Tuesday, September 17, 2013

$80 Million Bet On Triangle; The City Of Alexander Will See Huge Storage Complex

This was in the news yesterday. I missed it. Investors must have liked the news; TPLM up almost 5% today.

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

Press release:
TPLM today announced that it has signed definitive agreements with joint venture partner First Reserve`s Energy Infrastructure Fund ("FREIF") to expand the Caliber Midstream Partners, L.P. ("Caliber") midstream and infrastructure system.
Expansion Project Details
  • The expanded Caliber system will service all Triangle-operated acreage in McKenzie County, ND including recently acquired assets
    • Expansion service lines include crude oil stabilization and transportation, produced water transportation and disposal, and freshwater delivery services
  • Expected to be in-service on or before June 1, 2014
  • Expansion project includes a 50,000 bbl/d pipeline from the Caliber Central Facility to Alexander, ND, where Caliber plans to build 40,000 barrels of crude oil storage and related infrastructure, providing Triangle and other customers with access to multiple crude oil pipelines, rail terminals and market centers in the Williston Basin 
Financial Funding & Capital Structure Details
  • FREIF will make an $80 million incremental equity investment
    • 8,000,000 Series A Units purchased at a price of $10.00 per unit
  • Triangle is not committing any capital to the new equity round
Comments: Alexander is a very, very "city" south of Williston. To get an oil storage complex in that area for TPLM oil suggests to me that Triangle expects to be producing a lot of oil before this is all over.

It's very, very possible, this is just the beginning of a huge new oil company in western North Dakota. I assume other operators have similar storage complexes, but I don't read of many. So, we'll see. 
I have remarked before that TPLM is in a very, very good area of the Bakken.

Related news: TPLM adds acreage in the Bakken; see sidebar at the right for other deals in the Bakken.

Eleven (11) New Permits -- The Williston Basin, North Dakota, USA; WPX And XTO Each Report A Nice Well

Active rigs: 180 (up nicely)

Eleven (11) new permits --
  • Operators: Hess (4) Newfield (3), Corinthian, Hunt, Triangle, Cornerstone
  • Fields: Westberg (McKenzie), Northeast Landa (Bottineau), Bear Butte (McKenzie), Rosebud (Williams), Rainbow (Williams)
  • Comments: Cornerstone has a wildcat in Burke County. Hess has permits for four wells in Rainbow oil field, which is in northeastern Williams County, along the Divide county line.
Only two wells came off the confidential list today; both went to DRL status; see sidebar at the right.

Wells coming off the confidential list Wednesday:
  • 23312, 690, WPX, Good Bird 36-25HB, Moccasin Creek, t6/13; cum 26K 7/13;
  • 24038, 1,620, XTO, FBIR Darcie 34X-14D, Heart Butte, t6/13; cum 17K 7/13;
  • 24074, 285, Fidelity, Enander 41-32H-29, Stanley, t3/13; cum 24K 7/13;
  • 24869, drl, Hess, EN-Fretheim A 155-93-3334H-8, Robinson Lake, no production data,
  • 25054, 95, Legacy, Legacy Et Al Wunderlich 5-6 2H, Souris, a Spearfish well, t5/13; cum 7K 7/13;
 ********************************

23312, see above, WPX, Good Bird 36-25HB, Moccasin Creek

DateOil RunsMCF Sold
7-2013253204310
6-20134710


24038, see above, XTO, FBIR Darcie 34X-14D, Heart Butte:

DateOil RunsMCF Sold
7-201346520
6-2013119230

CLR's Guidance For 2014

A reader sent me this. I would have missed it. Thank you. Great update.

Petroleum News is reporting:
In 2014 Continental Resources expects to increase drilling rigs in the Bakken from 20 to 21, but in its other major operating area, the South Central Oklahoma Oil Province, or Scoop, it plans to bump up the number of rigs from 10 to 18.
Still, the Williston Basin’s Bakken play will get the bulk of the company’s 2014 capital expenditure budget, Continental officials said Sept. 11 in a 2014 operating and financial guidance conference call.
In 2014 Continental plans to complete 300 net wells (886 gross) in the Bakken petroleum system, finalize four well density pilots involving 47 wells, and start three more density projects based on the results from the first four.
By the end of that year, Continental expects to be producing 200,000 barrels of oil equivalent per day, about two-thirds of which will come from the Bakken in North Dakota and Montana’s Williston Basin. By the end of 2013, the company-wide exit rate is going to be close to 150,000 boe per day, according to Jeffery B. Hume, vice chairman of strategic growth initiatives.
Continental’s projected capital budget for next year will be $4.05 billion, the bulk of which will go to its Williston Basin Bakken assets. The rig count next year will be split between North Dakota and Montana, with 17 rigs in North Dakota and four in Montana.

