Monday, September 9, 2013


Every now and then (generally on a daily basis) someone elsewhere complains that their share of Bakken royalties is not fair, but be that as it may, here's a a great story for those who thrive on schadenfreude.

I don't know how many have followed the divorce proceedings of the husband-wife team who own the Los Angeles Dodgers, but here's the story today, as being reported by The LA Times:
Jamie McCourt has no legal basis to force her ex-husband to share his record profit from the sale of the Dodgers, a judge ruled Monday.
In a 57-page ruling, Los Angeles Superior Court Judge Scott Gordon repeatedly dismissed Jamie McCourt’s claim that she was unaware of the potential values of the Dodgers and of a regional sports network as “not credible.”
Frank McCourt sold the Dodgers for $2.15 billion last year, five months after Jamie McCourt accepted $131 million in a divorce settlement. Guggenheim Baseball Management, the new owners, subsequently agreed to an $8.5-billion deal with Time Warner Cable to launch a regional sports network centered on the Dodgers.
I can't get my hands around these huge numbers, but $2.5 billion is 2,500 million dollars. So let's say $2,500. She got $131.

She needs to sue her attorney. She may not have been aware of the potential value of the Dodgers and a cable television deal, but certainly her army of $1,000/hour attorneys should have. Wow. Call me flabbergasted.

If I were he, I would hire a lot of body guards: "hell hath no fury like a scorned woman."


By the way, some sad news. In the same newspaper today, it was announced that Cal Worthington died. I grew up with Cal (on television). One of the originals.

Cal Worthington And His Dog Spot

Back in the 70's and 80's I drove by Cal Worthington almost every day when visiting California. Great memories.

ENB Announces Public Offering Of Up To 9 Million Shares

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

Press release here.
ENB today announced that it has commenced an underwritten public offering of approximately eight million of its Listed Shares (the "Shares"). Enbridge Management is expected to grant the underwriters a 30-day option to purchase up to an additional one million Shares.

Proceeds will be used to invest in an equal number of i-units of Enbridge Energy Partners, L.P.
Enbridge Partners will utilize such proceeds, including the proceeds from any exercise of the option to purchase additional Shares, to repay commercial paper, to finance a portion of its capital expansion program relating to its core liquids and natural gas systems and for general partnership purposes. Some or all of the net proceeds of this offering may be invested temporarily in short-term investment grade securities pending their use for such purposes.
All things being equal, shares of ENB should open about $41 tomorrow, but all things are not equal.

A Flurry Of Stories Regarding Whiting Today

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

Press release:
WLL today announced that it has priced a public offering of $1.9 billion aggregate principal amount of senior notes consisting of the following:
  • $1.1 billion of senior notes that mature on March 15, 2019 and bear interest at an annual rate of 5.000%, and
  • $800.0 million of senior notes that mature on March 15, 2021 and bear interest at an annual rate of 5.750%.
Whiting expects to use the net proceeds from this offering to repay all of the debt outstanding under Whiting Oil and Gas Corporation’s credit agreement, to fund its $260.0 million acquisition of Williston Basin assets, to retire its $250.0 million of outstanding 7.0% Senior Subordinated Notes due 2014 on or prior to their maturity on February 1, 2014 and for general corporate purposes including capital expenditures.
I don't know much about business, but paying off a 7% loan with 5% money seems a pretty decent move.

Moody's Investors Service assigned a Ba2 rating to Whiting Petroleum Corporation's (Whiting) proposed $1.8 billion of senior unsecured notes. At the same time, Moody's changed the rating outlook to positive from stable. Moody's also affirmed Whiting's Ba2 Corporate Family Rating (CFR), Ba3 rated senior subordinated notes, and Speculative Grade Liquidity (SGL) rating at SGL-2.

The proceeds from the proposed notes will be used to redeem Whiting's existing $250 million senior subordinated notes on or prior to their maturity on February 1, 2014, to repay all drawings under its revolving credit facility, to fund a $260 million acquisition in the Williston Basin, and to pre-fund its capital expenditure program through 2014.

