Thursday, May 2, 2013

Chesapeake Sells Mississippi Lime Assets

Old news, May 1, didn't see it until now, Motley Fool is reporting: Chesapeake sold Mississippli Lime assets to Sem Group --
In the latest of a string of divestments, the company has inked an agreement to sell its Midstream Gas Services subsidiary to SemGroup for a cash payment of $300 million.
The unit operates a set of gas gathering and processing assets located in the Mississippi Lime play. These include 200 miles of gathering pipeline, and a pair of cryogenic processing plants currently under construction. The first of the two plants is expected to come onstream in Q1 2014, while the second is planned to be operational in Q1 2016. Combined, both require additional capital expenditures of roughly $125 million, plus investment into future well connects.

Wells Coming Off The Confidential List Friday; Oasis Is Going To Have A Huge Well; Half Of Wells Coming Off List Go To DRL Status

For Friday:
  • 21383, 3,194, Oasis, Zaye Federal 5201 34-2H, Camp, middle Bakken; t11/12; cum 75K 3/13; 36 stages; 3.6 million lbs; 1/3 sand; 2/3 ceramics;
  • 23740, drl, Statoil, Jerome Anderson 15-10 6H, Alger,
  • 23809, 452, CLR, Myrhre 2-18H, Stoneview, t2/13; cum 12K 3/13;
  • 24206, drl, QEP, MHA 8-04-33H-150-92, Heart Butte, no production data, but you know it's gonna be huge

21383, see above, Oasis, Zaye Federal 5201 34-2H, Camp, already hooked up to a natural gas line:

DateOil RunsMCF Sold

23809, see above, CLR, Myrhre 2-18H, Stoneview,

DateOil RunsMCF Sold

OBSERVATION 4: Random Observations Regarding the USGS 2013 Assessment of the Bakken: The Pronghorn Member

From the report:
The Pronghorn Member of the Bakken Formation, although geologically and stratigraphically defined as part of the Bakken Formation (LeFever and others, 2011), is assessed with the Three Forks Formation.
Where present, the Pronghorn Member is in fluid communication with the underlying Three Forks reservoirs.
Two comments:
  • this is an administration decision, to include the Pronghorn Member with the underlying Three Forks reservoirs (note the plurality of reservoirs when discussing the Three Forks Formation)
  • noting that the Pronghorn Member is geologically and stratigraphically defined as part of the Bakken Formation (and has been so defined at least since 2011) provides scientific basis for the NDIC's decision to redefine stratigraphic limits as requested by the oil industry
And that's it. Nothing controversial. Simply an observation and a couple of comments.

But, I cannot resist: It would be interesting to read the 2011 Julie LeFever paper that explains why the Pronghorn Member, lying below a tight shale formation, and communicating with the Three Forks Formation, is geologically and stratigraphically defined as part of the Bakken Formation; and, then, of course, why oil from the Pronghorn Member will be considered Three Forks oil.

I assume the answer to the second part of that question/statement is based on precedence and commingling. It makes sense to assess Pronghorn Member oil with the Three Forks Formation oil,  going back to hydrocarbon "fingerprints."

But the 2011 Julie LeFever paper should make interesting reading:
LeFever, J.A., LeFever, R.D., and Nordeng, S.H., 2011, Revised nomenclature for the Bakken Formation (Mississippian-Devonian), North Dakota, in Robinson, J.W., LeFever, J.A., and Gaswirth, S. B., eds., The Bakken-Three Forks Petroleum System in the Williston Basin: Denver, Colo., Rocky Mountain Association of Geologists, p. 11 - 26.
The North Dakota Geological Survey, Geologic Investigation No. 165 (GI-165) provides a very nice graphic of the three members of the Bakken, as well as five (5) members of the Three Forks. This is a must-read document: it points out that "current industry terminology refers to the member 5, 4, 2, and 1 as benches (i.e., member 5 is referred to as the "First Bench").
.... It is interesting to compare the oil saturations against the water saturations. Oil saturations are consistent through the Bakken, but tend to taper off below member 5 ("First Bench"). Correlations become especially important in the Continental Resources, Inc. -- #1-3H Debrecen well where the highest oil saturations are in the Pronghorn Member of the upper Three Forks. In contrast to the cross-sections wells, the EOG Resources, Inc. -- #2-11H Liberty has oil saturations throughout the Three Forks section.
... An abundance of fractures appear to coincide with higher water saturations in the Three Forks. The opposite is reflected by fractures in the Bakken. ... The absence of significant amounts of clay suggests that the marker bed that denotes the top of member 4 ("Second Bench") may not confine a fracture stimulation treatment as previously thought. ... A preliminary examination of the Three Forks  Formation raises some interesting questions as to how extensive is the resources, what are the controlling factors, and what constitutes the reservoir. Additional examination of new cores may answer some of the questions.

