Monday, August 19, 2013

Nine (9) New Permits -- The Williston Basin, North Dakota, USA; EOG Reports A Monster Well In Parshall Oil Field; 1/3 Of Wells Go To DRL Status

Active rigs: 183 (no change)

Nine (9) new permits --
  • Operators: BR (3), QEP (2), Oasis (2), SM Energy, MRO
    Fields: Blue Buttes (McKenzie), Cottonwood (Mountrail), Grail (McKenzie), Charlson (McKenzie)
  • Comments: MRO has a permit for a wildcat in Slope County
Wells coming off the confidential list were posted earlier today; see sidebar at the right.

One producing well was completed, and a very nice well it was:
  • 24858, 1,790, XTO, Star 21X-14F, Grinnell, t7/13; cum --

Wells coming off the confidential list Tuesday:
  • 21548, 1,437, Whiting, Taylor 34-7H, Sioux, a nice well, t2/13; cum 39K 6/13;
  • 23281, drl, CLR, Krehlik 1-11H, wildcat, no production data,
  • 24005, drl, CLR, Columbia 4-5H, Dollar Joe, no production data,
  • 24128, 1,304, Whiting, Miller 34-8-1H, Harding, t3/13; cum 42K 6/13;
  • 24281, 1,833, EOG, Parshall 32-0225H, Parshall, middle Bakken, spectacular well; 137K in less than 4 months; 49 stages; 10 million lbs of sand;
  • 24558, 834, Whiting, Langwald 31-17-1H, Estes, t3/13; cum 25K 6/13;
Sioux oil field is just south of Indian oil field, south of the river, south of Williston, and just west of US 85 south. It appears to be all of 3 sections in size.

Krehlik is northwest of Dickinson, near Whiting's Pronghorn Prospect.

Harding oil field, five sections in size, is north/west of the river, along the Montana state line

Estes oil field, about 18 sections, is immediately south of the river, along the Montana border.  


24281, see above, EOG, Parshall 32-0225H, Parshall, spectacular well:

DateOil RunsMCF Sold

Living The American Dream -- Socialism -- The Gift That Keeps On Giving

This story is not unlike all the other stories we've heard from countries like Cuba and Zimbabwe, but it has a very, very happy ending. For American capitalists.

Prior to Mr Chavez nationalizing large farms, redistributing land, and controlling food prices to help the poor, Venezuela was a net exporter of rice. Venezuela is now a net importer of rice. And that's great news for some Americans.

But don't cry for me, Argentina -- oh, that's Argentina, not Venezuela -- whatever --

Don't Cry For Me, Argentina, Madonna

[Is it just me, or does she remind you of Hillary in this clip, especially the line, "I had to change"? But I digress.]

American capitalists are getting rich, exporting rice to Venezuela. I can't make this stuff up. I would have completely missed the story had a reader not mentioned it to me, front page of today's Wall Street Journal
Steve Orlicek, a rice farmer here, is living the American dream. He owns a thriving business; he vacations in the Bahamas.
His good fortune springs from many roots, including an unlikely one: He is a prime beneficiary of the socialist economic policies of Hugo Chávez, Venezuela's late president and critic of what he called U.S. "imperialism."
It is a paradoxical legacy of Mr. Chávez's self-styled socialist revolution that his policies became a moneymaker for the capitalist systems he deplored. During his 14 years in power, he nationalized large farms, redistributed land and controlled food prices as part of a strategy to help the poor.
But these policies turned Venezuela from a net exporter to a net importer of rice—from farmers like Mr. Orlicek. "The rice industry has been very good to us," Mr. Orlicek said, sitting in his newly renovated home, appointed with a baby grand piano played by his wife, Phyllis.
And so it goes.

What an incredibly good story, front page. I missed it because I was reading the digital edition and "rice" in the headline did not attract my interest. I doubt I would have missed it had I been reading the print edition. Lousy excuse.

A big "thank you" to the reader. 

For My Benefit: I Can Never Remember RINS

Platts is reporting as way of background:
RINs prices have soared for much of 2013 on aggressive buying ahead of the impending "blend wall." The term describes when the maximum amount of the US gasoline pool has been blended with 10% ethanol. Refiners will then be under pressure to run higher ethanol blends or buy RINs, unless Congress is pressured to alter the RFS.

The EPA issues a RIN to track renewable fuel usage throughout the supply chain.

