Wednesday, January 1, 2014

QEP, SM Energy to Report Nice Wells Tomorrow -- Wells Coming Off Confidential List Thursday

Wells coming off the confidential list:
  • 21677, 854, OXY USA, Brew 2-13-12H-143-96, t7/13; cum 52K 11/13;
  • 23408, 43 (no typo), Hunt, Scorio 1-13-24H, t8/13; cum 20K 11/13;
  • 25059, drl, Hess, BB-Chapin 151-95-0506H-4, Blue Buttes,
  • 25139, 1,319, Whiting, Tifft 21-18-2H, Pleasant Hill, t7/13; cum 40K 11/13;
  • 25184, drl, Slawson, River Rat Federal 7-23-14TFH, Four Bears,
  • 25508, drl, BR, CCU Powell 41-29TFH, Corral Creek, 
  • 24691, 291, Baytex, Marcella 36-25-162-98H-2XD, Whiteaker, t8/13; cum 20K 10/13;
  • 25002, drl, SM Energy, Annie 12X-18HA, Poe,
  • 25425, drl, Hess, EN-Nelson 155-94-3328H-2, Alkali Creek, no production data,
  • 25480, drl, CLR, Malcolm 4-20H1, Sauk, no production data,
  • 25567, 2,307, QEP, Dodge 4-6-7BH, Grail, t11/13; cum 12K 11/13;
  • 25572, 2,350, Statoil, Holm 9-4 6H, Alger, t11/13; cum 5K 10/13;
  • 25658, 1,732, QEP, Ernie 4-2-11BH, Grail, t10/13; cum 27 11/13;
  • 25659, 2,191, QEP, Ernie 3-2-11BH, Grail, t10/13; cum 24K 11/13;

25002, see above, SM Energy, Annie 12X-18HA, Poe

DateOil RunsMCF Sold

25658, see above, QEP, Ernie 4-2-11BH, Grail:

DateOil RunsMCF Sold

A Note to the Granddaughters
Talent On Loan From God

Norah Jones and Billie Joe Armstrong, Foreverly

I wasn't thinking of this album when I wrote the "talent on loan from God" -- stolen from Rush Limbaugh.

I thought of "talent on loan from God" while reading the last few pages of the David Shields and Shane Salerno biography of J. D. Salinger. It's the only Salinger biography I've read and I'm pretty sure it's the only Salinger biography I will ever need to read. This one is quite excellent.

It is interesting to look at the Amazon reviews. There are about 100 reviews, to date, with 26 giving the book "5 stars" and 25 giving the book "1 star" and then everything in between. It is obvious that the majority of amateur reviewers have taken sides, having read the book or not: those who think Salinger was God, those who thought he was a nutcase after WWII, and those, like me, who never knew his story until this book. It was my understanding he was a recluse. Salinger gave the word "recluse" a new meaning and raised it to an art level.

I think I've blogged about this before. I can't remember. I can't recall reading Catcher in the Rye in high school or at any time prior to 2011. Then in 2011, or thereabouts, maybe it was earlier, when visiting family in Portland, Oregon, our younger daughter, knowing that I had an aggressive reading program, gave me her copy of Catcher.

I really enjoyed Catcher but thought I would only read it that once. Having read the biography, it's obvious I need to read Catcher again. I missed a lot.

The biography, the novel, the comments regarding Salinger -- my first thought -- talent on loan from God. Salinger was neurotic, probably not psychotic, but for laymen, it's probably all the same. But that's okay.

Global Warming Intensifies

I love it! Drudge Report has this as the headline: "Global warming intensifies" with a thermometer resting at minus 40 degrees. I don't know if folks know this but minus 40 Celsius is the same as minus 40 Fahrenheit.

CBSNews is reporting:
The recent surge of arctic air in Wisconsin has led to record-breaking low temperatures in places like Owen, a Clark County town that hit minus 31 degrees this week. A La Crosse Tribune report says records were tied or broken in about half a dozen cities in the region.  
The La Crosse airport hit a low of minus 17 degrees. That tied a record set in 1976. Friendship also tied a record with temperatures of minus 22.
Owen got down to minus 31 degrees, two degrees colder than the previous record set in 1963.
The CBC is reporting:
In terms of astonishing weather facts, it doesn't get much more impressive than being as cold as a distant planet for a day.

