Montana: Eminent Domain Law Passed; Favors Consumers

Link here.

Gov. Brian Schweitzer said he will allow a business-backed eminent domain measure to become law Monday, ensuring private utilities can continue major projects but dealing a blow to landowners fighting business developments.

The bill allows utilities involved in negotiations with landowners to take private property for a public good if they cannot reach an agreement over compensation.

A Montana Alberta Tie Line spokesman Darryl James said he was relieved the legislation had passed into law, allowing his company to resume construction on the 215-mile utility line.

Although the case could still end up before the Montana Supreme Court, the writer suggests that this is not likely. We will see, I suppose.

SSN Updates Earl 1-13H -- Bakken, North Dakota, USA

Fracking continues on Earl 1-13H; ran into some difficulties, problems, slowing things down, but the crew remains optimistic by the tone of the press release.

Motley Fool: Is BEXP The Perfect Stock?

Link here.

Brigham Exploration has grown very quickly in the past year on the back of higher oil prices, but as commodities start to top out, its future may soon be in question.

Brigham holds more than 300,000 acres, and it has ramped up production quickly, leading to outpaced revenue growth in the past year. Moreover, the company plans to double daily production in 2011.

Of course, Brigham has plenty of company in the Bakken. Oasis, after its recent IPO and KOG expanded in the area last year.

Perhaps the obvious exit strategy for shareholders is to hope for a buyout. With Chesapeake Energy and EOG suffering from low natural gas prices, expansion could lead them to acquire smaller players such as Brigham.

Market cap and value/Bakken acre:

• BEXP: 300,000 acres? It has almost 400,000 acres (371,000 according to recent presentation.) Market cap -- $3.4 billion ($9,000/acre); BEXP is not exclusively in the Bakken, so value per acre is actually less
• KOG: 70,000 acres. Market cap -- $1.2 billion ($17,000/acre); as far as I know, pretty much pure-play Bakken
• Oasis: 303,000 acres. Market cap -- $2.7 billion ($9,000/acre); as far as I know, pretty much pure-play Bakken, although they may have acreage elsewhere. Niobrara?

Chesapeake market cap: $20 billion
EOG: $28 billion

I assume buying BEXP, KOR, or OAS could require as much as a 50% premium -- thus $2 billion for KOG, $5 billion for OAS, and $7 billion for BEXP. The takeover offer would be much less, but I don't think any of the three are for sale, thus resulting in a bidding war, taking their shares to a 50% premium. Just my 2 cents worth.

Only Two (2) New Permits Today in the Bakken, North Dakota, USA

Drillers: Petro-Hunt

Fields: North Tioga and Little Field.

The rest of the daily activity report today was fairly light in information. There were three nice wells reported:

19434, 2,112, Denbury Onshore, Satter 44-34SWH, Siverston, Bakken
19468, 866, North Plains, Wold 16-7H, Banks, about 10 miles west of the Charlson
19673, 981, Hess, Wahlstrom 18-1H, wildcat southwest of Arnegard; not much activity in this area

Lithium Batteries: Hippos in Pink Tutus -- SeekingAlpha

Link here.

From Steven Chu, SecEnergy, whose worse nightmare is coal, notwithstanding the nuclear debacle in Japan:

And what would it take to be competitive? It will take a battery, first that can last for 15 years of deep discharges. You need about five as a minimum, but really six- or seven-times higher storage capacity and you need to bring the price down by about a factor of three. And then all of a sudden you have a comparably performing car; let's say a mid-sized car which has a comparable acceleration and a comparable range.

John Petersen:

In the simplest of terms, electric drive can't be competitive with internal combustion until somebody invents and commercializes an entirely new class of battery. In the meantime, the market will remain profoundly confused by snake oil suggestions that the cleantech revolution will mirror the progress that information and communications technology made over the last four decades. It's just not going to happen!

Remember This Headline? Gasoline To Drop in Price 50 Cents This Summer

That headline was all over the news last week, Friday, May 6, 2011, three days ago.

Link here (regional links break often and break early).

Today, the first business day after that headline, there are fears that the rising Mississippi River will cause gasoline shortages.

Link here. This is a May 2, 2011, story, but generally overlooked by CNBC until today where it is a huge story as oil rises by $5.50. (Regional links break often and break early.)

Along that same line, CNBC noted that crops are late getting into the field in North and South Dakota, pushing wheat and corn higher.

AXAS Misses by 2 Cents; Misses on Revenues

Link here.

Net loss for the quarter ended March 31, 2011 was $10.0 million, or $0.12 per share, compared to net income of $11.2 million, or $0.15 per share, for the same period in 2010. Adjusted net income, excluding unrealized losses on derivative contracts, for the quarter ended March 31, 2011 was $959,000, or $0.01 per share, compared to adjusted net loss, excluding unrealized gains on derivative contracts, of $513,000, or $0.01 per share, for the same period in 2010.

