Thursday, April 11, 2013

Ready To Launch Five Missiles Is The Rumor; SecState Kerry Says US Intel Reports Bogus; Not To Worry; They Had Nukes When He Was A Congressman; As SecState, Not So Much


April 12, 2013: Kerry called Mr Reagan's missile defense a "cancer on our nation's defense system (whatever that means)." My hunch is that Kerry will not remind us that the world that is safe (or at least safer from tyrants like North Korea's Kim Jong Un) because of Ronald Reagan. Imagine what the world would be like if Kerry had been elected president. The good news is that Kerry knows the US intel report is completely wrong about Korea's nuclear capabilities. Imagine what the world would be like if Kerry had been elected president. But I repeat myself. What a bozo.

Original Post

I assume North Korean's Kim family might be listening to this tonight:

Enola Gay, Hillbilly Moon Explosion

Just for the record.....

On April 8, 2013, I posted a story that the days of wind energy were over. "Wind," in that context, of course, was a catch-all term for renewable energy to include solar energy. Be that as it may. In that article I used the idiom "nails in a coffin."

It was with some amusement, then, that tonight I stumbled across a Motley Fool renewable energy article in which they used the same idiom:
Formerly the biggest maker of solar panels in the world, with more than 10,000 employees, China-based Suntech Power Holdings has witnessed a long fall from grace. The nail in the coffin came in March, when the company failed to pay a $513 million debt obligation. Shortly following its default, the company sailed into Chinese bankruptcy protection. Fast-forward to this week and the company is trading more than 30% higher on a largely speculative rumor that Warren Buffett is looking to buy it.
There is another reason for a bit of amusement. Just about the time STP was hitting all-time lows (?) a few days ago, Don suggested I invest in STP (I have no idea whether he did). I did not know whether he was serious or joking; suffice to say, I did not invest in STP.

What makes me think that Don invested in STP? The foremost contrarian. In December, 2007, STP hit a high of $85. This past week, one could have bought a share for about 85 cents.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at this blog or think you read at this blog.

Only One Well Came Off The Confidential List Today

Active rigs: 187

23417, 447, Hess, EN-Hegland 155-94-0508H-3, Manitou, t2/13; cum 17K 2/13;

Rail Car Loadings -- Genesee & Whoming's Carloads Increased !00% Over One Year Ago

From Yahoo!In-Play early this morning:
6:31AM Genesee & Wyoming's traffic in March 2013 was 154,077 carloads, an increase of 77,031 carloads, or 100.0%, compared to co's traffic in March 2012 : Co reported traffic volumes for March 2013 and the first quarter of 2013. G&W's traffic in March 2013 was 154,077 carloads, an increase of 77,031 carloads, or 100.0%, compared to G&W's traffic in March 2012, and an increase of 5,198 carloads, or 3.5%, compared to total March 2012 carloads pro forma for the RA acquisition. G&W's traffic in the first quarter of 2013 was 450,304 carloads, an increase of 228,126 carloads, or 102.7%, compared to G&W's traffic in the first quarter of 2012, and an increase of 19,387 carloads, or 4.5%, compared to total first quarter of 2012 pro forma for the RA acquisition.
From Yahoo!In-Play late this afternoon:
5:42PM HollyFrontier and Holly Energy Partners (HEP) announce New Mexico crude oil rail project: Co and Holly Energy Partners, L.P. (HEP) announced that the companies are collaborating to construct a rail facility that will enable crude oil loading and unloading near HollyFrontier's Artesia and/or Lovington, New Mexico refining facilities. The rail project, which will be connected to Holly Energy's crude oil pipeline transportation system in southeastern New Mexico, will have an initial capacity of up to 70,000 barrels per day and will enable access to a variety of crude oil types including West Texas Intermediate (WTI), West Texas Sour (WTS) and Western Canadian Select (WCS). The project will provide both additional crude oil takeaway options for producers as crude production in the region continues to grow, and an expanded set of crude oil sourcing options for HollyFrontier. Project completion is expected by early 2014.
 The modern crude-by-rail phenomenon began a few miles southwest of Williston. At least that's my myth.

Miscellaneous Links

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at the blog or think you read at the blog.

Zacks upgrades Helmerich & Payne to buy.

Three reasons to buy SandRidge -- Motley Fool

Schlumberger will pop to $88 when earnings reported -- Forbes.

