Thursday, October 31, 2013

The Williston Wire

Headlines and short notes only; no links. It is easy to subscribe to The Williston Wire.

Best story of the day: A swimming sensation at the 2012 London Olympics, Bethesda's Katie Ledecky followed her gold-medal performance in the Summer Games with a record-smashing showing at the world championships in Barcelona this summer.  For her achievements in 2013, highlighted by winning four gold medals and setting two world records at the FINA World Championships, the 16-year-old Ledecky was named the U.S. Olympic Committee's Sportswoman of the Year.  Ledecky is the granddaughter of long-time Williston resident Kathleen Hagan and the niece of Frank Keogh.

Construction at one of Williston's newest subdivisions is in high gear.  The infrastructure is in the ground at The Meadows and eight single family homes are under construction; builders hope to break ground on at least five more before winter weather sets in.  Some of the 104 lots feature beautiful views of the Eagle Ridge Golf Club and Little Muddy River. The development will accept single family occupancy only. 

Lutheran Social Services is getting ready to complete a key project that will provide another location for older adults living in Williston to call home. The Legacy at Central Place (formerly the Williston Junior High)is expected to be ready for occupancy at the end of 2013.  The 44-unit project has one-bedroom and two-bedroom apartmentsthat will be rented out to those 55 and older with modest income. 

This is truly an incredible story: It's been a long day for Andrew Klefstad. And a long four years.  At dawn, he coaxed milk from the cows in his father Roger's barn near Ridgeland, Wis. Then he went back to work, restoring the century-old farmhouse that will soon become his young family's home.  Now it's 11 p.m., and his wife, Tiffany, is reaching up to wrap her arms around his neck, kissing him goodbye after a 90-mile drive from the farm to the Amtrak depot in St. Paul.  A duffel bag slung over his shoulder, Klefstad searches for a seat. More than 54,000 passengers last year rode this 12-hour, overnight train to the Bakken oil fields near Williston - more than doubling the passenger volume since North Dakota's latest oil boom began.

Not dealing with dry holes -- where I have heard that before? A leading energy analyst believes the world has an endless supply of oil.  Speaking at the North Dakota Motor Carriers Association Oilfield Trucking Convention in Dickinson, Southern Methodist University professor Bernard Weinstein said with advances in technology, fossil fuels may never run dry.  "There are five factors that go into the amount of oil that's available: geology, technology, price, capital and policy. Forever is a long, long time, but producing from shale is not like wildcatting. Shale plays are more like manufacturing plays because you're not really dealing with dry holes. We don't really know how much shale oil and gas is recoverable because the numbers keep going up." 

In June (most recent month for international oil production data), the three most prolific US oil fields - Permian Basin, Eagle Ford, and Bakken - together produced more than 3.1 million bpd. To put that amount of oil into perspective, that's almost as much oil produced throughout all of Canada in June at 3.66 million bpd, and slightly more oil than Iraq produced in June at 3.1 million bpd.

More trains proposed to move North Dakota oil to Washington state. With five refineries, Washington has long received crude oil from Alaska and elsewhere by ship, barges or pipelines.

XOM Looks At CBR; Consequence Of Killed Keystone XL 1.0

Corporate Intelligence is reporting that XOM is being hurt -- perhaps significantly -- by the lack of adequate pipeline coming out of western Canada.
Exxon Mobil Corp.'s ambition of boosting production depends in large part on wringing more crude from the oil sands of Western Canada. One challenge: Getting that crude to market to get paid. 
With room on Canadian oil pipelines in short supply, and the future of the proposed Keystone XL project in doubt, Exxon is considering building a rail terminal in Edmonton, Alberta to haul crude into the U.S. on trains, a company executive said on Thursday.
Meanwhile, a local Chicago news outlet posts a video on CBR safety, sent to me by a reader, noting that Chicago probably has the most truck/rail traffic in the nation. The reader questioned whether the news outlet had "an agenda." My answer:
Probably no agenda per se. But this is the buzz -- safety of CBR.

And the network now has file footage when the next CBR derailment occurs and blows up the entire city of Chicago.  Smile.

Seriously, thank you.

You are correct about all the railroad and truck traffic that goes through Chicago. It has to be much more than NY simply because of geographic location. Not  a lot of trains/trucks go east from NYC.

So, It Was God All Along, Huh?

Remember that record oil spill in North Dakota a few weeks ago? It looks like it had nothing to do with a "bad pipe," but rather a "bad lightning storm." The Bismarck Tribune is reporting:
Federal regulators say a lightning strike may have caused a pipeline rupture that spilled more than 20,000 barrels of oil in northwestern North Dakota.
The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (TPHMSA) said Thursday that a preliminary investigation "points to a strong electrical discharge as the cause of the failure."
I have heard through the grapevine that President Obama has directed the USDOTPHMSA to begin legal proceedings against God.

Vice President Biden has also asked the TPHMSA to come up with a shorter name/acronym -- one that he can remember.

MDU Reports Strong Earnings; Diesel Topping Plant Construction Progressing On Time

Data points highlighted by MDU regarding 3Q13 earnings, from the press release:
  • adjusted earnings per share of 49 cents compared to 38 cents last year, 29 percent increase
  • GAAP earnings per share of 44 cents compared to a loss of 16 cents last year
  • E&P earnings substantially higher; oil production grew 37 percent
  • construction business continues growth with combined 18 percent earnings increase and higher backlog
  • midstream asset drives earnings growth at pipeline and energy services
  • diesel topping plant construction progressing on time 
  • utility electric retail sales increased 5 percent
Hey, do you remember that wind farm that wasn't needed, that had no customer, ....

Earlier this week, in a press release, MDU announced:
 ... that [MDU] has signed a power purchase agreement with Thunder Spirit Wind LLC, a subsidiary of Wind Works Power Corp. 
The agreement is for approximately 105 megawatts of installed capacity of wind turbine generators to be located in southwest North Dakota near Hettinger. 
The generation will interconnect at Montana-Dakota’s substation near Hettinger. The project is expected to begin commercial operation in the fourth quarter of 2015.
Montana-Dakota issued a request for proposal earlier this year for electric capacity and energy. 
The Thunder Spirit Wind proposal will provide Montana-Dakota customers with stable pricing over the 25-year contract.

Wells Coming Off The Confidential List Friday; Oasis Has Several Big Wells; BR Has A Huge Well; KOG Reports Four Nice Smokey Wells In Pembroke Field

Active rigs: 180

Wells coming off the confidential list Friday:
  • 24570, 1,649, Oasis, Shields 5200 43-20T, Camp, t7/13; cum 27K 9/13;
  • 24644, 1,773, Oasis, Newberry 5200 41-20T, Camp, t9/13; cum --
  • 24905, 2,846, BR, CCU Prairie Rose 31-30MBH, Corral Creek, t8/13; cum 9/13;
  • 24952, 2,765, Oasis, Leni 5693 42-11B, Alger, t7/13; cum 24K 9/13;
  • 24956, drl, SM Energy, Cade 12X-19H, Poe, no production data,
  • 25278, 2,605, BR, CCU William 24-20TFH, Corral Creek, TD = 22,550 feet;  t10/13; cum --;

24905, see above, BR, CCU Prairie Rose 31-30MBH, Corral Creek:

DateOil RunsMCF Sold


In today's daily activity report, seven wells came off the confidential list and all went to PNC (permanently canceled), including two BR permits, one EOG permit, one Hess permit, one American Eagle permit, one MRO permit, and one Zenergy permit.

Six (6) new permits -- 
  • Operators: Oasis (4),Whiting (2)
  • Fields: St Anthony (Dunn), Gros Ventre (Burke), Cottonwood (Mountrail)
  • Comments:
Seven producing wells were completed:
  • 21646, 22 (no typo), Hess, LK-State 146-98-3526H-1, a Bakken well, Ranch Coulee, t9/13; cum --; this well was designed to test the middle Bakken production in this oil field, near Grassy Butte, North Dakota; the completion data is not yet scanned in; the consulting geologist thought the well would be a "successful well," pending completion
  • 23783, 640, CLR, Brandvik 4-25H1, Corral Creek, 4-section spacing, t10/13; cum -- 
  • 23784, 632, CLR, Brandvik 3-25H, Corral Creek, 4-section spacing, t10/13; cum --
  • 24788, 1,880, KOG, Smokey 13-7-19-13H, Pembroke, t9/13; cum 12K 9/13;
  • 24789, 1,669, KOG, Smokey 13-7-19-13H3, Pembroke, t9/13; cum 10K 9/13;
  • 24786, 1,321, KOG, Smokey 13-7-19-14H, Pembroke, t9/13; cum 12K 9/13;
  • 24787, 1,329, KOG, Smokey 13-7-19-14H3, Pembroke, t9/13; cum 8K 9/13;
KOG's Smokey wells are tracked here. The Pembroke oil field is tracked here
Rim Operating assumed operator status for 35 Prima Exploration wells.

