Wednesday, November 6, 2013

Enbridge Getting Ready To Announce "Open Season" For The Sandpiper


November 13, 2013: Duluth News Tribune is reporting:
Enbridge Energy officials said Tuesday that they want to drop part of a proposed new pipeline route in Carlton County that had farmers and rural residents upset.
Company officials said they will ask the Minnesota Public Utilities Commission to consider a revised route for about 1.5 miles of the proposed Sandpiper pipeline that would have crossed undisturbed farm and woods in Carlton County.
Enbridge wants the PUC to consider a new alignment that will follow existing pipelines and then follow electric and gas-utility corridors for that portion of the pipeline.
The news came after the Carlton County Board voted 4-0 Tuesday morning to ask the PUC to back existing utility lines as state regulators consider approving the proposed pipeline and where it will go.
Original Post

The Calgary Herald is reporting:
A Canadian company has applied to build the largest oil pipeline yet from western North Dakota's booming oil patch and will soon begin courting oil producers to reserve space, a key step in a $2.6 billion project that would move millions of gallons of oil to Minnesota and Wisconsin.
The Calgary-based pipeline company is proposing the 612-mile Sandpiper pipeline to each day carry 225,000 barrels of oil to a hub in northern Minnesota and 375,000 barrels to one in northwestern Wisconsin. If approved by regulators, it would be the largest pipeline moving oil out of North Dakota, the nation's second-leading producer of oil behind Texas. [225 + 375 = 600.]
There is nothing new in this story for regular readers except for the announcement regarding "open season." 
The company submitted the application last week to the North Dakota Public Service Commission and will take similar steps with regulators in Minnesota and Wisconsin in the next month, company spokeswoman Katie Haarsager said.
But she noted that soliciting and securing shipping contracts, during a process called "open season," is as vital as obtaining permits for the project.
"The open season is very important and allows us to ensure that we have shippers' interest in the project. A successful open season means we should have a successful project," she said Tuesday.
Haarsager said Enbridge will begin the open season within the week and it will be in effect from one to three months.
The pipeline is the biggest project yet to come before North Dakota regulators to move oil from the rich Bakken and Three Forks formations in the western part of the state, said Brian Kalk, who heads the North Dakota Public Service Commission. The three-member commission oversees a slew of public interests, from pipelines to grain elevators, though much of its recent work has involved the oil and natural gas industry.
With the flexibility that CBR provides this is not a slam-dunk. Minnesota and Wisconsin environmental activists are watching this one very, very closely, and have probably scheduled news events to coincide. Speaking of which, I wonder how the Greenpeace folks in Siberia are doing?

Wow, What A Great Day; Abraxas Shows A Bit Of Moxy

Wow, --- disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or thought you read here. Now, back to what I was going to say: wow, what a day. Let me count the ways:
  • the Dow hits a new high -- according to a Drudge link; I haven't had a chance to check
  • Oasis reported a nice quarter
  • CLR reported a nice quarter
  • I thought SD, CHK, and HK all did okay but the market thought otherwise (so, what does Mr Market know?)
  • EOG reported some nice things including a record well in west Eagle Ford
  • Abraxas told a mineral owner in Montana to take his/her mineral acres and shove 'em
  • the price of crude oil finished in the green (futures don't mean squat, but oil futures remain green -- barely)
  • a reader sent me the top ten highest pad jobs in the Bakken (and exotic dancers did not make the cut)
  • this big of trivia: one-fourth of the entire Eagle Ford production can be attributed to EOG
  • except for two hydroelectric states (Washington State and Idaho), North Dakota has the cheapest electricity in the country; New Yorkers pay three to four times what North Dakotans pay for electricity
  • Enbridge is building more pipelines, including a diluent pipeline
  • Europe finally get the clue regarding renewable energy
  • investors finally get the clue regarding Tesla
  • other than the link to Dow hitting a new record, not one thing at Drudge interested me or caught my attention
After today, this is about how my head feels:

Sunday Morning Coming Down, Johnny Cash and Kris Kristofferson

Fifteen (15) New Permits -- The Williston Basin, North Dakota, USA; HRC And Oasis Report Some Huge Wells

Active rigs: 181

Fifteen (15) new permits --
  • Operators: CLR (8), XTO (3), KOG (1), Fidelity (1), QEP (1), Oasis (1)
  • Fields: Grail (McKenzie), Ukraina (Billings), Gros Ventre (Burke), Jim Creek (Dunn), Oakdale (McKenzie), Siverston (McKenzie), Alger (Mountrail), Pembroke (McKenzie)
  • Comments: When I see permits for the Gros Ventre and the Ukraina I get the feeling operators are still delineating the Williston Basin oil fields; when I see permits for the Grail, Oakdale, Siverston, I know it is strictly for the cash flow (unless CLR is testing some lower benches)
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

