Tuesday, January 29, 2013

Random Video of the BHI Complex West of Williston

A reader alerted me to this video of the new Baker Hughes complex west of Williston. This was an impressive building when it was going up; probably the biggest construction job in the Bakken at the time.

The first "new" BHI complex west of Williston

Unfortunately the video does not do the complex justice. I wish they had taken more video of the complex while it was being built and/or more of it now.

The reader noted, as have others, that BHI is putting up another complex "across the street." Apparently, this second complex is even bigger and more impressive.

Another Look At The Liberty Wells/Permits in Otter Field


May 19, 2014: a very nice well reported today --
  • 26342, 2,706, HRC, Miller 157-101-12D-1-2H, Otter, t2/14; cum 17K 3/14;
Original Post

In today's daily activity report: Triangle USA Petroleum with six permits in Otter field. They must like something they've found in that area.

Triangle has two wells sited in section 21-157-101, Otter field. One well is active and producing, the other is still on the confidential list:
  • 22296, 463, Triangle, Larsen 157-101-21-16-1H, Bakken, 31 stages; 4 million lbs sand and ceramic; excellent hydrocarbon show; high gas units, up to 2,000 and 3,000 units;  Otter, t8/12; cum 88K 3/14;
  • 22297, 207, Triangle, Larsen 157-101-28-33-1H, Bakken, 28 stages; 3.6 million lbs sand/ceramic;  moderate to excellent hydrocarbon shows; gas 500 - 3,500 units; Otter, t1/13; cum 56K 3/14;
The new permits (four Three Forks and two middle Bakken):
  • 24877, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-2H, Three Forks, Otter, 
  • 24878, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-3H, Bakken, Otter,
  • 24879, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-28-33-4H, Three Forks, Otter,
  • 24880, conf --> loc, Triangle, Larsen 157-101-21-16-2H, Three Forks, Otter,
  • 24881, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-21-16-3H, Bakken, Otter,
  • 24882, conf --> loc (permit renewed in 2014), Triangle, Larsen 157-101-21-16-4H, Three Forks, Otter,
A non-Triangle well in this field, one mile to the east:
  • 22506, 509, Petro-Hunt, Rossland 157-101-22C-15-1H, Otter, t5/12; cum 31K 12/12;
So, it looks like a good field, but not yet a great field.

Otter field is in a relatively small field, only 24 sections (and won't get any bigger; hemmed in by fields on all borders) in the far northwest corner of Williams County. It is immediately north of Tyrone oil field, which means it is pretty much straight north of Williston, no more than 15 miles away.

Wells Coming Off Confidential List on Wednesday; Companies To Report Tomorrow

Here we go:

Two refiners now mention "less expensive domestic oil" as a huge deal.

Hess Corp,
under pressure from an activist investor to break up the company, reported a fourth-quarter profit on Wednesday as production from its wells in North Dakota's Bakken oilfield soared. Hess posted a profit of $566 million, or $1.66 per share, compared with a loss of $131 million, or 39 cents per share, a year earlier. Revenue rose 10 percent to $9.69 billion, Hess said.
Marathon Petroleum Corp (MPC) 
on Wednesday reported a quarterly profit as the U.S. refiningcompany processed higher amounts of cheaper domestic crude oilin its plants, helping lift refining margins.
The company reported a fourth-quarter profit of $755 million, or $2.24 per share, compared with a loss of $75 million, or 21 cents per share, a year earlier.
The refiner more than doubled its fourth-quarter dividend to 35 cents per share and said its board approved an additional $2.65 billion share buyback program.
announces fourth-quarter earnings of $708 million and adjusted earnings of $1.3 billion. This compares with earnings of $2.0 billion and adjusted earnings of $379 million during the fourth quarter of 2011. Eleven cents per shares; adjusted: $2.06/share.


