Tuesday, December 17, 2013

Nine (9) New Permits -- The Williston Basin, North Dakota, USA -- To Be Completed Later

Active rigs: 189 -- quite a drop over the past few days.

Nine (9) new permits --
  • Operators: Whiting (3), SM Energy (2), OXY USA (2), CLR, Petro-Hunt
  • Fields: Clear Creek (McKenzie), Twin Valley (McKenzie), Crooked Creek (Dunn), Sanish (Mountrail), Ukraina (Billings), Colgan (Divide)
  • Comments: SM Energy has a permit for a wildcat in Divide County
Wells coming from off the confidential list were posted earlier; see side bar at the right.

Five (5) producing wells were completed:
  • 25434, 62, Williston Hunter, MMU 3H, Mohall, a Madison well, t9/13; cum 3K 10/13;
  • 25383, 0 (no typo), XTO, Allie 31X-24H, Capa, t9/13; cum --; possibly not fracked yet; 24 stages planned; Three Forks;
  • 25326, 887, XTO, Olson 34X-19H, Arnegard, t11/13; cum --
  • 25327, 877, XTO, Olson 34X-19G, Arnegard, 30 stages; 2.7 million lbs; geology report not promising; t11/13; cum --
  • 25025, 1,164, Oasis, Folda 5393 43-4T, Sanish, t7/13; cum 34K 10/13;

ConocoPhillips Donates $1 Million For New Dickinson Hospital; Matches Marathon's Early Contribution

The Dickinson Press is reporting:
Bakken operator ConocoPhillips has pledged $1 million to Dickinson’s under-construction St. Joseph’s Hospital, the hospital announced Tuesday.
With the latest gift, the foundation has raised nearly $10 million of its $15 million goal for private fundraising St. Joseph’s Hospital spokeswoman Stephanie Fong said.
The other $85 million for the project is coming from parent company Catholic Health Initiatives.

Minor Point For The Archives: BNSF Requires Coal Shippers To Suppress Coal Dust

The Billings Gazette is reporting:
The federal Surface Transportation Board has decided that BNSF Railway can require coal shippers to use certain methods to reduce the amount of coal dust lost from rail cars leaving coal mines in Wyoming and Montana.
In a decision last Wednesday, the board said shippers challenging the railway's coal-loading rules had not shown the measures were unreasonable. It did, however, find one provision related to liability unreasonable.
BNSF spokeswoman Courtney Wallace said Tuesday the board's decision ensures coal dust stays in railcars where it belongs.

**************************
Speaking of coal, and killing the coal industry....

Business Insider is reporting that President Obama has worse polling numbers since Richard Nixon
President Barack Obama is ending his fifth year in office with the lowest approval ratings at this point in the presidency since President Richard Nixon, according to a new Washington Post/ABC poll released Tuesday.
Obama's approval rating in the poll stands at 43%. By comparison, President George W. Bush had a 47% approval rating at the end of the fifth year of his presidency. And all other Post-World War II presidents had approval ratings above 50% — with the exception of Nixon, who, amid the Watergate scandal, had a dreadful 29% approval rating.
The brutal numbers underscore what has been something of a lost year for the President. His approval ratings have been plunging recently as a result of the botched implementation of the Affordable Care Act. In the Washington Post/ABC poll, only 34% approve of how Obama is handling his signature health law's implementation
34% is not a whole different than 29%, especially onsidering we're talking about the president mainstream media loves the most since JFK, this is really quite shocking. And then look at the outlet that provided the polling: Washington Post/ABC.

Another Inconvenient Truth

Rigzone via Reuters is reporting:
U.S. crude oil production, rejuvenated by the advent of "fracking" shale formations, will approach historic highs by 2019, the Energy Information Administration (EIA) said on Monday, raising its forecast to levels that would have been unforeseen just a few years ago.
The U.S. oil and gas industry has been a bright spot in recent years as the economy struggles to recover from a financial crisis and growth stagnation. The energy renaissance has prompted some large U.S. oil companies to sell foreign assets and come home to focus on shale, leading to a upsurge of infrastructure projects. Cheap gas, meanwhile, has reinvigorated the refining and energy-heavy industrial sectors
by lowering costs. The EIA said production in the world's largest oil consumer will rise by 800,000 barrels per day (bpd) every year until 2016, when it will total 9.5 million bpd. By 2019 it will peak at 9.61 million bpd, nearly matching a 1970 record of 9.64 million bpd.
This still remains one of my favorite posts. Jane Nielson says:
Frequent Internet users are getting emails about the Bakken Formation in North Dakota and Montana, supposedly a great oil bonanza just waiting to be tapped if only nasty enviros would let it happen. The emails and websites say that Bakken would solve all our petroleum “needs.” (What, me worry about  global warming?)
Don’t believe it. There’s some oil to be gotten out of Bakken, and it’s going to be exploited. But the “bonanza” is nothing but hype.
 Jane has not updated her post. Another inconvenient truth.