Simply For The Archives: Where Is Fisker?

Yahoo/Reuters is reporting:
The U.S. Department of Energy will auction next month a green technology loan made to Fisker Automotive, a move that may allow the struggling company to mount a comeback under a new owner.

Fisker, which has not built a vehicle in more than a year, now owes $168 million to the DOE. The auction is scheduled for October 11 with bids due on October 7, according to a notice posted on Tuesday on govsales.gov, which tracks government asset sales.
The auction comes about a month after the DOE put its $50 million green-energy loan to the Vehicle Production Group LLC on the block. The loan was later sold for $3 million.
"After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker's loan obligation, offering the best possible recovery for the taxpayer," said Peter Davidson, executive director of the DOE's loan program office, in a blog post.
Another great investment paid for by the US taxpayer.  See also the "list of 38."

Another One Bites The Dust

Yahoo/AP is reporting:
Ecotality, which makes charging systems for electric vehicles, has filed for Chapter 11 bankruptcy protection.
Ecotality Inc. said it made the filing Monday in Arizona. The company had said in August that it might be forced into a sale or bankruptcy filing after disappointing sales and a suspension of payments from the federal government. It has also paid $855,000 in back wages and damages to resolve an investigation by the U.S. Department of Labor into allegations that the company broke labor laws.
The San Francisco company makes charging and power-storage systems for electric vehicles under the Blink and Minit Charger brands, including charging stations for the Nissan Leaf. It also does testing for government agencies, auto makers and utilities.
Ecotality has received more than $100 million in funding from the Department of Energy since 2009. The company has also received funding from the state of California and from Australia.
So, we will add this to the "list of 38." 

Update On Additional Natural Gas Takeaway Capacity For Burke, Mountrail Counties; Aux Sable's Prairie Rose Pipeline, and Summit Midstream's Alliance Pipeline; Increases Local Takeaway Capacity By Almost 50%

Related headlines:
More takeaway capacity for North Dakota natural gas identified.

The Prairie Rose Pipeline, owned by Aux Sable, Calgary, with origins in Burke and Mountrail County, will feed natural gas from these two counties into the Alliance Pipeline, owned by Summit Midstream Partners; this pipeline is 2,300 miles long and runs from western Canada to the Chicago hub.

Capacity:
  • Current agreement: 17 million cubic feet/day
  • New agreement: 25 million cubic feet/day
 That's almost a 50% increase in one pipeline system.

According to the September, 2013, Director's Cut, North Dakota produces slightly less than 1 million-thousand OR 1 billion cubic feet/day. So, if I did the math correctly (and that's a huge "if), the 25 million cubic feet represents about 2.5% of the total amount of natural gas produced in North Dakota on a daily basis. Again, I make a lot of math errors, and millions/billions cubic feet of natural gas continues to confuse me.

The Bismarck Tribune is reporting:
Calgary-based Aux Sable Midstream LLC and Summit Midstream Partners LP of Dallas said up to 25 million cubic feet of natural gas daily will be sent from Burke and Mountrail counties along a 2,300-mile pipeline system. Alliance Pipeline Ltd.'s pipeline runs from western Canada to the Chicago hub, where the gas is sold to Midwest and East Coast markets. In North Dakota, the pipeline is fed by the Prairie Rose Pipeline owned by Aux Sable.
Summit spokesman Marc Stratton said about 17 million cubic feet of North Dakota natural gas is being shipped at present under an existing pact that has been in place since late 2011. Stratton said work is being done by Summit to bump the gathering capacity of natural gas in western North Dakota to about 30 million cubic feet daily by mid-2014.

Idle Musings On Whiting, KOG, Repsol; Four Companies That Could Buy Whiting -- September 17, 2013

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.

WLL has been trending higher since May, but in lots of fits and starts. But today, it trades near its 52-week high and is up over 4% without any news.


This is old news now, posted yesterday or the day before (LOL), but the article certainly deserves another look:
A bid from Repsol would give a jolt to the U.S. oil patch, where deal-making has fallen off this year and is on track for its lowest level since 2009, according to data provider Dealogic.
Several U.S. companies around the size that Repsol seeks have recently explored sales without finding buyers, including Whiting Petroleum Corp. and Kodiak Oil & Gas Corp., which have stock-market values of about $6.4 billion and $3 billion, respectively.
It also might be a good day to familiarize oneself with WLL.  WLL is bit more complicated to follow than KOG. At the link you will find WLL's most recent presentation; the last WLL presentation I looked at was back in August.