Based on the number of salt water disposal wells being transferred to Cypress Energy Partners and the number of Cypress Energy disposal sites I saw while visiting the Bakken recently suggests Cypress Energy is becoming a major player in the Bakken. Maybe it always has been, and I simply had not noticed.

WPX: Website With Interesting Updates On The Bakken, The San Juan, The Niobrara, And The Marcellus

A reader alerted me to a nice 3-part series on the San Juan Basin at the WPX website. It turns out WPX has a number of great articles on various plays around the country, including the Bakken.

A reminder: I track, to some degree, the other oil and gas plays in the United States and Canada on the sidebar at the right, but you might have to scroll down a bit to find it.

Way Too Much Today: The New York Times Reporter Has It Wrong -- It Does Not Cost More To Ship By Rail Than By Pipeline

I'm going to be going off the net in a few minutes. I am overwhelmed with stories that need to be posted. So quickly, which I will come back to:

The New York Times is reporting:
Gizem Akhan, 24, was about to begin her final year studying the culinary arts at Yeditepe University in Istanbul. Tomasz Dziemianczuk, 36, took a vacation from his job as a cultural adviser at the University of Gdansk in Poland that has now unexpectedly turned into an unpaid leave of absence. 
Dmitri Litvinov and the others are just three of the 30 people aboard a Greenpeace International ship, the Arctic Sunrise, who are now confined in separate cells in the far northern city of Murmansk after staging a high-seas protest last month against oil exploration in the Arctic. All face criminal charges that could result in years in prison as a result of having grossly underestimated Russia’s readiness to assert — and even expand — its sovereignty in a region potentially rich with natural resources.
The vigorous legal response by the authorities, including the seizure of the ship itself, appears to have caught Greenpeace off guard and left the crew’s families and friends worried that the consequences of what the activists considered a peaceful protest could prove much graver than any expected when they set out. 
And speaking of unintended consequences, The New York Times is also reporting:
Over the past two years, environmentalists have chained themselves to the White House fence and otherwise coalesced around stopping the Keystone XL pipeline as their top priority in the fight against global warming.  
But even if President Obama rejects the pipeline, it might not matter much. Oil companies are already building rail terminals to deliver oil from western Canada to the United States, and even to Asia.
Since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day — equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline that is designed to bring oil from western Alberta to refineries along the Gulf Coast. 
Over all, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today.
The acceleration has come despite a derailment in the lakeside Quebec town of Lac-Megantic in July, in which a runaway oil train bound for a refinery in eastern Canada exploded, killing dozens of people and bankrupting the railway company. That accident and others more recently have renewed concerns about the safety of transporting oil by rail, and given an added argument to some who favor the Keystone XL pipeline.
“They don’t give up,” Jesse Prentice-Dunn, a Sierra Club policy analyst, said of the oil industry. [Nor does the Sierra Club, it should be added.]
If all the new terminals are built, Canada will potentially increase its exports to the United States by more than 20 percent — even if Keystone XL is never built.
Shipping by rail can cost an additional $5 or more per barrel, but oil companies have decided that they cannot afford to wait.
“The indecision on Keystone XL really spawned innovation and mobilized alternatives, and rail is a clear part of the options available to our industry,” said Paul Reimer, senior vice president in charge of transport and marketing at Cenovus Energy, a Canadian oil company that is planning to increase rail shipments from 7,000 barrels a day to as many as 30,000 barrels a day by the end of 2014. 
And much more at the link. The New York Times reporter notes that it costs $5/bbl more to ship by rail than by pipeline....I think that's grossly inaccurate. It is incredibly cheaper (as in less expensive to ship by rail and than by pipeline. When I have time, I might explain. I've explained it before, but it seems some folks still don't get it. A hint: it costs about $85/bbl more to ship by pipeline than by rail.)

Throwing Working Americans Under The Bus

This, incredibly, is the lead story over at Yahoo!Finance: "ObamaCare's Unintended Consequences: Throwing Working Americans Under The Bus."

Okay, that wasn't the exact headline; I paraphrased.

But here's the opening paragraphs:
Obamacare is meant to provide health coverage to the millions of Americans who don't have it, but the cruel irony is that millions of other Americans may lose their current health insurance as a result.
These "losers" are primarily people who buy their own health insurance rather than have it provided by an employer. Many now find their plans will be canceled because they fail to meet the minimum coverage requirements under Obamacare. These plans offer "bare bones insurance...usually catastrophic care...and beginning Jan. 1 insurance companies will not be allowed to offer these very plans," says Rick Newman, Yahoo Finance columnist.
"Obama did not tell us this was coming," adds Newman, "and now the White House is saying it's only 5% of the U.S. population. But it's 15 million people we're talking about here."
No one knows for sure exactly how many of those 15 million will actually lose their current insurance coverage. NPR reports that some insurers are canceling 20% of individual plans; others are canceling 80% of them.
Interestingly, the video has been pulled, as in removed. 

Much more at the link.

What makes this so incredible, is that just a few minutes ago, I posted a long "original" post that complements this story very, very nicely.

Nukes In A Post-Nuclear World: Going, Going, ... Gone


August 25, 2017: more on the Duke Energy decision to scrap the South Carolina nuclear energy project.

July 31, 2017: nuclear energy is dead in the US. The final nail in that coffin was the abrupt halt to any new work on the construction of nuclear reactors in South Carolina and Georgia.

May 30, 2017: Three Mile Island to close in 2019, Harrisburg, PA, although the announcement could simply be to put government regulators on notice.

Original Post 

Wow, this is incredible.

Over on the sidebar, I have something called the "Big Stories."

And over at "Big Stories," I have something called "Natural Gas and Coal in the Post-Nuclear World." I couldn't find a link for this to go to, so I simply linked a number of sites by country and state (that probably doesn't make sense but I doubt folks coming to read about the Bakken have read even this far, so it really doesn't matter, does it).


A reader sent me a most interesting article a couple of days ago. I was traveling and didn't have time to read the article or get back to the reader. It turns out to be a great article. Everyone (who had read this far, all three of you) needs to read this article.

Seldom do I hear such tough talk from a CEO (exception: Martha Stewart on her way to prison).

An excerpt from the article:
Facing deteriorating sentiment on Wall Street, Exelon Corp. CEO Christopher Crane today directly challenged analysts' views on his company and restated his confidence that the depressed wholesale power markets largely responsible for the Chicago-based utility giant's declining earnings will recover.
But, though Mr. Crane delivered it more pointedly than in the past, his message is one analysts have heard before, with no evidence afterward that the market fundamentals were changing. So this time Mr. Crane put a time limit on his patience: one year.
If wholesale power prices don't show signs of increasing by late next year, Exelon will begin shuttering power plants, he said on a call to discuss the company's third-quarter earnings, which surpassed analysts' expectations.
“We will shut down facilities that we do not see a path to long-term sustainable profitability,” Mr. Crane pledged.
Among the nuclear power plants regarded as the most vulnerable in that scenario is Exelon's Clinton facility, one of five it runs in Illinois.
And this:
But in reiterating their long-held view that power prices will increase $2 to $4 per megawatt-hour and boost Exelon's profits from its industry-leading nuclear fleet, Mr. Crane and other company executives didn't offer much new to back their opinion. “I sound like a broken record when I do this,” said Kenneth Cornew, CEO of Exelon's power-generation unit.
He then laid out Exelon's case that the retirement of old coal-fired power plants will lead to price increases over the next few years. Asked what effect the recent news that Princeton, N.J.-based power generation company NRG Energy Inc. would buy four coal-fired power stations in Illinois out of bankruptcy had on Exelon's outlook, Exelon Senior Vice President Joseph Nigro said, “We still see that $2 to $4 of upside in the market.”
While much of Exelon's stock performance is predicated on future natural gas prices, which correlate strongly with wholesale power prices, its current performance exceeded expectations. Its third-quarter operating earnings of $667 million, or 78 cents per share, easily beat consensus analyst estimates and also topped the 77 cents per share posted in the same quarter a year before.
Earnings at Exelon's Commonwealth Edison Co. were responsible for much of the upside surprise. ComEd generated operating earnings of $127 million, or 19 percent of Exelon's total, up 41 percent from $90 million during the same period last year, when ComEd accounted for 14 percent of Exelon's earnings.
The primary reason: higher revenues at ComEd thanks to the 2011 formula rate law enacted in Illinois over Gov. Pat Quinn's veto, according to Exelon's earnings release.
And much, much more at the link.

