Monday, September 30, 2013

Wells Coming Off The Confidential List Tuesday; Several Nice Wells Will Be Reported; Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA -- September 30, 2013

Active rigs: 185

Wells coming off the confidential list Tuesday:
  • 21406, 1,355, EOG, Liberty 25-0107H, Parshall, t4/13; cum 105K 7/13;
  • 22921, 60, EOG, Liberty 106-0107H, Parshall, t5/13; cum 144K 7/13
  • 22932, drl, EOG, Redmond 28-2917H, Clear Water, producing,
  • 23997, drl, Statoil, Margaret 5-8 6H, Spring Creek, no production data,
  • 24052, 738, Fidelity, Wayne 3-4-33H, Sanish, 4/13; cum 42K 7/13;
  • 24511, 52, Fidelity, Irene 12-13H-24, Alger, t4/13; cum 29K 7/13;
  • 24673, 175, Hunt, Frazier 1-20-17H, Frazier, t6/13; cum 9K 7/13;
  • 24931, conf--> loc, CRL, Tangsrud 14-1H, Hayland, no production data,
  • 24980, drl, BR, CCU Corral Creek 41-28MBH,  Corral Creek, no production data,
  • 25005, 2,913, BR, Bullrush 44-10TFH, Elidah, t6/13; cum 14K 7/13;
  • 25029, drl, Hess, EN-Sorenson A 154-94-0211H-5, Alkali Creek, no production data,

21406, see above, EOG, Liberty 25-0107H, Parshall:

DateOil RunsMCF Sold

22921, see above, EOG, Liberty 106-0107H, Parshall:

DateOil RunsMCF Sold


Fourteen (14) new permits issued on the last day of the month for September, 2013. I will provide that data tomorrow. For September 30, 2013, new permits for --
In addition three producing wells were completed, including:
  • 24529, 1,621, Petro-Hunt, Clear Creek 152-96-34A-4H, Clear Creek, t9/13; cum --  
  • 25555, 3,079, Whiting, Nesheim 41-24, Sanish, t8/13; cum --

RDO In Dickinson, North Dakota, Expands; Moves Location; North Of Dickinson On Highway 22; Near New Truck Route

The Dickinson Press is reporting:
RDO Equipment Co. has the ability to supply the John Deere and Vermeer machinery needed to build the Bakken.
The company has had a presence in Dickinson for nearly three years, but quickly outgrew its east Dickinson location near Interstate 94. It has found a lot on the city’s north side along Highway 22.
The planned Dickinson bypass is set to connect I-94 and Highway 22 through 116th Avenue Southwest west of Dickinson and 33rd Street Southwest, which is now a gravel road that travels past RDO’s new location, which opened in April.
The bypass will allow truck traffic to bypass Dickinson on the northwest side of town, very similar to the original bypass in Williston, in terms of location to the city.

Going south of I-94, in the opposite direction to the proposed truck route, one would be headed to the new CBR terminal and MDU-Calumet refinery.

After I Post The IPs Of Wells Coming Off The Confidential List This Morning, I'm Signing Off; New Poll

It's shaping up to be a day I don't want to follow the news.

Good luck to all. The wells coming off the confidential list over the weekend and today are posted here.


While waiting, I might as well clear out an old poll. Obviously the Syrian issue went nowhere, and oil didn't come close to surging as some thought might happen. Results of the poll in which we asked if readers thought oil would hit $145 by now:
  • Yes: 10%
  • No, not higher than $130: 19%
  • No, not higher than $120: 38%
  • No, the high ($114) has been reached for now: 32%
Now, the new poll:
Will NYMEX oil drop below $100 by the end of the month, October, 2013?

Monday, Monday -- The Bakken ... And Apple (Why Not?)

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.