Refiners, importers and blenders -- called "obligated parties" -- use them to show the EPA that they have fulfilled their mandated government use of renewable fuels. If the obligated party has not used enough physical product, it can buy RINs to satisfy the quota.
Now, the news:
All current-year US RINs assessments strengthened for the sixth straight session Monday, marking the first such streak since Platts began the advanced biofuel (D5) assessment on January 3, 2011.

Platts began assessing corn-based ethanol (D6) RINs in 2009 and biomass-based diesel (D4) in 2010.

Corn-based ethanol (D6) RINs for 2013 were assessed 1 cent higher at $0.8150/RIN, and both current-year advanced biofuel (D5) RINs and biomass-based diesel (D4) RINs a half-cent higher at $0.90/RIN and $0.95/RIN, respectively.
Buying interest heated up last week after a week-long selloff that followed the US Environmental Protection Agency's August 6 announcement of a four-month extension for meeting 2013 Renewable Fuel Standard-2 blending requirements, sources said.

Job Watch -- Details From Last Week's Report; Alabama -- Unemployment Rate Drops But Total Employment Plunged (Not Often Have We Seen The Word "Plunge" In These Reports)


August 20, 2013: same story, as reported by The WSJ:
The labor market's progress was uneven across the U.S. in July, with many states and regions experiencing rising unemployment despite an overall decline across the country.
The unemployment rate rose in 28 states and the District of Columbia, fell in eight states and held steady in the remaining 14, the Labor Department said Monday.
Nationwide, the unemployment rate fell to 7.4% from June's 7.6%, partly because the number of employed people rose, though some also left the labor force. That was the lowest overall level since December 2008.
The unemployment rate grew the most in Alaska and Georgia, at 0.3 percentage point. Rates stand at 6.3% in Alaska and 8.8% in Georgia. Mississippi made the most progress on the labor front, with its rate declining 0.5 percentage point to 8.5%.
The numbers reflect frustratingly slow economic growth. Employers have been adding jobs but the pace hasn't been fast enough for the 11.5 million Americans who want a job but can't find one; in July, employers added 162,000 jobs, the lowest total since March.
No matter how you report it, the unemployment news is bad and shows no signs of improving under this administration.

Original Post
Reuters is reporting:

Nationally: unemployment rate drops to 7.4, according to Reuters:
Nationally, the jobless rate fell to 7.4 percent in July, the lowest level since December 2008, largely due to people giving up on the job hunt and dropping out of the work force.
This is the first time I have seen Reuters so blunt about the truth.

At the state level, the news was no better.
  • jobless rates rose in 28 states month-over-month in the latest reporting period (July, 2013)
  • jobless rates dropped in only eight states (of those, six states dropped 0.1%)
  • one state, for example, from 9 percent to 8.5 percent, Mississippi (the largest drop)
  • in most states where jobless rates fell, rates fell 0.1 percent (insignificant)
Reuters continiues:
In neighboring Alabama, where the rate dropped to 6.3 percent from 6.5 percent in June, the labor force also shrank. While manufacturers in the state gained jobs, total employment "plunged this month, dropping by 14,700," according to Alabama's labor department, with most losses in construction, educational and health services, leisure and government.
Conversely, Virginia pointed to an expanding labor force as the reason its jobless rate rose to 5.7 percent in July from 5.5 percent in June. At the same time, local governments' elimination of 4,500 jobs created a drag, with nonfarm employment increasing by 1,400 jobs last month, according to the Virginia employment department.
In Montana, Utah, North Dakota, Hawaii, Nevada and New Jersey, the jobless rates edged down 0.1 percent.
By state:
  • highest rate: Nevada, 9.5%
  • second: Illinois, 9.2%
  • lowest rate: North Dakota, 3%

