Friday, February 8, 2013

International Tribune Rules For Chevron Re: Ecuador

Rigzone is reporting:
An arbitration panel in The Hague said Ecuador should have prevented plaintiffs in a $19 billion award against Chevron Corp. from taking their battle to other countries, and needs to justify why its government shouldn't be held responsible for the costs.
In 2012, an Ecuadorian court ruled Chevron was responsible for environmental damages in that country's Amazon region, a decision the oil company is contesting. The international tribunal, which is studying the issue of whether the ruling constitutes a violation of a bilateral investment treaty between the U.S. and Ecuador, had asked the country to keep the plaintiffs from suing Chevron in foreign courts while the appeal was pending. But the plaintiffs filed lawsuits against Chevron assets in Canada, Argentina and other countries--a move the tribunal decided was a breach of Ecuador's obligations and of its previous rulings. Now the tribunal is asking the country's government why it shouldn't be held responsible for the harm done by the lawsuits filed by the plaintiffs outside Ecuador.
The house of cards is starting to fall. 

Ten (10) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 185 (nice)

Ten (10) new permits --
  • Operators: Marathon (3), Whiting (2), CLR (2), Oasis (2), American Eagle
    Fields: Colgan (Divide), Bull Butte (Williams), Bailey (Dunn), Pleasant Hill (McKenzie), East Fork (Williams)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

One oil and gas permit cancelled:
  • 20445, PNC, EOG, Kandiyohi 24-3526H, Burke County

The Roughnecks Have Called It A Day

A reader sent me this screenshot from the NDIC website:

I'm being tweeted that all the roughnecks have called it a week and are headed to J Dub's Bar and Grill on 2nd Street West, Williston, ND.

It's 5 O'Clock Somewhere, Alan Jackson and Jimmy Buffett

Nemo: Lesson Learned -- Don't Make Fun of Mother Nature


February 9, 2012: It is being reported that total snowfall for this winter in Boston is now slightly above average for this time of the year, and there's at least six more weeks of winter.  Mother Nature having the last laugh.

Original Post

The weather reports coming out of Massachusetts are quite impressive.

Right now the snow is pouring down, like a heavy rainfall, fifteen miles west of downtown Boston. Apparently, it is just starting. It looks like maybe accumulating three inches over a few hours. But starting tonight at 7:00 p.m. it is forecast for a minimum of 2 inches of snow/hour through 1:00 a.m. (i.e., 12 inches of snow) and possibly 3 inches of snow/hour, or 18 inches. The total expected is about 24 inches of snow.

About ten days ago a Boston weatherperson said this was another "non-winter for Boston." The city had received only 9" of snow for the entire winter, when "normal" snowfall would total 24" by now.

So, fast forward to today. Nine (9) inches then; today another 24 inches --> 33 inches.

Lesson learned: don't make fun of mother nature.

Random Update on NDIC Oil and Gas Permits To Date


March 28, 2013 (in 2012, there were 29 days in February):
  • Permits to date: 620
  • Projected for 2013: 2,601
  • Projected for 2012 same time one year ago: 1,989
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled. 
February 28, 2013 (in 2012, there were 29 days in February):
  • Permits to date: 402
  • Projected for 2013: 2,487
  • Projected for 2012 same time one year ago: 1,862
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled. 
February 22, 2013: 
  • Permits to date: 371
  • Projected for 2013: 2,555
  • Projected for 2012 same time one year ago: 1,901
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled. 
February 14, 2013:
  • Permits to date: 322
  • Projected for 2013: 2,612
  • Projected for 2012 same time one year ago: 1,841
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled.
February 11, 2013: 
  • Permits to date: 297
  • Projected for 2013: 2,581
  • Projected for 2012 same time one year ago: 1,790
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled.
Original Post
Active rigs: 185

This is way too early to make these projections, but just for the fun of it: with regard to oil and gas permits in North Dakota, where are we compared to last year at this time?

Today's daily activity report with permits for today has not yet been issued.

As of yesterday, my database shows 275 oil and gas permits to date. Through February 7, that projects to 2,641 permits for the entire year (2013).

Last year, 2012, through February 7, there were 204 permits issued. Projecting that number through the end of the year showed 1,959 permits for the year. In fact, there were 2,521 permits issued last year (2012) with about 30 or so of those ultimately canceled.

So, for the 30-second sound bite: through February 7, 2013, there have been 275 permits for oil and gas wells issued compared to 204 permits this time last year. Those numbers project to more than 2,600 permits in 2013, compared to less than 2,000 in 2012.

Someone asked if operators might be "front loading" permits this year. I have no idea. A more reasonable explanation is pad drilling.

The rig count has stabilized in the 185 range.

Editor Change At The Dickinson Press

The Dickinson Press is reporting that the current editor will be leaving that position.
I’ve met many fine western North Dakota residents and have traveled many a’ western North Dakota, eastern Montana and South Dakota roads, and it is time for me to take a new route. Home base is Wisconsin and I’m heading back in that direction.
For archival purposes, the editor of The Dickinson Press for the past four years has been Jennifer McBride.

