Schlumberger To Increase Dividend; Net Earnings Up 36 Percent -- 4Q11

Payable February 22, 2012.

Net earnings up 36 percent. 

Schlumberger Ltd.'s fourth-quarter earnings rose 36% as a global drilling frenzy continued despite fears about the global economy.

The company said oil consumption and oil field activity will continue to grow, driven by relatively high energy prices and large oil companies' need to grow their reserves, despite uncertainty surrounding economic recovery in the U.S. and Europe.

Schlumberger, like other large oil field service providers, faces the specter of a major reduction in natural gas-directed drilling in North America, as prices for the commodity have reached 10-year lows due to a glut caused by overproduction and lackluster demand. Any reductions in activity, Schlumberger said in a statement, will be "short-lived," although the company said it was "building the required flexibility" into its plans.

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

Daily activity report, January 19, 2012 --

Operators: CLR (4), Whiting, XTO

Fields: Brooklyn, Banks, Lonesome, West Capa, St Demetrius

Five (5) on DRL status reported IPs, including:

• 19423, 1,106, OXY USA, Elroy Kadrmas 1-10-3H-143-96, Dunn County, Bakken, Fayette
• 19958, 1,494, MRO, Rhoda 24-31H, Mountrail, Bakken
• 20416, 489, OXY USA, Dvorak Trust 1-6-31H-142-96, Dunn County, Bakken, Russian Creek
• 20749, 101, OXY USA, Marlene Steffan 1-5-8H-141-97, Dunn County, Bakken, St Anthony Field

Five (5) wells released from confidential list; three completed/fracked, including:

• 19348, 995, EOG, Round Prairie 7-1522H, Bakken,
• 19919, 1,648, EOG, Liberty LR 21-36H, Bakken, 

OXY USA has had a number of poorer wells (based on IPs) in Dimond field, Burke County. The Fayette field in Dunn County is a very good field, part of the "original" Anschutz prospect. St Anthony and Russian Creek abut each other in the southwest part of the county; southwest part of the state. These are two very promising fields -- even so, OXY USA has not reported very exciting IPs in this field (see link to Russian Creek for other OXY USA wells in this field. 

Update On the Liberty Wells -- The Bakken, North Dakota, USA

Update on the Liberty wells as of posted date; cumulatives updated:

• 26602, 1,135, EOG, Liberty 28-23H, Parshall, 320 acres, t3/14; cum 71K 8/14;
• 26601, 1,045, EOG, Liberty 27-34H, Parshall, 320 acres, t3/14; cum 95K 8/14;
• 25103, 1,721, EOG, Liberty 26-1319H, Parshall, 1920-acre (3-section); t10/13; cum 217K 8/14;
• 23958, loc, EOG, Liberty LR 107-1109H, Van Hook,
• 22921, 60, EOG, Liberty 106-0107H, Parshall, middle Bakken (app for Three Forks), 49 stages; 10.5 million lbs; 1920-acres, t5/13; cum 320K 8/14;
• 21406, 1,355, EOG, Liberty 25-0107H, Parshall middle Bakken; 53 stages; 13.6 million lbs; 1920-acres; t4/13; cum 274K 8/14;
• 21225, 995, EOG, Liberty 24-2531H, Parshall, middle Bakken; 25 stages; 3.4 million lbs; 1920-acres; t12/11; F; cum 162K 3/13;
• 20557, PNC, EOG, Liberty 24-2531H, Parshall
• 20255, 892, EOG,  Liberty LR 15-26H, Van Hook, t4/12; cum 236K 8/14; ICO spacing (1600-acre)
• 20254, 980, EOG, Liberty LR 20-26H, Van Hook, t12/11; F; cum 226K 8/14; ICO spacing (1600-acre)
• 20038, 625, EOG, Liberty LR 12-11H, Van Hook; t4/12; cum 173K 8/14; ICO spacing
• 20037, 790, EOG, Liberty LR 17-11H; s1/11; Van Hook; t6/11; cum 243K 8/14; ICO spacing
• 19919, 1,648, EOG, Liberty LR 21-36H,  Van Hook; t7/11; 349K 8/14; F
• 19802, 1,215,  EOG, Liberty LR 18-14H, Van Hook, t10/11; cum 246K 8/14; ICO spacing; F
• 19721, 1,063, EOG, Liberty LR 19-23H; Van Hook; t3/11; F; cum 267K 8/14; ICO spacing
• 19720, 510, EOG, Liberty LR 14-23H, Van Hook; t4/11; F; cum 202K 8/14; ICO spacing
• 19360, PNC, EOG, Liberty LR 15-26W, Van Hook, Bakken
• 19231, 398, EOG, Liberty LR 13-14H, Van Hook; t12/11; F; cum 228K 8/14; ICO spacing
• 19210, 637, EOG, Liberty 3-14H, Van Hook, t12/10; cum 110K 8/14; 320-acre spacing
• 19122, 170, EOG, Liberty 102-01H; Parshall, Three Forks, 15 stages, 2.2 million lbs;  t11/10; cum 63K 8/14; one section
• 18979, PNC, EOG, Liberty LR XX-23H, Van Hook
• 18971, 894, EOG, Liberty 09-23H, Van Hook; t9/10; cum 143K 8/14; 320-acre spacing
• 18884, 625, EOG, Liberty 23-12H; Parshall; t9/10; cum 171K 8/14; one-section
• 18877, 541, EOG, Liberty 103-13H; Parshall; t8/10; cum 123K 8/14; one-section; pump
• 18828, 1,066, EOG, Liberty LR 16-36H; Van Hook; t2/11; cum 305K 8/14; 2-section; pump
• 18827, 732, EOG, Liberty 10-36H, Parshall; t2/11; cum 257K 8/14; one-section
• 18365, 1,379, EOG, Liberty 8-01H, Parshall; t7/10; cum 268K 8/14; one-section, pump
• 18101, 209, EOG, Liberty 2-11H; Van Hook; t12/09; cum 162K 8/14; one-section, pump
• 18066, 515, EOG, Liberty 101-12H; Parshall, Three Forks, 15 stages; 1.9 million lbs; t9/10; cum 96K 8/14; one-section, pump
• 18065, 369, EOG, Liberty 100-26H; Van Hook; t8/10; cum 90K 8/14; 320-acre, pump
• 18038, 806, EOG, Liberty 5-24H, Parshall; t9/10; cum 267K 8/14; one-section, pump
• 17997, 1,191, EOG, Liberty 6-25H, Parshall; t5/10; cum 177K 8/14; one-section, pump
• 17992, 711, EOG, Liberty 4-13H, Parshall; t8/10; cum 167K 8/14; one-section, pump
• 14345, PNC, Chesapeake, Liberty 1-8, Cedar Hills, Red River B, 9/97

