US Energy Advantage Vis A Vis Europe

The Financial Times is reporting:

The US shale gas revolution is forcing a redoubling of efforts by European chemical producers to move away from low-margin petrochemicals and focus on higher margin speciality products.

European petrochemical makers risk being squeezed between low-cost producers in the Middle East and a resurgent chemicals industry in the US, where feedstock and energy prices have plummeted following shale gas discoveries.

The big story:

After a decade of almost zero capacity expansion in US petrochemicals, shale gas has prompted the likes of Dow Chemical, LyondellBasell, Chevron Phillips and ExxonMobil Chemical to invest billions of dollars in ethane cracker capacity on the US Gulf Coast.

Fresh US supplies of petrochemicals – primarily ethylene derivatives such as polyethylene and PVC – will hit global export markets in coming years. Meanwhile, Middle Eastern chemical companies that have long had a big feedstock and energy cost advantage over Europe may struggle to export to a more competitive US and seek European customers instead.

Environmental concerns and greater population density have so far prevented Europe developing its own shale gas reserves, which threatens to leave European chemical producers at a competitive disadvantage in the near term. Natural gas prices in the US are roughly a third of the Europe price.

But now a contrarian view. Jeffrey Rubin over at The Huffington Press suggests it is only a matter of time before Europe starts drilling for natural gas. 

Once fracking technology opens up shale gas reserves overseas, why wouldn't the onset of new production have the same dramatic effect on prices in the rest of the world as it has in North America? If that happens, why would Asian countries want to import expensive LNG from across the Pacific? Taking it a step further, why would anyone want to build a pipeline across B.C. to Kitimat to supply an albatross of an LNG plant that will be lucky to scrape by with economics that will suddenly have become exceedingly marginal.

The shale gas revolution in North America reversed the polarity of global LNG flows. The spread of the shale gas revolution to Asia and Europe could have just as big of an impact. Will North America's LNG hopes, from plants to pipelines, soon become obsolete?

Won't happen in my investing lifetime. 

Death Of King Coal Is Premature: This Rigzone Story Is Really Quite Incredible; Thank Goodness For China -- Saving The Earth From Another Ice Age

Updates

December 10, 2013: CNBC is reporting:

In 2011 the World Energy Council estimated China's recoverable coal reserves at 128 billion short tons, the third largest in the world exceeded only by the United States and Russia Federation, equivalent to about 13 percent of the world's total coal reserves.

Chinese coal consumption is now roughly 300 percent higher than it was in 2000, reversing the decline seen from 1996 to 2000, with more than half of China's coal being used for power and heat generation. This soaring, relentless demand has meant that, despite its enormous reserves, China became a net coal importer in 2009 for the first time in over two decades.  

Thank goodness for China, saving us from a coming ice age.

Original Post

 

Rigzone is reporting: "Lured by coal, southeast Asia is turning TO coal, AWAY FROM natural gas.

Southeast Asia's power sector will tilt away from gas to use more coal by the end of this decade, chipping away at demand for liquefied natural gas as the region of more than 600 million people tries to cut costs to meet soaring electricity needs.

With a wave of LNG projects due to come online this decade, this shift in consumption from a region long expected to be a key growth market could help take some of the heat out of rising Asian prices of the cleaner fuel.

Gas prices in Asia are about five times more expensive than in the United States, driven by demand for LNG from countries such as Japan and South Korea - whose nuclear power sectors are in crisis, and China, where stringent pollution control measures are driving a switch from dirtier coal.

Demand for more coal could also help lift flagging prices of the fuel by at least partially compensating for China's move to cleaner energy sources.

Presidents come and go. King Coal is here to stay. 

QEP Makes Another Move: $950 Million For Oil Acreage In The Permian; Not Much In Specifics

Reuters is reporting:

QEP Resources Inc said it would buy oil assets in Texas' Permian Basin as it looks to transform itself into a pure-play exploration and production company, following pressure from activist investor Jana Partners. The purchase of the oil and natural gas properties for about $950 million will add production of 6,700 barrels of oil equivalent per day (boepd), of which roughly 68 percent was crude oil, QEP said. 

Some other data points:

• QEP said last Monday that it planned to spin off its QEP Field Services division, as well as its 25 percent stake in QEP Midstream Partners LP;
• QEP said it would also sell some non-core assets located in the Mid-continent region during the first half of 2014; and, 
• QEP now expects to focus its spending on its oil assets, the Permian basin and North Dakota's Williston Basin, besides its liquids-rich gas assets in the Uinta Basin in Utah. 

Not much in the way of specifics, but it confirms that the three big shale plays remain: the Bakken, the Permian, the Eagle Ford. 

Yahoo!Finance reports it here, but again lacking in specifics.

For Investors Only; Random Data Point On NOG; Musings: Are Energy Investors Rotating Out Of Independents Into Big Oil?