When Is The Bailout Coming?

Reuters is reporting that the USPS lost $1.3 billion in its most recent reporting quarter -- but that's better than the $3.3 billion it lost in the same quarter a year earlier.

That's the good news.

Now the bad news:
  • The October to December period, which is the first quarter of the Postal Service's fiscal year, is typically the strongest [quarter] because of the holidays.
  • This year, extra mail tied to the November elections and stronger revenue from holiday-related packages contributed to a better quarter.
  • The Postal Service defaulted twice last year on required payments to the federal government and lost almost $16 billion during the fiscal year.
Defaulted twice in one year, no bailout, and nary a whimper from anyone.

Two defaults in one year.

That must be some kind of record. 

The Fed: Reading The Tea Leaves; The New Normal; Unemployment, Jobs

The new normal: 6.5% unemployment.

Before the Great Recession: never exceeded 5%.
While the Federal Reserve has set its benchmark at 6.5 percent, that is significantly higher than the unemployment rate in the year before the start of the Great Recession, which never exceeded 5 percent. Returning to pre-recession normal will necessarily take even longer.
The Fed has established a "new normal" for unemployment: 6.5%. 

How long will it take to get back to pre-recession employment numbers? Bottom line -- it appears the Fed feels that will "never" happen.

Between November, 2011, and November, 2012, the average number of jobs added each month: 220,000. At that rate, we get back to 6.5% in 2Q15.

Unemployment/full employment calculators here.
If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until August 2020 – or eight years – to close the jobs gap. Given a more optimistic rate of 321,000 jobs per month, which was the average monthly rate of the best year of job creation in the 1990s, the economy will reach pre-recession employment levels by December 2016 – not for another four years. 
Jobs gap, by state.

Hess #17117 And Assoicated Wells Data Updated

Data for the nine wells along the long Hess well (#17117) in Big Butte has been updated. Nothing particularly new.

For Investors Only: Will 4Q12 Production Results Finally "Juice" Bakken-Centric Stocks?

Link here to
Investors want to know if Bakken shale oil producers' earnings will be enough to juice their somewhat stagnant stock prices. Here are some prominent up-coming Q4 2012 earnings announcement dates:
As can be seen, February 28th will be a busy day. Investors can listen to the CLR call and go directly into the WLL call - two consecutive hours of fun. NOTE: clicking on the date links above will take you to the respective company's webcast page.
Disclaimer: this is not an investment site. It's a blog, a "web log" for my personal use only. But if others want to read it, that's fine with me. I use it to keep track of the Bakken, and learn as much as I can about it. By opening it to the general public, folks send me some interesting links, stories, and are never shy when telling me that I made a huge mistake. 

For me, personally, I look forward to the Bakken production numbers in 2020. 

2020 hindsight.

Higher Gasoline Prices Coming -- Cue Up Connie Francis

MarketWatch is forecasting higher gasoline prices. Cue up Connie Francis.

Some "Peak Oil" folks predicted this.  Killing the coal industry, subsidizing renewable energy despite the math not working (ask Spain and Denmark how that worked out), harassing the oil and gas industry, promoting the closure of domestic refineries, killing the Keystone XL,  have led to this, I suppose.

[I assume all the wind turbines will be off-line today in the Northeast due to Nemo. I doubt there will be many electric snow plows out there today.]

Back to the linked story.
Gasoline prices at the pump have climbed every day for the past 21 days — and they’re not going to let up anytime soon.

The price has risen 26.3 cents, or about 8%, this year, steeper than the 6.2% increase for the same period in 2012 and 1.6% rise for the same period in 2011.

“Gas prices increased at a blistering pace over the previous couple of weeks,” said Michael Green, AAA spokesman, adding that the jump of 17.4 cents between Jan. 28 and Feb. 4 marked the largest weekly price spike in nearly two years. 
But disregard the hyperbole. There are a lot of data points in that article. Opportunity for any number of stories. 

One data point, helping me understand the Seaway reversal and expansion story:
The market hoped the completion of the Seaway pipeline expansion last month could alleviate the glut, but terminal capacity issues forced the pipeline’s operator to limit the flow of oil. Read Enterprise: Seaway bottleneck to end in Q4.
Enterprise Products Partners LP  said Thursday the bottleneck affecting its Seaway crude oil pipeline should end by the fourth quarter after Enterprise finishes a lateral pipeline connecting Seaway to its ECHO storage terminal.
Enterprise increased Seaway's capacity to 400,000 barrels of oil a day earlier this month. But the company was soon forced to limit the flow to the Jones Creek terminal near Port Arthur to 175,000 barrels a day because the terminal filled to capacity.
Enterprise has said that the biggest reason behind the build up was a cut in demand from Phillips 66's refinery in Sweeny, Texas, a major customer for oil from Seaway.
Seaway should be back to normal by the fourth quarter after Enterprise finishes construction of a pipeline connecting Seaway to its new ECHO outside of Houston, Enterprise Chief Operating Officer Jim Teague said. Enterprise finished construction of 750,000 barrels of storage at ECHO in November and plans to add another 900,000 barrels of storage by 2014.
A big "thank you" to RBN Energy for all the stories they have provided the past year. Because of RBN Energy, I understand the oil and gas industry a whole lot better. Their articles on pipelines along the Texas and Louisiana gulf have been particularly illuminating.