I can't think the reader enough for sending me this article. This will be the post linked to one of the "Big Stories" at the sidebar at the right.

Wow, I love my readers. In a manly sort of way, as they say in Dallas. 

History Is Repeating Itself

I would usually put something like this in draft, but these three data points keep bugging me, waking me up at night; bothering me while traveling cross country; and, interrupting my thoughts while at Starbucks. So, I will post the data points, and expand on the subject at later date:
  • Industrial Revolution: 1760 - 1820/1860
  • Romanticism Period: 1790 - 1800/1850 (peaked between 1800 and 1850)
  • Americans afraid of pipelines, perhaps the most mundane "thing" this country does
I was "forced" to finally start this subject when I read the headline/article that Don sent me: shale gas fracking a low risk to public health, review finds. Reuters is reporting out of London. Great Britain is debating whether to bankrupt their country with wind energy or become energy independent through fracking. It doesn't take a geologist or rocket scientist to know where this is going.
A Note To The Granddaughters

During the summer between my junior year and senior year in high school (1968), I took a summer course in "Romanticism" at St Olaf College, Northsomething, Minnesota. It was an incredible course, perhaps the most important thing I did during my high school years. (The most important thing I did in junior high was take a typing course during the summer following eighth grade. Prior to that, the most important thing I did was build a pinball machine with my close friend, Bruce.)

Some years before that summer at St Olaf College, I remember the specific moment when John F Kennedy said, in 1961: the United States should set as a goal the "landing a man on the moon and returning him safely to the earth" by the end of the decade.

I was ten years old, watching television, eating popcorn, and had just dropped a kernel on the floor when my mom asked me if I was okay and the wind was howling outside, and we were expecting a May thunderstorm, and the sky was getting darker and darker, and then the president said he was going to send a man to the moon. He didn't say which man, but I believed him. I thought maybe he was going to send Hubert Humphrey (too big) or maybe Richard Nixon (too controversial).

Now, I am older, wiser (?), certainly more cynical, and we have a president who can't get a website right and the Americans are afraid of underground pipelines.

The course on "Romanticism" helps me understand why Americans are afraid of underground pipelines. It's funny how things happen.

Carbo Ceramics Blow Past Analysts Expectations

Disclaimer: this is not an investment site.  Do not many any investment decisions based on what you read here or what you think you might have read here. 

From Yahoo!In-Play:
Carbo Ceramics beats by $0.48, beats on revs (CRR) 97.68 : Reports Q3 (Sep) earnings of $1.31 per share, $0.48 better than the Capital IQ Consensus Estimate of $0.83; revenues rose 33.4% year/year to $201.5 mln vs the $161.03 mln consensus.

The increase in revs was mainly attributed to a 48% increase in proppant sales volumes offset by a 6% decrease in the average proppant selling price for all proppants. North American (defined as Canada and the U.S.) proppant sales volumes increased 63%, while international proppant sales volumes decreased 17%, compared to the same period last year. 
CRR is surging $21 today, up 21%. No typo. Up 21% today. And the rich get richer. I think I first blogged about CRR back in 2009, maybe earlier. This was my August 7, 2010, post on Carbo Ceramics. At that post, I was in a hurry, but specifically singled out CRR as something folks should read about and finished with this, back in 2010:
I am easily swayed by presentations and earnings reports, but reading the "tea leaves" suggests to me that there are some very interesting things going on in the Bakken. I am accused of being inappropriately exuberant, but I feel even more so going into this next week. If we slip into a double-dip recession and price of oil drops back to below $60, I won't feel so good, but it will be another buying opportunity: a) the bigger companies have hedged their prices; and, b) the long term trend for the price of oil is up, at least in my mind.
Wow, "... some interesting things going on in the Bakken." Talk about an understatement.

For Investors Only

Disclaimer: this is not an investment site. Wow, how many times do I have to post this. Buy my legal adviser says I need to post if "often." Whatever that means. This is not an investment site. Do not many any investment decisions based on what you read here or what you think you might have read here. But if you had, you would be very, very rich today. Or broke. Whatever. 

For the rich folks, seven more companies announced they were increasing their dividends/distributions in this very, very bad economy, in which the US stock market hit a new all-time high earlier this week.

From Yahoo!In-Play:
  • Crude oil just rallied sharply higher. Dec crude is now +0.2% at $96.92/barrel.
    Magellan Midstream misses by $0.03, beats on revs; Raises 2013 DCF guidance: Reports earnings of $0.55 per share, $0.03 worse than the Capital IQ Consensus Estimate of $0.58; revenues rose 36.2% year/year to $443.8 mln vs the $424.75 mln consensus.
  • Phillips 66 seeks to expand Midstream business with proposed LPG export terminal to supply global markets. Co plans to develop a liquefied petroleum gas (LPG) export terminal in Freeport, Texas. The new terminal is intended to help meet growing global market demand for U.S.-supplied products. The proposed LPG export terminal would provide 4.4 million barrels per month of LPG export capacity, the equivalent of eight very large gas carriers (VLGC). It would be located at the site of the company's existing marine terminal in Freeport and utilize existing Phillips 66 midstream, transportation and storage infrastructure to supply petrochemical, heating and transportation markets globally. 
  • Exxon Mobil beats by $0.01, beats on revs: Reports earnings of $1.79 per share, $0.01 better than the Capital IQ Consensus Estimate of $1.78; revenues fell 2.4% year/year to $112.37 bln vs the $106.1 bln consensus.   
  • Enterprise Products: Texas Express Pipeline begins operations: Cos announced the start of service on the Texas Express natural gas liquids ("NGL") pipeline from Skellytown, Texas to the NGL fractionation and storage complex in Mont Belvieu, Texas. The Texas Express Pipeline, operated by Enterprise, gives producers in West and Central Texas, the Rocky Mountains, southern Oklahoma, the Mid-continent and the Denver-Julesburg basin much-needed takeaway capacity for growing NGL volumes and improved access to the largest NGL trading hub, located along the Gulf Coast.
  • Cardinal Health beats by $0.07, beats on revs; guides FY14 EPS above consensus; authorizes new $1 bln repurchase program.
  • ConocoPhillips beats by $0.02: Reports arnings of $1.47 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $1.45.  Achieved third-quarter guidance with production of 1,514 MBOED, including continuing operations of 1,470 MBOED and discontinued operations of 44 MBOED, which reflects two months of disruptions in Libya.  Carbo Ceramics beats by $0.48, beats on revs: Reports Q3 (Sep) earnings of $1.31 per share, $0.48 better than the Capital IQ Consensus Estimate of $0.83; revenues rose 33.4% year/year to $201.5 mln vs the $161.03 mln consensus. The increase in revs was mainly attributed to a 48% increase in proppant sales volumes offset by a 6% decrease in the average proppant selling price for all proppants. North American (defined as Canada and the U.S.) proppant sales volumes increased 63%, while international proppant sales volumes decreased 17%, compared to the same period last year.  
  •  Freightcar America beats by $0.01, misses on revs.

Thursday -- Jobless Apps Fall Less Than Expected; Rigs Falling In The Bakken; And It's A Wonderful Fall In Dallas; Stepping Stone To National Health Service

Active rigs: 180 (trending down)

RBN Energy: an update on CBR in the Bakken --
Bakken producer wellhead netbacks now favor shipping crude to the East Coast by rail. That is because Brent crude prices are trading more than $13/Bbl above WTI and nearly $11/Bbl higher than Light Louisiana Sweet crude at the Gulf Coast (October 30, 2013). Loading data from North Dakota indicates that volumes being shipped by rail have returned to levels not seen since April although less crude is going to the Gulf Coast. Today we conclude our two part analysis of Bakken producer transport options.
Jobless claims fall less than expected: another stellar ObamanNation report; data points:
  • analysts expected the drop to 339,000
  • actual drop to 340,000
  • worse: four-week average, a better measure, increased by 8,000 to 356,250
  • analysts blaming glitches in computers (where have we heard that before?)
  • when glitches fixed, some analysts expect numbers to drop to 330,000
  • buried very, very deep in the article, this boiler-plate: 
The four-week moving average for new claims, considered a better measure of labour market trends, increased 8,000 to 356,250.
It's interesting to scroll through the weekly summaries at "job watch" to see how little things have actually changed with regard to unemployment claims.  Sad commentary overall. Considering.