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. 

This is very, very interesting. Not the data point itself, but rather the fact that a relatively "small" company (market cap: $865 million) like NOG makes the "front page" of Yahoo!Finance, unfortunately not for the best of reasons.

Forbes is reporting:

In trading on Monday, shares of Northern Oil & Gas Inc crossed below their 200 day moving average of $14.20, changing hands as low as $13.97 per share. Northern Oil & Gas Inc shares are currently trading off about 1.7% on the day.

A chart at the link shows the one year performance of NOG shares, versus its 200 day moving average.

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I started noticing "this" about one to weeks ago, but didn't say anything because this is not an investment site. Now that others are reporting it, I can link those reports. From SeekingAlpha, one of my favorite contributors:

As I write this, the DJIA is up +184 points yet the stocks of some of the fastest growing shale oil producers are strong to the downside: EOG Resources is down -$3.67, Whiting Petroleum is down -$1.70, and Continental Resources is down -$3.70. Smaller producers like Kodiak Oil & Gas and Oasis Petroluem are also off sharply. Meanwhile, Exxon Mobil is up +$1.30 and Chevron is up +$1.12. 

Energy investors appear to be rotating into big cap dividend paying oil stocks.

Random Tweets: Record Amount To Be Spent On Oil Exploration In 2014; Natural Gas Price Rising On Forecast For More Global Warming

Platts tweets (without a link): Global spending for oil and natural gas exploration and production is poised to rise to a record; near $723 billion in 2014, up 6.1% from 2013: Barclay's.

Platts also tweets NYMEX January natural gas up 11.8 cents to $4.232/MMBtu as frigid weather forecast for much of the US spurred buying interest. The AP is reporting: natural gas "soars" on weather forecast.

Meanwhile, natural gas rose above $4.20 for the first time since May 28, on the likelihood that homeowners turned up the heat to try to shake off the effects of two wintry storms that plowed across the country. Forecasts are for colder than normal temperatures in the Midwest this week. 

Wow, It Never Quits, Does It? One Daily Surprise After Another -- Now It's The Nation's Volunteer Fire Departments That Could Be Thrown Under The Bus

My hunch is the administration will sort this one out fairly soon, once they get all the facts, but it again reveals how little we know about the Obamacare bill. Just as Nancy said: we will know all about it once it becomes law.

As a reminder, this is one of the surprises this bill contained, and no one talks about it any more: ObamaCare officially defines the American work week at 30+ hours. Now we have another surprise.

The DailyMail, which seems to know Obamacare better than most other media outlets is reporting:

• The Affordable Care Act forces companies with more than 50 workers to buy them all health insurance or pay hefty fines 
• the IRS says volunteer firefighters are 'employees,' even though the Department of Labor says they're 'volunteers' 
• out of more than 1 million fire departments in the U.S., 87 per cent are staffed entirely or mostly by volunteers 
• members of Congress are weighing in, but the Obama administration hasn't taken any action yet to carve out a fire-fighting exception 

The president will probably make his decision after he decides on the fate of the Keystone XL. LOL. 

The article continues:

The U.S. Department of Labor takes the term 'volunteer' literally, but the IRS says volunteer firefighters are technically employees if they're on the job more than 30 hours per week, making them subject to Obamacare's employee-mandate rules. 

And it will be the IRS, not the Department of Labor that enforces Obamacare.

Global Warming? Say What?

The AP is reporting the coldest temperature ever recorded on earth:

Feeling chilly? Here's cold comfort: You could be in East Antarctica which new data says set a record for "soul-crushing" cold.

Try 135.8 degrees Fahrenheit below zero; that's 93.2 degrees below zero Celsius, which sounds only slightly toastier. Better yet, don't try it. That's so cold scientists say it hurts to breathe.

A new look at NASA satellite data revealed that Earth set a new record for coldest temperature recorded. It happened in August 2010 when it hit -135.8 degrees. Then on July 31 of this year, it came close again: -135.3 degrees.

The old record had been -128.6 degrees, which is -89.2 degrees Celsius.

This is another data point that did not/will not show up in Algore's PowerPoint presentation.

An inconvenient truth. 

The new record was not a slight difference. It blew away the previous record. The old record: -129; the new record: -136. Almost 7 degrees. When records like these are set, it's generally a tenth of a degree or maybe a full degree at best. This is not trivial. And that was back in 2010 when things were said to be warming up. Hmmmm.....

And to think the my granddaughters and I were around to read about this.

For Investors Only

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. 