Just How Good Is The Three Forks? Just How Good Is EOG's Completion Technique? Forbes Mentions Oasis

Early on, NDIC, Lynn Helms said the Three Forks might be better than the middle Bakken; and EOG has said they are getting 100% internal rate of return within one year.

In the old days (back in 2010, many of us considered a well that produced 100,000 bbls of oil in the first full year -- i.e., twelve months -- was an exceptional well).

Look at this one: more than 110,000 bbls in less than four full months (in about 3 1/3 months).

For newbies, also note the legal name for this well -- "....130-2526H." The "130" designates this as a Three Forks well by EOG.
  • 24855, 1,981, EOG, Van Hook 130-2526H, Parshall, 35 stages; 11 million lbs, Three Forks, t7/13; cum 111K 10/13;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-201331267342671286451377413467161
BAKKEN9-2013303324033204111941727416742387
BAKKEN8-20132629840302641390216347141002130
BAKKEN7-201310211301969695041054083062184

Look at that: 35 stages.

Look at the length of the horizontal: much shorter than the usual "two-section" standard "long" lateral.

For 30-second sound bite, Bakken wells are generally drilling around 9,700 feet vertically and then driling a total of 20,000 feet, or about 10,000 feet of horizonal.

In this case, the vertical depth was 9,540 feet (the Three Forks target was 9,527 feet) and the total depty was 16,601 feet, much shorter than the standard 20,000 feet of total depth for a standard "long" lateral in the Bakken. About 3,000 feet shorter than the standard long lateral.

Generally speaking, most operators are using about 100,000 lbs of proppant per frack stage; it would not be unusual to see about 3 million lbs of proppants for a 35-stage frack. In this case, EOG used a whopping 11 million lbs for just 35 stages. EOG has been using 12 to 14 million lbs of proppant for 60-stage fracks.  So, even for EOG, an exceptionally large amount of proppant (sand) was used to frack this well.

If the usual is about 100,000 lbs/frack stage, then 300,000 lbs of proppant/frack stage is three times what others are using.

The spacing unit is the standard 1,280 acres. 

************************
For Investors Only

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. 

Forbes provides seven names for skeptical investors who look through rose-colored glasses. Of the seven names, one is very well known to readers of the blog: Oasis.

Route 66 To Oatman, Arizona -- Nothing About The Bakken

I arrived safely in the Los Angeles area last night about 4:00 p.m. local time, but didn't actually get to the final destination until about 8:00 p.m. Los Angeles really, really sprawls. The traffic from San Bernardino County to San Pedro moved very nicely, until south on the 710 to Long Beach, but no big deal. I cannot articulate how invigorating it is to drive in Los Angeles when the traffic is flowing at 70 mph. Absolutely invigorating. No road rage any more, from what I can tell.

There are some incredible scenes in Top Gun of fighter aircraft in tight quarters performing the "rolling scissors" maneuver. That was done by professionals and with a lot of pre-briefing and planned choreography. On the I-10 going west into Los Angeles yesterday afternoon at 70 mph I saw a lot of rolling scissors maneuvers in my rear-view mirror(s). The rolling scissors maneuvers in my rear view mirror(s) were accomplished by amateurs with no pre-briefing and no planned choreography. The singular difference between the I-10 at 4:00 p.m.going west into Los Angeles and fighter aircraft is this: on the freeway, it is done in three dimensions (x, y, and time); at 20,000 feet it is done in four dimensions (x, y, z, and time). 

I left the Dallas-Ft Worth area at 9:30 a.m. Sunday morning after a good night's sleep. I usually begin driving about 4:00 p.m. for my cross-country trips but Saturday night I was with the granddaughters until late, so I wanted to get a good night's sleep before starting off.

I last checked the mileage when I was near my San Pedro destination: exactly 1,400 miles. How's that for a round number. Straight through with some cat naps in New Mexico, east of Albuguerque.

I sleep along the way when I get tired; the updates are here.

