in WSJ.

RBN Energy: a must read -- analysis of the flaring problem in the Bakken --
From the start of the Bakken oil production boom four years ago, a substantial portion of the associated natural gas produced has been flared, mostly due to a lack of gas gathering and processing infrastructure. Widespread flaring continues as the energy industry struggles to keep pace with the Bakken’s explosive growth. Finally, though, a confluence of events—new gas gathering and processing capacity coming online, new rules on flaring, and the emergence of new technologies for capturing and using stranded gas--suggests flaring activity may decline significantly over the next few years. In this new blog series, we examine what the energy industry, the government and entrepreneurs have been doing to help solve one of the shale era’s most persistent and high-profile problems.
As we said a while back in Why Will Bakken Flaring Not Fade Away?, flaring—while frustratingly wasteful—is done for both environmental and economic reasons. In any situation where natural gas (methane, a particularly potent greenhouse gas) would otherwise escape into the atmosphere (known as venting) it is less damaging to the environment if that gas is flared (burned). As for economics, flaring allows oil production to begin before pipeline infrastructure is in place to take away the associated gas that is produced. That is, if you drill a well for Bakken oil and start production, you can capture the oil in tanks and transport it to market in trucks and railcars until an oil pipeline is built, but you cannot do the same with the well’s associated gas.
In the early years of the region’s oil boom, companies were wary to invest up-front in gas pipelines and processing plants until they knew for sure just how much gas would be produced. They have been playing catch-up ever since, and (as we will get to later) they finally are starting to close the gap between gas infrastructure needs and gas infrastructure in operation. In Set Fire to the Gas—The Fight to Limit Bakken Flaring, we explained that substantial flaring could occur even at wells that are connected to gas gathering systems and processing plants. Why? New wells connected to a gathering system produce gas at higher initial production rates and higher pressure. Gas from these new wells takes up pipeline capacity and knocks older, lower-pressure wells off the gathering system, causing their gas to flow back to the wellhead and require flaring. The solution to pressure problems that throw older wells off the gathering system is to increase compression in the system or to add additional capacity to existing pipelines by looping. Again, this is a constant game of catch-up.
Active rigs:

Active Rigs187187210175110

Rigzone is reporting that BP sells assets in some of its Alaska North Slope assets --
BP plc announced late Tuesday that it has agreed to sell interests in four of its Alaska North Slope assets to U.S.-based independent oil and gas firm Hilcorp Energy. However, the firm said it remains committed to plans to increase investment at Prudhoe Bay, which have resulted from recent oil tax reform by the State of Alaska.
"This agreement will help build a more competitive and sustainable business for BP in Alaska," BP Upstream Chief Executive Lamar McKay said in a company statement.
"It will allow us to play to two of our great strengths, managing giant fields and gas value chains. We will now concentrate on continuing development and production from the giant Prudhoe Bay field and working to advance the future opportunity of Alaska LNG."
The Prudhoe Bay plans include adding two drilling rigs, one in 2015 and another in 2016, for a total incremental investment of $1 billion over five years. BP estimated these activities will account for some 200 jobs in Alaska and 30 to 40 additional wells being drilled each year.
The Wall Street Journal

 More good news for Apple: FCC to repeal net neutrality; big operators win.

Cold War II gets hotter: Russia warns Ukraine. I assume Kerry and Obama are drawing new lines int eh sand.

US home sales plunge almost 15% in March.

Labor Department pursues war on coal with new coal-mine rules.

Georgia expands gun owners' rights:
Called the "Safe Carry Protection Act," the law eliminates a host of restrictions on Georgians' ability to carry guns in public and allows people licensed to carry weapons outside the home to bring them into some bars and many state- and local-government buildings.
The law also largely eliminates criminal penalties for people found with guns at airport-security checkpoints and removes gun-permitting restrictions for anyone who has pleaded "no contest" to a criminal charge.
In addition, the measure extends the state's "stand your ground" law to convicted felons. Such laws generally grant people more leeway to attack and even kill someone who is threatening them.
 Seven fruitless weeks searching for Malaysia airplane; search efforts to get a reset.

