Epping, A Dying City Northeast Of Williston, Is Now Booming -- August 18, 2014

The Bismarck Tribune is reporting:

The tens of thousands of workers who have flocked to high-paying jobs have driven huge demand for housing in oil patch towns. Now, a half-mile from town, developers are building Epping Ranch, a subdivision that will have 400 cookie-cutter homes, a contrast to the western facades of Main Street.

“There will probably be a few thousand people there — that’s a small city,” said Lee Luscht, a listing agent for the agency handling Epping Ranch. “I think the little post office there is about to get pretty crowded.”

Small towns like Epping sprouted across North Dakota’s plains around a century ago as homesteaders settled the rugged land. Many followed a familiar pattern over the decades: losing population, eventually surrendering their post offices and ZIP codes before seeing their buildings melt into the prairie grass. Places like Trotters, Angie and Temple, where the state’s first batch of oil was loaded onto a train, no longer exist.

And all that's about to change.

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A great article sent to me a week or so ago when I was traveling. A must-read. The (London) Telegraph is reporting:

The world’s leading oil and gas companies are taking on debt and selling assets on an unprecedented scale to cover a shortfall in cash, calling into question the long-term viability of large parts of the industry.

The US Energy Information Administration (EIA) said a review of 127 companies across the globe found that they had increased net debt by $106bn in the year to March, in order to cover the surging costs of machinery and exploration, while still paying generous dividends at the same time. They also sold off a net $73bn of assets.

This is a major departure from historical trends. Such a shortfall typically happens only in or just after recessions. For it to occur five years into an economic expansion points to a deep structural malaise.

The EIA said revenues from oil and gas sales have reached a plateau since 2011, stagnating at $568bn over the last year as oil hovers near $100 a barrel. Yet costs have continued to rise relentlessly. Companies have exhausted the low-hanging fruit and are being forced to explore fields in ever more difficult regions.

The EIA said the shortfall between cash earnings from operations and expenditure -- mostly CAPEX and dividends -- has widened from $18bn in 2010 to $110bn during the past three years. Companies appear to have been borrowing heavily both to keep dividends steady and to buy back their own shares, spending an average of $39bn on repurchases since 2011. 

And then this:

The latest data shows that “tight oil” production has jumped to 3.7m barrels a day (b/d) from half a million in 2009. The Bakken field in North Dakota alone pumped 1m b/d in May, equivalent to Libya’s historic levels of supply. Shale gas output has risen from three billion cubic feet to 35 billion in just seven years. The EIA said America will increase its lead as the world’s largest producer of oil and gas combined this year, far ahead of Russia or Saudi Arabia. 

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Train Wreck

The operative word: plummeting

The numbers keep plummeting. The Daily Caller is reporting:

The number of Obamacare enrollments for top health insurer Aetna is plummeting, according to a report from Investor’s Business Daily.

Aetna’s enrollment reached 720,000 by May 20, after the final end to the the extended open enrollment period. But by the end of June Aetna had less than 600,000 paying customers, IBD reports, and the company expects paying customers to fall to “just over 500,000″ by the end of 2015. That would be a drop of just under 30 percent from the May sign-up numbers — the last time the Obama administration released its official Obamacare enrollment tally.

Aetna’s reported drop-off rate appears to be more extensive than other companies. Cigna reported that between both its exchange customers and those in the private individual market, it expects to lose around 20,000 paying customers throughout the year, out of 300,000.

Dying on the vine. 

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Pop Quiz

Name the world's #3 economy.  China, #1; US #2 -- the third is ....

Japan.