Tuesday, December 10, 2013

I'm Sure It's Just Temporary ... Once The Website Is Up And Running ...

... his poll numbers will recover.

Major Building Boom In Fargo, North Dakota; 350 Miles From The Bakken; Oil Boom Said To Be Driving Fargo Development

Prairiebizmag.com is reporting:
A mammoth complex of more than 320 apartment units being built in West Fargo, N.D., is said to be the largest of its kind in the city and perhaps the largest in Fargo-Moorhead.
It’s about the same size as a collection of apartment buildings planned for a south Moorhead, Minnesota, neighborhood that will result in about 316 apartment units.
Fargo, too, expects to see sprawling apartment complexes go up in the near future.
Mega projects aside, Moorhead and Fargo building permit information shows both cities have set records this year for the number of apartment units approved, with Fargo approving 1,170 and Moorhead 274.
By comparison, Fargo approved 743 units in 2012 and Moorhead approved 60.
So, what’s fueling the boom?
City officials and developers offer a variety of answers to that question, from job growth – some of which is related to North Dakota’s oil boom – to attractive borrowing rates for builders and low vacancy rates in the existing apartment market.


Data Points On Fargo From A Fargo Businessman

Agriculture is still the biggest "business" in the state.  Oil is catching.

Fargo has a critical mass. About 200,000 in metro area. 2-3% growth a year is 4,000 to 6,000 new people every year.

Microsoft has about 2,000 jobs.

$500 million new hospital being built.

25,000 college students.

So between, ag, school, tech, hospitals, there is a diversity.

Every week I consult with a taxpayer on  how to be a ND resident for tax purposes versus a Minnesota resident.  No reason at all to live or do business in Minnesota if at all possible.

Ten (10) New Permits -- The Williston Basin, North Dakota, USA; Four New Permits For Hess, Six New Permits For Oasis; Oasis Has Eleven (11) Approved For "Tight Hole" Status

Active rigs: 193

Ten (10) new permits --
  • Operators: Oasis (6), Hess (4) [That was easy.]
  • Fields: Alger (Mountrail), Cherry Creek (McKenzie) [That was easy]
  • Comments: The Oasis permits are for a 6-well pad; the Hess permits are for a 4-well pad.
I forgot to post the wells that came off the confidential list today. Here they are:
  • 23694, drl, XTO, FBIR Beaks 24X-8A, Heart Butte, no production data,
  • 24579, 285, CLR, Barney 4-29H-1, Brooklyn, t8/13; cum 20K 10/13;
  • 24733, 150, Hess, LK-Pohribnak 147-96-16H-7, Cedar Coulee, t10/13; cum --
  • 25344, drl, RO, Orvin 31-13TFH, Reunion Bay, no production data,
  • 25582, drl, KOG, P Evitt 154-98-15-12-24-15H3, Truax, no production data,
  • 25608, 138, Legacy, Legacy Et Al Bernstein 13-17 2H, Pershing, no production data,
This is more than I normally see on a daily activity report: 19 wells approved for "tight hole" status, including 11 for Oasis and 8 for Whiting. That's pretty impressive. No moss growing under either of Whiting's rigs or Oasis' rigs.

Wells coming off the confidential list Wednesday:
  • 23933, drl, XTO, FBIR Beaks 24X-8E, Heart Butte, no production data,
  • 24799, drl, CLR, rollefstad Federal 7-3H-1, Antelope, no production data,
  • 25092, drl, Statoil, Bill 14-23 5TFH, Alexander, no production data,
  • 25266, 900, Hess, BW-Rolfson-151-98-2116H-3, Siverston, t11/13; cum 11K 10/13;
  • 25513, drl, KOG, P Evitt 154-98-15-12-1-2H3M, Truax, no production data,

Mike Filloon's Update On Microcaps In The Bakken With A Focus On American Eagle Petroleum

