Wednesday, December 31, 2014

Gasoline Prices Expected To Rise About Ten Cents/Gallon January 1, 2015

Enjoy record low gasoline prices for about 24 more hours. Starting January 1, 2015, the Federal Cap and Trade Act (real name: American Clean Energy and and Security Act / Waxman-Markey bill) will add about 10 cents/gallon of gasoline. The act was passed in 2009.

Obviously, the actual cost of gasoline will vary from location to location based on many factors; this is simply what some analysts are predicting and they could be really, really wrong. It's very possible gasoline in your neighborhood might even decrease. LOL. If this information is important to you, find another source. Don't rely on this blog.

A Note to the Granddaughters

Your grandmother asks me a stupid question several times daily. I try to ignore her or the question. She's pretty insistent until she gets the answer. Drives me nuts.

Today, "Ms Negativity" asked why they drop a ball on New Year's Eve. She got a bit angry when I told her what I tell when you when you don't know the answer to something:
  • follow the money;
  • ask "why now"; and/or,
  • google it.
The first two (follow the money and ask "why now") didn't seem appropriate.

Googling, wiki:
A time ball or timeball is an obsolete time-signalling device. It consists of a large, painted wooden or metal ball that is dropped at a predetermined time, principally to enable navigators aboard ships offshore to verify the setting of their marine chronometers. Accurate timekeeping is one means by which longitude can be determined at sea.
Although the use of time balls has been replaced by electronic time signals, some time balls have remained operational as historical tourist attractions.
So, there you have it.

Having said that, still has the Bakken wrong. Very, very wrong.

Zen And Leonard

Love Itself, Leonard Cohen

High Initial Production Numbers -- Page 7 (Starting January 1, 2015)

This is Page 7 for "high IP" wells. The first wells will be added January 2, 2015.

Page 6
Page 5
Page 4

Daily Activity Report, December 31, 2014; 9/9 Completed Producing Wells Register "High Initial Production" Numbers

On the last day of the year, nine (9) producing wells were reported as completed:
  • 25527, 1,525, Zavanna, Sylvester 32-29 3TFH, Springbrook, t12/14; cum --
  • 26158, 3,771, Statoil, Johnston 7-6 3TFH, Banks, t11/14; cum --
  • 26829, 2,085, XTO, Rolfson 14X-34B, Siverston, t111/4; cum --
  • 26831, 2,379, XTO, Rolfson 14X-34A, Siverston, t12/14; cum 11 --
  • 27698, 1,403, BR, Haymaker 31-15TFH-B, Elidah, t12/14; cum --
  • 28156, 2,349, MRO, Conklin USA 31-17H, Van Hook, t11/14; cum --
  • 28157, 1,665, MRO, Snow Bird USA 31-17TFH, Van Hook, t12/14; cum --
  • 28356, 2,092, MRO, Boldt 14-22TFH, Bailey, t11/14; cum --
  • 28357, 2,439, MRO, Davis 24-22H, Bailey, t11/14; cum --
Active rigs:

Active Rigs170187183197156

No wells came off the confidential list today; there was no June 31, 2014.

There were nine (9) new permits today, bringing the grand total of new North Dakota oil and gas permits to 3,012 permits, up almost 50% from previous years, with a relative surge of new permitting in the last couple of months --
  • Operators: CLR (7), Petro-Hunt (2)
  • Fields: Camp (McKenzie), Corral Creek (Dunn), Charlson (McKenzie)
  • Comments:
QEP added ten (10) more wells, all in the Grail, to the "tight hole" list.

Oasis renewed three (3) permits in Williams County, the "Cook 5300 12-13" wells.

Whiting canceled three (3) permits, two in Golden Valley and one in McKenzie County. Slawson canceled one permit in Mountrail County.

It looks like we might be getting some better delineation of the Three Forks: CLR changed the name of three wells from "H2" and/or "H1" to "H" suggesting a change in formation target from TF2 or TF1 to the middle Bakken. 

