California Will Raise Tax On Gasoline Just In Time For The July 4th Holiday

Cue up Connie Francis.

The photo says it all. $5 gasoline.

Connecting The Dots, UK-Style: UK's Energy Output Fell For the 11th Consecutive Year; Coal Use At Highest Level Since 1966; Environmentally-Friendly Natural Gas Use At Lowest Rate Since 1966; Not Enough Natural Gas; What's a Country To Do? And Now A Likely Recession

Updates

March 1, 2013: Less than 24 hours after posting the two stories below, a third connecting dot is reported by Reuters: 

The risk that Britain is entering its third recession in four years grew on Friday with figures showing that manufacturing shrank unexpectedly last month and mortgage approvals for home buyers dropped in January.

Gross domestic product fell at the end of last year, bringing Britain within sight of another recession and the latest data suggested the central bank may need to do yet more to revive the economy.

Original Post 

Despite all that oil in the North Sea, UK energy production continues to fall. UK energy production has fallen for eleven consecutive years, and the writer of the story below says the rate has slown down, to almost 11% --- that's huge -- UK production falls 11% in the past year, and that's "less bad" than the previous 11 years....wow. UK returning to coal, as a result.

First this story, as reported by Rigzone:

UK energy production fell for the 11th consecutive year in 2012 ... though at a slower rate ...

Figures from the Department for Energy and Climate Change, released Thursday, showed primary energy production fell 10.7% on the year as maintenance activity and a long-term output decline led to sharp falls in output from the North Sea.

Production of crude oil fell by 14.3%, while natural gas output fell by 14.1%. Imports of both exceeded domestic production, although due to the country also exporting large quantities production of both exceeded net imports.

Coal accounted for 42.8% of electricity supplied in 2012 and natural gas accounted for 27.6%, respectively the fuels' highest and lowest shares of generation since 1996.

The U.K. government has said the country will need up to 30 new gas-fired power stations by 2030 to ensure future energy supplies and to replace old coal and nuclear plants due to close by the end of the decade.

So, UK energy production falls -- and quite significantly.  And look at that: coal use at highest rate since 1996, and natural gas at lowest rate since 1966....CO2...what Kyoto Protocol?...

...what's a country to do? Hmmm....let us think.... how about allowing fracking?  Then this story, after banning fracking not long ago, the UK has now okay'd it but...with guidelines, as reported in Rigzone, in the very same issue:

The guidelines set out that operators must publically disclose all chemical additives to fracturing fluids on a well by well basis, including regulatory authorisations, safety data and maximum concentrations and volumes. These disclosures meet or exceed all known standards in the shale gas industry.

The UK lifted its ban on shale gas drilling in December after the Chancellor of the Exchequer announced plans to better exploit the country’s gas resources. Exploratory fracking had been suspended in the UK since May 2011 after two small seismic tremors were detected near the country's only fracking operation in the Bowland Basin to the east of Blackpool in Lancashire, northern England.

By the way, in that first linked story about coal being the "new" fuel for the UK, there was no mention of the world's largest off-shore wind farm, the one in the mouth of the Thames River, the London Array. It started to produce electricity late last year, but apparently isn't doing much to offset need for coal. Developers have had to cut back on the number of turbines due to environmental concerns, but they will re-apply for original number of turbines. Having said all that, the UK says they hope to reduce the cost of off-shore wind by 40% -- they didn't say how much off-shore wind energy is, but it is up to three times more expensive than on-shore wind farms -- and if the goal is to reduce the cost by 40%, one can imagine how expensive it is. We'll probably know more a year from now. Stay tuned. In the meantime, cue up Connie Francis.

***************************

It's a stretch, I know, but UK's eleven years of decreasing energy output reminds me of that seven-year ache:

Seven-Year Ache, Rosanne Cash

[Speaking of seven-year aches, "they" say the Keystone has been delayed 5 years now. If approved this year, Nebraska says the pipeline still won't come on-line until 2015 -- another two years -- talk about a seven-year ache.]

Another LPG-Export Terminal

In the process of searching for something else, I ran across this, as reported by Argus Media.

