Friday, February 21, 2014

Completely Off The Radar Scope: Temple Oil Field

A reader suggested I update Temple Oil Field. Having just updated the field, I see why. It's going to be an incredible field.

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On a completely different note, an update on the frozen Great Lakes, and some incredible photographs. 
Great Lakes ice cover topped out at just over 88 percent frozen over on Feb. 13, according to NOAA’s Great Lakes Environmental Research Laboratory. This hasn’t happened in nearly two decades.
Lake Superior, Lake Erie and Lake Huron are closer to 100 percent frozen over, as of Feb. 19, according to NOAA-GLERL.
The most ice cover reported on the Great Lakes, in records dating to 1973, was in 1979 when the ice reached 94.7 percent. Weather Channel meteorologist Jonathan Erdman says that for the past four years, the ice coverage remained around 40 percent or less. The 40-year average peak seasonal ice coverage is just over 51 percent.
For the first time in five years, ice caves on Lake Superior’s south shore are now accessible by walking across the sufficiently thick ice on Lake Superior. This week temperatures are expected to rise above freezing, and the Great Lakes could see some thawing, Erdman says. However, a cold front in the wake of Winter Storm Seneca will open the door to a return to a colder pattern that is likely to hold through the end of February, if not into early March. Given that, it seems reasonable ice cover will make a comeback, and could top the peak value from just before Valentine's Day.

Taking The Bakken To Oklahoma -- Devon

Devon isn't drilling in the Bakken, but the the oil and gas company is obviously watching the North Dakota operators closely. Rigzone is reporting:
US onshore-focused junior oil firm Magnolia Petroleum reported Monday that partner Devon Energy is to drill eight wells on the same spacing unit in Oklahoma as the Marion 1-23 HW well. This will be to maximize the recovery of reserves from both the Mississippi Lime formation and the lower-lying Woodford formation, the firm said.
Magnolia, which has a 4.1-percent interest in the area being drilled, said this will be the first time it will have participated in eight wells on a single section in Oklahoma.  
Magnolia Chief Operating Officer Rita Whittington commented in a company statement: "Just as it has become established practice to drill eight wells on a single unit to maximize the recovery of reserves from both the Bakken and the lower lying Three Forks Sanish formation in North Dakota, we believe more and more operators will do the same in Oklahoma, targeting the Mississippi Lime and Woodford. 

So Much For All That Talk That The Bakken Is Destroying North Dakota

A big "thank you" to Don who sent me this link; I certainly would not have seen it. The Consumerist is reporting:
If you’re living in North or South Dakota right now, you’ve probably got a big ol’ grin on your satisfied face. And well you should, as a new study from Gallup says the Dakotas top the list of states with the highest well-being figures in the nation for 2013.
In case the link is broken in the future, here are the top 10 and the bottom 10:
The Top 10
1. North Dakota: 70.4
2. South Dakota: 70.0
3. Nebraska: 69.7
4. Minnesota: 69.7
5. Montana: 69.3
6. Vermont: 69.1
7. Colorado:68.9
8. Hawaii: 68.4
9. Washington: 68.3
10. Iowa: 68.2
The Bottom 10
50. West Virginia: 61.4
49. Kentucky: 63.0
48. Mississippi: 63.7
47. Alabama: 64.1
46. Ohio: 64.2
45. Arkansas: 64.3
44. Tennessee: 64.3
43. Missouri: 64.5
42. Oklahoma: 64.7
41. Louisiana: 64.9

The President's War On Coal Is Hurting Most Those Who Can Least Afford It; No Wonder We Need To Raise The Minimum Wage; To Pay For The War On Coal -- Both The Campaign And The Consequences

Wow, this is incredible and exactly predictable.

CNS News is reporting (and I assume NBC, CBS, ABC, and Al Jezeera are not reporting):
The electricity price index soared to a new high in January 2014 with the largest month-to-month increase in almost four years, according to the Bureau of Labor Statistics.
Meanwhile, data from the Energy Information Administration, a division of the U.S. Department of Energy, indicates that electricity production in the United States has declined since 2007, when it hit its all-time peak.
To some extent it can be blamed on this severe winter, so it will be interesting to see how the entire calendar year 2014 compares to previous years.

