Friday, September 6, 2013

CLR's Limousin Pad In Sanish Oil Field


September 4, 2014: this is where we stand today in this section, the eight-well CLR Limousin pad (see original post below): all wells on confidential; one rig on the pad:
  • 17544, 2,164, Whiting, Lacy 11-12H, Sanish, spacing ICO,  t5/09; cum 453K 12/18;
  • 19221, 1,466, Whiting, Ness 21-3H, Sanish, 2 secs; t1/11; cum 276K 12/18;
  • 19222, 1,100, Whiting, Bartleson 21-3H, Sanish, 2 secs; t2/11; cum 197K 12/18;
  • 26411, 1,586, Whiting, Ness 21-3TFH, Sanish, t7/14; cum 212K 12/18;
  • 26412, 2,091, Whiting, Hansen 21-3H, Sanish, t7/14; cum 254K 12/18;
November 24, 2013: in the original post I noted that there were three completed Whiting wells in the same section that the CLR Limousin wells will be sited (all eight CLR wells are still on the confidential list). Today I see there are permits for two more Whiting wells in the same section (3-152-93): #26411 and #26412.  

Original Post

In today's daily activity report, CLR has permits for 8 wells on one pad on Lot 3, 3-152-93, Sanish oil field.
  • 26391, 911, CLR, Limousin 1-3H, Sanish, t3/15; cum 288K 12/18;
  • 26392, 814, CLR, Limousin 2-3H1, Sanish, t3/15; cum 276K 12/18;
  • 26393, 763, CLR, Limousin 3-3H, Sanish, t3/15; cum 291K 12/18;
  • 26394, 817, CLR, Limousin 4-3H1, Sanish, t3/15; cum 268K 12/18;
  • 26395, 710, CLR, Limousin 5-3H, Sanish, t3/15; cum 305K 12/18;
  • 26396, 669, CLR, Limousin 6-3H1, Sanish, t3/15; cum 277K 12/18;
  • 26397, 760, CLR, Limousin 7-3H, Sanish, t3/15; cum 314K 12/18;
  • 26398, 667, CLR, Limousin 8-3H1, Sanish, t3/15; cum 353K 12/18;
To some extent this pad and its location may be driven by the geography; this area sits near the river, limiting drilling locations.

There are already three wells sited in this section: they are Whiting wells, longer than typical short laterals, but shorter than the usual long laterals.

I'm not sure what to make of this, permits for 8 CLR wells in a spacing unit with three existing WLL wells. There is no 640-acre or 2560-acre overlapping spacing unit here, just the 1280-acre spacing unit. Most likely, these wells will be drilled east to west, sections 4 and 5-152-93. These two sections are under the river, and no horizontals exist in these sections. The pad is about 1,700 feet from the west line, and about 1,600 feet from the north line. Sited 1,700 feet from the targeted section(s) is a long way, but that might be the only possible way to reach this area under the river. 

Disclaimer: I often misinterpret what I read, making amateur errors, but I post in good faith with regard to the Bakken. This post is simply idle chatter as I try to sort out another piece of the Bakken. I could be way off. 

Eighteen (18) New Permits -- The Williston Basin, North Dakota, USA

Active rigs: 184 (down slightly)

Eighteen (18) new permits --
  • Operators: CLR (9), Oasis (5), BR (4)
  • Fields: Sanish (Mountrail), Corral Creek (Dunn), Cottonwood (Mountrail), Blue Ridge (Williams), Alger (Mountrail)
  • Comments: CLR has permits for 8 wells on one pad on Lot 3, 3-152-93;
Wells coming confidential list were reported earlier; see sidebar at the right.

Four (4) producing wells completed:
  • 24561, 533, Hess, EN-Hermanson-154-93-0235H-4, Robinson Lake, t8/13; cum --
  • 24851, 1,965, XTO, Rolfson 11X-16A, Siverston, middle Bakken; t6/13; cum 39K 7/13;
  • 24852, 1,434, XTO, Rolfson 11X-16E, Siverston, Three Forks; t6/13; cum 28K 7/13;
  • 25643, 114, Corinthian Exploration, Corinthian Skarphol 13-27 1H, 
More information on #24852:
  • Middle Bakken; gas recorded has an average of 175 with a range of0-16,063 API units; 20,520 TD; 24 days spud to TD; (looks like an error in the summary -- the summary stated the target was Three Forks, but lateral was all about the Middle Bakken; no frack data
More information on #24852:
  • Three Forks well; the total gas measured has an average of 548 with a range of 0-17,186 API units (no typo); 20,659 TD; 29 days spud to TD; no frack data

The Williston Wire

Headlines only, no links. It is easy to subscribe to The Williston Wire.