A remarkable eight (8) producing wells were completed:
  • 25197, 1,051, XTO, Allie 31X-24D, Capa, t9/13; cum 11K 9/13;
  • 24297, 1,967, HRC, Fort Berthold 148-95-13A-24-5H, Eagle Nest, t9/13; cum --
  • 24298, 1,615, HRC, Fort Berthold 148-95-13A-24-4H, Eagle Nest, t9/13; cum --
  • 24307, 896, HRC, Fort Berthold 148-94-29A-32-4H, Eagle Nest, t10/13; cum --
  • 24306, 1,727, HRC, Fort Berthold 148-94-29A-32-3H, Eagle Next, t10/13; cum --
  • 24227, 3,318, Oasis, Nellie John Federal 5300 14-25B, Willow Creek, t10/13; cum --
  • 25745, 513, Whiting, Elmer Bartleson 14-29TFX, Sanish, t9/13; cum 6K 9/13;
  • 24310, 2,132, HRC, Fort Berthold 148-94-29A-32-5H, Eagle Nest, t10/13; cum --
Wells coming off the confidential list Thursday:
  • 19783, drl, Fram Operating, Schlak 2, Norma oil field, no production data, 
  • 20330, 142, EOG, West Clark 3-2413H, Clarks Creek, middle Bakken, 30 stages; 6.7 million lbs sand, background gas as high as 4,000 units, t6/13; cum 83K 9/13;
  • 23336, drl, QEP, MHA 4-03-35H-150-92, Heart Butte, no production data,
  • 24583, 1,950, EOG, Parshall 25-3032H, Parshall, middle Bakken, 55 stages, 11.4 million lbs sand; t6/13; cum 150K 9/13;
  • 24767, drl, CLR, Rosenquist 3024H, Hamlet, a very, very nice well for Hamlet;
  • 25254, drl, EOG, Parshall 34-0509H, Parshall, no production data,
  • 25299, 1,881, XTO, Franchuk 24X-20A, Murphy Creek, 30 stages; 2.7 million lbs sand, t8/13; cum 23K 9/13;

20330, see above, EOG, West Clark 3-2413H, Clarks Creek:

DateOil RunsMCF Sold

 24583, see above, EOG, Parshall 25-3032H, Parshall:

DateOil RunsMCF Sold

25299, see above, XTO, Franchuk 24X-20A, Murphy Creek:

DateOil RunsMCF Sold

CLR Profit Jumps Nearly Four-Fold -- Reuters; Hawkinson Unit Density Test Produces At An Initial Combined Rate Of Almost 15,000 BOEPD

Reuters is reporting:
Continental Resources Inc, which drills for oil in North Dakota, Oklahoma and Colorado, posted a nearly four-fold increase in quarterly profit as production jumped across many of its regions.
For the third quarter, the company posted net income of $167.5 million, or 91 cents per share, compared with $44.1 million, or 24 cents per share, in the year-ago period.
Revenue rose 70 percent to $823.8 million.
Production rose 38 percent to 141,873 barrels of oil equivalent per day (boe/d).
The press release:
  • Hawkinson Unit density test produces at an initial combined rate of 14,850 boe per day from middle Bakken and Three Forks benches one, two and three
  • adjusted net income for third uarter 2013 of $297 million, or $1.61 per diluted share
  • record EBITDAX of $798 million, an increase of 13% compared to 2Q13 and 62% compared to 3Q12
  • record production totaling 141,900 boe per day for 3Q13, an increase of 5% sequentially and 38% compared to 3Q12

Oasis Earnings -- 3Q13; Will Continue To Increase Number Of Rigs In The Bakken; Will Spud More Than 200 Gross Wells In 2014

