Monday, July 9, 2012

Little Rig on the Prairie -- Looking East Over Williston -- A BEXP Walking Rig in the Foreground

Just a quiet little town on the prairie.
Photo sent to me by Gary.
At the far left you can see a yellow warning sign: circle or round-about. The only one in Williston. I have been told there is only other round-about in the state, in Fargo. This photo is taken from the far northwest corner of the city. Looking east over the "old city." To the right (out of the picture) and several miles to the south would be the new industrial parks. At least I think that's the view. 

Bakken Realty

This is their website.

Because I am on the road, I have not had a chance to look at the site in depth, but they sent me a note, asking if I would get the word out that they are interested in helping folks find a place to live in the North Dakota oil patch.

That's all I know. If I can be of further help in a specific way, let me know. But I'm not in the Bakken right now, so I'm not up to date on what is actually going on in the trenches.

Earnings: 2Q12

All 2Q12 earnings will be reported at this page; link will be on sidebar at the right, under "Earnings Central."

I don't have time to check/update earnings on all companies listed below. If you see one that I have missed, feel free to send it in (anonymous comment or by e-mail) and I will post it.

General update: Mike Filloon, 2Q12; widening deltas affecting bottom line;

Earnings Calendar
Abraxas Petroleum Corp. misses Q2 ests: Reports Q2 (Jun) earnings of $0.02 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.03; revenues fell 4.8% year/year to $15.9 mln vs the $19.41 mln consensus. Production of 388.7 MBoe (4,272 Boepd), up 12% over Q1 2012, of which 54% was oil or natural gas liquids.
BEXP: see STO below

BHI: Baker Hughes beats by $0.22, beats on revs: Reports Q2 (Jun) earnings of $1.00 per share,
$0.22 better than the Capital IQ Consensus Estimate of $0.78; revenues rose 12.3% year/year to $5.33 bln vs the $5.25 bln consensus. "The impact on margins from the seasonal slowdown in Canada was mostly offset by improved results in onshore U.S. The initiatives to improve our Pressure Pumping business helped stabilize its results this quarter by offsetting the higher costs for certain raw materials and the weaker market conditions for Pressure Pumping. Our International business delivered improved revenue and operating profit, driven primarily by outstanding performance in Europe and the Middle East....We are cautiously optimistic about the market outlook for the remainder of the year. If commodity prices remain at current levels, we believe activity in onshore U.S. should remain stable. In the Gulf of Mexico and International, we expect continuing improvement as these markets expand.
CHK:  earnings report, a pdf; profit rises on asset sale; from Rigzone: profits soar!
CLNE: transcript;

CLR: sneak peek; press release, raises guidance for 2012;
Continental Resources misses by $0.07, misses on revs: Reports Q2 (Jun) earnings of $0.68 per share, $0.07 worse than the Capital IQ Consensus Estimate of $0.75; revenues rose 34.6% year/year to $523.4 mln vs the $554.23 mln consensus. The co has revised its guidance for G&A and now expects it will average in a range of $2.10 to $2.35 per Boe for 2012, compared with its original guidance of $2.50 to $2.75 per Boe. Co achieved record production of 94,852 barrels of oil equivalent per day, a 76% increase over production of 53,984 Boepd for the second quarter of 2011. Production reached 100,000 Boepd in June 2012.
COP:   tough report for COP;  $1.80/share vs $2.41/share yoy;

CVX: beats forecast; revs down 7% yoy;

DBLE:  press release;

DNR: profits fall; transcript;

EEP: investors like 2Q12 report; still paying 7.2%; 

ENB: misses by 2 cents; a dividend growth stock with significant upside potential --;

EOG: 2Q12 production results outstanding; beats by 18 cents; third biggest player (in terms of wells drilled) in the Eagle Ford; highlights and "straight talk" from 2Q12 earnings conference call;

EPD:  Enterprise Products beats by $0.10, misses on revs: Reports Q2 (Jun) earnings of $0.64 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.54; revenues fell 12.7% year/year to $9.79 bln vs the $11.72 bln consensus.