Sakura Japanese Steak House ...
Complete Nutrition ...
Cash Wise Foods ... all three will locate in Sand Creek Town Centre

The Petersen Group to build townhomes at The Ridge in Williston...

GA Haan and ND Housing Finance Agency to add 21 additional affordable apartments at the Williston Senior Apartment Homes ...

Developers unhappy: Williams County Commission declares six-month moratorium on new development approvals...need to catch their breath... "do things right"

New Williston rec center under budget, ahead of schedule...

Hunter's Run, the first work-live Master Planned Community, east of Watford City, 294 acres, at the junction of ND Highways 23 and 1806; 1,500 - 1,800 dwelling units, two hotels, a travel center, a medical center, an office building, industrial office space announced...

Legacy Fund: currently $1.3 billion; could rise to $3 billion by 2017 when legislators first allowed to vote on whether/how to spend it....

Update on the TrainND workforce program at Williston State College....

The Cushing Era Is Over -- BloombergBusinessweek; Backwardization --> Expectation That Prices Will Fall

BloombergBusinessweek is reporting:
In the last two months, traders and oil companies have been moving their crude oil out of the giant tanks in Cushing, Okla., faster than at any time in recent memory. Since late June, crude inventories at the country’s biggest oil storage hub have plunged some 40 percent, from about 50 million barrels to 34 million as of Aug. 30.
The drawdown effectively marks the end of an historic glut of crude that built up in Cushing over the past three years, as double-digit increases in domestic oil production overran the U.S.’s ability to move it around. “What this really reflects is the removal of the bottleneck and a rebalancing of the country’s pipeline infrastructure,” says Tim Evans, an energy analyst at Citigroup.
The pipeline industry has worked feverishly to reorient the country’s oil pipelines around new sources of domestic crude production in the middle of country. New pipes have been built and old ones reversed to get more crude out of places such as North Dakota and Oklahoma and into refining hubs along the Gulf Coast. That’s essentially the opposite of what they were intended to do, when increasing imports needed to be piped from the coasts to the interior of the country.
Last year, Enterprise Products Partners and Enbridge reversed the flow of the 500-mile Seaway Pipeline to take crude out of Cushing and into Freeport, Tex. After a slow ramp up, and some hiccups along the way, Seaway is now pumping about 300,000 barrels per day out of Cushing.
Oil from the Permian Basin in West Texas that used to flow into Cushing is now getting piped straight to refiners outside Houston. In April, Magellan Midstream Partners’ Longhorn Pipeline reversed its flow and started moving crude from El Paso into Houston. In June, Sunoco’s Permian Express pipeline started moving about 90,000 barrels of crude per day out of Wichita Falls, Tex., and into Port Arthur.
In July, BP’s massive refinery in Whiting, Ind., restarted after a nine-month modernization process and is now funneling more crude out of Cushing.
Much, much more at the link. A must-read. 

For Investors Only: Bakken Operators; Hess Increases Dividend By 150%; CLNE Expands

