Thursday, November 8, 2012

On Tap For Friday: Wells Coming Off Confidential List

RBN Energy: continues the series on crude oil pricing at Cushing. This time -- the roll adjust mechanism that links the NYMEX CMA back to physical price timing and then the WTI Postings Plus (P-Plus) alternative mechanism used to price WTI at Cushing.

These are the Madson wells, in section 33-153-95, on a 3-well pad, in the Williston area, October, 2012, sent in by a reader, southeast of Williston in the Charlson field:
  • 22860, 1,471, XTO/Denbury Onshore, Madson 22-33SEH, Charlson, t10/12; cum 138K 8/14;
  • 22861, 1,594, Denbury Onshore, Madson 22-33SH, Charlson, t9/12; cum 133K 8/14;
  • 22862, conf, Denbury Onshore, Madson 11-33SWH, Charlson, t10/12; cum 138K 8/14;

Wells coming off the confidential list:
  • 10327, 431/25, Red River/Red River B, Encore/Total Petroleum, Olson 1-30, Horse Creek, for the Red River, t1/84 with cum of 212K now PNA; for the Red River B, t8/12; cum 14K 8/14;
  • 21487, 762, BR, Bartlett 11-16TFH, Murphy Creek, t9/12; cum 45K 9/14;
  • 22857, 358, CLR Willie 2-36AH (the "AH" designation has been discussed earlier); t8/12; cum 88K 8/14; 
Finally: rationing of gasoline in Sandy-hit area of NYC;
Earlier today it was reported that the gasoline crisis could last weeks. Human nature and hoarding. Hofmeister pointed that out several days ago (no link unfortunately; happened to catch part of an interview on CNBC; that must have been last week).

Fracking Acids and Glycols

I received the following as a comment. I know nothing more than you do now with regard to this comment, but knowing that some folks don't read comments, here it is:
My company supplies industrial chemicals such as glycols, methanol, formic acid, hydrochloric acid, boric acid, isopropanol, and many others. If interested, please call Sam @ 973-460-9222.

Big Stories at the Williston Wire Today: Airlines, Airport, RV Lots, Apartment, Famous Dave's, Tractor and Equipment Expands; Hospitals

No links; Williston Wire is easy to subscribe to where one will find the full stories. This is an incredible "Wire" today:
  • Famous Dave's to locate in Williston; click here for details (a pdf); for investors only; press release: 21 new locations;
  • Tractor and Equipment plans major expansion; 50 acres in the Bakken Industrial Park north of Williston on Highway 2; future home to a full T&E The Cat Rental Store; click here for more (a pdf)
  • Williston Village RV Resort Spa opens; three miles north of Wal-Mart within Williston City limits; 100 lots for RVs; 48-unit apartment complex; lots are huge (30 x 70; large enough for three trucks to be parked in front of them)
  • Hospital looking for affordable housing for its employees; nurses needed in western North Dakota
  • Watford City hospital faces big challenges with huge population increase
  • Airlines: United Airlines off to smooth start; Delta to begin service to Williston next week;Frontier Airlines returns to Minot; previously reported -- new terminal for Minot airport planned;
  • Feel-good story on crude-by-rail
  • Previously reported: Enbridge Sandpiper Pipeline, Tioga to Superior, Wisconsin
  • Theodore Roosevelt Expressway annual meeting to be held next week; the expressway begins in Rapid City; goes through Spearfish, Belle Fourche, Bowman, Belfield, Watford City, Williston, Culberton, Plentywood, and ends at the Port of Raymond into Canada;

Eleven (11) New Permits; QEP Continues To Infill In Heart Butte; Newfield Cancels Two Permits;

Bakken Operations

Active rigs: 190 (hmmmm, surprise, surprise, back up to the "190s")

