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Monday, July 15, 2013

Wells Coming Off Confidential List Over Weekend, Monday Have Been Posted; Oasis With Two Huge Wells; Soda Companies Suffering From Chilly Spring, Wettest June In Decades (But Not Global Warming; Rather "Extreme Weather")

Results of wells coming off the confidential list have been posted.

The bigger news is the number of wells going to DRL status the past few weeks. In the update today, 10 of 18 wells coming off the confidential list went to DRL status.

Active rigs: 188 (steady, trending up)

RBN Energy: US natural gas headed to Mexico; bullish report; second in a series, I believe. Another must read story for those interested in natural gas, and especially the pipeline situation

My 2 cents today: Alaska squabbling over oil taxes. My 2 cents worth:
If I read it correctly, some folks are unhappy that Alaska cut oil taxes to try to encourage drilling.

If so, I think Alaska has some real problems getting their act together: neither the state nor the Federal government is helping their situation.

North Dakota is competing with Eagle Ford and the Permian, but Alaska (much harsher environment, politically and environmentally) is competing with all of the lower 48 (Permian, Williston, West Gulf, Niobrara), and with Canada. I don't see a lot of good things coming out of Alaska in the near term.
Of course, France is in even more trouble: won't drill at all. Rigzone is reporting:
President of France François Hollande ruled out shale gas exploration under his administration, as the country celebrated Bastille Day.
Speaking in a televised broadcast Sunday, Hollande said: "As long as I am president, there will be no shale gas exploration in France."
Hollande also joked: "What is shale gas? It is an Eldorado that just needs to be drilled?"
Hollande added that there was a risk to groundwater due to the hydraulic fracturing techniques used and that "one sees a number of consequences of this in the United States".
France banned exploring for shale gas in 2011 despite the country – along with Poland – having the greatest potential for recoverable shale gas in Europe, according to the International Energy Agency. Schuepbach Energy, which held exploration permits in France that were cancelled as a result of the 2011 ban, recently brought a legal case to challenge the ban in the French courts.
Of course, there have been "no" environmental disasters due to fracking in the US.

I hope France is not depending on their wine industry to save them. The Wall Street Journal is reporting:
One of the world's biggest vintners has been left with a hangover after poor U.S. sales forced it to destroy thousands of gallons of expired wine.
Treasury Wine Estates Ltd.,  whose brands range from the mass-market Beringer, made in the U.S., through to $1,000-a-bottle Penfolds Grange made in Australia, said Monday that it would book a 160 million-Australian-dollar (US$145 million) charge against its U.S. business in the year ended June 30, 2013.
The vintner relies heavily on sales of cheaper labels to cost-conscious consumers in the world's biggest wine market. While wine supplies in the U.S. and Europe have been stabilizing after a decadelong glut that worsened during the global financial crisis, Treasury Wine Estates said it had overestimated U.S. demand in the past year, forcing it to discount or destroy older wines that had passed their use-by date. 
Yup. They should have read the bill. Hero worship got them in trouble. Big trouble.  
My hunch: the employer-mandate is delayed; the unions will be given an extension of their previously-approved waivers. Individual mandates will be all that is left, and the House will de-fund enforcement.
WSJ Links

On Monday, only three sections, so we start with Money & Investing. But nothing of interest, and on we move to Marketplace.

The Boeing Dreamliner will take "days" to investigate; no mention in the headline whether the plane is grounded; Ethiopia Airlines says the fires are not a safety issue. That should be reassuring.

And then another story on a subject we will be seeing a lot more of in the future. The story was first reported in blogs like this one, then in media not read by 47% of the population; it will hit the fan next year: restaurant industry shifts to part-time:
Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law.
He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce.
I've said it before, and I'll say it again: I don't think the question has been adequately answered, who determines whether employees are part-time or full-time? The employer or the IRS. My hunch is some employers will be shocked and awed. Just saying.

Global warming, er.... climate change ... oh, okay, extreme weather is affecting soda sales. 
Coca-Cola Co., PepsiCo Inc., and Dr Pepper Snapple Group Inc. are expected to disclose weak U.S. sales in the wake of a chilly spring and the wettest June in decades. That's not the kind of weather that drives Americans into the arms of a cold drink, likely exacerbating a nearly decadelong decline in domestic soda consumption amid obesity concerns.
Cold and wet conditions in Europe also have damped demand for beverages, prompting regional bottler Coca-Cola Enterprises Inc. to scale back its full-year guidance last month. Globe-trotting Coke and PepsiCo also are navigating foreign-exchange headwinds from a strengthening dollar and slackening consumer demand in countries like China and Brazil, even as they boost profits through cost-cutting and other measures.
EU, China reach impasse on solar panels.

Microsoft cuts price of Surface (that's Microsoft's tablet) by up to 30%. I don't recall Microsoft cutting the price of the Zune before it faded away some years ago. I assume MSFT is taking advantage of the demise of the Nook; giving B & N customers a break.

An update on one of the biggest bankruptcies in US history.
As the largest electric company in Texas moves toward one of the biggest bankruptcies in U.S. history, its 1.6 million retail customers may hold the key to its future.
Energy Future Holdings LLC, a Dallas-based collection of power plants, transmission lines and an electricity-sales business, wants to shed $32 billion of debt that it amassed after a 2007 leveraged buyout that still ranks as one of the biggest in history.
But that debt-shedding effort has hit some stumbling blocks. In April, the former TXU Corp. said it had offered its senior creditors 85% of the firm and $5 billion in new debt or cash, but the creditors didn't bite.
There may be lessons here for other utilities, investors, and the US in general as we go down the road of renewables, crony capitalism, crazy policies.

Has anyone been following the Tour de Farce?

Absolutely nothing in The Front Section. Whatever happened to Syria?

Op-Ed: several good op-ed pieces, but not worth posting, linking. They can all be found here.

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