Remember: coal-produced energy is the least expensive (excluding hydroelectricity). Nuclear is next. Then natural gas. Wind and solar are very expensive. It doesn't take a rocket scientist to figure out what will happen when president's war on the least expensive form of energy is succeeding, and the government, through tax credits and loan guarantees, continue to promote the most expensive form of electricity. Spain and Germany found out and are trying to stop the insanity.

This is really quite astounding. The president has put us on the road to New England (see tag at bottom of the blog).

There are three interesting things about electricity and the cost of electricity. It is not a progressive "expense." The rich pay the same price/kwh as the very poor.

The second thing, as part of their income, utility expenses for the poor take up a disproportionate share of their cost of living compared to the upper middle class and the wealthy.

Finally, electricity is not really in the "nice to have" category. It is pretty much something everyone requires, no matter how poor.

The president's war on coal is hurting most those who can least afford it.

More Odds And Ends; Catching Up With The Day's Events

First, a huge thank you to all the readers who sent in multiple stories today. I apologize for not getting back to you sooner. I am beginning a fairly extensive two-week cross-country trip which is occupying my time, both physically and mentally, errands to run and mixed emotions about leaving.

I will get to all the stories. I doubt I will be blogging as much as usual, and when I do, it will be at odd hours, during the next two weeks.

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This is an interesting story about the price of oil. I agree with the premise, the headline, but I have not read the entire article. I will get back to it later. The Dallas Business Journal is reporting:
One month after TransCanada opened the oil floodgates in Cushing, Okla., the West Texas Intermediate price of crude oil is over $100 a barrel and drivers are paying 10 cents more per gallon.
The opening of the Gulf Coast Pipeline cleared up the bottleneck of oil by moving it from the hub in Cushing to refineries in South Texas, said Patrick DeHann, a senior petroleum analyst with GasBuddy.com. The 485-mile, 36-inch diameter pipe, which passes 80 to 100 miles east of Dallas, can carry up to 700,000 barrels of oil a day.
Oil supplies in Cushing have dropped from 35.8 million barrels, down 6 million barrels since the pipeline first opened Jan. 22.
“It’s a sizeable drop. The bottleneck has been removed,” DeHann said.
He quickly points out that there are a number of factors beyond the pipeline that affect oil prices and supplies.
Regardless, gasoline prices in Dallas have shot up to $3.26 per gallon for regular unleaded, 10 cents higher than a week ago, according to AAA.com. They’re still cheaper than a year ago when drivers were paying $3.70 per gallon and some feared gasoline prices would reach $4 a gallon.
I noted the same in a post the other day that neighborhood gasoline went from $2.99 to $3.26 pretty much "overnight."

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Oil and gas boom, 2014. Forbes is reporting:
Where jobs are concerned, Texas has consistently outperformed the national economy in terms of job creation and rate of unemployment in every month since the advent of the Great Recession and the discovery of the Eagle Ford Shale play, both of which took place in October of 2008.  Indeed, during the 24 month period from July 2009 through June of 2011, Texas created 49% of all new jobs created in the United States, and the vast majority of those jobs were either directly or indirectly the result of the state’s oil and natural gas boom, centered in plays like the Eagle Ford in South Texas, the Permian Basin of West Texas, and the Granite Wash play in the Texas Panhandle.
And then it goes on from there.

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Update on the New England propane shortage. Background to this story at this post.  The Burlington Free Press is now reporting emergency propane is on its way:
The Federal Energy Regulatory Commission has used for the first time emergency powers it has under the Interstate Commerce Act to try to alleviate a shortage of propane in the Midwest and Northeast, including Vermont.The Federal Energy Regulatory Commission first issued an order on Feb. 7 for the Enterprise TE Products Pipeline Co., which owns a pipeline that delivers propane and other refined products to the Midwest and Northeast from the Gulf Coast, to give propane top priority in the pipeline for a week.
The commission then extended that order for another week, ending today, sending an estimated 500,000 barrels — or 21 million gallons — of propane north from Houston to Cincinnati, then across Pennsylvania to New York.

