Thursday, August 1, 2013

IRS Chief Doesn't Want To Switch To ObamaCare

The Weekly Standard is reporting:
"I don't want to speak for the NTEU, but I'll offer a perspective as a federal employee myself and a federal employee at the IRS," said the IRS chief. "And that is, we have right now as employees of the government, of the IRS, affordable health care coverage. I think the ACA was designed to provide an option or an alternative for individuals that do not. And all else being equal, I think if you're an individual who is satisfied with your health care coverage, you're probably in a better position to stick with that coverage than go through the change of moving into a different environment and going through that process. So I think for a federal employee, I think more likely, and I would -- can speak for myself, I would prefer to stay with the current policy that I'm pleased with rather than go through a change if I don't need to go through that change."
I don't think there's any way to parse his opinion. I don't think he needs to go through any change. He has two options: a) pay the ridiculously low penalty for not enrolling in ObamaCare; b) make sure his agency doesn't audit his return.  

More interesting question: how long will he keep his job?

Nine (9) New Permits -- Williston Basin, North Dakota, USA; Wells Coming Off Confidential List Friday; WPX And Statoil With Nice Wells

Active rigs: 178 (sets new post-boom record low; previous record low was 17)

Nine (9) new permits --
  • Operators: OXY USA (4), Hess (4), Triangle USA
  • Fields: Fayette (Dunn), Sandrocks (McKenzie), Beaver Lodge (Williams)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Wells coming off confidential list on Friday:
  • 22072, 1,664, WPX, State of ND 10-3HC, Van Hook, t5/13; cum 44K 6/13;
  • 23640, 883, Whiting, Buresh 44-10PH, Dutch Henry Butte, t2/13; cum 29K 6/13;
  • 23641, 1,153, Whiting, Buresh 41-15PH, Dickinson, t2/13; cum 44K 6/13;
  • 23662, drl, CLR, Zimmerman 3-13H, Stoneview, no data,
  • 23675, 2,236, Statoil, Esther Hynek 10-11 6TFH, Alger, t6/13; cum --
  • 24387, 592, SM Energy, Behan 2-29H, Indian Hill, t5/13; cum 18K 6/13;
  • 24403, drl, SM Energy, Koeser 3-26HA, Siverston, no data,
  • 24404, drl, SM Energy, Koeser 3X-26HA, Siverston, no data,

 22072, see above, WPX, State of ND 10-3HC, Van Hook:

DateOil RunsMCF Sold

23640, see below, Whiting, Buresh 44-10PH, Dutch Henry Butte:

DateOil RunsMCF Sold

 23641, see below, Whiting, Buresh 41-15PH, Dickinson:

DateOil RunsMCF Sold

 24387, see below, SM Energy, Behan 2-29H, Indian Hill:

DateOil RunsMCF Sold

Wind Farm Near New Salem Expanding

The Bismarck Tribune is reporting:
Minnesota Power plans to begin construction this year on a 200-megawatt expansion of its Bison wind project.
Bison 4 will increase the company’s total wind generation by more than 50 percent to more than 600 megawatts of power. The expansion will make Minnesota Power’s Bison project the largest single wind energy center in North Dakota at 500 megawatts.
The project is estimated to cost $345 million and will be built on 50,000 acres in Oliver County, north and west of the project’s first three phases currently in operation. The expansion will include a new substation and 11 miles of transmission line.
Don't even get me started. As long as Minnesotans don't mind paying more for their electricity, and, of course, as Don points out in an e-mail, less tax revenue being generated for the state of Minnesota. Unfortunately the migratory birds don't get a vote.

Incredible Photos Of The Bakken -- Baltimore Sun

Link here.

Forty-four photos. Absolutely outstanding.

Two immediate thoughts:
  • these photos really catch the "human side" of the Bakken
  • the aerial photos of drilling pads really highlights how beautiful the ND topography
I don't think folks appreciate the beauty of North Dakota until they can compare it's immensity and grandeur with the "smallness" of a drilling rig.

Slides 9, 30, and 34, certainly remind me of the North Dakota I grew up in.

A huge "thank you" for the reader sending me this link.

KOG's P Wood Wells As Reported In Their 2Q13 Earnings Report

I track the P Wood wells here.

Bakken Oil Arriving On East Coast By Rail And Barge

PBF has a 190,000 bopd refinery in Delaware City; some of that oil is coming from the Bakken. I can't remember if I posted the earlier stories, but a reader sent me an update. Here are some older stories; the update suggested that everything seems to be moving on schedule.