For newbies:  ObamaCare has three parts -- a) the employer mandate; b) the individual mandate; and, c) tax on medical devices.

The employer mandate was delayed for one full year. The individual mandate has been delayed six weeks due to a horrendous rollout on October 1, 2013. There are calls for the employee mandate to be delayed one year; the administration says the process will be fixed by December 1, 2013. I've lost the bubble on the tax on medical devices, and have no interest in it, anyway.

The big insurers are underwriting the employer mandate, but they are pulling out of the individual mandate insurance. The insurers underwriting the individual mandates are undercapitalized new-to-the-game health insurers. Folks who understand how insurance works can already see that the insurers underwriting the individual mandate will go the way of Solyndra over then next two to five years. These insurers have already said the six-week delay for the individual mandate will affect their profits. There is a reason the insurers underwriting the individual mandates are raising their premiums (often doubling their premiums) and canceling existing policies.

But that is all well known.

This is the bombshell: the employer mandate.  Everyone I have talked to, and having read extensively (I spend at least 30 seconds each day reading about ObamaCare, more time than I spend on sports), the majority of Americans are unaffected by ObamaCare because their company health care plan has been unaffected. Those who still have insurance with their employer haven't noticed a change in their insurance programs. So they are all happy. Hello! The employer mandate was extended one year, so of course company health programs have not changed much in the past few months.

There were many reasons that the employer mandate was extended, but I have not seen this reason discussed anywhere. So again, the MillionDollarWay blogspot is providing "new" information, something the site is well known for. LOL.  But I digress.

Just like the individual mandate, the employer mandate was not "ready for prime time." The insurers needed the one-year extension to see/study how the individual mandate was going to roll out. And it's not been a pretty picture.

As the undercapitalized, new-to-the-game insurers of the individual mandate start to exit the game (having made their money), the president will ask (direct?) the larger insurers to underwrite the individual mandate. The undercapitalized, new-to-the-game insurers are the "bad apples" that the President references. These "bad apples" will leave on their own, or will be directed to leave. The void will need to be filled by the larger health care insurers.

All things being equal, ObamaCare will increase the number of dollars insurance companies pay out for health care. One of the best features of the program, and one I strongly support, is the end of the cap on lifetime healthcare expenses. But commonsense tells one that eliminating the cap on lifetime healthcare expenses will require insurance premiums to go up. So, all things being equal, starting next year, folks who are insured through their employer will see their health care premiums, co-pays, and/or deductibles rise. More likely, the companies will simply shift their employees to ObamaCare's individual mandate, giving their employees $200/month to find their own care. Or as Mr Obama himself has said: "shop around."

But all things are not equal. As noted above, the president will ask (direct?) the larger insurers who underwrite employer-mandate insurance to step in and underwrite the individual-mandate insurance.

Two things follow:
  • the large insurers knew this would happen, and they needed the one year extension to see how the individual mandate roll-out would, well, roll out ---; and, 
  • the large insurers know they will have to increase premiums and/or change the benefit program for the employee-mandate insurance
So, for all those folks who get their insurance through their employer and have noted no change in their premiums or benefits, enjoy it for one more year. Next year, you will be subsidizing the individual mandate, as well as paying for the increased costs associated with ObamaCare mandates.

"Navigators" are noting that they are not signing up new folks because of "sticker shock."

The tea leaves are pretty easy to read:
  • the individual mandate will fail because it defies the law of insurance
  • the employer mandate will be the stepping stone to single-payer insurance
Single-payer insurance is "code" for a national health care system. And that's fine with me. The National Health Service works relatively well in Great Britain.


I don't know if anyone outside Massachusetts knows this, and I'm sure few residents of Massachusetts know this, but electricity for Massachusetts is provided by a UK company, National Grid.

This begs the question. If Mr Obama copied the Massachusetts health care plan when he developed ObamaCare, as he said throughout the day yesterday, why didn't he follow Massachusetts' lead in the electricity grid, and simply contract out the entire US health care program to the British National Health Service?

My hunch: that was in the works (for the US to simply contract out its entire healthcare program to the Brits until Mr Snowden defected, and we learned that Mr Obama was listening in (eavesdropping) on the Britsh prime minister's private phone calls. And so it goes.

Wednesday, October 30, 2013

For Archival Purposes: Analyst Thinks California Is Back In The Oil / Fracking Business; If So, It Won't Be Any Time Soon

Rigzone posts an analysis by John Kemp, a market analyst. He thinks now that California has approved fracking with stricter regulation, the state is back in the oil / fracking business.

The first few paragraphs of this five-page internet article:
LONDON, Oct 30 (Reuters) - California's lawmakers have ensured the state will remain a major oil and gas producer by approving new legislation allowing hydraulic fracturing and acid treatments to rejuvenate its ageing wells in exchange for strict controls and tougher enforcement. 
Senate Bill No 4 (SB 4), which Governor Jerry Brown signed into law on Sept. 20, directs the state Department of Conservation and other agencies to adopt new rules and regulations covering well construction, fracturing and other well stimulation treatments by the start of 2015
The chemicals used will have to be disclosed to regulators and published, subject to special treatment for trade secrets. Penalties for violating certain regulations on oil and gas operations were increased from $25,000 per violation to between $10,000 and $25,000 per violation per day. 
In another concession to environmental and community groups worried about the safety of fracturing and acidizing, the law directs the state's Natural Resources Agency, which focuses on environmental protection rather than oil and gas production, to conduct an independent scientific study into the hazards and risks.
I'm sure the anti-oil lobby can delay the publishing of these "new rules and regulations" well past the "start of 2015."

Posted for archival purposes only.

Daily Activity Report For Tuesday, October 29, 2013 -- Late Posting; Twenty-Six New Permits -- If Not A Record, Nearly A Record -- The Williston Basin, North Dakota, USA

Due to my traveling, I completely forgot about posting the daily activity report for yesterday, Tuesday, October 29, 2013. And what a day to miss: 26 new permits, five producing wells completed, and two of those made the "high IP" list.

This is really quite remarkable: 26 new permits. That certainly is a record, or nearly a record, for number of new permits in one day.

Twenty-six (26) new permits --
  • Operators: Hess (5), XTO (11), HRC (4), CLR (6)
  • Fields: Heart Butte (Dunn), North Tioga (Williams), Lindahl (Williams), Robinson Lake (Mountrail), Grinnell (McKenzie), McGregory Buttes (Dunn)
  • Comments:
Wells coming off the confidential lists for the last several days are posted; see sidebar at the right.

Five (5) producing wells completed:
  • 24469, 2,521, Statoil, Viking 16-15 2TFH, Poe, t9/13; cum --
  • 24865, 803, True Oil, Nelson 41-24-24-23H MB1, Red Wing Creek, t9/13; cum 2K 8/13;
  • 25685, 92, Corinthian Exploration, Corinthian Brandjord 9-4 1H, North Souris, t9/13; cum --
  • 23096, 825, QEP, MHA 1-06-05H-149-92, Heart Butte, t9/13; cum --
  • 23094, 2,512, QEP, MHA 2-06-05H-149-92, Heart Butte, t9/13; cum --
One well name change suggesting Slawson is targeting the middle Bakken with this well:
  • 24796, conf, Slawson, Blackdog 3-13-14H, Stockyard Creek,

The Dog Ate My Homework

Alaska has thrown in the towel, at least temporarily on ObamaCare citing the dog ate my homework a faulty calculator. A faulty calculator. One can download a calculator free at google. Yes, I know we're talking about a slightly more sophisticated calculator, like subtracting $100 from bronze, silver, gold, and platinum insurance plans, but for $150 million and rising, one would think that a calculator would be the least of the problems.

Washington State has/had the same problem, according to the source, but whereas Alaska underestimated subsidies, Washington State overestimated subsidies.

As a public service reminder, Consumer Reports recommends folks stay away from ObamaCare on-line enrollment sites.


Reuters is posting an incredible story on how bad the ObamaCare website story really is.