From Yahoo!In-Play:
Oasis Petroleum beats by $0.04, beats on rev: Reports Q3 (Sep) earnings of $0.80 per share, $0.04 better thanthe Capital IQ Consensus Estimate of $0.76; revenues rose 65.4% year/year to $305.5 mln vs the $290.2 mln consensus.  
"Including production from our recent acquisitions, we expect production to range between 42,000 Boepd to 46,000 Boepd in the fourth quarter of 2013. Given our further confidence in the growing resource potential in the Williston Basin, we have increased our current rig count to 14, including the two rigs we picked up in our acquisition in West Williston. With the continued growth in our project inventory, we expect to add another two rigs during 2014 which will further accelerate production growth. With the growth in rig count and continuous improvements in drilling efficiency, we expect to spud approximately 210 gross operated wells in 2014." 
From Reuters:
Oasis Petroleum Inc, which drills for oil in North Dakota's Bakken shale field, said on Wednesday its third-quarter profit nearly tripled on a jump in production. 
The company posted net income of $54.5 million, or 59 cents per share, compared with $18.3 million, or 20 cents per share, in the year-ago period. 
Revenue rose 65 percent to $305.49 million. 
Production rose 10 percent to 33,064 barrels of oil equivalent per day (boe/d).
Another story from Reuters:
Production rose 10 percent to 33,064 barrels of oil equivalent per day (boe/d). Oasis completed 28 net operated wells during the quarter, with 253 net operated wells at the end of the quarter. The company said it cut its well completion cost to $8 million, below the industry average 
In September, Oasis bought roughly 161,000 net acres of leases in North Dakota from Magnum Hunter Resources Corp and three other buyers for a total of $1.52 billion, boosting its production by nearly 33 percent. 
Shares of Houston-based Oasis rose 1.2 percent to $53.16 in after-hours trading. The stock has gained 65 percent so far this year.

The Story Speaks For Itself -- No Comments Needed

The European Commission issued new guidelines Tuesday which could end costly and controversial subsidies for renewable energy, opening the way for state-aid backing of gas or coal-fired electricity generation projects.
"When the sun is not shining and the wind is not blowing, electricity must still be produced," Oettinger's statement underlined.
To ensure back-up generating capacity, new power plants would be needed, and these could get state backing.
State intervention is potentially harmful to the working of the market and the new guidelines are meant to prevent that and show member nations what "best practice" is.
Accordingly, the Commission will now "consider whether to propose legal instruments" to ensure the new recommendations to member states' governments are upheld.
The guidelines meet a demand by some member states, including France, for extra capacity to be provided by "coal and gas power plants which are flexible enough to be turned on and off whenever needed." [France bans fracking; the French must like coal more than natural gas.]

The Commission said investment costs in renewables have come down and therefore government support can now be tapered off.
It warned that "governments must avoid unannounced or retro-active scheme changes" while the guidelines also stress that back-up capacity should meet European-wide needs, not only requirements in national markets.
The energy story in the EU completely baffles me; yesterday, it was reported that Germany and Sweden generate so much wind/solar energy, they export huge amounts of renewable-generated electricity, but they are still bringing on more coal-fired power plants.

EOG Earnings -- 3Q13; Transcript Highlights; Bakken Is Now Providing Rates of Return In Excess of 100%

The transcript at SeekingAlpha:
  • oil, NGL, and gas production exceeded guidance 
  • unit cot beat the lower guidance provided last quarter
  • will (again) raise full 2013 production growth guidance from 35% to 39%
  • three plays: Eagle Ford, Bakken, Leonard
  • "no other large cap oil company has even remotely matched EOG's oil growth rate either in 2013 or for the six-year average"
Eagle Ford:
  • Eagle Ford: 100% direct (after-tax) rate of return from both the western and the eastern portions
Bakken/Three Forks:
  • will continue the downspacing program (e.g. Van Hook 126-2523H and 130-2526H)
  • encouraged by completions in the Antelope Extension area
  • achieving direct (after-tax) rates of return in excess of 100% in both the Core and Antelope areas
  • reminder: in the quarter call, EOG increased drilling inventory in the Bakken/Three Forks from 7 to 12 years; EOG will increase drilling activity in the Bakken/Three Forks in 2014
Leonard: also achieving direct (after-tax) rates of return in excess of 100%

The macro oil environment:
  • US rate of crude oil production will slow in 2013 (compared to 2012)
  • bullish on oil prices; EOG doesn't see any large international shale oil plays to impact global supply for east five years
  • hedging at $95 to $97
  • believes that natural gas prices will stay depressed until 2018 timeframe
  • the current Marcellus location differential is likely just a harbinger of chronic Appalachian price dislocations that will be seen over the next multiple years
  • EOG likely to ramp up activity in Eagle Ford and Bakken/TF above 2013 levels
  • in the Permian Basin, overall capex will be flat, but allocation will shift to the Delaware Basin
Q & A
  • like another operator, EOG is still trying to re-calculate accurate EURs as completions techniques improve; won't provide revised EURs until longer production time
  • "The Bakken, with the dramatic improvements we have had in it, is now equal to the Eagle Ford in returns in excess of 100%, so it will get more money each year."
  • Eagle Ford drilling downtick: now, down to 9 days; previously "less than 12 days"; and, drill times in the Eagle Ford are getting faster; "EOG has had many wells that are quite a bit faster than that"
  • up to about 56 rigs (across all plays); upgraded entire rig fleet; "just premium rigs"
  • second bench of the Three Forks just as successful as the first bench; "particularly in the Antelope area, we do believe that we have potential in the third benchand possibly in the fourth bench in the Antelope;
  • "as we said, we are getting extremely strong rates of return in the Bakken"
  • "we have 12 years of inventory in the Bakken/Three Forks. So as next year and the years go along, we believe that we will be drilling more wells each year in the Bakken and that's really the whole Bakken/Three Forks....setting production records even with modest programs ... so we have got some good expectations as we go forward."
  • why 2018 before we see LNG prices improve? 2018: the first significant impact of the gas exports in way of LNG from these converted former LNG import terminals; ... first meaningful impact..."
  •  a reminder that EOG does have a water injection pilot in the Bakken  

