For the archives.
Enbridge may soon double the amount of oil it exports from North Dakota once the Sandpiper Pipeline comes online.
Preliminary construction of the 600-mile pipeline will begin in North Dakota this summer with more than 3,000 people working on the project. The current timeline for completion projects the line will begin moving 225-thousand barrels of oil per day in 2017.
The new pipeline will expand upon Enbridge’s current Bakken pipeline network and will create a new route, carrying more than double the company’s current transportation capacity. As reported by KX News, Enbridge North Dakota Director of Operations Bob Steede said, “The sandpiper pipeline starts in the Tioga, North Dakota, area, roughly follows … our existing pipeline network, comes to Clearbrook, Minnesota, and then works its way to Superior, Wisconsin.”I hope Enbridge has a Plan B when Minnesota says "no."
Islamic State militants reportedly captured the ancient Syrian town of Palmyra Wednesday as Syrian officials evacuated citizens and scrambled to keep priceless antiquities from falling into terrorist hands.
The Syrian Observatory for human rights told The Associated Press that government forces collapsed in the face of ISIS attacks and withdrew from the town late Wednesday.
The Wall Street Journal reported that before fleeing, the National Defense Forces evacuated civilians as militants took control of residential areas and established themselves in the city’s nearby ruins.
It was not immediately clear how close to Palmyra’s famed archeological site ISIS forces had come, but Syrian activists said that Syrian soldiers were seen fleeing the area.Another archaeological treasure to be destroyed. Thank you Mr Obama for not taking out the JV team. What a legacy.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 0.7 percent on May 19, unchanged from May 13.
The nowcast for second-quarter real business fixed investment growth fell from −0.6 percent to −2.3 percent following last Friday's industrial production release from the Federal Reserve.
The nowcast for second-quarter real residential investment growth increased from 1.3 percent to 3.6 percent following this morning's housing starts release from the U.S. Census Bureau.CNBC asks why "we" can't shake off the Great Recession despite a gazillion dollars in stimulus? Blame it on globalization, not the Obama administration, the most anti-business administration in my lifetime:
In the first quarter, the GDP growth rate fell to +0.2 percent annualized, from an average of +2.4 percent during 2014. Trade data that emerged subsequently indicates that the first quarter growth rate will be revised downward into negative territory and that the second quarter will prove disappointing as well.But Wall Street is doing just fine. Both the Dow and the NASDAQ are flirting with new highs.
Gasoline crack spreads in the United States, especially on the U.S. East Coast, have reached several-year highs in recent months. Crack spreads, which reflect the difference between wholesale product prices and crude oil prices, are a good indicator of refiner profitability. --- EIACrack spreads can be found here.
Updated data from NASA satellite instruments reveal the Earth’s polar ice caps have not receded at all since the satellite instruments began measuring the ice caps in 1979. Since the end of 2012, moreover, total polar ice extent has largely remained above the post-1979 average. The updated data contradict one of the most frequently asserted global warming claims – that global warming is causing the polar ice caps to recede.
The timing of the 1979 NASA satellite instrument launch could not have been better for global warming alarmists. The late 1970s marked the end of a 30-year cooling trend. As a result, the polar ice caps were quite likely more extensive than they had been since at least the 1920s. Nevertheless, this abnormally extensive 1979 polar ice extent would appear to be the “normal” baseline when comparing post-1979 polar ice extent.
Updated NASA satellite data show the polar ice caps remained at approximately their 1979 extent until the middle of the last decade. Beginning in 2005, however, polar ice modestly receded for several years. By 2012, polar sea ice had receded by approximately 10 percent from 1979 measurements. (Total polar ice area – factoring in both sea and land ice – had receded by much less than 10 percent, but alarmists focused on the sea ice loss as “proof” of a global warming crisis.)I may post this as a stand-alone later -- this is a pretty big deal. It won't be taught in the elementary, middle, or high schools in this country.