Slump In Oil Price, January 1, 2015 - December 31, 2015: Permitting

Disclaimer: all data is unofficial; all data is subject to error. Assume there are typographical and/or factual errors. If this information is important to you, go to the source. Everything about the Bakken is posted in good faith. This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here.
Slump In Oil Price, October 1, 2014 - December 31, 2016
Permitting, 2015
Permitting, 2016
Pricing, Part I
Pricing, Part II
Saudi Arabia Market Share
Mid-East Geo-Politics
OPEC Realities
For permitting in 2014, click here.

Total permits. This is from my database. See disclaimer above. I assume my numbers are different from those of the NDIC, but I also assume they are very close. These are only oil and gas permits, not salt water disposal permits. If this information is important to you, go to the source:
  • 2015: 2,056
  • 2014: 3,012
  • 2013: 2,247
  • 2012: 2,187
  • 2011: 1,916
Real time (date, # of permits; projection to end of year)
  • July 31, 2015: 1,377, 2,564
  • July 24, 2015: 1,330, 2,477
  • July 21, 2015: 1,297, 2,415
  • July 17, 2015: 1,276, 2,426
  • February 10, 2015: 327, 2,911
  • January 29, 2015: 241, 3,033
  • January 28, 2015: 230, 2,998
  • January 23, 2015: 195, 3,095
  • January 16, 2015: 134, 3,057
  • January 15, 2015: 114, 2,896
  • January 14, 2015: 104, 2,738
  • January 13, 2015: 97, 2,723
  • January 12, 2015: 78, 2,373
  • January 9, 2015: 75, 3,042
  • January 8, 2015: 71, 3,239
  • January 7, 2015: 57, 2,972
  • January 2, 2015, 14: 2,555

End-Of-Year Rig Count, December 31, 2014 -- 170 Active Rigs In North Dakota; Update On CLR 2015 Spend Plans; Elsewhere, More Wind Farms

Active rigs:

Active Rigs170187183197156

Note: this data is from the NDIC. See their disclaimer regarding this rig count. Bottom line: it is what it is. Deal with it. If this information is important to you, visit North Dakota, drive around, and count the rigs that appear to be active. If you see no roughnecks on the rig for 48 hours, it may mean the rig is no longer active, or it may simple mean it's too freaking cold to be out there pushing steel two miles into the earth. I have no idea how accurate it really is. For all I know there may be some active rigs drilling salt water disposal wells.  

CLR Announces Further Cuts is reporting
CLR has recently announced its plans to further cut its capital expenditures for the upcoming year but also projects the activity will increase production growth by up to 20 percent when compared to last year.
Last month the company announced it would be cutting its budget from $5.2 billion to $4.6 billion. However, those figures have been updated and expenditures will now be cut from $4.6 billion to $2.7 billion. Since the summer, oil prices have dropped by nearly 50 percent with this month seeing prices hovering around $60 per barrel. Continental Chairman and Chief Executive Officer Harold Hamm said, “This revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015.”
Additionally, the company plans to decrease its current operating rig count from 50 to about 34 by the end of the first quarter of 2015. Continental plans to keep 31 rigs in operation for the full year. Of these rigs, only 11 will be operating in North Dakota’s Bakken formation. Four of the remaining rigs will be operating in the Northwest Cana area of the Anadarko Woodford formation, and 16 will be operating in the South-Central Oklahoma Oil Province (SCOOP).
Announcements are unfolding very, very quickly. I do not know if this announcement is new or old, but it is what it is. Do not make any investment, financial, or relationship decisions based on what you read here. Check with Investor Relations if you have questions.  