The Manitoba Museum is reporting Winnipeg's temperatures on Tuesday were actually as cold as the surface of Mars.
According to the Curiosity Rover, Mars reached a maximum temperature of -29 C on Tuesday, a temperature Winnipeg only reached shortly before 3 p.m.
This December’s average temperature so far is close to –21 C. That is only about the fifth coldest ever.

Little Drummer Boy, Pentatonix

Back To The Kinder Morgan Ocean-Going Tanker Story


January 7, 2014: whoopee! Just as I said, regarding the Kinder Morgan Energy/tank company story. Motley Fool has a piece on this same story and comes to same conclusion!  
So while Enterprise and Buckeye stick closer to the mainstream in the midstream sector, Kinder is again cutting a slightly different path. Keep an eye on this transaction and its performance after it's consummated. Kinder might just use its "bird's eye" view of the oil and gas industry to put more money to work in the Jones Act area if the deal works out well. 
Original Post

On Christmas eve I happened to post a story, actually a response to an article in SeekingAlpha. It had to do with Kinder Morgan's purchase of two tanker companies. This was the purchase:
Kinder Morgan Energy will spend $962 million in cash to buy two tanker companies as the transportation and storage company expands its shipping business.
American Petroleum Tankers has a fleet of five tankers that can hold 330,000 barrels of cargo.
State Class Tankers has commissioned the construction of four tankers that hold 330,000 barrels of cargo. They are expected to be completed in 2015 and 2016. 
I made some comments, thinking out loud, behind the strategic thinking on this purchase.

Don sent me an interesting link to a thread over on the Yahoo!Finance MDU board which probably connects the dots better than I did. The link takes you to a Wall Street Journal article: Asian refiners get squeezed by US energy boom
Asian oil refiners have become significant players in the global market for liquid fuels, thanks to investments in large, modern facilities. But they are facing growing pressure from a previously unlikely region—the U.S. Refiners in the U.S. have gained access to relatively inexpensive domestic shale oil and Canadian crude, which is giving them a competitive edge in the export market for fuels such as gasoline and diesel.
Rivals in Asia started feeling the pressure when tankers leaving U.S. ports started unloading cargo in Europe and South America. Now the U.S. companies are starting to venture into Asia. BP PLC and Vitol Group SA in recent weeks have sold U.S. jet fuel to Chinese buyers, according to Singapore-based traders, reversing the usual flow and underscoring the impact that unconventional oil is having on the global fuel trade.
Japanese utility Tokyo Electric Power Co. said in February that it would import 200,000 tons of liquefied petroleum gas from U.S.-based Enterprise Products Partners EPD  between 2013 and 2016. The deal makes sense for Tepco, which has had to sharply increase its purchases of hydrocarbons since suspending operations at its nuclear power plants in the wake of the March 2011 earthquake and tsunami.
Recently RBN energy had a piece on global propane prices, and here's another reference:
Propane, for example, costs around $620 a ton in the U.S. compared with more than $1,000 a ton in China. The price difference for butane is even wider, according to DNB Bank.
For more, see this Market Realist story on how soaring US propane exports are affecting prices.
Currently, domestic propane trades at a discount to international propane. This is because domestic propane production has continued to grow and despite a growing amount of propane exports, export capacity has been limited by a lack of infrastructure. However, this price disparity provides an economic incentive to build the necessary infrastructure to export propane. Midstream companies have already announced projects to build or expand propane export terminal facilities, which should result in increased propane exports and support for propane prices.
This year Enterprise Products Partners finished an expansion of an export facility earlier this year and current propane deliveries are over 7.5 million barrels per month. EPD also recently announced an expansion project that will add 1.5 million barrels per month of capacity starting 1Q15. Additionally, the company announced construction of a second export terminal on the Gulf Coast with initial loading capacity of 6-6.5 million barrels per month of propane or butane, expected to be in service 4Q15. In total, the company expects to have loading capacity of 15-16 million barrels per month of low ethane propane and/or butane at its marine terminals.
Interesting, huh? Puts the Kinder Morgan ocean-going tanker story in perspective. I'll leave readers with this:
Until recently, U.S. oil products mainly went to markets that were relatively close to refining centers in and around the Gulf of Mexico, where more than 40% of U.S. refining capacity is located.
Brazil, for example, has been buying more U.S. diesel, displacing at least three shipments a month from Asia, according to oil traders. Traders estimate U.S. diesel deliveries to Europe have doubled to around 1.3 million barrels a day over the past year. Overall, European imports have remained relatively stable at between three million and four million barrels a day.
That has undermined the profitability of fuel sent to Europe from Asia, Russia and the Middle East. The more-recent forays of U.S. shipments to Asia could become more common once an expansion of the Panama Canal is completed in 2016, likely cutting shipping costs and further increasing the price competitiveness of U.S. exports.
Readers should go to the linked article for the full story.