Investors Business Daily Op-Ed On ObamaCare

This is from an editorial from, "powered by Investors Business Daily."
Rockefeller, like a growing number of Democrats, realizes that ObamaCare is shaping up to be a political disaster for the party next November.
The Rockerfeller is:
West Virginia Sen. Jay Rockefeller, had a more accurate take on the problem the administration faces: the law is "probably the most complicated piece of legislation ever passed by the United States Congress" and "if it isn't done right the first time, it will just simply get worse."
Congress prevented the US Postal Service from going ahead with its plans to stop Saturday delivery.

My hunch is that right, wrong, or indifferent, the implementation of ObamaCare will be delayed until after the mid-term elections. Rockefeller, it appears, has been appointed to be one of the lead spokesmen to start the ball rolling.

Williston Wire Headlines; New Town Proposed North Of Williston: "Bakken Village"


April 17, 2013: Note the headline story below -- talk of a new city north of Williston. Now The Bismarck Tribune is reporting the story:
A group that helped incorporate a new city in western South Dakota eight years ago might now do the same in western North Dakota's booming oil patch.
Four Front Design and the owners of property north of Williston have presented a plan for Bakken Village to the Williams County Commission, which has set up a task force to look into the possibility. North Dakota's secretary of state also would have to approve any new city.
Original Post

Headlines only, no links. It is easy to subscribe to the Williston Wire.
  • Meadows Development: housing lots in first and second phase their subdivision, now available for purchase.
  • Elk Ridge Subdivision begins selling lots.
  • North Dakota funds affordable rental housing during oil boom.
  • Developers propose new city at 13-mile corner: "Bakken Village."
  • Washington family opens candy store in Williston.
  • Williston police department will grow to 38 officers by mid-2013, from 22 in 2007.
  • Rail expansion in New Town hopes to reduce truck traffic. Dakota Plains Holdings Inc plans a large expansion to move crude from New Town via rail. The expansion will involve builidng two 8,300 long loops of railroad track to load oil onto unit trains. Each track can accommodate 120 rail cars.
  • McKenzie County expects to grow to 11,500 over the next two years.
  • Cobblestone Hotels is building a new hotel in three small ND towns: Harvey, 32-room; B Bottineau , 45-room; and, Rugby, 36-room hotel.

Fairfield Sun Times Provides Nice Weekly Update of Montana's Oil Patch

First, this little bit of history, the "accidental oil field" in Montana, as reported by the Fairfield Sun Times:
The Cut Bank Field, which is located in Glacier and Toole County, was discovered in 1926… by accident. According to “Petroleum Exploration Progress in Montana” by John R. Fanshawe, early records show that drilling equipment “was mired en route to a selected drill site, and the operator was faced with a deadline to be spudded in order to hold the lease. He therefore off-loaded the rig where it was bogged down and began drilling.” Since it’s discovery, the Cut Bank field has, according to the Montana Board of Oil and Gas Conservation, produced 172,740,070 barrels of oil. Since 1986, the field has produced over 60 billion cubic feet of gas. Great Falls Geologist Bill Hansen explained that until 1984, Montana Power kept records for the Cut Bank Field. From the time of the field’s discovery through 1984, the Cut Bank Field produced 467,000,000,000 cubic feet of gas, bringing the total gas produced to over half a trillion cubic feet.
Denbury, Whiting, and Petro-Hunt are active in Montana and mentioned.

Oasis announced completion of four Montana wells, one in Richland County (think Elm Coulee) and three in Roosevelt County.

Nine (9) New Permits -- the Williston Basin, North Dakota, USA

Active rigs: 187 (steady)

Nine (9) new permits --
  • Operators: XTO (4), Sequel (2), EOG, MRO, Fidelity
  • Fields: Parshall (Mountrail), Bull Moose (McKenzie), New Hradec (Stark), Pierre Creek (McKenzie), Tobacco Garden (McKenzie), Murphy Creek (Dunn)
  • Comments: Again, as noted before, XTO is getting very, very active; nothing to suggest they are holding spacing units by production and not drilling
Wells coming off the confidential list were reported earlier; see sidebar at the right.

The daily activity report was very long today, because the report contained results of wells coming off two days of the confidential list. 