Williams Cos and Boardwalk Pipeline (BWP) joint venture Bluegrass Pipeline announces extension of open season until January 17: Bluegrass Pipeline LLC, a joint venture between Williams (WMB) and Boardwalk Pipeline Partners, LP (BWP) (Boardwalk), today announced that it is extending its binding Open Season until Jan. 17, 2014 at 5 p.m. CST. The extension is in response to requests of interested shippers who would like additional time to evaluate the pipeline project and the project's market outlet options. The open season is being held to secure industry commitments to the Bluegrass project which would provide timely natural gas liquids (NGLs) transportation capacity from the Marcellus and Utica shale plays to the petrochemical and export complex on the U.S. Gulf Coast. The Open Season began on Oct. 29, 2013 at 8 a.m. CDT and will conclude on Jan. 17, 2014 at 5 p.m. CST. 

[Note: from an earlier post:
August 25, 2013: Wall Street Cheat Sheet provides background to three pipelines that are as "environmentally dangerous" as the Keystone XL according to activist environmentalists (some of them noted below): a) the Bluegrass Pipeline; b) the TransCanada's Energy East Pipeline (entirely within Canada, skirting Maine); and, c) Enbridge's Eastern Gulf Crude Oil Access Pipeline. 

• Bluegrass Pipeline: across Kentucky; 500 miles; natural gas; from western border of Pennsylvania to Arkansas, where it will connect with existing line to the Gulf
• Energy East Pipeline: most expensive TransCanada project ever; $12 billion; converting 1800 miles to natural gas pipeline to handle crude oil
• Eastern Gulf Crude Oil Access Pipeline: 770 miles, crude oil, Illinois (Patoka/Johnsonville) to Louisiana

Also, from March 6, 2013: 

The proposed "Bluegrass Pipeline" design would provide producers with 200,000 barrels per day of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania.

The proposed pipeline could be increased to 400,000 barrels per day to meet market demand, primarily by adding additional liquids pumping capacity. It would deliver mixed NGLs from these producing areas to proposed new fractionation and storage facilities, which would have connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas.

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Casualty due to global warming:  Plum Creek cancels presentation at Bank of America Merrill Lynch 2013 US Basic Materials Conference due to inclement weather : Co announced that due to the inclement weather in the Northeast, Rick Holley, chief executive officer, will be unable to present at the Bank of America Merrill Lynch 2013 US Basic Materials Conference in Boston on December 10, 2013, at approximately 8:45 a.m. Eastern time. Plum Creek will post the presentation material to its Internet site at http://www.plumcreek.com. Investors can access the material by clicking on the "Investors" section and following the directions.

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Several story lines here, none of which I have time to go into: Arch Coal announces it has begun operating its longwall mining system: Co announced that Tygart Valley's Leer mine in northern West Virginia has begun operating its longwall mining system, representing a major milestone in the development of the overall mining complex. The Leer mine is expected to ramp up production during the first quarter of 2014, and to produce more than 3 million tons of coal on an annualized basis thereafter. The majority of the output will be sold into domestic and international metallurgical coal markets for use in the production of steel.

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA;

Active rigs: 193

Fourteen (14) new permits --

Operators: Oasis (6), EOG (3), Legacy (3), Petro-Hunt (2)
Fields: Parshall (Mountrail), Charlson (McKenzie), North Souris (Bottineau), Rosebud (Williams), Baker (McKenzie)
Comments: the Oasis permits were for two 3-well pads

Wells coming off the confidential list over the weekend, and today, were posted earlier; see sidebar at the right.

Two (2) producing wells were completed:

• 19462, swd, Legacy Oil & Gas, Legacy Etal Emery Norm 4-19H, Red Rock, a Spearfish well drilled in 2010, that was tested but never put on production due to uneconomic rates; it was converted to a salt water disposal well
• 25352, 899, Hess, BW-Spring Creek 149-99-1201H-3, Cherry Creek, t11/13; cum --

Except for a lot of wells coming off confidential list (posted earlier) and a lot of new permits (14) today, a fairly benign daily activity report.

Another Positive Sign For The Economy: US Household Net Worth Hit A Record High; The Ninth Consecutive Quarter Of Quarterly Increases; Highest In US History

Updates

January 3, 2014: Ford Motor Company delivers best sales year since 2006

December 25, 2013: another positive economic indicator -- November's durable goods number exceeds expectations.

December 17, 2013: Ford announces it will build three new manufacturing plants (two in China, one in South America). Now, this from GM: CEO Dan Akerson said the nation's largest auto maker could consider paying a dividend on its common shares next year even as it looks to raise executive salaries and invest $1.3 billion in modernizing five factories. Also, US industrial production hits pre-recession peak.

December 11, 2013: add another data point -- the AP is reporting job openings reach a 5-year high. 
 