Zacks like this, too: gives WLL a "strong buy" recommendation.
The company reported earnings surprises in three out of the last four quarters with an average beat of 5.51%. The long-term expected sales growth of Whiting Petroleum is poised at a promising 20.53%. Currently, the company’s asset divestiture, strategic acquisitions and strong hedging program have placed it well in the market.
The proceeds from the sale of its Postle assets will enable the company to invest in the resource-rich Niobrara and Bakken formations thereby expanding its future growth prospects. These plays have proved to be the major drivers of production for Whiting Petroleum in the first six months of 2013.
Oil and gas players are perennially on the lookout for reserve additions. Whiting Petroleum’s recent purchase of Williston Basin assets in North Dakota and Montana has given it access to the prolific Bakken and Three Fork shale formations.
In the near term, the company is relying on the low-cost operations of its Redtail and Missouri Breaks assets in Colorado and Montana, respectively, to drive production. Moreover, planned drilling activities and superior frack design execution at the operating plays will act as tailwinds for Whiting Petroleum.
Coincidentally, earlier today, I posted some observations from Whiting's August corporate presentation.  Those observations were posted before I saw the news about Whiting's public offering announcement today.

So, $1.51 billion deal for Oasis announced this past week, and now this $1.9 billion deal announced by Whiting. Pretty soon Wall Street might sit up and take notice.

Monday Evening News, Links, And Views

Wow, the UK thinks it won't be until 2020 before the country sees significant results from fracking.
UK Energy Secretary Ed Davey has urged caution regarding hype around the country's burgeoning shale gas industry, warning that the UK cannot rely on shale has to solve its energy challenges during the current decade.
In a speech titled "The Myths and Realities of Shale Gas Exploration" given Monday to The Royal Society, London, Davey said:
"We may have been fracking in Britain's offshore waters for years. The US may have been fracking onshore for years. But in Britain, fracking for onshore gas in shale, at any significant scale, is something new.
"Nobody can say, for sure, how much onshore UK shale gas resource exists. Or how much of it can be commercially extracted. So let's be cautious about hyperbole on shale.
"For it would likely be the 2020s before we might feel any benefits in full. So we can't bank on shale gas to solve all our energy challenges, today or this decade. And in the next decade, shale, by itself, will not come close to solving even our basic energy resource security challenge."

On top of a triple-digit advance on Wall Street today, futures look positive for tomorrow. Oil is dropping another dollar. That, by the way, is good news, even for Bakken operators, as we have discussed before. 

So, it's down to this for Ben's replacement at the Fed: Yellen, Summers, Geithner.
Rather Obama, hyper aware of growing economic inequalities, avidly wants to lessen them. To do so, he must promote economic growth calculated to help lead the country’s downtrodden out of poverty, and would need a new Federal Reserve chairman to tolerate far higher inflation levels than previous chairmen. So, Geithner might just fit the President’s bill.
Again, wrong: the president has no concern for the "downtrodden." Geithner may get the nod, but not because the president is concerned about the widening gap between the "haves" and the "have-nots."


Sixteen (16) New Permits -- The Williston Basin, North Dakota, USA; QEP With Three Huge Wells In The Helis Grail; Petro-Hunt ReportsTwo Nice Wells; QEP With Three Huge Wells

Active rigs: 184

Sixteen (16) new permits --
  • Operators: CLR (4), BR (4), Whiting (3), XTO (2), Mountain Divide, Zenergy, Oasis
  • Fields: Alger (Dunn), Heart Butte (Dunn), Fortuna (Divide), Dollar Joe (Williams), Corral Creek (Dunn), Foreman Butte (McKenzie), Sanish (Mountrail), North Creek (Stark)
  • Comments:
Wells coming off the confidential list earlier today have been posted; see sidebar at the right.