CLR Cutting Back; Wind Still Blowing

The Dickinson Press is reporting:
Basin Electric Power Cooperative announced Wednesday it has signed power purchase agreements with new wind farms in Richardton and Tioga.  
The NextEra Energy Resources plant will be called the Dickinson Wind Energy Center and produce 150 megawatts at the farm near Richardton. Tradewind Energy is developing the Lindahl Wind Project, another 150 megawatt farm near Tioga.
NextEra’s farm is slated to be complete by the end of 2015, and Tradewind’s by the end of 2016.
300 more MW of slicers and dicers. Whatever. 

Earnings - 4Q14

This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. If this is important to you, go to the source. There will be factual and typographical errors on this page. If something looks wrong, it probably is.

Earnings Calendar

All 4Q14 earnings will be reported at this page; the link will be on the sidebar at the right, under "Earnings Central." When we start to see earnings reports for any quarter, the "Earnings Central" link is moved to the top of the sidebar until the earning season is over.

I don't have time to check/update earnings on all companies listed below. If you see one that I have missed, feel free to send it in (anonymous comment or by e-mail) and I will post it.

Much of this information is done in haste. I assume there are factual and typographical errors. It is for my personal use only. If this information is important to you, go to the source.

  •  CSX, expectation, 49 cents: CSX reported fourth quarter earnings per share of $0.49, up 17% from $0.42 in the same period last year. This represents a new fourth quarter record for the Company. Revenue grew 5% in the quarter, to $3.2 billion, also a fourth quarter record, with broad based growth across nearly all of our markets, reflecting continued economic momentum.
General update (dates subject to change)
  • AAPL --  Actual: crushes expectations. See this link Earlier:  Apple's iPhone 6 and 6 Plus may boost Apple's iPhone sales to a new record in the company's year-ending Q1 2015 quarter, says Morgan Stanley analyst Katy Huberty in a recent investor note. In line with other analyst predictions, Huberty and her team expect iPhone sales in the December holiday quarter to reach as high as 69 million units, eclipsing last year's quarterly record of 51 million units sold in Q1 2014.

    Huberty also predicts strong Mac sales based on IDC's estimate of 5.8 million units, well above Morgan Stanley's earlier estimate of 5.2 million units and exceeding the record-setting 5.5 million Macs the company sold in fiscal Q4 2014. While the iPhone and Mac climb, iPad demand year-over-year is expected to remain weak with 22 million units shipped in Q1 2015, down slightly from the 26 million sold in the same quarter of 2014. [For folks unfamiliar with iPads: they last "forever."]
  • AA (Alcoa):  -- beats on sales, revenue; expectations, 29 cents; actual, 33 cents;

EPS estimates in parentheses following the ticker symbol (according to Yahoo!Finance) -- typographical errors likely.

ARII (American Railcar Industries) ($):

Anadarko (APC) ($0.86): reported disappointing fourth-quarter results as it coped with the fallout from sinking oil prices. The Houston-based oil and natural gas company reported a loss of $395 million, or 78 cents per share, for the quarter versus a loss of $770 million, or $1.53 per share, last year. After adjusting for a number of items, it earned 37 cents per share versus 74 cents per share last year. That fell far short of market forecasts — analysts polled by FactSet were anticipating earnings of 80 cents per share.

APA ($0.76)a fourth-quarter 2014 net loss of $4.8 billion or $12.78 per diluted common share, primarily as a result of after-tax, non-cash charges totaling $5.2 billion. Adjusted earnings, which exclude certain items that impact the comparability of results, totaled $404 million or $1.07 per share. Net cash provided by operating activities was approximately $1.9 billion in the fourth quarter of 2014, with cash from operations, before changes in operating assets and liabilities, totaling $2.1 billion.

AXAS ($):  

AMZG ($): 

BTE.TO (Baytex) ($): 

BAX ($1.31): big beat; fourth-quarter earnings of $953 million. On a per-share basis, the Deerfield, Illinois-based company said it had net income of $1.74. Earnings, adjusted to account for discontinued operations, came to $1.34 per share.