Original Post

Back on December 6, 2013, I noted a number of positive data points about the US economy:

• car sales up huge in November
• housing is back in California -- strong
• first time unemployment claims (yesterday) down significantly
• unemployment rate (today) down 0.3 points
• strength of dollar changes day-to-day, but price of WTI oil is trending up
• 3.6% 3Q13; revised: 4.1% and Fed continues to buy briskly
• gasoline demand is up (but ...)
• Wal-Mart trading at all-time highs
• Genesee & Wyoming car loadings double year-over-year

Now, a new data point, and a very interesting one at that. Reuters is reporting:

U.S. household net worth hit a record high in the third quarter as home prices marched up and the value of stocks and mutual funds surged, a hopeful sign for the economic recovery.

The Federal Reserve said on Monday household wealth increased $1.9 trillion to $77.3 trillion in the third quarter, the highest level since records started in 1945. It was the ninth straight quarter of increases.

Household net worth hits a record high, 3Q13. Not a record high in the past year. Not a record high in the past decade. Not a record high in the past 50 years, but a record high since records started in 1945, and, of course, that means this is a record high in the history of the United States.

The "funny" thing is this: does anyone believe it? Do you all feel that "US household net worth is at an all-time high"? Reading the mainstream media, looking at the Drudge links, reading this blog, listening to most talking heads, certainly suggests something different.

When you look at the other economic data points (noted above) and then this Federal Reserve announcement, .... well, I get pretty excited. Things don't seem so bad.

But, wow, that snuck up on me. I never in a million years would have guessed that US household net worth hit a record high this past quarter.  This includes the bubble back in 2000.  And this without any sign of an inflationary bubble during the past nine quarters, which takes us back to sometime in late 2011, I suppose.

Why isn't this a Drudge headline? Will Peggy Noonan mention this? Will Rush mention this? Will CBS Evening News report this? This seems so under-reported. Very, very strange, to say the least.

Several other data points from that linked Reuters article (look at them closely; very interesting):

• During the third quarter, businesses were sitting on a cash pile of about $1.93 trillion, up from $1.81 trillion in the prior three months.
• State and local government debt declined at a 3.9 percent rate in the third quarter, the sharpest drop since 1995. It had increased at a 1.1 percent rate in the second quarter.
• Federal government debt increased at a 1.5 percent rate. It was the smallest increase since the second quarter of 2007 and was a slowdown from a 2.5 percent pace in the second quarter, which economists said was a good sign.

Random Note About Producers In The Eagle Ford; Focus On Marathon Oil

Motley Fool is reporting:

Indeed, Marathon is now one of the leading producers in the Eagle Ford, competing with the likes of EOG Resources, which delivered 39% year-over-year oil-production growth during the third quarter and is currently the Eagle Ford's largest oil producer, and Chesapeake Energy, which reported a whopping 82% year-over-year increase in third-quarter Eagle Ford production and currently holds the No. 2 spot in terms of total gross oil production in the play.

While Marathon was a relative latecomer to liquids-rich shale plays, it has quickly made up for its late entrance over the past few years by amassing sizable stakes in two of the highest-growth onshore U.S. shale plays, currently boasting roughly 200,000 net acres in Texas' Eagle Ford and nearly 380,000 net acres in North Dakota's Bakken shale.

Fueled by strong results from these plays, Marathon's third-quarter production increased to 200,000 barrels of oil equivalent per day from 172 mboe/d in the same quarter a year ago, with income from the company's North American E&P segment more than doubling to $242 million, up from $107 million in the year-earlier quarter.

Canadian Oil Sands Project Approved

Zack's is reporting:

Europe’s oil giant Royal Dutch Shell plc has received approval from the Canadian government to expand its Jackpine oil sands project in northern Alberta. The expansion is expected to increase production in the region by around 100,000 barrels a day (Bbl/d) to 300,000 Bbl/d.

The regulatory application for the project was filed in 2007 and includes sanction for additional mining areas and related processing facilities, utilities and infrastructure.

The project had faced opposition from several environmentalists on grounds of adverse environmental effects. However, the Canadian government gave the green signal to Shell stating that the resulting effects are justified.

Two story lines:

• someone must find the Canadian oil sands profitable
• the Canadian government listens to environmentalists and proceeds appropriately

Natural Gas Price Continues To Melt Up -- But, Then, Of Course, This Is Winter

Yahoo!Finance is reporting:

The price of oil remained close to $98 a barrel Monday after figures showing stronger U.S. hiring suggested demand for crude could increase.

By early afternoon in Europe, benchmark U.S. crude for January delivery was down 2 cents at $97.63 a barrel time in electronic trading on the New York Mercantile Exchange. 

In other energy futures trading on Nymex:
— Wholesale gasoline rose was nearly flat at $2.727 a gallon.
— Heating oil lost 0.16 cent to $3.0549 a gallon.
— Natural gas gained 7 cents to $4.184 per 1,000 cubic feet

Freezing weather, spurred by global warming according to the warmists (posted yesterday; I can't make this stuff up), is obviously spurring higher natural gas prices. 