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

Zacks is reporting:
Hess Corporation has increased its quarterly common stock dividend by 150% to 25 cents per share. The new dividend will be paid on Sep 30, 2013 to shareholders of record as of Sep 16. The company had paid a dividend of 10 cents in the previous quarter.
Bret Jensen on Oasis
Regular readers of these columns know that I am a big bull on a good number of E&P concerns on the back of the huge domestic oil & gas production surge within the United States over the last 6-8 years. I own and have written extensively about a variety of smaller plays among these producers over the last two years. Bakken producer Oasis Petroleum is a stock I have owned and written about since April of last year.
Oasis is up better than 40% over that time frame to better than $43 a share. However, I still believe this fast growing producer has further upside. The company just made a significant purchase and has had received some very positive actions from analysts. It seems an appropriate time to revisit its investment thesis.
SeekingAlpha on HK, Oasis:
With the bull case having already been stated over the past few months for the sector, we are not surprised at all that names such as Halcon Resources - and a company which we hold a position in - and Oasis Petroleum  have been trending higher. Oasis has seen a move which has been more prolonged based off of the positive happenings the company has been experiencing in the Bakken area. Halcon however had been in a downtrend which saw shares really get hit when the company announced a secondary equity offering and debt issuance. We were bullish then and remain so today. Yesterday's 3.60% move higher in the company's shares indicates that the shares are still alluring to investors and are pretty attractive when compared to other names in the sector right now.
The move by Oasis to add to its Bakken position by buying roughly 161,000 net acres is a real positive. The company has a good balance sheet and a focus on the 'oily' assets which we like to see. Although the deal will not see Oasis increase the production on the acreage they are acquiring this year, watch for it in the future as they take on two rigs which are currently drilling and expand upon their exploration efforts moving forward across the entire play. The company expects to add 2-3 rigs to the total now being run across their acreage and that which they just purchased next year.
Steve Zacritz on Triangle Petroleum:
In mid August, Triangle Petroleum announced a McKenzie County, ND core acreage acquisition to be funded by public and private offerings. We liked the deal then and wanted to walk through the pieces as TPLM remains one of our largest Bakken positions and one that remains cheap to its peers (you almost get the acreage, its in-house frac spreads and its midstream segment for free at this point just based on production value).
Clean Energy Fuels awarded multiple natural gas fuel agreements in the state of Missouri over the last few weeks including yesterday's approval by the City Council of Kansas City to provide compressed natural gas for the city's fleet of natural gas vehicles.

Now It Gets Personal: Hollywood To Lose Out With O'BamaCare; So Much For Keeping Your Own Physician

But as Obamacare begins to kick in, artists, photographers, writers, and other members of the “creative class” who have access to health insurance programs through numerous professional organizations will lose that coverage.
Up until now professional organizations have worked with insurance providers to craft reduced-rate plans for their members. But thanks to the fine print in the Patient Protection and Affordable Care Act (PPACA), on January 1, 2014, many of these plans will fail to pass legal muster.
The College Art Association website posted a notice this month: “The New York Life Insurance Company recently informed CAA that it will no longer offer catastrophic healthcare coverage previously available to CAA members.” Why? Because it “is no longer an option” for “associations whose members reside in different states” to provide such coverage. These members will have to seek help from their home states’ newly formed Obamacare exchanges. Plans offered to Modern Language Association (MLA) members will suffer a similar fate.
Other insurance providers are reporting cancellations. The Entertainment Industry Group Insurance Trust (TEIGIT) website posts the following notice: “All individual and/or Sole Proprietor Health Insurance will terminate January 1, 2014. This includes plans acquired as Members of our Affiliated Associations & their groups.” Those affiliated associations include the American Federation of Television and Radio Artists, the Dramatists Guild, the Graphic Arts Guild, NY Women in Film and Television, and many others.

For Investors Only: An EOG Feel-Good Story -- Nothing More, Nothing Less

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.

Over at SeekingAlpha, this feel-good story:
EOG Resources  has been one of my favorite stocks in the oil patch over the years. It is now a $43 billion large cap company headquartered in Houston, TX. EOG engages in the production and marketing of crude oil and natural gas in the U.S., Canada, Trinidad, the U.K., and China.
In other words, EOG has a much diversified portfolio. But this is not the first time EOG is flourishing-it has had some pretty good numbers over the years!

Libyan exports down to 80,000 bopd

Friday Morning Links, News, And Views -- Part III


September 8, 2013: this is how Bloomberg saw the G20 summit. Putin hosted; Putin seduced; Putin won. "Overwhelming" was the word used. In his Cadillac, O'Bama was the outlier -- all the rest rode in the BMW's provided by the host.

Later, 3:50 pm CST: the worst thing about the Syrian missile crisis is that it appears to be viewed completely from a political point of view. I was too young to understand at the time, but now, 50+ years later, reading about it, I don't recall the Cuban missile crisis as being political. It seems that Americans were genuinely concerned about the crisis, and the Kennedy brothers were truly equally concerned.