GEOI: acquired by Halcon (HK) 2Q12; transcript; see HK below;

GMXR:  press release here; S&P cuts GMXR racing to 'CC';

HAL: beats both top and bottom lines;

HES: a nice report; beats forecasts, $1.61 vs $1.39; transcript;

HP: beats by $0.22, beats on revs: Reports Q3 (Jun) earnings of $1.38 per share, $0.22 better than the Capital IQ Consensus Estimate of $1.16; revenues rose 27.3% year/year to $819.8 mln vs the $778.73 mln consensus.

HK: acquired GEOI 2Q12; transcriptrecently discovered new NGL-rich field; earnings and operations update for 2Q12 here;

Kinder Morgan: reports loss; raises dividend; transcript at; positive review at;

KOG:  2Q12 production; in-line earnings, misses on revenues; transcript; from Motley Fool:
Another strong performer is Kodiak Oil & Gas (NYSE: KOG ) , up 7% this morning. The company has once again made significant strides over the past quarter, growing revenue 288% year over year as well as surpassing EPS estimates by $0.15. Things are looking bright for Kodiak, especially if oil prices continue to march higher -- the company expects a 50% growth rate over the next few years.

LINE: misses;

MDU: beats by 10 cents; transcript;

MPC (Marathon Petroleum): Profits rise 1.5%;

MRO (Marathon Oil): solid 2Q12 profits; 56 cents versus $1.39 last year, 2Q11;

NBL: at Yahoo In-Play -- misses by 26 cents; but investors pushed share price higher; Investopedia;

NBR: goes red;

NFX: tough report; $1.00/share vs $1.62/share yoy; July corporate presentation; raises production forecast, doesn't mention the Bakken; earnings call at; despite natural gas prices, will increase production; doing very, very well in the Eagle Ford and Uinta;

NOG:  pre-announcement stories; production and drilling update, 2Q12; thoughts prior to announcement at; solid quarter;

NOV: outstanding; transcript; investors like results --- share price up almost 10%;

OAS:  earnings; Motley Fool; investors must like what they are seeing -- share prices are up over $2.00; transcript; data points from the conference call;

OKE:  earnings preview; earnings increase; transcript;

OKS: ONEOK Partners earnings higher; increases guidance for rest of 2012; 

OXY: beats on revenue;

PSX: Phillips 66 beats by $0.48: Reports Q2 (Jun) earnings of $2.23 per share, excluding non-recurring items

QEP: sneak peek; earnings drop for first time after four straight earnings increases;

RIG: transcript (September 12, 2012);

SD:  July presentation here; slammed for increasing CAPEXbeats profits estimates; huge; the "hidden gem" of the energy sector (; transcript:
The Mississippian continues to be our growth engine. Last quarter, we drilled 91 horizontal wells and our production continues to meet or beat our expectations. This play also is a shallow, low-risk carbonate reservoir, where our production per well on a 30-day rate has continued to improve over time. The value driver of the horizontal Mississippian play is the ability to consistently drill thousands of high rate of return oil wells over hundreds of miles. It's a story of scale. Our team has assembled 1.7 million net acres with room to drill more than 8,000 horizontal wells. And now nearly 50% of that acreage has been proven by the 872 horizontal wells that have been drilled. Each quarter, we become more convinced in the size and scope of the play. SandRidge has now drilled 382 producing wells across the original acreage we put together from 2007 to 2011. And we are seeing consistent results from Comanche County, Kansas through Grant County, Oklahoma. This covers an area of more than 150 miles and an area where we have nearly 850,000 net acres or a 10-year inventory at today's rig count at only 3 wells per section.