For Investors Only; Daily Activity Report; Odds And Ends

A slow day, I suppose. The US men's hockey team lost; it will play Finland tomorrow for the bronze medal. I hear the US women's team also lost to Canada yesterday. I didn't confirm.

The stock market finished relatively flat today after a good week, but that not to say some investors got very, very good news.

Mueller Industries announces 20% dividend increase and two-for-one stock split:
Co announced that its Board of Directors has declared a regular quarterly cash dividend of 15 cents per share on its common stock. This represents a 20 percent increase, or two and one half cents per share increase, over previous quarters. The dividend will be payable March 14, 2014, to shareholders of record on March 3, 2014.

The Company also announced that the Board of Directors has declared a two-for- one stock split to be effected in the form of a 100 percent stock dividend. Stockholders of record on March 14, 2014 will receive one additional share of common stock for each share of the Company's common stock held on that date. 
Sempra Energy increases quarterly dividend 4.8% to $0.66 from $0.63 per share. 

Other news -- 

Windstream is reducing its workforce; expects to incur charge of $9 -10 mln:
Co is reducing its workforce to increase operational efficiency. Co plans to eliminate ~400 positions by March 3. About 175 of those positions are being eliminated through a voluntary separation initiative. Windstream currently has approximately 13,500 employees.
Active rigs in North Dakota:


2/21/201402/21/201302/21/201202/21/201102/21/2010
Active Rigs18718420117094

Ten (10) new permits -- 
  • Operators: SM Energy (4), Hunt Oil (3), Oasis (2), WPX
  • Fields: West Ambrose (Divide), Alexandria (Divid), Zahl (Williams), Antelope (McKenzie), Tyrone (Williams)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right. 

Wow, Does Anyone See The Unintended Consequence In This Story? This Is Quite Incredible: The Road To New England

First, some facts to get out of the way: renewable energy, wind and solar, will never make a significant contribution to the electricity needs of this country. And wherever wind and solar replace coal or natural gas, the costs are three to five times higher. That won't change over time. I may be wrong on some of the details, but the underlying premise is correct: wind and solar will never make a significant contribution to the electricity needs of this country. There is simply not enough land area available. This was posted back in 2012, but I doubt anything has changed.

Second: nuclear is pretty much dead in this country. Even if "we," as a nation, embraced nuclear energy this weekend, it would take 20 years to get new nuclear reactors built and on-line.

Third: if you want to know where I'm going with this story, check out the stories at the "NG_Shortage" and "NG_NewEngland" tags at the bottom of the post. Those links are about the natural gas shortage in New England this year, and the spot price of natural gas jumping to $40 or more compared to the "going" price of $4. Why? Everybody in New England switched to natural gas this past year; there was not enough; and there was no alternative.

Fourth: the country will need more electricity in the future, not less. EVs, server farms, LED TVs, computers, smart phones, it's all going to add up. 

Now, the story. I was not going to post this story as a stand-alone post. I posted/linked it deep in the blog for archival purposes when Don sent it to me. But while reading it, posting it, linking it, it dawned on me that the natural gas companies are sitting very, very pretty.

The article is linked at this post:
Bloomberg is reporting another coal plant in the heart of coal country is closing. The country is converting to natural gas. This is for the archives. Some day folks are going to be wondering why their electric bills are so high. Come back to this article for an explanation. For the archives.
For evidence, look to the E.D. Edwards power plant, built in 1960 close to the coal mines south of Peoria. While it pumped out electricity for once-booming steel mills and distilleries, the plant cruised along and avoided spending the millions of dollars to install a scrubber on its smokestack.
And so Edwards, confronting a need to meet state and federal rules to clean up and mounting competition from cheaper natural gas, was part of an unusual transaction last year. Owner Ameren Corp. paid Dynegy Inc. to take Edwards and four other Illinois coal plants off its hands, a transaction that perplexed some analysts.
“This was an exercise in kicking the can down the road,” said David Johnson, an analyst at ACM Partners, a financial advisory firm that reviewed the sale for environmentalists trying to scuttle it. “To throw money at someone to take something off your hands is a bit atypical.”
Ameren’s move is among a series of closures, bankruptcies or fire sales by companies desperate to get out of investments in aging U.S. coal plants. Owners are reacting to abundant electricity from natural gas and wind, flat or declining demand and a slew of new environmental rules meant to clean up the country’s top source of pollution. Also in the mix: efforts by environmentalists targeting individual coal facilities.
Read the article and then re-read the preamble above.  Do you see where "we" are going? This is quite incredible. The president has set the United States to go down the road of ensuring that there is only ONE fuel source for electricity some twenty years from now. Presidents think very long term, that's why they are called "change agents." (Google -- "change agents")

