Link here.
AAPL and XOM are my two favorite companies.
Tuesday, May 17, 2011
Rigzone: Where Are Oil Prices Headed?
Link here.
Pay particular attention to the last six months of this year (2011).
Pay particular attention to the last six months of this year (2011).
According to May 10 statistics from the US Energy Information Administration, total world oil consumption will grow by 1.4 million bpd (barrels per day) in 2011. Although this is about 0.1 million bpd below last month's EIA Monthly Energy Outlook, the agency predicts demand growth of 1.6 million bpd in 2012, slightly higher than forecast in April.
Meanwhile, supply from non-OPEC countries should increase by an average of 0.6 million bpd annually through 2012, EIA said. The preponderance of supply will come from Brazil, Canada, China and countries of the former Soviet Union, EIA forecasts.
Wow, Wow, Wow -- After $165 Million -- BP and COP Call It Quits
Link here.
Anon 1 provided his take on this story and additional background:
No surprise.
The real natural gas line is the AGIA TransCanada line, with Exxon on board.
COP/BP spent some money while claiming that they would build their own line. They wanted leverage in negotiations.
They virtually shut down many months ago.
The legislature went home without caving to them.
The real news will be what happens to the AGIA line - the real natural gas line project.
Background (I have not checked out all of these sites):
http://www.reuters.com/article/2011/05/17/us-alaska-pipeline-idUSTRE74G7Q020110517
http://www.thealaskapipelineproject.com/
http://www.thealaskapipelineproject.com/project_description
http://www.palintv.com/2010/07/31/palins-pipeline-progresses/
http://www.palintv.com/2008/01/21/governor-palin-apologizes-and-talks-about-agia-january-21-2008/
http://www.palintv.com/2007/07/03/presser-discussing-agia-request-for-applications-and-bill-signing-july-3-2007/
http://www.palintv.com/2007/11/30/presser-companies-that-have-submitted-applications-under-agia-announced-nov-30-2007/
http://www.palintv.com/2008/01/04/agia-completeness-review-galvin-palin-irwin-ruther/
The obvious question is whether any natural gas pipeline from Alaska is viable right now.
The Alaska Gas Pipeline announced that its open season efforts have not resulted in the customer commitments necessary to continue work on its Alaska North Slope gas pipeline project, which has an overall estimated capital cost of $35 billion (2009 dollars).
Denali will withdraw its Federal Energy Regulatory Commission pre-file application and, over the next few months, close out its operations.
Denali - The Alaska Gas Pipeline is owned by subsidiaries of BP and ConocoPhillips.
***********
No surprise.
The real natural gas line is the AGIA TransCanada line, with Exxon on board.
COP/BP spent some money while claiming that they would build their own line. They wanted leverage in negotiations.
They virtually shut down many months ago.
The legislature went home without caving to them.
The real news will be what happens to the AGIA line - the real natural gas line project.
Background (I have not checked out all of these sites):
http://www.reuters.com/article/2011/05/17/us-alaska-pipeline-idUSTRE74G7Q020110517
http://www.thealaskapipelineproject.com/
http://www.thealaskapipelineproject.com/project_description
http://www.palintv.com/2010/07/31/palins-pipeline-progresses/
http://www.palintv.com/2008/01/21/governor-palin-apologizes-and-talks-about-agia-january-21-2008/
http://www.palintv.com/2007/07/03/presser-discussing-agia-request-for-applications-and-bill-signing-july-3-2007/
http://www.palintv.com/2007/11/30/presser-companies-that-have-submitted-applications-under-agia-announced-nov-30-2007/
http://www.palintv.com/2008/01/04/agia-completeness-review-galvin-palin-irwin-ruther/
*************
The obvious question is whether any natural gas pipeline from Alaska is viable right now.
Denbury, Losses, and Hedging -- Motley Fool
Link here.
Who would have thought that oil companies would show a loss because of $120 oil?
This article from 2008 is a nice primer on oil and hedging. A "tip of the hat" to Don for finding this article.