We also have optimism about our extension acreage in Western Kansas, where we control nearly 900,000 net acres and where there have been more than 7,000 vertical Mississippian producers drilled. We are now drilling oil wells in the extension portion of the play with 3 rigs. And we'll know more about the results by the end of this year.
SLB: "best-in-show" -- Cramer; Schlumberger beats by $0.05, reports revs in-line: Reports Q2 (Jun) earnings of $1.05 per
share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of $1.00; revenues rose 16.2% year/year to $10.45 bln vs the $10.45 bln consensus. Internationally, sequential results were underpinned by activity growth both offshore and in key land markets. Latin America and Middle East & Asia Areas both progressed well, while Europe, CIS and Africa showed particular strength across the Area. In North America, the Canadian spring break-up and the weakness in the US land hydraulic fracturing market lowered results although this was tempered by robust performance in other land businesses and in the US Gulf of Mexico.
SM: wow, whiffs on revenues; transcript: things not so "hunky dory" in the Eagle Ford;

SRE: beats; transcript;

SRGY: Synergy Resources misses by $0.03; misses on revs: Reports Q3 (May) EPS of $0.05 vs $0.08 CIQ est; revs increased 157% YoY to $7.5 mln vs $8.1 mln CIQ est.; revenue record; SeekingAlpha (June 27; up 10%, not stopping); focused on D-J Basin;


STO (BEXP): SeekingAlpha

STR: 22 cents vs 22 cents yoy; misses on revenue;

TPLM: Press release; transcript;

USEG: press release; transcript;

VOG: press release -- this might be last report for VOG under this ticker symbol; will be listing under Emerald Oil in the future; record oil production -- almost 1,000 bbls/day; earned 2 cents/share;

WFT: ugly;

WHX:  why WHX is down --;


WLL: 2Q12 production up 26% yoy; $1.27/share; ups 2012 production guidance; ups 2012 CAPEX budget; for comparison, I believe it was $1.03 for 1Q12 and 84 cents for 1Q11; transcript.

WMB: sneak peek; earnings decline/investors not happy; transcript;

WPX:  link here; huge share price decline (almost 8%);

XOM: great story; transcript: In the Bakken, we have moved into a development phase across our roughly 400,000 net acre leasehold. In the first half of 2012, we turned 40 wells to sales, nearly double the pace of 2011. In the second quarter of 2012, our gross operated Bakken production increased by 60% over the prior year quarter. Since our entry into the play, we have more than doubled gross operative production to approximately 32,000 oil equivalent barrels per day.

North Dakota's Workforce Intelligence Network

I have only a few minutes while traveling to do a bit of blogging, so just the link -- it may be of interest to several for any number of reasons. A big "thank you" to Don for sending me the link.

Workforce Intelligence Network.

Employment in North Dakota by county, a PDF file. 

KOG Posts New Corporate Presentation

Link to PDF file here.

Minor but significant changes noted at snapshot. It looks like they've formally added a new prospect, the Wildrose. They also note that two of their prospects will be held by production by the end of this year, and a third prospect will be HBP by the end of 2013.

A big "thank you" to Don for alerting me to new presentation.

CarpeDiem: What Each Well Means To North Dakota -- Staggering

Link here to Carpe

Again, the comments are most interesting to read.

Bottom line: the great wells pay for themselves in 6 months; the good wells in 18 months; the average well in 3 to 5 years; there are no "dry" wells; and the Bakken wells will produce for 29 years. There may be some hyperbole in all that but not much. The oil companies are investing on the order of $3 billion/month -- repeat, $3 billion/month -- in just a few counties in western North Dakota. And this is despite a depression in some parts of the country, a recession in many parts of the country, and an economic downtown in all but a few counties in the country.

Estimated ultimate recovery (EUR) has been revised upward over the past 18 months, from 400,000 bbls in the "better" Bakken to 900,000. I expect to see EURs of 1,000,000 bbls. Initial production rates of 500 to 1,000 bbls/day got the interest of folks in the Bakken. Now, even wells with IPs of 1,000 to 2,000 are not talked about except by the mineral owners. And I haven't seen a headline in "I don't know how long" regarding a "gusher." The only comment that comes remotely close is the current question of whether the IP reported for a CLR well last week of 4,991, was an error. It probably was.

Estimates of original oil in place also continue to be revised upward.

Total production of four or five counties in North Dakota now exceeds that of California and Alaska. North Dakota oil production is #2 in the nation, behind Texas, and North Dakota production is choked back due to several factors.

The railroad industry is being transformed -- that probably would have happened anyway, but the killing of the Keystone XL offered new opportunities. Funny how things work out. 