Twelve (12) producing wells completed:
  • 25515, 303, Whiting, Rigel State 11-16XH, Sanish, t8/13; cum --
  • 24686, 2,207, QEP, G. Levang 13-32/29H, Grail, t8/13; cum --
  • 24687, 2,740, QEP, G. Levang 4-32-29BH, Grail, t8/13; cum --
  • 24685, 2,994, QEP, G. Levang 3-32-29BH, Grail, t8/13; cum --
  • 25076, 726, OXY USA, Charles Tompkins 1-31-30H-144-97, Little Knife, no data at NDIC; still listed as conf;
  • 24504, 827, Hess, BB-State 151-96-0310H-2, Blue Buttes, t8/13; cum --
  • 22799, 574, Hess, LK-Dukart 145-97-0310H-2, Little Knife, t8/13; cum --
  • 23499, 694, Hess, BB-Burk-15195-0718H-2,  Blue Buttes, t8/13; cum --
  • 24861, 595, Hess, BW-Sharon 150-100-2536H-3, Timber Creek, t8/13; cum 10K 7/13;
  • 24503, 733, BB-State 151-96-3625H-2, Blue Buttes, t8/13; cum 10K 7/13;
  • 24371, 842, Hess, EN-Weyrauch A-154-93-1720H-6, Robinson Lake, t8/13; cum 7K 7/13;
  • 22800, 746, Hess, LK-Obrigewitch 146-97-3427H-3, Little Knife, t8/13; cum 6K 7/13;
Wells coming off the confidential list on Tuesday:
  • 23195, drl, Statoil, Hospital 31-36 3H, Alger, no production data;
  • 23361, drl, CLR, Atlanta 12-6H, Baker, no production data;
  • 23515, 303, Petro-Hunt, L. Hoiby 159-94-30C-19-3H, North Tioga, middle Bakken, 30 stages; 3.3 million lbs; 500 to 2,000 units; t51/13; cum 30K 7/13;
  • 23668, drl, KOG, Koala 8-5-6-4H3, Poe, no production data;
  • 24010, 1,810, MRO, Cummings USA 41-6TFH, Van Hook, t8/13; cum --
  • 24015, 507, CLR, Colfax 3-19H, Oliver, t7/13; cum 5K 7/13;
  • 24326, 1,674, Petro-Hunt, Vera 1-1H, Clear Creek, middle Bakken; 30 stages, sliding sleeve; t5/13; cum 45K 7/13;
  • 24947, drl, QEP, Lawlar 2-5-8BH, Grail, no production data;
  • 25013, 23, CLR, MPHU 13-10H, Medicine Pole Hills, a Red River well; t5/13; cum 2K 7/13; 
I made a mistake yesterday talking about the "backlog" in fracking. Some of the "backlog" is scheduled operations due to pad drilling. Due to pad drilling, it makes it difficult to determine just how severe the "backlog" is. My hunch: it's not as bad as I first thougth. 


23515, see above, Petro-Hunt, L. Hoiby 159-94-30C-19-3H, North Tioga:

DateOil RunsMCF Sold

24326, see above, Petro-Hunt, Vera 1-1H, Clear Creek:

DateOil RunsMCF Sold

I Wonder If The National Geographic, Smithsonian, BloombergBusinessweek, Huffington Post, New York Times ....

... will post the NASA graphic as seen at CarpeDiem. [I guess that graphic has been removed -- December 12, 2014.] From CarpeDiem:
A chilly Arctic summer has left nearly a million more square miles of ocean covered with ice than at the same time last year – an increase of 60 per cent. The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013. Instead, days before the annual autumn re-freeze is due to begin, an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores (see NASA satellite image at the link).
If you aren't enraged yet, you haven't been paying attention. 

I posted the above information earlier but not the graphic, which is quite stunning.

First The Australians, Now The Norwegians

First it was Australia, scrapping the carbon tax, kicking the "green" government, and electing a pragmatic realist.

Now it's the Norwegian's turn. The FT is reporting:
The results mark a decisive rightward shift in the Nordic country of 5m inhabitants where more than a decade of oil wealth is raising questions of how to spend that money.
“This is a historical result. It is the first time in 24 years that we have a Conservative prime minister,” Jan Tore Sanner, deputy leader of the Conservatives, told the Financial Times.
You might recall that the liberal Norwegian government wanted open their "Legacy Fund" spigot. As noted earlier, I have no earthly idea why would need all that money
Labor this year proposed spending 3.3 percent of the fund to plug budget deficits, staying within the 4 percent rule for a fourth year. Still, with the fund quadrupling in size since the middle of last decade, that represents a 19 percent increase in government spending versus 2012.
The government estimates the fund will grow about 50 percent by 2020.

Packers Plus In The News

For background, two related links:
At the second link, you have to scroll through a lot to get to the story on Packers Plus but you will scroll through some fun.