Global Warming Update, Grapevine, TX, December 9, 2013; Remembering The 1906 San Francisco Earthquake

I guess 1906 was the year for global warming here in Grapevine, TX:

December 9, 2013	Max Temp	Min Temp
Normal (KDFW)	58 °F	38 °F
Record (KDFW)	79 °F (1906)	15 °F (2005)
Yesterday	33 °F	26 °F

Sent in by a faithful reader. Smile. 

Look at that temperature in 1906 -- the year of the San Francisco earthquake, and as far as I know, that earthquake was not associated with fracking. Perhaps had they been doing a bit of fracking, it would have relieved a bit of stress with minor earthquakes, preventing the "big one." And, wow, talk about flaring of natural gas in 1906 in San Francisco.

And look how "cold" is was just a few years ago, 2005, during the height of global warming.

 

This photo was taken 30 seconds after they got out of bed. I said "good morning" to the younger one, age 7 years old, but she said she was "busy." Probably checking her portfolio. I hear "Daffy Duck" emanating from the laptop being watched by the older one. I assume it is not a school-related site. LOL. 

For The Archives: I'm Not Holding My Breath

The Bismarck Tribune is reporting:

Three natural gas-related companies want to know how many operators using diesel fuel in the Bakken would convert to natural gas.

Companies have struggled with what should come to the area first, natural gas vehicles or fueling infrastructure. GoCH4 and partners MicroLNG and AmeriFlare, wants to take the first step by providing the equipment to fuel the vehicles if there are enough companies ready to make the switch.

From my vantage point, not going to happen in my investing lifetime which is now down to ten years, decreasing, and counting.

The companies are still debating "compressed" vs "liquified" and I am unable to keep the pros and cons of each straight. In a more temperate climate it would be confusing enough; throw in two months of sub-zero weather and the calculus is overwhelming. At least for me.

The three companies issued a call for submissions for the purchase of compressed natural gas or liquefied natural gas to determine if the market exists to support the investment.

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

Light Refining Has Hit A Wall; "Power" Shifts To Refiners -- Seeking Alpha

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. 

Michael Fitzimmons over at SeekingAlpha explains the market action last week affecting Bakken producers and why PSX continued to trade at new highs.  The light oil refiners have hit a wall, he says, and "power" now shifts to the refiners.

A reader and I discussed the "light oil" issue just the other day; and RBN Energy has talked about it for months. Again for newbies, the US refineries along the Gulf Coast were optimized decades ago, at huge cost, for heavy oil coming from Venezuela and Canada. These refiners are not optimized for Bakken light, sweet oil, and thus a glut of such oil, even as the pipeline situation starts to improve. The refiners have learned to mix light oil with heavy oil but the relative excess of light oil continues to be an issue.

From Michael Fitzsimmons:

My last article, Are Energy Investors Rotating Out of Shale Producers And Into Big Oil, addressed the relative outperformance of big oil companies like Exxon and Chevron over that of shale oil producers like EOG Resources, Continental Resources, and Whiting Petroleum  over the past month or so. 

During that time period, Chevron and Exxon are up while shares of EOG, CLR, and WLL are all down around -9.5%. The article provoked a lively comment section in which readers discussed everything from frigid weather in North Dakota, to production growth expectations, realized prices and simple profit taking.

However, at the end of the day I believe the selling in shale producers is because realized prices for mid-continent shale oil, barring a Presidential decree allowing crude oil exports, have significant downside from here. The ramifications will be huge. Going forward, the trend will favor the downstream operators over the shale producers. It will be a feedstock buyer's market in 2014, which bodes well for a mid and downstream company like Phillips 66.

In other words, it's not the weather.

And the president isn't going to allow crude oil exports. We're stuck with overproduction of light oil in this country. Good, bad, or indifferent that's what some folks are saying. And that's also why the price of gasoline won't go down -- the price of gasoline will more closely follow Brent, and there have been recent articles that the spread between Brent and WTI will continue to widen.

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

For Investors Only: This Will Ruin Someone's Day -- Nuverra On The Hook For $181 Million For A Two-Vehicle Accident; Insurance Limit Of $16 Million -- Ya Just Gotta Love Texas Juries

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

Dividends: eight companies announced increased dividends/distributions, and most are significant increases.

In-Play:

Abraxas Petroleum Corp announces sale of WyCross for $73 mln : Co recently executed a definitive agreement to sell the company's Eagle Ford interests at WyCross in McMullen County, Texas to an undisclosed buyer for $73 mln. The sale is subject to customary closing conditions and purchase price adjustments and reflects an effective date of December 1, 2013.