North Dakota is blessed with most land in private hands, but we will get the chance to see what federal fracking regulations do to drilling on the reservation next year. Based on the history of Montana, the writing is on the wall.

But I digress.

When one reads some of the comments at CarpeDiem on this story, one gets the feeling that some folks don't understand that every month, 200 new wells are being drilled, each costing about $6- to $14 million. All with private money; no federal money. Each of those wells -- each of those wells -- can be thought of as equivalent to a new $10 million business sprouting up in your neighborhood. Two hundred new $10 million businesses sprouting up each month. I think I read somewhere it takes about 75 other oil service companies that keep a well running, including the tax accountants, the landmen, and, of course, it provides a lot of work for federal and state regulators and bureaucrats. And the cost of each well should be paid back within five or six years at worse, and unless the world quits using oil, they will keep pumping oil for 30 years.

Oh, one more thing. Each well right now is pretty much targeting one payzone: the middle Bakken or the Three Forks. 

Three (3) New Permits -- Oasis Has a Gusher -- MRO, GMXR, and Newfield With Some Nice Wells

NDIC has not yet corrected #21068, if it needs correcting? At the file report, I don't see the geologist's narrative, and I don't see the sundry forms that have the fracking data and IP. It looks like it was 27 days to total depth.

Daily activity list, July 9, 2012 --
  • Operators: Hess (2), XTO
  • Fields:Wheelock (2), North Fork
Off confidential:
  • 18652, drl, Whiting, BSMU 3107, Big Stick, s1/12;
  • 21502, 1,656, MRO, Jahnke USA 24-31TFH, Reunion Bay, t4/12; cum 26k 5/12;
  • 21750, 2,084, MRO, Wakelum 31-3TFH, Reunion Bay, t3/12; cum 44K 5/12;
  • 21925, 401, Hess, MC-Heinert 144-94-2215H-1, Murphy Creek, t3/12; cum 21K 5/12;
  • 22121, 94, Corinthian Exp, Corinthian Brenden 9-33-1H, North Souris, Spearfish formation, t4/12; cum 8K 5/12;
  • 20425, 398, OXY/Anschutz, Polensky State 1-35-36H-142-97, Willmen, t1/12; cum 10K 5/12;
  • 21272, 442, Hess, GO-Weyrauch 157-97-1918H-1, Ray, t5/12; cum 9K 5/12;
  • 21571, 78 (no typo), Baytex, Moe 29-32-162-100H 1BP, t1/12; cum 11K 5/12;
  • 21894, 707, CLR, Kiefel 1-36H, West Capa, t4/12; cum 28K 5/12;
  • 21971, 662, CLR, Mathewson 1-30H, Oliver, t4/12; cum 25K 5/12;
  • 20143, drl, XTO, FBIR Lawrence 24X-26, Heart Butte, s1/12;
  • 20654, drl, Whtiting, Curl 21-14H, Ellsworth; s10/11; cum 41K 5/12;
  • 21319, 756, Oasis, Dunlin 5892 34-32H, Cottonwood, t2/12; cum 24K 5/12;
  • 21640, 3,163, Oasis, Catch Federal 5201 11-12H, Camp, t2/12; cum 62K 5/12;
  • 21642, 298, XOY USA, Coyote Creek 1-20-17H-142-97, 
  • 21776, 461, CLR, Scottsdale 1-31H, Indian Hill, t4/12; cum 19K 5/12;
  • 21860, 100, Crescent Point Energy, CPEUSC Paopao 35-26-158N-100W, Dublin, t3/12; cum --
  • 21898, 1,088, XTO, Vance 31X-14, Dollar Joe, t3/12; cum 17K 5/12;
Seven (7) producing wells completed, including:
  • 21942, 1,023, Newfield, Inga 150-99-11-2-10H, McKenzie,
  • 21941, 1,876, Newfield, Inga 150-99-11-2-2H, McKenzie, 
  • 21589, 1,296, GMXR, Johnson 31-4-1H, McKenzie,

Carpe Diem: Economy is So Good, It's Almost Like Another Country

NOTE: If you came here looking for the Bakken, I would skip this post. It's mostly idly rambling about my sorry life and it's not worth reading. I guess this is a note to the grandchildren without calling it that. 

