Huge Initiative By Chesapeake To Help Loosen the OPEC Noose

Link here. And here.

The first link is a press release; the second link is a story that pretty much repeats the press release. It's a huge story.

Clean Energy Shares rise 15% on news of Chesapeake's initiative.

A big "thank you" to "anon 1" for alerting me to it.

Just too much news today to find on my own.

And earnings season just around the corner. And Alcoa reports it doubled its earnings this quarter compared to same quarter one year ago.

And Yet Another Forbes Article on Harold Hamm -- CLR -- Bakken, North Dakota, USA

Link here.

Forbes describes Harold Hamm as a "wild-eyed optimist."

I wish we had a "wild-eyed optimist" in the White House.

We could all use a few more "wild-eyed" optimists.

A big thank you to "Dave H." for alerting me to this article.

For Investors Only -- Double Eagle, KOG, and BEXP

Link here.

Look at the gross and net margins. As I've said many, many times, it's the "business of the business" that determines how well a company does. Gross margins may be great, but it's net margins that count.

Motley Fool on Chesapeake -- Bulls -- But Cautious -- For Investors Only -- Chesapeake Has A Bakken Position

Link here.

Bottom line:

Chesapeake is one of the most polarizing stocks I've seen. I side with the bulls on this one, because I'm a sucker for a company with a ton of hard assets, but I acknowledge that the bears have very good arguments. As such, I will be watching this company closely to see if it continues its plan to reduce debt and increase production. It would signal the end of the era of irresponsibility and bring about a higher share price.

Chesapeake has a Bakken position.

US Announces "WINNERS" of Oil Released From Strategic Petroleum Reserves -- This Is Absolutely Crazy -- But I'll Play Along

Link here.

The vast majority of the oil released from the US strategic petroelum reserve goes into off-shore storage vessels, or perhaps will be sent to Europe, making the US an exporter of light oil. Who woulda thought? About 80 percent will be moved to off-shore vessels. So, now, instead of the US government storing it, private companies are storing it. Something tells me they are not storing it for altruistic purposes. Average price paid: $107/bbl. This is absolutely crazy.

For all those who thought Barclays was an inappropriate bidder, they immediately put their oil into the pipeline. You could have done the same.

It looks like refiners were happy to get the oil (something tells me they did not pay a premium).

And it looks like everyone who bid, got their bid. Interesting.

Here are some highlights of the article:

 

Fifteen energy trading companies received contracts for crude oil from 

U.S. emergency stockpiles, the Department of Energy said on Monday.

The bids total 30.64 million barrels of oil, with the average bid at 

$107.20 per barrel.

About 80 percent of the offers for a drawdown of the 

Strategic Petroleum Reserve crude were based on moving the oil by vessel.

Valero Energy Corp            6.90 mln  105.62-109.76   Pipeline: 3.85
Vessel:   3.05 
 
Vitol Inc                     4.00 mln         108.05   Vessel 
 
Shell Trading USA             3.65 mln  105.70-108.88   Vessel:   3.0
Pipeline: 500,000
Barge:    150,000 
 
ConocoPhillips                2.10 mln  106.29-107.88   Vessel
Plains Marketing              2.08 mln  106.78-107.78   Vessel
Hess Corp                     2.00 mln  105.01-107.54   Vessel
Marathon                      2.00 mln  105.80-107.80   Vessel
ExxonMobil Corp               1.51 mln  107.34-108.94   Pipeline: 930,000
Vessel:   580,000 
 
JPMorgan                      1.50 mln         105.33   Vessel
Sunoco                        1.40 mln         106.78   Vessel
Tesoro                        1.20 mln         107.08   Vessel
Trafigura                     1.10 mln  105.20-107.20   Vessel
Murphy Oil                    500,000          106.73   Vessel
BP PLC                        500,000          105.04   Vessel
Barclays                      200,000          104.98   Pipeline 

If the US Doesn't Want Arctic Oil, Russia Will Have No Trouble Going After It -- Not A Bakken Story

Link here.

THOUSANDS of feet beneath impenetrable ice the Russian commander meticulously checked his position and opened the mini-submarine's hatch. A mechanical arm gently lowered a rustproof flagpole on to the floor of the ocean, directly beneath the North Pole.

Back in Moscow this feat of daring in the world's most inhospitable region, claimed to have been carried out in the name of exploration, was celebrated and compared to the Moon landing. Elsewhere it was regarded as a blatant act of provocation by a nation desperate to get its hands on yet another chunk of the Arctic. With it comes an almost unimaginable wealth of resources, including billions of barrels of oil, which lie untapped beneath the frozen wastes.