Now, fast forward to today: Packers Plus suing others, claiming fracking infringement.
“An entire new generation of wells in the last five years, [promoted by] resource plays where 75% of the wells drilled are horizontals and fracked, with all kinds of problems and solutions they are creating, is rewriting the book on how to drill and complete a well,” he said.
Packers Plus, headed by engineer Dan Themig, led the change with advances such as the ‘ball drop.’
The technology involves launching a ceramic ball the size of an orange with fluid into a horizontal well. When the ball reaches the bottom it activates a port and opens a sleeve.
Sand is pumped down at high pressure to fracture the rock. When the fracturing is completed, another ball is launched to fracture the next stage. The same process is repeated at high speed multiple times, resulting in multi-stage fracking.
The technology has been deployed all over the world and is behind the success of the Bakken and the Montney fields, among others.
But it’s also expensive and competitors have come up with similar methods as oil and gas companies push for lower drilling costs.
Packers Plus, which has spent tens of millions on R&D, obtained a patent for its invention in 2012.
Go to the link for the full story. Fascinating. The Bakken as laboratory. 

For Investors Only: Bakken Bullishness Leading Commodities Sector

At SeekingAlpha:
In Friday's article we discussed the transaction that Oasis Petroleum completed to drastically scale up their operations in North Dakota's prolific Bakken shale oil play. We have had numerous emails sent to us, as well as some comments in much older articles, where readers believe that our optimistic outlook on these junior E&P names is misplaced. We would disagree and based on some of the research we did this weekend, which focused a good bit on the Bakken, we believe that we were possibly not bullish enough.
Readers may remember our bearishness as it pertained to Magnum Hunter Resources due to their accounting issues. It was a big issue when we wrote about it with many readers getting upset that we took a short-term view of the accounting discrepancies. In our experience that is the only way to play the situation but we did say at the time that the bearishness had absolutely nothing to do with the company's properties and everything to do with their accounting. This ties into the Oasis news because Magnum Hunter announced that they did in fact participate in the sale of a portion of the acreage to Oasis. Although Magnum Hunter only came away from the deal with $32.5 million, it was a small deal on their part, the move does highlight the value of the rest of their portfolio - and it is our opinion that those holdings would be much more valuable.
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. 

Some Random Observations From Whiting's August, 2013, Corporate Presentation

Disclaimer: I often make typographical errors. Again, the blog is for my personal use (see "welcome/disclaimer") but I post it publicly for folks who might be interested. I try to be as accurate as possible when posting about the Bakken, but I do make errors. I recommend folks go to the original source.

Slide 10 (I am unsure of the meaning of some symbols in the legend, but I believe I am correct in the following):
Whiting notes four zones in the middle Bakken, Zones A, B, C, and D. In this particular slide, Whiting does not note the various benches in the Three Forks.

Zone A:
  • TOC: 6.3 to 7.9%
  • OOIP: 6 (mmboe/1280 acre)
Zone B:
  • TOC: 4.4 to 6.1%
  • OOIP: 7
Zone C:
  • TOC: 6.0 to 9.4%
  • OOIP: 6
Zone D:
  • TOC: 4.7 to 6.5%
  • OOIP: 11
Three Forks
  • TOC: 7%
  • OOIP: 9
[Back of the envelope: 40 x 0.05 x 75 = $150 million/1280-acre drilling unit at the wellhead.]

Slide 11:
  • Whiting adds another 19 million bbls OOIP in Bakken shale; recovery efficiencies < 2%
  • Whiting feels Zone D is underexploited 
Slide 12:
  • proposed drilling plan for Whiting's various prospects
  • as few as 6 wells per spacing unit in the Pronghorn prospect
  • as many as 15 wells per spacing unit in the Hidden Bench prospect
Slide 13:
  • graphic of Whiting's recent acquisition
  • 17,282 net acres smack dab between its Missouri Breaks and Hidden Bench prospects
  • even with the pricey new acquisition, Whiting states: as of 6/30/13, Whiting's total acreage cost in 697,259 net acres is approximately $383 million, or $549/net acre"
  • for perspective: Oasis recently announced 161,000 acres for $1.51 billion
  • cost of Red River wells: $3 to $3.5 million; EUR: 250K/well
  • compare with "Bakken wells": $6 to $8.5 million
Slide 19:
  • North Dakota production exceeds pipeline capacity
  • rail plus pipeline exceeds production
Slide 20:
  • Whiting has a robust oil and gas gathering system in the Williston Basin
Slide 21:
  • realized prices in 2Q12: $75/bbl
  • margins in 2Q12: $50/bbl