This may be the first Obama scandal that the administration cannot ride out simply by ignoring it. The administration ignored every past scandal until the next scandal came along and folks forgot about the previous scandal. There's something to suggest that this debacle won't go away simply by ignoring it. It is now a cocktail party subject, with folks checking their iPhones to see if the ObamaCare website is up and running.

From the linked story:
This year, the bills skyrocketed. The government spent $27.7 million more in April, an additional $58 million in May and, in its latest outlay, $18.2 million in mid-September.
According to the government records, that brought the total spending for CGI's work on to $196 million. Adding in potential options, the contract is now valued at $292 million.

The changes to the contract came in response to more detailed requirements about how the site should operate, said a person at CGI familiar with the work. 
When CMS awarded CGI Federal the first $55.7 million delivery order in 2011, "most of the regulations and guidance implementing the Affordable Care Act had not yet been finalized," said the person with knowledge of the award.

Natural Gas Corridors In The United States

From The Wall Street Journal (the link will probably break soon):
Operators of some of the largest U.S. truck fleets, including Lowe’s Cos., Procter & Gamble Co. and United Parcel Service Inc., are accelerating a shift to natural gas fueled trucks, betting on new engine technology that promises to drop the cost of shifting from diesel fuel.
Home-improvement retailer Lowe’s wants its delivery company to shift all of its several hundred trucks to natural gas by 2017. P&G already has 7% of its trucks on gas and could reach as much as 20% within two years. UPS says it plans to buy 1,000 natural gas trucks by the end of next year. FedEx Corp. plans to shift 30% of its long-distance trucks to natural gas over the next decade.
For related stories, see the articles at the "tags." Natural gas corridors will now be tracked at "The Big Stories." 

New "Screen Shot" For "The Million Dollar Way" When The Webmaster Is Off The Net

At 5:37 p.m., October 29, 2013, I checked the ObamaCare site. The state sites are up and running. The federal site is "down." Ms Sebelius says that the federal site has never "crashed." She said that during her testimony earlier today. While testifying, the system "crashed," "went down," whatever. Perhaps it was hacked. The security system has never been tested "end-to-end," but folks who worry about the security of Facebook, Google, and Apple, are happily providing the government site with social security numbers and other "private" information.

The government said it would be up "soon." So I checked. I assume this will become the next cocktail chatter, folks checking on their iPhones to see if the system is up.

If you check, be sure to go to a state that has the federal site. Again, the state sites are up and running. The site run by President Obama/Ms Sebelius is "down at the moment."

If you want to hear a recording, "you might" call the 1-800 number. And then, again, "you might" not.

Thirteen (13) New Permits; Some Great Wells Reported; Update On A Well That Was Being Re-Fracked

Someone recently asked if I had any update regarding any MRO wells that were going to be re-fracked. Look at the note at the bottom of this post.  

I don't see any wells coming off the confidential list Thursday.

Active rigs: 182

Thirteen (13) new permits --
  • Operators: Oasis (5), Abraxas (4), Slawson (2), OXY USA (2)
  • Fields: North Fork (McKenzie), Camp (McKenzie), Big Bend (McKenzie), Fayette (Dunn), Manning (Dunn)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right. 

Six (6) producing wells completed:
  • 25186, 2,170, QEP, Bert 1-2-11BH, Grail, t10/13; cum --
  • 24299, 1,687, HRC, Fort Berthold 148-95-13A-24-3H, Eagle Nest, t9/13; cum --
  • 23505, 2,147, HRC, Fort Berthold 152-93-17D-08-7H, Four Bears, t9/13; cum --
  • 23554, 2,909, HRC, Fort Berthold 152-94-14D-11-4H, Antelope, t8/13; cum 40K 8/13;
  • 25235, 2,285, BR, Everglades 21-3TFH, t8/13; cum --
  • 25279, 2,966, BR, CCU Williams 24-20MBH, t10/13; cum --
There were five well name changes, none seemed significant, except American Eagle's Wade well in Divide County will now be an Olaf well. 

Marathon has temporarily abandoned:
  • 16987, TA/373, MRO, Willard Kovaloff 21-17H, NENW 17-144N-95W,  Murphy Creek, t6/08; cum 102K 8/13; it was taken off-line for all practical purposes in November, 2011.  This wells was fracked with one (1) stage using 543,300 lbs of sand; an open hole frack, 6/16/2008. Then this note dated 5/9/12:  "After fracking the first stage, plug and perf tools were lost in the well at 13,878 feet. Work was done to try and retrieve; to no avail. Frack was stopped at that time. Flowed back some water, but no oil. One stage was fracked using 67,452 lbs of proppant. 

To the best of my knowledge, there is no Bakken operator with the name noted below, so I assume whoever sent me this letter anonymously is, in fact, a figment of one's imagination.

October 29, 2013

From: Bakken's Best Oil & Gas Exploration Company
To: [redacted]

Dear Jim,

As you know, you've been receiving in excess of $80,000/month (on average) in royalty payments for the well drilled in section [redacted] for the past year or so. It is an incredible well and we had hoped to drill several more Bakken and Three Forks wells on that drilling unit. That well is too remote to economically lay a natural gas pipeline.

Based on the NDIC ratio of 80-1, and the amount of natural gas flared from the existing well, you would be receiving about $56/month if we gathered, processed, transported, and sold the "wet" natural gas from that well, in addition to the (average) $80,000/month you have been receiving for quite some time.

As you know, you collect royalties on any flared natural gas after the initial natural gas royalty-free period.

We notice that you have joined the class action suit, claiming that we underpaid you for the natural gas that was flared after the initial natural gas royalty-free period.

Our records show that we made all the correct payments during this time period. It appears we will sort that out later.

For now, however, as you know, operators desire a good working relationship with mineral owners. I assume you are also aware that there are thousands, maybe tens of thousands of well sites that need to be drilled. Many of those sites are located in areas with better prospects than "your" well.

Although we had planned to drill upwards of ten more wells on that spacing unit, netting you untold millions of dollars in royalties, we have decided to move the rig elsewhere and concentrate on wells and areas where natural gas pipelines exist. This has nothing to do with the class action lawsuit, per se. It simply brought to our attention that you want us to be good stewards of the environment. So, we will drill where it makes sense to lay natural gas pipelines, construct natural gas processing plants, and where we have customers for that natural gas (which is becoming more and more difficult to the relative glut of natural gas in the United States).

We don't expect to get back to your area for several years. Off the record, we have learned that the Sierra Group might have found a pair of breeding sage grouse on your land, and it is our expectation that over the next few years, the environmental groups will succeed in their efforts to get this area declared a "safe zone." By that time, the decline rate of a Bakken well will mean that your royalties will .... well, you get the picture.

Sincerely yours,

CEO, Bakken's Best Oil & Gas Energy


Disclaimer: I'm pretty sure the letter above is fictitious. There is no group that I know of by the name, "Sierra Group."The writer probably meant to say "Sierra Club."


Okay, if you've read this far: it is a fictitious letter. Completely made up. Consider it an op-ed piece.

An Indication Why New York State Has Been Ambivalent Regarding The Marcellus

[Note: I don't want to get too far off course from the Bakken, but if folks are curious about the "wet" natural gas industry, the current corporate presentation by Range Resources is outstanding. In the post below, I was only concentrating on one small story line. In fact, the entire presentation is full of "wet" natural gas data, some of which is applicable to the Bakken.]


It's always been an enigma to me why New York State has been so ambivalent about fracking. Yes, I know the environmental / political controversy regarding fracking, but when there is a lot of money involved, sane men and women usually come to some sort of compromise. But, so far, New York State has not moved on approving fracking, though there are stories that New Yorkers may yet see fracking in their state.

Assuming there are sane men and women in New York, one has to ask the question why the state ha not come up with some sort of compromise.

Take a look at Range Resources' most recent corporate presentation, which can be found at the company's website.

Go to slides 11 - 14 of that October, 2013, presentation (I assume this presentation will change in the next month or so).

The map shows very little of the surrounding states, but even so, it is obviously the "Marcellus" and "Pennsylvania" are almost synonymous. The Marcellus extends into Ohio and West Virginia, but nothing compared to Pennsylvania.

But here's the bigger story: not only does it hardly extend into New York, what little extension there is into New York, the gas in place (GIP) is not very impressive.

This suggests a reason why the governor has been ambivalent about fracking: there may not be all that much reason to go after the gas in New York State. It may not be worth the political cost. It's very clear, God favored Pennsylvania when it came to oil and gas.