The Apple Brand -- Not a Bakken Story

As regular readers know, my favorite company is Apple Corp. It would be a hard call to say whether I enjoy talking about the Bakken or Apple more.

I don't own stock in the company. I missed it years ago and never got in.

However, our family has never owned any computer other than an Apple computer, and we have probably owned 20 different Apple computers over the years, starting with the Apple IIe, I think, and then, the Apple IIc, back in 1984.

I grew up with Coca-Cola and Forbes Magazine. For years Coca-Cola was the number one brand in the world. I honestly do not know when Coca-Cola lost that #1 spot.

But today I see Apple has moved to the top, and Coca-Cola has moved farther down the list.

"Dead Cat Bounce" Today? -- Oil Up Today on Weaker Dollar

Link here.

Unless I missed it, the article did not specify how much weaker the dollar got today.

Last week on the day when oil had the most precipitous/spectacular drop in price, the dollar strengthened by ... drum roll ... two cents. This was shortly after the dollar hit a three-year low.

CEO's Second Son Named Williston -- NOG -- Heart of the Bakken, North Dakota, USA

Link here.

A very nice human interest story in a regional newspaper.

Despite its Williston Basin roots, 12-employee Northern is based on tony Wayzata Bay, Minnesota. Reger, who earned business degrees from the University of St. Thomas, married a Minnesota girl and settled in the Twin Cities. His second son is named Williston.

And for investors, NOG is at a very low entry price -- down below $22/share.

The shares of a small Minnesota company with big interests in the North Dakota oil patch have returned to earth after soaring from $12 a year ago to almost $33 in March.

Northern Oil & Gas has 150,000-plus acres under lease in the huge Bakken fields of western North Dakota and eastern Montana. The stock peaked in early March, about the time CEO Michael Reger sold more than $20 million worth of stock.

 A big think you to a reader who alerted me to the article.

[Comment: Williston is my home town, but for a daughter's name, I might consider "Tioga."]

The Unusual Becomes the Norm -- CNBC Contributor

Updates

May 27, 2011: WSJ -- Unemployment: The New Norm

Even as the economy recovers, the days of 5% unemployment may be gone for good.

A chorus of economists and labor market observers say that the "natural" or "structural" rate of unemployment has shifted up, meaning that Americans looking for work should get used to having a harder time finding it. The unemployment rate is currently 9% and could take until 2016 to reach the natural rate.

The so-called natural unemployment rate is somewhere around 7%, according to Mark Vitner, a senior economist at Wells Fargo. Other economists peg the natural unemployment rate somewhere between 5.5% and 7%. They said the figure will be held higher by a skills mismatch in the labor market that has been growing since the 1970s, the recent extension of unemployment benefits and the 2009 minimum wage increase.

Original Post

Idle chatter while waiting for the market to open.

This is an interesting post-script to something I posted a few days ago in the comment section of a posting regarding unemployment numbers.

In that comment I stated two things:

• a) The unusual has become the norm: I stated that 10% unemployment / 20% unemployment is the new norm.
• b) Homeowners have accepted the fact that the value of their homes will "never" rise.

The guest host on CNBC this morning is Richard Bernstein, former Merrill Lynch Chief Investment Strategist and now CEO of his own firm and regular contributor to CNBC. At 7:20 a.m. EST just before the break he made these very surprising statements in a short 30-second blurb:

• a) The unusual has become the norm. He did not mention specifics
• b) He said homeowners should know that house values will sink forever. I can't remember the exact words, but I do believe "sink forever" was the exact phrase.

Both of us may be using a bit of hyperbole to make a point. It's one thing for an amateur to make those comments on a blog that few read, but to hear almost the same thing from a former Merrill Chief Investment Strategist on the "only" 24-hour cable business network is something quite different.

Updates

May 10, 2011: Zillow reports the number is now up to 28% -- the number of US homes "under water."

May 9, 2011, 3:30 p.m.: I posted the above earlier this morning. Now, I see on a link on the Drudge Report: "Housing Crash is Getting Worse." Yup, the unusual is becoming the norm. The "unusual" in this case is the continuing fall in the price of homes. By the way, during the budget fight in Wisconsin, a pundit noted that once your house is paid for, you continue to pay rent to your landlord, the teachers' union. And like most rent, it increase every year.

GeoResources: Earnings In-Line; Top Line Beats -- Bakken, North Dakota, USA

Link here.

Reports Q1 (Mar) earnings of $0.29 per share, in-line with the Thomson Reuters consensus of $0.29; revenues rose 7.5% year/year to $28.6 mln vs the $28 mln consensus.