DNR has joined the long list of oil companies that have reported losses this quarter on account of derivatives contracts. Based on this, it is clearly evident that companies never expected crude oil prices to shoot past $120 per barrel. And they will pay the price for that. Yet, Foolish investors should absolutely realize that there are more to these stocks than what the bottom lines are suggesting.I think this is quite remarkable. "It is clearly evident that companies never expected crude oil prices to shoot past $120 per barrel."
Who would have thought that oil companies would show a loss because of $120 oil?
This article from 2008 is a nice primer on oil and hedging. A "tip of the hat" to Don for finding this article.
Senator Reid Won't Let Nancy Pelosi Out-Waiver Him -- Nevada Gets ObamaCare Waiver
Link here.
Only one out of five new ObamaCare waivers are in Nancy Pelosi's district.
Senator Reid's entire state gets a waiver. Or a partial waiver.
Only one out of five new ObamaCare waivers are in Nancy Pelosi's district.
Senator Reid's entire state gets a waiver. Or a partial waiver.
Trillions To Be Invested in Canadian Oil Sands -- Not a Bakken Story
When anyone says "trillions" will be invested in anything -- that catches my attention.
Perhaps this explains why TransCanada seems so eager to get Keystone XL routing, leases, permits, etc., even while waiting for US federal approval. They have to ship their oil somewhere.
The recession that clouded the future of oilsands development two years ago has lifted and clear skies beckon trillions of dollars of investment, according to a report released Monday.Canada is predicting as much as five (5) million bbls of oil per day from western oil sands.
Over the next 25 years, through 2035, $2.077 trillion will be invested in building and maintaining the oilsands, according to the Canadian Energy Research Institute.
Perhaps this explains why TransCanada seems so eager to get Keystone XL routing, leases, permits, etc., even while waiting for US federal approval. They have to ship their oil somewhere.
SeekingAlpha: Four Boone Pickens Stocks These Folks Like
Link here.
Companies listed: CHK, Apache, HAL and Hess.
Again, we keep seeing some of the same companies on these lists.
Companies listed: CHK, Apache, HAL and Hess.
Again, we keep seeing some of the same companies on these lists.
Ontario's Experience With Green Energy -- Not a Bakken Story
Link here.
Ontario (that would be the Canadian province, not the city in California) is looking at "rolling back" green energy initiatives. (I guess they had a severe winter, also. Smile.)
Ontario (that would be the Canadian province, not the city in California) is looking at "rolling back" green energy initiatives. (I guess they had a severe winter, also. Smile.)
With regards to job creation, there is nothing special about subsidizing electricity generation. It’s just as harmful as subsidizing anything else. We have long and lamentable experience in Canada with failed job creation schemes based on subsidies to money-losing industries. From Sprung cucumbers to Bricklin sports cars, governments have regularly learned and relearned, at taxpayer expense, the immutable rule that if a business plan depends on subsidies, the jobs it creates are not sustainable, and if the business is profitable on its own, it doesn’t need subsidies.
An industry that depends on subsidies for its survival is not a net source of jobs. The funds for the subsidies have to be raised through taxation, and the burden of taxes kills more jobs than the subsidies create. This is as true for wind power as it is for greenhouse cucumbers, and it doesn’t matter if the taxes are visible or are hidden in the form of feed-in tariffs and artificially inflated electricity bills.
MDU Might Be the Perfect Stock to Buy Right Now
There was a lot of talk today on various CNBC shows about "flight to safety": utilities, telecoms, health care.
One utility that is very diversified, and located in the heart of the Bakken, is MDU. It continues to trade in a narrow range, but with a hint of moving slightly higher over past few weeks. Since $20.66 in February, 2011, MDU is now over $23. (Look at the one-year graph for MDU.)
Today, on another "down" day for the market, MDU was up a bit.
I sold my MDU one or two years ago -- I had accumulated shares in MDU over twenty years, but finally got out when it looked like there were better places to invest. I don't hold any shares of MDU right now, so I am reporting this not as a plug for investing, as much as a company that might be sitting in the best of both worlds right now.