Older stories:

Bloomerberg reported, Feb 4, 2013:
PBF finished construction of the second train unloading terminal at its Delaware City refinery, boosting total crude-by-rail capacity to 110,000 barrels a day.
PBF expects to unload its first unit train of Bakken oil this week, with 17 more scheduled to arrive in the next two weeks, the company said today in a statement. The 182,200- barrel-a-day refinery can take 40,000 barrels a day of heavy crude by rail and 70,000 barrels of light. 
PBF, based in Parsippany, New Jersey, is trying to tap into the glut of oil stranded in Canada and the U.S. Midwest as production growth has outpaced pipeline capacity, depressing prices relative to Brent, the benchmark crude for Atlantic refiners. 
BloombergBusinessWeek reported, Feb 6, 2013:
The biggest challenge to fixing this problem, and connecting supply with demand, is getting some of North Dakota’s Bakken oil into the densely populated East Coast market. Building a 1,500-mile pipeline from North Dakota to New York would be the straightest way, but that’s not happening anytime soon. Which means that oil is moving east any way it can—by train, by barge, even by truck.
While some Bakken barrels have started arriving on the East Coast, a whole lot more are on their way in 2013. A number of projects scheduled to finish this year will more than double the amount of Bakken crude that finds its way to the East Coast, from about 300,000 barrels per day to more than 800,000, according to Eric Lee, an oil analyst at Citigroup.
One of the first projects came online this week in Delaware. PBF Energy announced on Monday that it’s completed a rail terminal that will take delivery of about 110,000 barrels a day of Bakken crude. PBF says it expects to unload its first train filled with Bakken crude later this week. That oil will go directly into its Delaware City refinery outside Wilmington. A $68 million project outside Philadelphia is turning the site of a shuttered coal plant into a rail terminal that’ll be able to take delivery of about 80,000 barrels of oil per day by this fall. That oil, mostly from the Bakken, will then get barged up to refineries along the Delaware River and even into New York Harbor.
Greenpeace is against it, of course. Photographs at the linked site suggest many protestors arrived by gasoline-powered SUVs.

Chevy Volt Vs Nissan Leaf Sales Figures, July 2013

AutoBlotGreen is reporting:
Another month, another chance to see if more people bought a Chevy Volt plug-in hybrid or an all-electric Nissan Leaf. For 2013, the tally has been pretty much tied, with the monthly "win" switching back and forth between the two cars throughout the year. Now that we have July's sales numbers – 1,864 units for the Leaf and 1,788 for the Volt – the yearly totals stand at 11,703 (Leaf) and 11,643 (Volt). That's just a 60-car margin for the Chevy over seven months. Silver medals all around.
The real race will be between BMW and all the rest.

The Keystone And Jobs: Another Red Herring

The Dickinson Press is reporting:
President Barack Obama has revived debate about the number of jobs that would be created by the proposed Keystone XL oil pipeline from Canada to Texas. The 1,700-mile pipeline would carry oil from tar sands in Alberta to refineries in the Houston area, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.
During a jobs speech Tuesday in Tennessee, Obama downplayed the pipeline's effect on jobs, calling it a “blip” compared with the overall economy. He also made that point in an interview with The New York Times last week.
The president correctly characterized the project's overall effect on U.S. employment but underestimated the number of jobs it would create.
So what? It's all politics. At least he telegraphed his plans to kill the Keystone once and for all.

My thoughts:
Looking at the Keystone based on jobs is extremely short-sighted. This project was never about jobs; TransCanada was probably wrong, in hindsight, to even bring jobs up as a selling point. This project should have been argued on the merits of the project's intended outcome and/or purpose.

TransCanada and supporters of the pipeline should have stressed the national interest for the US.

The jobs would take care of themselves. Everyone knows that most of the jobs will be temporary, no matter how many are created. Arguing that the jobs will mostly be temporary anyway is a fallacious / misleading argument; all construction projects are temporary by their very nature. I don't think the major reason for wind farms has to do with jobs, though that is sometimes invoked.

Like flaring, talking about jobs and the Keystone XL diverts folks from working much more important issues.

Groundbreaking Held At North Hill Luxury Complex -- Minot, North Dakota

The Minot Daily News is reporting:
The subdivision's 15.5-acre campus will be the location for a $42 million luxury apartment complex, whose 239 units will be accommodated by an underground parking garage, swimming pool, fitness facility, theater, playground and basketball court. With Dickinson-based J. Scull Construction Services beginning work immediately, the townhouse portion of the project is expected to be available sometime next spring. 
The project was a brainchild of Jerry Chavez, president and chief executive officer of the Minot Area Development Corporation. He was acknowledged to be the driving force behind North Highland, making the case to developers that the facilities he envisioned would fill a need within the community for higher-end housing.

KOG Announces 2Q13 Results

Press release here.
  • 2Q13 Oil & Gas sales of $173.5 million, 102% increase from 2Q12 and a 5% increase from 1Q13 
  • 2Q13 adjusted EBITDA of $131.1 million, 94% growth from 2Q12 and a 5% increase from 1Q13
For the second quarter-ended June 30, 2013, the Company reported oil and gas sales of $173.5 million, as compared to $85.8 million during the same period in 2012 and $165.1 million in the first quarter 2013, representing increases of 102% and 5%, respectively.