Huge "Thank You" To RBN Energy Over The Past Year Or So For All Their Great Tutorials: Update On Enterprise ECHO Expansion


May 7, 2013: When I posted the original post below I was not sure I had read the story correctly because of the way the source wrote the story. The new story makes it clear.

Today, Rigzone makes it clear with the headline: ECHO to add 4 million barrels crude storage ECHO, bringing the total storage capacity to more than 6 million barrels of storage.
Original Post

Platts is reporting:
Enterprise Products Partners said Thursday it will expand its ECHO crude storage terminal in Houston as part of an overall plan to increase infrastructure in Southeast Texas.

The Enterprise Crude Oil Houston (ECHO) storage terminal will be increased to more than 6 million barrels of capacity and have access to Enterprise's marine terminal at Morgan's Point on the Houston Ship Channel, the company said in statement.

Plans call for a total 4 million barrels of new crude oil storage capacity at the ECHO and Bertron facilities.
A year ago, I had no idea what ECHO was; I had never heard of it. But RBN Energy has had a couple of nice tutorials on it. Googling ECHO RBN Energy milliondollarway I'm sure you can find it.  In fact here it is.

At the second link above, it was said that Enterprise was expanding to more than 6 million bbls storage. It looks like the storage facility will go from about 2 million bbls of storage to more than 6 million bbls of storage. This should give folks a feeling how huge the energy revolution really is.

Temporary Error At NDIC Website, Daily Activity Report

Daily Report #16338, May 2, 2013, shows up in both the May 1, 2013, and the May 2, 2013, blocks.

Yesterday (May 1, 2013), the correct daily report was there, but tonight, the NDIC has accidentally placed the May 2, 2013 report in both the 1st and 2nd of May blocks.

I'm sure it will be corrected sometime tomorrow.

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

Active rigs: 190 (very nice)

Twelve (12) new permits --
  • Operators: G3 Operating (4), Zavanna (4), SM Energy (2), Legacy Oil, Whiting,
  • Fields: North Souris (Bottineau), Antelope (McKenzie), Springbrook (Williams), West Ambrose (Divide), Big Stick (Billings), McGregory Buttes (Dunn)
  • Comments: SM Energy has a permit for a wildcat in Divide County; G3 Operating continues to be very active; Whiting has a permit for a Madison or a Red River well in Billings County
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Western Canadian Oil Being Booked On Flanagan South; Business As Usual, Or Keystone XL Work-Around

Platts is reporting:
Canadian light oil and natural gas producer Penn West Exploration has contracted 35,000 b/d of capacity on the planned Flanagan South Pipeline in the US and also expects to "selectively" move 5,000-7,000 b/d of crude by rail in 2013, CEO Murray Nunns said Thursday.

The pipeline shipments will start mid-2014, when Enbridge expects to complete the Flannagan project. The 600-mile, 600,000 b/d line will run from the Chicago area to Cushing, Oklahoma, where it will link to the Seaway pipeline that runs to the US Gulf Coast, a key refining center.
This could simply "business as usual," or an indication of a work-around since the Keystone XL has not been approved. The short article did not say how the western Canadian oil would get to Illinois (rail or Enbridge pipelines).