The article is at Seeking Alpha:
The oil and gas renaissance occurring in the United States has provided a unique investment opportunity. It is less difficult to choose large-cap oil and gas names but may provide less growth and return on investment. Smaller operators can provide better returns, but it is likely and investor would shoulder more risk. Everyone is looking for the lottery ticket type investment, when in reality the chances of finding it are quite low. It is also important to note that these fast growing stocks are generally a short-term investment and not a stock one could hold on to over a matter of years. I don't generally recommend smaller operators as it is possible one could lose the majority of an investment.
Mike then goes on to look at the following companies as they compare to American Eagle:
  • Emerald Oil: great acreage; excellent results
  • American Eagle: growth is attributed to its operated Spyglass Prospect wells
  • Magnum Hunter: focuses on the Three Folks; believes it has a sweet spot
  • SM Energy: active in Colgan oil field (Divide); targeting the TFS
  • KOG's Liberty wells in western Williams are noteworthy
  • EOG: Mike lists EOG's top wells in west Williams County
In summary, AMZG is an interesting investment. It has low well costs when compared to other, better producing areas of the Williston Basin. Although these wells produce less, payback times are still competitive. Its most recent quarter was quite good and adds optimism to the names going forward. Magnum Hunter and SM Energy have been working the area with success, and it would seem AMZG could improve well results and lower costs based on Magnum Hunter's current data. When valuing this acreage, keep in mind the upper Three Forks is the main target, and middle Bakken results have not been as good. This could still be a stacked play, as the second and third benches may be productive as well. 
By the way, look at the question asked by the first person to comment at the linked article by Mike. Regular readers know the answer to that question. 

Triangle Petroleum Earnings 3Q14

TPLM press release:
  • increased quarterly sales volumes to 626 Mboe (+390% y/y, 6,804 Boepd) as compared to 128 Mboe (1,389 Boepd) in the same period in Q3 fiscal 2013
  • increased consolidated sales to $88.5 million (+316% y/y) as compared to $21.3 million in the same period in Q3 fiscal 2013
  • increased consolidated net income to $17.4 million, or $0.22 basic EPS (adjusted net income of $15.2 million, or $0.19 adjusted basic EPS)
Earnings lag; revenues beat; guidance -- increased production. 

Yes, this is 3Q14: I brought this up before and was told by Triangle that is correct. They are in their fiscal year 2014, and this is already their 3rd quarter.

Presentation at their website. Slide 7, December, 2013, presentation: incredibly good acreage.

Mineral Acres In Morton County Bringing $1,500/Acre? -- December 10, 2013


December 11, 2013: less than 48 hours after the original note is posted, we get official word that four (4) permits have been issued in two counties even farther east than Morton County, which lends credibility to the rumor that someone is interested in looking for oil in Morton County also. 
Original Post 

Before reading any further, click on this link, an overview of the geology of the North Dakota Williston Basin. When you get to the link, scroll down to Figure 4.

[Okay, three readers cheated: the tracking device reveals that three readers continued reading without clicking on the link. And I go to so much trouble finding these links.]

Whatever. Figure 4: North Dakota oil producing counties (yellow) with the producing wells (blue).

The "stretched-out" county east of Stark County is Morton County. It is not yellow, i.e., it is not an oil producing county. Mandan is the county seat, sitting on the opposite shore from Bismarck.

Now that you are oriented: a reader sent me a note telling me he has heard from "reliable" sources that there was a land sale in Morton County yesterday, and I quote: "@ $1,500.00 per acre. Speculation is that it is oil money."


Later, December 11, 2013, a reader sent this note:  I was told the area is not real suitable for farming. That it is "scrub land" & so the purchase was unlikely for agriculture. My understanding it was a land sale rather than a mineral lease.  (The reader had time accessing the blog to post a comment; others have said the same thing. It's possible one has to log in with a g-mail account to post on "blogger" applications. Also, I have never been able to post from my iPad, but I have the oldest version of iPad. E-mails work fine if posting comments does not work.)

Another Data Point That Won't Show Up In Algore's PowerPoint Presentation: Coldest Night In Chicago In 18 Years -- And It's Just Beginning; The Market Update -- Check Out The Bakken Operator Action

I have no idea why this is "a story" and why it's such a huge headline on Drudge.

Drudge has been linking stories for quite some time now that a) the earth quit warming about 17 years ago; and, b) there is evidence the earth is moving into a new colder climate that will last for some time.

Regardless, ChicagoCBSLocal is reporting:
Temperatures in Chicago hit an 18-year low overnight, when the mercury dipped to one degree below zero.
It was the first time since 1995 that the temperature was below zero in Chicago, and that’s just the start of frigid conditions.
Though temperatures will get into the low 20s on Tuesday, they could drop below zero again Wednesday night. Before that, Chicago likely will get more snow.

Wow, wow, wow! For investors only! Have you all looked at what the Bakken companies are doing?

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. 

In-Play Over At Yahoo!In-Play

Northern Oil & Gas provides November drilling and completion update: Co provides a drilling and completion update for the month of November 2013. During the month of November, Northern participated in 62 gross (4.8 net) wells that were completed and placed into production. Through the first two months of the fourth quarter, Northern had completed 127 gross (9.5 net) wells. These additions bring Northern's year-to-date well additions to 485 gross (36.8 net) wells. As a result, Northern's total producing wells totaled 1,712 gross (143.0 net) as of November 30, 2013. In addition, Northern was participating in 255 gross (16.6 net) wells drilling or awaiting completion as of November 30, 2013.

