For Investors Only; Fitzsimmons With Excellent Article Over At Seeking Alpha; We're Not Going To Run Out Of Oil -- Former BP CEO

It's been removed from Yahoo!Finance but early this morning RBC had a story listing six oil companies they suggest for traders who think the Iraq uncivil war could result in a relative shortage of oil this summer. The analysts recommended six companies: I recall four of them: Continental Resources, Whiting, Kodiak Oil & Gas, and Oasis Petroleum. The other two were not Bakken-related and the other two did not include EOG or any of the majors. I will look for the sttzsory later; if I have time I will come back to this. It's an interesting list to say the least.

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.

Mike Fitzsimmons has a nice article on LNG transportation over at Seeking Alpha. This is another really, really good article by Fitzsimmons, and I may come back and re-post this as a stand-alone post. It helps explains the geo-political background for some of the decisions / non-decisions being made in the Mideast. This paragraph, for example, stood out:

So why not let the region come to some sort of three-state "equilibrium" and then deal with each faction (Shia, Sunni and Kurd) individually? This was how General Petraeus met with some level of success. The answer is likely that even a temporary interruption of Iraqi oil production in the south (i.e. the maroon color on the map) would expose the US economy to much higher oil prices. And oil prices are already high: currently $112.60 for Brent and $107.11 for WTI.

For investors interested in KOG, there is also an article on KOG over at Seeking Alpha.

 By the way, did anyone else catch this? I think I know what this story is all about , but I could be wrong. Over at Yahoo!In-Play:

Weatherford announces registration of merger in commercial register of the Canton of Zug : Co informs its shareholders that the merger of Weatherford Switzerland with and into Weatherford International plc, the new public holding company and parent of the Weatherford group of companies incorporated under Irish law, has been registered in the commercial register of the Canton of Zug, Switzerland, and has thereby become effective. The effective day of delisting of Weatherford Switzerland's shares from the SIX Swiss Exchange will be June 19, 2014.

Also, Samson Oil & Gas provides it weekly update in Stockyard Creek in the Bakken:

• The work over rig on the Billabong well has now recovered 20 of the 26 joints in the hole. Of the remaining 6 joints, 2.5 joints have been washed over in the hole, as recovery operations continue. 
• The Bootleg 5-14-15TFH well has been drilled to a total depth of 19,076 feet in the Three Forks, where a 4.5 inch cemented liner was run. This means that both Bootleg 4 and 5 are ready to be fracture stimulated. Frontier 24 is moving to the Three Forks South pad where it will batch drill the next 4 wells (Bootleg 6 and 7, and Ironbank 6 and 7). 

The top story over at Yahoo!Finance right now, not exactly a reason to feel comfortable about the price of oil -- former BP CEO says it's not time to panic. We're not going to run out of oil. He is absolutely correct. but it brings up the point that others have often remarked: it is not the availability of the first drop of oil that affects the price of oil, but the availability of the last drop of oil. And that I think is the risk. From the linked article:

If you want to gauge the market impact of the latest turmoil in Iraq, just watch oil prices. This most political of global markets is trading near its highest prices in nine months because of new battles raging in the region.

Sunni rebels from the Islamic State in Iraq and Syria (ISIS) captured Mosul and Saddam Hussein’s hometown of Tikrit last week and on Monday they took over the small city of Tal Afar in northwestern Iraq, according to Iraq security officials. Shelling continues in the capital of Baghdad.

The situation is so serious that U.S. Secretary of State John Kerry Monday said the White House is "open to discussions" with Iran and wouldn't rule out possible military cooperation with the Shiite-led country.

And then this:

So far oil production in Iraq has not been affected, says Browne, who adds that "plenty of people are heavily engaged in making sure" that continues.

Iraq is the second largest oil producer in OPEC after Saudi Arabia, producing over 3 million barrels a day. Its production has helped to stabilize the oil market, which is already subject to declining production in Libya and Nigeria.

But if Iraqi production is disrupted, Browne is not very concerned. He says Saudi Arabia and others could "certainly make up for" the decline, and the U.S. has "plenty of domestic supply and other sources coming in."

Just one week before the Iraqi uncivil war began, there was already talk of oil supply and demand issues. And now, with Iraq imploding, folks are telling us not to be concerned -- that Saudi Arabia can make up the difference. We'll see. 

In fact, oil production has already been affected in Iraq; it occurred prior to the outbreak of current hostilities. I believe the number was about 250,000 or 350,000 bopd of Iraqi oil lost due to conflict. And I think that was in the south, not in the northern (Kurdish) area of Iraq. I don't think these fields can operate without western companies: the canary in the coal mine will be when the first western oil company or oil services company says they are evacuating their employees. 

No, we're not going to run out of oil. We're going to run out of affordable, reliably-accessible oil. There's a huge difference. 

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