It will be a busy day tomorrow with these five companies reporting earnings:
  • COP ($1.42) after market close:
  • Hess ($1.22) before market open:
  • Marathon Petroleum (MPC) ($2.10) before market open:
  • Murphy Oil (MUR) ($1.34) after market close:
  • Phillips 66 (PSX) ($0.69) 8:00 a.m. ET:
Wells coming off confidential list on Wednesday:
  • 21141, 1,108, Liberty Resources, Anna 156-100-8-5-1H, East Fork, t8/12; cum 71K 12/12;
  • 21429, 1,140, Hess, BB-Eide 151-95-3328H-2, Blue Buttes, t12/12; cum 4K 11/12;
  • 23059, drl, Hess, LK-M Elisabeth 147-97-1522H-3, Little Knife,
  • 23143, 189, Corinthian, Corinthian Skarphol 16-28 1H, North Souris, a Spearfish well; t10/12; cum 12K 1/13;
  • 23321, 496, Crescent Point, CPEUSC Aldag 36-35-164N-100W, West Ambrose, a Bakken well; t11/12; cum 6K 1/12;
Newbies may want to look at Blue Buttes oil field. This is going to turn out to be a nice field. There is some evidence that operators are getting better at delaying the "dreaded Bakken decline." I think the general consensus is that the "dreaded Bakken decline" is inevitable, but ...

21141, conf, Liberty Resources, Anna 156-100-8-5-1H, East Fork:

DateOil RunsMCF Sold

23143, conf, Corinthian, Corinthian Skarphol 16-28 1H, North Souris:

DateOil RunsMCF Sold

23321, conf, Crescent Point, CPEUSC Aldag 36-35-164N-100W, West Ambrose:

DateOil RunsMCF Sold

Valero's Earnings: How Did Investors React? Share Prices Surge 13% After-Hours


Later, 8:20 pm: be sure to note the first comment -- back in 1997, "they" were concerned with a glut of oil from Canada, when they noted that the WTI/WCS spread had doubled to $7. That was back in 1997. They were concerned about adequate pipelines back in 1997. Fast forward to 2013: the WTI/WCS is now as much as $40. And the Keystone XL is still not approved.

Original Post

I was so busy, I completely missed the news when the Valero earnings came out. I was taking my granddaughter to gymnastics. A huge "thank you" to a reader for reminding me.

I think this article says it all: http://www.cnbc.com/id/100417697?__source=yahoo|headline|quote|text|&par=yahoo
"In other words, because of the Bakken and the Eagle Ford shales and so many other terrific domestic prospects, one of our major refinery powers no longer needs to import expensive oil from other countries to feed its refineries, and this trend is only going to get stronger," Cramer explained.
I thought the easy money had been made in the Bakken but it looks like for investors, still opportunities. I'm thinking of Hess, as another example.

Anyway, back to Valero, this from their press release:
Valero reported net income attributable to Valero stockholders of $1.0 billion, or $1.82 per share, for the fourth quarter of 2012 compared to net income attributable to Valero stockholders of $45 million, or $0.08 per share, for the fourth quarter of 2011.  Included in the fourth quarter 2012 results was a noncash asset impairment loss of $37 million after taxes, or $0.06 per share. For the year ended December 31, 2012, net income attributable to Valero stockholders was $2.1 billion, or $3.75 per share.
So, how did investors react to the news?

Up a whopping 13% in after-hours and continuing to rise.

Warren's Answer To The Keystone XL While Nebraskans Dither, Washington Delays

This is a "biggie" for Warren Buffett -- his answer to the Keystone XL -- a multi-grade crude oil loading terminal -- the first in the Rocky Mountain oil region; will support the Bakken. Huge thanks to Don for this link to the Fairfield Sun-Times.
Eighty-Eight Oil LLC announced today its plans to construct and operate a unit train facility on BNSF Railway’s mainline near the Guernsey crude oil pipeline hub. The facility will be directly connected to EEOLLC’s existing Guernsey crude oil terminal which has two million barrels of storage and currently receives crude oil from Butte Pipeline, Belle Fourche Pipeline, Platte Pipeline, and the Rocky Mountain Pipeline System
The Guernsey terminal also maintains truck unloading facilities. The facility will be the first rail transloading terminal capable of loading multiple crude types including those from the Williston Basin (e.g. Bakken), the Powder River Basin (e.g. Niobrara), Southwest Wyoming, Big Horn Basin and Canada. 
“Because this terminal is being designed to handle multiple crude types, we are confident of its long term viability,” says Jerry Herz, Superintendent of EEOLLC. “Further, by connecting our terminal to BNSF’s expansive railway system, we can provide producers of the Rocky Mountains and Canada further flexibility in adding value to their production and transporting it to markets throughout the United States.”
This is a huge story.