Some Random Observations From Whiting's August, 2013, Corporate Presentation

Slide 10 (I am unsure of the meaning of some symbols in the legend, but I believe I am correct in the following):


How Much Is Green Energy Costing The Germans? Green Energy Is Adding 20 Percent To Germany's Cost Of Living

Remember my earlier post this morning -- how cheap electricity is in Texas?  TXU is now offering those who switch to their service, completely "free" electricity either all weekend, or "free" electricity Monday through Friday, 10:00 p.m. to 6:00 a.m.

Compare that with the German experience:
German consumers already pay the highest electricity prices in Europe.
But because the government is failing to get the costs of its new energy policy under control, rising prices are already on the horizon.
German Environment Minister Peter Altmaier’s predecessor once claimed that switching Germany to renewable energy wasn’t going to cost citizens more than one scoop of ice cream. 
Today Altmaier admits consumers are paying enough to “eat everything on the ice cream menu.” The government predicts that the renewable energy surcharge added to every consumer’s electricity bill will increase by 20 percent.
And with energy underpinning "everything," one can safely say this will add 20 percent to their costof livign.

How Much Is Green Energy Costing The Germans? Green Energy Is Adding 20 Percent To Germany's Cost Of Living

Remember my earlier post this morning -- about how inexpensive electricity is in Texas? TXU is offering "free" electricity to those who switch. New residential customers can choose to have all their weekend electricity "free" or all their night-time electricity, Monday through Friday, 10:00 p.m. to 6:00 a.m. free. I'm going with night-time free electricity; I can run the air conditional all night at no charge, and lower my monthly $45 electric bill even further. On weekends, I will spend the days at Starbucks or at the pool, and leave the a/c off at home.

Meanwhile this is the German experience with "green" energy:
German consumers already pay the highest electricity prices in Europe.
But because the government is failing to get the costs of its new energy policy under control, rising prices are already on the horizon.
German Environment Minister Peter Altmaier’s predecessor once claimed that switching Germany to renewable energy wasn’t going to cost citizens more than one scoop of ice cream.
Today Altmaier admits consumers are paying enough to “eat everything on the ice cream menu.” The government predicts that the renewable energy surcharge added to every consumer’s electricity bill will increase by 20 percent.
And because energy underpins everything else in the economy, one can safely say that "green" energy will raise the cost of living in Germany by 20 percent over time.

The linked article continues:
This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project.
Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.
If there is too much power coming from the grid, wind turbines have to be shut down. Nevertheless, consumers are still paying for the “phantom electricity” the turbines are theoretically generating.
Go to the linked article to see just how bad this had gotten. 

Around The Horn; Very Early Morning Trading

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. 

Oops, KOG does it again. KOG hits a new high ($10.85).

Oasis up nicely; flirting with a new high.

CVX, COP, XOM: all up slightly.

EOG up nicely again.

CHK is up, flirting wit new highs; but SD is down slightly, essentially flat. Re: CHK --
Thursday, September 5, will most likely go down as one of the worst days in the history of Chesapeake Energy. Why is that, you ask? According to Jacqueline Sahagian, "Chesapeake is being forced to give up a substantial chunk of land in New York, as the state doesn't look like it will lift its existing ban on hydraulic fracturing anytime soon and the company must also pay a $7.5 million settlement to Pennsylvania landowners who accused the company of making illegal deductions from their royalty payments". In the wake of Thursday's news, I wanted to take a closer look at Chesapeake and highlight a number of additional catalysts that I think could be beneficial to any investment related decision regarding shares of the company's stock. [Later, September 10, 2013: Rigzone is reporting that CHK "terminates" 13,000 acres in New York State.]
If in fact, we are entering a period of "global cooling," CHK should do well, and Warren Buffet with his COP will look like a genius, again (although I think he sold off a lot of his COP; I lost the bubble on that).

AMZG flat.

TPLM up 2%. HK flat/up a penny.