Although WLL is concentrated on the Bakken right now, KOG is 100% Bakken. WLL can offer Repsol a toehold in the Permian, mid-continent, and the Gulf coast. 

More than half (52%) of CAPEX is budged for the northern Rockies (i.e., the Bakken), but the #2 line item for WLL's CAPEX is .... EOR, at 8% of CAPEX, which is almost three times that budgeted for the Permian (3%).

WLL says it has about 1,250 drilling locations in the Bakken; about 320 drilling locations in the Permian.

But get this: I've never been all that impressed with the Niobrara in the short term, but long term, it could be a surprise. Does WLL have any Niobrara exposure? Note: WLL has about 1,250 drilling locations in the Bakken; it has about 1,215 drilling locations in the Niobrara and with another 650 drilling locations in the central Rockies, WLL has over 1,800 drilling locations in and around the Niobrara. Folks forget about that, so much that WLL finally had to highlight that bit of trivia in yellow (slide 15)

And even in the Bakken, WLL has, not only more acreage, but more diversified acreage than KOG.

WLL also has midstream assets in the Williston Basin that an acquirer might sell off if the buyer wanted to focus on E&P only.

EOR may or may not be all that exciting right now, but a) it keeps Whiting at the forefront of this technology which will become more important over time; and, b) allows a buyer another non-core asset to be sold off.

KOG $3 billion market cap plus $1.45 billion.

WLL $6.5 billion market cap plus $2.25 billion.

For a company like Repsol, KOG seems "underwhelming." WLL seems just a bit more interesting. But then, that's just me. That and $1.85 will get you a small cup of coffee at Starbucks.

See also "acquisition targets in the North American market" at SeekingAlpha. Another article at SeekingAlpha, suggesting KOG and WLL make the best Bakken targets for Repsol.

Meanwhile, from last Friday: four companies that could buy Whiting: Chevron, OXY, Apache, and Shell.

I was unaware of this: Shell just announced (Wednesday) that it paid $1.9 billion to Chesapeake for some Permian assets.

It is very possible that things could move very, very quickly.

Feel-Good Story: North Dakota Boom/Recent Production Record Linked At Drudge Report

Regular readers know the story; go to the link to read the comments. They are always a hoot.

And another feel-good story. The Motley Fool has just discovered a new shale play that might be bigger than the Bakken: the Three Forks. LOL. Regular readers have known about this for more than a year. 
The North Dakota Bakken has helped revive the United S. energy industry, driving the nation's crude production to its highest level since 1989. Yet there could be a bigger play, even larger than the Bakken, sitting right below it.
The Bakken has been one of America's biggest shale finds in history. In July, output from the formation hit a record 810,000 barrels per day, up from less than 80,000 barrels per day during the same month five years earlier. 
But based on the latest findings from United States Geological Survey, the Three Forks formation could hold more oil than the Bakken shale that lies above it. According to USGS estimates, the Bakken contains 3.65 billion barrels of undiscovered, technically recoverable oil. That's slightly short of the Three Forks' 3.73 billion barrel estimate
The new report also triples the estimated quantity of undiscovered, technically recoverable gas and natural gas liquids, or NGLs, in the Williston Basin. The USGS projects that the combined Bakken and Three Forks contains 6,726 billion cubic feet of natural gas and 527 million barrels of NGLs. These estimates are conservative and could be increased as technology improves.
Of course, industry operators have provided a more optimistic assessment. 'What [the Bakken] looks like in terms of recovery factor and recoverable reserves was about 24 billion barrels of oil.' Rick Bott, President and Chief Operating Officer at Continental Resources, told analysts on Thursday, 'But if you add the deep benches and depending on what recovery rates you use, those deeper benches could move the amount of oil in play to 32 billion to 45 billion barrels of oil. So that's an exciting number to be going after.' 
For a much better review of the trillion-bbl reservoir in North Dakota, click here

Around The Horn -- Early Morning Reporting

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. 

Everything looks very, very good except for Halcon which seems to be struggling. 

KOG pulling back 1%.

Oasis up nicely, about 0.5%.

HK struggling. Down another 1% today. Hit a 52-week low

CVX, COP, XOM: all up slightly.

EOG up slightly.

CHK: up nicely, about 1.5%.

SD: up nicely, about 1.5%.

AMZG down; in a trading range.

TPLM: wow! up almost 2%; trading at a new high.

UNP down about half a percent.

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

ENB, EEP: one up, one down; in a trading range.