One utility that is very diversified, and located in the heart of the Bakken, is MDU. It continues to trade in a narrow range, but with a hint of moving slightly higher over past few weeks. Since $20.66 in February, 2011, MDU is now over $23. (Look at the one-year graph for MDU.)
Today, on another "down" day for the market, MDU was up a bit.
I sold my MDU one or two years ago -- I had accumulated shares in MDU over twenty years, but finally got out when it looked like there were better places to invest. I don't hold any shares of MDU right now, so I am reporting this not as a plug for investing, as much as a company that might be sitting in the best of both worlds right now.
Six (6) New Permits -- Daily Activity Report -- Bakken, North Dakota, USA
Drillers: EOG (3), Whiting, BR, and Newfield
Fields: Clarks Creek, Bell, Zenith, and Siverston
Another nice Sinclair well reported today:
Clarks Creek is a very narrow oil field, about 2 sections wide by 6 sections long, sitting almost completely inside the reservation on the far west side, just west of the Antelope oil field.
Whiting has another permit in the very exciting Bell oil field, where the highest prices have been paid for mineral acres.
Added after original posting, see comment below: I forgot to mention BR's permit in Zenith oil field. Of all the fields in North Dakota, the Bell oil field and the Zenith oil field are, for me, two of the most exciting, if not the two most exciting. If you haven't clicked on Zenith oil field link, highly recommend you do so now. And then look at the GIS map server.
Fields: Clarks Creek, Bell, Zenith, and Siverston
Another nice Sinclair well reported today:
- 19520, 1,038, Sinclair, Hovden Federal 1-20H (reported earlier)
Clarks Creek is a very narrow oil field, about 2 sections wide by 6 sections long, sitting almost completely inside the reservation on the far west side, just west of the Antelope oil field.
Whiting has another permit in the very exciting Bell oil field, where the highest prices have been paid for mineral acres.
Added after original posting, see comment below: I forgot to mention BR's permit in Zenith oil field. Of all the fields in North Dakota, the Bell oil field and the Zenith oil field are, for me, two of the most exciting, if not the two most exciting. If you haven't clicked on Zenith oil field link, highly recommend you do so now. And then look at the GIS map server.
Voyager Oil and Gas: Operations Update and Guidance -- Bakken, North Dakota, USA
Link here.
In 2011 Voyager has acquired 4,123 net mineral acres at an average price of $1,239 per acre in the Williston Basin targeting the Bakken and Three Forks formations.
Voyager controls approximately 28,000 net acres targeting the Bakken and Three Forks as of May 15, 2011. We anticipate that the industry will eventually drill as many as six wells per 1,280 acre unit which would equate up to 131 net wells on our current leasehold. Most of the newly acquired acreage is located in Richland County, Montana where Brigham Exploration announced the Johnson 30-19 #1H discovery. The Johnson well was reported to produce 2,962 barrels of oil equivalent "BOE" during its early 24-hour peak flow back period.
Based on our current and forecasted drilling activity, Voyager expects to average 700 barrels of oil equivalent "BOE" per day by the end of 2011. The drilling and production guidance is in line with previous estimates.
Thank Goodness for the Internet: Does Anyone Really Think This Would Have Been Reported in the Evening News?
One in five (20%) of new ObamaCare waivers go to nightclubs, restaurants, and "fancy hotels," in Nancy Pelosi's home district. Does one really think this would have made the nightly news? Do pigs fly?
I commented on this back on January 26, 2011:
I commented on this back on January 26, 2011:
[Update: holy mackerel -- the number of waivers is now up to 733. Many of them Obama's friends. This is absolutely nuts. January 26, 2011.]
Seeking Alpha: Nice Response to the NOG Bear Raid
Link here.
All I can say is investors have yet another great entry point into the Bakken. I can't keep track of everything, but one data point that cries "buy me" is whenever KOG drops to $6.00/share. As recently as May 11, 2011, Motley Fool had a short positive blurb on KOG. Motley Fool was, however, way off base connecting the administration's policies with the Bakken (see comments at the link).