KOG Releases 1Q13 Earnings

Press release here.
For the first quarter 2013, the Company reported net income of $19.4 million, or $0.07 per diluted share, compared to net income of $1.7 million, or $0.01 per diluted share, for the same period in 2012.  Net income for the first quarter 2013 includes an unrealized loss of $17.2 million related to the mark-to-market of derivative instruments used for commodity hedging.  The net effect, after-tax, of the non-cash hedging activities decreased Kodiak's reported net income for the first quarter 2013 by $0.04 per basic and diluted share.
From the press release:

From My File: No Question Is Too Dumb To Ask (Although This One May Come Close)

A reader tells me that an oil company operating in the Bakken says the reason for canceling some permits is because the company is only allowed so many permits. That's all we know. It was not clear to me whether that meant in North Dakota in general, or in the Bakken, specifically.

So, either that's a company policy or an NDIC "rule": companies operating in the Bakken are allowed only so many permits. If it's an NDIC rule, I assume it is based on something other than just an arbitrary number. But I don't know.

So, at great risk to my credibility with regard to the Bakken, I will throw it out there: does anybody know why a company would say they are allowed only so many permits?

Off The Net For Awhile -- A Reader Just Provided a Great Graphic; Oil Up Almost $3.00 Today;

2. NYMEX built on gains late in the US morning session to close $2.96/b higher at $93.99/b as the market reversed Wednesday's selloff.

1. For those following my "observations" regarding the USGS 2013 Survey of the Bakken/Three Forks, you may be interested in the most recent update.

It comes from a reader, and is simply ... spectacular.

Mainstream Media Gets It: Clean Energy Can Be Profitable; So Does Mark Zuckerberg

The LA Times is reporting: activist environmentalists advocate censorship -- our way or the highway.
The 28-year-old billionaire co-founder and chief executive of Facebook has funded a political advocacy group called that has come under fire for spending millions on television ads that support expansion of the proposed Keystone XL pipeline and oil drilling in the Arctic National Wildlife Refuge. is trying to give political cover to conservatives such as Democratic Sen. Mark Begich in Alaska and Republican Sen. Lindsey Graham in South Carolina to support immigration reform. The ads underscore the conservative credentials of the lawmakers who may be vulnerable in 2014. But the controversial strategy is not sitting well with the Sierra Club and other environmental groups.
The AP is reporting: (
Technology created an energy revolution over the past decade — just not the one we expected.
By now, cars were supposed to be running on fuel made from plant waste or algae — or powered by hydrogen or cheap batteries that burned nothing at all. Electricity would be generated with solar panels and wind turbines. When the sun didn't shine or the wind didn't blow, power would flow out of batteries the size of tractor-trailers.
Fossil fuels? They were going to be expensive and scarce, relics of an earlier, dirtier age.
But in the race to conquer energy technology, Old Energy is winning.
Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs "walk" from one drill site to the next. And engineers in Houston use remote-controlled equipment to drill for gas in Pennsylvania.
The result is an abundance that has put the United States on track to become the world's largest producer of oil and gas in a few years. And the gushers aren't limited to Texas, North Dakota and the deep waters of the Gulf of Mexico. Overseas, enormous reserves have been found in East and West Africa, Australia, South America and the Mediterranean.
The AP is reporting: (
A decade ago, large investors in so-called clean technology had a straightforward goal: finance companies that would help eliminate the world's dependence on oil, natural gas and coal.
But as profits from wind, solar, biofuels and other alternatives consistently fell short of expectations — and as the fossil fuel business boomed — things got complicated. [Complicated? Not really. Those companies mostly went broke.]
Venture capitalists and other investment funds started stretching the definition of clean technology almost beyond recognition in an effort to make money while clinging to their environmental ideals.
Today, clean technology investment funds are not trying to replace the fossil fuel industry, they're trying to help it by financing companies that can make mining and drilling less dirty. The people running these funds acknowledge the apparent hypocrisy, but defend a more liberal definition of clean technology.
The bad news: it took five years of an Obama presidency for things to turn. The good news: it only took five years. 