UNP up a bit. Zacks is reporting:
UNP recently introduced “Arrowedge,” an aerodynamic fuel and locomotive technology that reduces emissions from double-stack intermodal freight trains. With the latest technological development, the company expects to enhance fuel efficiency on its locomotives, ultimately resulting in improved costs.
Union Pacific currently holds two patents for this new technology in the U.S. and is awaiting additional patents in the U.S. and Canada. Over the near term, the company expects to utilize Arrowedge in its double-stack train service between Joliet, IL and Long Beach, CA.
Double-stack and double-track, I believe.

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

ENB, EEP both up slightly.

SRE down; TransCanada flat.

Number Of Wells Going To DRL Status Might Be Setting Some Sort Of Record

Wow, this is quite remarkable.

Wells coming off the confidential list have been posted.

Eighteen wells came off the list over the weekend and today. Several (I believe four) went from confidential back to "loc" although it appears they are all on "drl" status. I could be wrong on that.

Definitely, of the 18 wells that came off the confidential list, only 7 reported an IP. All of the rest went to DRL status (though one was said to be LOC and DRL not mentioned).

But 10/17 went to DRL status. It was the wettest spring on record this year and that put everyone behind on fracking. Not only does it put folks behind on fracking simply because of weather delays, but the schedule gets really screwed up, compounding matters.

Some other observations:
  • OXY USA has another OXY USA well -- a lot of story lines there
  • KOG has another very nice well; say what you want about IPs, they are what they are
  • the North Dakota Spearfish wells continue to look promising

Monday Morning Links, News, And Views -- IBM, TimeWarner, Join GE -- Part II

Here's an idea. The oil companies who want to frack for oil in New York ought to offer to fund the New York Opera. Wow, wouldn't that be a gut check? It looks like the New York Opera is about to go under (again). And, to think that all that oil royalty income for the state of New York could do so much for its citizens.
New York City Opera will cancel the rest of its season and could fold entirely if it doesn't raise $7 million by the end of September, company officials said Sunday.
The emergency capital campaign, aiming for $20 million by the end of the year, comes two years after the company pulled itself out of a financial tailspin by trimming its budget, cutting productions from its season and leaving its longtime home at Lincoln Center.
While those painful measures—criticized at the time by many opera supporters—allowed City Opera to balance its budget for the first time in more than a decade, it since then has struggled with cash-flow problems.
You can show them how to do it, but only they can decide. 

North Dakota, with $500 million/year in royalties, North Dakota could fund the $7 million the NY opera needs with about a week's worth of oil money. Just saying. A week's worth.


Might Congress step in and repeal the US Renewable Standard, the one requiring 15% ethanol? Unlikely. Iowa farmers can sleep peacefully.


Austrian oil company OMV halts production in Libya due to civil unrest.

A South Korean giraffe sets a record for calving its 18th baby. Cool.
Until Sunday, Jang-soon had shared the record of 17 offspring born in a controlled environment with a giraffe named Lamba at Paris zoo, which died in 2005.
Jang-soon belongs to the endangered reticulated-giraffe subspecies characterized by white-lined polygonal shapes on a brown coat. There are less than 5,000 reticulated giraffes living in the wild, mostly in eastern African nations like Somalia, Ethiopia and Kenya, according to the Giraffe Conservation Foundation.
Sunday was coincidentally the mother’s 27th birthday, Everland said. She was born in 1986 and gave birth for the first time at age four. The gestation period for a giraffe is around 15 months, meaning Jang-soon has been carrying offspring most of her adult life. She once gave birth to twins.
The ever-enduring Jones Act is not going to go away. Sad face.
The US maritime industry loves it, refiners tolerate it and traders scorn it. The nearly 100-year-old Merchant Marine Act of 1920, or the Jones Act, is regarded both as an American job saver and as a protectionist burden on taxpayers that raises the price of gasoline.
The Jones Act requires that all goods transported by water between US ports be carried in US-flag ships, built in the US, owned by US citizens and crewed by US citizens (and permanent residents). It was designed as both a national security measure and as a way to support US shipyards, tug and barge owners, as well as other US maritime interests.
Almost a year ago, when Hurricane Sandy battered oil market infrastructure on the US Atlantic Coast—taking pipelines, ports and refineries offline that caused widespread fuel shortages—the Department of Homeland Security was forced to issue a blanket waiver of the Jones Act to all shipping for 12 days. It was the first time it had been waived since Hurricane Katrina struck in 2005.
Average US household gained $1,200 in 2012 thanks to surging US oil production. I used my $1,200 to install a home entertainment system for my wife in her artist studio. The over-sized flat screen television will air "CreateTV" 24/7.

