Russian energy firm Rosneft and Norway's Statoil agreed to set up a joint venture to assess the viability of shale oil production in Russia's Samara region, the firms said on Friday.Second, Statoil and Exxon:
Statoil ASA and Exxon Mobil Corp. have announced a fifth gas discovery in Block 2 offshore Tanzania.
The discovery is of between 2 and 3 trillion cubic feet of gas in place in the Mronge-1 well. The firms said that the discovery brings total in-place volumes in Block 2 to between 17 and 20 Tcf. Mronge-1 was drilled by the Discoverer Americas (DW drillship). The site is located some 13 miles north of the Zafarani discovery and is at 8,200 feet.
Under pressure from the wind-power industry, the Obama administration said Friday it will allow companies to kill or injure eagles without the fear of prosecution for up to three decades.
The new rule is designed to address environmental consequences that stand in the way of the nation's wind energy rush: the dozens of bald and golden eagles being killed each year by the giant, spinning blades of wind turbines.If the Sierra Club has no objection to the wind industry decimating bald and golden eagles, and probably bringing about the demise of the California condor and the whooping crane, I certainly won't prolong the discussion. [It should be noted that the president continues to dither on making a decision on the Keystone XL. My hunch is that this won't help the Keystone XL. You can't screw the environmentalists over and over and over and hope to keep the base.]
Sky-high fuel costs have made cost-cutting, not growing market share, the mantra for many airlines. One of Delta's riskier cost-cutting moves, buying an oil refinery, looks like it's starting to pay off.
Delta bought the refinery, which is in Trainer, Pa., just outside of Philadelphia, in 2012 for $150 million as a way to hedge against its biggest expense, jet fuel costs.
But after losing a combined $136 million in the previous nine months, the Trainer refinery turned a profit for the first time in the third quarter, bringing in $3 million.
As a result, the price Delta paid for a gallon of jet fuel dropped 5.4 percent to $2.97 during the quarter. Though its overall fuel costs increased 3 percent, which Delta attributed to an increase in flying capacity.
Delta has said the oil refinery purchase could save the airline as much as $300 million a year in fuel costs, which accounted for 32 percent of operating expenses in the third quarter.
| 12/6/2013 | 12/06/2012 | 12/06/2011 | 12/06/2010 | 12/06/2009 | |
|---|---|---|---|---|---|
| Active Rigs | 193 | 182 | 200 | 165 | 66 |
"We believe nine of 10 transactions are being successfully transmitted," the Centers for Medicare and Medicaid Services, or CMS, spokeswoman Julie Bataille said at a news briefing.And this is not some Fox News celebrity reporting this: it's highly-respected Bloomberg quoting highly-respected Julie Bataille of the highly-respected Centers for Medicare and Medicaid Services.
After refusing for weeks to detail the extent of back-end problems with healthcare.gov, the Obama administration on Friday said a technical bug affected approximately 25 percent of enrollments on the federal exchanges in October and November.
Those technical bugs, separate from the troubles consumers had experienced accessing information on the website during the first two months, are posing a significant new problem for those who signed up and are expecting insurance coverage come Jan. 1.
One in four of those applications either did not get transferred to insurers, were transferred in duplicate form, or had major errors in information shared.It is amazing the chief architect of this debacle still heads HHS.
Exxon's shares are actually close to all-time highs, and a similar or better entry price could have been had for a long time.
The "Why now?" part of the Exxon purchase stumps me -- but I think I've got a pretty good idea about the why.
It is all about the price of oil. I think Buffett expects it is going to rise over the medium and long term.
The reason I think that is because Buffett's longtime business partner, Charlie Munger, said so.
Of course, Munger didn't tell me that directly. But he did tell anyone who happened to come across a roundtable presentation that the Berkshire vice chairman participated in.
Munger's one of the most rational thinkers in the entire investment world, and he's almost always on the same page as Buffett.
Munger had this to say about future oil prices:
"Oil is absolutely certain to become incredibly short in supply and very high-priced. The imported oil is not your enemy, it's your friend. Every barrel that you use up that comes from somebody else is a barrel of your precious oil, which you're going to need to feed your people and maintain your civilization. The way to do that is to go very slow in producing domestic oil and not mind at all if we pay prices that look ruinous for foreign oil.
This is actually old news. I've actually the blogged the very same thing, and regular readers may remember the post."The oil in the ground that you're not producing is a national treasure ... It's not at all clear that there's any substitute [for hydrocarbons]. When the hydrocarbons are gone, I don't think the chemists are going to be able to just mix up a vat and create more hydrocarbons. It's conceivable that they could, I suppose, but it's not the way to bet. We should spend no attention to these silly economists and these silly politicians that tell us to become energy-independent."