Data points:

• new LPG-export terminal; Beaumont, Texas; Japan + European joint venture
• exports predominantly to Asia-Pacific
• hinted at this project in 2011 due to glut of propane but didn't say anything until yesterday
• Japan: 34% stake
• first phase: $500 million; will include a 100,00 b/d de-ethanizer (strip ethane from propane)
• to be completed by 4Q14
• differential between US propane / Asian propane: $452/t
• several other LPG-export facilities mentioned in the linked article

Note: the ethane will be stripped out, adding to even more ethane stateside. (Corrected: see comment from "anon 1.")

Look At Some Huge Wells; KOG and BR Each With a Huge Well; EOG With A Nice Bear Den Well; MRO With a Nice Well; Wells Coming Off the Confidential List Friday; Huge Wells Being Taken Off-Line Due to Excessive Flaring?

Less than 24 hours.

Newbies should check out the Iron Horse wells in the Union Center field; see below. 

Wells coming off the confidential list on Friday:

• 21689, 1,665, EOG, Bear Den 104-2116H, Spotted Horn, t9/12; cum 76K 1/13;
• 21716, 943, Petro-Hunt, Van hise GTrsut 153-95-28C-21-2H, Charlson, t12/12; cum 54K 1/13;
• 22013, 360, Cornerstone Natural Resources, Jepsen 3-20-17H, Coteau, t11/12; cum 24K 1/13;
• 22114, 1,712, MRO, Baker USA 11-18TFH, Van Hook, t10/12; cum 60K 1/13;
• 22164, 693, Slawson, Athena 3-36H, Alger, t11/12; cum 13K 1/13;
• 22197, 508, OXY USA, Griggs 2-8-9H-142-97, Willmen, t9/12; cum 21K 1/13;
• 22448, 650, G3 Operating, C. Rasmussen 1-23-14H, Strandahl, t12/12; cum 8K 1/13;
• 22685, 598, Hess, EN-Jeffrey -155-94-2215H-2, Alkali Creek, t2/13; cum 8K 1/13;
• 22758, 2,485, BR, Iron Horse 11-2TFH, Union Center, t11/12; cum 6K 1/13;
• 22850, 2,338, KOG, Koala 15-33-28-2H, t11/12; cum 64K 1/13;
• 23009, 815, Hess, HA-Grimestad-152-95-3031H-2, Hawkeye, t11/12; cum 45K 1/13;
• 23135, drl, BR, CCU Powell 11-29MBH, Corral Creek, no production data;
• 23394, 1,170, XTO, FBIR Baker 34X-25A, Heart Butte, t1/13; cum --
• 23397, 969, CLR, Collison 1-23H, Avoca, t12/12; cum 23K 1/13;
• 23459, conf, Sinclair, Crosby Creek 2-5H, Little Knife,
• 23532, drl, CLR, Lousiville 2-9H, Last Chance

************************

I could be wrong, but if you look at the Bear Den wells in Spotted Horn oil field, it looks like natural gas takeaway is huge constraint in the field. Wells are hooked up to gas lines in many cases, but are still flaring natural gas. In addition, it looks like some huge wells have been taken off-line because they continue to flare gas after twelve months of production. Again, all I have to go by are the monthly production runs but that is what the data is telling me.  A huge "thank you" to an anonymous reader who provided the tip.

************************

21689, conf, EOG, Bear Den 104-2116H, Spotted Horn

Date	Oil Runs	MCF Sold
1-2013	11777	0
12-2012	12153	0
11-2012	15165	0
10-2012	18395	0
9-2012	17345	0

 21716, conf, Petro-Hunt, Van hise GTrsut 153-95-28C-21-2H; already on a gas line:

Date	Oil Runs	MCF Sold
12-2012	31642	18666

 22013, conf, Cornerstone Natural Resources, Jepsen 3-20-17H, Coteau; already on a gas line:

Date	Oil Runs	MCF Sold
1-2013	12348	6803
12-2012	10174	3505
11-2012	1242	0

 22114, conf, MRO, Baker USA 11-18TFH, Van Hook

Date	Oil Runs	MCF Sold
12-2012	20053	0
11-2012	15855	0
10-2012	6505	0

 22850, conf, KOG, Koala 15-33-28-2H; already on a gas line:

Date	Oil Runs	MCF Sold
1-2013	18121	24614
12-2012	22419	29505
11-2012	23289	14972

 23009, conf, Hess, HA-Grimestad-152-95-3031H-2, Hawkeye, on gas line:

Date	Oil Runs	MCF Sold
1-2013	10912	0
12-2012	15352	14276
11-2012	18422	1513

 

Williston State College Makes History -- The Williston Wire

A national championship for Williston State College. National:

History was made Sunday afternoon in Rochester, N.Y. 