I had forgotten that GE moved it retirees off its health care program; pushing them on the Federal program
America's biggest employers, from GE to IBM, are increasingly moving retirees to insurance exchanges where they select their own health plans, an historic shift that could push more costs onto U.S. taxpayers.
Time Warner Cable Inc. (TWC) yesterday said it would steer retired workers toward a privately run exchange, days after a similar announcement by International Business Machines Corp. General Electric Co. (GE) last year said it, too, would curb benefits in a move that may send some former employees to the public insurance exchanges created under the 2010 Affordable Care Act.
While retiree health benefits have been shrinking for years, the newest cutbacks may quickly become the norm. About 44 percent of companies plan to stop administering health plans for their former workers over the next two years, a survey last month by consultant Towers Watson & Co. (TW) found. Retirees are concerned their costs may rise, while analysts predict benefits will decline in some cases. 
GE's CEO was O'Bama's economic adviser at the time time, so he got the jump on things.

An Inconvenient Truth -- BBC Predicted Years Ago That The Arctic Would Be Ice-Free By 2013 -- Well, That Didn't Happen -- But I Got The T-Shirt

The Telegraph is reporting:
There has been a 60 per cent increase in the amount of ocean covered with ice compared to this time last year, they equivalent of almost a million square miles.
In a rebound from 2012's record low an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia's northern shores, days before the annual re-freeze is even set to begin.
The Northwest Passage from the Atlantic to the Pacific has remained blocked by pack-ice all year, forcing some ships to change their routes.
A leaked report to the UN Intergovernmental Panel on Climate Change (IPCC) seen by the Mail on Sunday, has led some scientists to claim that the world is heading for a period of cooling that will not end until the middle of this century.
If correct, it would contradict computer forecasts of imminent catastrophic warming. The news comes several years after the BBC predicted that the arctic would be ice-free by 2013.
Some folks already knew this. Canada was the first signatory to leave the Kyoto Protocol. Australia, this past week, scrapped the "carbon tax," threw out the "green" prime minister, and voted in a pragmatist and realist. Meanwhile, the US will keep is collective head in the sand. The cooling sand.

Tumbling Tumbleweeds, The Sons of the Pioneers

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

Active rigs: 186

Futures (6:58 a.m. CST): Dow up 32; oil down 71 cents.

RBN Energy: seventh in a series -- can Canadian railbit crude compete with pipelines?

WSJ Links

Great article for couples in retirement who lead "parallel lives."  
Absence often does make the heart grow fonder; couples usually enjoy each other more after they have had some time apart. Whether partners live in different cities part of the time or just spend a few hours apart, they usually appreciate each other more when they are together. They take each other for granted less; they probably communicate better; and they usually have a stronger bond of both physical and emotional intimacy because they have a greater appreciation of each other as capable, separate, interesting people.
On the Missouri River in Montana:
Several years ago, I read "Undaunted Courage" by Stephen Ambrose, an account of the Lewis and Clark expedition of 1804-1806. In his introduction, the author describes canoeing the upper Missouri River with his family. I was instantly intrigued. Our family has always been up for outdoor adventures, so the planning began.
We first found an outfitter in the little town (two buildings) of Virgelle, Mont. We flew into Great Falls, Mont., drove to Virgelle and, after getting familiar with our gear, put in at Coal Banks Landing. 
Over the course of four days, we worked our way downstream through the spectacular White Cliffs area of the Missouri Breaks, almost exactly as Lewis and Clark saw it more than 200 years ago. All that was missing were the vast herds of buffalo and elk, though we saw mule deer and some pronghorn antelope.
It's difficult to describe the feelings that surface during such a journey. I think wanderlust comes close. It's almost a spiritual experience: lost in the immensity of the landscape but still knowing you're part of the country. To share it with people you love is what life is all about.
Another long article on health exchanges and retirees. The headline: Time Warner joins IBM in health shift for retirees.
Yet while these efforts are just ramping up—and creating a good deal of anxiety in the process—hundreds of thousands of retirees are already using exchanges to pick Medicare plans, and many more are likely to do so in the months ahead as companies look for ways to fix their health-care costs by moving to the "defined contribution" model they adopted for pensions years ago. 
Although this is not an investment site, and folks should not make investment decisions based on what they read here or what they think they read here, the linked article provides investors some interesting ideas. 