I think the unsaid issue with the Syrian missile crisis revolves around the other 800-pound gorilla in the room - Russia and his trainer, Vladimir.

It may be all political fun and games now, but if the US goes ahead with military intervention, I do feel strongly that Russia will intervene. For the moment, Vladimir has not been foolish enough to make his own "red line" speech, but he has probably already drawn a "red line" in the sand. If the civil war in Syria becomes a major confrontation between Russia and the US, it will not be pretty. The entire Mideast will draw up sides pretty quickly. This might be as good a time as any to read Bernard Lewis' history of the Mideast and the clash of civilizations: What Went Wrong? Bernard Lewis, c. 2002. My notes are here. Russia's ties with the Mideast go back a lot longer than US ties with that part of the world. 

Original Post

Wow, the market is so incredibly unpredictable. I would love to hear what CNBC talking heads are saying, but I am so glad I'm not. What a bunch of fluff.

Oil is spiking, up almost $2.00. Solidly over $110, and almost every Bakken operator is enjoying the run. Profit taking by the end of the day? And the market just went green. I think investors know the strike won't occur over the weekend, so there is little risk holding stocks over the weekend. I assume the president will release the war plans at least 72 hours in advance to allow the adversary time to adjust. Also, he needs to see if polling suggests he needs to change his war plans.

But this is a most interesting story, reported by Yahoo!Finance: traders struggle with perfectly terrible jobs number.
Well, that was awful. Or should I say, perfectly awful?
The August jobs report missed expectations pretty much on all major fronts. It also included some historic morsels of doom, and a general smattering of blah befitting a sluggish economy rife with uncertainty. 
All those jobless numbers, and yet auto sales are surging. What gives? In the big scheme of things, it doesn't take many new auto sales to goose the numbers. My hunch is that the oil and gas industry is having a huge trickle down effect on the economy. First of all, there are more new millionaires than ever in North Dakota, Pennsylvania, Ohio, and south Texas, just from direct impact of oil and gas drilling. Then all the folks who work for the railroads, and then all the oil service companies. As much as they hate mining sand in their states, my hunch is that there are a lot of employed truck drivers in Minnesota and Wisconsin hauling fracking sand. [By the way, I understand there is a sign at the Michigan border asking the last one leaving the state to turn off the lights; apparently that state is hemorrhaging residents about as fast as North Dakota is gaining them. That was true of Idaho several years ago when the Bakken boom began.]

So, the gap between the "haves" and the "have-nots" continues to widen, and the "haves" are able to buy cars.

On another note, my ten-year-old granddaughter tells me that everyone in her 5th grade class has an iPhone. I think I mentioned that the other day. Two days ago she couldn't live without an iPhone; yesterday she rationalized why she doesn't need one. She still confuses "android" with "iPhone" but I always correct her. I don't want her to make a faux pas at any social event.

Wouldn't this be the most perfect soundtrack for the lead up to the Syrian missile launch, say, the one hour before the strike begins?

Theme From Twin Peaks, Angelo Badalamenti

The NSA/White House could commandeer all television networks/cable stations, replace whatever would be shown with this still/music.

Play the music/video while reading the post, and imagine the lead up to the missile launch. The missile strike won't happen on a Friday (Muslim sabbath) and so it probably rules out a weekend launch, although a Sunday evening launch would work, allowing for a Monday morning briefing by the commander-in-chief, John Kerry Barry O'Bama.

You know how your computer locks up when it gets conflicting input? The same thing happens with my brain: it locks up when I see a video of John Kerry ready to kill innocent Syrians and then think back to April 23, 1971. Back in 1971, I had my lottery number -- that was the draft lottery -- one of the few lotteries in which you did not want to "win." My number was low enough to have been called up; I still don't know the back story.

And then, of course, this was a #1 song back in 1971:

How Do You Mend A Broken Heart? The Bee Gees

This could be the song for the aftermath. After the missile strike is over.


For the time-date stamp: if O'Bama launches, it will launch a replay of the 1962 Cuban Missile Crisis, and the outcome will be quite different. Vladimir Putin will not let Russia lose a second time.  It might behoove O'Bama's "brightest and best" to really think this thing through before doing something they regret.

Around The Horn

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. 