From Yahoo!In-Play:
EOG Resources beats by $0.27, misses on revs: Reports earnings of $2.32 per share, excluding non-recurring items, $0.27 better than the Capital IQ Consensus Estimate of $2.05; revenues rose 19.8% year/year to $3.54 bln vs the $3.86 bln consensus.
  • EOG increased its U.S. crude oil and condensate production by 41 percent and total company crude oil and condensate production by 39 percent in the third quarter of 2013 over the same prior year period. Total company liquids production -- crude oil, condensate and natural gas liquids (NGLs) - rose 33 percent.
  • EOG is increasing its full year crude oil and condensate production growth target for the second time in 2013 to 39 percent from 35 percent, following three quarters of extraordinary results. Total natural gas liquids production is expected to increase 17 percent, compared to the previous 14 percent target, and total natural gas production is projected to decline 11 percent, consistent with EOG's longstanding strategy in North America. Overall, EOG is targeting 9 percent total company production growth in 2013, versus its previous goal of 7.5 percent. In addition, EOG is again lowering certain unit cost estimates, based on results to date.
From Bloomberg:
EOG Resources, Inc., the second-largest U.S. independent oil and natural gas producer by market value, said third-quarter profit rose after crude prices and output increased.
Net income climbed to $462.5 million, or $1.69 a share, from $355.5 million, or $1.31, a year earlier, the Houston-based company said in a statement on PR Newswire today.
Excluding one-time items such as a loss from energy contracts, per-share profit was $2.32 cents, exceeding the $2.06 average of 37 analysts’ estimates compiled by Bloomberg.
EOG has been remaking itself to focus on oil production, with an estimated 88 percent of its North American revenue forecast to come from crude and natural gas liquids this year, according to an Oct. 2 presentation. The explorer is looking for growth from the Eagle Ford Shale and Permian Basin in Texas and the Bakken Shale of North Dakota. The company’s shares have risen 46 percent this year.
“Their asset base is so extensive and so high quality and the management team has such a long track record of creating value and not making mistakes,” James Sullivan, an analyst with Alembic Global Advisors in New York, said in a phone interview before the earnings release. Sullivan’s rating on EOG is equivalent to a buy and he doesn’t own shares in the company.
More at the link.


The press release:
  • delivers 39 percent year-over-year total company crude oil production growth
  • raises 2013 full-year crude oil production goal to 39 percent from 35 percent
  • increases 2013 total company production growth target to 9 percent from 7.5 percent
  • reports record western Eagle Ford oil well
  • continues to achieve stellar economic results from the Eagle Ford, Bakken/Three Forks and Leonard plays
  • announces Mark G. Papa will continue as director following year-end retirement
This was the record well in the western Eagle Ford EOG referenced:
During the third quarter, EOG reported its top well to date from its western Eagle Ford acreage. The Kaiser Junior Unit #1H began initial production at 2,815 barrels of oil per day (Bopd) with 160 barrels per day (Bpd) of NGLs and 940 thousand cubic feet per day (Mcfd) of natural gas in Atascosa County.

A Great Halcon Analysis -- Richard Zeits Over At Seeking Alpha

Link here to SeekingAlpha.