By the way, Australia scrapped the "carbon tax." They threw out their "green" prime minister and elected a realist and pragmatist. Canada withdrew from the Kyoto Protocol years ago; was the first signatory to do so. Just some idle rambling.

Op-ed: Obama's successful foreign failure. (I entertained this thought early on. "My credibility is not on the line. America's credibility is on the line.")
Summing up the net effect of all this, as astute a foreign observer as Conrad Black can flatly say that, "Not since the disintegration of the Soviet Union in 1991, and before that the fall of France in 1940, has there been so swift an erosion of the world influence of a Great Power as we are witnessing with the United States."
Yet if this is indeed the pass to which Mr. Obama has led us—and I think it is—let me suggest that it signifies not how incompetent and amateurish the president is, but how skillful. His foreign policy, far from a dismal failure, is a brilliant success as measured by what he intended all along to accomplish. The accomplishment would not have been possible if the intention had been too obvious. The skill lies in how effectively he has used rhetorical tricks to disguise it.
The key to understanding what Mr. Obama has pulled off is the astonishing statement he made in the week before being elected president: "We are five days away from fundamentally transforming the United States of America." To those of us who took this declaration seriously, it meant that Mr. Obama really was the left-wing radical he seemed to be, given his associations with the likes of the anti-American preacher Jeremiah Wright and the unrepentant terrorist Bill Ayers, not to mention the intellectual influence over him of Saul Alinsky, the original "community organizer."
As they say, if you are not outraged yet, you are not paying attention.

Two Organizations That Would Love To Hear From You

Heaven's Helpers in Bismarck, North Dakota.

Your local Salvation Army.

Have a great week.

How Cheap Is US Energy? Free In Some Cases

TXU is now advertising: if folks switch over to TXU, they can choose between getting their weekend electricity FREE or their night-time electricity FREE. Folks can elect to get their entire weekend electricity use free or they can elect to get electricity use between 10:00 p.m. and 6:00 a.m. completely free.

Time Warner Joins IBM, GE: Moves Its Retirees Off Company Health Plan; Over To ObamaCare Health Exchanges


Up to 80 million could lose employer coverage; small business coverage -- Fox News, November 26, 2013. 
Firms punting employees to ObamaCare -- WSJ, September 26, 2013.
Time Warner, IBM -- leading the way for the future of health care -- Yahoo!Finance, September 16, 2013.
ObamaCare is killing traditional employer-sponsored health insurance, Forbes, September 23, 2013

OBCCS Meta-Lists 

Moving Retirees Off Company-Health Care Plans

Major companies, the list:
Small businesses, the list:

Target -- announced January 22, 2014; moving part-time workers off company health plan
Sears Holding
Darden Restaurants
Indiana University 
Emory University, Atlanta, GA
Vanderbilt University Medical Center, 1,000 layoffs
Cleveland Clinics: 3,000 layoffs
Home Depot: 20,000 part-time workers off company health plan

Warning Shots Across The Bow

McDonald's franchisees
Small businesses, Minnesota case study

Original Post

I assume there are many, many companies doing this without headlines or fanfare, but with IBM earlier and, now, Time Warner, the die is cast. Companies are going to move their retirees off company plans and over to health exchanges.

I've maintained for quite some time that for investors, O'BamaCare will be good news.

First, companies will move their retirees and, perhaps even their employees over to the health exchanges. Besides saving money, this will make it much easier to budget. Instead of guessing how much their health insurance will increase in the out-years, companies can simply budget what they will contribute to employees to use as they wish signing up/not signing up at the health care exchanges.

Second, companies will move as many employees as possible to under 30 hours, decreasing still more the number of employees eligible for health care.

Kaiser noted this as far back as October, 2012: moving retirees off company-health plans.