At Kingman, Arizona, I took historic "Route 66" to Needles, California. I have several minutes of video going over the pass through the mountains to Oatman, some taken from outside the window, this one from inside the window.

I had been reading Max Tegmark's Our Mathematical Universe during the trip and was thinking about his thoughts on perceiving reality and multiple universes, while the same time observing the 1,000-foot drops off the side of the narrow two-lane road, and listening to Chris Isaak's Forever Blue album, over and over and over. On a different site, I talk about music putting me into a fugue state. I found myself near a fugue state; my temporal lobe was lit up, no doubt. There were moments when I thought I should ignore the curves, go over the edge, and observe another parallel universe as described by Max. It took an enormous amount of concentration and "resolve (?)" not to simply go over the edge. For lack of a better word (or phrase), I suppose, it was "common sense" that kept me on the center line.

On Route 66 to Oatman, going south from Kingman, Arizona

I am incredibly afraid of heights and I'm not sure I could have taken the route had I not been concentrating on filming and listening to Chris Isaak's music.

I have had that particular CD (Forever  Blue) for years. I never particularly enjoyed that CD, mostly because of the first cut. But I guess it all came together for me, south of Kingman. The CD is awesome. I must have played it a hundred times, but every time the first cut came up again, I simply skipped. I don't think there are many cuts from this album on YouTube. If I find any, I will upload one or two.

This particular cut playing in the background reminds me of Robert Rodiguez.  If you actually click on the video, go to full screen and turn up the volume to hear Chris Isaak.

This particular Chris Isaak album makes me think of Roy Orbison. The acoustic guitar, the occasional falsetto, the ballads. Roy was generally upbeat, or optimistic, but wow, I've never heard so many depressing songs that sound so good on one CD. Can anyone have lost more loves than Chris Isaak lost, based on 13 songs of lost loves in this CD, or thereabout. Yes, the first cut is not about a lost love but that's about the only one that isn't.

I continued on Route 66 from Needles to 29 Palms and Palm Springs.

I had planned on flying back to DFW, and coming back to pick up the car later, but after this incredible trip on "Route 66" I will most like drive back.

So, although I can check of "Route 66" from my "bucket list," I look forward to it again.

Oh, that reminds me, speaking of fugue states. Many, many years ago, I drove straight through from San Antonio, Texas, to Grand Forks AFB, North Dakota. I had just completed flight training and was rushing home to see my wife who was ready to deliver our first child. I drove straight through, no sleeping. Google maps says it is 1,429 miles from San Antonio to GFAFB. I remember hallucinating during the last 100 miles or so. I "was driving through a 100-mile continuous canopy of trees," through a 100-mile tunnel on I-29 north. Of course, there are no trees along I-29, and certainly no canopy of such. But the "tunnel" kept me "true." Ah, to be young again, and immortal.

Ah, here it is, a YouTube video of Chris Isaak's Shadows In A Mirror:

Shadows in a Mirror, Chris Isaak

There are 13 cuts on the CD. Twelve of them are incredible. At midnight, in a fugue state, on an infinite loop, or through the Oatman pass. Nirvana.

A bit more upbeat, but very, very similar (or not), the acoustic guitar:

Chingon, Malagueña Salerosa, Robert Rodiguez 
 
From wiki:The song is that of a man telling a woman (from Málaga, Spain) how beautiful she is, and how he would love to be her man, but that he understands her rejecting him for being too poor. Chris Isaak would understand.

Another Off-Shore Wind Project Scrapped; For Investors Only: Hess Sees Lower 4Q13 Earnings; North Dakota Makes Motley Fools' List Of Five States That Are "Obamacare's Biggest Roadblocks Thus Far" -- They Have Got To Be Kidding

British off-shore wind project scrapped; Inner Hebrides, Scotland

Another off-shore wind project for Great Britain scrapped.
This is the second huge British off-shore wind farm to be scrapped. I just reported on another off-short project planned off the west coast of England that was scrapped a few weeks ago. It's hard to keep them all straight.

1) The London Array, off the east coast, (London) Thames is still on-going.
2) The one I talked about earlier was off the west coast of England (Wales).

http://themilliondollarway.blogspot.com/2013/11/uk-throws-in-towel-on-wind-farm-due-to.html

3) Now, the one you sent me would have been on the west coast off Scotland, Inner Hebrides.

Dropping like flies. The London Array will be completed, I assume but will be a financial drag for quite some time, I bet.