The days when powerful nations sailed round the globe planting their flags on every patch of land they encountered have supposedly been consigned to history.

Now there are strict rules set by the United Nations about sovereignty and just eight countries in the region, including the US and Russia, have a claim on the Arctic.

These nations are permitted to exploit "economic zones" stretching 200 miles beyond their borders and, until the world woke up to the huge opportunities lying beneath the ice, no one seemed very bothered about claiming more.

While Russia moves forward in its exploration of the Arctic energy resources, American politicians delay offshore drilling and debate "cap and trade" rules. 

Six (6) New Permits -- Bakken, North Dakota, USA

Daily activity report, July 11, 2011 --

Operators: Chesapeake (2), BEXP, Hess, Newfield, and Oasis

Fields: Painted Woods, Beaver Lodge, East Fork, Mondak and two wildcats

Chesapeake has two wildcats in Stark County.

BEXP has the permit in Painted Woods, up by Williston, the heart of the Bakken.

Hess has another permit in Beaver Lodge, where Amerada (later Amerada-Hess) discovered the first oil well in North Dakota, in 1951.

In today's daily activity report, there were two nice wells reported:

• 19808, 2,461, Newfield, Malm 149-98-11-2-1H, McKenzie County
• 19497, 1,046, Newfield, Wilson 150-99-29-21-1H, McKenzie County
• 18785, 852, CLR, Daniel 1-33H, Divide County
• 19332, 1,105, XTO, Lonnie 31X3, Williams County
• 19584, 2,192, BEXP, Dave Arnson 8-5 1H, Williams County
• 19824, 1,683, BR, Ransom 44-31H, McKenzie County

Newfield has been having some great wells lately. Slawson (privately held) also has some great wells; and, of course, BEXP always reports stunning IPs.

Top Oil Producers in North Dakota -- 2010 -- Bakken, North Dakota, USA -- From the Best Oil Journal in the Universe -- The Rocky Mountain Oil Journal

Raw data now. More explanation, links, comments later, but you all will like this, a quick summary of 2010 ND oil production by producer (producer; bbls oil in 1,000s; bbls water in 1,000s; # of wells; oil production/well):

1. EOG: 17,132; 4,896; 259; 66,146
2. WLL: 13,706; 10,291; 341; 30,278
3. CLR: 12,148; 11,156; 415; 29,272
4. BR: 9,420; 23,419; 221; 42,624
5. Hess: 6,970; 16,878; 445; 15,663
6. Marathon: 5,389; 1,586; 175; 30,794
7. Slawson: 4,604; 1,320, 84; 54,810
8. BEXP: 3,317; 2,867; 58; 57,190
9. Encore: 3,274; 21,564; 297; 11,023
10. XTO: 2,166; 1,632; 152; 14,250
11. Murex: 2,667; 1,283; 134
12. Petro-Hunt: 2,643; 4,960;179
13. Hunt Oil Co: 2,307; 1,063; 37
14. SM Energy Co: 2,005; 4,876; 177
15. Tracker Res Dev II LLC: 1,624; 1,294; 42; 38,667
16. Fidelity E&P Co: 1,599; 282; 98
17. Anschutz Expl Corp: 1,494; 952; 46
18. Oasis Pet NA LLC: 1,430; 2,033; 66
19. Newfield Prod Co: 1,353; 423; 52
20. Kodiak O&G (USA) Inc: 987; 531; 25; 39,480
21. Sequel Energy LLC: 804; 2,173; 232
22. Zenergy Oper Co LLC: 775; 136; 17
23. Zavanna, LLC: 767; 1,296; 42
24. Zenergy Inc: 731; 1,894; 74
25. Enerplus Res USA Corp: 671; 243; 9; 74,556
26. Sagebrush Res LLC: 640; 9,211; 123
27. QEP Energy Co: 543; 204; 10
28. Helis O&G Co LLC: 535; 126; 14
29. Citation O&G Corp: 438; 5,972; 113
30. Samson Res Co: 431; 543; 32; 13,468

The full list includes 67 producers. If you don't see "yours" in the list above and are interested, let me know in the comment section below.

More statistics to follow. Don't read too much into bbls/well without thinking about reasons for variations. Companies who drill a lot of wells, may have had a lot of wells come on line in the last couple of months of 2010, thereby skewing their 2010 results. Companies who brought on most of their wells in early 2010 would have artificially "higher" numbers, for example.