There is a huge wall of worry to climb when investing in Halcon .... 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 ... but it's always a pleasure to read about the Bakken in this light (which, by the way, I posted after reading the transcript -- but Zeits does such a better job):
Halcón has recently implemented significant modifications to its completion design in the Bakken which include increased stage density, higher amount of proppant per lateral foot and the use of slickwater as the fluid type for completions (which is an innovation in the Bakken). The company reported that the new design has demonstrated improved results in all areas of the Williston Basin.
Halcón recently completed its first three Bakken wells in the Fort Berthold area using slickwater with encouraging results. Two McGregory Buttes wells had an average 60-day rate of 1,542 Boe/d, which is 58% higher relative to the company's comparable wells in this area.
The third slickwater well was completed in the Antelope area and recently came online producing 2,820 Boe/d, a 20% improvement relative to comparable wells.
Halcón also reported positive results from its three-well downspacing pilot in the Middle Bakken in the North Fort Berthold area.
The three wells came online producing an average of 2,665 Boe/d, which compares favorably to other recent wells in the area.
Based on these results, Halcón announced that the majority of its future drilling in the Fort Berthold area will be at 660 foot spacing. Drilling Bakken and Three Forks wells 660 feet apart has commenced on four additional pads with initial results expected late in the first quarter of 2014. In addition, Halcón plans to conduct initial Bakken downspacing tests in Williams County in early 2014.
So, for the Bakken:
  • increased production due to better completion techniques (being announced by "everyone," now it seems; and, 
  • increased density (leases already held by production) 
I guess I have one note I could add to Zeits' analysis: he mentions that Halcon will be decreasing the number of its rigs in the Bakken. It sounds like Zeits considered that a "negative" reading for Halcon. This gets back to the discussion regarding "rig count." All operators are doing "more with less."

And, again, successful oil companies are involved in both E&P -- once an operator has delineated one play, all things being equal, the operator can drop back a bit in that play and focus on emerging plays.

Again, there are investors and there are traders. Something for everybody. 

A Random List Of Data Points Newbies May Want To Consider

For newbies, some data points to consider.
  • The crawler on your television screen for NYMEX WTI has dropped precipitously from $110 to $90/bbl (rounding)
  • Halcon said yesterday that their new completion techniques are resulting in production doubling in some areas; increasing by 35- to 50-percent in other areas
  • Lower crude oil prices --> perhaps less demand destruction --> more oil sold, all things being equal, perhaps
  • Lower crude oil prices --> perhaps lower energy costs in the US --> perhaps a better economy overall; perhaps
  • 500,000 bbls x $110 = $55 million
  • 1.25 x 500,000 = 625,000 
  • 625,000 x $90 = $56.25 million
  • Cost of drilling is coming down significantly even without the fall in oil prices
  • When oil prices fall, the cost of drilling generally goes down
  • RBN Energy recently talked about the netbacks Bakken oil operators receive through CBR
  • There appears to be a glut of takeaway capacity in the Bakken
  • Interest rates appear to be at or near all-time lows
  • As the economy improves, airlines will book more miles, using more aviation fuel (which comes from oil)
  • As the price of oil / gasoline drops, consumers tend to drive more (back to demand destruction argument noted above)
  • Bakken operators hedge their oil contracts; Halcon has a floor of just under $90
  • Weather is unpredictable; weather can play a significant role in oil production in the Bakken; falling oil prices can actually help an operator's bottom line if weather interrupts oil production in the Bakken
  • There is a difference between investing and 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.

Ten Highest Paying Jobs In The Bakken Oil Patch

This list apparently excludes exotic entertainers in some of the local bars. Smile. Some of these entertainers would easily make the top ten list and they do not require a bachelor's degree. A good understanding of IRS rules on income in the form of tips is probably helpful. But I digress.

The list was compiled by The Financial Times, and sent to me be a reader. Thank you.

The list, heavily edited (go to source for full story):
1. Drilling Consultant: $238,697
.... a bachelor’s degree or higher in engineering or a related field and at least five to 10 years experience in the oil field.

2. Directional Driller: $192,799
... one of the highest-paid positions you can get without a college degree, though a bachelor’s degree in engineering or geology can’t hurt. Directional drillers typically work on-site running a rig, ....

3. Foreman or Superintendent: $182,483
Sometimes called a “company man,” this managerial/supervisor position involves overseeing day-to-day operations of a crew, including safety, budget and maintenance, and coordinating with the various contractors that work with the company.

4. Workover or Completion Driller: $151,947
A “workover” or “completion” rig is placed on a hole after it’s been drilled.

5. Reservoir Engineer: $149,611
There are many types of engineers in the oil field. One of the highest paid is a reservoir engineer, which involves estimating oil reserves and performing modeling studies to determine optimal locations and recovery methods. Other high-paid engineering jobs include a drilling engineer (averaging $142,664 a year), petroleum engineer ($126,448 a year) and mud engineer ($109,803 year).

6. Rig Manager: $140,560
Rig managers tend to oversee and manage the crew that’s working on-site. The job could include prepping and managing the budget and making sure targets are met. A bachelor’s degree isn’t usually required, as most rig managers start at the bottom as a rig hand or roustabout and work their way up.

7. Geoscientist or Geologist: $126,575

8. Coil Tubing Specialist: $106,976
Coil tubing refers to the metal piping used in an oil well after it’s been drilled. The tubing needed to pump fracking fluid down a well, among other operations. A coil tubing professional provides technical support and overseas the operation from start to finish, and tends to work as a contractor with many different oil companies. No bachelor’s degree is required.