Random Look At Another Confidential Stockyard Creek Well That Is Producing

22958, conf, Zavanna, NSI 23-24H, Stockyard Creek:

DateOil RunsMCF Sold

Kind of exciting. Stockyard Creek is a monster field.

Harold Hamm (CLR) Q&A: 2014

Don sent me an excellent IBD Q&A with Harold Hamm. The story is here.

My comments back to Don:
  • it is interesting how Harold Hamm compares horizontal drilling and fracking. He is probably the world's expert on the subject, and he sees horizontal drilling as the key, fracking as a "distraction" (he used a different word)
  • he is also correct about the price of oil with regard to OPEC
  • he doesn't want to get into a discussion about federal fracking rules; he's a great negotiator. I learned that in Air War College. Once you enter into a discussion, everything is on the table; everything is negotiable; everything has a price. If one does not want to see federal fracking rules, one doesn't start talking about that possibility. The discussion would open doors
  • it was interesting to see where IBD placed CLR in relation to EOG, others
  • it's striking to see that CLR accounts for 65% of all Bakken oil production. Error -- see first comment. A reader noted my error. Sixty-five percent of CLR's total production comes from the Bakken (other production, for example, comes from Oklahoma SCOOP).
In case the link is broken: 
Continental, whose stock lifted 53% in 2013, is the sixth largest name in IBD's Oil & Gas-Exploration & Production industry group, after EOG Resources, Anadarko Petroleum, Pioneer Natural Resources, Devon Energy, and Noble Energy.
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

At the linked story, Harold Hamm mentions that the "land grab" is probably over, and that the industry will see a more stable and orderly drilling environment in 2014. He thinks that some folks got ahead of themselves in projecting American energy independence. He says that the US is still on track to become energy independent along earlier predictions of taking ten years -- now 2020, 2021.

Apple Mac Pro

Wow, I knew they were good, but I did not know they were this good.

Side-by-side comparison of three top desktop computers -- way more computing power than I will ever need but exactly what professionals are looking at. 

The critics are the best judges -- see the comments.

Apple Mac Pro is priced significantly lower than the other two. I like this comment: if the Apple computer is $700 less it's "competitively priced" but if the PC is $700 less it's "far less expensive?"
That's been my impression for the past 20 years. 

Update On The Atlanta Wells, Baker Oil Field, Southwest Of Williston Near The River

I track the Atlanta wells here, one of the first 14-wells pads in the Bakken. 

It sure has been a long time getting these wells completed.

The first two were spud in November, 2012, and tested April, 2013.

All of the wells have now been drilled to total depth, on DRL status, and folks are waiting for test (IP) results.

It is possible to frack in very, very cold weather, but it is my understanding that it is more expensive and more difficult (I don't know if that still holds true). If I recall correctly, some companies (EOG?) did not used to frack in the dead of winter. Be that as it may. There may be something happening on the Atlanta pads.

The two wells that were completed first, tested in April, 2013, are now off line, and have been off-line pretty much for the past three months (through November, 2013, the most recent month for which we have data).

For #23370, Atlanta 3-6H:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

For #23372, Atlanta 1-6H:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

 [I assume the "-2" for bbls of oil produced in November, 2013, for #23372, is a typographical error unless Harold Hamm is putting oil back into the ground, waiting for better crude oil prices.]