There may be typographical errors. I will correct them as I find them. Not all wells targeted the Bakken formation. I have explained in earlier postings the reason for identifying the current North Dakota boom as the "Bakken," even though it encompasses more than just the Bakken.

Data comes from a "free sample" of the best oil journal in the universe, the Rocky Mountain Oil Journal, Volume 91, No 8, February 25 - March 3, 2011.

Link here: 

http://www.rmoj.com/Content/SampleIssue.pdf

2nd Annual Infrastructure Finance and Development Summit -- Bakken, North Dakota, USA -- Denver, CO -- October 24 - 26, 2011 -- Register Now

This blog has focused on the oil companies operating in the Bakken. A shortfall of the blog has been the lack of much information on companies working to provide the necessary infrastructure to support those oil companies.

In fact, someone just asked who was buying, hauling, and selling water in the Bakken, a question I could not answer. But those answers and more should be forthcoming at the 2nd Annual Bakken Infrastructure Finance and Development Summit, October 24 - 26, in Denver, Colorado.

You can register now at this site: http://www.infocastinc.com/index.php/conference/528.

One of the Williston coordinators of this conference, Amy Olson, tells me that you can get a 15% discount in registration fees if you register using this promotion code: 116650.

The pre-workshop agenda is on the first day of the event, October 24.

The actual summit will be held the following two days, October 25 - 26.

At the linked site, you can download the agenda.

Some highlights:

• The keynote speaker will be ND Governor Jack Dalrymple
• Current takeaway capacity, Rick Smead, Navigant Consulting
• A panel of experts on pipeline instructure, to include: MDU, TransCanada, Kinder Morgan, Enbridge, others
• A panel of consultants for venture capital investments: Locke Lord Bissell & Liddell, Pine Brook Road Partners, MacQuarie Bank, Haddington Ventures, others
• Power (as in electricity, not political) issues, Cole Gustafson, North Dakota State University
• A case study on rail transloading facilities for crude oil by Watco Companies
• Panel discussion on outlook for trucking and oil-railing infrastructure, to include the vice president, chemical, Norfolk Southern Corporation
• A panel discussion on real estate opportunities

I did not see any agenda items related to the newly formed WAWS (water distribution authority in northwestern North Dakota) but something tells me there will be folks at the summit who will have some insight on the new project. 

My hunch is that the most valuable portion of this conference will be the networking. If one is serious about investment opportunities in the Bakken, this looks like a very good conference.

For me, the most exciting thing about the conference is its location: Denver, Colorado. It speaks volumes that the venue would be held where a number of oil companies that operate in the Bakken are located, but also where the financial institutions are that would provide the financing.

This has to be very, very exciting for those who have lived and worked the oil industry in the Williston Basin for the past 60 years (oil discovered in 1951).

This update and future updates will be linked at the sidebar at the right at the very top for easy access. If there are updates, I will let folks know. Again, I am being told that there is a 15% discount in on-line registration if you use the promo code noted above.

If anyone has any trouble registering, let me know, so I can let Amy know. Or phone the folks directly at (818) 888-4444.

18,000 -- Coming Into Focus -- Not A Bakken Story -- Cisco Announces Pending Layoff of 5,000

Update

July 12, 2011: Wow! Cisco has doubled the number of potential job cuts to 10,000.

Networking equipment company Cisco Systems Inc could eliminate as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, Bloomberg said, citing two people familiar with the matter.

As many as 7,000 jobs would be eliminated by the end of August, the people told the agency. Cisco is also providing early-retirement packages to about 3,000 workers who took buyouts, according to Bloomberg.

Early on Monday, Reuters reported that Cisco may slash about 5,000 jobs to meet Chief Executive John Chambers' goal of slashing costs by $1 billion.

Original Post

Until recently I had not really followed jobs numbers, unemployment, etc., except for the big picture. Like billion and trillion, I could never really get my arms around unemployment numbers, or jobs numbers. But with recent news, the numbers are starting to come into perspective.

For example, "everyone" opined (shouted?) that the June jobs numbers were horrendous. This was the report in which only 18,000 "new" jobs were reported in the month of June, 2011, when analysts had forecast 90,000.

18,000. It sounds horrendously low for a country the size of the United Stated, but can 18,000 be put into perspective?

With the last space shuttle launch, it is estimated that upwards of 8,000 jobs in Florida will be lost "directly" with the demise of this single program, and that another 20,000 "indirect" jobs could be lost. It would be close to impossible to quantify the lost revenue in establishments that survive, but cater to the employees of NASA that will be let go.

One contractor in New Orleans will let go 1,300 out of a workforce of 1,900 when the space shuttle program ends.