Wow! Talk about early morning market swings. Down as much as 125 points early on, after pre-market trading suggested an upward move of 70 points. The Dow has now recovered and is only down 35 points or so.

KOG with a huge move up, up 3%, and now trading at new highs, $10.69.

OAS even better, up almost 5% after a huge move yesterday. Trading near it's all-time high, $43.89.

CVX down slightly; COP up slightly; XOM down slightly -- mixed.

EOG up another $2.00, up almost 1.5%; at new highs, $163.94. Sweet.

CHK up.

SD up over 3%, continuing its incredible run.

HK up almost 2%; TPLM up over 2.5%. Incredible.

AMZG: down a bit; I assume a bit of profit taking after a tremendous run.

UNP up almost a dollar.

I don't follow BNSF (BRK) much any more; BRK follows the market in general.

ENB, EEP both up nicely.

SRE has struggled recently, but is up today.  TransCanada flat.

Friday Morning News, Links, And Views -- Krugman Must Have Missed The Bull Market --Part II

What happened to global warming and all those hurricanes we should be experiencing this summer? The Christian Science Monitor is even asking:
The weather system that had become tropical storm Gabrielle overnight Wednesday has abruptly lost strength and was demoted to tropical-depression status with sustained winds of only 35 miles per hour at 11 a.m. Thursday.
And so goes the 2013 Atlantic hurricane season so far.
The season has produced seven named storms to date – meaning tropical storms or hurricanes. Typically, the seventh named storm doesn't appear until Sept. 14, according to data gathered by the National Hurricane Center.
The number of named storms is on pace to fall within the range several seasonal forecasts have projected. On average, however, the season should have seen its first hurricane by now, and none has emerged. Indeed, the first major hurricane, with maximum sustained winds of 111 miles an hour or more, typically appears around Sept. 4, notes Dennis Felgen, spokesman for the National Hurricane Center.
The storms are there; they just don't develop into full-fledged hurricanes. I assume Allah is trying to make it easy for President O'Bama, allowing him to concentrate on war plans and not be bothered by those pesky requirements for photo ops when hurricanes do hit.

WSJ Links

Sugar processors defaulting on loans. 
Sugar processors have defaulted on about $34.6 million in federal loans due in August, the U.S. Department of Agriculture said.
The USDA said Thursday that processors had forfeited an estimated 85,000 tons of sugar put up as collateral for the loans, marking the first defaults for the U.S. sugar industry since 2005. The defaults are a setback for the USDA, which has spent $53.4 million buying sugar this year to reduce a glut of the sweetener that has sent prices tumbling.
Peak sugar?

Cancer vaccine not working
An experimental cancer vaccine failed to help skin-cancer patients in a GlaxoSmithKline PLC clinical trial, a setback for a hot area of medicine that seeks to harness the body's immune system to fight tumors.
When compared to a placebo, the vaccine, called MAGE-A3, didn't increase the amount of time melanoma patients lived without their disease returning, Glaxo said Thursday. The 1,345 patients in the late-stage trial were given either the vaccine or a placebo after their tumors were surgically removed.

Mr Paul Krugman must have missed the bull market. He finally gets it --
Nobel Prize-winning economist and New York Times columnist Paul Krugman argues in his new editorial that U.S. economic policy over the last five years has been “an astonishing, horrifying failure.” Krugman, a long-time critic of the Obama Administration’s stimulus efforts, writes that the U.S. government should have spent three times the amount of money it did to get the economy back on its feet:
“…if the U.S. government had actually been able and willing to do what textbook macroeconomics says it should have done — namely, make a big enough push for job creation to offset the effects of the financial crunch and the housing bust, postponing fiscal austerity and tax increases until the private sector was ready to take up the slack…we would be a richer nation, with a brighter future — not a nation where millions of discouraged Americans have probably dropped permanently out of the labor force, where millions of young Americans have probably seen their lifetime career prospects permanently damaged, where cuts in public investment have inflicted long-term damage on our infrastructure and our educational system.”
It should be noted that the money from the cuts in public investment had to have gone somewhere: DOE-bankrupt solar energy companies; automobile/union bailouts; bank bailouts; O'Bamacare. Can you imagine how much better off we would have been had all that money gone into infrastructure: highways, ports, pipelines, railroads, bridges?