Houston-based Occidental Petroleum is the largest oil and gas producer in the Permian Basin of western Texas. It also operates domestically in Colorado, Kansas, New Mexico, North Dakota and Oklahoma. Internationally it’s all over the world, including Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates and Yemen. Earlier this month, it spun off its California assets as California Resources (CRC), and it still owns 71% of the company.
Occidental pays out a dividend of $0.75 per share every quarter, an amount that is up $0.03 from earlier this year. The $3.00 annual dividend is amply covered by $11.51 per share in cash from operations over the past 12 months.
Even though it has shifted to a pure exploration and production company instead of one that ran substantial refining and marketing operations, the discounts relative to history suggest value. As a ratio of enterprise value to trailing 12 months of EBITDA, Occidental trades 25% more cheaply than it has on average over the past five years.I post this not as an investment story but as a reminder that OXY is the largest operator in the Permian, the largest shale play in the US. Whiting is probably the largest operator in the Bakken (could be CLR depending how one measures the data). Is EOG the largest in the Eagle Ford?
San Antonio-based NuStar announced on Tuesday that it is pursuing a strategic alliance with Minnesota-based agribusiness giant CHS Inc.
Under the deal, NuStar will develop an expanded pipeline and terminal network that will increase supply of propane to meet product demand in the Upper Midwest.
At a time when 8.5 million Americans still don't have jobs, some 40 percent have given up even looking.
The revelation, contained in a new survey Wednesday showing how much work needs to be done yet in the U.S. labor market, comes as the labor force participation rate remains mired near 37-year lows.
Duration matters: The longer someone was out of work, the more likely it is that they've quit looking.
Of the total, 55 percent who were unemployed for more than two years fell into the category; 32 percent of those idle for 13 to 24 months and 34 percent out for seven to 12 months had quit as well. Just 21 percent out for three months or less had stopped looking.
Oregon is about to embark on a first-in-the-nation program that aims to charge car owners not for the fuel they use, but for the miles they drive.
The program is meant to help the state raise more revenue to pay for road and bridge projects at a time when money generated from gasoline taxes are declining across the country, in part, because of greater fuel efficiency and the increasing popularity of fuel-efficient, hybrid and electric cars.
Starting July 1, up to 5,000 volunteers in Oregon can sign up to drive with devices that collect data on how much they have driven and where. The volunteers will agree to pay 1.5 cents for each mile traveled on public roads within Oregon, instead of the tax now added when filling up at the pump.
Some electric and hybrid car owners, however, say the new tax would be unfair to them and would discourage purchasing of green vehicles.Unfair to them? Exactly why? The fuel-at-the-pump tax is for the privilege of driving on maintained roads.
The 63-year-old late actor listed the breathtaking Calif. home in April for $29.9 million just months before his passing.
The 640-acre property was named Villa Sorriso, or Villa of Smiles by the comedian in the early 2000s.Because of blogging I know how "big" 640 acres is. I can "see" it. If were square it would be a mile wide by a mile long.
Scaling down drilling programs in order to achieve cash flow neutrality has been an important theme during the current earnings season in the E&P sector.
Oasis Petroleum reported significant progress in this direction and indicated that it should be able to balance its upstream spending and cash flow for the rest of the year. The company also guided that a $60 per barrel oil price would be sufficient for it to stay cash flow neutral in 2016.
The operating metrics highlighted by Oasis are mostly in line with the indications from other major operators in the Bakken. However, the concept of "cash flow neutrality" has many nuances that need to be carefully accounted for in order to avoid wrong conclusions.Note: 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 been reading here.
Target Corp on Wednesday reported a larger-than-expected increase in first-quarter profit as revenues got a boost from online sales and a program to narrow its product focus.
Target, the fourth-largest U.S. retailer, also said it repurchased $562 million worth of its shares in the quarter, resuming buybacks for the first time in nearly two years.
There's a difference between consumers' expectations and investors' expectations. The post above regarding Wal-Mart was from the perspective of a single consumer.Adjusted earnings, excluding restructuring costs and other items, came to $1.10 per share in the three months ended May 2, against a profit of 92 cents in the same period a year earlier.