Kodiak reported an overall 8% increase in quarter-over-quarter equivalent sales volumes with 2.1 million barrels of oil equivalent (MMBOE) sold, or an average of 23,200 BOE per day (BOE/d) during the second quarter 2013, as compared to 1.9 million BOE, or an average of 21,700 BOE/d in the first quarter of 2013. 

Crude oil revenue accounted for approximately 94% of oil and gas sales recorded during the second quarter 2013.  Adjusted EBITDA, a non-GAAP measure, was $131.1 million for the second quarter 2013, as compared to $67.7 million in the same period in 2012, reflecting a 94% increase.  
KOG certainly has challenges increased earnings per share:
For the second quarter 2013, the Company reported net income of $44.3 million, or $0.17 per diluted share, compared to net income of $93.1 million, or $0.35 per diluted share, for the same period in 2012.  
Hedging accounted for 25-cent gain in 2012 vs 5-cent gain in 2013 (same period). So, if you subtract out those figures, it would be 12 cents this period, and 10 cents the 2012 quarter. (Note: I often make mistakes when doing advance math or trying to read financial reports. I highly recommend you cross-check numbers for yourself.)

Disclaimer: this is not an investment site. Do not many any investment decisions based on what you read here or what you think you may have read here.

US: #1 "Petroleum" Producer For The Sixth Straight Month -- CarpeDiem

Link here.

Note what the EIA statistic includes: crude oil and other petroleum products like natural gas plant liquids, leased condensate, and refined petroleum products.

Also note that one reader replied by saying that "and oil prices continue to rise." In fact, he's wrong. Brent has come down significantly in price since February, 2013. WTI has increased because it was artificially held down in price by the relative glut at Cushing. That has changed.

I've Added A New Tag: Forrest Gump ...

... at the suggestion of a reader. Thank you.

Josh and Becky (see tag) deserve each other.

Josh notes Bakken operations were disrupted by spring weather (2013); he had predicted major flooding in the Bakken earlier BECAUSE OF PREDICTIONS OF RED RIVER FLOODING.

These were my thoughts to his initial post predicting gloom and doom in the Bakken.

KOG is trading at new highs today, and Halcon reported net production for the period increased 646% year-over-year to an average of 29,165 barrels of oil equivalent per day.

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

New Post-Boom Low In Active Drilling Rigs: 178

I track "active rigs" here.

No One Is Listening To The President -- Noonan

The other day, Peggy Noonan had a column suggesting that President Obama is having the same problem other second term presidents have had: folks have quit listening to him.


Putin's decision to grant Mr Snowden asylum speaks volumes. Who knows? Someday Mr Snowden may become very valuable to the US/USSR for a trade of some sorts.

TransCanada Moving Forward With 1.1 Million BOPD Energy East Pipeline

Oil & Gas Journal is reporting:
TransCanada Corp is moving forward with its 1.1 million b/d Energy East Pipeline project based on binding, long-term contracts received from producers and refiners. A recent open season on the pipeline concluded with the company having signed 900,000 b/d of firm, long-term contracts to transport crude oil from Western Canada to Eastern Canadian refineries and export terminals.

Eastern Canada currently imports 700,000 b/d of crude oil, according to TransCanada.

The pipeline will terminate at Canaport in Saint John, where TransCanada and Irving Oil have formed a joint venture to build, own, and operate a new deep water marine terminal.
TransCanada intends early next year to proceed with the necessary regulatory applications for the pipeline project and terminal.
The company expects Energy East to cost about $12 billion, excluding the transfer value of Canadian Mainline natural gas assets.
So, what about the Keystone?
The decision to move forward on Energy East has not diminished the need for Keystone XL, according to TransCanada Pres. and Chief Executive Officer Russ Girling.
So, we'll see. 

Interesting. To Say The Least.

Brent: $109.28 (+ $1.58)
WTI: $107.69 (+ $2.66)

Many energy and energy-related companies hit a new high today. Both KOG and OAS hit new highs. KOG is within two pennies of $10.00

Cool. An "APP" To Determine Annual Retirement Income

Link here to CoRI.

Works for those of us between the ages of 55 and 64.

Two steps:
  • set your age by moving the icon
  • click on "calculate retirement income"

Gun Free Zones? Only Bad Guys Will Have Guns

Newtown parents call for stricter gun controls nationwide; meanwhile, gun permits in Newtown surge.