The top ten holdings of an activist environmentalist:
  1. Evergreen Solar 
  2. SpectraWatt
  3. Solyndra 
  4. Beacon Power 
  5. A123
  6. Nevada Geothermal
  7. SunPower 
  8. First Solar
  9. Coda
  10. Fisker
The top ten holdings of a progressive investor:
1. ChevronTexaco
2. ExxonMobil
3. ConocoPhilips
5. Chesapeake
6. Continental Resources
7. Whiting Petroleum
8. Kodiak Oil & Gas
9. Oasis Petroleum
10. Enbridge
To see how that have done over the past year, go to Yahoo!Finance.

Mainstream Media Gets It: The 29-Hour-ObamaCare-Work-Week Has Arrived

MDW has blogged about it for quite some time. It was an early observation.

Finally mainstream media is reporting on what was obvious. The latest: LA Times is reporting:
Many part-timers are facing a double whammy from President Obama's Affordable Care Act.
The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. But rather than provide healthcare to more workers, a growing number of employers are cutting back employee hours instead.
The result: Not only will these workers earn less money, but they'll also miss out on health insurance at work.
Consider the city of Long Beach. It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average. City officials say that without cutting payroll hours, new health benefits would cost up to $2 million more next year, and that extra expense would trigger layoffs and cutbacks in city services.
There is still some confusion out there, and I've seen it both ways. The question is this: who determines the number of part-time workers an employer has? The employer or the IRS. If it's the IRS, which I suspect, this will be quite a surprise for some employers.

Let's consider a company with 100 employees, and they are all considered part-time by the employer, each working less than 30 hours, to fall under the 30-hour threshold. Let's say 25 hours each. The employer tells the IRS the company has 100 part-time employees and is not subject to requirement to provide $2,000/employee for ObamaCare health insurance.

The IRS says: 100 workers x 25 hours = 2500 hours. Twenty-five hundred hours divided by the 30-hour threshold, and one gets 83 full-time equivalents. The IRS will tell the employer to pony up enough health care to cover 83 FTEs. In fact, the IRS will do the calculations over a two-week pay period but the math works out the same.

So this employer who thinks he/she has no full-time employees (except himself/herself) will be told by the IRS he/she has 83 full-time employees. 

Again, I don't know. I've seen it both ways. But I don't think the IRS is going to let employers define part-time employees. [Later: I'm being told that rules may be different for companies with federal contracts.]

Why I Love To Blog; It Was Meant To Be

This is simply incredible, and just one more reason why I love to blog.

See this post from the first of May, two days ago, in which I stated that after resisting Twitter I now find it the best thing since sliced bread.

I always thought Warren Buffett was reading my blog to keep up with the Bakken. I was pretty sure he based his decision to buy Burlington Northern Santa Fe (BNI) based on my notes about the Williston Basin.

But then, reading this -- breaking news from a few minutes ago -- I am now convinced beyond a shadow of a doubt that he reads my blog.

Warren Buffett has announced that he will now start tweeting.  His account is already set up, and he will tweet sometime today. My hunch: before the day is over he will have more followers than The Wall Street Journal, the #1 newspaper, based on circulation, in the US.

My day is complete.

A Note To The Granddaughters

It's funny how things work out. Our "new" apartment complex manager says some things "are just meant to be."  In fact, I think that's her favorite phrase: some things are just meant to be. And perhaps that's why she's always in such a good mood. Such a positive outlook on life.

After signing the contract for our new apartment, I found myself in a Starbucks somewhere along Texas State Highway 360, north of Dallas. I was in one of those comfortable, easy chairs, that most Starbucks have one or two. I don't like them but that's where the only available electric outlet happened to put me.

I was across a small coffee (what else?) from a 30-ish year old man who appeared somewhat less than inviting. I am pretty sure my wife would have wanted to avoid him; my brother-in-law would have suggested another seating location. Tall, nerdy, geeky....I haven't been able to quite say what bothered me about his demeanor, until just now (it helps to ramble) .... a kind of creepiness.