This week the winter storm, with the Weather Channel-bestowed named of Cleon, waved a snowy wand over the US’ north and midsection, which eventually migrated to the East Coast. The result was a number of Permian-area facilities hit by power outages and ice that affected the basin’s production–a natural, obvious consequence of such weather. Now Cleon is back, in the form of another Arctic blast that is currently swooping down on the US, with its eye fastened on a broad area that again includes the Midcontinent and parts of the Permian.
Permian operators Pioneer Natural Resources, Energen Resources, and smaller operators Laredo Petroleum and Legacy Resources have all reported impacts from Cleon, although currently not quantified, to their Q4 production.
Pioneer, echoing some of the other companies, said the severe weather “significantly” affected its production and drilling operations. These impacts were mainly felt in three operations: the Spraberry/Wolfcamp horizons in the Permian, South Texas’ Eagle Ford Shale and North Texas Barnett Shale combo plays.
The company’s Spraberry/Wolfcamp operation, in the eastern Permian, “has been especially hard hit as heavy icing and low temperatures have resulted in extensive power outages, facilities freeze-ups, trucking curtailments and limited access to production and drilling facilities,” Pioneer said in a November 27 press release.And if they can't get their contracted petroleum to the refineries, they will have to buy Venezuela oil on the spot market. Or something.
My third category would be for the timid investor, one who wants to make a little money in the oil market, but not bet the farm.
The Milquetoast investor wants mainly blue chip stocks, ones with great dividends and little downside, which can often exclude volatile oil industry shares.
For this investor I would put together an ETF of major oil companies from the US, Canada, the UK and Norway. I would throw in a couple of big service companies and some larger E&P companies with proven output.
Then I would hedge the whole thing by adding a large oil price element that is controlled by a clever trading algorithm.
The algo would turn on a dime and go short when oil prices are dropping (for more than, say, a couple of hours), then reverse itself when they go back up. This provides instant, and practically constant, balance to your portfolio, but necessarily constrains profits.
Still, even the Milquetoast ETF would let an investor get close to the excitement of the oil industry without getting his hands dirty– or having to sleep in an RV in 40 degrees below zero weather (think North Dakota).The story is done "tongue-in-cheek," but if you read it closely there are some interesting bits of trivia that confirm my thoughts on the Niobrara.
Enterprise Products Partners LP (EPP) began injecting ethane into the Appalachia-to-Texas Express (ATEX) pipeline in late November and will continue through this month. The company expects commercial service to begin January 2014. The 1,230-mile ATEX pipeline starts in Washington County, Pa., and is, or will be, connected to four fractionators in the Marcellus-Utica shale region, including the MarkWest Houston plant in Pennsylvania and Cadiz plant in Ohio, the Blue Racer Natrium plant in West Virginia, and the Utica East Ohio Scio plant.
ATEX will have an initial capacity of 125,000 b/d, expandable to at least 265,000 b/d. Firm ship-or-pay transportation agreements with 15-year terms support the project. About 65,000 b/d of those contracted volumes are expected to move initially, ramping up to more than 130,000 b/d transported beginning in 2018.
ATEX ends at EPP’s Mont Belvieu, Tex., complex, which has more than 100 million bbl of NGL and petroleum liquid storage, more than 750,000 b/d of fractionation, and an extensive NGL distribution system. EPP says with the addition of its Aegis ethane pipeline now under construction, ATEX will link Marcellus-produced ethane to every existing ethylene production facility in the US and provide supply security to support construction of new crackers currently planned for the Gulf Coast.
Oasis Petroleum is an independent exploration and production company that engages in the acquisition and development of oil and natural gas resources in the Montana and North Dakota regions of the Williston Basin. With its recent purchases of ~160,000 net acres, the company now has almost 500,000 net acres in this key energy producing region.
Part of the decline was triggered by a just announced secondary offering. The company will issue some 7mm new shares. It should be noted the new shares will amount to just ~8% of the company's overall float. The proceeds will be used to retire debt which will lower interest expense as well. A lot of the company's debt was taken on to significantly expand the company's acreage in the Williston region of the Bakken formation.
Oasis is also operating from a position of strength. The company has beat on top and bottom line expectations in each of its four quarterly reports delivered in 2013. The median price target on Oasis held by the 26 analysts that cover the firm is $59.50 a share, ~30% above the current stock price.