9. Well Control Specialist or Well Tester: $102,868
Well control specialists or well testers typically travel from site to site, setting up and taking down rigs; inspecting production levels and equipment; and testing flowback quality. No bachelor’s degree required, though strong analytical skills, computer skills and experience with Excel spreadsheets is needed.

10. Stimulation Supervisor: $101,703
These jobs involve the work done to a well to increase production, including the process of hydraulic fracturing, when a mix of chemicals is pumped down the well to create fissures in the rock formation.

One-Fourth Of Eagle Ford Production Can Be Attributed To EOG -- Texas Railroad Commission

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.

The trivia one finds in the most unlikely places is incredible.

For newbies, there are three unconventional shale plays in the US:
  • the Bakken (west North Dakota)
  • the Eagle Ford (east Texas)
  • the Permian (west Texas)
From Motley Fool:
EOG holds the lead position in the profitable Eagle Ford shale, among holdings in other profitable plays (Bakken and Permian Basin). 
In fact, according to the Texas Railroad Commission, nearly 25% of all production within the Eagle Ford play can be attributed to EOG.
And, the Commission reports that 2013 natural gas production just through August exceeded total 2012 production by 21.73%. Further growth is expected, too. Moving forward, EOG raised its production growth 3.5% for the remainder of the year and is extending its positions in key drilling regions.
For newbies, the Texas Railroad Commission is to Texas as NDIC is to North Dakota. In addition, rules and regulations set by the TRC are generally followed by the other states when it comes to the oil and gas industry. 

Random Look At Cost Of Electricity Across The US

Don sent me this -- a look at the cost of electricity in the 57 US states. When you get to the link, click on the second presentation, an Excel spreadsheet.
  • North Dakota is third cheapest at 8.58 cents/kwh.
  • Idaho, with its hydroelectric power, is cheapest at 7.87 cents/kwh.
  • Washington State, also with hydroelectric power, is second, at 8.28 cents/kwh.
New York State, which bans fracking, and hates coal, but loves wind, pays 18.26 cents/kwh, more than twice what North Dakotans pay.

One can move the Excel spreadsheet to your own spreadsheet and then sort. Doing that, New York is the most expensive for electricity, excluding Hawaii, which is in last place, at 34.68 cents/kwh.

I think the Germans pay in excess of 35 cents/kwh. 

Motley Fool Story -- A New Emerging Oil Story; CHK vs COP vs EOG

In a sense, the Motley Fool headline is a tease; it is nothing new to long-time readers, but I think investors ..... 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....forget this:
In a monumental shift for the energy markets, China recently became a bigger oil importer than America. The U.S. is switching to more fuel efficient cars and driving less, while China's per capita GDP continues to grow and spur more demand for oil. The world's oil consumption is shifting, and smart investors are helping bring oil to Asia.
 Canada's oil producers are facing a smaller U.S. market, and the next logical place to turn is Asia. The problem is that oil sands producers are separated from B.C.'s ports by the Rocky Mountains. A number of new pipelines are on the drawing boards, but the permitting process takes a number of years. For the immediate future railroads will provide the critical link between the Canadian interior and the coast.
West Coast refiner Tesoro has positive news for investors. The Port of Vancouver recently approved Tesoro's rail offloading oil terminal with an initial capacity of 120 thousand barrel per day (mbpd). It will allow cheaper land-locked crudes be used as feedstock for Tesoro's refineries. The facility is not expected to be completed until 2014, but it is a positive catalyst for the company. While the facility calls for the transport of Bakken crude from North Dakota, there is no reason why Canadian crudes could not be transported as well.
For investors, there are a lot of other ideas at the linked story. 


As long as we've linked one Motley Fool story, we might as well link another: can Chesapeake Energy beat COP and EOG to big profits? I didn't read the article and I did not care. This is the real story, and I'm sure Motley Fool did not even mention it: look how big EOG has gotten. EOG sold for less than $10/share in 2000. EOG is now close to $200/share.

Rock N' Roll Animal, Lou Reed

Update On Enbridge

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.

Perhaps because I was traveling, I missed all these Enbridge stories. Wow.

First, the dividend declaration; no change.

Second, a new diluent pipeline in western Canada:
Enbridge Inc. announced that it will develop a new industry diluent pipeline with associated capital of up to $1.4 billion, depending on scope, to meet the needs of multiple producers in the Athabasca oil sands region.
Third, a new crude oil pipeline in western Canada:
Enbridge Inc. announced that it has been selected by the Fort Hills partners (Suncor Energy Inc., Total E&P Canada Ltd. and Teck Resources Limited) as well as Suncor Energy Oil Sands Limited Partnership (Suncor) to develop a new $1.6 billion pipeline to transport crude oil production under long term transportation commitments to Enbridge's mainline hub at Hardisty, Alberta.
Fourth, Enbridge secured a 50% interest in the 80-megawatt Saint Robert Bellarmin Wind Project, with an approximate investment of $0.1 billion.