The Williston State College Tetons won the National Junior College Athletic Association hockey championship 3-2 over Monroe Community College.

The national championship is the first in school history.

No links; it is easy to subscribe to the Williston Wire. 

NOG: 4Q12 and Full Year

From Yahoo! In-Play:

Northern Oil & Gas beats by $0.07, misses on revs: Reports Q4 (Dec) earnings of $0.34 per share, $0.07 better than the Capital IQ Consensus Estimate of $0.27; revenues rose 202.9% year/year to $81.75 mln vs the $82.88 mln consensus. Q4 total production was ~1 mln Boe. Average daily production was 10,865 Boe. Average realized price per Boe was $84.74.

Press release: 

• Annual production increased 95% over 2011 to 3,760,123 barrels of oil equivalent ("Boe"), or 10,274 average Boe per day
• Total revenues, including the effects of derivatives, increased 109% over 2011 to $311.6  million
• Net income increased 78% over 2011 to $72.3 million
• Adjusted EBITDA increased 101% over 2011 to $225.3 million
• Proved reserves increased 44% over 2011 to 67.6 million barrels of oil equivalent
• Added 563 gross (48.3 net) wells to production bringing total producing wells to 1,227 gross (106.2 net)

Twelve (12) New Permits -- Williston Basin, North Dakota, USA

Active rigs: 184 (nice)

Twelve (12) new permits --

• Operators: BEXP (6), Petro-Hunt (3), EOG, MRO, Hess
• Fields: Nelson Bridge (McKenzie), Camp (McKenzie), Alexander (McKenzie), Parshall (Mountrail), Wolf Bay (Dunn), Big Gulch (Dunn)
• Comments:

Wells coming off confidential list were posted earlier; see sidebar at the right.

Two producing wells were completed:

• 22281, 373, Crescent Point, Walters 35-26-158N-101W, Little Muddy, a Bakken well; t10/12; cum 15K 1/13; 
  
• 22617, 448, CLR, Sorenson 1-21AH, Alkali Creek, t2/13; cum --

Extraction Taxes -- State-by-State Comparisons

The Dickinson Press is reporting: 

A comparison of effective oil tax rates in fiscal year 2010 of the top eight oil-producing states in the U.S. found that North Dakota had the fourth-lowest rate. Here is the ranking of the rates, with the total taxable value of oil production in each state in parentheses.

1. California — 2.5 percent ($15.2 billion)
2. Oklahoma — 6.7 percent ($11.1 billion)
3. Texas — 7.9 percent ($49.4 billion)
4. N. Dakota — 9.8 percent ($6 billion)
5. Montana — 10.7 percent ($2 billion)
6. Louisiana — 10.9 percent ($8.6 billion)
7. Wyoming — 13 percent ($8.3 billion)
8. Alaska — 25.1 percent ($14 billion)

Source: Covenant Consulting Group study commissioned by the North Dakota Department of Commerce.

A comparison of effective oil tax rates in fiscal year 2010 of the top eight oil-producing states in the U.S. found that North Dakota had the fourth-lowest rate. Here is the ranking of the rates, with the total taxable value of oil production in each state in parentheses.
1. California — 2.5 percent ($15.2 billion)
2. Oklahoma — 6.7 percent ($11.1 billion)
3. Texas — 7.9 percent ($49.4 billion)
4. N. Dakota — 9.8 percent ($6 billion)
5. Montana — 10.7 percent ($2 billion)
6. Louisiana — 10.9 percent ($8.6 billion)
7. Wyoming — 13 percent ($8.3 billion)
8. Alaska — 25.1 percent ($14 billion)
Source: Covenant Consulting Group study commissioned by the North Dakota Department of Commerce