Plains All Amer announces new permian basin expansion activities:
Co announced four projects that are part of its plan to significantly increase and expand its Permian Basin pipeline infrastructure over the next few years to keep pace with rising production volumes. These four projects, as well as several other projects currently under review, will result in aggregate investments of ~$400 mln to $500 mln.

The four projects are expected to be completed in stages throughout 2014 and early 2015 and include the construction of three new large diameter pipelines that will increase the Partnership's takeaway capacity in support of crude oil production growth in the Delaware and South Midland Basins and will support gathering systems the Partnership is constructing in the Avalon, Bone Spring and South Spraberry developments.

Co announced it is constructing approximately 45 miles of new crude oil pipeline that will complement its existing Mississippian Lime pipelines and will further service growing production in the Mississippian Lime resource play. The pipeline is expected to be brought into service in the first quarter of 2014. 
Samson Oil & Gas provides operational update on its North Stockyard Project: Co provides update on its NORTH STOCKYARD PROJECT in ND
Blackdog 3-13-14H (SSN WI 25.03%)
The Blackdog well successfully set and cemented the 7 inch casing in the Middle Bakken at 11,691 feet measured depth, 11,341 feet true vertical depth. Currently the 6 inch lateral portion of the well is being drilled at a depth of 15,258 feet. The forward plan is to drill the Blackdog to a total depth of 19,987 feet.

This well will be a middle Bakken lateral and is the infill location between the Rodney 1-14H well (SSN WI 27.18%) and the Sail and Anchor 1-13-14HBK well (SSN WI 25.03%).

Coopers 2-15-14HBK (SSN WI 27.7%),
The 22 stage plug and perf stimulation treatment commenced on December 3rd as planned. Currently eleven stages of the frac have been completed as of December 9th. Operations have been delayed due to extremely cold weather and the subsequent effect on operations including frac line sand manifolds being frozen. After completion of the Coopers well, the forward plan is to fracture stimulate the Tooheys, which will be a 24 stage sliding sleeve configuration.

Tooheys 4-15-14HBK (SSN WI 27.7%),
Fracture stimulation was expected to commence on December 8th, following the Coopers frac. With the weather delays experienced in the Coopers stimulation this frac has been pushed back. The completion configuration is a 24 stage sliding sleeve.

For Everyone, Not Just Investors

Over the years I've subscribed to not less than a dozen different weeklies and/or monthlies, but over time have gradually whittled back to just one: The Wall Street Journal. There is one exception: I still get the weekly BloombergBusinessweek but somehow that is an "error." I tried canceling but was told I still owed $8.95 on an introductory offer a year or so ago, so I paid it, although I didn't think I owed it, and then I never got another issue for several weeks. I wrote them and now it is arriving regularly. I have no idea how long the subscription will last. But I digress.

I can't remember why I first subscribed to The Wall Street Journal. I first subscribed in 1984, when we were living on Spruce Street, Grand Forks Air Force Base, North Dakota. My earliest recollection is reading it simply to find the P/Es, closing prices, and yields of stocks, pretty much on the NYSE. I was surprised how good the writing was in general, and like those folks who subscribe to Playboy for the articles, I stayed with The Wall Street Journal for the non-business news and the excellent writing.

Occasionally I enjoy the op-eds, but as I get older, I find that even op-eds in The WSJ no longer interest me all that much.

So, I really shouldn't have to post the disclaimer (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 some folks may think there is a hidden agenda to my posting these links, so I post the disclaimer. But there is no hidden agenda.

Smart move: the GOP moves away from its own health plan. Not even worth reading. The headline says it all.

Environmental concerns remain, but California is pressing on with massive $25 billion project to bypass and restore "the Delta." I guess if one can slice and dice the national emblem, the endangered smelt "and other fish" don't stand much of a chance.
A contentious project to divert water supplied to Southern California past an ecologically sensitive river delta moved a step closer to fruition Monday, as state and federal officials unveiled a draft final environmental analysis. 
 Under the $25 billion plan, which is backed by Gov. Jerry Brown, two 30-mile-long tunnels would bypass the Sacramento-San Joaquin Delta in Northern California. The area often serves as a choke point for water destined for more than 20 million people and farmland in semiarid parts of Southern California and the Central Valley because of pumping restrictions to protect endangered smelt and other fish.
This may be the most interesting business story to follow right now: where Boeing decides to build the 777X. One has to read the article to see how big these incentives have gotten:
Washington's legislature last month approved sweeteners valued at $8.7 billion over 16 years—which experts say is the largest corporate-incentive package in U.S. history—in an effort to keep the jobs in what has been Boeing's primary manufacturing base for commercial jets. But Boeing then began looking elsewhere after its largest union rejected an eight-year contract deal that would have made significant changes to employees' wage structure and retirement and health-care benefits.