It is easy to see why analysts hold Oasis in high regard. The company is tracking to double its earnings this year to ~$3 a share. Analysts believe earnings will increase more than 25% on consensus in FY2014 as well. The stock goes for just over 12x forward earnings, which is a significant discount to its five year average valuation (21.7).This is huge. I thought Oasis issued 7 million new shares to help pay for their recent acquisition of Zenergy assets. But if that's accurate, and I assume it is, to use the proceeds to retire debt and lower interest expense as well is ... well.... that's incredible. That says a lot about operators using / needing cash to maintain their drilling plan.
Speaking before reporters Thursday, Obama recounted that “the first thing I ever did that involved an issue or policy or politics” was a college protest against apartheid.
“I would study his words and his writings.
The day he was released from prison it gave me a sense of what human beings can do when they’re guided by their hopes and not by their fears,” Obama said.
Obama’s admiration has largely been from afar.
They met once — in a Washington hotel room in 2005 when Mandela was on a speaking tour. At the last minute, a Mandela associate arranged a meeting between the aging icon and the newly elected young senator from Illinois. Obama has rarely spoken publicly of that day. After Obama was elected president, Mandela kept a photo of the encounter in his office.It looks like President Obama spent more time with his uncle "the White House" did not know about than the amount of time the president spoke with Mr Mandela (fifteen seconds for a photo-op).
"Uh-oh." That's the sound being uttered in doctors' offices and hospitals across the country as medical providers realize they're getting stuck with another bottomless Obamacare bill. While the White House desperately tries to pivot from the havoc wrought by the "Affordable Care Act," its hidden regulatory bombs keep exploding.
I heard about the latest problem this week from an eye doctor friend who received a letter from a Colorado-based insurer informing her that she's essentially on the hook for Obamacare's payment grace period for debtors. The optometrist is bracing for a flood of similar letters from other insurers. Like countless other independent providers, she's extremely concerned about the potential liability, uncertainty and fraud the rule imposes on her business.
Here's the raw deal: The Affordable Care Act created a 90-day grace period before insurers can drop patients who fall behind on premiums. So, delinquents who obtain tax-subsidized health insurance through an Obamacare health insurance exchange have three months to settle up their bills prior to their policy being canceled. As written, the law puts insurers on the hook for the grace period.Not to worry. Doctors, clinics, and hospitals are not neophytes. Non-emergency medical care will need to be paid for in advance. They will let the patients get reimbursed by the insurance company, which of course will never happen. In the big scheme of things, there is very little emergency medicine compared to all the elective crap that can be pushed into the next quarter.
An ice storm will continue to affect millions of people into Friday and threaten to cut power for hundreds of thousands from northern Texas to western Kentucky.
Travel by vehicle or foot will be dangerous during and after the storm, due to icy roads and falling trees and power lines. The power could be out for days in hard-hit areas. In some locations hit by ice, temperatures will dip into the single digits and teens in the storm's wake, causing wet and slushy areas to freeze solid and adding to the hardship for those without heat.
I woke up late, getting up about 7:15 a.m.
I woke up to what looks like 2 inches of snow. It is 28 degrees.
I rode my bike into Snowbucks. The coffee shop should be filled by now but I was the second person here ... so I got my usual seat.
It is incredibly easy to ride through the snow; there is almost no traffic.
However, in the parking lots, and the intersections, the snow changes to two inches of very, very dense, maybe four inches deep of SLUSH. Inexperienced riders would not be able to ride in the slush. I can ride through some of it; but have to walk through some of it. It is too thick / dense to move through. [I did not have snow tires; and if I had, it would be too much trouble to change -- maybe front tire.]
Absolutely no wind, so it feels very, very mild. Everything is shut down in Dallas. Everything canceled.
Kiri's husband is stranded in Calgary, Alberta, Canada -- the airport is closed. So he won't come home this weekend. Kiri is off today, but she goes in Saturday and Sunday.
I will be with Arianna and Olivia all day both days. I will spend the day in kitchen teaching Olivia to cook. We are going to do vegetarian dishes, lots of broccoli, three-bean salads, green bean casserole, etc.
No more precipitation forecast; the slush will become deep ruts as cars drive through it all day. I will have coffee and breakfast here at Snowbucks. Then halfway home, stop at McDonald's for lunch, and then home, maybe get to Sonic across from where we live for dinner.
BruceThe stuff about teaching Olivia to cook vegetarian is an inside joke; she does all she can to avoid anything green.