- See more at: http://www.thedickinsonpress.com/event/article/id/66076/#sthash.v5kRZeAs.dpuf

A comparison of effective oil tax rates in fiscal year 2010 of the top eight oil-producing states in the U.S. found that North Dakota had the fourth-lowest rate. Here is the ranking of the rates, with the total taxable value of oil production in each state in parentheses.
1. California — 2.5 percent ($15.2 billion)
2. Oklahoma — 6.7 percent ($11.1 billion)
3. Texas — 7.9 percent ($49.4 billion)
4. N. Dakota — 9.8 percent ($6 billion)
5. Montana — 10.7 percent ($2 billion)
6. Louisiana — 10.9 percent ($8.6 billion)
7. Wyoming — 13 percent ($8.3 billion)
8. Alaska — 25.1 percent ($14 billion)
Source: Covenant Consulting Group study commissioned by the North Dakota Department of Commerce

- See more at: http://www.thedickinsonpress.com/event/article/id/66076/#sthash.v5kRZeAs.dpuf

SandRidge 4Q12 And Full Year Earnings

Press release.

SandRidge Energy, Inc. today announced financial and operational results for the quarter and year ended December 31, 2012.

Fourth Quarter

• Adjusted EBITDA of $318 million for fourth quarter 2012 compared to $175 million in fourth quarter 2011.
• Operating cash flow of $259 million for fourth quarter 2012 compared to $154 million in fourth quarter 2011.
• Net loss applicable to common stockholders of $302 million, or $0.63 per diluted share, for fourth quarter 2012 compared to net loss applicable to common stockholders of $389 million, or $0.97 per diluted share, in fourth quarter 2011.
• Adjusted net income of $35.3 million, or $0.06 per diluted share, for fourth quarter 2012 compared to adjusted net income of $8.7 million, or $0.02 per diluted share, in fourth quarter 2011.

Full Year

• Adjusted EBITDA of $1,070 million for 2012 compared to $654 million in 2011.
• Operating cash flow of $915 million for 2012 compared to $542 million in 2011.
• Net income available to common stockholders of $86 million, or $0.19 per diluted share, for 2012 compared to net income available to common stockholders of $52 million, or $0.13 per diluted share, in 2011.
• Adjusted net income of $124.3 million, or $0.23 per diluted share, for 2012 compared to adjusted net income of $6.9 million, or $0.01 per diluted share, in 2011.

At Least We Now Know "Who" We Can Blame -- As Mr Bush Recedes Into the Background

One of the silver linings coming out of the sequestration: the federal government now has "something" to blame for their inefficiencies.

Administration says, starting tomorrow, federal energy permits will be delayed. 

"Oh, you haven't gotten your permit yet? It's because of the sequestration."

"Oh, you haven't gotten your permit yet? It's because of the sequestration."

"Oh, you haven't gotten your annual Social Security statement yet? It's because of the sequestration."

"Oh, you missed your flight because TSA is slow today? It's because of the sequestration."

"Oh, jobless rate went up? It's because of the sequestration."

"Oh, no Saturday mail delivery? It's because of the sequestration."

As we always said in the military: "Sounds like a personal problem."

Given an obstacle, the average soldier usually found workarounds.  Not administration department heads -- don't try do more with less; just fall back on, "it's because of the sequestration."

Connecting the Right-To-Work Dots

A big "thank you" to Don.

USA Today reported: Indiana becomes the "rust belt's" first right-to-work state. That was reported about .. oh, one month ago, February 2, 2013, to be exact.

Quick, fast forward to today, February 28, 2013, 11:15 am: Chrysler announced huge investment in north-central Indiana.

An automaker is investing hundreds of millions and adding well more than a thousand positions at transmission and metal casting plants in Indiana.

Thursday morning, Chrysler announced it is adding 1,250 jobs to increase production of fuel-efficient transmissions in north-central Indiana. It’s also investing $374 million in area plants.

Interesting to note that the second-linked story failed to at least think about connecting the dots. In less than a month. This is not rocket science.