Again, there has been a lot written about the ban on fracking in New York State. Like all the hand-wringing on flaring in North Dakota, fracking in New York State is a red herring, or a McGuffin.


For investors, the Range Resources presentation is very interesting.  Range Resources has 540,000 acres in the Marcellus; with assumed spacing of 80-acre units, Range has about 6,750 potential Marcellus Shale locations. Range has drilled only 7% of their potential locations.

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

Oops! They Did It Again! SM Blows Past Analysts' Expectations. SM Reports Earnings: Beats By 46 Cents

Disclaimer: this is not an investment site. Whatever you do, do not make any investment decisions based on what you read here or what you think you may have read here. 

Regular readers might remember that just a few days ago Whiting blew past analysts' expectation

Data points from the SM Energy press release:
  • record quarterly average daily production of 138.8 MBOE per day at top end of guidance range of 132 - 139 MBOE per day
  • quarterly production mix of 50% liquids/50% natural gas
  • quarterly GAAP net income of $70.7 million, or $1.04 per diluted share
  • adjusted quarterly net income of $105.4 million, or $1.54 per diluted share
  • record quarterly EBITDAX of $410.4 million
  • net cash provided by operating activities of $404.5 million exceeds capital expenditures of $387.4 million 
  • successful Wolfcamp B well (30-day peak initial production 1,226 BOE per day)
  • company adds acreage in Midland Basin with potential in multiple benches of the Wolfcamp interval 
Beats by 46 cents.
Independent energy company SM Energy reported third-quarter results today after the market closed, showing that it posted total operating revenues of $613.1 million, a robust 62% gain from the $379.0 million in the same period the previous year, and ahead of the $596.8 million Capital IQ consensus estimate.
With adjusted net income coming in at $105.4 million, or $1.54 per share, well ahead of the $9.7 million, or $0.14 per share in the same period in 2012, it easily outpaced by $0.46 the CapIQ estimates of $1.08 per share.
SM is trading at a new high, almost 5% higher today. 

Montana Update

The Fairfield SunTimes is reporting:

Two completions in Richland County, both by Continental Resources:
  • Clayton-Rita HSU, total depth of 20,250; an IP of 215
  • Gidley 1-18H, total depth of 13,124; an IP of 264

Wednesday. Another Stellar Obama Economy Jobs Report: "Average Monthly Growth Has Fallen Below 150,000."

I see "we" had another stellar month with regard to jobs. Data points as being reported by Reuters:
  • 130,000 jobs added; less than the 150,000 required
  • 200,000 is the magic number; at least 200,000 required to keep things going
  • so, 130,000 is about as bad as it gets -- until it gets worse
  • oh, it did get worse: last month's tepid report was revised....drum roll ... down
  • last moth: revised from 166,000 to 145,000
  • quote from link:
"Average monthly growth has fallen below 150,000," said Mark Zandi, chief economist of Moody's Analytics, in a statement. "Any further weakening would signal rising unemployment. The weaker job growth is evident across most industries and company sizes."

Active rigs: 182

RBN Energy: update on California's energy needs. Less natural gas will be used, but Southern California Gas and San Diego Gas & Electric (both subsidiaries of Sempra Energy) are developing proposals to expand their gas pipeline systems, especially the part that feeds the San Diego area. Those plans will roll out in the next few months. That seems to be counter-intuitive, but the RBN Energy folks explain why.

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

Twelve companies announced increased dividends/distributions including Burger King and Williams Partners.

While driving last night, I heard that ObamaCare was "enrolling" 17,000 applicants/hour but now, this morning from CNNMoney: the ObamaCare site had another "outage" overnight. I was aware that the site was overwhelmed and not working as advertised when it came on-line, but I was unaware that there were actual "outages." Connecticut had good news: the system was preventing completing the full registration process, but some functions were still working. Yes, the "sister" site that explains how ObamaCare works would still be up.

Two data points:
Another data point for one of the nominees of the 2013 Geico Rock Award, I'm sure.

Tuesday, October 29, 2013

The Dow Hits An All-Time High?

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

30-second sound bite: the Dow closes at 15,680.35; apparently this is a new all-time high, or during the day the Dow traded at a new all-time high. Something like that. Whatever. The new Fed nominee will print more money; said to be more dovish than Mr Bernanke. Oil was down about 75 cents today, but here was an earlier RBN Energy analysis posted today talking about WTI and Bakken rail netbacks.
Disclaimer: the numbers are from Yahoo!Finance. I notice that occasionally Yahoo!Finance seems to have errors reporting 52-week highs.

KOG  is at a new high, $13.41.

HK is in a trading range, up half a percent, to $5.44.

Oasis is below its all-time high of $57, but was up a bit today, to $54.47.

WLL traded at a new high today, just slightly above $70.

CLR is in a trading range; up about half a percent today, but off its high.

CVX, COP, XOM: COP hits a new high. The other two in a trading range. All three up today.

EOG: off its 52-week high, but up 1.5% today.

Except for SRE, none of the following were updated due to time constraints.






I don't follow BNSF (BRK) much any more; BRK follows the market in general.


SRE: at a new high, $92.19.



Hess, Natural Gas Pipeline, Processing Plant

The Dickinson Press is reporting that the Alliance pipeline is completed.
The 80-mile-long Tioga Lateral Pipeline will move natural gas from Hess Corp.’s gas processing plant near Tioga and tie in to the existing Alliance mainline near Sherwood, just south of the Canadian border in Renville County. From there, the gas will make its way to processing facilities and other market connections in the Chicago area.
However, while the pipeline was ready for service on Sept. 1, gas won’t move through it until Hess Corp., which has contracted with Alliance to use about 50 percent of the pipeline’s capacity, finishes doubling the processing capacity of its Tioga plant to 250 million cubic feet per day. Steve McNally, Hess Corp’s general manager for North Dakota, said the expanded plant will open soon, but he wouldn’t say exactly when, saying more details would be available in the company’s quarterly report due out Wednesday.
There are several story lines here. Regular readers will know which story most interests me. Click here for the original post on the Alliance pipeline.

I track pipelines of interest here.

Seven Wells Coming Off Confidential List Tuesday; Several Whiting Pronghorn Prospect Wells

CNBC, 2nd from the top, headline story: serial entrepreneur finds gold in North Dakota oil boom. It's just a repeat of stories posted earlier regarding CNBC's recent visit to North Dakota. Link is here:
Sometimes serendipity happens in the strangest places. Case in point: Williston, N.D.
We flew into the Bakken boomtown and needed a place to do our TV show the next day. We found a hot new restaurant and asked if we could film there. They were more than happy to oblige, and the coolest thing was that the owner was a guy we probably should have heard of before.His name is Marcus Jundt, CEO of Williston Holding Co., which owns the Williston Brewing Co.--the spot we did the show from--and three other restaurants in town.
Of course, the rest of the story is at the link.

Active rigs: 182

Wells coming off the confidential list Wednesday: 
  • 21090, 468, Whiting, Pronghorn Federal 34-9PH, Park, t5/13; cum 17K 8/13;
  • 23849, 572, Whiting, Pronghorn Federal 44-9PH, Park, t5/13; cum 13K 8/13;
  • 23850, 508, Whiting, Pronghorn State Federal 41-16PH, Park, t5/13; cum 17K 8/13;
  • 24675, 694, CLR, Jerol 4-27H1, Lindahl, t9/13; cum --
  • 25035, 1,356, Whiting, Berry 14-11-1H, Cartwright, t5/13; cum 34K 8/13;
  • 25186, drl, QEP, Bert 1-2-11BH, Grail, no production data,
  • 25436, 280, Samson Resources, Stingray 1819-1H, Ambrose, t8/13; cum 5K 8/13;

The Gap Widens

This is the top link at Yahoo!Finance at the moment: how Americans will adapt to lower living standards.
Tyler Cowen, author of Average Is Over: Powering America Beyond the Age of the Great Stagnation, creates a stark image of a future U.S. economy in which most people either rocket toward the top or drift toward the bottom.
For me the "great stagnation" is the "Lost Decade: which is a tag at the bottom of the blog. I haven't added much to the "Lost Decade" in a long time.  The "Lost Decade," by the way, has become the two lost decades: first, 2000 - 2007 (not quite ten years), and now 2008 - 2018 (slightly longer than one ten-year period. 

Americans may adapt to lower living standards (like the Brits have done) but at least "we" will have the specter of "free" healthcare for all, whereas the Brits actually have it.