BCEI ($0.27): miss, 24 cents; press release here;

BHI ($1.10): Baker Hughes, which agreed to a merger with rival Halliburton for $34.6 billion in November, reported fourth quarter earnings of $1.19 on an adjusted basis, ahead of analysts $1.10 consensus estimates for the period. 

BK ($0.59):58 cents after adjusted; earnings of 70 cents;

BKH ($0.77):  fourth-quarter earnings of $34 million.On a per-share basis, the Rapid City, South Dakota-based company said it had net income of 76 cents. The energy company posted revenue of $378.1 million in the period. For the year, the company reported profit of $128.8 million, or $2.89 per share. Revenue was reported as $1.39 billion. Black Hills expects full-year earnings in the range of $2.80 to $3 per share.

BWC (Babcock & Wilcox) ($0.44): beats by 21 cents; press release here;

Calfrac Well Services (CFW.TO):

CHK ($0.24): huge miss, 11 cents; beats on revenue; shares slump 10%;

CLNE ($ ): 

CLR ($0.55): big beat, $1.14 (due to one-time items)

CNR.TO (Canadian National Railway) ($0.97 ):  Canadian National Railway (CNR.TO), expectation, 97 cents; earnings up; raises dividend; Net income rose to C$844 million ($681 million), or C$1.03 a share, from C$635 million, or 76 Canadian cents, a year earlier. Revenue rose to C$3.21 billion from C$2.75 billion. The railway boosted its quarterly dividend by 25 percent, to 31.25 Canadian cents per common share.

CNP ($):   2/26
COP ($0.59): ConocoPhillips reports EPS in-line; Co expects to deliver 2-3% production growth in 2015 from continuing operations, excluding Libya: Reports  earnings of $0.60 per share, in-line with the Capital IQ Consensus Estimate of $0.60. Co expects to deliver 2-3% production growth in 2015 from continuing operations, excluding Libya.

CPG.T) (Crescent Point) ($):

CRR ($0.64): profit of 2 cents per share. Earnings, adjusted for asset impairment costs and non-recurring costs, were 70 cents per share. The results beat Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 64 cents per share

CSX ($0.49): CSX reported fourth quarter earnings per share of $0.49, up 17% from $0.42 in the same period last year. This represents a new fourth quarter record for the Company. Revenue grew 5% in the quarter, to $3.2 billion, also a fourth quarter record, with broad based growth across nearly all of our markets, reflecting continued economic momentum.

CVX ($1.64): beats; fourth-quarter net income of $3.47 billion, or $1.85 per share, compared with $4.93 billion, or $2.57 per share, a year earlier. Analysts on average had expected earnings of $1.63 per share the second-largest U.S. oil producer, reported a higher-than-expected quarterly profit on Friday as sales of chemicals, lubricants and other refined products helped offset plunging crude prices (CLc1).

DNR ($): forecast 23 cents, before market opens; shares fall 4% in futures; rise after earnings release: fourth-quarter 2014 earnings of 27 cents per share, flat year over year. The bottom line, however, came above the Zacks Consensus Estimate of 23 cents. The outperformance was mainly backed by higher production;
DVN ($):    

ECA ($):  

EEP ($):  2/18

ENB ($): misses by $0.03, beats on revs : Reports Q4 (Dec) earnings of CC$0.49 per share, CC$0.03 worse than the Capital IQ Consensus Estimate of CC$0.52; revenues rose 6.1% year/year to CC$8.8 bln vs the CC$8.07 bln consensus.

EOG ($): forecast $1.02, big miss: 81 cents; shares slump after-hours; reports here;

EOX (Emerald; was VOG) ($0.03): meets expectations, 3 cents.

EPD ($0.37):  Enterprise Products misses by $0.01, misses on revs; currently expect growth capital expenditures of ~ $3.5 bln and sustaining capital expenditures of ~$380 mln: Reports earnings of $0.36 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.37; revenues fell 22.2% year/year to $10.19 bln vs the $12.85 bln consensus.

ERF ($): shines. Long report here.