First off the blocks: KOG in SeekingAlpha.
There is only one potential rock in this shoe that could slow down the rate of progress Kodiak is experiencing: the looming specter of global contraction. The GDP numbers from China have been accused of being soft this quarter, and the EU remains stymied, if now slightly less than previously estimated, by untenable debts incurred by the peripheral states and a large amount of resentment as a result in the central economic powers.
These two issues, in conjunction, could result in a near term drag on global oil demand, and the cumulative effects they could have on global oil prices will remain one the largest impacts on the rate of development of the domestic oil plays, and will be coupled with further downside risk associated with the recent surplus of oil reported in the past few months.
No, the "potential rock in this shoe" is the Federal government stepping in with new fracking rules. As posted earlier, Whiting has this Bakken rule: no drilling in North Dakota where federal permits are required (BLM land) -- previously posted. 


Futures: gonna be ugly today. Already down 120 points. Oil could drop below $100.


MacRumors is reporting: AAPL tops Google, Coke to become world's most valuable brand. It quotes The New York Times:
Every so often, a company changes our lives, not just with its products, but also with its ethos. This is why, following Coca-Cola’s 13-year run at the top of Best Global Brands, Interbrand has a new #1—Apple. Few brands have enabled so many people to do so much so easily, which is why Apple has legions of adoring fans, as evidenced by the record-breaking launch of the iPhone 5c/5s. For revolutionizing the way we work, play, and communicate—and for mastering the ability to surprise and delight—Apple has set a high bar for aesthetics, simplicity, and ease of use that all other tech brands are now expected to match, and that Apple itself is expected to continually exceed.

From our perspective, Apple’s internal brand strength has remained steady. CEO Tim Cook has assembled a solid team that is aligned around the Apple vision, which has allowed them to deliver against the promise time and time again. There’s been a lot of change at the top in the last 12 months, but the alignment of both hardware and software design under Jonathan Ive is a major step toward maintaining focus. A shrewd move, perhaps, given the stiffer than ever competition over the last 12 months: Samsung is now the world’s most profitable smartphone manufacturer, Google has expanded Android and its maps still seem to be the “preferred” route, and Windows Phone 8 certainly raised more than a few eyebrows.

Who Says Japan And China Can't Cooperate -- This May Be A Bigger Story Than Folks Realize

There are a lot of story lines in this short press release:
Enbridge announced that it has entered into an agreement to construct facilities and provide transportation services for the Hangingstone Oil Sands Project in Canada. The initial term of the transportation agreement is 20 years. Oil sands extraction company, Japan Canada Oil Sands Limited (:JACOS) is the operator of the Hangingstone Oil Sands Project. However, the project is jointly owned by JACOS and Chinese offshore giant CNOOC Ltd.

Per the agreement, Enbridge will construct a 50-km pipeline with a capacity to transport 40,000 barrels per day (bpd) of diluted bitumen produced at the Hangingstone Project to the Enbridge terminal in Cheecham, Alberta. The project is expected to be operational in early 2016, with initial volumes of 18,000 bpd. However regulatory approval for the project is pending.

Monday, Monday -- The Newspapers


Later, 3:04 pm CT: the original post was posted at 7:15 a.m. -- see date/time stamp. I, somewhat tongue-in-cheek, suggested that the "showdown" was "simply political theater to raise funds going in the 2014 mid-terms. Now at 3:05 pm CT, I see this story: the Democratic National Party is broke. The DNC owes creditors $18 million; the GOP has $12 million in cash to spend. Fortune is reporting:
There's another budget crisis in Washington, and it's unfolding inside the Democratic party. The Democratic National Committee remains so deeply in the hole from spending in the last election that it is struggling to pay its own vendors.
It is a highly unusual state of affairs for a national party -- especially one that can deploy the President as its fundraiser-in-chief -- and it speaks to the quiet but serious organizational problems the party has yet to address since the last election, obscured in part by the much messier spectacle of GOP infighting.
The Democrats' numbers speak for themselves: Through August, 10 months after helping President Obama secure a second term, the DNC owed its various creditors a total of $18.1 million, compared to the $12.5 million cash cushion the Republican National Committee is holding.
Original Post

The Wall Street Journal

The showdown, of course, is the top story. No links; story everywhere. However, this interesting bit of trivia: political fund-raising for both parties is at record levels over the showdown -- wouldn't it be interesting to learn that the whole showdown was simply political theater to raise funds going into the 2014 mid-term elections?