But back to the story at hand: the North Dakota economy is so good, it's almost like another country.

Link to CarpeDiem. com.

At the link it's more fund to read the comments. So a bit of a digression. The winter in North Dakota is said to keep the riff-raff out.

One comment talks about all the snow North Dakota gets. Western North Dakota gets very little snow, interestingly enough. Snowmobiles sit idle most of the year. No one is "digging themselves out" of snow in the oil patch. Not to the extent implied by those who do not know. Boston, Chicago, Detroit, Denver, etc., are incredibly worse.

Cold, remote? I used to think the same thing. Then I read about Calgary. As in Canada. Calgary sits on the plains also. Cold, remote. Calgary didn't grow because tourists wanted to see the grain grow.

But I digress.

While making my cross-country trip from San Antonio to Los Angeles, I had similar thoughts about North Dakota: it's economy is doing so well that it's almost like another country. This morning, I'm sitting in a cyber cafe/coffee shop up the street from Starbucks and there are three of us here, on one of the busiest streets in this part of south Los Angeles. Earlier in the week, I was going to Starbucks and the same thing: half a dozen people. I honestly don't know how these folks are staying in business (and a lot apparently are not, in southern California). But in Williston, it's standing room only and waiting everywhere for almost anything. When visiting Williston I plan my route before I leave the house to eliminate all left turns.

As long as I'm digressing, I can't remember if I posted this. In Boston where I now spend most of my time taking care of our granddaughters, I frequent the Starbucks on Harvard Square. It's a very large Starbucks, two floors with two "bars,"  and hard to find a place to sit if one does not get their early. Forget about the weekends. It's all young folks and everyone -- literally everyone -- has a computer or table or mobile device -- and almost 100% Apple/Mac. 

In San Antonio, in a busy part of two, a "normal-size" Starbucks and maybe half-filled, and maybe have the folks are connected, and about 2 out of 3 or maybe 3 of 5 have an Apple.

But here, in south Los Angeles, San Pedro, I am the only one with a computer, and most folks are my generation (age 60 or older). Right now, two of us are sitting here. Two at the counter. One outside smoking a pipe. Earlier, the conversation between two were typical of the conversations I hear all week: social security, medical problems, how to get more disability, new taps for the kitchen, remodel the house. I told my wife that the Los Angeles suburbs are one step above Miami, Florida, with regard to retirees. At least based on what I've heard. I've never visited Miami.

I told May that I'm not sure I could live in southern California. I suppose some day my conversation will be mostly about social security, medical problems, how to get more disability, new faucets for the kitchen, remodel the house. But not yet.

I wonder what they're talking about at the coffee shops in Williston? Probably the Irgens Rexall wells northeast of Williston, #21068, you know.. the CLR well that reported an IP of almost 5,000 bbls -- I just checked the NDIC website. It has not been corrected yet. We will see if the daily activity report corrects it. If not...

Unemployment Benefits Overpaid by $14 Billion ...

... so much could be said. Maybe later.

Link here to mainstream media that reported the story.

The $14 billion overpayment is a "dog-bites-man" story and I assumed the Drudge Report would not bother to link it. I was wrong. I just checked, but of more interest is the Drudge Report link just below that story that Democrat donors are starting to renounce their US citizenship. Well, at least one has. To be closer to her family. (Family is described as "money.")

CLR Calls Special Shareholder Meeting To Vote on Issuing More Shares

I don't know if the number of proposed shares has been released; I did not see it in the announcement, but you know me, I often read too quickly and miss things.

The meeting is scheduled for August 12, 2012, I believe.

RBN Energy: The Marcellus Changes Everything

The Marcellus changes everything: Part IV.

Link here to RBN Energy, Part II and Part III.

Several data points due to shale gas from the Marcellus within the next couple of years:
  • imports from Canada into the northeastern US will cease
  • imports from the Midwest will gradually back out
  • inflows from the Gulf region could diminish/halt