Sunday, January 13, 2013

Readers In For A Treat: A Two-Fer -- All About the Bakken; Link to A Mike Filloon Article

This is a "two-fer." Two stories. First, a link to a new Mike Filloon article, and second, getting closer to completing an earlier post.

A few days ago, I posted a long commentary on winners and losers with the pipeline story for 2013. I say that is it still in "draft" because I am still sorting out winners and losers, but I now have one more data point. At the link, note that I could not decide whether refiners would be winners or losers with all the pipeline projects coming on line in 2013 - 2015.

Well, here's the second story of the "two-fer." Mike Filloon suggests that it should be a wash for refiners. At least that's how I read it. Mike has been bullish on refiners due to the wide spread between Bakken and WTI but he still feels that the additional pipeline won't change his mind with regard to refiners. Again, that's how I read it, but it is subject to interpretation. Mike is very clear in stating that Bakken oil will always sell at a discount to WTI and Brent.

Filloon's article includes a quick, short overview of pipeline activity affecting the Bakken.
Upcoming pipeline projects by Enbridge Inc. and Enbridge Energy Partners are levered to the Bakken. Both are funding the Superior to Flanagan project. The most important expansion for EEP is its Sandpiper Project starting in Minot. Other rail expansions include the Bakken Berthold Rail and Philadelphia Rail JV.
He doesn't mention the Seaway reversal and expanded capacity. I think the ENB/EPD Seaway project will have huge effects on the Bakken.

With regard to pricing:
There are a wide range of oil price estimates for 2013.
Raymond James believes WTI will average $65/Bbl. [Raymond James] estimates a hard landing in China, continued macroeconomic issues in Europe, and weak demand in the United States. In response, OPEC will cut production. While these variables are possible $65/Bbl is unlikely.
My [Mike Filloon's] estimate is $88/Bbl. Bakken differentials to WTI will tighten to $8/Bbl. Expectations are for significant volatility. WTI's low for 2013 will be short lived and bottom around $75/Bbl. This will be a buying opportunity.
Disclaimer: this is not an investment site. Don't make any investment decisions based on what you read here. 

Wells Coming Off Confidential List Over the Weekend, Monday; Almost Half On DRL Status; Weather Related

Active rigs: 182 (steady)

Monday, January 14, 2013
22799, drl, Hess, LK-Dukart 145-97-0310H-2, Little Knife, 
22951, 519, CLR, Obriyenitch 1-14H, St Demetrius, t11/12; cum 12K 11/12;
23100, drl, QEP, MHA 3-06-32H-150-92, Heart Butte,

Sunday, January 13, 2013
19776, 352, CLR, Rolla 1-33H, Elidah, 11/12; cum 22K 11/12;
22941, drl, BEXP, West Bank 26-23 1H, Briar Creek,
23047, drl, Hess, GO-Olson 155-97-0310H-2, Dollar Joe,
23120, 512, G3 Operating, Hought F. T. 1-22-15H, Strandahl, t9/12; cum 10K 11/12;

Saturday, January 12, 2013
20918, 607, Petro-Hunt, Fort Berthold 148-95-24c-13-1H, Eagle Nest, t10/12, cum 30K 11/12;
23033, drl, BEXP, Jennifer 26-35 1H, East Fork,
23160, 545, Triangle, State 154-102-25-36-3H, Rosebud, t10/12; cum 30K 11/12;

Port of North Dakota -- Looking For An Update


August 4, 2014: is reporting a Q&A from HeggBakken Report, April 28, 2014:
Hegg Bakken Report: Tell us about the port of North Dakota. Why is that important to Minot?
Curt Zimbelman, Minot Mayor: Well, the port of North Dakota is, it could be, and will be, someday, one of the finest things that Minot can bring to the table. Minot, as you know, may or may not know, Minot is a main stop between Chicago, and the west coast for the BNSF, and we have two different rails that cross right in the, two class-one rails actually that, railways that cross right in downtown Minot, and that’s the CP, and the BNSF, so we’re at the perfect location for a huge regional transportation hub, and that’s really getting off the ground now, and especially for intermodal that we don’t really have around this area to move containers, also egg products (sic) that can be moved in containers. It’ll be a great oil hub. So we’ve got about three thousand of available acres out there to run rail in. So it’ll really put us on the map as far as regional transportation hub, I think.