If the math doesn't work for renewable energy (wind or solar); hydroelectric is maxed out; nuclear is dead; and coal is dead; what's left to provide electricity for the nation? This is quite incredible. One almost gets the feeling that Washington movers and shakers were heavily invested in natural gas when they came up with the idea of how to kill coal.

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 her, but this is quite incredible. 

Think about it. I take that back. Don't think about it. Re-read all the stories this past two months about the high cost of natural gas in New England, and how they are literally on the cusp of running out. That's not an exaggeration. If I had the time I would post the links but they are easily found at the blog and everywhere on the internet.

This is one of those "aha" moments. I assume, because presidents come and go, coal will make a comeback in this country, but that assumption could be wrong. The refineries along the coast spent billions of dollars converting to heavy oil capability and they aren't eager to switch back to light oil capability due to the billions of dollars it would take. They are still hoping Canadian heavy oil will reach them.

Likewise, all the electric utilities that have spent billions switching to natural gas aren't about to switch back to coal. And that leaves the US on the road to New England: natural gas shortages and/or high price electricity due to high price natural gas.

The road to New England: the US quest for a single fuel source for electricity. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you might have read here, but I'm certainly not going to avoid this investment opportunity. This is a once in a lifetime investment strategy. Thank you Mr Obama. 

Addenda:

This was sent in by a reader as another example: Chicago's two coal-fired plants to shut down sooner than expected. It's an old story but is another example of going to one fuel for electricity, natural gas, without really thinking this through. The reader points out that the state of Illinois has nuclear power but the plants are probably in their last decade of life, and as they age, anything can happen. The reader also makes this point: "to me it appears the power generating companies are being separated from the utilities... the utilities are more just distribution companies now...  the regulation for the power generation is really a burden."

Enerplus Recaps 2013

Link here.
  • Production grew by 9%, exceeding guidance in spite of non-core asset sales 
  • Proved plus probable reserves were up 17% year-over-year, replacing 284% of 2013 production
  • Capital spending came in slightly lower than our forecast of $685 million, totaling $681 million. Approximately 70% of our spending was directed to our crude oil assets with the majority invested at Fort Berthold, North Dakota. We invested 82% of our budget on drilling and completion activities, with 62 net wells drilled and brought on-stream across our asset base.

  • We continued to concentrate our portfolio throughout 2013. We sold $365 million of non-core assets, redeploying $245 million to increase our working interests in our crude oil waterflood portfolio and in the Marcellus.  This also includes additional acreage acquired in the Wilrich, Marcellus and Bakken/Three Forks plays. Our net acquisition and divestment activities realized gross proceeds of $120 million in 2013.

Permian Basin Wolfcamp: $61,600/Mineral Acre -- And One Can Still Get Bakken Acreage For $6,000/Acre

Motley Fool has an interesting piece this week. The lede:
I think that LINN Energy LLC  and, by association, LinnCo LLC are hiding something big. And that's a good thing. Because that means investors still have a chance to invest in either company before the big reveal. 
So, what is LINN Energy hiding? The remarkable untapped value of its horizontal acreage in Texas' Permian Basin. The company believes that it holds about 60,000 net acres that have horizontal potential for the Wolfcamp formation.
Later, in the article, a bit of asset juggling:
The reasons this is still a big secret is because the drilling shift from vertical to horizontal in these areas of the Permian Basin is still in its infancy. That's actually creating some crazy shifts in reporting as one of LINN Energy's peers, for example, was forced to erase 185 million barrels of oil from its books as it can't yet book the horizontal inventory because there isn't enough data. That said, early data is so compelling that the company believes that it will likely add back nearly 600 million barrels of oil equivalent over the next few years as it drills more horizontal wells. Similar horizontal potential exists at LINN Energy and by association is available to LinnCo investors as well.
But this is pretty easy to understand:
Just today LINN Energy's partner on its first horizontal well, Diamondback Energy, announced that it was adding to its acreage position in the play. The company is picking up 2,825 net acres in the play, and it's paying $174 million for those acres. The company hopes to eventually buy out its partners on the 6,450 gross acres that are associated with this asset package, and it's willing to fork over a total of $397 million to buy out those partners. To put those numbers into perspective that's more than $61,500 per acre.
Actually, I did the math. The Motley Fool numbers are slightly off: $174,000,000 / 2,825 acres works out to $61,592.92 which is closer to $61,600 than $61,500. And it's that kind of math that gets analysts in trouble. LOL. 