It appears the Liberty wells are paying for themselves at the wellhead within the first two years. They will produce oil for 30+ years. 

This does not mean that EOG is a company to consider investing in; rather it points out a couple of things -- why the Bakken is so exciting, and the cumulatives despite very average IPs.

Update: SuperLongLaterals -- Bakken, North Dakota, USA

Link here.

Update on a couple of the "super long laterals."

• 21002, 384, GMX Resources, Wock 21-2-1H, New Hradec, Bakken Pool, s7/11; t10/11; cum 14K 12/11; 15 stages, 2.8 million lbs; Three Forks Formation
• 19721, 1,063, EOG, Liberty LR 19-23H, Van Hook, Bakken, s10/10; t3/11; cum 129K 11/11, 31 stages, 5 million lbs 

Unemployment Benefits -- First Time Claims Plummet

352,000.

That headline is an emotional boost, but then the reality sets in:

Still, the job market has a long way to go before it fully recovers from the damage of the Great Recession, which wiped out 8.7 million jobs. More than 13 million people remain unemployed. Millions more have given up looking for work and so are no longer counted as unemployed.

The overall number of people receiving benefits, which isn't seasonally adjusted, rose. More than 7.8 million people received benefits in the final week of last year. They include about 3.6 million people covered by extended-benefit programs begun during the recession. 

"...a long way to go."  That's putting it mildly.

Update of the Natural Gas National Interstate System

Bakken growth refuses to stop -- a Motley Fool blurb that is not worth reading. I assume a paid subscription to Motley Fool provides better content, but the Motley Fool articles I've seen are pretty worthless.

On the other hand, SeekingAlpha.com seldom disappoints. One of the themes on this blog regarding natural gas is that if it is to succeed, users and suppliers will evolve together to develop an economically feasible natural gas national interstate system.

I don't follow this national interstate system but my "myth" is that long-haul truckers now have a natural gas interstate system from California to Nevada/Utah and on to Wyoming. SeekingAlpha.com provides an update of the national system.

On January 12 Clean Energy (CLNE) announced more details of the planned "Natural Gas Highway". The company has identified 98 locations and plans to have 70 stations open by the end of 2012 in 33 states. Here is a map of the company's planned refueling locations: [map at link.]

The first phase of the plan will be completed by 2013 and will include 150 natural gas refueling stations. Phase 1 is targeting major highway hubs including: the San Diego-Los Angeles-Riverside-Las Vegas cluster and the Texas Triangle (Houston-San Antonio-Dallas/Ft. Worth); CLNE is also targeting high use long-haul routes like Los Angeles-Dallas; Houston-Chicago; Chicago-Atlanta; and a network of stations along major highways in the mid-west region (IL, IN, OH, MO, KY, TN, KS, OK, AL) to serve the heavy trucking traffic in the area.

It looks like my understanding of the system is not too far off.

For simplicity, it looks like I-10, I-20, and I-80 are the most likely interstates to be targeted for coast-to-coast refueling stations.

With diesel hitting new highs, and natural gas hitting new lows, it should be just a matter of time.  It will be interesting to watch this unfold as we pass through the tipping point.