This is why the individual mandate needs to be delayed. This thing is not ready for prime time.
Obama administration officials scrambling to get the health law's insurance marketplaces ready to open on Tuesday keep hitting technical problems, while government-funded field workers across the country say they aren't fully prepared to help Americans enroll in the program.
Implementation of the law is expected to proceed even if the government partially shuts down because Congress fails to pass the necessary spending bills. But insurers, who are counting on the law to usher in new customers, say that even short-lived quirks could sour Americans on participating. That could deter people who are on the fence about buying coverage—especially young, healthy people needed to make the law work.
What is not being widely reported, the on-line exchanges will be run by Solyndra-like companies: government funded; little experience; will collapse once the bills start arriving for unlimited lifetime expenses for pre-existing conditions. These on-line exchanges will attract those facing high medical bills; the low-risk won't enroll. Anyone who understands how spreading risk and how insurance works will see how this mandate was set up to fail.

Look at the names of the big insurers that have dropped out of the exchanges and the ten states in deep trouble as insured are dropped off the rolls: California, Missouri, Connecticut, Maryland, South Carolina, New York, New Jersey, Iowa, Wisconsin, Georgia. Voters in these states will remember the name of the act: OBAMA-care.

So, readers can follow this company -- see how this debacle plays out:
Pradeep Goel arrived from India 23 years ago to study in America. On Tuesday, Mr. Goel, now chief executive of a technology company, has to make sure the software behind two new health-insurance exchanges doesn't crash. 
For the state exchanges to work, normally separate computer systems have to talk to each other and it is EngagePoint Inc.'s job to build software bridges between those systems. When a consumer tries to sign up online for insurance, the state's computers have to interact with federal computer systems to verify the person's Social Security number, citizenship status and income. The state exchange also has to link up to the private insurance companies offering policies on the exchanges.
Within minutes, the program has to produce a final answer, telling enrollees what plans are available, how much in federal subsidies they are eligible for and whether they qualify for Medicaid. There are thousands of different scenarios determining whether a person might qualify for help, Mr. Goel said.
You will note that Apple, Amazon, Google, Microsoft, H-P, IBM, SAIC are not in the news with these exchanges, but instead companies like EngagePoint Inc. founded in 2007. I don't think it is publicly traded.


The Los Angeles Times

No survivors after fiery crash at Santa Monica airport: business jet; holds up to 8 people. Authorities have not said how many folks were on the plane. I guess that's a state secret. But that's the top story in Los Angeles this morning.

And then this: truancy is at crisis level in California. One-quarter of California elementary students are truant. Wow. Twenty-five percent.
Among counties, Santa Cruz, San Luis Obispo and Calaveras had the highest truancy rates — about 30% — last year. Los Angeles County's rate was 20.5%, with about 166,000 truant elementary students.
Among school districts, three of the five elementary campuses with truancy rates at 90% or higher were in the Pasadena Unified School District, where the overall truancy rate increased to 66% last year from 17% in 2008-09. Eric Sahakian, Pasadena's director of child welfare, attendance and safety, said "dramatic budget cuts" in staff handling attendance as well as financial hardship among families during the recession contributed to the district's elevated rates. The system has launched a new attendance improvement plan this year.
90% truancy? I can't even imagine.