He was working on his laptop; when he went to get another healthy food selection, I took a look at the books he had stacked on the table: information technology at a PhD graduate level. It was meant to be.

When he came back I showed him the book I was reading, George Dyson's Turing's Cathedral, c. 2012. Wow, he became animated. A great discussion ensued, pushing us to metaphysics where we stopped. I always feel uncomfortable moving into metaphysics. It's too easy to feel one might lose control.

In the conversation, he mentioned that I would enjoy James Gleick's The Information: A History, A Theory, A Flood, c. 2011, soft cover, 2012. I had not heard of it, despite my voracious and eclectic reading program.

Yesterday I walked down to the Half-Price Book Store on Broadway, north of downtown San Antonio. I asked if they had a copy of The Information. It turns out they had one copy. Just one copy. It was meant to be. It took quite awhile to find it, but I found it.

Last night, I read the first two chapters. It is incredible. It is amazing how that 30-ish year-old man knew exactly what I would enjoy. It was meant to be.

Just one anecdote from the book for now.

Our younger granddaughter took Chinese language and African drumming for her first grade after-school activities. She wants "to take drums" in band later on.

The first chapter in James Gleick's book on the history of information was on African drumming. I kid you now. It was meant to be.
It turns out that drumming could carry complicated messages a hundred miles or more in a matter of an hour. A missionary, Roger T Clarke was able to translate one drumming language many years ago. In the process, he noted that "while only some people learned to communicate by drum, almost anyone could understand the message in the drumbeats. Some people drummed rapidly and some slowly. Set phrases would recur again and again, virtually unchanged, yet different drummers would send the same message with different wording. Clarke decided that the drum language was at once formulaic and fluid. 'The signals represent the tones of the syllables of conventional phrases of a traditional and highly poetic character,' he concluded, and this was correct, but he could not take the last step toward understanding why."

It will be fun to read about African drumming with our younger granddaughter who has already been introduced to drumming.

It was meant to be.

And then Gleick turns to Chinese writing.
Chinese script began this transition (oral --> pictographs --> ideographs --> logographs) between 4,500 and 8,000 years ago: signs that began as pictures came to represent meaningful units of sound. Because the basic unit was the word (unlike English), thousands of distinct characters were required. This is efficient in one way, inefficient in another. Chinese unifies an array of distinct spoken languages: people cannot speak to one another can write to one another. It employs at least 50,000 symbols, aobut 6,000 commonly used and know to most literate Chinese. In swift diagrammatic strokes they encode multidimensional semantic relationships. One device is simple repetition: tree + tree + tree = forest; more abstractly, sun + moon = brightness, and east + east = everywhere.

The process of compounding creates surprises: grain + knife = profit; hand + eye = look.

Characters can be transformed in meaning by reorienting their elements: child to childbirth and man to corpse. Some elements are are phonetic; some even punning. The entirety is the richest and most complex writing system that humanity has ever evolved. Considering scripts in terms of how many symbols are required and how much meaning each individual symbol conveys, Chinese thus became an extreme case: the larges set of symbols, and the most meaningful individually. Writing systems could take alternative paths: fewer symbols, each carrying less information. An intermediate stage is the syllabary, a phonetic writing system using individual characters to represent syllables, which may or may not be meaningful. A few hundred character can serve a language.
Yes, an incredible book. It was meant to be.

New Conference Announcement Added To Sidebar: Denver In Less Than Two Weeks

Bakken & Three Forks Completions Congress, Denver: May 13 -14.