The Wall Street Journal is reporting:
The number of people seeking permits to buy guns has surged in this town following the December massacre of schoolchildren by a local man, even as the parents of some victims had urged stricter weapons laws nationwide.
Through July 24, more than 200 people in Newtown have received new local pistol permits, according to a review of local records, surpassing the 171 new permits issued for all of last year. Such permits are prerequisites for Connecticut permits that allow people to purchase and carry pistols as well as rifles or shotguns.
The rise in Newtown comes in tandem with a general upswing in gun sales nationwide and in Connecticut, which passed tough firearm restrictions after Adam Lanza shot and killed 26 people, including 20 children, at Sandy Hook Elementary School on Dec. 14. It was the nation's worst shooting of young children. 
The local surge is especially sensitive in Newtown. The town of about 28,000, approximately 75 miles northeast of New York City, has a sizable population of hunters and sportsmen as well as a base of politically active gun-control advocates that has organized since the Sandy Hook shooting.
"I think people realize that you can't call the police all the time and expect them to save you," said Newtown resident Bill Stevens, 48 years old, an avid hunter who owns more than a dozen firearms. "It's sinking in to some folks that 'I need to take responsibility for keeping my family safe.' "
Yes, when seconds count, police are only minutes away.

You simply can't call the police all the time and expect them to save you. You have to stand your ground.

MDU, Following 2Q13 Earnings Report, Conference Call: 29.60 Up 1.56 (5.56%)

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or thought you might have read here.

Thursday Morning Links, News, And Views, Part II -- XOM and Chevron Missing Out On US Oil Boom

Active rigs: 179 (back down to post-boom low)

Wells coming off confidential list have been posted

WSJ Links

XOM and Chevron missing out on US oil boom.
Exxon and Chevron are tapping less oil and gas than they did even three years ago. As Exxon reports earnings Thursday and Chevron follows Friday, their quarterly results are expected to show that production growth remains elusive.
Last year alone, Exxon's oil and gas production fell 6% from 2011, to 4.2 million barrels a day. Chevron's production fell 2.4%, to 2.6 million barrels a day.
Big Oil's shrinking output contrasts with global oil production, which has risen 12% over the last decade, according to the U.S. Energy Information Administration.
Oil prices have climbed far faster, tripling since 2003 to over $100 a barrel. That gives energy companies more incentive to drill, and it boosts their cash flow so they can afford to spend more.
But the big companies are finding that the pools of oil they have access to are shrinking—or are technologically more complicated to tap.
For oil, "anytime price goes up and supply doesn't really follow, it's getting damn hard to get it out of the ground," said Dan Pickering, co-president of investment bank Tudor, Pickering, Holt & Co.
Google to provide free wi-fi for Starbucks. Sweet:
Google Inc. unseated AT&T Inc. as the supplier of free Wi-Fi service at more than 7,000 Starbucks Corp. coffee shops in the U.S., moving the search giant deeper into the business of connecting people to the Internet.
Google is partnering with Level 3 Communications Inc., an Internet middleman, to offer the service. Starbucks says it will be about 10 times faster than the existing T1 connections.
AT&T said it had offered to upgrade its own service to the same speed. Instead, the carrier will supply Starbucks stores with other business services while customers reach the Web through Google and Level 3.
The new service will be available in some stores beginning next week and will be rolled out to all of them within 18 months.
Starbucks didn't detail Google's role, though it suggested Google could bring more to the table with media offerings like YouTube and Google Play. The two companies will "co-develop the next generation Starbucks Digital Network," Starbucks digital chief Adam Brotman said.
This is nice. I have never been happy with the way ATT often made it a challenge to access wi-fi at Starbucks. McDonald's is among the easiest.

Could this be one of the reasons the market is surging: the delay in ObamaCare? Small businesses are eyeing expansion, taking advantage of delay in ObamaCare:
Nearly a quarter, or 24.4%, of small-business owners affected by the delay said they will invest in equipment or facilities with money that would otherwise have gone into complying with the health-care law, according to July's Wall Street Journal/Vistage Small Business CEO Survey. An additional 16% of small companies plan to hire new employees, 15% expect to provide raises or other benefits for their workers and 3% are planning to lower prices to gain a competitive edge.

Tea leaves: Summers wins; Keystone loses.

As I posted yesterday: GDP looks rosier with new math.
The government this week took a new view of the U.S. economy and found some additional growth.
The Commerce Department on Wednesday released a comprehensive overhaul of gross-domestic-product data going back to 1929, revising the figures to include new measures and data it says give a better picture of the U.S. economy.
One of the biggest changes is how the agency measures what it calls the "knowledge economy" through investments in research and development and entertainment and the arts. Previously, that spending was included as intermediate components during the production of other goods or services, but now such investments will be measured as fixed assets and reflect their continuing contributions.
Smoke and mirrors. "Knowledge economy." Sort of like paying your children $1.00 for each A they bring home on a report card.