Ur-Energy's Lost Creek uranium facility made its first shipment this week, sending 35,000 pounds of yellowcake uranium to an Illinois conversion plant.
The shipment came seven years after the in-situ uranium recovery site north of Rawlins was first proposed.
The mine soon expects to be shipping two to four truckloads a month, said Wayne Heili, president of Casper-based Ur-Energy, the company that owns and operates the sites. Each truckload weighs 35,000 pounds.
"There was a certain amount of enthusiasm about seeing that first shipment leave the site," Heili said. "It is not every day you see a company succeed in its long-term goals."
Uranium prices have slumped in recent years. The $130 per pound prices of 2007 are gone, replaced by today's average of $36 per pound on the spot market. Long-term contracts for yellowcake are slightly better, averaging $50 per pound.A big "thank you" for Don to point out this bit of irony. The yellow cake will go barreling down I-80 across Nebraska -- the entire state -- all 500 miles of it.
Big gains in factory and construction jobs last month have experts optimistic that the labor market is starting to produce enough higher-paying jobs to fuel stronger economic growth.
"It's not just the quantity of the jobs but the quality," Diane Swonk, chief economist at Mesirow Financial, said of Friday's Labor Department report of a surprisingly strong 203,000 net new jobs added in November.
I see the market is up big in early morning trading. What is oil doing? Approaching $98, up slightly today. Pretty incredible. I don't know about you, but I don't see a whole of difference between $98-oil and $100-oil but we will still get analysts writing stuff like this:Of those hires, manufacturers accounted for 27,000, the most since March 2012 and a sharp increase from October's 16,000 new jobs.]
Growth-oriented exploration companies that have taken on excessive debt are more likely to be takeover candidates, because "outspending cash flow is unsustainable. The party will end with a pullback in commodity prices," says Sven Del Pozzo, an energy analyst at IHS Herold. U.S. oil prices, near $97 per barrel, have fallen almost $10 in recent months.Sven at IHS Herold needs to meet Sven in the Bakken.
U.S. employers hired more workers than expected in November and the jobless rate fell to a five-year low of 7.0 percent, which could fan speculation the Federal Reserve could start reducing its bond purchases this month.
Nonfarm payrolls increased by 203,000 new jobs last month, the Labor Department said on Friday.
The unemployment rate dropped three tenths of a percentage point to its lowest level since November 2008 as some federal workers who were counted as jobless in October returned to work after a 16-day partial shutdown of the government.
Economists polled by Reuters had forecast payrolls rising only 180,000 last month and the unemployment rate falling to 7.2 percent from 7.3 percent.We all know the numbers are massaged, but as more supporting data comes in, the general trend becomes somewhat clearer. These are the tea leaves in my Snowbucks tea this morning:
Could the US end up exporting 700 MMb/d of crude to Canada by the end of the decade? Despite static domestic refinery demand and a growing production surplus, Canadian imports of crude increased this year. How could that be? The reason for this apparent anomaly is that East Coast Canadian producers are getting better prices exporting their crude anywhere but the US rather than competing at home against cheaper imports from South Texas and North Dakota. Today we explain some unintended consequences of the US crude export regulations.
This is a complex explanation so hold on to your hats as we walk through what is actually happening today and could increase dramatically in the future – the import of cheap US crude into Canada to replace similar grades produced locally that are being exported elsewhere for higher prices. Our story starts - with government regulation in the shape of the US crude oil export rules.
We have previously detailed these rules administered by the Bureau of Industry and Security that dictate US produced crude and/or lease condensate cannot be exported (see Fifty Shades Lighter the Lease Condensate Export Problem). The export ban applies to all countries except for Canada and to all US crudes except for limited quantities of California and Alaskan production. One consequence of the ban would seem to be somewhat lower prices for some US light crudes. That is because US refineries are not configured to handle the preponderance of light crude from greatly expanded domestic shale production, so supplies are beginning to outstrip refinery demand. That in turn is causing US crude prices to move below overseas levels, in part because the surplus cannot be exported to compete in international markets.I'm sure Harry Reid is already looking into this.
According to new a survey done by market research firm Parks Associates, Apple desktops have become the most sought after desktop computers this holiday season, beating out longtime holiday desktop leader Dell and other competitors such as HP and Acer. This marks the first time that Apple products have taken the top spot in the history of the survey, as the company was ranked 3rd in the category in 2011 and 2nd in 2012. The Apple TV also remained at the top spot for the most sought after streaming media device, topping the Roku TV.