SRE up about a percent. Finally, moving in the right direction over the past couple of days.

TransCanada up about a percent. Investors still happy that the company is not going to spend all that money on Keystone XL. Investors can thank environmental wackos.

CLR: up slightly.

WLL: up nicely; over 2%.

Montana Completions

Middle Bakken completions as reported by The Fairfield SunTimes:

Richland County
  • Whiting, Christiansen 34-11-1H, Bakken, two laterals, 16,547 TD and 21,120 TD, 389.
  • CLR, Charlie 1-5H, Bakken, 19,457 TD, 283.
Roosevelt County
  • Oasis, B & RT 2958 13-25H, Bakken,  three laterals (18,460, 18,141, and 20,715); 1,014.
  • EOG, Highline, Bakken, 20,328 TD, 598.
These wells were reported last week; see the "Montana" tag.

Random Update Of The QEP G. Levang Wells, The Helis Grail, The Williston Basin

The wells:
  • 22378, PNC, Helis, G. Levang 13-32/29H, Grail,
  • 24686, 2,207, QEP, G. Levang 13-32/29H, Grail, t8/13; cum 276K 5/19; off line from 12/18 to 4/19; only four days in 5/19;
  • 24684, 2,805, QEP, G. Levang 2-32-39TH, Grail, t8/13; cum 418K 5/19;
  • 24685, 2,994, QEP, G. Levang 3-32-29BH, Grail, t8/13; cum 386K 5/19;
  • 24687, 2,740, QEP, G. Levang 4-32-29BH, Grail, t8/13; cum 335K 5/19;
These four G. Levang wells were all taken off-line from October, 2015, through mid-January, 2016, in when the QEP Boggs wells sited to the north, and running south parallel along the Levang wells were fracked.

***********************
Flaring

24687:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20153167116698863960682541149
BAKKEN6-201526557755071665485546960
BAKKEN5-20152616751903111235022840
BAKKEN4-20153051685302678566054260
BAKKEN3-201527725068559651036198000
BAKKEN2-20152834323987846346233240
BAKKEN1-2015311090010356118414520141390
BAKKEN12-2014256663693426151553967960

Tuesday Morning News, Links, And Views -- Breaking News: Keystone XL Approval Unlikely This Year; Apple With Unheralded Technology

The Canadian Prime Minister says approval of the Keystone XL is unlikely this year (Rigzone is reporting). Let's see. This is September. The Thanksgiving break and then the Christmas break is just around the corner. Yes, I would agree with the Canadian Prime Minister. As I've noted earlier, these three issues have dropped to the bottom of President O'Bama's "to do" list:
  • the Keystone XL
  • the Syrian Missile Crisis
  • another Parisian trip to celebrate Michelle's birthday
However, the Prime Minister could have added, "or next year."

This is huge: an Apple story over at SeekingAlpha I'll jump right into it. Near field communication has limited range: 20 cm but the practical range is an incredibly lousy 4 cm. Watch how close folks have to hold their androids to a sensor next time for NFC to work. Apple is ignoring NFC. Why. They have incorporated iBeacon, which does the same thing, only better and more, and has a range of ... 50 meters. That's a bit farther than half the length of a football field. It was interesting that although Apple is already incorporating the technology, it did not mention this technology at their two most recent public presentations. But iBeacon sounds just like Steve Jobs. If someone came to Jobs and said NFC had an effective range of 4 cm he would jump up, yell, and say, "you've got to be kidding. I want an effective range of at least the length of a soccer field." This is a huge story. I don't invest in AAPL, never have, never will. I am just impressed with their technology. One company consistently beats all the rest, with very, very rare missteps.

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

Tuesday Morning News, Views, And Links

Active rigs: 177 (lowest since the post-boom high)

RBN Energy: pricing the waxy crude that comes out of the Uinta.

WSJ Links

The battle for Detroit's cash is on. At the center of the battle are five bond insurers who are the city's biggest creditors. Chicago is probably watching closely how this plays out.

Syria is widening the WTI-Brent spread.
The conflict in Syria has driven a wedge between U.S. and European oil prices, as investors focus on the cushion that booming U.S. production provides against potential supply shocks elsewhere in the world.
U.S. oil futures now are roughly $3.50 a barrel cheaper than Brent, the European benchmark that many experts consider to be a gauge of world prices.
The two contracts were trading in line with each other in July, before tensions in Syria sparked a broad price rally amid fears that U.S. military intervention would disrupt the flow of oil out of the Mideast, which accounts for a third of world oil production.
On NPR news this morning, the eulogies were already starting -- for the mass murderer at the Navy Yard in Washington, DC. He was described as a "sweet man" who was "working to get his life back together again," taking on-line courses, and working part-time jobs. He sounds like he was a very nice guy. One can always count on NPR to begin the spin. The WSJ story here. With a prior shooting record, he doesn't sound all that sweet.

