Friday, October 18, 2013

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. 

30-second sound bite: oil remains in a very narrow trading range, just above $101.  Bakken operators are significantly outperforming the majors. Sweet. One certainly gets the feeling that a) Wall Street has discovered the Bakken operators; and/or, b) there is something going on behind closed doors with regard to M&A.

OXY USA has officially said it will start looking for strategic alternatives to the Bakken, which suggests to me they are getting ready to unload their acreage in North Dakota if the price is right.

OXY should have about 300,000 net acres in the Bakken. If OXY sells, there are four possibilities: a) CLR; b) Statoil; c) CLR & STO both accumulate more acreage; d) new player in the Bakken (CNOOC, ENI? -- ENI has been mentioned before, but very deep in the blog). I suppose Whiting could get involved, but Whiting has also suggested it is looking for a buyer. I doubt any of the other current players (with exceptions like BR [COP] and XTO [XOM] have pockets deep enough to buy all of OXY's acreage in North Dakota. I think EOG is now more interested in the Eagle Ford than the Bakken; Hess, possibly, might be interested.

Would $4.5 billion for all 300,000 acres be out of line? I assume most, if not all their property is derisked; most held by production; much of it under production. Again, idle chatter, just throwing it out there for folks to think about.


KOG surges almost 5%; trading well above $13, and a new high. The article has been removed, but the headline was "Paulson says KOG may be takeover target." Also, KOG was singled out as one of four "strong" companies in the Bakken over at SeekingAlpha.

HK was up about half a percent. A very, very good analyst mentioned Halcon in an article on Eagle Ford, also over at SeekingAlpha today.

Oasis is trading at a new high, up over 2% today.

WLL was down slightly after a great week. Trading near its 52-week high.

CLR is having an incredible week; up another 3% today, and at a new high.

CVX, COP, XOM: all were slightly "green" today. COP is at a new high. CVX is well off its 52-week high.

EOG was up over 1%; near its 52-week high.

CHK was up over 2%; at a new 52-week high.

SD had a great day; up 3%.

AMZG was down a penny today, but is still 17 cents above a nice entry point.

TPLM was also up about 3%.

UNP is in its trading range well below its 52-week high. Up slightly today.

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

ENB, EEP are both in a trading range, well below their highs.

SRE: so much for all my earlier comments about struggling. SRE hit a new high today, up over 1%.

TransCanada was up slightly; well below its high.

Twelve (12) New Permits -- The Williston Basin, North Dakota, USA; Statoil With Another High IP Well;

Active rigs: 184 (steady, down 1)

Twelve (12) new permits --
  • Operators: Zavanna (3), EOG (3), Baytex (2), Oasis (2), OXY USA (2)
  • Fields: East Fork (Williams), Burg (Divide), Squaw Creek (McKenzie), Alger (Mountrail), Little Knife (Dunn)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Enerplus renewed six (6) permits, all in Dunn County (148-93/148-94 sections).

HRC cancelled one permit:
  • 26416, PNC, HRC, Erickson 157-101-24D-13-3H, 
Two producing wells were completed:
  • 24087, 4,059, Statoil, Sax 25-36 5H, Banks, t9/13; cum --
  • 23943, 1,227, Statoil, Sanders 34-27 4TFH,  Ragged Butte, t9/13; cum --

OXY Looking To Sell Assets In The Bakken?

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.

Ten companies announced dividend increases including Kinder Morgan, Kinder Morgan Energy, and, El Paso Pipeline Partners.

OXY announces initial phase of strategic review:
  • to sell assets in the Middle East/North Africa; 
  • to pursue strategic alternatives for select midcontinent assetts, including oil and gas interests in the Williston Basin, Hugoton Field, Piceance Basin and other Rocky Mountain assets; and,
  • to sell a portion of its interests in Plains All-American
Four oil service companies (OIH +2%) ripping to multi year highs following strong reports from SLB, BHI (OIH) 50.18 +0.98 : BHI +9%, SLB +3%, HAL +1%, WFT +1%.

Schlumberger beats by $0.05, reports revs in-line : Reports Q3 (Sep) earnings of $1.29 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of $1.24; revenues rose 10.6% year/year to $11.61 bln vs the $11.58 bln consensus. Co recorded net credits of $0.51 per share in the second quarter of 2013 and charges of $0.02 per share in the third quarter of 2012. Trades at new high; jumps more than 2%.

Baker Hughes beats by $0.03, reports revs in-line : Reports Q3 (Sep) earnings of $0.81 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.78; revenues rose 8.1% year/year to $5.79 bln vs the $5.78 bln consensus. Trades at new high; jumps almost 8%.  

Some have said the recent success of SLB and BHI can be directly attributed to "the Bakken."

Crazy, crazy market -- completely unpredictable: both the equity futures and crude oil are up in pre-market opening futures.

If This Is Friday, I Must Be In Salina, Kansas

Active rigs (in North Dakota): 185 (steady, trending up)

RBN Energy: another great essay -- this time on NGL / condensates.
This is Part 1 of a two part series looking at the gap between surging condensate supplies and market demand. In this episode we start with a few definitions and then detail growing US condensate production. In Part 2 we tackle the demand side of the equation. Much of the material in this blog is adapted from a presentation Rusty made to the 3rd Annual Platts NGL Conference in Houston at the end of September (2013).
If you are new to condensates then before we get going we should point out a number of previous RBN Energy posts on this topic that you might want to check out in conjunction with this one. At the end of last year we provided some early definitions and looked at regulatory issues around condensates in our “Fifty Shades of Condensate” series including “Which One Did You Mean?”, “What Should be Done With Condensates?” and “Where is All This Condensate Going?” Earlier this year Al Troner of APPEC consulting contributed a couple of blogs on the market for condensates outside the US including some comprehensive definitions (see Through The Looking Glass). And there have been others on specific topics that (as usual) we will provide links to as we go along.
A Note To The Granddaughters

I am near/in Salina, Kansas, enjoying a wonderful drive. I left about 6:30 pm last night from the Fort Worth, TX, area, driving all night, cruise control at 59 mph and taking two naps along the way. Lots and lots of truck traffic up and down this mid-continent energy corridor. It really is quite incredible. Got first aroma of natural gas in the Oklahoma City city, then lots of rigs in the Edmonds area. I like to think they were all CLR rigs, but probably not. No flaring that I could see in the immediate area.

This has been the most difficult trip for me so far in terms of memories. I wear my emotions on my sleeve, as they say, and I have lots of memories relating to Oklahoma City. Traveling alone gives one too much time, sometimes, to think. But this morning, doing much better.

Again, I was reminded that the best country music on the radio is found in Oklahoma and Kansas. When I was growing up in Williston, I wasn't listening to country music. In the evening, and sometimes late into the night, we would listen to KOMA, Oklahoma City, the best 1960's rock station. I see KOMA has its own wiki page.

[Wow, it looks cold and wet out there -- outside McDonald's, here in/near Salina, Kansas. Old-time next to me says it's time to get the snow-blower out; it looks like snow. This will be a short stop to be followed by a longer stop later this morning. I feel wide awake. One's natural corticosteroid hits rock bottom between 4:00 and 6:00 a.m., making it difficult to stay away. But now, the corticosteroids have surged making this a great time to drive.]