****************************

I just can't get too excited about this:
Hess Corp said fourth quarter profit will be lower on a sequential basis due to a drop in oil prices and output will be lower than it had previously forecast. Hess said the average price it received for its crude oil fell to $98.65 per barrel in the first two months of the fourth quarter, down from $104.95 in the third quarter.
I would think hedges, contracts, collars, expense management, etc, would be more important than price in crude dropping from $105 to $99. If earnings miss expectations, and Hess blames it on price of crude, I would be disappointed in Hess. Let's see how Hess does, relative to others. 

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.

Yesterday:
Halcon Resources prices $400 mln add-on offering of senior notes (HK) 3.75 +0.04 : Co announced that it has priced an additional $400 million in aggregate principal amount of its 9.75% senior unsecured notes due 2020 in a private offering at an issue price of 102.750% of par and a yield to worst of 8.999%. The additional senior notes are being offered as additional notes to the $750 million aggregate principal amount of 9.75% senior notes due 2020 that the Company sold in a private placement that settled on July 16, 2012. 
*****************************  

When you read the story at the link:
  • when I see someone say wind is "more competitive with power from fossil fuels," I say "show me the data" -- because it's only competitive when one factors in the tax breaks
  • Warren Buffett playing this for the tax breaks; taking advantage of a beleaguered industry
  • wind power is cheapest source of energy in Iowa (I believe the only other source of energy in Iowa is ethanol, other than hot air emanating from politicians)
Warren Buffett orders $1 billion of wind turbines for Iowa projects. The following sounds like a press release, which I'm sure it is:
The decision by Warren Buffett’s utility company to order about $1 billion of wind turbines for projects in Iowa shows how a drop in equipment costs is making renewable energy more competitive with power from fossil fuels.
Turbine prices have fallen 26 percent worldwide since the first half of 2009, bringing wind power within 5.5 percent of the cost of electricity from coal, according to data compiled by Bloomberg. MidAmerican Energy Holdings Co., a unit of Buffett’s Berkshire Hathaway Inc., yesterday announced an order for 1,050 megawatts of Siemens AG wind turbines in the industry’s largest order to date for land-based gear.
Wind is the cheapest source of power in Iowa, and the deal indicates that turbines are becoming profitable without subsidies, according to Tom Kiernan, chief executive officer of the American Wind Energy Association trade group. That’s a boost for suppliers including Siemens, General Electric Co. and Vestas Wind Systems A/S, and a threat to coal miners such as Peabody Energy Corp.

By the way, my comments about Warren Buffett buying "wind" for the tax breaks was written before reading the article. In fact, except for the blurb I posted above, I did not read any more of the article. Don sent me the "rest of the story":
Wind farms provide “a hedge for our customers going forward in an era of reduced coal generation,” he said at the event. The projects will qualify for the federal production tax credit for wind power, which is set to expire at the end of the year.
I really get a kick out of this: Investors (Wall Street investors) are doing very, very well. MDU, for example, could probably qualify for up to $10 million in tax credits. And MDU's pay higher rates for more expensive electricity.  Consumers are getting screwed. And they still like Obama. Well, at least 37%, according to the polls. This is my favorite quote from the polls: "I still support President Obama. Everything he has done has screwed up my life, made it worse, but I still support Obama." Talk about cognitive dissonance. Obama puts the "dissonance" in "cognitivity." And then goes golfing. Or takes selfies.


*****************************

The market is up in early trading. Now that the movers and shakers have locked in their profits for 2013 and cleaned up their portfolios, investors can get back to business. It's hard to ignore all that good economic activity

The market is up in early trading even though most expect tapering will start to flow. I suggested that the market priced that into equities some time ago. Did you all see how good XOM did yesterday? PSX continues to do well. SRE continues to trade near it's all time-high.

************************
ObamaCare

The headline: These 5 States Are Obamacare's Biggest Roadblocks Thus Far -- The Motley Fool. The five states: North and South Dakota (that would be two states), Oregon, Alaska, and Delaware (isn't the vice-president from Delaware?).
Cumulatively, these five states managed to enroll just 1,510 people through two months. That is pretty miserable considering that Vermont's state-run health exchange has been practically nonfunctional -- and the state has the second-lowest percentage of uninsured residents in the country, behind only Massachusetts -- yet it's still been able to enroll nearly 5,000 previously uninsured people.
There are certainly a few similarities worth noting here.
First, lower-populated states would be logical choices to bring in a smaller number of enrollments. This is why figures from Alaska and North Dakota are understandable, but states like Oregon deserve a wag of my finger! But more so than just total enrollment, all five states are significantly below the national average of signing up 20% of total applicants. With the exception of Oregon, which is trolling along at an abysmal 0.2% enrollment-to-full applicant rate, the remaining four states above are only enrolling between 10% and 15% of people who have completed the application process.