Two Years GE and Renewable Energy Seemed Synonymous; Now, Not So Much


December 31, 2015: GE buys Metem, a very, very small buy, $200 million; technology to make natural gas turbines run smoother; provide greater value for its Alstom (European) purchase
  • Metem's expertise is in making turbines run more efficiently.
  • GE was Metem's largest customer; GE is eager to hog capabilities (and technologies) for itself and Alstom.
  • The acquisition, likely less than $200 million, is an example of GE working aggressively to optimize the value of the Alstom acquisition.
December 12, 2015: GE looking to buy Hallburton's drilling assets as well as some of Baker Hughes' completions operations. 

September 29, 2014: GE to supply gas turbines for Exelon power plants in Texas.

September 20, 2014: a continuation of the theme -- GE turning away from renewable energy to oil and gas.

February 26, 2014: the age of natural gas is here -- GE's Immelt. 

February 14, 2011: a second look at GE diversifying into oil
Original Post

Two years ago GE would have announced a research center on renewables to be built in Silicon Valley or across the street from the new Apple factory in North Carolina.

But there is no question that Jeff Immelt is no Jack Welch. GE's returns under Jeff Immelt have paled compared to those under Jack Welch. I think Jack Welch would have been disappointed with what GE has done under Immelt. Folks remember that Welch fired the bottom ten percent of his performers every year. Check out GE's share price performance since 2000 when Jeff Immelt took over at GE. You can't blame it on the economy; compare it to Apple over the same time period. Apple had the same economy with which to work.

Jeff Immelt, it appears has finally seen the light. Renewable energy, solar and wind, are at the bottom of the barrel in returns. At least compared to the oil and gas industry.

Back in 2011, I posted a note that GE was turning away from renewables and moving into oil and gas. From the Monday, February 14, 2011, post:
It has been interesting to watch General Electric over the past few years try to make a go of it with regard to wind energy. General Electric had a huge interest in wind energy and wind turbines.

But it looks like even General Electric has finally seen the light (no pun intended). Read the Financial Times story; read the direct quotes, and read between the lines.
Then, last November, from the blog:
General Electric Co reached a deal to sell equipment to Clean Energy Fuels Corp, which is building out a series of liquefied natural gas fueling stations for U.S. truckers.
GE -- the largest U.S. conglomerate -- sees liquefied natural gas equipment as becoming a $1 billion market over the next five years, said Mike Hosford, general manager of unconventional resources for GE Oil & Gas.
Now, GE announces an oil and gas research center in the heart of Harold Hamm country. The Fairfield Sun Times is reporting:
General Electric has announced that it will build a new Global Research Center in Oklahoma dedicated to driving innovation and technological advancements in the oil and gas sector and bringing products to market faster. The new facility, which is GE Research's first sector-specific Center, represents a $110 million investment by the company and will result in the creation of 125 high-tech engineering jobs initially, in disciplines ranging from mechanical and electrical to systems and software engineering. These researchers will join GE's global network of 50,000 world-class scientists and engineers who are working to solve some of the world's toughest challenges.
GE Oil & Gas is the company's fastest-growing business, with revenues of more than $15 billion and earnings and new orders having each grown 16 percent in 2012. GE has grown its oil and gas portfolio to win in today's dynamic landscape, bringing to bear industry-leading technologies and services in turbomachinery, subsea drilling, pressure control, remote monitoring and diagnostics.
It's an incredible story. Read the entire article at the link.

A few day ago, I mentioned that Germany turning away from wind energy represents about seven nails in a 12-nail coffin. GE buying the oil service company Lufkin for a $24 dollar premium was worth another two nails. Now the research center.  Folks can deny it all they want, but except for well-defined niches, wind and solar are dead. And investors who argue that this is inaccurate, sell your GE shares and buy shares in First Solar and Vestas Wind Systems. As noted, the latter may do very, very well ... in well-defined niches.

The Song of the Meadowlark

The linked essay resonates with me. I also grew up with the song of the meadowlark, and perhaps that's why I enjoy bird watching with my granddaughters.

Read the essay at The Bismarck Tribune submitted by the the Theodore Roosevelt Center scholar at Dickinson State University, as well as Distinguished Scholar of the Humanities at Bismarck State College and director of the Dakota Institute.

Some Might Say These Were Bold-Faced Lies

I happened to catch the interview with the First Solar CEO on CNBC. I began to transcribe what he was saying, but it seemed so far off base (regarding pricing) I gave up. I thought I was mishearing.

But you can hear it for yourself.

The First Solar CEO says his solar-generated electricity "at more than 60 cents/watt" can compete without government subsidies or mandates. He also says he will get the cost down to "40 cents/watt."