This is a must-read: researchers say the US overstates methane leaks by natural gas drillers.
The study, led by researchers at the University of Texas at Austin and published on Monday by the Proceedings of the National Academy of Sciences, is likely to ease some concerns about the impact of natural-gas extraction on the climate.
Measuring emissions at 190 sites, the study found less "fugitive methane" than previous work by the Environmental Protection Agency and some university researchers, which relied on estimates. Methane, the primary ingredient in natural gas, is a potent greenhouse gas.
Critics of fracking have contended that large amounts of methane leak from gas drilling sites, with some suggesting the problem was so great that it would be better for the environment to burn coal instead of natural gas.
More work must be done on other potential sources of methane leaks, for example from pipelines, before researchers can say definitively that producing and burning natural gas is better for the environment than using coal to generate electricity.
But the measurements of gas emissions found that wells emitted about 20% less greenhouse gases than the EPA had estimated—which is less than the amount emitted by burning coal. The study also found much higher-than-expected leakage from pneumatic switches, which are used to turn equipment on and off at well sites.
Algore probably won't add this new data to his PowerPoint slide show.

Politics: O'Bama feels the pinch from Summers' withdrawal:
The Democratic uproar that sank Lawrence Summers's chances of taking charge of the Federal Reserve suggests that President Barack Obama's clout on Capitol Hill is eroding ahead of crucial decisions about government spending and the debt ceiling.
Mr. Obama often singles out House Republicans for blocking his agenda in Congress.
But as his second term plays out, he also is confronting restive factions within his own party that are uneasy with some of his policies. The liberal wing in particular has rallied against his proposed use of force in Syria, his openness to changing entitlement programs and his apparent interest in awarding the Fed chairmanship to Mr. Summers, who some associate with financial deregulation of the Clinton years.
This was predictable: now the Philippines want "us" back
In 1991, after the Philippine Senate voted to close Subic Naval Base—then the largest American overseas military facility—an emotional Sen. Agapito Aquino summed up the popular mood. It was, he said, "the dawn of our nation's birth."
Tossing out the Americans from Subic and nearby Clark Air Base, he added, had ended the country's "crippling dependence" on its former colonial overlord.
Now, the Philippines wants American forces back in Subic to counter Chinese moves off the Philippine coast. Just west of Subic, Chinese ships have fenced off the Scarborough Shoal, one of the world's richest fishing grounds, which falls within the Philippines's 200-nautical-mile exclusive economic zone. 
Won't happen in my lifetime.

And finally, this op-ed: as education declines, so does civic culture:
Even as the cost of higher education skyrockets, its benefits are increasingly being called into doubt. We're familiar with laments from graduates who emerge from college burdened with student loans and wondering if their studies have prepared them for jobs and careers. A less familiar but even more troubling problem is that their education did not prepare them for responsible civic life. The decline in education means a decline in the ability of individuals—and ultimately the nation as a whole—to address political, social and moral matters in effective, considered ways.
The trouble begins before college. Large numbers of high-school students have faced so few challenges and demands that they are badly underprepared for college courses. Many who go on to four-year colleges seem to need two years of college even to begin to understand what it is to study, read carefully and take oneself seriously as a student. For many students, high-school-level preparation for college is a matter of having high self-esteem and high expectations but little else.
Even after three or four years of undergraduate education, many students still cannot recognize reasoning when they encounter it. They have little grasp of the difference between merely "saying something" and constructing an explanation or formulating an argument. This is often reinforced by college instructors who urge students to regard all theories, intellectual perspectives and views as ideology—without acknowledging the differences between theories, beliefs, hypotheses, interpretations and other categories of thought.
The Los Angeles Times

The gunman was a Buddhist; that's the angle the LA Times is taking. A Buddhist who always carried a gun. I can't make this stuff up.

Appalachian miners "decry what they call" O'bama's "war on coal." Too little too late. That train has left the station. And it's running on natural gas.

The New York Times

Focus shifts to "motive" in Navy Yard shootings. Three words: angry young man.  Who felt he was being dissed. Urban rap songs. This is not rocket science.

The Boston Globe

Apparently not concerned about patient privacy issues, the newspaper reports the "alleged Washington Navy Yard gunman was reportedly treated for a host of serious mental health issues, including paranoia, sleep disorder, and hearing voices.