In April, Target’s overall comps improved 4.5% year over year. Wal-Mart was slightly more impressive, delivering a 5.0% improvement (4.0% without fuel). Costco’s comps improved 2%, but it would have been a 7% gain without negative impacts related to gas prices and foreign exchange, but these factors do matter.
Watford City breaks ground today on an $83 million event center, marking three years of work and planning backed by a public vote to increase the city’s sales tax after the Stenehjem family donated the land on which to build.
The Watford City Event Center — adjacent to the new high school project in the Fox Hills Subdivision — will house arenas for hockey, turf and hard-floor sports, a 1,000-capacity convention center, a 3,000-seat auditorium, plus a lap pool and swim-play facility.
It will connect directly to the new high school for athletic practice, competitions and some physical education classes and will be an off-campus venue for the University of Mary.
There’s plenty of blame to spread around. An Exxon Mobil Corp. refinery explosion near Los Angeles in February and a fire at a plant in Washington state reduced supply at the same time two other California sites make repairs.
Refiners sent five cargoes in one week to Mexico. Since there are no pipelines to bring in gasoline from elsewhere in the U.S., tankers are delivering fuel from Asia and Europe.
Add the strictest clean-air policies in the nation and you get the most expensive gas in the country.
Exxon hasn’t said when its Torrance refinery will be back to normal. Repairs will continue through June.
Less than 10 miles up the road from Torrance, Chevron Corp. shut units at the El Segundo refinery this month for repairs and Phillips 66 is doing work at its Los Angeles plant.
In Tacoma, Washington, a complex owned by the TrailStone Group remains shut after a May 6 fire.
It doesn’t help that the West Coast is cut off from pipeline supplies in other parts of the U.S. Kinder Morgan Inc. runs a network of lines that send fuel out of the state to Arizona and Nevada, but it doesn’t bring supplies in. So the only way refiners can deliver fuel to California is by tanker.
So few refineries produce gasoline that can be used in California’s cars that tankers come from thousands of miles away in Asia and Europe to deliver the specialized fuel.
A full-blown humanitarian crisis has developed from ISIS takeover of Ramadi, as an estimated 25,000 Iraqi refugees are now making their way east toward Baghdad, seeking food and shelter wherever they can and facing the prospect of being blocked from the capital city amid fears their ranks could include militants.
The United Nations and other aid agencies were handing out food, water and medical supplies along the 60-mile route between the cities, but the situation was worsening amid dwindling supplies and reports the Iraqi army was blocking the refugees from reaching the safety of Baghdad.
The flight was a repeat of a wave of refugees who poured out of Ramadi in April, when fighting between ISIS and the Iraqi army flared up. Many had returned, only to be again driven out of the city, some 60 miles west of Baghdad.
Now, the crisis could be coming to a bloody head, as the black-clad jihadist army is moving east just behind the refugees, who are now stuck on the bank of the Euphrates River, unable to cross to safety. And those left behind in Ramadi, where ISIS was reportedly going door-to-door to root out government sympathizers, were braced for more fighting as Shia militias were summoned by Baghdad to help mount a counter-offensive to retake the city, once home to 750,000.
Even the decision to launch a counter-offensive to recapture the largely Sunni capital of Anbar province was fraught with peril. The Iraqi Army’s humiliating defeat there has left Baghdad with little choice but to make a deal with the devil – the battle-hardened and Iranian-backed Shia militias that offer the best chance of retaking the key city, say experts.
The collapse of Anbar has also set in sharp relief the continuing tragedy of Iraq’s Sunnis, beginning with the American invasion in 2003, which almost instantly upended the old social order of Sunni prominence. With the majority Shiites thrust into power, the Sunnis were sidelined, many banished from public life for good because of their ties to Saddam Hussein’s Baath Party.
Some of those Sunnis joined the insurgency, and many fight today for the Islamic State. Other Sunnis boycotted elections. A great number even deny the demographic fact that they are a minority in Iraq.