The assets to be sold consist of approximately 1,200 net acres, 3.7 mln barrels of proved reserves (1) (2.8 mln barrels of oil, 3.0 bln cubic feet of gas and 0.5 mln barrels of NGLS) and produced 655 boepd (597 barrels of oil per day, 154 mln cubic feet of gas per day and 32 barrels of NGLs per day) net to Abraxas during the month of September 2013. Abraxas plans to use the proceeds from this sale to immediately pay down the company's bank line, before being ultimately redeployed into additional operated lease blocks in the Eagle Ford and Bakken.

Closing is scheduled for December 2013. With the removal of the WyCross production volumes and two additional WyCross well completions in 2013, Abraxas is revising its 2013 production and exit rate guidance. Abraxas now expects 2013 production to average 4,300-4,350 boepd with an exit rate of approximately 4,500 boepd.

In-Play:

Nuverra Environmental Solutions responds to Texas jury verdict involving subsidiary Heckmann Water Resources : Co responded to the District Court of Dimmitt County, Texas jury verdict against its operating subsidiary Heckmann Water Resources (CVR), Inc. in a wrongful death case involving a vehicle accident.

The jury awarded $181 million in compensatory damages and $100 million in punitive damages. The accident occurred in May 2012 and involved a Heckmann Water Resources truck and one other vehicle. No citations were issued against the subsidiary or its employees.

"We are disappointed by the actions of this Texas state court jury but remain confident in the judicial system at both the trial court and appellate court levels," said Mark Johnsrud, Chief Executive Officer. "While we are highly sympathetic to the deceased and his family for his unfortunate passing, we believe based on input from our legal advisors and consultants, both trial and appellate, that this recent award exceeds well-established judicial norms and precedent by a staggering margin. The verdict is subject to post-trial motions and has not yet been entered as a judgment. After conferring with our legal advisors, we believe we have meritorious grounds to seek reconsideration of the verdict and to appeal. We intend to file motions to reduce or overturn the award and otherwise to file for reconsideration of the case," Mr. Johnsrud added.

Based on the pre-award analysis of the case, Heckmann Water Resources exposure in this matter was not expected to exceed its available insurance limits of $16 million. Although it continues to review the matter, the Company does not anticipate establishing an accounting reserve for the matter at this time. [I haven't followed Nuverra for quite some time: the chart is interesting to say the least -- look at the past three months; headline store that Nuverra announced a reverse 1-10 stock split.]

In-Play:

Newfield Exploration updates its production and capital investment outlook for 2014-16; Domestic liquids production expected to grow 30% in 2014. Company plans to invest ~$1.6 bln in 2014, focused on liquids growth (NFX) 26.40 : Co updated its "three-year plan" and provided additional information through its @NFX publication, located on its website.

"Our three-year plan provides strong cash flow and production growth," said Lee K. Boothby, Newfield Chairman, President and CEO. "Last February, we issued our first three-year plan, reflecting confidence in the quality and depth of our asset base as we complete our transition to a domestic resource co. Our growth outlook for 2014-15 is substantially unchanged, and we today introduced guidance for 2016. The execution of our plan through 2016 is expected to yield more than a 20% compound annual growth rate (CAGR) in liquids production and a 25% CAGR in cash flow."

Net production from continuing operations in 2014 is expected to range from 44-48 million BOE, or 10-20% higher than 2013 estimated net production from continuing operations of ~40 million BOE. Domestic liquids production in 2014 is expected to increase 30% over the previous year. Newfield plans to invest ~$1.6 billion in 2014 in its continuing operations.

Boothby continued, "We are increasing our 2014 investments in our SCOOP and STACK plays in the Anadarko Basin of Oklahoma. Our results to date have been very strong and we are improving our returns through fewer drilling days, optimized completion practices and the proven efficiencies associated with pad drilling. We are fortunate that three of our four focus areas are largely 'held-by-production' and we can redirect capital to our SCOOP and STACK plays without foregoing any future drilling opportunities in other regions."

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

ObamaCare: You Can't Keep Your Doctor. Or Your Hospital. Or Your Pharmacy.

NPR early this morning confirmed The FT story that was posted yesterday; that story was taken down and placed in draft so that Bakken stories would lead overnight. This post will be up only for a few minutes and also taken down. Everything will be re-posted later this morning after the Bakken news is presented.

But back to the NPR story. It turns out that, according to NPR, "a powerful Tea Party faction" prevented New Hampshire from setting up its own state Obamacare website, and thus New Hampshire must rely on the federal exchange. [Based on what is going on in Oregon, New Hampshire's political sister, it sounds like New Hampshire made the right choice. Oregon's state website is still not up.]

Only one insurance company "signed up" for New Hampshire's website: Anthem BC/BS, and Anthem "locked out" 26 hospitals across New Hampshire. NPR did not state the reason but it would have been done because the hospitals a) did not meet Anthem's medical standards; b) were inefficient and costly; and/or c) maybe first-rate hospitals but excessively expensive. Something tells me the teaching hospitals were part of the "locked out" hospitals.