Predictable

I don't know if folks remember the story yesterday with regard to the Winter Olympics. Putin's games were all about the Russian hockey team. And Russia lost to America. And then they lost to Finland. And Russia did not even make the quarter finals.

With Putin fuming, is there any wonder a Russian 17-y/o figure skater took gold, stealing it from the reigning grand champion, from South Korea? This is as predictable as the earth getting colder. LOL.

The judges:
One of the nine judges who picked a young Russian skater over two more refined competitors for the Olympic gold medal Thursday night was suspended for a year for trying to fix an event at the 1998 Winter Olympics in Nagano.
And another is the wife of the former president and current general director of the Russian figure skating federation. Another Olympics, another huge skating controversy involving the countries of the former Soviet Union.
So, two of the nine judges probably got personal phone calls from Mr Putin a couple of hours before the event. 

With hundreds of nations participating in the Winter Olympics, and I can name a dozen counties with an ice-skating interest, I find it amazing that Russia had two of the nine judges.

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Also Predictable

More and more stories will come out about the websites:
Last fall, when healthcare.gov was all but useless for two months, a handful of states that decided to build their own Obamacare enrollment websites grappled with their own problems. Home-grown exchanges in such places as Kentucky and California worked relatively smoothly, but in other states, including Oregon and Maryland, the insurance portals looked as bad as healthcare.gov, or worse.
The federal site has been in better shape since its Dec. 1 reboot. The same can’t be said for some of the states trying to repair their own malfunctioning sites. Cover Oregon has resorted to an analog solution, taking applications offline with paper applications. (A beta site that brokers can use opened Feb. 18 to mixed reviews.) The exchanges in Maryland and in Massachusetts—the state that was the model for the Affordable Care Act’s reform—have also been plagued with problems.
Congressional Republicans are calling for probes of the failures in these three blue states, which together were awarded more than $500 million since 2010 to establish new insurance marketplaces, according to grant data from the Center for Consumer Information and Insurance Oversight, the federal agency in charge of the portals. More than half of that went to Oregon, which in turn spent $40 million to hire contractor Oracle.
In the aggregate, the 14 states (plus the District of Columbia) that built their own exchanges are doing better than the federal marketplaces, according to recent estimates by consulting firm Avalere Health. The company gauged the latest public enrollment figures through the end of January against Avalere’s projection for each state exchange’s total sign-ups for 2014.
State-run marketplaces are 72 percent of the way to their target, compared with 48 percent for the federal site, according to Avalere’s data. But almost all that difference comes from California, the largest state and, by Avalere’s measures, the most successful. The Covered California exchange enrolled 728,000 by the end of January, which already exceeds Avalere’s projections. Take the Golden State out of the mix, and the other 15 state exchanges are about where healthcare.gov is: halfway to the target.
Despite its website woes, Oregon has also reached roughly half of Avalere’s projected enrollment. Massachusetts is the laggard, with a little more than 8,000 newly insured through its exchange, 17 percent of Avalere’s projection. Maryland, at 38 percent, lands somewhere in the middle. Besides California, a couple of states that enthusiastically embraced Obamacare, including Colorado and Washington state, have robust enrollment in their insurance portals to show for it.