Re-Cap Of Oppidan In The Bakken

The Star-Tribune is reporting:
Joe Ryan was certain he had a solid sales pitch.
His company, Minnetonka-based Oppidan Investment Co., has built shopping centers nationwide. And Watford City, a fast-growing locale on the western edge of North Dakota’s oil-rich Bakken region, has struggled to provide grocery stores and restaurants as its population surges.
On paper, the two seemed like a match.
But the town planner “looked at my pretty pictures and said, ‘Joe, I could meet with guys like you all day long. Show me something.’ ”
With that blunt-but-earnest challenge, Oppidan stepped outside of its comfort zone. The firm, known for its work with retailers such as Cub Foods, Gander Mountain, Goodwill and Orchard Supply, built an apartment complex, of all things, in nearby Williston.
“We really needed to put our money where our mouth was,” Ryan said recently. “It was so obvious that they desperately needed housing” with the influx of new residents and workers in the region.
Oppidan’s 36-unit apartment complex, called the Gables, leased up so quickly that a second Gables opened earlier this year. Then, in June, the company opened Pheasant Ridge Apartments, a 42-unit complex in Watford City.
“That was the fastest way for us to prove that we were for real,” Ryan said. Since then, Oppidan has completed $150 million in retail and residential projects in Dickinson, Minot, New Town, Stanley, Tioga and Williston. More than 1 million square feet of commercial projects have been done in just over two years.
The rest is at the link. Enjoy. Send to me by a reader. 

Also, search this site for many other Oppidan stories.

Monday Morning Links, News, And Views; 450 Killed In Cairo Over Four Days -- Let's Talk US Civil War Before We Get All Bent Out Of Shape

Banks oil field has been updated; look at the number of wells still NOT on a pump; look at the cumulative production of these very young wells. (Click on the link in blue; when you get to the link, be sure to scroll to the very bottom and work your way up to see the cumulative production of the wells; all wells have been updated. Also note that every operator in the Bakken wants part of this action.)

Truax oil field has also been updated but wells that were previously updated through 4/13 were not updated - if that makes sense.

Bull Butte oil field was also updated but there really wasn't much to update; it's been quiet up there. But it was one of the early fields in the Williston area and has always held a special interest for me. 


Update on Enbridge's Sandpiper pipeline at Duluth News Tribune:
Janaki Fisher-Merritt said he was surprised in recent weeks to get letters from Enbridge Energy asking to survey his family’s Carlton County farm for a possible new oil pipeline route.
Fisher-Merritt had heard about Enbridge plans to expand existing pipelines across the Northland to carry more Canadian and North Dakota oil east and south. But he assumed the new oil would flow along the existing pipeline route and not across the woods on his land.
“This was out of the blue. We’re a couple miles from any other pipeline, and we hadn’t heard they were looking for new routes,” he said, echoing several of his Wrenshall-area neighbors.
I track pipelines of interest here


Wells coming off confidential list have been posted. Zavanna with a huge well in Williston oil field. But only four wells reported an IP: 7 of the 11 wells coming off confidential list went to DRL status.

Disclaimer: this is not an investment site.
Samson Oil & Gas requests trading halt due to capital raise : Co announces that, per its request, an immediate Trading Halt of its Ordinary Shares has been issued by the Australian Securities Exchange commencing Monday August 19 2013 until Wednesday August 21 2013 pending the announcement to the market of a capital raising. 

Also: Chesapeake Energy: Icahn disclosed 9.98% active stake (66.45 mln shares) in an amended 13D filing out Friday after the close; up from ~59.7 mln shares as of 6/30. 


Active rigs: 183

RBN Energy: a great analysis of crude price as related to the turnaround in Cushing inventories.  For nnewbies (and me) a great explanation of backwardization and cotango, any why oil companies are selling their crude now. A look at the future of crude oil pricing in the out years.

Folks might want to take a look at the WTI NYMEX forward curve at the linked article. Not necessarily a pretty picture. The chart tells you all you need to know why oil companies are selling their crude now (backwardization), which is the opposite of what one would see is experiencing cotango.


WSJ Links

Very little of interest today. Front section: US and Egypt on collision course. As the reverend has said, the chickens have come home to roost. Saudi king, by the way, backs the Egyptian military. Tectonic changes in the Mideast.

Biden will run for presidency; putting together PAC.  Of course, that's not official.

I can't remember if I posted my little story about helium in short supply. The "balloon man" in Belmont (Massachusetts) confirmed that when I asked about helium supplies. Now a story that "unless lawmakers act to wind it down more gradually, the Federal Helium Reserve, which supplies more than one-third of the world's crude helium, will shut down."

Hospitals require substantial amounts of helium to cool their MRI machines.