Enough Is Enough -- MInot

The Minot Daily News is reporting:
2013 was a record-setting year for annual precipitation in the Minot area. In many years that would be welcome news for cropland, hayfields, rivers and sloughs. But a year of unprecedented precipitation throughout the region certainly has grabbed the attention of forecasters and weary residents still struggling to recover from devastating flooding in 2011.
Evidence of the effect of 2013's heavy precipitation can be seen throughout the Minot area. Water tables rose during the year. In places such as Rice Lake southwest of Minot, there was visible proof of aquifers reaching levels of saturation that exceeds recorded history. Many sloughs were full to overflowing at freeze-up. Excess water is seemingly everywhere, but what does it mean?
The reaction of most people who live in wetter than normal areas is that enough is enough. While it is much too early to tell what spring runoff will bring, each snowfall between now and the spring melt will be watched carefully and its moisture content closely evaluated. What is known is that whatever amount of snow that falls in the weeks and months ahead will land on saturated ground.
ObamaCare: Too Little Too Late

Finally, the mainstream media is reporting what bloggers have been reporting since the beginning. I remember ObamaCare was "sold" on the concern that 30 million Americans did not have health insurance. Now we learn that a lot of those 30 million wouldn't qualify for ObamaCare anyway. To qualify for ObamaCare one has to have "income" and many of the 30 million uninsured were uninsured for exactly that reason: no income.

It appears another 8 million who have lost their insurance due to ObamaCare will be added to the original 30 million uninsured, minus the 1.1 million who "might" be insured through the federal website and another 500,000 who "might" be insured through state exchanges. 30 + 8 - 2 = 36 million uninsured.

It would be "nice" if that was the extent of the debacle. Fiscal Times via The Week exposes how badly ObamaCare really is. We had to pass the bill to see what was in it.

Mandatory birth control for Catholic nuns is as good a soundbite as any for the craziness of ObamaCare. It took an Obama-appointed Supreme Court judge to "temporarily" stop that craziness. The White House has until Friday, this week to respond. It will be interesting to see how they spin this. Catholic nuns requiring birth control coverage.

For the archives. Fiscal Times, again:
Now, younger consumers who will largely only see a doctor for an annual wellness check and perhaps an acute-issue clinic visit have to pay higher premiums for comprehensive coverage they don’t need, and won’t use. Most of them will have to accept high deductibles just to keep those skyrocketing premium costs within reach – which means they will have to spend thousands of dollars out of pocket anyway before they see any new benefit from comprehensive coverage.  It’s a bad deal for younger and healthier consumers, but the flood of cash is needed by insurers to cover the expenses of older and sicker Americans who will flood into the risk pools.

Based on enrollment figures already released from federal and state exchanges, the age distribution for enrollees in private-insurer plans skews too old, at least so far. Kentucky, where Obamacare advocates have claimed their greatest success, only has 24 percent of enrollments among those under 35 years of age compared to 39 percent above 55. In order to keep premiums from spiking again in 2015, the percentage for younger enrollees has to be close to 40 percent to ensure enough funds coming into the risk pools.
Needless to say, the White House is desperate to get younger Americans to provide that rather regressive wealth transfer.  Only 25 percent of the respondents [in a recent poll] are planning or leaning toward enrolling in private insurance plans, despite the fine that will be imposed for non-compliance. They can do math well enough to know that spending thousands of dollars on premiums and then more thousands on out-of-pocket deductibles for benefits they’re unlikely to access makes less sense than paying a few hundred dollars in fines and a cash price for the occasional clinic visit.
By the way, young, healthy millennials are not going to pay out-of-pocket for annual check-ups. Remember, the annual deductible must be met before insurance starts to kick in.

North Dakota Pipelines Approved -- That Was Easy

The Dickinson Press is reporting (note the Heart River crossing):
State utility regulators gave their blessing this week for two pipelines that will carry petroleum byproducts from a new diesel refinery near Dickinson to a nearby rail hub, crossing the Heart River in the process.
Dakota Prairie Refining LLC, which is building a diesel refinery slated for startup in December 2014, will use the 6- and 8-inch-diameter pipelines to transport the byproducts about 5,900 feet from the refinery’s storage tanks to Lario Shipping LLC’s rail hub.
Data points:
  • a $5 million project: $5 million for a one-mile pipeline
  • the first of its kind built in the United States since 1976
  • it will process 20,000 barrels of Bakken crude per day
  • it will produce 7,000 to 10,000 barrels of diesel fuel daily 
  • the diesel will be trucked to fueling stations within 50 miles of the refinery
The commission also approved Bakken Oil Express LLC’s application to construct a 38-mile, 16-inch-diameter crude oil pipeline that’s expected to reduce truck traffic on State Highway 22 between Killdeer and Dickinson. Original post and updates here.