Note that when the interviewer says First Solar electricity "costs" "60 cents," the CEO quickly responds by saying "more than 60 cents." At least he wanted to be clear there.

He and the interviewer used the word "watt" as in "60 cents/watt" which, of course, makes no sense. The unit of scale is KWH.  I assume that's what they meant. It was also unclear whether this was "cost" to produce, or the "price" the consumer pays.

Let's assume for the benefit of First Solar and the consumer, the 60 cents is the "price" paid by the consumer.

I was appalled when the First Solar CEO refused to answer the question how 60-cent-solar-electricity compared to "natural-gas-electricity"? He said it depends on the price of natural gas, saying that the price of natural gas varied around the world, but overseas First Solar was competitive with natural gas.

He was being very, very disingenuous. He was on CNBC, speaking English, to an American interviewer for an American audience. The interviewer was clearly asking how First Solar's 60-cent-solar-electricity compares with American "natural-gas-electricity." The First Solar CEO wouldn't answer.

The answer: American "natural-gas-electricity" costs the consumer about 10 cents compared to 60 cents for his solar-generated electricity. The spread may be significantly more if we are comparing "cost" and "price."

Be that as it may, in America it appears, solar-generated electricity would cost you six times (or more) what natural gas or coal-generated electricity would cost you.

By the way, 60 cents was incredible. When I started the blog, the "cost" was about 37 cents/KWH.

I was very, very negatively impressed by that interview. Maybe I was missing something. But I doubt it; especially when he refused to answer a very simple question. CNBC's listeners, I hope, aren't that gullible.

Eagle Ford Leading To More Fractionation Units in South Texas, Gulf Coast

Oil & Gas Journal is reporting:
TexStar Midstream Services LP, San Antonio, will install two fractionation units in Corpus Christi, Tex., adjacent to LyondellBasell’s Equistar Chemicals LP olefins plant.
Combined, the new fractionators will be able to process 63,000 b/d of NGLs from the Eagle Ford shale.
The announcement follows news earlier this month from Phillips 66 that it will develop a 100,000-b/d NGL fractionator at Old Ocean, Tex., near the company’s Sweeny refinery, some 40 miles southwest of Houston. Construction will begin early next year with start-up by second-half 2015, said the company.

Corn: And So It Goes

In today's WSJ:
Corn futures rise on corn report
In yesterday's WSJ:
Corn traders brace for a long slump. The corn market was upended last month when the US government reported unexpectedly high domestic supplies. Now many investors are bracing for a prolonged period of ample stockpiles and lower prices. Awesome. May the article will explain the unexpectedly high supplies. Ethanol?

Funny How Things Work Out ....

For newbies, the daily posts are mostly filler just to get me through the day. Smile.

The really good stuff is buried in the archives at the sidebar at the right.

One of the "data bases" (although it's not really a data base) is "Earnings Central." The list started with Bakken-centric companies, expanded to oil and gas in general, then added some non-energy companies I was particularly interested in. Some, because I had invested in them at one time or another, and others, simply because they ... are well, occasionally, interesting.

CNP is an example of a company that I added to "Earnings Central" some time ago because it was a company I have invested in over the years. I continue to accumulate. It was one of the first companies in which I ever invested, when I was looking for a conservative, stodgy investment to balance other not-so conservative, stodgy investments.

I was perhaps as surprised as anyone when it was announced that a newly-formed, wholly owned subsidiary of CNP will be transporting XTO crude oil from the Bakken. This is the press release.
CenterPoint Energy Bakken Crude Services, LLC, an indirect, wholly-owned subsidiary of CenterPoint Energy, Inc., announced it has entered into a long-term agreement with XTO Energy Inc., a subsidiary of Exxon Mobil Corporation, to gather XTO's crude oil production through a new crude oil gathering and transportation pipeline system in North Dakota's liquids-rich Bakken shale. The agreement with XTO is the first agreement entered into pursuant to the open season announced by CEBCS on February 19. 
Under the terms of this new agreement, which includes volume commitments, CEBCS will provide service to XTO over a gathering system to be constructed in Dunn and McKenzie counties, North Dakota. The gathering system will have a capacity of up to 19,500 barrels per day.
It was also reported in the WSJ, but one will need a subscription or use google reader.  The WSJ article was very, very short, summed up here:
The agreement is the first secured for the proposed pipeline, which will have a capacity to gather 19,500 barrels per day. It underscores the rapid buildup of infrastructure taking place in the shale plays that are underpinning a big boost in U.S. oil output.
The Bakken shale is located in North Dakota, and has turned the state into the second-largest producer of crude after Texas. Limited infrastructure in the region has led many producers there to ship their oil via rail, and the bottleneck has produced a discount in the price of crude extracted in the region. 
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here, or what you think you read here. 