What's Mr Hagel up to these days?
Defense Secretary Chuck Hagel on Wednesday laid out options for implementing the Pentagon's share of broad spending cuts known as the sequester, including shrinking the Army from 490,000 under current targets to a force as small as 380,000—far below even its modern low point at the end of the Clinton administration.  
Under one option outlined by Mr. Hagel, the Navy stands to lose two aircraft carriers; the Marine Corps could cut between 8,000 and 33,000 people; and the Air Force would give up bombers and transport aircraft.
The most serious cuts to the Army and other military services would come only if the sequester remains in place. But even if Congress reverses the spending cuts, the Pentagon plans to cut as many as 50,000 Army soldiers and 90 to 120 tactical aircraft, as well as older C-130 cargo planes. Officials said the Air Force reductions would fall heaviest on A-10s, planes designed as tank-killers, and older F-16 fighter jets.
I didn't even know we still had A-10s in the inventory. Wow. Yes, there's a bit of fat that can still be cut. D.R.O.N.E.S.

Jobless Claims -- This Would Be Huge If It Were Accurate. LOL.

Reuters is reporting:
Claims for jobless benefits unexpectedly dropped to the lowest level in more than five years, extending swings typical for the month of July.
Applications (INJCJC) for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 345,000. A government analyst said no states were estimated, and the data were still being influenced by the auto plant shutdowns that play havoc with the figures at this time of year. 
So, the analysts expected a the number to be 345,000 (compared to 345,000 revised from 343,000 last week) which meant almost no change. In fact, the analysts were off by almost 20,000 -- their biggest miss to date -- and a number from the Labor Department suggesting the lowest level in more than five years.

These incredibly "good" numbers come just as the president begins his 10-speech odyssey on how he will improve the economy for the rich and the poor. Very, very coincidental. I don't know how analysts could have been so far wrong.

Let's see: how did this affect the market? The Dow surges, up 135 points and oil is up almost $2.00.

So, we have Goldilocks: the market knows that tapering by the Fed, when it happens, will be very, very slow; and, the US economy appears to be taking off based on these new unemployment numbers. What is not to like, he asked rhetorically.

Back to the jobs report. Buried in the story, I think the real explanation is provided: automakers did not shut-down or slow-down as is usually the case in July. Of course, that's just one minor data point. I still think a miss by almost 20,000 is suspect, and so do others:
“Claims for the entire month of July are pretty much a waste because of seasonal issues,” Jacob Oubina, senior economist at RBC Capital Markets LLC in New York, said before the report. “Volatility spikes seriously in this number in early to mid-July. We’ll get cleaner information on claims in the weeks ahead.”
The less-volatile four-week moving average declined to 341,250 last week, a two-month low, from 345,750.

Roubini Thinks The Price Of Oil Might Possibly, Maybe, Could, Go Down ... Of Course, It Could Also Go Up, I Suppose

The video was hardly worth watching. These are the three factors why Roubin thinks the price of oil might go down:
  • China demand won't keep up with supply.
  • US supply: sharp tick up in US production in unconventional oil comes on line; despite small oil shocks in the Mideast, OPEC able to keep up.
  • The Fed: will slowly normalize; tapering to begin end of year/early next year.
Not only was there nothing new there, I think she's wrong on two out of three, and possibly all three.

Halcon, HRC Operating, G3 Operating, And GeoResources

In light of the long Halcon post, posted earlier today, I will re-post this note, taken from PN Bakken:
In this week’s North Dakota well operator transfers list, there are numerous transfers of wells from G3 Operating LLC to HRC Operating LLC. 
HRC Operating, formerly G3 Operating, is an indirect, wholly-owned subsidiary of Halcon Resources Corp. G3 Operating was acquired by Halcon as part of Halcon’s acquisition of GeoResources in 2012.
The transfers are part of an internal reorganization and simplification effort by Halcon to apply its brand to all of the company’s remaining subsidiaries. All active assets that were formerly identified as G3 Operating are now identified as HRC Operating, both in North Dakota and Montana. The transition was done through a blanket name change.
There are still wells on the North Dakota Industrial Commission Department of Mineral Resources Oil and Gas Division’s website posted under G3 Operating and GeoResources, but none are active. All of Halcon’s active wells are posted under the new HRC unit.

Bakken Acreage Going For About $4,000/Acre in Williams County?

In July, 2013, Halcon closed on 18,569 net acres from a non-operated working interest partner on its operated acreage in the New Home II area in Williams County, North Dakota for approximately $76 million.

$76 million / 18,569 acres = $4,000/acre in Williams County.

The US Shale - Fracking Revolution: Hey, Not So Fast -- It Wasn't Just George Mitchell, DOE Was His Silent Partner

A big "thank you" to a reader for sending a link to an interesting New York Times story.

This may be a factual re-writing of history, but after DOE's debacle with solar research and funding (can you say "Solyndra"?), this story almost has the feel of a DOE press release crying, "Hey, we're not so bad. We've had some successes." From the article:
[With regard to fracking] the Department of Energy was there with research funding when no one else was interested.
It would be interesting to hear Harold Hamm's side of the story. 

The linked article tells us that it was actually the federal government geologists that deserve all the credit for fracking which led to an energy boom in this country. I find that a bit of a stretch.