Politically, the president's polls are sinking. Wait until we hit $5.00 gasoline. 

The Headline: Trade Deficit Narrows. Can You Guess The Reason? Fracking

Reuters is reporting that fracking is responsible for the U.S. trade deficit [shrinking] in December to its narrowest in nearly three years, suggesting the economy did much better in the fourth quarter than initially estimated.

Wow, ya gotta love it.

Wow, who wudda thought.

In the fifth paragraph at the linked story:
In a reflection of a boom in oil output driven by hydraulic fracturing technologies, petroleum exports rose by nearly $1 billion during the month to a record high level.
Yeah, fracking.

There are a number of story lines in that one sentence. Like the canard that it's illegal to export oil from the US.

And then I reflect on Karlgaard's thoughts (at the link, it's the last story on the page, I believe).

For newbies (we're talking oil, not natural gas): the Bakken started all of this. The Bakken had its start in 2007, but has not yet reached its stride. Lessons learned in the Bakken are being transferred to the Eagle Ford in Texas -- a new play -- and to several other plays in the mid-continent stretching from south Texas to the Arctic (Canol Shale).

Back in 2007, folks were talking about one well in each section; now we're talking about siting 14 wells in one spacing unit in the better Bakken.

I don't recall what the EURs in 2007 were but I do remember EURs of 350,000 bbls were talked about a lot in the early days, and then they went to 500,000 bbls. Now, there is talk of 900,000-bbl EURs in the better Bakken, and there's even talk of 2-million-bbl EURs in the best Bakken.

Lots of story lines.

Disclaimer: for newbies, I am inappropriately exuberant about the Bakken. I often get carried away. I often misinterpret data, misread stories, but that's the way it is. If something I post doesn't seem right, it probably isn't. Go to the original source if one has questions. This is a blog. A diary for my personal use to help me learn about the Bakken and to keep track of what is going on. I opened it up to general readership because a) folks send me some great links; b) folks point out my errors; and, c) comments help keep me grounded.


I Won't Back Down, Tom Petty and the Heartbreakers

Later, I'm hoping to put up a graphic that will point out something I've not seen before regarding the Bakken.

Friday Links

Remember that story about high-frequency trading and "a high frequency trading event about 400 milliseconds before the scheduled EIA storage data release"?
RBN Energy takes a look at high-frequency trading in the energy markets:
These events resurrected ghosts of EIA storage numbers past and inspired our examination of these developments in the context of the evolution of high frequency trading in energy markets.
CNBC: why is oil up in price?
  • First talking head: oil is part of the rising tide: equities are rising; the euro is rising; bad economic data --> weak dollar --> interest rates won't be raised any time soon --
  • Second talking head, obviously bullish: he said it was about the recent stories of the "bounce back" in China. This bounce back in China has been discussed at the blog
WSJ Links

Section M (Mansion): did not read

Section D (Arena): save for later
KKR net surges on stake sales; the firm paid out more cash to its investors than any other year in the firm's history. Now, why in the world would I link this story. Because KKR is in the Bakken and it's posted on the blog.

Section B (Marketplace):
For AMR, a vast new network; from another source but I think same story

Now on YouTube: return of copyright woes -- big headache for Google

787 probe indicates fire was caused by short

Section C (Money & Investing): nothing
Section A:
Yesterday or the day before, I forget, I mentioned "Medicare" on one of my posts. "Anonymous" commented on it but I really couldn't add anything: the issue is way too complex to talk about in the comment section, and it's even too complex to talk about in postings on a blog (not that that inconvenient truth will stop me -- smile) -- but this is what I was really thinking about when I mentioned Medicare: defensive medicine may be costlier than it seems -- the headline for an op-ed in today's WSJ

What A Great Way To Start The Day -- Bakken Photos

A reader sent me this link. Enjoy.

Short CNBC Piece on Refineries Closing, Refineries Expanding

CNBC reporting:
At $96 a barrel, U.S. oil prices are now $20 cheaper than North Sea Brent crude futures, which are trading above $116 a barrel. Since gasoline is priced based on the Brent crude oil market, Gheit says, "making a gallon of gasoline is cheaper to do here than overseas."
That's the reason East coast refineries, which rely more on foreign oil than domestic crude, are shutting down.
Last week, Hess announced the closure of its Port Reading, NJ refinery at the end of the month. Deutsche Bank estimates about 610,000 barrels a day of refining capacity has been shut down since 2009, excluding Hess' NJ refinery.
About 60 percent of the closures have been on the East Coast, according to Deutsche Bank.
Meanwhile, BP is spending billions of dollars to expand its Whiting, Indiana facility, already the largest refinery in the Midwest, to better handle growing U.S. and Canadian supplies. But shutdowns and planned repairs to refineries are also reducing gasoline supplies more severely in some parts of the country than others. Overall, the result is higher prices at the pump.