I always thought of CNP as a regulated electricity utility out of Houston serving that area and north and east to Louisiana and Arkansas. I never thought CNP would be interested in a crude oil pipeline. 

Simply too much information to follow. Smile. 

On a completely unrelated note, back on March 15, 2013, a new midstream partnership involving CNP  was announced. MarketWatch reported:
CenterPoint Energy, OGE Energy Corp. and ArcLight Capital to Combine Assets to Form Leading Midstream Partnership - Partnership will be a significant midstream company in U.S. with combined assets of nearly $11 billion - Will benefit from exposure to gathering and processing activities in high-growth basins and stability of substantial interstate and intrastate pipeline business. 
The partnership will include:
The new partnership will own and operate 8,400 miles of interstate pipelines with nearly 9 billion cubic feet of transport capacity and nearly 2,300 miles of intrastate pipelines. It will also have more than 11,000 miles of gathering lines, which in 2012 moved nearly 4 billion cubic feet of natural gas per day. Additionally, it will have more than 90 billion cubic feet of natural gas storage capacity and 11 major processing plants with nearly 2 billion cubic feet per day of inlet capacity. 
Its operating areas:
Significant asset positions in a broad range of basins, including the Granite Wash, Tonkawa, Mississippi Lime, Cana Woodford, Haynesville, Fayetteville, Barnett and Woodford plays. 

Job Watch: Four-Week Moving Average Increased By 3,000 to 358,000

About that incredibly great jobs report. I hope folks don't get too far ahead of themselves.

One has to read deep into the article to see that things may not be as rosy as the headline suggests: see if you can find what I am referring to in the note below, posted elsewhere:
Jobless claims plummet -- down 42,000 to 346,000; largest weekly drop since mid-November. Interestingly enough the numbers for March 30 were revised upward, making them worse than originally reported -- California's numbers had been estimated. Economists forecast a drop to 365,000, which was reasonable. It will be interesting to see what the revised numbers show next week. The numbers are seasonally adjusted which leaves room for all kinds of shenanigans, and, in fact, Reuters reported that the floating Easter holiday and spring breaks pose challenges for the "so-called" seasonal factor. The four-week moving average increased to 358,000.  The four-week average is a better measure of labor market trends.
Yes, I put it in bold to make it easier to spot. Last week's very, very, very bad numbers were actually worse; and, the four-week average which Reuters says is a better measure of labor market trends actually increased by another 3,000.

But that was buried deep in the linked article.

Thursday Morning Links: Oasis Reported 7 Wells; Several Good Ones; Judge Rules For Martha Stewart

Judge finds for Martha Stewart in Macy's Case

Chesapeake shareholder suit dismissed 

Wells that came off the confidential list Wednesday have been posted. KOG has a gusher.

Wells that came off the confidential list Thursday have been reported. OXY USA has quite a well. Oasis had a number of good wells.

Active rigs: 190 (steady, relative high since the intra-boom low)

Jobs report: jobless claims drop an astounding 42,000. Last month's huge rise was simply an anomaly. Happy days are here again. Futures will edge up.

RBN Energy: California crude-by-rail terminals.

Two great economic stories:
WSJ Links

Section D (Personal Journal): 
  • Smile: It's Thursday in Augusta
Section C (Money & Investing): 
  • Corn futures rise on corn report. Didn't we just read yesterday corn would be in the doldrums? 
  • OXY Plus would shake big oil.
  • T-Mobile upsets the Apple cart, heard on the street. T-Mobile will require no contract and will sell the iPhone for $100 (full retail, $580). The monthly bill will be an additional $20 until the phone is paid off. Teenagers and low-income folks (and maybe me) will love this. I have to check the data plans and the national coverage. I still prefer my Sprint non-smart phone. 
Section B (Marketplace):
Section A:
  • Obama makes budget gamble; throws grandma under the bus. No link; story everywhere. Budget proposal DOA. Like most presidential budget proposals. 
  • Post Office won't end Saturday mail service. Ever.
  • Does anyone know if North Korea was able ever to get a missile launched overnight?