Even the article's authors have to admit it really was George Mitchell that deserves most of the credit:
Mitchell Energy engineers encountered numerous obstacles to successful shale plays before partnering with federal agencies, which bore some of the costs for novel horizontal drilling techniques and hand-delivered crucial three-dimensional mapping technologies developed at Sandia National Laboratories. Even with this partnership, Mitchell Energy endured years of experimentation and dozens of failed test wells before producing shale gas for a profit.
And it continues:
Where George Mitchell proved invaluable was engaging the work of government researchers and piecing together different federally-developed technologies to develop a commercial product. Mitchell himself spent much of the 1980s lobbying for sustained federal fossil energy research at the Department of Energy, defending “Crawley’s folly” in front of a hostile Congress.  
Fighting the government, fighting Congress, makes George Mitchell's story even more incredible: not only did he have to take on geologists he had to take on government bureaucrats. Unlike the gazillions of dollars poured into the US solar industry without much question or oversight, it sounds like George Mitchell was a David against a Goliath. According to the linked essay, George Mitchell took most of the financial risk; the government appeared to provide a small amount of funding for a demonstration project. The "Solyndra" companies took on zero risk as far as I can tell; it was mostly (or, in some cases, all) government funding.

(And, of course, that same government is now trying to put the horse back in the barn, trying to shut down fracking if at all possible. By the way, that leads to another story line that I posted when when I first started blogging about the Bakken.)

This was the final line of the essay:
Disregarding the role of the public sector in the U.S. shale revolution erases Mitchell’s crucial strengths as a collaborator, scholar, and champion of public innovation efforts.
It does?

Whatever the factual re-write really entails, it does appear that the DOE mission statement has changed under the Obama administration. Prior to this administration it sounds like the DOE mission was to work with US citizens in developing new sources of energy; the current DOE mission statement appears to be more about crony capitalism and slow-rolling the US fossil fuel industry.

With regard to the Bakken: the Bakken never would have been developed as quickly as it did had it been under Federal jurisdiction. In fact, had it been under BLM control, the Bakken may not have come to pass. The state of North Dakota, its citizens, the legislature, the NDIC, all played a critical role in the Bakken boom. The Bakken boom in North Dakota where BLM was in charge was delayed about two years; it took a senator, Senator Byron Dorgan, to get things moving in Dunn County.

China's Shale Basin Prone To Earthquakes

Bloomberg is reporting.

There is a story line here that Bloomberg is missing. If I get a chance, I will come back to it. It's the same story line with regarding to fracking in California.

Strippers In Williston -- And We're Not Talking Oil

The Dickinson Press is reporting:
When stripper Susan Shepard started dancing in Williston in 2007, men were often surprised to see attractive women at the small-town strip club.
But even as North Dakota’s oil boom was in the beginning stages, Shepard had friends from all over the country traveling to Williston to spend a week dancing for workers who had cash to spare and were lonely for female company.
“It’s all but guaranteed money, same reason everybody else is up there,” Shepard said.
Shepard shares her story, Wildcatting: A stripper’s guide to the modern American boomtown, on the website BuzzFeed.
In an interview this week, Shepard said topless dancers in Williston don’t make thousands of dollars in one night, as one national news story reported, but a slow night in Williston could still bring in $400.
MDW posted that link to Buzzfeed on July 29, 2013 (a huge "thank you" to a reader) but I buried the story on purpose. Now that The Dickinson Press has posted the story, a stand-alone post was appropriate. I hate to post anything controversial on the MDW. If you are looking for the BuzzFeed article, go to the link and scroll to the very, very bottom.

RBN Energy: Huge Story On Houston

RBN Energy: huge story on Houston.

Houston crude storage and distribution terminals are getting busy fast these days as a flood of new crude begins to show up from inland production basins. Crude tank storage rates in Houston are double those at Cushing. Houston is now a trading hub for light sweet crude – as witnessed by the launch of a new Platts assessment last week. The Magellan East Houston terminal is the front line receipt point for incoming crude from the Permian Basin. Today we spotlight Magellan’s expanding Houston storage and distribution facilities.
Back in January of this year (2013) we completed a multi-part series on the build out of crude oil storage and terminal facilities in preparation for the flood of new crude streams headed into Houston on pipelines this year and next. The final episode in that series provides a recap and links to all the earlier posts. In May we updated our analysis of the crude distribution network around the Enterprise Crude Houston Oil terminal (ECHO) being built out by Enterprise Product Partners. Today we turn our focus back to Magellan Midstream Partners whose crude terminal in East Houston is rapidly becoming the major distribution point for incoming crude from the Permian basin.

Thursday Morning Links, News, And Views -- COP With Huge Earnings Beat -- Part I

Today would be a nice day to have television to watch CNBC. The talking heads must be going nuts with Dow futures up already 106 points, and WTI futures up $1.64 to $106.67.

A lot of 6's.

They say the price of WTI is surging because of all the economic growth in the US. LOL.