Eleven (11) new permits
  • Operators: QEP (4), BEXP (3), CLR (2), Liberty Resources, Fidelity
  • Fields: Lone Tree Lake (Williams), Stanley (Mountrail), Glass Bluff (McKenzie), Ragged Butte (McKenzie), Heart Butte (Dunn)
Comments: No OXY USA, no Newfield permit; however, Newfield has canceled two permits:
  • 20943, PNC,  Newfield, Jarrett 156-99-35-26-2H, East Fork,
  • 20945, PNC, Newfield, Sami 156-99-35-26-1H, East Fork,
Concentration of wells: to see how concentrated the wells are getting in the Heart Butte field where the four new QEP wells will be, click here

Wells coming off confidential list were reported earlier; see sidebar at the right

Producing well completed:
  • 22521, 888, XTO, Gravgaard 13-24-1H, Midway, t10/12; cum --
About twenty wells, operator was transferred from Upton Resources to Williston Exploration; permits numbers between 12078 (the oldest) to 16526) the most recent; all were in Billings County except for four in Stark County;

Petro-Hunt renewed four permits; one in Dunn County; three in Burke County

Canadian Perspective On The Keystone Following The Election

Link here to Calgary Herald.
As Canadian political and business leaders expressed optimism the proposed Keystone XL pipeline will win approval under a re-elected President Barack Obama, environmental opponents and the U.S. ambassador to Canada cautioned the energy megaproject isn’t a slam dunk.
But Obama, who earlier this year rejected TransCanada Corp.’s initial application because it needed more environmental review, has remained noncommital about the fate of the line, which would ship Alberta oilsands product to the U.S. Gulf Coast.
By the way, that reminds me, I need to post the top ten "to do" list for the EPA.

Holiday Gift Suggestion: A Book -- Double Entry, Jane Gleeson-White

Link here to the bookkeeper of Venice, the WSJ's book review of Double Entry, by Jane Gleeson-White.

I never, never buy business books -- I used to, but haven't bought one in ages. But I might make an exception for this one. This looks fun.
Double-entry bookkeeping was greeted by the kind of ecstatic commentary normally reserved for scientific discoveries. Goethe referred to it as "among the finest inventions of mankind."
Why such excitement? For a start, double entry represents a feat of quantification. Every asset or liability and each exchange is given a monetary value and recorded in the same currency.
The German sociologist Werner Sombart, author of "Modern Capitalism," a six-volume work of intellectual history published before World War II, went so far as to claim that, by encouraging regular record-keeping, mathematical order and the reduction of events to numerical abstractions, double entry contained the germ of the later scientific revolution.

After Sandy, No One Lined Up for Wind Turbines -- WSJ

Link here to the WSJ.
Let's consider what a wind-powered hospital in New York might look like. NYU's Langone Medical Center lost power shortly after Sandy hit. The hospital had diesel-fired emergency generators, but basement flooding caused them to fail. [One would think that lessons from the Japanese nuclear disaster would have taught us something, but I digress.] [The power failure] required the evacuation of hundreds of patients.
Assume the hospital needs one megawatt of emergency electricity-generation capacity. Lives are at stake. It needs power immediately. That capability could easily be provided by a single, trailer-mounted diesel generator, which would occupy a small corner of the hospital's garage (and be safely removed from any flooding threat).
By contrast, providing that much wind-generation capacity would require about 5.6 million square feet of land—an area of nearly 100 football fields. And all of that assumes that the land is available, the wind is blowing, and there are enough transmission lines to carry those wind-generated electrons from the countryside into Lower Manhattan.
Last year the mayor of New York pledged $50 million to Sierra Club's "Beyond Coal" campaign. The WSJ suggested he won't be making a similar pledge for Sierra Club's parallel "Beyond Oil" campaign.

Thank goodness.

But I bet there are a few folks in NYC wishing the major had pledged $50 million to shore up conventional utilities in case of global warming catastrophes that have been predicted since at least 1992 by Al Gore. Wow, a short synopsis of how long folks have had to prepare for global warming disasters predicted by Al:
Gore became interested in global warming when he took a course at Harvard University with Professor Roger Revelle, one of the first scientists to measure carbon dioxide in the atmosphere.
Later, when Gore was in Congress, he initiated the first congressional hearing on the subject in 1981. Gore's 1992 book, Earth in the Balance, dealing with a number of environmental topics, reached the New York Times bestseller list. 
As Vice President during the Clinton Administration, Gore pushed for the implementation of a carbon tax to encourage energy efficiency and diversify the choices of fuel better reflecting the true environmental costs of energy use; it was partially implemented in 1993.
My goodness, the book was published in 1992 -- that's exactly 20 years ago. And it reached the New York Times bestseller list, so it wasn't exactly unheard of. Twenty years to prepare for one storm that barely reached Hurricane Level 1 status.