ETP ($): 

GEOI (bought by Halcon [HK], below)

HAL ($1.10):
Oilfield services giant Halliburton posted stronger fourth quarter revenue and earnings Tuesday, but warned that slumping crude oil prices had weakened its outlook for 2015.
The company said revenue rose 14.8% to nearly 8.8 billion from $7.6 billion in the fourth quarter of 2014. Net income climbed 13.8% to $905 million from $795 million in the year ago quarter. For the full year, revenue rose 12% to $32.9 billion and adjusted net income rose 28% to $4.02 a share.
HES ($0.29): misses by 5 cents; reported a fourth quarter net loss of $8 million after crude prices fell. Net loss per share was 3 cents, compared with profit of $1.9 billion or $5.76 a year earlier. Per share profit excluding some items was 18 cents, 5 cents below the average estimate

HP ($1.53): Earnings per share from continuing operations (excluding special items) came in at $1.70, above the Zacks Consensus Estimate of $1.57. Revenues of $1,056.6 million was substantially higher than the Zacks Consensus Estimate of $974 million.

HK (Halcon; previously GEOI) ($0.00):  beats by 5 cents; press release here;

Kinder Morgan - KMI ($0.34): expectation 34 cents; Kinder Morgan misses by $0.24, misses on revs; announces Steve Kean will become CEO, 10% increase in dividend (KMI) : Reports Q4 (Dec) earnings of $0.08 per share, $0.24 worse than the Capital IQ Consensus Estimate of $0.32; revenues rose 2.0% year/year to $3.95 bln vs the $4.3 bln consensus. Co announced that its board of directors approved a 10% increase in its quarterly cash dividend to $0.45 ($1.80 annualized) payable on Feb. 17, 2015.

Kinder Morgan - KMP ($):  

KOG ($):  

LEG.TO (Legacy/Bowood) ($): 

LINE ($):  forecast 6 cents; huge miss; shares fall almost 5% in pre-market trading; reports a loss of 47 cents; misses by 52 cents; 

MDU ($0.39): net income of $84.3 million; profit of 43 cents per share. Earnings, adjusted for non-recurring gains and to account for discontinued operations, came to 35 cents per share.

MHR (Magnum Hunter) ($): 

MMR (McMoRan) ( ): 

MPC (Marathon Petroleum ($): 2/4


MRO (Marathon Oil) ($):  forecast 3 cents, shares hold after-hours; looks like 13 cents/share for 4th quarter;

NE (Noble Corp) ($0.50): a fourth-quarter loss of $609.6 million, after reporting a profit in the same period a year earlier. On a per-share basis, the London-based company said it had a loss of $2.44. Earnings, adjusted for asset impairment costs and to account for discontinued operations, were 47 cents per share.

NBL: forecast 34 cents; before market opens; beats by 3 cents;

NBR ($): 2/17

NFX ($): 2/24


NOG ($0.19): big beat, 95 cents; press release here; shares up;

NOV ($1.60):  reported fourth-quarter earnings of $595 million. On a per-share basis, the Houston-based company said it had profit of $1.39. Earnings, adjusted for non-recurring costs and amortization costs, were $1.84 per share. The results exceeded Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.60 per share.
The oil and gas industry supplier posted revenue of $5.71 billion in the period, which fell short of Street forecasts. Analysts expected $5.72 billion, according to Zacks.

OAS ($0.57): huge miss, 35 cents; press release here;

OKE ($0.36): beat; 45 cents; see this link

OKS ($): see this link;

OTTR ($0.45): net income of 28 cents per share. Earnings, adjusted to account for discontinued operations and non-recurring costs, came to 43 cents per share.

OXY ($0.68): core income for the fourth quarter of 2014 of $560 million ($0.72 per diluted share), compared with $1.2 billion ($1.46 per diluted share) for the fourth quarter of 2013. The fourth quarter of 2014 had a reported loss of $3.4 billion ($4.41 per diluted share), compared with income of $1.6 billion ($2.04 per diluted share) for the fourth quarter of 2013. The spin-off of California Resources Corporation was completed on November 30, 2014, and its financial and operational results have been classified as discontinued operations.