Active rigs: 180

RBN Energy: huge story on Houston -- Houston is replacing Cushing as center of universe for light oil. Combine this story with recent story on CVX moving talent and capital from California to Texas, and recent story that OXY USA may spin off California assets.

Seven (7) companies announced increased dividends yesterday.

Halcon's revenues jumped slightly today.

KOG is supposed to report after market close today.

COP announced earnings: profit falls 10 percent. COP is about almost 2% in pre-market trading.
Net income fell to $2.05 billion, or $1.65 per share, in the second quarter, from $2.27 billion, or $1.80 per share, a year earlier.
Oil and gas output from continuing operations rose to 1.51 million barrels of oil equivalent (boe) per day from 1.49 million boe per day a year earlier.
But having said, that COP beats estimates based on increased production; huge earnings beat, $1.41 vs $.129.  Reuters is reporting:
COP reported a better-than-expected profit due to higher oil and gas output and raised its full-year production forecast.
Output from continuing operations rose to 1.51 million barrels of oil equivalent (BOE) per day in the second quarter from 1.49 million a year earlier, the company said on Thursday.
Conoco, which is spending heavily to boost crude production in the United States, said its output from the Eagle Ford shale field in Texas almost doubled to 121,000 BOE per day.
XOM disappoints, however: Zachs is reporting --
XOM earnings of $1.55 per share missed the Zacks Consensus Estimate of $1.89. Earnings also plunged nearly 14% from $1.80 in the year-ago quarter. The decline was mainly due to weaker refining margins and volumes related to planned refinery turnaround and maintenance activities.
-- which means -- buying opportunity. See disclaimer.

Train traffic is doing just fine due to the oil and gas industry (President Obama won't mention, so we will):
Genesee & Wyoming beats by $0.03, slight miss on revs : Reports Q2 (Jun) earnings of $1.14 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $1.11; revenues rose 84.3% year/year to $400.7 mln vs the $404.55 mln consensus.

G&W's traffic in the second quarter of 2013 was 480,979 carloads. On a Combined Company basis, traffic increased 34,296 carloads, or 7.7%, compared with traffic in the second quarter of 2012. Combined Company same-railroad traffic increased 29,005 carloads, or 6.5%, compared with the second quarter of 2012. The traffic increase was principally due to increases of 10,455 carloads of petroleum products traffic (primarily crude oil and liquid petroleum gases in the Pacific, Southern, Mountain West and Canada regions)...
Maybe killing the Keystone was kounterintuitively the smart thing to do.

Back to flaring natural gas which most folks elsewhere don't understand
Shell, based in London, also took net write-offs of $1.85 billion, including a write-down of about $2 billion on natural gas acreage in the United States, where a decline in fuel prices has led the company to re-evaluate its holdings.
Shell also said it was reviewing its North American exploration and production portfolio, where it has been losing money. This exercise, the company said, will lead to divestments and a sharper focus on fewer projects.
When natural gas sells for less that what it cost to lay the pipeline to gather the natural gas and then pay someone to process it, ... well.... let's just say it's a problem.

By the way, that linked article to the Shell story also highlighted another story I have been following but have not posted because ... well, I just didn't want to ... but now it's become relevant:
[Shell] blamed the sharp decline on higher costs, foreign-exchange issues and production lost as a result of sabotage in Nigeria, an important area for Shell. Shell said the problems in Nigeria had lowered production by an average of 100,000 barrels a day during the quarter. Shell said it was reviewing its troubled Nigerian onshore operations and might sell leases producing up to 100,000 barrels per day. The company said the deteriorating security situation in Nigeria as well as a blockade of its Nigerian liquefied natural gas joint venture cost at least $250 million in the quarter. 
The state of Washington will slow-roll the coal industry. That's fine. The railroads will ship coal to ports of Houston and the East Coast. I used to worry about the Pacific Northwest but no more. Not when I learned the five major coal-shipping ports are on the east coast and the Gulf (none on the west coast) and that larger ships will now be able to pass through the Panama Canal. A reader noted that with oil and coal on trains through Nebraska, it's going to be tough for activist environmentalists to get to their appointments on time, waiting at train crossings, idling their cars, spewing CO2 into that pristine Nebraska air (except for cattle-methane). If the link is broken google two-year environmental study coal Washington state Powder River Basin.

Got Halcon?