Good for Anthem BC/BS -- doing the right thing: forcing hospitals to provide reasonable care at a reasonable price. If folks want better care, they can pay more -- the President's tzar on health care (yesterday, Sunday morning talk shows previously linked), and even the President has told folks to "shop around."

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Forbes: you can't keep your pharmacy either.  I wouldn't get too shook about this. There are plenty of medications, brand-name and generic, to choose from. This is simply tweaking the drug list you worked so hard to massage for your personal needs. A year from now you will be happy with your new drug list. Or not.

Final Phase Of Seaway Pipeline Expanison To Come Online 2Q14

RBN Energy: update on the Seaway Pipeline Expansion -- and yes, this affects the Bakken.

Throughout the three year-long disruption of the US crude oil distribution system caused by rising domestic and Canadian production trying to find a path through the Midwest, the Seaway pipeline reversal project has been a market bellwether of progress to unwind the congestion. In 2Q 2014 the final phase will come online - opening up an additional 450 Mb/d capacity between Cushing and Houston. As the Seaway project has been built out, the crude surplus in the Midwest appears to have moved to the Gulf Coast. Today we detail the impact of Seaway Phase 3 on Gulf Coast crude supplies.

A bit more detail from the earlier snippet:

By the time that Seaway Phase 3 comes online during the second quarter of 2014, we will already have observed the impact of as much as 700 Mb/d of additional crude capacity coming online from Cushing to Port Arthur sometime in January via TransCandada’s Cushing Marketlink Pipeline (CMP). As we detailed in the previous episode in this series, the volume of crude flowing on CMP will be constrained by a lack of supplies at Cushing. We cited two reasons for that lack of supply- first continued delays in building the northern leg of the Keystone XL pipeline that was supposed to feed into CMP and second the limited pipeline capacity to deliver crude into Cushing from Chicago until the 585 Mb/d Enbridge Flanagan South project is completed in mid 2014. Without those pipeline links there is not enough crude flowing into Cushing to feed the 700 Mb/d CMP and the 450 Mb/d Seaway expansions.

But shippers on the Seaway expansion should be in better shape next year than their counterparts on the CMP. That is because the Seaway expansion comes online at the same time as the Flanagan South project and the two pipelines share a common owner in Enbridge. That means Seaway shippers should be able to secure adequate supplies of Canadian or Bakken crude at Cushing via Flanagan South. Their counterparts with commitments to ship crude on the CMP have no such connection to crude supplies from Canada or North Dakota until the Keystone XL northern section receives a Presidential permit and gets built – an event that may never happen - and if it does, will not be completed before 2016 at the earliest.

Monday: Schools Still Closed In DFW Area Due To Global Warming's Frigid Temps, Impassable Bridges; Update On The Seaway Pipeline Expansion -- How It Will Affect The Bakken; Active Rigs At 193 Despite Arctic Cold In The Bakken; Snafu: New Synonym For ObamaCare; Warmists Predicted Snowier Winters And We're Getting Them (Ask The NFL)

Active rigs: 193

RBN Energy: update on the Seaway Pipeline Expansion -- and yes, this affects the Bakken.

Throughout the three year-long disruption of the US crude oil distribution system caused by rising domestic and Canadian production trying to find a path through the Midwest, the Seaway pipeline reversal project has been a market bell weather of progress to unwind the congestion. In 2Q 2014 the final phase will come online - opening up an additional 450 Mb/d capacity between Cushing and Houston. As the Seaway project has been built out, the crude surplus in the Midwest appears to have moved to the Gulf Coast. Today we detail the impact of Seaway Phase 3 on Gulf Coast crude supplies.

The Wall Street Journal

Regular readers know all about this, but now the mainstream media is starting to report the "real" stories that will frustrate Obamacare: high deductibles; sticker shock.  

As enrollment picks up on the HealthCare.gov website, many people with modest incomes are encountering a troubling element of the federal health law: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn't cover.

In general, folks do not understand insurance, and they certainly don't understand health insurance. Even I don't know whether the $12,000 annual deductible is firm, or whether there are ways to offset it gradually over the year. All I know that in addition to a $12,000 premium for a couple aged 55, there's a $12,000 annual deductible.

From the linked article:

The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.

By the way, I get a kick out of "out-of-pocket" expenses: that phrase does not include the monthly premium.

Folks might have put insurance policies in their carts, but there is no way to pay for them yet, and when the time comes? Nope, they aren't gonna buy. This is not rocket science. In fact, the first opportunity to pay will be just when the Christmas bills start coming due. The perfect storm.

Meanwhile, health-site snafus plague Maryland. I don't know if folks know where the acronym "SNAFU" originated, but Webster's will soon add that acronym as a synonym for Obamacare.

Maryland is struggling to fix its troubled health-insurance website more than two months after it opened, showing how technology woes are affecting more than just the federal system.