PAA ($0.61): fourth-quarter earnings rose 26% as lower costs offset weaker revenue and the master-limited partnership lowered the midpoint of its 2015 profit outlook. For 2015, Plains All American Pipeline now expects the midpoint of its estimate for earnings before interest, taxes, depreciation and amortization, excluding certain items, will be $2.35 billion, compared with its previous view for just over $2.5 billion. profit of $389 million, or 67 cents a limited partner unit, up from $309 million, or 58 cents a unit, a year earlier. Excluding items, per-unit earnings fell to 60 cents from 76 cents. Revenue fell 11% to $9.46 billion.

PSX ($1.34):  $2.05 per share; fourth-quarter earnings of $1.1 billion, compared with earnings of $1.2 billion in the third quarter of 2014. Adjusted earnings, excluding special items of $234 million, were $913 million in the fourth quarter, compared with adjusted earnings of $1.1 billion in the third quarter of 2014.

PXD (Pioneer Natural Resources) ($):  2/10

QEP ($0.25): forecast 25 cents; miss, 22 cents; shares slump;

RRC (Range Resources):2/24

RIG ($):

SBUX (Starbucks) ($0.80): Press release: 80 cents; in line;

SD ($0.00): big beat; 8 cents; press release here;

SLB ($1.46): Actual: 23 cents. How can analysts get it so wrong?
The Houston, Texas-based company reported a profit of $302 million, or 23 cents per share, down from $1.66 billion, or $1.26 per share, a year ago. Fourth quarter revenue rose 6% from a year ago to $12.64 billion.
Wall Street analysts expected earnings of $1.46 per share and revenue of $12.72 billion.
SM ($1.09): forecast $1.09, misses by 5 cents; $1.05/share; shares hold;

SRE ($1.09): nice beat; beats by 14 cents at $1.23; Zacks here;



STO (BEXP) ($):  
STR ($): forecast 38 cents, after market close; shares hold after-hours; record earnings for 2014; looks like 35 cents per share 4Q14; announces quarterly dividend to increase 11% and raises target payout ratio to 65%;

T ($0.55): posts slight beat;The second-largest U.S. wireless carrier posted a net loss of $4 billion, or 77 cents per share, in the fourth quarter, compared with net income $6.9 billion, or $1.31 per share, a year ago.  Shares in AT&T were up 2 percent in after-hours trading after closing at $32.81 on the New York Stock Exchange. AT&T said it had added more than 2 million new wireless customers and 854,000 contract subscribers in the quarter.

Targa Resources (TRGP): $108.2 million in net income, or 58 cents per partnership unit, in the October-December period, compared to $108.6 million, or 70 cents per unit, in the same year-ago period.

TPLM ($):

TSO ($0.31):  $1.13 per share. Earnings, adjusted to account for discontinued operations and non-recurring costs, came to $1.46 per share; increased its quarterly dividend by 40% to 42.5 cents a share.

TransCanada (TRP.TO) ($): 

Ultra Petroleum (UPL) ($): 

UNP ($): 1/22

USEG ($): 

VLO ($1.32):  beats by $0.51, reports revs in-line : Reports Q4 (Dec) earnings of $1.83 per share, $0.51 better than the Capital IQ Consensus Estimate of $1.32; revenues fell 19.1% year/year to $27.86 bln vs the $27.64 bln consensus.


WFT ($0.23):  net income before charges of $252 million ($0.32 diluted earnings per share non-GAAP) on revenues of $3.73 billion for the fourth quarter of 2014.