One cannot argue that Luddites were standing in the way of upgrading and hardening conventional utilities; there is an article in the same WSJ today talking about the strides being made with new technology, and all the money spent on conventional ways to protect utilities.

The problem is that advocates of wind energy to replace oil ("Beyond Oil") cannot do the math. The math doesn't add up. One small generator in the corner of a garage will match 100 football field-size windmill farms.

The WSJ:
If oil didn't exist, we would have to invent it. No other substance comes close when it comes to energy density (the amount of energy contained in a given unit of volume or mass), ease of handling or flexibility. A single kilogram of diesel fuel contains about 13,000 watt-hours of energy. That is about twice the energy density of coal, six times that of wood, and about 300 times that of lead-acid batteries. (And those batteries are useful only if they have been charged by some other energy source.)
[And no, we're not going to run out of fossil fuel any time soon.]

A hundred football fields of windmill farms to power one hospital for emergency services only. [I have not verified the Journal's figures.]


And folks get alarmed by a quarter-acre pad that will support a well that will produce upwards of one million bbls of oil over its 30-year lifespan.

OK, You Be The Judge:

What's worse:
"We're from the government and we are here to help."

"Hey, we're from FEMA -- you know that federal emergency agency -- we're closing shop due to weather." (Their clipboards will get wet.)
Meanwhile: the US Post Office -- Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

I can't make this stuff up.

I assume the Red Cross and Salvation Army will remain behind when FEMA leaves due to weather.


And then this: Long gasoline lines likely for weeks post-Sandy.

This is quite remarkable. I thought they were making progress. Link here to NBC New York. It's not gonna help that the election is over and recovery efforts take on less urgency at the federal level.
Significant damage to northern New Jersey petroleum distribution facilities -- including the region’s largest refinery -- could keeps lines long at the gasoline pumps for weeks, ....
When Sandy came ashore last week, the Bayway Refinery in Linden, N.J. took on 12 feet of salt water, ....
Floodwaters damaged critical equipment, hampering the facility’s ability to pump gasoline into pipelines that are typically accessed by tanker trucks.
The Bayway refinery is the most productive refinery in the tri-state region, processing about 238,000 barrels of crude oil per day. On the East Coast, Bayway is second only to a plant operated by Philadelphia Energy Solutions, which has a production capacity of 335,000 barrels a day.
I didn't see FEMA mentioned in the article. 

STO (BEXP) To Make Bid For WLL?


November 9, 2012: Statoil completely denies. One needs to parse the denial. Smile.

Original Post
Link here.

$7.6 billion for Whiting? Market cap today is $4.95 billion.

7.6 - 4.95 --> 2.65
2.65/4.95 --> 53%
WLL has $1.6 billion in debt.

BEXP had about 385,000 net acres in the Bakken when bought by STO.
WLL has about 700,000 net acres in the Bakken, including some very, very nice sweet spots, and a great business plan/strategy for developing the Bakken.
385 + 700 --> 1.085 million. Just shy of CLR's "1.1" million net acres if their most recently announced deal goes through.

7.6 + 1.6 --> 9.2
9.2 billion / 700,000 acres --> $13,000/Bakken acre

Diamond Resources paid a bonus of $15,000/Bakken acre in the November ND state land lease auction.


From the November, 2012, WLL corporate presentation:

Gulf Coast: 1 mboed
Michigan: 2.6 mboed

Rocky Mountains (Bakken, Niobrara, Utah), headquarters in Denver: 60 mboed

Mid-Continent (Oklahoma): 8.4 mboed

Permian (west Texas): 11 mboed

Pie chart: Permian Basin, 37%; Rocky Mts, 46%

Drilling locations (net)
  • Northern Rockies (Bakken): 334
  • Southern Rockies (non-Bakken, such as Niobrara and Utah): 283
  • Permian: 338
  • Mid-Continent: 189
CAPEX: at $885 million, CAPEX for Northern Rockies ALONE accounts for almost 50% of WLL's total CAPEX.