Sequestration: What The Politicians Are Not Telling Us

Sequestration exemptions

An executive summary provides a list of the most important exemptions:

• Social security benefits (old-age, survivors, disability) and railroad retirement benefits
• all programs administered by the VA and special benefits for certain WWII veterans
• net interest
• payments to individuals in the form of refundable tax credits
• unobligated balances, carried over from prior years, for nondefense programs
• at the president's discretion: military personnel accounts may be exempt entirely, or a lower sequestration percentage may apply

The actual list of exemptions is too long for the executive summary, but includes:

• activities resulting from private donations, bequests of voluntary contributions
• advances to the unemployment trust fund
• payments to various retirement, health are, and disability trust funds
• certain Tribal and Indian trust accounts
• medical facilities guaranty and loan fund
• specified federal retirement and disability accounts and activities
• prior legal obligations
• low-income programs, including Child Care and Development Fund; Child Nutrition Programs; Children's Health Insurance Program; Commodity Supplemental Food Program; Temporary Assistance for Needy Families; Family Support Programs; Federal Pell Grants; Medicaid; Foster Care and Permanency Programs; Supplemental Security Insurance
• Medicare Part D low-income premium and cost-sharing subsidies

To see the entire list (too long for the executive summary), the author of this document refers the reader to the "statute" itself. US Congresswoman Maxine Waters probably has a copy available upon request.

In addition to this list that is too long to even include in the executive summary, there is an additional list of budget line items are are protected by special rules.

Bottom line: the safety net for children and other social safety nets remain in place. When Congress passed the law, following the president's suggestion of a sequestration, it was done coolly, calmly, and collectively.

At the end of the day, the sequestration is pretty much all about jobs within the Beltway. 

Nice Two-Part Article on Process of Land Reclamation in North Dakota

The Dickinson Press is reporting.

Part I appears today. 

Timely: Microseismic and Data Suites Favor Large Integrated Services Companies

Updates

Later, 3:17 pm: this is truly coincidental. See original post. Now, this, just noted now, at Yahoo! In-Play:

Acorn Energy's US Seismic Systems secures order for their Ultra High Sensitivity fiber optic sensing system from a 'supermajor' oil co; terms of the sale are confidential.

Original Post

In the past five days or so, regular readers will note a theme running through the blog: it began with the Acorn Energy corporate presentation. Since that original note, there have been a couple more notes regarding the same issue.

Now today, the Wall Street Transcript covers this issue in a long interview. I don't subscribe so I cannot provide any detail, but the lede is enough to suggest some rabbit trails to follow.

The headline:  

Fractioning Optimization Using Microseismic and Data Suites Causing Shifts in Oil Services Market Toward Large Integrated Services Companies 

The lede:

The Wall Street Transcript has just published its Oil & Gas: Drilling Equipment and Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. 

Topics covered: Capital Expenditures and Consolidation Activity - Frontier Exploration and Development - Shale Drilling Capital Expenditures - Oil Price Expectations - Shale Drilling Dynamics - Shale, Offshore and Deepwater Drilling - Oil and Gas Price Divergence - Offshore Deepwater Oil Discoveries Companies include: Halliburton Company, Schlumberger Limited, Baker Hughes Inc., Weatherford International Ltd., National Oilwell Varco, Incorp, FMC Technologies, Inc., Cameron International Corporation, Oceaneering International, Inc, Noble Corp., Ensco International Inc., Rowan Companies Inc., and many more.

Disclaimer: I am not posting this for investors. Having said that, this is not an investment site. Do not make any investment decisions based on what you read at this blog.

I am posting this because of recent stories regarding better microseismic technology which should improve production. If it is accurate that "frack failure" is due to poor understanding of subsurface geology almost 75% of the time, it only makes sense to try to do better.

The companies in bold above have major operations in Williston and the Bakken in general.

Time For a New Poll -- Non-Bakken Related

Results of the current poll asking the question, which operator has the "big" well northwest of Watford City?

• Newfield: 27%
• Slawson: 17%
• SM Energy: 14%
• Other: 43% 

Rounding results in 101%.

****************************

Now the new poll. According to a CNBC crawler, the president has until 11:59 pm Friday night to sign the sequester bill. Essentially, by midnight tomorrow night.