The unemployment rate down just 0.5 percent in 56 months under President O'Bama. And the trillions of dollars for job training and stimulus. Wow. The unemployment rate down just 0.5%, Krugman finally noted what we've been saying for quite some time: a nation where millions of discouraged Americans have probably dropped permanently out of the labor force, where millions of young Americans have probably seen their lifetime career prospects permanently damaged.


I guess Yahoo!Finance took Krugman's story and expanded upon it:

The dominant story about the job market is no longer the nation’s 11.3 million unemployed people or the painfully slow pace of hiring. It’s the growing portion of the working-age population that has dropped out of the labor force and isn’t even looking for a job.
The jobs report for August seemed upbeat on the surface, since the unemployment rate dropped by one-tenth of a point to 7.3%. But analysts have been quick to point out that the unemployment rate fell because the number of people looking for work -- part of the numerator in the equation used to determine the unemployment rate -- declined. That’s usually a sign of an ailing economy, not a recovering one.
Overall, the U.S. economy is being driven by a smaller portion of the population. The percentage of adults either working or looking for work peaked in the late 1990s, declined gradually until the recession began at the end of 2007, then began to fall more sharply.
Black unemployment edges up: now up to 13% ("official" -- the real unemployment rate is estimated to be a lot higher.)

Bakken 101 -- Shorthand -- Naming Wells In 2560-Acre Spacing Unit -- Hess Method

It's possible this is nothing new for most readers, but it is something I just noticed. Hess has an interesting way of naming their wells on larger spacing units. For example:
  • 26380, loc, Hess, HA-Chapin-2560-152-95-3229-3328H-1, Hawkeye
The "2560" designates this as a well that will have a 2560-acre spacing. It will be in T152N-R95W. The well will be sited somewhere in sections 32/29 and will drill west-to-east into sections 33/28. From the name, one can't tell which section it will be sited in; the legal description says it will be in section 32-152-95.

And, of course, as soon as one sees "HA-Chapin," one sees:

Taxi, Henry Chapin

Note To The Granddaughters

The Harry Chapin song brings back incredible memories of my coming of age stories in Boston 30+ years ago.

"... you see, she was goin' be an actress, and I was going to learn to fly ...

... we both had gotten what we asked for such a long, long time ago ..."

Incredibly bittersweet. Could be followed up with Garth Brooks' "The Dance," but time to move on.

The President Orders The Pentagon To Expand The Syrian Target List; Job Growth Weak, Market Plunges -- Look At That Revision

I normally don't have stand-alone posts like this, but the headline struck me as quite remarkable. I can just see President O'Bama in "the tank" discussing war plans with his military brass. Why does Quentin Tarantino flash in front of me?

Inglorious Basterds, Quentin Tarantino

This must really be messing with the minds of the dovish liberal Democrats in Massachusetts -- their party going to war. Gotta love it. [I wrote the above before getting to the WSJ. The op-ed in today's WSJ: Obama's Syria problem -- his own democrats.
One political party is proving especially troublesome for President Obama in his quest for congressional authorization to strike Syria. Its members are trashing his strategy and priorities.
One congressman calls the situation "embarrassing"; another vows to "vote and work against the president's request"; still another has launched "" The party's outside partisan groups are mobilizing against an affirmative vote.
Yes, this is the Democratic Party.
The press is obsessed with the Republican reaction to Mr. Obama's resolution. But the party facing the biggest split over the vote—and whose actions will have the greatest ramifications for the presidency—is Mr. Obama's.
Things are not looking good for the president, and that's no surprise. Mr. Obama's liberal governance—cramming the economic stimulus, the health-care law, a cascade of regulations down voters' throats—led to the 2010 revolt. That midterm obliterated Blue Dogs and hawkish Democrats who would have been most supportive of the president's Syria mission. The remains of Mr. Obama's House caucus tilts significantly more to the left. It has been indulged by the president's lead-from-behind foreign policy and is unprepared to step up to Mr. Obama's call.
And so it goes.]

I think President O'Bama should have dumped Joe Biden and replaced him with John McCain as his vice president.


Wow, the job numbers came in really, really marginal, and the market plunges, down 110 points in early trading. Or maybe folks realize that President O'Bama will be directing military operations in a new war in the Mideast.