North American Energy Revolution: If You Don't Believe It, Look At Kinder Morgan At Edmonton

Active rigs: 189

RBN Energy: Kinder Morgan's infrastructure in the Edmonton region.
Midstream companies are expanding their infrastructure in Edmonton, Alberta. Kinder Morgan is adding over 5 MMBbl of storage at the origin terminal for its Trans Mountain pipeline to the West Coast. However new investment is also being piled into rail infrastructure – including Kinder’s JV unit train loading terminal with Keyera. Canadian producers are shopping for routes to market that offer them optionality that can help mitigate congestion and discounting.  Today we describe five company’s infrastructure plans in the Edmonton region.
The Wall Street Journal

Federal judge says NSA spying violates the 4th Amendment.

Another sign the economy is turning: US industrial production hits pre-recession peak.
Industrial production, which measures the output of U.S. manufacturers, utilities and mines, surged a seasonally adjusted 1.1% from the prior month, the Federal Reserve said Monday. That was the biggest jump in a year.
This is really cool. Some pediatricians noted this years ago, that kids with asthma with dogs seemed to do better than kids with asthma without dogs. It did not make sense. 

Multivitamins found to have little benefit, and "should be avoided."

Insurers fight hospitals' paying premiums. Very, very clever. I always thought this might happen: hospitals paying the premiums for their high-use (and potentially very profitable patients). Remember, the insurers are on the hook for unlimited liability. And in the end the courts are going to rule it does not matter who pays the premium. How could one control who pays the premium?

Buyer's remorse in southern California:
A water war in Southern California could result in rates being driven up for millions of customers, just as the state enters a third year of drought. The San Diego County Water Authority is alleging in a lawsuit that its supplier, the Metropolitan Water District of Southern California, is gouging the county on charges to deliver water through an aqueduct system. MWD officials say San Diego agreed to the rates 10 years ago and is essentially suffering buyer's remorse.
The data points keep getting better: the economy continues to improve. Earlier it was reported that Ford would be building three (3) new manufacturing plants. 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.
Regardless of what the US does under this administration, Canada is moving forward:
Canadian federal regulators on Monday approved four new applications to export liquefied natural gas, including for proposed Pacific Coast terminals backed by Exxon Mobil Corp., BG Group PLC and Malaysian state-owned energy giant Petroliam Nasional Bhd, or Petronas. The move by Canada's National Energy Board comes as the latest in a series of approvals issued by the government body in response to a flurry of applications to export natural gas offshore. Western Canada aims to become a global hub for LNG by matching rising demand across the Pacific in Asia, where LNG sells for a premium, with abundant supplies of cheap gas in North America. 
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.

Did you all see how XOM did yesterday. Incredible.  I think Warren Buffett put 2 + 2 together -- Asia plus XOM.

The Los Angeles Times

Linda Rondstadt voted into the Rock and Roll Hall of Fame. Others inducted: Peter Gabriel, KISS, Hall and Oates, Nirvana and Cat Stevens.

They never give up.
Water samples collected at Colorado sites where hydraulic fracturing was used to extract natural gas show the presence of chemicals that have been linked to infertility, birth defects and cancer, scientists reported Monday.
The study, published in the journal Endocrinology, also found elevated levels of the hormone-disrupting chemicals in the Colorado River, where wastewater released during accidental spills at nearby wells could wind up.
Tests of water from sites with no fracking activity also revealed the activity of so-called endocrine-disrupting chemicals, or EDCs. But the levels from these control sites were lower than in places with direct links to fracking, the study found.
"With fracking on the rise, populations may face greater health risks from increased endocrine-disrupting chemical exposure," said senior author Susan Nagel, who investigates the health effects of estrogen at the University of Missouri School of Medicine.
Fracking involves injecting millions of gallons of chemical-laced water and sand deep underground to crack shale formations and unlock oil and gas. The process is exempt from some regulations that are part of the Safe Drinking Water Act, and energy companies do not have to disclose the chemicals they use if they consider that information a trade secret.
It would be interesting to see what shows up in all that waste water from all those fertilized farms. I don't think we want to go there.