All I can say is investors have yet another great entry point into the Bakken. I can't keep track of everything, but one data point that cries "buy me" is whenever KOG drops to $6.00/share. As recently as May 11, 2011, Motley Fool had a short positive blurb on KOG. Motley Fool was, however, way off base connecting the administration's policies with the Bakken (see comments at the link).
There Are Now Nine (9) Wells Along The Hess Long Lateral #17117
Looking at the GIS map server this morning I see that there are now nine (9) wells alongside the Hess long lateral #17117. I first talked about six monitoring wells along this long lateral back on March 18, 2011.
The original six wells all had "observation" in their names. The newest three wells no longer have "observation" in their names and are located immediately around the original well site of Hess #17117: EN-Person-156-94-1102H-1. Based on their names, these three new wells will not be monitoring #17117 but will be production wells. Note that the most recent permit (#20772) is the odd-man out of these four wells. #20772 is not a "Person" well but an "Enger" well and it will be going south, where the other three are going north.
The original long lateral EN-Person was a good well, but perhaps not a great well. It had an IP of 345, when it was tested back in September, 2008. Its total production has not yet reached 100,000 bbls of oil which I consider an important milestone by which to compare wells.
The nine permits along the horizontal #17117:
The original six wells all had "observation" in their names. The newest three wells no longer have "observation" in their names and are located immediately around the original well site of Hess #17117: EN-Person-156-94-1102H-1. Based on their names, these three new wells will not be monitoring #17117 but will be production wells. Note that the most recent permit (#20772) is the odd-man out of these four wells. #20772 is not a "Person" well but an "Enger" well and it will be going south, where the other three are going north.
The original long lateral EN-Person was a good well, but perhaps not a great well. It had an IP of 345, when it was tested back in September, 2008. Its total production has not yet reached 100,000 bbls of oil which I consider an important milestone by which to compare wells.
The nine permits along the horizontal #17117:
- 20500, EN-Person Observation 11-33, east side of the lateral
- 20315, EN-Person Observation 11-22, west side of the lateral (rig on site)
- 20442, EN-Person Observation 2-24, west side of the lateral
- 20361, EN-Person Observation 11-31, west side of the lateral
- 20539, EN-Person Observation 2-32, east side of the lateral
- 20599, EN-Person Observation 2-43, east side of the lateral (rig on site)
- 20669, EN-Person-156-94-1102H-2, at the wellhead, east side
- 20670, EN-Person-156-94-11-2H-3, at the wellhead, west side
- 20772, EN-Enger-156-94-1423H-1at the wellhead, south side
********
I assume the original six vertical wells are for monitoring, but there may be something else going on. Check out this article about EOG in Eagle Ford, south Texas.
********
May 17, 2011: The discussion group is starting to discuss this.
EN-Person Observation Wells Discussion
For folks interested in an update regarding Hess' EN-Person Observation wells might be interested in this link.
For a fuller discussion regarding location of all six wells, click here.
For a fuller discussion regarding location of all six wells, click here.
EPA Delays Rule on Industrial Emissions -- Los Angeles Times
Link here.
The above story was above the fold in the LA Times with a huge headline. I am unable to find the story on the front page of the New York Times. I'm sure the story will eventually show up on the front page, but later in the news cycle. Very interesting. The leading story in today's on-line NYT edition has to do with thieves stealing "real" hair for hair extensions. Okay.
The regulation to limit pollutants at power plants is suspended after protests from industry. It is the Obama administration's latest concession on the environment.
The Obama administration has decided to delay a rule that would cut emissions from power plants at major industrial facilities, the most recent in a series of decisions since the midterm election to postpone controversial environmental regulations and steer a more business-friendly course.
The EPA's decision Monday about the rule comes three days after President Obama announced plans to open more domestic territory to oil and gas drilling.
Cover-Up Lite or Selective Reporting
The above story was above the fold in the LA Times with a huge headline. I am unable to find the story on the front page of the New York Times. I'm sure the story will eventually show up on the front page, but later in the news cycle. Very interesting. The leading story in today's on-line NYT edition has to do with thieves stealing "real" hair for hair extensions. Okay.