The job report, as reported by TheDailyTicker:
A weak jobs report just landed with a thud on Wall Street.
The numbers: 169,000 new jobs were created in August, just missing consensus estimates. There was a huge revision down for July however -- from 162,000 to 104,000. And the unemployment rate dropped to 7.3%.
Give it a bit to see how the market settles this morning and whether this number could push the Fed to delay the taper.
But stepping back, it’s important to remember where this jobs data really fits in the bigger picture of a labor market that has been severely stunted since falling off a cliff during the recession. Typically what gets all the attention is how the data came in relative to expectations, but that's too myopic of a view now.
And that's why we're going to war. To get Americans' minds off a) the economy, and, b) O'Bamacare.

China Going Back To The Drawing Board On Shale

This is a very interesting story -- I have had several posts over the past two years regarding this; it seems to be gaining traction -- the Bakken and the Eagle Ford are somewhat unique. Reuters is reporting that China is going back to the drawing board as shale gas fails to flow.

Can anyone say King Coal?

This is a 5-page internet article, not to be missed:
China has gone back to the drawing board on how to develop what could be the world's largest shale gas reserves after attempts to stimulate investment and engineer an energy revolution brought little progress in the gas fields.
Beijing has struggled to find a way to emulate the frenetic exploration and production activity of the shale gas boom in the United States, and the latest setback makes reaching even a modest 2015 output target of 6.5 billion cubic metres (bcm) unlikely.
This is only a fraction of the 224 bcm of shale gas the United States produced in 2011, and would amount to just 6 percent of China's total current output of natural gas.
But even that target is under threat as an eclectic mix of new participants in the sector drag their heels on development, while China's biggest energy companies prioritise spending on other oil and gas projects.
Frustrated with slow progress on shale from state energy giants PetroChina and Sinopec Corp, China in late 2012 encouraged a broad range of companies - including a property developer and a grains trader - to bid in its second shale gas auction.
Not one of the 16 firms that won exploration rights had ever drilled a gas well. But they did promise to spend at least $2 billion over three years to pump gas from shale.
And it ends with:
One of the challenges Chinese firms have struggled to overcome is how to adapt shale technology developed in the U.S. to China's geology. Chinese shale formations tend to be deeper than those that have provided the energy that has ended U.S. dependence on imported gas and slashed reliance on imported oil.
"A realistic way to look at China's shale gas is that it is a very rich resource, but one that needs a long process to unlock," said the government official. China took nearly 20 years to embark on full-fledged development of its conventional gas fields, he said, and shale may be similar.

Friday Morning News, Views, And Links -- Part I

Active rigs: 187 (steady)

RBN Energy: This is part 2 (I believe) of a continuing series on the economics dry natural gas wells in the Haynesville. I now know what a reservoir engineer does:
But producers have to make those estimates on a regular basis to understand the rate of return they will achieve on each well. That task falls to reservoir engineers whose job it is to estimate well production, production decline and EUR. Typically, reservoir engineers use complex geophysical models to arrive at these estimates. Analysts and investors are also interested to understand production estimates but, due to their limited access to data, they tend to adopt a more rule of thumb approach to modeling. We describe four methods here that are commonly used to estimate production.
Mixed news for investors; a bad omen, being reported by Reuters/Rigzone:
Oil and gas firms are cutting back on investments to try and improve profits and save cash for dividends, perhaps signalling an end to a decade-long boom in capital spending.
Companies seeking to bring oil fields into production have splashed out on new drilling, equipment or pipelines, supported by rising oil prices.
But suppliers and analysts expect investment growth to slow sharply this year and in 2014, in line with a projected fall in oil prices. The spending boom has squeezed budgets and forced companies to sell assets and issue debt to pay dividends.
Onshore spending will be hurt the most, including the saturated U.S. shale segment. New ultradeep markets, such as Brazil, West Africa and Mexico, will still flourish, however, as they offer the rare opportunities for big finds.
"Oil firms have a dilemma: They still need to grow their production, which is virtually flat and even declining, so they have to spend but will have to become much more selective," Magnus Lundetrae, the chief financial officer of Seadrill , the world's biggest offshore rig operator said.
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