The official in charge of Maryland's insurance marketplace, Rebecca Pearce, resigned late Friday after criticism of her decision to take a vacation in the Cayman Islands during Thanksgiving week.

New statistics released Friday showed just a trickle of customers signing up for private coverage in the state. Maryland, under Gov. Martin O'Malley, a Democrat who quickly moved to implement the Affordable Care Act, was expected to be a leader among the 14 states running their own health-insurance exchanges.

The state is strongly Democratic, and Mr. O'Malley hired Ms. Pearce two years ahead of the site's launch on Oct. 1. The site has suffered repeated crashes and errors, a reminder o the challenges of building a new health-insurance market from scratch.

The federal HealthCare.gov site, which serves 36 states that declined to run their own exchanges, has had similar problems, as have a few other states running their own websites, including Oregon and Hawaii.

If Rush is not on vacation, his program today has already been written. He only needs to read the front page of The WSJ.

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 Detroit update:

Problems in this bankrupt city run deep. Police on average take nearly an hour to respond to some of the most serious calls. Firefighters must contend with blazes that erupt among the roughly 78,000 abandoned and vacant structures. The population has shrunk to 700,000 from a high of 1.8 million decades ago.

But when federal bankruptcy Judge Steven Rhodes last week affirmed the city's eligibility for Chapter 9 bankruptcy, he cited streetlights as a prime example of Detroit's decline. Nearly half of the city's 88,000 street lamps are dark, according to city estimates.

Most of the poles here are stripped of copper or the underground wiring is fried—trouble that no new bulb will correct.  I'm beginning to think "Hunger Games" could have been filmed here. 

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For folks who are tired of the ObamaScare stories, here's a huge story:

China posted its biggest trade surplus in almost five years as soaring exports ran ahead of modest import growth, potentially resurrecting a source of friction with the U.S.

In November, China's trade surplus rose to $33.8 billion from $31.1 billion the month before. Exports staged a rebound, rising 12.7% from November last year, well ahead of October's 5.6% growth, in what many economists see as a positive sign for the global economy and China.

But imports grew a more modest 5.3% year-over-year, aggravating China's overall trade surplus and bringing the imbalance with the U.S. to $22.4 billion for November. A persistent trade surplus has been a source of contention between Beijing and Washington and has fed China's accumulation of a $3.66 trillion trove of foreign-exchange reserves as of the end of the third quarter.

Is the tide turning? Syria recaptures key town. Over the weekend, it was reported that the president probably lied about Syrian chemical-weapons use. No link; story easily found if interested. Google Seymour Obama Syria. You don't even have to add "lied" but it will help.

Florida State and Auburn will meet in BCS Championship. #10 Michigan knocked off #2 Ohio.

Ohio State's upset loss to Michigan State sent the Spartans to the Rose Bowl, where they will meet Stanford on Jan. 1 in the traditional Big Ten vs. Pac-12 pairing. For the resurgent Cardinal, a program with one Rose Bowl appearance between 1972 and 2013, this marks a fourth straight BCS bowl. Meanwhile, Michigan State is playing after the floral parade for the second time since 1966.

Global warming? As predicted, global warming led to snowiest weekend for the NFL since 1991 (the earth quit warming in 1995). Those warmists are good with their predictions.

There were five simultaneous snow games, by far the most since 1991, according to Stats LLC. On only two other occasions since then have there been even three snow games: Nov. 24, 1991 and Dec. 13, 1992.

The Lions and Eagles in Philadelphia got the worst of it-or maybe the best from the perspective of those watching from the comfort of home. The snow buried field markers, made it nearly impossible for quarterbacks to find receivers downfield and caused Detroit to cough up seven fumbles in the 34-20 Eagles victory.

The other snow games were relatively high-scoring too: Miami beat Pittsburgh 34-28, Green Bay edged Atlanta 22-21, Kansas City routed the Redskins 45-10 and Baltimore beat Minnesota 29-26. The average of 53.8 combined points in these games is more than any other snowy Sunday since 1991. 

Heard on the street: the best way for shale investors to rid out the storm if oil weakens.

The U.S. exploration-and-production sector faces a tricky 2014, largely due to its own success. Rising domestic and Canadian output is leading to a glut in North American oil. When some refineries shut down for maintenance this fall, reducing capacity to process oil, West Texas Intermediate crude prices slumped by 16%—and stalled out this year's rally in E&P stocks by mid-October.

The glut looks set to grow in 2014. Goldman Sachs forecasts U.S. and Canadian oil supply to grow by 1.45 million barrels a day next year. That alone beats projected global demand growth of just 1.35 million barrels a day. In that scenario, the most efficient E&P firms look best placed to ride out lower oil prices.

The link names three shale companies to watch: all are in the Permian; one is also in the Bakken.