Back to drilling locations:

Subtract out the Bakken (334): 810 net drilling locations. Thirty percent of their drilling locations accounting for almost 50% of total CAPEX, which includes corporate-wide facilities, land, EOR, etc.

Bottom line:

DNR sold its Bakken acreage and pulled back to its core competency in the south/southwest. Might WLL be considering selling its Bakken assets and pulling back to its heritage?

NOG Beats By a Penny; Doubles Production, Year-Over-Year


Later, 7:40 am: press release here: 27 cents, beats by a penny.

Original Post
From Wall Street Cheat Sheet:
The average analyst estimate is for profit of 26 cents per share, a rise of 36.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 28 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 27 cents during the last month. For the year, analysts are projecting net income of $1.01 per share, a rise of 62.9% from last year.

Enbridge Continues to Impress; Sempra Blew Away Analysts

Earnings press release here
Conference call here
New work here
This is not an investment site, so I won't say anything more. But again, do not make any investment decisions on what you read here. I am a long term holder of Enbridge and will continue to invest in shares on a regular basis.
Huge quarterconference calleven Motley Fool noticed
This is not an investment site, so I won't say anything more. But again, do not make any investment decisions on what you read here. I am a long term holder of SRE and will continue to invest in shares on a regular basis.

Ecuador, Argentina, Chevron

Argentina will embargo all of Chevron's assets in that country until they make good on the $19 billion Ecuadorian environmental claim. That's too bad; Chevron had just signed an agreement with Argentina to develop their oil and gas reserves.

Asians Buy More US Energy Assets

I would not have posted this, the 3Q12 earnings report for Devon since I do not follow the company, but somehow I stumbled upon it, and was curious why they experienced a steeper decline in revenue than expected. Before finding the answer, I read this:
The company also agreed in August to sell 30% of its interest in about 650,000 net acres in the oil-rich Cline and Midland-Wolfcamp Shales in West Texas to Japan's Sumitomo Corp. in a deal valued at about $1.4 billion.
And so it goes. We are selling our debt (bonds) to China, and our oil and gas to China and Japan.

Oh, the reason for the steeper-than-expected revenue decline:
Devon has seen its bottom line weaken in recent quarters on hedging losses. And like a number of energy producers, the company has turned its attention to oil as natural-gas prices remain weak. Last month, Devon unveiled plans to consolidate its U.S. exploration and production operations group at its Oklahoma City headquarters by the end of the first quarter, resulting in the closing of its Houston office. 
By the way, does this paragraph in the story mean anything to anybody (it preceded the explanation for the revenue decline):
Devon Energy Corp. swung to a third-quarter loss on a large asset-impairment charge as the independent oil and gas producer posted a steeper-than-expected revenue decline.
That's a rhetorical question; don't answer. Your time is better spent pondering why we are selling our energy assets to Japan and China. That's rhetorical, also.

Two Inches of Beautiful White Global Warming Blanketing Belmont, Massachusetts

Got up at 3:30 to shovel snow off the sidewalks and driveway.

Wow! Talk about a beautiful morning. The global warming is still coming down, I suppose, about a half-inch per hour. It is extremely wet and very heavy. On the streets, which have been cleared, it is turning to liquid along the edges -- so no "black ice." At least not in this area. And unless it gets colder again as the day goes on, I'm sure most of this will melt off later today.

There's a law in Massachusetts that will put you in prison if  someone slips on your sidewalk that has not been shoveled, so that's why we and the rest of Belmont were up at 3:30 to shovel snow. Not.

I was the only one up and shoveling, until Miss Daisey came down to help. It had nothing to do with any Massachusetts law. Neither of us really thought of this as drudgery -- it really was a beautiful morning. So, now to check a few things and then go back to bed. Maybe some photos in the a.m. when there's a bit more light.