For folks who want a job but don't want the harsh climate of Williston, North Dakota, and love the sound of the name "Cheyenne" now have yet another opportunity to find wealth and happiness, even as the reporters from the Minneapolis Star-Tribune note the struggle North Dakota has dealing with its prosperity. To those reporters: "Go west, young woman!"

Guernsey, Wyoming, population, 1,200, is about an hour and a half north of Cheyenne, WY, just east of I-25. Cheyenne: home of the world-famous frontier days.

I have hitchhiked that area more than once in my cross-country hitchhiking days, summer and winter, and it is beautiful country.

Eighteen (18) New Permits -- Triangle Pete With Eight New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

This is a "biggie" for Warren Buffett -- his answer to the Keystone XL -- a multi-grade crude oil loading terminal -- the first in the Rocky Mountain oil region. Will get its own stand-alone post later. -- huge thanks to Don. 

Active rigs: 187 (heading back down)

Eighteen (18) new permits --
  • Operators: Triangle (8), Slawson (2), BEXP (2), Murex (2), Surge (2), Corinthian, Fidelity,
  • Fields: Van Hook (Mountrail), Haram (Bottineau), Otter (Williams), North Souris (Bottineau), Stanley (Mountrail), Strandahl (Williams), Spring Creek (McKenzie), Beaver Lodge (Williams), West  Bank (Williams)
  • Comments: Surge has a permit in Bottineau County;
Wells coming off the confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 22934, 518, CLR, Salem 2-6H, Dollar Joe, t12/12; cum --
  • 23698, 781, Murex, MacKenzie Joy 3-10H, t1/13; cum --
  • 23696, 612, Whiting, Evy June 18-19H, t12/12; cum --
  • 22434, 738, CLR, Gale 2-32H, Cedar Coulee, t1212; cum --

A P/E of 3,099 And Shares Jump --- Not An Energy Story

Here's the headline: misses earnings forecast; downbeat on guidance; shares jump after hours. P/E earlier in the day: 80. P/E now at 3,099 according to Yahoo!Financial.

Profit margin is 0.07% (about the same as the forecast rise in global temperature over the next 100 years).

No debt. No dividend.

King of the Road, Roger Miller

Tops Well Services --

This was sent in as a comment to another post. For those who may not see the comments.
Tops Well Services
115140 49 T Way NW
They have all new equipment and look like they are ready to do business.

New Poll

Time for a new poll. Actually today, it will be an open-book test, one question. Good luck.

Results of the current poll: Earlier there was talk of EOG as a possible takeover candidate. Two companies were suggested as possibly interested in and able to buy EOG: ChevronTexaco (CVX) and Statoil/BEXP (STO). The question: which would you prefer?
  • CVX: 51%
  • STO: 49%
I would have voted for CVX to increase the international exposure of the Bakken.


Now, the open book test:
Within a few months of production, even if gas is flared, mineral rights owners are paid for the flared gas at market rates.
  • True
  • False

On a completely different note, I see "Skeeter" is back in the news: birthers, truthers, and now skeeters.

So, for your listening pleasure:

The End of the World, Skeeter Davis

A note to the granddaughters
Long overdue, but puts into perspective the thoughts of some folks in the US and/or Canada during the time in which I blogged about the Bakken

These are observations of a Canadian being circulated on the net. I assume this is all "made up" by a non-Canadian but it doesn't matter. The comments are meant to be inflammatory, but it's hard to argue with these observations. Most of the observations are factual; some probably fall into "general consensus" but up for discussion.

1. The folks in America who pay 86% of all income taxes are accused by some of not paying their "fair share." Approximately 50% of Americans do not pay any income taxes. Many Americans are eligible for income tax credit, meaning that if they work they will be paid additional money from the US government. Some of the richest Americans say the "rich" should pay even more, but go to court to keep from paying taxes imposed upon them by the IRS.

2. The mainstream media and television talking heads continue to beat the drum that the US government discriminates against black Americans despite the fact the two men tasked with dealing with discrimination in the US are black: the US president and the attorney general. In addition, almost 20% of the federal workforce is black while just slightly more than 10% of the US population in general is black. In fact, by the time I being my "long rest," the white component (not including Hispanic) may be a minority in the US.