For Investors Only -- Abraxas, Chesapeake, CLR, Oasis Report Today

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.

Abraxas reports before market opens. Others reporting today: Arsenal Energy, CalFrac Well Services, Chesapeake, CLR (after market close), Devon Energy, Enbridge (before market opens), Oasis (after market close), Rosetta Resources (ROSE), Tesoro, Transocean, and possibly others I missed.

The market likes what Abraxas reported: up almost 8% in pre-market trading; earnings 3 cents/share; excluding certain items, as much as 9 cents/share.

The market likes what Chesapeake reported: up over 3% in pre-market trading; earnings of 24 cents/share; excluding special items, as much as 43 cents/share. At $28/share, trading near its 52-week high of $29. [Update: at market close, CHK had fallen back almost 7% based on guidance.]

EEP: reported third-quarter 2013 adjusted earnings of 9 cents per unit, lagging the Zacks Consensus Estimate of 26 cents. The quarterly figure was also lower than the year-earlier profit of 29 cents.

ENB: earnings increased 12% to $1.33 for nine months; remains at 34 cents for the quarter. In addition to all the fossil fuel stuff, Enbridge secured a 50% interest in the 80-megawatt Saint Robert Bellarmin Wind Project, with an approximate investment of $0.1 billion. At close, ENB up almost 2.5%.


OAS: profit nearly triples; Oasis Petroleum Inc, which drills for oil in North Dakota's Bakken shale field, said on Wednesday its third-quarter profit nearly tripled on a jump in production.
The company posted net income of $54.5 million, or 59 cents per share, compared with $18.3 million, or 20 cents per share, in the year-ago period.
Revenue rose 65 percent to $305.49 million.
Production rose 10 percent to 33,064 barrels of oil equivalent per day (boe/d).

Wednesday -- For Investors; And The Wall Street Journal; Reality Sets In At Tesla

Five companies announced increased dividends/distributions.

Calumet and MDU are partners on the new refinery going up west of Dickinson. Calumet is also active in the Eagle Ford:
Calumet Specialty Products expands crude oil logistics network; TexStar Midstream Logistics to build new crude oil pipeline system that will supply significant volumes of Eagle Ford crude oil to Calumet's San Antonio, Texas refinery by year-end 2014: Co announced that its wholly-owned subsidiary, Calumet San Antonio Refining, has entered into a definitive agreement with TexStar Midstream Logistics, under which TexStar will construct, own and operate a 30,000 barrel per day crude oil pipeline system that will supply significant volumes of Eagle Ford crude oil to Calumet's San Antonio, Texas refinery.
The Wall Street Journal

All that talk about insurance companies cancelling policies and Congress/President putting pressure on insurers NOT to cancel policies. It turns out, this, too, will be a non-story. The Congress/President are only asking that insurers extend those policies until the end of the year. By the time "they" quit quibbling, the year will be over. Hello! It's November 6, 2013. Even if they go beyond "year-end," the cut-off date is March 15, 2013. That's the law. Starting January 1, 2014, the insurers are liable for unlimited expenses.


Tesla stock skids on outlook
Tesla reported a narrower third quarter net loss on higher production but its shares fell sharply in after-hours trading as investors worried the luxury electric car maker's outlook for revenue and profit fell short.
The Palo Alto, Calif., company said it delivered 5,500 of its $70,000 and up Model S electric cars in the three months ended Sept. 30, including 1,000 vehicles shipped to Europe. That was more than the company had projected earlier but below the whisper number of as many as 7,000 cars.
Tesla's shares fell 12% in after hours trading on Tuesday after the company told investors to expect fourth quarter adjusted profit would be similar to the third quarter. Excluding stock-based compensation costs and accounting for Model S leases and "noncash interest expense," the company said it had adjusted income of $16 million, or 12 cents a share, in the quarter.
Of course, today, I will get a gazillion e-mail notes telling me "they" sold their Tesla stock last week. LOL. The company's production is constrained by  adequate battery availability. And then this: "Tesla's gross margin, the profit after product costs, was 24%. The company aims to get a 25% gross margin by year-end." We'll be watching.


Unless I missed it, Syria was not mentioned in the on-line edition of The Wall Street Journal, as a headline story.

Killing The Goose That Lays The Golden Egg; Montana Acreage Sold For $4,000/Acre


November 11, 2013: see comment this date below. Despite my November 9th note, I still think it was a Montana well/location (oil companies tend not make typographical errors when reporting well names). I appreciate readers taking an interest in solving the mystery. 