More to follow. In pre-market trading, HK is up over 3% today.
Revenues for the second quarter of 2013 increased to $214.3 million, compared to $23.3 million for the three months ended June 30, 2012. Net production for the period increased 646% year-over-year to an average of 29,165 barrels of oil equivalent per day (Boe/d). Second quarter 2013 production was comprised of 83% oil, 5% natural gas liquids (NGLs) and 12% natural gas.
This is really quite remarkable:
Halcon reported net income available to common stockholders, after assumed conversions, of $37.3 million, or $0.08 per diluted share for the quarter. After adjusting for selected items (primarily related to the non-cash impact of derivatives), the Company reported net income for the three months ended June 30, 2013 of $16.8 million, or $0.04 per diluted share, compared to net income of $2.8 million, or $0.02 per diluted share in the comparable quarter of 2012 (see Selected Item Review and Reconciliation table for additional information).
Halcon reported cash flow from operations before changes in working capital of $122.7 million, or $0.28 per diluted share for the three months ended June 30, 2013 (see Condensed Consolidated Statements of Cash Flows for a reconciliation to net cash provided by operating activities). After adjusting for selected items (see Condensed Consolidated Statements of Cash Flows and Selected Item Review and Reconciliation table for additional information), cash flow from operations before changes in working capital was $122.7 million for the quarter, or $0.28 per diluted share, compared to $0.2 million, or $0.00 per diluted share for the same period of 2012.
Compare these numbers to the numbers KOG was reporting in its early days in the boom. KOG pales in comparison, at least as far as I recall.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here. I have no formal (or informal) training (or education) in the oil and gas industry or in business. I make a lot of typographical errors, and I often come to the wrong conclusions. I post about the Bakken because I enjoy the story. I don't post about the Bakken for investment purposes. I post articles about earnings because it helps me understand the Bakken. I don't trade. I am a long term investor. I won't be buying, selling, or trading anything in the next 72 hours, though I did write to my wife to tell her to give our outside electric grill away. I will never being using that grill again, now that I am a regular "subscriber" to Omaha Steaks and can grill in our new apartment complex.

Additional information regarding Halcon:
On July 15, 2013, the Company closed on the acquisition of 18,569 net acres from a non-operated working interest partner on its operated acreage in the New Home II area in Williams County, North Dakota for approximately $76 million, including closing adjustments. The acquired interests are currently producing approximately 900 Boe/d (90% oil). This transaction had an effective date of March 1, 2013.
The ongoing implementation of drilling and completion modifications continues to yield positive results. The performance of wells that have been completed with modified completion techniques is currently above previously published type curve estimates.
Halcon's average initial production (IP) rate for the two most recently completed Bakken wells put online in the Fort Berthold area is greater than 3,000 Boe/d. A new Company record was recently set with a 3,317 Boe/d IP on a Bakken well in this area.
Halcon currently has approximately 150,000 net acres in the Williston Basin and expects to operate an average of six rigs in the basin for the remainder of 2013. The company averaged 7 operated rigs in 2Q13.
That 150,000 net acres is up from 130,000 net acres in June, 2013.

Halcon also has position in Woodbine (Texas).

But even more exciting, for other reasons, is Halcon's success in the Utica:
It is important to note that the Kibler 1H (100% WI), located in Trumbull County, Ohio, tested at a rate of 2,233 Boe/d (75% liquids), assuming full ethane recovery, which compares favorably to the other highly productive wells in the play. This discovery well for the Utica/Point Pleasant play in Trumbull County tested at 860 barrels of condensate per day and 4.5 million cubic feet of natural gas per day (1,350 BTU).
Based on composition analysis and assuming 27% gas shrink, Halcon estimates the well would produce an additional 821 barrels of NGLs per day. The Kibler 1H was drilled to a total measured depth of 14,257 feet, had an effective lateral length of 6,734 feet and was completed with 26 frac stages. The Company has significant holdings in Trumbull and Mahoning Counties, Ohio and believes there is potential to drill hundreds of wells on its acreage in the area over time.
 Kibler should not be confused with Keebler, which are cookies. Compare the Kibler well with a typical Bakken well. In the Bakken, now: total measure depth of around 20,000 feet; an effective lateral length of 9,000 feet; and 36+ stages.

Again, Halcon in the Utica:
The process of delineating Halcon's Utica/Point Pleasant acreage position is essentially complete. The Company has finished drilling its first nine wells and is evaluating results. There is currently one Utica/Point Pleasant well producing, four wells that have been tested and are shut-in awaiting infrastructure, two wells being tested and two wells resting. Halcon expects to operate a minimum of one rig in the play throughout the remainder of 2013 and anticipates seven of the nine wells drilled to be flowing into sales pipelines by the end of the year.
More rail:
The Company's midstream subsidiary, Halcon Field Services (HFS), has entered into an exclusive arrangement with the Ohio Commerce Center (OCC), a 516 acre mixed used industrial site located in Lordstown, Ohio, to develop an oil storage and rail-loading facility. HFS and the OCC have obtained a variance from the Village of Lordstown to permit the planned facility.
OCC has over 12,000 feet of recently installed loop track and direct access to Class 1 rail service, making it an ideal location for low cost rail services to support the rapid production growth expected in the northern tier of the Utica/Point Pleasant play. HFS plans to build the terminal at the OCC in phases, the first of which is expected to go into service by the end of 2013. At scale, HFS anticipates the facility would accommodate unit train loads at the rate of 140,000 barrels of oil or condensate per day.