I don't quite agree that "most" people will "rocket" toward the top or drift toward the bottom. I think about 20% of educated, investing Americans -- many employed by the US government, including the military -- will "rocket" toward the top; another 47% will remain among the lower-middle class, lower class, and the "homeless"; another 40% (which we used to call the working middle class) will actually drift toward the bottom.

The upper-middle class (the 20% noted above) will disappear ( most will become rich, but not super-rich, who in turn will be different than the hyper-rich). The middle-middle class (the 40% noted above) will drift toward the lower middle class.

The upper-middle class will be those who have incomes that match those in Congress who were voted in before they were "rich." If that makes sense.

The remaining 3% (super-rich and mega-rich) will be the John Kerry-s and the Warren Buffett-s of America.

I don't see the "47%" number changing much, but I do see the quality of life improving immensely for about half of this group; deteriorating for the other half.

A Note To The Granddaughters

I picked up The Last Stand: Custer, Sitting Bull, and The Battle of the Little Bighorn, by Nathaniel Philbrick, c. 2010, at the museum / bookstore at the Chief Crazy Horse Memorial just north of Custer, South Dakota, in the Black Hills.

Absolutely fascinating book. I will write about it when I have time over at my literature blog

Increasing Energy Costs In Great Britain

Regular readers know about the renewable energy debacle in Europe (Europe at a tipping point) and the energy challenge facing Great Britain (Will Great Britain be prepared this year? ) which I follow with the other "Big Stories."

So, this article sent to me by Don was just a bit more than interesting, reported by BBC:
British Gas said prices for its dual-fuel customers would go up by 9.2% on 23 November. That includes an 8.4% increase in gas prices and a 10.4% rise in electricity prices. 
Regular readers also know that Great Britain could probably be energy independent or nearly energy independent if they wanted. But their actions have consequences, as noted by the BBC.

Meanwhile, our "own" South Dakota, MDU was granted a 2% rate increase vs the 3.3% it had requested.

By the way, I've not yet had time to find out how Britain's Thames Estuary off-shore wind farm during the recent storm, said to be the worse storm in the last five years (this time of year?) in Great Britain.

A Note To The Granddaughters

Regular readers know that one of my pet peeves is that McDonald's -- which is so good about offering free wi-fi across the country -- tries very, very hard to prevent folks from "plugging in." This is incredible. At the McDonald's on the north side of Salina, Kansas, just off US Highway 81, and just south of the I-70, the manager has installed a long bank of outlets. One other individual was plugged in when I walked in. She was in the booth on the other side of the bank of outlets; I took the large semi-circular table that sat four in permanently fixed seats. I am very, very impressed. And no "PlayRoom" -- something else I've talked about with regard to McDonald's.

Hodge Podge While Traveling; Minimal Updates While Traveling

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

OXY USA 3Q13 profit rises 15% on US output growth. -- Reuters.

SM Energy will report after the market closes today.

Valero Energy beats by 16 cents.  Reports earnings of $0.57 per share, $0.16 better than the Capital IQ Consensus Estimate of $0.41; revenues rose 4.1% year/year to $36.14 bln vs the $31.02 bln consensus.
The decrease in operating income was due to lower refining throughput margins caused by lower gasoline and diesel margins as well as lower light sweet and sour crude oil discounts. Also contributing to the decline in operating income were higher costs for Renewable Identification Numbers to comply with the U.S. federal Renewable Fuel Standard. Strong performance in the ethanol business partially offset the decline in operating income. -- Yahoo!In-Play
Apple Inc: Apple's net profit drops but earnings beat forecasts. Apple's (AAPL) FQ4 net profit fell to $7.5B from $8.2B a year earlier, although revenue rose 4% to $37.5B and beat consensus, as did EPS of $8.26. iPhone volumes rose sharply following the introduction of new models in September, although iPad shipments were flat and those for the Mac fell. On the earnings call, Apple CEO Tim Cook said the company will announce any changes to its capital allocation early next year. The comments come as Carl Icahn clamors for a new $150B buyback. Shares were +0.2% premarket after slipping late yesterday. -- SeekingAlpha, October 29, 2013; earnings transcript;

BP's profit falls 26% but shares jump 5%. BP's (BP) shares gushed 5% higher in premarket trading after Q3 underlying replacement profit dropped to $3.7B from $5B a year earlier but exceeded forecasts of $3.4B. BP raised its dividend by 5.6% to 9.5 cents a share, and said it intends to sell another $10B in assets within two years and use the money for payouts to shareholders. -- same link as above, SeekingAlpha, October 29, 2013

Examining the links between earthquakes and fracking -- at Rigzone. 

Six companies announce increased dividend/distributions including American Midstream Ptrs lP, Holly Energy Partners, and Tesoro Logistics LP.

The driving range of a Tesla. I believe my cross-country trip is about 1,600 miles each way.

COP must be doing something right. Most oil companies have been in a trading range the last few days, most slightly negative, but COP keeps hitting new highs. At one time Warren Buffett owned a huge amount of COP but I've long lost the bubble with regard to how much, if any, he still holds. 

Monday, October 28, 2013

Tuesday; Minimal Blogging Today And Next Few Days; Still Traveling

Active rigs: 183 (back up from 180 yesterday)

RBN Energy: another must-read article for those following the Bakken. I will have to read it later; I'm traveling and pressed for time.
With Brent premiums hovering close to $10/Bbl versus West Texas Intermediate (WTI) crude in the past month, the netbacks for Bakken producers shipping crude by rail to the East or West Coast are higher than they are for pipeline movements to Cushing or the Gulf Coast. Netbacks represent the crude price at the destination less transportation costs back to the wellhead. Today we show how the market destinations with the highest netbacks have reversed since July.
For investors, huge implications, but remember, this is not an investment site. I post these stories because it helps me understand the Bakken better and puts the Bakken into perspective. Do not make investment decisions based on what you read here or what you think you may have read here.

The Wall Street Journal

President Obama will now let the Senate write the rules for the NSA. Senator Feinstein will take the lead.  This should be fun.

Finally, a story on Syria: "Syria weapons inspections hit snag." Oh, really. Who wudda thought?

 Apple: Apple reported a third consecutive quarter of declining profits, but showed signs that both prices and profit margins are stabilizing despite heightened competition for its iPhone and iPad.

Burger King: Burger King's third-quarter earnings soared as the fast-food chain posted significantly fewer operating expenses and as same-store sales increased in its international regions.

Thirteen (13) New Permits -- The Williston Basin, North Dakota, USA; Petro-Hunt Has A Nice Well

Active rigs: 180 (trending down; could hit new low)

Thirteen (13) new permits -- 
  • Operators: QEP (4), XTO (3), SM Energy (3), Whiting (2), Hess (1),
  • Fields: West Capa (Williams), Robinson Lake (Mountrail), Grail (McKenzie), Poe (McKenzie), Hay Creek (McKenzie)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Wells coming off the confidential list Tuesday:
  • 21725, 230, Petro-Hunt, USA 150-102-6A-7-1H, Foreman Butte, t7/13; cum 26K 8/13;
  • 24145, 2,447, XTO, Ester Federal 34X-28C, Lost Bridge, no production data, 
  • 24226, drl, Oasis, Neva Federal 5300 14-25T, Willow Creek, no production data,
  • 24262, drl, BR, Glacier 41-4TFH, Clear Creek, no production data,
  • 24359, 842, CLR, Mack 7-2H, Antelope; a "Sanish" well; short lateral; t8/13; cum 18K 8/13;
  • 24716, 797, OXY USA, John Kinne 1-27-34H-142-98, Snow, t4/13; cum 33K 8/13;
  • 24761, 1,957, Oasis, Gloria 5393 44-4B, Sanish, t7/13; cum 25K 8/13;
  • 24955, drl, SM Energy, Cade 12-19HB, Poe, no production data,
  • 24968, 505, Oasis, Sonora 6094 42-24H, North Tioga, t7/13; cum 10K 8/13;
  • 25227, drl, XTO, Koeser 41X-15C, Siverston, no production data,
  • 25279, drl, BR, CCU WIlliam 24-20MBH, Corral Creek, no production data;

21725, see above, Petro-Hunt, USA 150-102-6A-7-1H: 

DateOil RunsMCF Sold

24716, see above, OXY USA, John Kinne 1-27-34H-142-98:

DateOil RunsMCF Sold

 24761, see above, Oasis, Gloria 5393 44-4B, Sanish:

DateOil RunsMCF Sold

For Investors Only

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here. I include "for investors only" for archival purposes and to put the Bakken in perspective, as well as to learn more about the Bakken and where the activity is headed, as noted in my "welcome/disclaimer." I have no formal training and limited experience in investing as folks can readily surmise by reading this blog. I can tell you that gasoline is very expensive in Williston, North Dakota, approaching $3.70/gallon for the cheap stuff, while just  a few miles down the road, one can find the same grade of gasoline for $2.99 at Watford City. At least that's what I think the sign said. Here in Belfield, on the date this was posted, I am looking at a Cenex Superpumpers sign that says gasoline is selling for as low as $3.34 gallon. 

