Friday Morning Links, News, And Views -- KOG Sails Through $10

Wow, KOG just sailed through to a new high, breaking the psychological $10.00 barrier. 

MDU just hit a new 52-week high.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here.

Active rigs: 178

Wells coming off confidential list today have been posted.

RBN Energy: nice "Fracking Sand 101" article today; great for reference and newbies.

The majority of the frac sand produced by companies like Unimin and US Silica is delivered under long term contracts to one of the main oil service companies that perform fraccing services at the wellhead (Weatherford, Sclumberger, Baker Hughes, Halliburton, and FTS International).

But one oil and gas producer at least has developed a proprietary frac sand supply. That company is EOG Resources – already a pioneer in the crude-by-rail business in North Dakota. EOG owns sand mines – they bought their first in 2008 in Texas and have purchased several mines in Wisconsin as well. EOG’s portfolio includes significant oil production assets in North Dakota and the Eagle Ford in South Texas. The company has built its own sand processing plant in Chippewa Falls, WS that delivers sand to distribution terminals close to drilling sites. For example, the company shipped 70 unit trains with 100 cars each of sand to its Refugio, TX storage and distribution terminal in the Eagle Ford during 2012.

EOG has also installed a resin coating plant at Refugio to coat frac sand for added crush resistance. Although numbers are hard to come by, it is clear from EOG’s continued investment, that the company has significantly reduced its frac sand costs by becoming its own supplier.

Holy sushi! From Japan, Reuters is reporting:

Prime Minister Shinzo Abe has to decide this later this year whether to carry out a plan that would raise the 5 percent sales tax to 8 percent from next April and then to 10 percent in October 2015.

WSJ Links

The start of the Detroit legacy: a Michigan County pulls its bond offering:

In the most tangible sign of fallout from Detroit's bankruptcy filing, a Michigan municipality postponed a $53 million bond sale as investors blanched at the offered terms.

Potential buyers wanted much higher yields than Genesee County was willing to pay, said people familiar with the offering.

The setback came amid broader concerns about the county's finances, the small size of the offering and the safety of municipal securities given the potential for some Detroit bondholders to suffer losses.

Postponing a bond offering like Genesee County's, which was scheduled for Thursday, is unusual in the municipal-bond market, and the county plans to try again in coming days, according to people familiar with the offering.

The postponement underscores the difficulties some other municipal issuers may encounter as they seek to raise funds in coming months amid difficulties in many locales in funding pensions, raising tax revenue and balancing budgets.

Buy munis at your own risk. 

The bad news keeps coming: lousy hiring numbers AND lower wages AND fewer hours.  But hey, the unemployment number dropped. Yup, because "workers" are dropping out of the labor force. The gap between the "haves" and the "have-nots" continues to widen.

By the way, there's a very, very interesting comment at that linked article just above about crappy hiring numbers, etc., etc. A reader mentioned he was able to make duplicates of his house key at a Lowe's using a machine with a credit card reader AND no employer required to help him operate the machine. Quite a few story lines in that short comment, but this is my comment: have you noticed all the plastic that makes your life so much simpler? And in many cases, you don't have to sign anything. Under $50 or something like that, and my Target Red Card just slides right through. I used to carry one credit card, and then let the credit card company organize the expenditures at the end of the year (to which I never paid any attention). It's a little late to be budgeting at the end of the year. Remember how some folks put so much money into various envelopes for rent, food, bowling, etc? It's gotten a lot easier: no envelopes. Just use pre-paid plastic. Pre-paid Starbucks plastic, for example. Subway has carried this one step farther: two cards on one account. Set up an account; keep one card for yourself and give another card to a significant other: friend, spouse, son, daughter, mother, father. Of course, using plastic is a bit old-fashioned when one can use an iPad app. Maybe next year.

Big Oil's problem: this is a great article for folks new to the investment world in the oil and gas industry.  Talk about a "Red Queen" problem. But I digress. This article helps explain why investing in Big Oil is not simply following the price of oil.

US car sales (continue to) surge.

The auto industry has been the most consistently improving area of the U.S. economy for the past several years. Auto and auto-parts makers have added hundreds of thousands of jobs as car and light truck demand rose from the industry's recent nadir in 2009.

Auto sales are getting a boost from low interest rates and gains in housing construction and energy exploration and production. Pickup truck sales, which are tightly related to new housing starts, have jumped this year. GM said July sales of its full-size GMC Sierra and Chevrolet Silverado pickups were up 44% from a year earlier. Ford's F-series pickup sales were up 23%, while Chrysler's Ram pickup notched a 31% gain.

Think about that: oil is flirting with $110/bbl and Ford pick-up sales are surging. 

And then this:

There is even some evidence that auto makers can't keep up with demand. Hyundai Motor Co. is at maximum capacity and has given up some sales because of inventory constraints.

For Adam Silverleib, vice president of Silko Honda in Raynham, Mass., it was a similar story. "We were challenged with inventory and had a low days supply, especially CR-V and Accord models. I just physically ran out of product," he said.

And the CR-V and Accord models are the higher end of the Honda line.

Rankings (GM, Toyota, Ford, Honda, Chrysler):

Honda Motor Co .'s July sales jumped 16% to 141,439 as it passed Chrysler in monthly sales for fourth overall. Toyota sales rose to 193,394. Toyota's jump in deliveries moved it past No. 2 Ford for the month in the U.S. for the first time in several years.

The Senate can't pass a spending bill? 

Congress's reeling budget process stumbled again Thursday as the Democratic-controlled Senate failed to advance a bill to increase spending for transportation and housing programs.

The vote came one day after a companion bill to cut spending for those programs collapsed in the Republican-controlled House because of a lack of support.

The twin failures show the struggle leaders of each chamber face in moving legislation, and the distance between the parties in reaching agreement on spending bills needed to keep the government operating.

I didn't think one could find a spending bill the Dems didn't like. I assume they were hoping the spending bill would include a bailout for Detroit.