3. The two folks currently most responsible for our tax code, Timothy Geithner, the head of the US Treasury, and Charles Rangel, who once chaired the US House Ways and Means Committee, both turn out to be tax cheats who are in favor of higher taxes.

4. Terrorists kill people in the name of Allah and the US media primarily reacts by fretting that Muslims worldwide might be harmed by the backlash.

5. Congress is currently discussing amnesty for 11 million illegal aliens while ignoring those who have waited legally in their home countries and have paid tens of thousands of dollars while waiting and applying.

6. Folks who argue that balancing the budget and sticking by the country's constitution are often referred to as "extremists" by the mainstream media.

7. In America, during my entire adult life, I have had to show an ID to buy cigarettes, buy alcohol, get into an "R"-rated movie, even to look at a house for sale, and yet I've never had to show an ID to vote. I even have to show an ID to get on a commercial aircraft or a private aircraft departing a commercial airport.

8. The margins on selling gasoline are significantly less than the margins on computers, and the oil companies are investigated for gouging Americans for the price of gasoline -- even though it's a fraction of what it would cost in England. And we never seem to run out of gasoline.

9. The US is collecting more money from its citizens than any other country in the world; the country is $16 trillion in debt; the country is spending at the rate of $7 million/minute; the country continutes to fund Mideast dictatorships; and, economists still say the government is not collecting and/or spending enough money.

10. Politicians regularly talk about the greed of the rich at $35,000/plate-campaign fund-raising events. It is never reported how much the waiters and waitresses are paid at these fund-raising events, and even if they are US citizens. [Two days after posting this note, this shows up on the internet: the richest US Senator, Senator John Kerry, rails against evil of money in politics. I wonder if he will throw his money over the fence like he did with his Vietnam medals?]

Tuesday Links -- Average Oil Prices Had Their Best Year Ever in 2012 -- WSJ

Active rigs: 189 (down a couple)

The Market: all green. Even oil is up a bit. The Bakken/WTI spread at Clearbrook, MN, hasn't changed in the past few days; still $3.25; for the average "Joe" -- parity. The WTI/Brent spread still about the same: $16. Energy is doing very well. I was surprised to see that the average price of oil was the best ever last year (2012; see story below). AAPL is now a momentum stock; up $12 in past two days. Retail investors and mutual funds will now be worried about missing this train. Oasis Petroleum is now larger (market cap) than S&P 500 component Allegheny Technologies. [Later, oil hits a four-month high. Why? Signs of global growth? Short squeeze? Easy money?]

Apple: just announced. Will launch a higher-storage iPad -- 128GB -- for a $100 premium; retinal display, fourth generation. Will launch February 5. This company is simply blowing away the competition. I had a short conversation with a real estate broker/agent the other day: he was new to the iPad. Said real estate agents can't survive without the iPad. I predicted that -- and blogged on it -- about 5,690 posts ago. I doubt if I could ever find that post. That will be true of several other "industries" -- depending on the iPad. By the way,  have you ever seen the Apple product placement in "30 Rock"? Something tells me Tina Fey has more revenue streams than one might imagine. Good for her. Her show is streamed live and for free almost immediately after it air. There's a reason for that, and "product placement" might be one of them.

Hess is up 10 percent today, after a pop yesterday. Pat myself on the back: I posted the Hess story before the market opened yesterday for those who might have been interested.  Disclaimer: this is not an investment site: don't make any investment decisions based on what you read here. The story on Hess is not a recommendation. I own no shares in Hess. Don sent me this link: a push to have Hess spin off its Bakken assets. Implications for others.

WSJ Links

Section D (Personal Journal): 
This is interesting: panel pushes vaccine for pregnant women; amid whooping cough crisis, new guidelines recommend mothers get vaccinated at each pregnancy.

Wow, a huge write-up on one of our favorite museums in New England: The Peabody Essex -- the museum has managed to defy conventional wisdom about museum funding.

Section C (Money & Investing): two interesting stories on "Heard on the Street":
A new foreign policy for Gazprom and Exxon: making something from nothing. The XOM story is an important one for investors. I might come back to it, but this pearl: Average oil prices had their best year ever in 2012. I would not have guessed that.