Companies in attendance:
QEP Energy Company, Sun, Crescent Point Energy, Zenergy, Enerplus,
Peregrine Petroleum, WPX Energy, Black Hawk Energy Services, Greenli,
OXY USA Inc., Harvest Petroleum Inc, Statoil, Arsenal Energy USA Inc,
Whiting Petroleum Corporation, Packers Plus Energy Services,  
Continental Resources, PCM, Millennium Directional Service USA Ltd,
XTO Energy, Dundee Energy Limited, FMC Technologies Completion Services, Inc,
True Oil LLC, CARBO Ceramics, EnerVest Operating, TAQA North Ltd,
Olympic Exploration & Production Company, FTS International,
Kraken Operating LLC, Triangle Petroleum Corporation,
Murex Petroleum Corporation, Navajo Nation Oil & Gas Company,
Halcon Resources, Abraxas Petroleum Corp, Samson Oil & Gas,
Hunt Oil Company, Gaedeke Energy LLC, Emerald Oil Inc,
North Plains Energy LLC, Liberty Oilfield Services, Hawkwood Energy,
Legacy Oil + Gas,  Samson Resources, Fasken Oil & Ranch, Ltd, Linn Energy,
Missouri River Resources, Villanova Oil Corp,
Colorado School of Mines, Appalachian Black Shale Group,
Denver Geophysical Society, plus many more.

Active Rigs Hit 191; Thursday Morning Links;

Active rigs: 191 (wow). After hitting the intra-boom low of 179, the active rig count hit a high of 191 before dropping back (that was on January 27, 2013); it's now back to that "record"

RBN Energy: rail bringing in bulk of supplies to the oil patch.

Platts: US crude oil imports fall below 7 mil b/d in March, lowest since 1996, says Dept of Commerce.

Denbury Resources beats by $0.04, beats on revs: Reports 1Q13 earnings of $0.33 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.29; revenues fell 9.6% year/year to $583.1 mln vs the $543.71 mln consensus. Co sees 2013 total production of 68,700-71,700 boed.

GM profit falls 14%; stock up.

WSJ Links

Section D (Personal Journal):

Section C (Money & Investing):
The Fed and Federal Deposit Insurance Corp. are considering requiring certain large, complex banks to maintain a minimum level of unsecured long-term debt, according to people familiar with the discussions.
There is growing momentum behind requiring such a move, which regulators consider key to ensuring that creditors bear any losses if a firm collapses, these people said. Regulators also see a benefit in having banks issue such debt since it would reduce reliance on volatile short-term funding markets.
Section B (Marketplace):
Supermarket giant Kroger Co. is winning the war against lengthy checkout lines with a powerful weapon: infrared cameras long used by the military and law-enforcement to track people.
These cameras, which detect body heat, sit at the entrances and above cash registers at most of Kroger's roughly 2,400 stores. Paired with in-house software that determines the number of lanes that need to be open, the technology has reduced the customer's average wait time to 26 seconds. That compares with an average of four minutes before Kroger began installing the cameras in 2010.
Are you listening, Wal-Mart?
Section A:

Historic Snowstorm Potential For Mid-America


Later, 12:28 pm: Reuters is reporting this as a rare spring snowstorm. Even before global warming, it was rare to see such storms. Makes one almost long for the good ol' days when we had "real" global warming.

Original Post

AccuWeather is reporting: this is going to be a doozy.
The same storm that brought heavy snow to Denver and Cheyenne Wednesday was delivering a swath of heavy, wet snow from southeastern Nebraska to northwestern Wisconsin and the western Upper Peninsula of Michigan through Thursday.
The storm, like many in recent weeks, seems to be ignoring the date and, if all the right pieces were to fall into place, could bring 6 inches to a foot of snow on its northwestern flank over the central Plains into the Upper Midwest.

Record, Record Lows In San Antonio For Next Two Days

Wow, this is quite incredible. It's going to get very, very cold over the next two days.  They are actually talking about "winter storm warmings" here in San Antonio. The temperature will get as low as 40 degrees. I can't recall it being this cold ever this late in the year in south Texas; in fact, it seldom gets this cold during winter in San Antonio (yes, we do get freeze warnings, but this is going to be cold).

Statoil's Output Falls; Profit Drops By More Than Half

Platts is reporting:
Q1 output falls 9% to 1.998 mil boe/d, driving down net profit by more than half.
Statoil warned again that growth towards 2020 would not be linear and that equity production for 2013 was estimated to be lower than in 2012.