Had I been in an all-electric Volt Tesla (see first note below) today I would have been in trouble. I would have reached Watford City, but I did not see any charging stations there.

I see, today, that 26 companies announced they are increasing their dividends/distributions, including Summit Midstream Partners, SandRidge Permian Trust, Panhandle Oil, Martin Midstream Partners, Magellan Midstream, among others.

This doesn't sound good: LDK Solar enters new forbearance arrangement with noteholders: Co announces that it has entered into a new 30-day forbearance arrangement with holders of a majority in aggregate principal amount of its US$-Settled 10% Senior Notes due 2014. The new forbearance arrangement, which expires on November 26, 2013, relates to the interest payment due under the Notes on August 28, 2013. That interest payment is still unpaid. It is LDK Solar's intention to find a consensual solution to its obligations under the Notes as soon as possible and LDK Solar remains hopeful that it will be able to achieve that goal.

This doesn't sound good either:
Thousands of Californians are discovering what Obamacare will cost them — and many don't like what they see.
These middle-class consumers are staring at hefty increases on their insurance bills as the overhaul remakes the healthcare market. Their rates are rising in large part to help offset the higher costs of covering sicker, poorer people who have been shut out of the system for years.
Enough for now. Apple reports earnings today after the market close. I should be in South Dakota by then. 


Active rigs: 182

RBN Energy: the condensate dilemma, part 2, demand.
Supplies from the three main branches of the US condensate family are increasing faster than demand can keep up. Field condensate production from shale basins is nearing 1 MMb/d - headed to 1.6 MMb/d by 2018. 
Plant condensate – aka natural gasoline - will increase from just over 0.3 MMb/d in 2013 to more than 0.5 MMb/d in 2018. 
Because field condensates cannot be exported to overseas markets, more of this material will be refined traditionally or using a splitter – pushing out existing refinery demand for natural gasoline and creating an excess of naphtha range material. 
Petrochemical demand for natural gasoline has dried up in the face of cheap ethane feedstocks. Canadian demand for natural gasoline as diluent will soak up some but not the entire natural gasoline surplus. With US gasoline demand declining, the only outlet for excess naphtha and natural gasoline will be more exports (beyond Canada). Today we look at changing condensate demand patterns.
Hard to believe, huh?


 The Wall Street Journal

Lying, incompetent, or insubordinate subordinates? President O'Bama said he did not know that his government had been spying on our allies for the past three years (since 2010). Lotsa fun. Talk radio did note that President O'Bama did kill Osama bin Laden singlehandedly. I don't recall that. I only recall that he flew the first of two helicopters into the compound; Michelle was piloting the second helicopter. Don't quote me on that; it's just what I recall at the time. But that was a long time ago.

American cities' fiscal health lagging behind other sectors as recovery slowly takes place. I follow the fiscal health of troubled cities at Doomsday: US Cities.

Apparently Ms Sebelius outsourced the plan to multiple underlings. As it becomes clear that no sole leader oversaw the health law's online exchange, the accounts of more than a dozen current and former officials show how a disjointed bureaucracy led to the site's disastrous launch.

Well, this is great news for ObamaCare: Some states are signing up tens of thousands of new Medicaid enrollees in the initial weeks of the health law's rollout, while placing far fewer in private health insurance. Predictable.

No articles on Syria in the front section of the on-line edition.

Apple Inc will report earnings after market close today. Ahead of the Tape: Analysts covering Apple routinely aim too low in making their earnings estimates, but earnings "beats" don't translate reliably into stock-market gains. I can hardly wait.


On The Road Again

It should be a great day for blogging, assuming truck stops and McDonald's all have free wi-fi. I left the heart of the Bakken, Williston, North Dakota, at 2:30 a.m., central time, and set the cruise control for 50 mph. I had to pull over several times to let truckers pass. I enjoyed the scenery -- lit up oil rigs, and a few huge flares.

I debated whether to stop for coffee in Watford City, but knowing that the next stop would be an hour or so down the road, Belfield, elected to stop. Nice conversation with young man from Austin, Texas. He has been in the Bakken for four months. His plan is to work here for one year to build up cash reserve for his next step/stop in life. He didn't say what that was.

I cannot begin to tell the stories of all the wonderful folks in the Bakken, the retired old-timers, the working life-long residents, and all the new arrivals. I think my biggest thrill came almost as soon as I arrived in the Bakken: learning about a new subculture in the oil patch, the pipeliners. Maybe I will write about that story some day.

I arrived at the Belfield truck stop -- I guess it's called "SuperPumpers -- that's on the coffee cup -- about an hour ago. I was one of the few here, but now, at 5:13 a.m. local time, it is really getting busy, really busy. If you haven't seen a boom, it's impossible -- at least for me -- to describe. But here we are, in the middle of nowhere, at the crossroads of I-94 and US Highway 85, and it's about as busy as a big-city Starbucks at 7:00 a.m. It looks like 96% men, 3% women, 1% other stopping in to get morning breakfast. Morning breakfast appears to be two cups of "30% more caffeine" coffee, a can or two of Red Bull, some hot Mexican burritos or doughnuts, and then out the door. Some, maybe most, are also picking up provisions for the rest of the day: six-packs of water; more Red Bull; food that comes in cellophane from out-of-state (and maybe from out-of-country).

I am continually amazed how friendly the cashiers are wherever I stop. I left the store momentarily to go back out to the car -- I had not bought anything, yet -- and the young female cashier wished me a "good day." I told her I would be back in a few minutes, getting something from the car. She seemed genuinely happy to hear that. Her day will go by very, very quickly.

The traffic should die down a big going south toward Bowman. Most of the oil activity is east/west of this truck stop (Dickinson area; Whiting Pronghorn prospect) and then north into the heart of the Bakken.

Sunday, October 27, 2013

Signing Off For Now

I've updated this week's "Top Stories."

I've also updated Todd oil field and Alkali Creek oil field.

On Track For 2,631 New Permits In The North Dakota Williston Bakken

As of Friday, October 25, 2013, there were 2,148 oil and gas permits for calendar year 2013 (this does not include salt water disposal well permits). That puts the state on track for 2,631 permits for calendar year 2013.

This time last year with 2,108 permits, the state was on track for 2,582 permits. The state ultimately issued 2,251 permits for calendar year 2012; about 30 of those permits were permanently canceled.

On another note, this month set a record for the number of wells coming off the confidential list:
  • August 2013: 158
  • September 2013: 186 (record, previous 181, at the time this was first posted)
  • October 2013: 199 (record, previous 195, at the time this was first posted)
I track the list at this post

But then look at the coming months; I can hardly wait for January, 2014:
  • November 2013: 153
  • December 2013: 170
  • January 2014: 206 (this might be a record; previous record, 199, October, 2013)

Just For The Fun Of It -- Satellite Views Of The Oil Patch

If you have absolutely nothing else to do today, you might have some fun looking at CLR's 14-well Atlanta pad in Baker oil field southwest of Williston.

Go to Google maps.

Find Williston.

Pan to the Missouri River bridge, US Highway 85, about six miles southwest of Williston.

Make your viewing area big enough to include US Highway 85 (the bridge over the Missouri River) on the east (right side) and State Highway 1804 on the west (left side). Place the river at the bottom of your viewing area.

Midway between State Highway 1804 on the left and US Highway 85/bridge on your right, you will see a large industrial area. This is obviously an old satellite photo; the pad is completed, and about half of the wells are completed; it is possible all fourteen are drilled to depth, or very close.

Now that you have found the 14-well pad, either zoom out or pan north about one mile to another great satellite view, a pad with one pumper and 12 tanks clearly visible:
  • 24742, 911, Zenergy, K2 Holdings 31-32H, Todd, t5/13; cum 37K 8/13;
Todd oil field, is, of course, the field of dreams. Smile.