The poll question:

Will the president sign the sequester order before midnight tomorrow, Friday, March 1, 2013?

[Later, 1:01 pm: CNBC video with Congress adjourning for the weekend and heading home.]

Front Page Story in The Wall Street Journal Today

I can't remember what I've posted, what I've written in e-mail to others, and what I've put in draft and not posted, but this front page story in today's WSJ is stunning confirmation: natural gas boom is projected to grow for decades.

The most important word in that sentence: "grow," as in "accelerate." That's an important distinction, by the way. "Grow" could simply mean continued "growth" on the same trajectory. The story actually uses the word "accelerate." To accelerate means to grow MORE than current rate of growth.

Second most important word in that sentence: "decades." The acceleration will continue over the next three decades. Here's the lede:

U.S. natural-gas production will accelerate over the next three decades, new research indicates, providing the strongest evidence yet that the energy boom remaking America will last for a generation.

The most exhaustive study to date of a key natural-gas field in Texas, combined with related research under way elsewhere, shows that U.S. shale-rock formations will provide a growing source of moderately priced natural gas through 2040, and decline only slowly after that. A report on the Texas field, to be released Thursday, was reviewed by The Wall Street Journal.

As the Journal notes, that growth will be generational.

Halcon Reports; RBN Energy; WSJ Links; How Serious Is The President About Working The Issue? A 7-Minute Photo-Op

The first face-to-face meeting between the president and Congressional leaders to discuss the sequestration is scheduled for Friday: a) hours before the deadline; b) again, the first meeting between the two on this subject; and, c) schedule time: 7 minutes -- three minutes to file in; 1 minute for photos; three minutes to file out. A reminder: this is playing out as expected when the president first suggested a sequestration some months ago. [Later, 1:01 pm: CNBC video with Congress adjourning for the weekend and heading home. It looks like they are not even waiting around for the meeting scheduled tomorrow.  CNBC says the next deadline is "government shutdown, a week and a half from today."]

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

WPX reports: Yahoo! In-Play: WPX Energy misses by $0.11, misses on revs: Reports Q4 (Dec) loss of $0.20 per share, excluding non-recurring items, $0.11 worse than the Capital IQ Consensus Estimate of ($0.09); revenues fell 8.0% year/year to $572 mln vs the $634.69 mln consensus. Press release here. 

Halcon reports: Yahoo! In-Play: Halcon Resources reports EPS in-line, beats on revs : Reports Q4 (Dec) earnings of $0.02 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.02; revenues rose 387.1% year/year to $124.7 mln vs the $114.09 mln consensus.

********************

Wells coming off the confidential list have been posted (only two, and one was put on DRL status).

RBN Energy talks about the natural gas situation, the pipelines, Canada and the US in the northeast.

WSJ Links

Section D (Personal Journal):

Section C (Money & Investing):

• Gasoline falls as supply worries ease
• Chevron's Australian shale-gas option; Heard On The Street; very interesting

Section B (Marketplace):

• JC Penney's losses snowball 
• Groupon lands with a thud
• FDA will go to 4-flu vaccine cocktail next year, from current trivalent vaccine
• Boeing, battery supplier at odds over fixes; subscription may be required
• Shell puts off drilling in Alaska's Arctic; reported elsewhere but not previously linked
• Isn't this interesting? Turnabout is fair play? Argentina's YPF inherits New Jersey River mess; New Jersey wants Argentina-run oil company to pay for cleanup of dioxin dumped in Passaic River decades ago; doesn't statute of limitations ever run out?

Section A:

• The sequester: identical to "going over the fiscal cliff"; go over the "sequester cliff" and then, get serious: both sides bet they'll have a stronger hand after deadline expires; this should catch one's attention: "The first face-to-face meeting on the issue between President Barack Obama and congressional leaders won't happen until Friday—the deadline for Mr. Obama to set in motion $85 billion in broad spending cuts." Question: why couldn't the president simply ignore the law on this one; plenty of other laws of much more importance have been ignored; I wonder what FDR or Reagan would have done?
• Gas boom projected to grow for decades. More discussion here.
• Quietly, SecTreasury confirmed; no links; story everywhere.
• State gun laws being passed faster than ever; no links; stories everywhere.