For Investors Only; Lots Of Good Stuff Today

Down below I have a link to today's WSJ, but moved this particular WSJ article to the top because of its topic. "Heard on the Street" talks: Big Oil's tricky mix of shale and scale.

If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world's biggest opportunities, shale, doesn't necessarily reward bigness.

Royal Dutch Shell's partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil.

Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted "elephant" fields with huge reserves in deep-water locations or far-flung countries.

So many story lines.

More from the link (pay attention to the decline rates):

In a presentation last year, consultant PFC Energy, acquired recently by IHS, highlighted the differences. An average well drilled in Angola produces almost 14,000 barrels a day in its first year of production and that output declines by about a fifth in the first four years of operation.

In contrast, a well drilled in the Eagle Ford shale, where Shell is selling assets now, might produce just a few hundred barrels a day in its first year, dropping by more than a third in the first four years.

Another way of considering efficiency is output per employee. This is a crude measure as oil companies use outside contractors. But it illustrates the performance range. Shell, for example, produced just under 46,000 barrels of oil equivalent, or BOE, per employee in its upstream division in 2012. For U.S. exploration-and-production companies, though, performance varies widely, based on data from IHS. At the top end of the range, EOG Resources wrings almost 65,000 BOE from each employee; Chesapeake Energy gets less than 20,000.

In part, this speaks to the variability of shale resources: Early movers do better than latecomers, as Shell has found.

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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.

Having gotten that out of the way, investors may enjoy leaving this site and going to a "real" investment site, SeekingAlpha. A reader lists his six top blue-chip energy companies. I will thrilled to see him list COP and PSX at the very top. Others he mentioned included Hess, First Solar, and BTU, yes coal which you can pick up for a lark, as they say. Actually very few say that. I think the correct idiom is "pick up for a song."


This is the song, by the way, I play for my ten-year-old granddaughter when I need an example of just how beautiful Mama Cass' voice really was:

Sing For Your Supper, The Mamas and The Papas

More later. I have to update the wells coming off the confidential list today. Look at some of these incredible wells:

• 23953, 2,022, KOG, Charging Eagle 16-21-16-1HA, Twin Buttes, t8/13; cum 27K 9/13;
• 25187, 2,175, QEP, Bert 2-2-11BH, Grail, t10/13; cum -- 
• 25101, 2,566, MRO, Martin 31-14H, Reunion Bay, t8/13; cum 36K 9/13
• 25114, 2,417, MRO, Patrick 34-32H, Bailey, t8/13; cum 26K 9/13;
• 20915, 3,363, HRC, Fort Berthold 150-94-3B-10-2H, Spotted Horn, t8/13; cum --
• 25188, 2,132, QEP, Bert 2-2-11TH, Grail, t10/13; cum 9/13;

And, yes, they all made the "high IP" list.

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Eleven companies announced they've increased dividends/distributions. 

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This IS a funny story over at Yahoo!News: how 'smart' does a toaster really have to be? I recently received -- for free -- a brand new, 'smart,' Hamilton Beach toaster. Absolutely free. I couldn't believe it: digital settings. For a toaster. I thought I was the only one who saw the irony but this story which begins:

Do I really need my toaster to be automated or linked up to the Internet?

"I think technology for technologies sake is sort of silly," responds Johnson. "Do you want to turn your toaster into a computer? Well maybe.

Well, maybe not. That geek needs to get a life.

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The Wall Street Journal

For my one reader in the great state of Florida: the USAF plans to build a bomber on a budget. LOL.

When a military contractor showed Col. Chad Stevenson a design for the Air Force's top secret plane of the future, he began to worry.

"They were showing this really nice fold out bed, this nice refrigerator and microwave, a kind of lounge-provision area," Col. Stevenson recalled of the recent design.

The contractor, Lockheed Martin,  didn't offer an estimate for such flying comforts. But Col. Stevenson imagined a publicity nightmare in the making: a $300,000 kitchenette as the latter-day symbol of Pentagon excess—the $600 toilet seat for the 21st century.

The kitchenette was killed.  [But not the microwave.]

Such financial considerations are vital to the Air Force's most important project today: building a new long-range bomber to replace the iconic and aging B-52s and B-1s that have come to represent America's domination of the sky.

It is the job of Col. Stevenson and a small group of Air Force colleagues to guard against improvidence and any untested technologies that could lead the grand project—expected to cost upwards of $55 billion—down the path the Pentagon often travels of cost-overruns and blown deadlines.

I think the B-1 bomber that recently crashed in Montana cost upwards of $280 million, but less if bought in bulk. LOL. I don't know how many times Congress tried to kill this program. There are only 60 of these Lancers left in the inventory.

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The Obama administration ruled that drug makers can help pay prescription-drug costs for patients on health-care exchanges. Pharmacy-benefit managers object, preferring generic drugs.

I think this was posted previously. I forget. Think Red Queen. Chevron pumps far less oil and gas than industry giant Exxon Mobil, but the company is spending more to find energy and boost production.