France to broaden spending cut to help narrow deficits required by European Union.

Facebook results surge on ad revenue.


I talked about this some weeks ago -- slowing down rail traffic will have huge repercussions. Auto industry already feeling the pinch and it's been less than a month for the new rules. WSJ is reporting:
New cars and trucks—including some of the season's hottest sellers—are stacked up outside U.S. factories as auto makers and railroads struggle to overcome delays brought on by winter weather and the rise of production outside the Midwest.
The logjams have left dealers short of some popular models, such as the Ford Explorer sport-utility vehicle and Toyota RAV4, ahead of the biggest months of the year for new-car sales.
Lost car and truck sales are another example of widespread fallout from U.S. rail traffic snarls. Farmers, grain elevators, and coal and ethanol shippers have all been hurt. Snowy, frigid weather and rising grain and coal shipment forced railroads to run shorter trains and more of them, clogging routes through Illinois, Michigan and southern Ontario.
Service is improving and eventually will be back to normal, the railroads and many auto makers say. However, some shippers believe the problems could linger, aggravated by a booming crude-by-rail business that barely existed five years ago and is crowding the rails. Other factors include the growth of U.S. auto exports, which means more vehicles are heading to coastal ports and returning empty, the rise of Mexico as a car production powerhouse, and the scrapping of rail car carriers during the recession.
The Keystone would not have eliminated the rail problem but in the middle of a North American energy revolution,  new pipelines are critical. The problem is not simply that the Keystone was stopped; the success of the activists here emboldened activists everywhere, slowing down pipelines everywhere across the US and Canada.


Canada toughens CBR rules. Great headline. I don't see much impact.

Dr Pepper Snapple profit soars; must be the new marketing campaign targeting men.

Delta's profit surges despite weather.

The Los Angeles Times

Jury awards Texas couple $3 million for health-related problems supposedly due to fracking.  

Obama: US ready to hit Russia with more sanctions. It will be interesting to see who wins this game of chess. Someone in Europe or America better be ready to pony up a lot of natural gas for the Ukraine and for Poland next winter if push comes to shove. The Berlin airlift all over again, this time natural gas, not coal.

The Dickinson Press

Oil revenue way up for "tribes"; money going for roads, infrastructure. In less than one year, the Three Affiliated Tribes have collected $184 million in oil tax revenue, nearly equal to the amount collected during the entire 2011-13 biennium. The reservation accounts for nearly 30% of North Dakota's total production.

Buffett: moving oil safely by CBR a major industry concern. He added that the delay in the construction of the Keystone pipeline was unlikely to prompt additional purchases of tank cars at Berkshire railroad unit BNSF Railway. Earlier this year the railroad said it plans to buy its own fleet of up to 5,000 new crude oil tank cars with safety features that exceed the latest industry standards.
Oil by rail has surged in recent years, helped by a boom in North Dakota. Traffic is now running 10 percent ahead of last year at this time, with BNSF accounting for roughly a third of U.S. oil-by-rail traffic. 

Global Cooling

Yahoo!Finance is reporting:
Consider this:
-In 2013, the UK had the coldest spring since 1963.
-In March 2013, Northern Japan received record snowfall–up to 16 ft thick just south of Aomori.
-In October 2013, the worst frost in more than 80 years hit Chile and damaged 50 million boxes of fruit for export—damages were over $1 billion.
-And my personal favourite—an expedition vessel full of Climate Change scientists became trapped in Antarctic sea ice 10 feet thick on Christmas Day 2013.
These true-life stories are examples of global cooling—from all over the globe.
In Parts I and II of this series, I outlined the long term cycle of temperature changes on Earth, and how sunspots have had an eerily accurate correlation to earth’s temperatures for centuries. Data strongly suggests that solar cycles have a definite impact on the world’s climate.
The President of the United States has pretty much been wrong on everything. The good news: the countdown calendar at the sidebar at the right will go under 1,000 days by the end of the week. Lamest of lame ducks.

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