The Farmers Get It: "Extraordinary Sites" List Is Bad, Bad News

The Dickinson Press is reporting:
“This is an insult to landowners,” Bowman said. “The biggest part of the area they are looking at is in my district. I can say this: If they ram this down our throats, we’ll shut down everything in western North Dakota. I’ll get a group of landowners together and shut down hunting on a huge area of private land. You can call me a radical, but that might be the last alternative we have.”
Opponents of the potential policy argue that it would be an overreach of government control over private property similar to an eminent domain power play. Backers of the proposal say it’s a needed measure to protect certain North Dakota landmarks and wild places from an onslaught of development of lands above the Bakken oil shale in the western part of the state.
I think the farmers, hunters, and everyone else realize that once the extraordinary sites is approved, the oil and gas industry won't be the only thing banned from the sites -- everything will be subject to approval, even farming, hunting, windmills. Oh, windmills? -- no, they will be fast-tracked.

For Investors Only

The real question is why Wal-Mart wouldn't partner with Amazon. Seriously. Everyone else (except Apple) will eventually partner with Amazon. Yahoo!Finance is reporting:
Amazon.com Inc. is in talks to bring listings for J. Crew khakis, Ralph Lauren polo shirts and Lord & Taylor suits to its site, according to people familiar with the talks.
The discussions, which seek to win over retailers that have largely shunned the online marketplace, involve about 10 well-known retailers, these people said, including Abercrombie & Fitch Co. and Neiman Marcus Group Inc.
Amazon wouldn't sell the goods directly; the listings would be links to the retailers' own sites. The arrangement would generate traffic for the retailers, while providing Amazon with more customer data and a new enticement for its Prime shipping program as it plans to raise rates.
Having said that, being re-directed to another site is generally an unsatisfactory experience. A better way would be to make it an "Amazon" experience. Even buying one-cent books from other re-sellers through Amazon seems like an all-Amazon experience. 

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Seventeen companies announce increased dividends or distributions including Wal-Mart, Xcel Energy, T-Rowe Price (from 38 cents to 44 cents), Allstate, and my favorite, Tootsie Roll.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here. Anything other than the Bakken may be tongue-in-cheek and/or completely wrong. And even what I write about the Bakken is subject to error. 

Abraxas Petroleum Corp. announces 2013 year end reserves grew 3% over 2012 to 31.0 MMBoe with 11.3 MMBoe of reserve additions more than offsetting 9.1 MMBoe of divestitures; provides production and CAPEX update.  Three percent?

Newmont Mining misses by $0.11, misses on revs: Reports Q4 (Dec) earnings of $0.33 per share, $0.11 worse than the Capital IQ Consensus Estimate of $0.44; revenues fell 12.4% year/year to $2.17 bln vs the $2.19 bln consensus.

This will be kind of interesting to watch over the next twenty years: whether its better for a state to fill its coffers by taxing oil (North Dakota, the Bakken) or by taxing recreational drugs (Colorado, marijuana). The AP is reporting that that the Colorado pot market exceeds all tax hopes. I would think it would only be natural to legalize heroin and tax that also, if taxes from marijuana are working out so well.


How To Win Bigger Than The Bakken -- Seeking Alpha -- February 21, 2014

Updates

December 4, 2018: 60,000 bopd by 2022. Okay.

October 29, 2018: Vaca Muerta shale output projection revised -- upward! YPF SA will produce more oil and gas than originally planned over the next five years as shale output from the Vaca Muerta formation picks up 

October 25, 2017: ExxonMobil and Vaca Muerta update.

May 4, 2017: Vaca Muerta to reach 113,000 bopd by 2018 -- Wood Mackenzie. 

April 25, 2017: update; lacks infrastructure; drilling costs 30% + than in the US

March 29, 2017: update on Tenaris, $2.3 billion investment in Argentina’s Vaca Muerta shale formation to drill 150 wells in the world’s second-biggest reserves of shale gas and fourth-biggest of shale oil.

September 14, 2016: BP interested in Vaca Muerta; the Permian is too expensive

June 22, 2016: the Vaca Muerta, more "muerta" than "viva"?

June 13, 2016: an update of the four shale basins in Argentina. Reports that COP will begin exploring one of them: Magallanes. 

June 4, 2016: XOM getting ready to invest $10 billion + in Vaca Muerta

March 9, 2016: update on the Vaca Muerta during the Saudi Surge / Slump

August 17, 2015: the dead cow looks like ... well, ... a dead cow.