Most, though, wanted to get on with their lives and find a place within the new order.Now, with the rise of the Islamic State, that has become nearly impossible. The Sunni militants of the Islamic State have declared war on those they consider apostates — Shiites, Christians, Yazidis — but it is Iraq’s Sunni Arabs who have arguably suffered the most.
The E&Ps have cut Capex to the bone, but as a group they expect oil and gas production in 2015 to increase versus last year. That’s true from an overall perspective, and it is an important indicator of upcoming production trends. But the real revelations come when you dig into the details. In the oily sector, small and mid-size companies are making deeper cuts but are faring much better than the big boys. On the gassy side, E&Ps in Appalachia are knocking it out of the park, while more diversified gassy players are having a much harder time of it. Today we begin a blog series to drill deeper into the company numbers to see why and how these differences happen.
We first looked into this issue back in January 2015 using an analysis of capex and production guidance provided by our friends at U.S Capital Advisors. This time we’ve crunched through the numbers based on data compiled from company’s SEC reporting and issued press releases. Our analysis indicates a 37% decline in exploration and development spending in 2015 for a group of 31 exploration and production companies. These very same companies are expecting to increase oil and gas production by 8% this year. The oil and liquids rich gas producers will see the brunt of the spending declines as the crude oil price decline has slashed cash flows, but the very profitable dry gas Appalachian producers will be moving full speed ahead despite low natural gas prices. This initial blog will provide an overview of our analysis, the next edition will review oil weighted E&Ps and the final posting will look at gas weighted companies.
The recycle ratio is a measure of profitability. It looks at field level profitability (netback) in context with the capital cost spent to bring the reserves to production (finding and development cost). The recycle ratio is calculated by dividing the netback (revenue-lifting costs) by finding and development costs. A recycle ratio of 200% is generally considered to be the threshold for value creation. Below that threshold value is not being enhanced. Figure 3 at the link highlights the profitability variances among the four different peer groups. We charted the recycle ratio along with the average realized oil and gas price for each peer group. The Appalachian Gas Weighted E&Ps crushed the other three groups due to a rock bottom cost structure. The Small/Mid-Size Oil/Liquids Weighted E&Ps and the Large Oil/Liquids Weighted E&Ps posted satisfactory results, but this was with oil prices in excess of $90/bbl. The Diversified US Gas Weighted E&Ps struggled the most with a misalignment between netbacks and cost structure. The group had netbacks a little better than the dry gas producers, but with a cost structure similar to the oil weighted producers. Going forward, the Appalachian Gas Weighted E&Ps will not suffer much from the slashing in oil and liquids prices which will further depress profitability for the three other peer groups. The Diversified US Gas Weighted E&Ps must make most drastic changes since they had the weakest profitability in an already robust oil/liquids price environment. The Small/Mid-Sized and Large Oil/Liquids Weighted peer groups will be pruning back their capital spending, focusing on their best projects to try to best survive this lower price environment.
The Wall Street Journal reported earlier this month from northwestern North Dakota, where Liberty Resources is constructing a groundbreaking new oil processing facility.In addition, see first comment below:
The $800 million “oil factory,” named Stomping Horse, aims to develop and unify 96 wells across nearly 10,000 acres while maintaining the ability to start and stop output depending on crude prices.
The development also includes pipelines to transport oil, natural gas, water and waste material. Liberty officials hope that the infrastructure spending will eliminate the need for trucks or far longer pipelines to transport those materials.
In addition, using natural gas to power facilities on-site should reduce energy costs, while the wells could operate with less personnel and reduce labor costs.
Liberty chief Chris Wright believes the project will eventually enable the company to "still make money at $50 a barrel."
Liberty is also trying a new technology from Energy Recovery Inc (ERII), that pumps frack fluid in without pump exposure to the proppant. The pump lives are drastically increased with this technology, decreasing downtime and capital, while increasing reliabilty.
ERII also makes efficient pumping systems for desalination plants and will introduce a product to generate electricity when pipelines run downhill. Downhill runs of liquid pipeline will cause major issues if the height is too great (much like railroads are limited to certain grades).