November 9, 2013: in the note below I noted that I could not find "Crusch 2-33" and suggested it might be a Montana well. Also, without the"H" designation it makes one question whether it was even a Bakken well. However, it's very possible it was misspelled. There is a "Crusch" well, spelled differently in North Dakota:
  • 16033, 179, XTO, Chruszch 11X-20, St Demetrius, t4/06; cum 46K
So, it's possible it was a North Dakota well.

Original Post
From Yahoo!In-Play:
Abraxas Petroleum Corp. provides third quarter 2013 production, guidance; in the Williston Basin, Abraxas elected not to drill the Crusch 2-33 due to overly onerous lease.
In the Williston Basin, Abraxas elected not to drill the Crusch 2-33 due to overly onerous lease renegotiation terms. The drilling on the Christensen 12-2 was postponed until the second quarter of 2014. Also in the Williston Basin, drilling on the Lillibridge West pad was completed a month ahead of schedule bringing forward originally planned 2014 CAPEX on the company's 76% working interest Jore Federal East pad into 2013. Furthermore, in order to ensure a safe operating environment, Abraxas elected to shut in the Jore 3H well during the drilling process of the Jore 1H, 2H and 4H. The Jore 3H well produced approximately 123 boepd net to Abraxas before being shut in.

Abraxas recently monetized the Bakken and Three Forks rights on the company's Fairview Prospect in Richland County, Montana and McKenzie County, North Dakota for $10.6 million in cash and the reversal of $0.3 million in accrued payables for total proceeds of $10.9 million. The sale consists of approximately 2,563 net acres and does not have any associated production. Abraxas plans on redeploying these proceeds into more core acreage and development in the Bakken and Eagle Ford. 
I find no record of a "Crusch" well in North Dakota, so it's very possible this would have been a site in Montana.

30-second soundbite: sells 2,563 non-producing Bakken acres in its Fairview Prospect, Montana (Richland County) and North Dakota (McKenzie County) for $10.9 million ($4,250/acre).

RBN Energy With Nice Update On CBR Tank Cars

Active rigs: 183

RBN Energy: a likely oversupply of tank cars for the CBR market.
A dramatic increase in crude-by-rail shipments over the past two years as well as surging lease rates for hard to come by tank cars encouraged an 18 month backlog of new orders – even while crude shipments only represent a small fraction of total rail carloads. Changes in the crude price differentials that encouraged the growth of crude by rail have reduced both the demand for tank cars and lease rates. Today we present analysis from PLG Consulting that shows rail tank car oversupply is quite possible - barring a few "wild cards."
The article contains a nice description of the two main types of tank cars:
The differences between the two widely used CBR tank car designs are worth further discussion. The higher volume tank car is the general-purpose non-coiled non-insulated car with nominal capacities of 30,000 gallons (GP30) and 31,800 gallons (GP31.8) used for light/sweet crude that is produced in the US shale oil plays. The GP31.8 is a crude optimized car that started being manufactured in 2011. These general-purpose non-coiled non-insulated cars have a lower tare (empty) weight, a higher usable capacity (up to 286,000 lbs. gross-weight-on-rail), and cost less to manufacture.  A GP31.8 car has an ability to haul about 720 Bbl of light crude oil, while a GP30 with a 263,000 lb. gross weight is able to haul about 675 Bbl of light crude oil.
The heavier Canadian Oil Sands type crude requires a more complex coiled and insulated railcar because the commodity is more viscous and needs to be heated to help it flow.  The coils and insulation decrease a tank car’s usable capacity and make it both heavier and more expensive to build.   The optimized “heavy crude” style car has a nominal capacity of 28,800 gallons and ability to haul about 600 Bbl of heavy crude oil.
In general, the leasing community will prefer to own the smaller cars with coils and insulation because they have far more flexibility across numerous commodities (chemicals, etc.), whereas the larger GP cars are more limited in scope (with ethanol, methanol and some refinery chemicals being the only sizeable alternative markets to crude).
The "wild cards" have to do with possible regulatory changes following the Canadian CBR spill and explosion.

By the way, one of the first presentations ever on CBR is still available at the NDIC site: a nice PowerPoint presentation of North Dakota's CBR terminals, click here for NDIC's conference held earlier this year (February, 2011), a PDF file. One presenter did refer to this as "Crude By Rail" but I did not actually see the "CBR" acronym in the presentation. It is possible some used the "CBR" acronym on a website prior to my using the acronym, but it would have been very, very rare. I have a 131 posts tagged with "CBR." The earliest post tagged with CBR was posted February 3, 2011.