So Much for Energy Independence for America

The deep water rigs are leaving the  Gulf, heading for greener pastures (bluer water?) elsewhere -- the first one is headed for off-shore Egypt. 

So much for energy independence for America.

By the way, for investors, this may be a once-in-a-lifetime opportunity to invest in such companies as Transocean (RIG). I do accumulate shares in deep water energy companies.

Global Warming? What Global Warming?

I'm visiting Los Angeles so I enjoyed this story.

Coming from south Texas where it's miserably hot and humid, I am enjoying the "cold" weather in Los Angeles.

In case the link breaks, or you are not interested in reading more, this is the headline: "What summer? Record cold at LAX as July gloom continues."

Out-of-State Workers Flock to North Dakota

Let's see an update of this story in January. Or February. Or March.

Another company short of workers in Williston: Tuboscope, an oil-field inspection firm. The company employs about 40 people in Williston and would like to hire 40 additional folks. 

Meanwhile, nationally, job openings decreased in May and layoffs edged up in May. Not good news for those who think the worst is behind us.

Clerks Unhappy with $96,000/Year

The clerks striking at the Port of Los Angeles may drive business to other West Coast ports, including Mexico.  I have no "dog in this fight" so it doesn't bother me.

But I do find this interesting:

The clerical union handles documentation and paperwork for the shipping containers moving in and out of the two ports, which receive about 40% of the nation's imported goods. On average, clerks earn $96,000 a year, with vacation, sick leave and healthcare benefits.

These are clerks. Can you imagine what the heavy lifters get? What a great country!

Elsewhere in the news: while these clowns are striking for better pay and benefits, six (6) US soldiers killed in one day in Afghanistan. 

Physicians in the US military serving in Iraq and Afghanistan earn less than $96,000. Physicians are among the highest paid in the US military. I assume the average salary of those killed yesterday in Afghanistan was about $30,000.  Yeah, what a great country. Clerks earning more than $120,000 in pay and benefits are striking for a better contract and the media does not call them out for that. We've come a long way since Jean Valjean.

Wealth Transfer Stories Start to Surface

Watch for wealth transfer stories to start to appear in the coming months as the biggest state fails to meet requirements for 20% of energy to come from "clean" sources. Utilities can't possibly accomplish that by end of 2010 (the deadline), and they will pay with huge fines. (I don't know about that but I would assume that there must be some penalty if they don't meet the 20% threshold.)

Utilities are guaranteed a certain rate of return as part of the regulatory process, but I would assume that if they don't meet regulatory guidelines, the state can make them pay. This is all hypothetical on my part; I'm shooting from the hip. I don't have time to research while traveling but time will tell.

Finally, An Impressive Daily Activity Report -- July 9, 2010

Finally, NDIC releases an impressive daily activity report (July 9, 2010). With all the activity in the Bakken, I have been perplexed by the relatively small number of wells being reported by the NDIC on a daily basis, but this report is a start.

In addition to wells being released from confidential status, there are eleven (11) new permits. First glance doesn't suggest anything novel about these eleven permits, but it's a jump in activity. Generally I see about 4 - 7 new permits/day.

Update on GeoResources and the Bakken

This is another very interesting story on the Bakken and GeoResources.

EIA Hikes Production Loss for the Gulf Spill

This is just the production loss from the spill itself. It does not address all the first, second, and third derivatives that will follow from this spill.

Highlights of the July, 2010, Whiting Presentation, Part I

I mentioned earlier that I would eventually get back to the new Whiting presentation. Again, Whiting "knocks it out of the park" with an informative presentation. Fifty-eight slides with great information including several FAQ slides. For long term investors who have never read the Whiting FAQs, I strongly recommend doing so. Of course, newbies will definitely want to read those slides.

Slide 23/58 (24/59):

Here are the results of some selected wells in the Sanish that WLL has working interests in, either as the operator or as a non-operator:

Anderson 11-7TFS: 1,262
Ogden 11-3TFH: 1,479
Maki 11-27H: 4,761
Hansen 12-20H, infill: 4,144
Foreman 11-4TFH: 1,447
Sanish Bay 42-12H: 2,638
Curren 11-14H: 3,311
Olson 11-14TFH: 1,640

Each one of these wells is a long lateral; all of them are in different sections and eventually all sections in the Sanish will have four, five, or even possibly six horizontal legs running through them.

That "infill" well is very, very interesting; it will be just as interesting to watch for results of other "infill" wells. 

And just for fun:

The Behr 11-34H was completed in June, 2008. Cumulative oil production from that one well as of June, 2010, exactly two years, is 578,000 barrles. At $50/bbl, that is $29 million. Wells cost about $5 million in the Sanish, maybe $6 million. This well will produce for many more years, and has probably stabilized at current production for awhile (with gradual depletion). The Behr well had a 24-hour flow back rate of 3,245 barrels.

Not all wells will be this good (some will be better) but it doesn't take many, and the $50/bbl is a conservative wellhead price going forward.

For Some, The Niobrara is the New Bakken

Interest in the Niobrara is pretty much outside of North Dakota so I won't be posting often about the Niobrara, but since some of the Bakken companies are also in the Niobrara, it might be of interest to some.

This is an update on the Niobrara in Colorado (US).