The New York Times
WASHINGTON — As the nation’s spy agencies assess the fallout from disclosures about their surveillance programs, some government analysts and senior officials have made a startling finding: the impact of a leaked terrorist plot by Al Qaeda in August has caused more immediate damage to American counterterrorism efforts than the thousands of classified documents disclosed by Edward Snowden, the former National Security Agency contractor. 
Since news reports in early August revealed that the United States intercepted messages between Ayman al-Zawahri, who succeeded Osama bin Laden as the head of Al Qaeda, and Nasser al-Wuhayshi, the head of the Yemen-based Al Qaeda in the Arabian Peninsula, discussing an imminent terrorist attack, analysts have detected a sharp drop in the terrorists’ use of a major communications channel that the authorities were monitoring. Since August, senior American officials have been scrambling to find new ways to surveil the electronic messages and conversations of Al Qaeda’s leaders and operatives.  
I don't think the article mentioned who leaked this information, but I remember the news reports of SecState closing embassies based on intel -- and the leaks must have followed in short order.  

The Boston Globe

Nothing of interest on front page. Sports (New England Patriots), local (mayor's race).

The Three Components Of ObamaCare

The Components of ObamaCare

[Initially posted September 27, 2013 as details started to become clear]

There are three components of ObamaCare: employer mandates, individual mandates, and everything else (hidden taxes and fees)

Employer mandates: 
  • delayed for one year; delayed until 2015
  • cost-shifting began in late 2013; employers moving employees to exchanges
Individual mandates:
One can start to see how ObamaCare is going to turn out exactly like Solyndra.

1. The individual mandate -- the cornerstone of ObamaCare -- will be provided by the "on-line exchanges."

2. None of the large, well-known health insurers will be participating in these "on-line exchanges." Small, under-capitalized, unknown companies will run these "on-line exchanges." Many of these companies will be start-ups with minimal, if any, experience in health care insurance.

3. These exchanges will offer very low premiums for insurance that meets the minimum standards mandated by ObamaCare. My understanding is that some premiums will be as low as $5.00/month (posted with link earlier). Of course, these policies will have huge out-of-pocket expenses: co-pays.

4. The large insurers say they will not support the "on-line exchanges" because they will be inundated with applications from those with pre-existing conditions and open-ended demands for psychiatric care.

5. It is my understanding that ObamaCare does not allow insurance companies to set an upper limit for lifetime claims. If that is true, the under-capitalized, small companies are at risk for large claims that won't be offset by the number of folks they would need to sign up who have minimal claims.

6. It took two to five years for the DOE-backed "Solyndra" companies ("the list of 38") to go bankrupt. We will see the same thing with the "on-line exchanges."  A lot of federal money will be provided these small, under-capitalized companies, but over time, they will run into financial difficulties, and gradually disappear. 
Everything else
  • Taxes on medical devices
  • Etc 

Monday Morning

Active rigs: 184

RBN Energy: another great article for those who want to better understand the Bakken. In this post, RBN Energy looks at the future of CBR to the west coast.
For Bakken producers and shippers, the economics of moving crude from North Dakota to the West Coast by rail are governed by the price spread between Bakken crude and the West Coast benchmark Alaska North Slope (ANS). So far this year those economics have been favorable.
Shell abandons two shale projects

Shell abandons two projects, first out west (Colorado), and then down south (Eagle Ford). The Wyoming Star-Tribune is reporting:
Royal Dutch Shell PLC became the latest company to abandon efforts to turn Western Slope oil shale into oil, joining a long line of companies in a boom and bust cycle in the region.
The company said energy markets have changed since the project started in 1982, and the company no longer wants to continue efforts to turn oily shale rock into liquid by heating the rock and pumping out the oil.
Meanwhile in the Eagle Ford, Reuters is reporting:
Royal Dutch Shell plans to sell its 106,000-acre stake in the Eagle Ford shale formation in South Texas, the Wall Street Journal reported on Sunday.
Shell's decision comes after it took a $2.2 billion charge against its U.S. shale business in August. 
Major oil companies have struggled in oil-and-gas rich regions such as the Eagle Ford, where smaller energy firms have thrived. BG Group and BHP Billiton have also taken impairment charges against their U.S. shale assets.
Unless the Bakken is a whole lot better than the Eagle Ford this suggests that majors may not be interested in the Bakken, either.