First-Time Claims: A Five-Year Low; Energy Revolution Starting To Shine

The Wall Street Journal is reporting (dynamic link; accurate when posted):
First-time claims for unemployment benefits fell 18,000 to 324,000 in the latest week, a five-year low.

US trade deficit sank 11% in March to less than $40 billion.
Initial claims:
Initial jobless claims, a proxy for layoffs, decreased by 18,000 to a seasonally adjusted 324,000 in the week ended April 27, the Labor Department said Thursday. That's the lowest level for claims since January 2008, just after the last recession started.
Economists surveyed by Dow Jones Newswires had forecast 345,000 new applications for jobless benefits last week. The prior week's new jobless claims were revised up slightly.
A Labor Department analyst said the influence of spring break vacations and the Easter holiday, which caused the numbers to be volatile in recent weeks, have mostly subsided.
The four-week average of claims, which smoothes weekly volatility in the figures, fell by 16,000 to 342,250. That was the sharpest drop in the four-week average since December
The number of continuing unemployment benefit claims—those drawn by workers for more than a week—increased by 12,000 to 3,019,00.

Hopefully these numbers hold up next week, without revisions. 

OBSERVATION 3: USGS Needs To Improve on Style: Slide 17 Legend

A better graphic -- A huge thank you to a reader; see comments. Now, why couldn't the USGS have done this in the first place? The link:


Original Post

This post refers to the USGS PowerPoint presentation for the 2013 Assessment of the Bakken/Three Forks 

At slide 17, the USGS provides a graphic of the relative size of the various basins of continuous oil reservoirs, such as the Bakken, in the United States, to include Alaska. If one is trying to downplay the size of the Bakken, this is pretty successful.

Each basin/locality has a green "dot" varying in size based on the size of the reservoir. The USGS uses four dots to represent four "sizes":
  • less than 0.1 billion bbls
  • 0.1 to 0.5 billion bbls
  • 0. 5 to 2.0 billion bbls
  • greater than 2.0 billion bbls
That was fine when the largest continuous reservoir, the Bakken, was estimated to be 3.6 billion barrels back in 2008. But with the new estimate, the graphic needs to be updated.

Take a look at the graphic (slide 17 at the link). There is not a whole lot of difference in the size of the green "dots" for the Permian, the Western Gulf, and the Williston Basin. In fact, a newbie glancing quickly at this one slide would not be all that impressed with how much bigger the Williston Basin is compared to the Permian or the Western Gulf based on the graphic or the size of the dots.

But then look at the numbers:
  • Permian Basin (Midland-Odessa): 0. 51 billion bbls
  • Alaska North Slope (Prudhoe Bay): 0.94 billion bbls
  • Western Gulf (Eagle Ford) Basin: 1.73 billion bbls
  • Williston (Bakken/Three Forks) Basin: 7.38 billion bbls
The Williston Basin, at 7.38 is more than 4x greater than the Western Gulf (Eagle Ford). And then, get this: the Williston Basin's continuous oil reservoir is almost 15 times larger than the Permian Basin (Midland-Odessa).  The "green dot" overlying North Dakota should be twice as big as it is.

Having said all that: my hunch is that the estimate for the Western Gulf (Eagle Ford) continuous reservoir is significantly underestimated, and will be revised upward in the next assessment.

Midnight Fugue


May 3, 2013: it looks like Yahoo!News will be re-printing this story in many different guises.  At least we have a date now for doomsday: May 14, 2013. That will be the date greenhouse gases will surpass 400 parts per million, coming during one of the coldest springs on record.

Original Post

This is probably one of the funniest press releases I've been sent this past year, and even die-hard activists are probably wishing the writer could have toned it down a bit. It was probably meant to be published April 1, but you know how deadlines are missed.

I have no problem that it was published at but Yahoo!News needs to be more selective in what it posts if it wants to be taken seriously. [I assume The Dickinson Press will be reprinting this story in the not-too-distant future.]