I track O'BamaCare here. Today, there were three big developments:

August 19, 2013: for those do not know, "Forever 21" is the trendiest young women's store right now. The chain has just announced it will no longer have any full-time non-management employees
The predictions and fears of the Affordable Care Act’s adversaries have begun to materialize, specifically fears that the law will encourage employers to demote their employees to part-time positions in order to evade federal health care requirements. Popular clothing company Forever 21 is the first of what might be many companies to limit its non-management workers’ hours to 29.5 a week, just below the 30-hour minimum that the ACA deems full-time work.
Explaining that the company “recently audited its staffing levels, staffing needs, and payroll in conjunction with reviewing its overall operating budget,” Associate Director of Human Resources Carla Macias informed employees that effective August 31, they will no longer be full-time employees of Forever 21.
August 19, 2013: O'BamaCare will be completely unraveled by Labor Day -- Chicago Tribune. But it's perfectly legal to flout the law. I guess.

August 19, 2013: the president has essentially blown off O'BamaCare: waiving, delaying; and now it's reported that the White House has missed more than 50% of the law's deadlines. I don't know if this is how all presidents have worked, but it is clear that this president broke the code -- Presidents can do what they want; they won't be impeached for failing to uphold laws that the public doesn't like.

[A digression: other than for political reasons and crony capitalism, does anyone remember why "we" even went down this road to national "O'bama" healthcare? Yes, it had something to do with 10 to 30 million folks who did not have health insurance. The number was always a WAG -- a wild ass guess. No one knew, but most of the uninsured fell into one of three categories: a) young, healthy, who elected not to carry health insurance; b) unemployed, in between jobs and would get health care when employed; and, c) undocumented (used to be called "illegal") aliens. So, now, it appears we have a train wreck involving 360 million previously insured people on a track that was built for those 10 to 30 imaginary health careless victims. "If it ain't broken, break it," taken to extremes. The biggest catalyst: Hillary.]


I track EV's here. Interesting story today at CNBC. Goes along with what I posted a few weeks ago: Tesla is going to make a lot of money; Tesla broke the code on who to target.

August 19, 2013: the young and the rich buying the Tesla Model S. I think this kills the Chevy Volt. In fact, at the very end of the article:
"If you can afford a $100,000 dollar car why would you buy the Chevy Volt? It is a nice car, but why wouldn't you buy the Tesla Model S? If you have the money, you are going to buy the Tesla model S," said Riswick.
And that's why there were no changes to the 2014 model. Everyone working on the Chevy Volt over at GM were moved to the Cadillac division which, with the 2013 model, now has "the world's only full-size luxury SUV." Interesting, huh? A page from the 70's Japanese playbook. Get the technology right on the small vehicles, and then move into the large, luxury car market.

The Market

CNBC is reporting:
Outflows from U.S. bond mutual funds and exchange traded funds has accelerated in August, ...
So far this month, U.S. bond mutual funds and ETFs have seen outflows of $19.7 billion, more than the $14.8 billion of outflows in July. August's outflow is already the fourth-highest on record ...
The sell-off in bonds pushed yields on the U.S. 10-year to 2.8656 percent on Monday morning, the highest since July 2011.
Gee, I wonder where that money will go?

Let's Put This Into Perspective

From the AP:
The streets of Egypt's capital have become a deadly battleground between Morsi's supporters and backers of the military that overthrew him. The crisis has severed friendships and, in some cases, turned neighbor against neighbor in the city of more than 18 million people.
More than 450 people have been killed in Cairo over the past four days, just over half the country's nationwide death toll during the week of violence. Hundreds of those victims died when Egyptian security forces attacked two pro-Morsi sit-ins in Cairo on Wednesday.
Neighbor against neighbor? During the US Civil War, folks, it was brother against brother. And the cost in lives? In the story above: more than 450 people have been killed in a city of 18 million over the past four days. From wiki, Antietam:
It is the bloodiest single-day battle in American history, with 22,717 dead, wounded, and missing on both sides combined.
And then there's Gettysburg, again from wiki:
The battle involved the largest number of casualties of the entire war and is often described as the war's turning point. Between 46,000 and 51,000 soldiers from both armies were casualties in the three-day battle.
And, then of course, there was King Philip's War, also from wiki:
The war was the single greatest calamity to occur in seventeenth-century Puritan New England. In the space of little more than a year, twelve of the region's towns were destroyed and many more damaged, the colony's economy was all but ruined, and much of its population was killed, including one-tenth of all men available for military service. More than half of New England's towns were attacked by Native American warriors.
September 11, 2001: almost 3,000 preventable deaths.

I won't even discuss the Turkish-Armenian genocide. Or the Holocaust.

Population of Chicago: 3 million. Annual homicides: 500.