Section B (Marketplace): 
Another important article for investors: Chinese machines, US doubt -- an article on the world's sixth-largest construction-equipment company.

Patriot Coal seeks trust to limit retiree health costs: the trust would have a lifetime limit of $200 million, according to union lawsuit documents.

GM to invest $600 million on Kansas factory upgrade. Earlier today I posted a story about Kansas being one of three states looking to eliminate personal and corporate income taxes. Kansas is a right-to-work state. 

Section A:
Front page: This almost deserves a stand-alone post of its own: the web-deprived study at McDonald's. The lede:
Joshua Edwards's eighth-grade paper about the Black Plague came with a McDouble and fries. Joshua sometimes does his homework at a McDonald's restaurant --  not because he is drawn by the burgers, but because the fast-food chain is one of the few places in this southern Alabama city (Citronelle) of 4,000 where he can get online access free once the public library closes. 
Maybe later. There are a lot of story lines in that article.

Company with ties to Senator Reid saw its rival's Medicare payments slashed. Shocked. I'm shocked. Another "dog bites man" story.

Op-ed: to outsmart ObamaCare, go protean. Lots of story lines in this article also. Maybe later.

Op-ed: Courts? Who Listens to Courts? The NLRB tells the DC Circuit to take a hike.

Op-ed: Zero Dark Ethanol. 'Do a good job ... If you fail, we'll fine your customers.' What a great country.

Beautiful Photo of the Bakken

Beautiful photo of the Bakken sent in by a reader:

The photo was taken in section 12-153-100 last spring (2012). The well on the right is the AK Stangeland and the one on the left is either Basey or Kovars (same pad). The picture is taken from the northwest to the southeast.

This photo also has the distinction of being one of three "alternating" photos on the Oasis website

I remember years ago, one of the most famous / most recognized oil well photo of all time was one taken by Willistonite Bill Shemorry, whose photo of an active rig was on the back cover of the ATT telephone book (white pages/yellow pages). I kept a copy of that photo for years; it's possible it's still in a cardboard box of memorabilia somewhere.

Two Wells Coming Off The Confidential List Tuesday

Wells coming off the confidential list Tuesday:
  • 17793, 2,325, Oasis, Nordby 5793-13-13H, Sorkness, t9/12; cum 34K 11/12;
  • 23208, drl, BR, CCU Boxcar 44-22PH, Corral Creek,
17793, conf, Oasis, Nordby 5793-13-13H, Sorkness,

DateOil RunsMCF Sold

The BR well should be interesting: not only is it in the Corral Creek oil field, but it is targeting the Three Forks formation. It is not uncommon for BR wells to come off the confidential list and go to DRL status, so I am not expecting to see the IP for that well today. As expected.


I see Centerpoint raised its dividend. Ever.So.Slightly. I would rather see a dividend hike, no matter how small, rather than a dividend cut, but when the dividends are raised by so little, it seems to be a gimmick. It allows the company to add to their years of uninterrupted dividend increases. Barely.


RBN Energy: Not looking good for natural gas pricing. Winter is over. 

Scandinavia: I see Paul Krugman has added another country to the world's list of nation's: Scandinavia:
Republican governors of Kansas, Nebraska and Louisiana are pushing to eliminate personal and corporate income taxes, setting up a possible fight with the Obama administration, which has already vowed to reform the nation’s tax code this year. To make up the lost revenue, these governors would raise the state sales tax.

Krugman says the Republican plan to hike state sales tax could be modeled after the European nation Scandinavia, a country with very high sales tax rates and a “less progressive tax system” than the U.S. The revenue generated by the high taxes are used to provide Scandinavian citizens with a “very good social safety net” and more financial security, according to Krugman. 
Scandinavia. A European nation. I can't make this stuff up. My hunch is that before the day is over, that story will be corrected. One can only hope so. Screenshots are sure nice.


Wow, Europe is hurting. Ford reported better-than-expected earnings. This was due to North American operations. Ford expects losses in Europe to widen (as in "get worse").


Message from Wall Street to Washington, DC: solve the debt problem now. Cut spending now.  -- CNBC reporting. When pigs fly.