The author suggests that Australia's coal reserves are a speculative bubble; worse than that, "Australia’s coal reserves will become worthless if governments throughout the world follow through on their promises to limit carbon emissions."

Yes, I suppose they would become worthless. But the chance of "governments following through on their promises" with regard to coal is, to quote that great investigative reporter, is slim to none, and slim just left town.

Not one credible source has suggested the world will be using much less coal than it is now 50 years from now.

The writer doesn't know when to stop. I knew it was joke when he wrote:
“With greenhouse gases in the atmosphere about to breach the 400 parts-per-million level for the first time in three million years, it is important to step back from the politics and remind ourselves of the basic physics at the core of the climate challenge,” Connor tells TakePart.
The author conveniently forgets to add that water vapor accounts for about 90% of greenhouse gases. The increase in atmospheric CO2, from 2010 to 2011, is measured at "nearly two parts per million"; the annual variability of atmospheric CO2 is 3 - 9 parts per million -- if green-house gases are about to breach -- repeat, breach -- the 400 parts-per-million level, the 2 parts per million that CO2 will add is hardly newsworthy. 

Most folks don't know what they had for breakfast two days ago; learning that greenhouse gases are about to breach 400 parts-per-million level is unlikely to register with anyone. The author conveniently goes back only 3 million years. The dinosaurs were thriving 175 million years ago (weren't they?).

However, in all seriousness (LOL), we are again reminded of the dire prospects of global warming: 1.5 degrees over 100 years.
“Australia, China, the U.S. and over 170 countries have committed internationally to avoid warming of more than 2°C above pre-industrial levels—indeed even to see if it can be kept to 1.5°C,” notes Connor.
The author conveniently chooses to ignore Canada which has pulled out of the Kyoto Protocol. And, of course, he doesn't even mention Great Britain or Germany, the latter, if not both, will be returning to using more coal.

Of the three countries he does mention -- Australia, China, and the US -- he also conveniently forgets to mention that CO2 emissions have decreased significantly in the US and are now at the lowest levels since, oh, I don't remember, but let's say back to 1990. You can find the answer at Carpe Diem if you've read this far. 

Oh, back to the 1.5°C. It's been stated often: over 100 years, 1.5°C is statistically irrelevant and not reproducible.

So, far, the only downside to a rise in temperature is a rise in ocean levels and the country at risk is Maldives. Sam Kinison, if he were alive, would give this advice, the same advice he gave to the folks who live in the Saharan Desert: move.

The British Meteorological Office has come around to the fact that the earth has quit warming now for 17 years; the quote is always 16 years, but the quote was first quoted a year ago. [Memo to self: next year it will be 18 years since the earth stopped warming.]

The one thing the writer at the linked article did not mention that is usually found in these boiler plate press releases on global warming: polar bears. That's because polar bears are doing just fine, thank you.

So Much For That Great Investing Idea

One would have thought that with all the railcars being built for crude-by-rail, FreighCar America would have had a good year. It just goes to show that investing is, to say the least, fickle.

FreightCar America (RAIL), after market close: not a good year.
  • 1Q13: loss of $0.22
  • 1Q12: gain of $0.81
  • 4Q12: loss of $0.08
“As I have previously stated, continued uncertainty in the freight railcar market will make 2013 a challenging year,” said Ed Whalen, Chief Executive Officer. “We remain focused on factors within our control, including: executing our railcar diversification strategy; the successful start-up of our Shoals, Alabama facility; improving the results of our Services business; and continuing to prudently manage our costs. I am confident that FreightCar America’s market position, strong balance sheet and the execution of our strategic initiatives will enable the Company to capitalize on its long-term opportunities and the eventual freight railcar market recovery.”
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or thought you read here. Despite the implication of the subject line for this blog, no, I did not invest in RAIL. Thank you very much. Never did, never will, simply because it does not fit my portfolio; it has nothing to with the company itself.

See also Forbes, April 24, 2013: missed earnings derail RAIL.

See also Zacks, April 22, 2013: bear for the day, RAIL.