July 16, 2015: Argentina's state oil company YPF, Pan American Energy and Wintershall will invest $38 billion over 35 years in the country's vast but mostly untapped Vaca Muerta shale formation.

January 19, 2015: the Vaca Muerta is a success
Oil production in the Argentine province of Neuquen rose 6.75 percent in the second half of 2014 from the first half, due in part to increased output at the Vaca Muerta shale field.
Original Post 

This was the top story released by SeekingAlpha today. The headline caught my eye. Let's see what it's all about. The article is about a penny stock operating in the Argentina shale. I don't care about the investment angle; the update on Argentina shale, the Vaca Muerta might be worth the read. And then again, probably not.

Previous posts on the Vaca Muerta:

Friday -- February 21, 2014

A picture (or a graphic) is worth a thousand words:


Let's hope the winter doesn't go on too much longer, and there's a bit of gap until global warming hits this summer and all the air conditioners are in use.


Active rigs in North Dakota:


2/21/201402/21/201302/21/201202/21/201102/21/2010
Active Rigs18318420117094


RBN Energy: exporting compressed natural gas to the Caribbean.
A brief sidebar on the mechanics and economics of CNG versus LNG. The compression process for CNG increases the pressure of the gas to about 3,600 psi—from about 300 psi in gas pipelines—and does not require any refrigeration. The process for converting pipeline gas into LNG, in contrast, involves cooling gas to a liquid form at about minus 260 degrees F and keeping it cool in cryogenic containers or specialized tankers with insulated walls; gas liquefaction also removes oxygen, carbon dioxide, sulfur, and water from the natural gas, making LNG almost pure methane (plus small quantities of other hydrocarbons like ethane and propane). That gives LNG about twice the energy density of CNG. The bottom line is that CNG compression/loading and unloading / decompression facilities—and CNG-carrying ships--are much less complex and less expensive than their LNG counterparts, with the trade-off being LNG’s much higher energy density and long-distance, high-volume economics. That makes CNG a more attractive alternative for smaller-volume, shorter-distance hauls like Emera CNG’s Florida-to-the-Caribbean plan.
Reuters is reporting, not all is going well for Statoil in the Arctic:
Norway's Statoil drilled a third disappointing well near its Johan Castberg find in the Arctic Barents Sea, casting further doubt on the $15.5 billion project that is already on hold because of high costs. Statoil said it found gas in a well near Castberg, a setback for the oil company as it looks for more oil as part of an ambitious exploration campaign aimed at securing more resources and improving the project's profitability.

The Wall Street Journal

Ah, finally some inflation. Just what the Fed ordered. Just in time for the 2014 elections. Consumer prices edge up, moving closer to Fed target. This is an interesting story coming at this particular moment. Two stores come immediately to mind: a) do you remember that story about the surging price in food/groceries -- just a few days ago; and, b) now, oil has melted up to $104, and if your gasoline has not increased by about 30 cents/gallon in the past two weeks, I would be surprised. The higher price of oil is going to trickle down through the whole economy. One almost wonders if the president hasn't been working toward this.  Later, there was an interesting story on NPR this morning suggesting there may be a grand plan coming together for the president to approve the Keystone. I still don't think it will happen this year.

Venezuela protests continue to escalate. The US refineries need their heavy oil to "cut" all the light oil being produced in the US. US refineries had counted on Canadian heavy oil but the president messed that up and Americans are paying the price.

Residents of Dallas fight construction of a water tower that would provide water for fracking. Exxon's CEO also fights to stop the water tower.

This was posted as a stand-alone post late yesterday; here it is again, in the WSJ: BNSF railway to buy new tank cars to transport crude oil. Warren must have gotten the green light from President Obama to press ahead.

Finally, Wal-Mart is doing what I suggested a long time ago: move toward smaller-format stores. Use bigger stores for warehousing, backfill for the smaller stores. Sears did the same thing years ago, moving to Sears catalog stores; we saw how that worked out. Amazon, CVS, Wal-Greens eating Wal-Mart's lunch at the low end; Amazon and Target eating Wal-Mart's lunch at the high end.

The Los Angeles Times

Nothing.