18,000. The number is starting to gain perspective.

We have not yet begun to see the number of state employees across the nation that will be let go now that the stimulus money is starting to run out. Minnesota alone could account for a number that puts "18,000" into perspective. The stimulus money was geared for a) shovel-ready jobs (which didn't exist); and, b) to save the jobs of state employees long enough until the economy recovered (which it hasn't).

And today, Cisco announces that it may soon cut 5,000 jobs. A number, "18,000," that was only ethereal a few days ago is becoming clearer, sharper.

It will be interesting if analysts project an increase in "new" jobs for the month of July, August, September. Federal jobs, state jobs, private sector jobs, Cisco. Hmmm. Clearer, sharper.

Vanguard Natural To Buy Rest of Encore Energy Partners LP -- Bakken, North Dakota, USA

Link here.

To some extent this is just a "bookkeeping" entry for me to keep track of operators in the Bakken. Vanguard Natural already controlled Encore, and Denbury Onshore acquired much of Encore's Bakken acreage last year. I assume we will see some "Encore" activity for awhile in the Bakken but over time the name "Encore" should disappear completely, having been bought by Denbury Onshore and Vanguard Natural.

Vanguard Natural Resources LLC (VNR) agreed to buy the 54 percent of Encore Energy Partners LP (ENP) it doesn’t already own in all-stock deal that values the oil and natural-gas producer at about $998 million.


Encore shareholders would receive 0.75 common units of Vanguard for each unit held, the Houston-based companies said today in a statement. Based on July 8 closing prices, the agreement values Encore at $21.94 a unit, a 20-cent premium. Vanguard on March 25 announced it had offered 0.72 units for Encore, which at the time amounted to $23.20 each, or $1.05 billion.

Consolidation will reduce operating costs and eliminate a $6.5 million annual payment from Encore to Vanguard. Vanguard already controls Encore through ownership of its general partner, according to the statement. Vanguard bought its stake in Encore in December from Denbury Resources Inc. for about $380 million.

Housing Shortage Extends To Northeast Montana -- Bakken, North Dakota, USA

Link here (regional links break early).

Dateline: Miles City, Montana.

Contractors in northeastern Montana are building 72 mobile housing units in Miles City to alleviate what officials say is a serious housing shortage for oil field workers based in Bainville.

"We're out of room," said Garth Harmon of Blaze Enterprises, a Bainville native who is developing the camp. "We've got people already every place we can shove them."

Rob Shores of Signal Butte Builders said crews are building the housing units as quickly as possible.

My father and I enjoyed driving over to Bainville every so often when I visited this past summer; lots of activity along the highway which was also being widened. 

Week 27: July 2 -- July 8, 2011

MDU To Build 88-MW Natural Gas Facility at Mandan, North Dakota

GMX Resources Spuds First Williston Basin Well

Interesting Proposal for New Housing Subdivision, Arnegard, North Dakota

Bakken Pipeline Update

Overview of Western Area Water Supply (WAWS) Authority

H&P To Build 12 New Land Rigs

Another Rail Oil-Loading Facility on Track -- Stark County

Williams County Commissioners Discuss Man-Camp Policies

Update on Nine Wells Along Hess Long Lateral #17117

No New Electric Lines to Be Placed In Reservation by McKenzie Electric?

Abraxas Buys Rig for the Bakken; Shortage of Rigs

We Are In Early Innings in the Bakken -- BEXP's Bud Brigham

GeoResources Provides Operations Update

Motley Fool Highlights Samson Oil and Gas

Operator Effectiveness in the Bakken

Rigs On Site by County

No Oil From Recent XOM Spill in Montana Reached North Dakota

Link here (regional link will break).

Test results from water samples taken in Williams County show that no oil from the recent Montana oil pipeline spill has traveled to North Dakota.

State Water Quality Director Dennis Fewless said results, which came in late Friday afternoon, came back negative for traces of oil.

SPR Release May Not Be Enough to Offset Libyan Loss of Oil

Link here (Forbes.com).

This is a most interesting story. Buried near the bottom of the story:

At the same time, rising hostilities between oil producer’s cartel OPEC and IEA, the west’s oil watchdog, have made the market nervous, according to Nomura.  While IEA announced they were releasing 60 million barrels of oil from strategic reserves (mainly from the U.S.) at a rate of 2 million barrels a day, “the market is now concerned if IEA can continue its release of strategic oil reserves to substitute the lost Libyan crude in the longer run.”

I posted the same thing some days ago, questioning whether if the release will even be adequate if hostilities in Libya continue into the autumn.