Original Post

I haven't found a news story on the web to confirm it, but two folks have written to tell me that "the railroad in Minot" is hiring a fair number of new employees, probably related to the Port of North Dakota. Perhaps one of the regional newspapers will provide an update sometime.

A story posted back in August/September suggested that several hundred employees might be hired, but that number could grow significantly in size.

The Port of North Dakota is the large grey area northeast of Minot, about six square miles in size.

States Flirt With Major Tax Changes; Opportunity Exists -- 37 States With Single Party Control of State Government


January 17, 20113: Add Nebraska to the list

Original Post

Thirty-seven of fifty states (or is it 57 states?) now have single-party control of the state government: 25 Republican; 12 Democrat.

Link here to Reuters.
Across the South and Midwest, Republicans have consolidated control of state legislatures and governorships, giving them the power to test long-debated tax ideas.
Louisiana Republican Governor Bobby Jindal, for instance, called on Thursday for ending the state's income tax and corporate taxes, with sales taxes compensating for lost revenue. A similar plan is being pushed by Republicans in North Carolina. Kansas, which cut its income tax significantly last year, may trim further. Oklahoma, which tried to cut income taxes last year, is expected to try again.
The political moment may have arrived for a test.
Thirty-seven of the 50 states now have single-party control of legislatures and governorships: 25 Republican, 12 Democratic. In those states, unlike Capitol Hill, partisan gridlock is not a big issue, making difficult projects such as tax reform easier.
In addition, new ideas look attractive in states that have suffered for years from high unemployment and tight revenue.
"We have no choice but to make change," said Bob Rucho, a Republican state senator in solidly Republican North Carolina, who is leading a push in that state for major tax changes.
Good, bad, or indifferent, the national gun debate may consolidate some of these changes in the near term. 

By the way: that link above to "57 states" is very, very interesting. Snopes is splitting hairs when the site includes "3 observer states" to suggest that 57 states is not quite accurate.

The New Immigrants: An Indian In Williston; Executive Culinary Chef in Stanley

Abhilash Soman

Link here to The Dickinson Press.

This is really a great story. It's too bad that over time it will be lost -- the link will be broken, the story will be gone. It will archived, available only by subscription. But two things happen when stories are lost by archiving on the internet:
  • there is so much free content, folks won't pay for "human interest" stories
  • even if the archived content is free, folks won't take the time to type in passwords and search archives
Once archived on the net, stories are lost. Yesterday, there was a story that folks won't even wait for a movie they plan to download if it is delayed by twenty seconds. Folks are not going to spend a couple of minutes trying to access an archived story. A lot will be lost.

I even think the nation's newspaper, the Wall Street Journal, is having challenges with free content. [Wall Street Journal: 2.1 million; USA Today: 1.8 million. By the way, these numbers speak volumes about content.]

This is a story about a 32-year-old native Indian (from the subcontinent of India) who started out in the diamond trade in Miami and is now "at home" in the Williston Basin oil patch. Another "horatioalger" story.
Abhilash Soman sold his wedding ring to come to Williston, where he says he’s found his fortune.
The India native had a career as a gemologist before he married an American and moved to Miami. There, he tried to work in the diamond market, but struggled to make a living.
After 10 months in Williston, he has a high-paying job and hopes to be certified next month as a drill pipe inspector.
I think of the Syrians who came to North Dakota in an earlier cycle of immigration. 

I guess that's where they archived stories will end up -- in university publications -- I'm thinking of one of my favorite books: Plains Folks: North Dakota's Ethnic History.

Caleb Peasall

Link here to The Bismarck Tribune
Caleb Pearsall, 26, originally of Florida and by way of Virginia, had been the youngest-ever executive chef at an Omni Hotel and Resort before moving to North Dakota last year.
“When I told them what I wanted to do, they said, ‘Bring it on,’” he said.
What he brought on was good food.
“Fresh, homemade and real,” he said.
Offerings at the Stanley Cenex include meals like homemade meatloaf or lasagna, served with vegetables and a fruit cup.