At Least The Wall Street Journal Thinks It Is A Bullish Sign

Moments ago I posted some comments regarding the economic news released by the Federal Reserve yesterday. I wondered why so little has been written about this; why there has been no ticker tape parade.

My faith is restored in my gut reactions. I thought it was a big story. It turns out that The Wall Street Journal also considers it a big story, talking about it in a story int he front section of the newspaper: Americans continue to regain lost wealth, (a subtle reminder to Proust, I assume).
The stage could be set for stronger economic growth next year, as a surging stock market and run-up in home values have helped Americans recoup nearly all the wealth they lost in the recession.
The net worth of U.S. households and nonprofit organizations—the values of homes, stocks and other assets minus debts and other liabilities—rose 2.6%, or about $1.9 trillion, in the third quarter of 2013 to $77.3 trillion, the highest on record, according to the Federal Reserve.
The Fed's figures aren't adjusted for inflation, but even after accounting for rising costs—using the Fed's preferred inflation gauge—Americans' net worth is at record levels. The figures also aren't adjusted for population growth, and the nation's wealth is roughly 1% short of its peak according to another commonly used gauge, the consumer-price index.
Still, the report shows American households' finances are making up more of the ground lost during the recession, which ran from December 2007 through June 2009, and that fundamental economic improvements are reaching more people. After four years of slow growth, economists expect output to grow faster next year, partly because rebounding home prices and stocks are making more Americans feel wealthier—a trend that, in turn, could make them more inclined to borrow and spend, giving the economy a lift.
We'll get a chance to see how many "points" are baked into "the Dow" now that it is beyond dispute that tapering will begin, certainly by February, and possibly earlier. My hunch is Ben Bernanke would like to announce he is tapering -- it will be a nice feather in his cap. Although I've never seen him wear a cap, much less put a feather in it.

Tuesday: Active Rigs, RBN Energy, And Futures

Crude oil is up over one percent in pre-market trading/futures. I know this has nothing to do with the economic news released yesterday by the Federal Reserve, but being the eternal optimist, I sure would like to think the news had some positive impact.

The news I am referring to, of course, is the Federal Reserve observation that for the ninth consecutive quarter, total household net worth has increased, and now has set an all-time US record. No ticker tape parade?

Pre-market trading means squat, but it is nice to see the price of oil back to where it should be. The fact that the Keystone XL South should be filling as we speak is said to be part of the reason the price of oil has gone up over the past few weeks. But I still like to think the economic news over the past few weeks has had some effect.

So, what else on this fine Tuesday where we see schools canceled for the third school day (five days of "holiday" for the granddaughters if one counts the intervening the weekend).

The active rig count continues to surprise some folks; it has surprised me. One-hundred-seventy-five (175) rigs would be about right, but here we are:

Active Rigs19318120016670

I don't see a whole lot of difference between 200 rigs near the "height of the boom" with 193 rigs today when one considers better understanding of the geology, delineation of the middle Bakken, more powerful rigs, and pad drilling.

RBN Energy:
Midstream infrastructure companies are investing heavily in facilities to gather, store and transport condensate and natural gasoline range materials in the Utica. The expectation is that production of these light hydrocarbons from the wellhead and gas processing/fractionation plants will increase significantly in 2014. Today we take a deep dive into two company’s plans for condensate and natural gasoline takeaway.
This is Part 4 in our blog series covering midstream plans to capture and deliver condensate range materials to market from Utica shale production. In Part 1 we covered the expected surge in condensate, natural gas liquids (NGLs) and to a lesser extent crude oil production from the Utica shale in the next year (2014) as a result of new infrastructure coming online.
Then we described condensate and crude supply infrastructure plans recently outlined by MPC/MPLX (Marathon) at the Hart Energy DUG East Conference.
In Part 2 we looked at MPLX’s longer term Utica transportation strategy to provide third party shippers with options to move liquids outside the region.
In Part 3 we reviewed infrastructure proposals from Unity Pipeline Company and Kinder Morgan to move condensate and natural gasoline to Western Canada from the Utica as a diluent for blending with heavy bitumen crude to enable the latter to flow in pipelines.
This time we cover existing and planned infrastructure plans by Crosstex and UEO to handle condensates and natural gasoline output in the Utica.
There are a number of reasons to pay attention to today's post, not least of which it might provide hints and/or guidance to what might be necessary in the Bakken.