WLL ($0.50): misses, 44 cents; shares rise; press release here;     

WMB ($): forecast 23 cents, up slightly after hours; looks like 26 cents/share 4Q14 but lots of data at this link;

WPX (-15 cents): huge beat; earns 3 cents/share; Zacks here;

XOM ($): Fourth quarter earnings were $6.6 billion, or $1.56 per diluted share, down from $8.4 billion in the year-ago quarter.

XLNX ($0.61): Xilinx beats by $0.01, misses on revs; guides Q4 revs below consensus : Reports Q3 (Dec) earnings of $0.62 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.61; revenues rose 1.2% year/year to $594 mln vs the $616.59 mln consensus. Co issues downside guidance for Q4, sees Q4 revs of approx $558-582 mln vs. $635.48 mln Capital IQ Consensus Estimate. Gross margin is expected to be approximately 68% to 69%. Xilinx sees Mar qtr sales are expected to be down 2% to down 6% sequentially; expectation was for 3% increase (consensus revenue equates to 7% increase off Dec. qtr actual)

American Eagle: We're Outta Here -- December 31, 2014; Fatburger To Cuba

Operators, including American Eagle, who operate in the Bakken are tracked here

From Yahoo!In-Play:

American Eagle Energy announces an operations update and production guidance; has suspended its 2015 operated drilling budget and does not anticipate resuming drilling operations until crude oil prices improve:
  • The Company recently monetized all of its crude oil hedge positions for December 2014 through December 2015, generating proceeds of $13 mln. The hedges represented approximately 414,000 barrels of oil at an average price of $89.59 per barrel. Proceeds will be used to improve American Eagle's liquidity position.
  • The co notes it has no outstanding indebtedness on its senior secured revolving credit facility that had an initial borrowing base of up to $60 mln as of August 27, 2014. Effective December 24, 2014, the borrowing base was reduced to zero.
  • The co notes that given current crude oil prices, American Eagle has suspended its 2015 operated drilling budget and does not anticipate resuming drilling operations until crude oil prices improve.
  •  The Company expects to conduct completion operations in the first quarter of 2015 on two gross (1.9 net) wells (Byron 4-4 and Shelley Lynn 4-4N) that were drilled during the fourth quarter ended December 31, 2014. These operations are estimated to require a capital expenditure of ~$4.5 mln in 2015.
More at The Wall Street Journal

See MarketWatch at WSJ.

Again, remember, this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. If this is important to you, go to the source. Data from the Bakken is always dynamic and what you are reading at the moment may be much different over the next 12 hours. But in this case, probably not. 

Big News Of The Day: Los-Angeles Based Fatburger To Cuba is reporting: 
For the past half-deacde (sic), Los Angeles-based Fatburger has aggressively expanded into locations that don’t exactly scream America-friendly: Saudi Arabia, Pakistan, and soon Libya. Their overseas push is based on a finding that, given rising global obesity rates, may not seem too surprising: People around the world love American burgers, shakes and fries. 
Memo to self: while in LA, get a photograph of Fatburger. 

The Big Story Will Have To Wait -- December 31, 2014

Okay, that's it, folks, at least for a little while. I'm going to jump on my bike and ride up the hill, leaving Starbucks here to Jacaronda, another deli/coffee shop to meet the wifely unit and her friend to say good-bye to long-time friends.

It's a bit cool outside but nothing like the rest of the country, especially the Bakken, is facing.

We don't turn on the heat in May's house at night. When I got up this morning, the temperature in the house was 49 degrees. Comfortable, but a bit on the cool side. I turned the heat on; the thermostat is set for 65. So, the thermostat is "set it and forget it" for years, set at 65. Ever since reports of global warming, it seems the heat comes on more than usual. Whatever.

(In the summer, the house has no air conditioning; no need.)

The "big story" today with regard to energy (an opinion piece, no news, so you aren't missing anything) will have to wait. But it has to do with the Platts article I referenced earlier. Oh, a quick check over at Drudge....80%  of the US is below 32 degrees (for Algove, "below 32 degrees" means "below freezing"). Oooohhh, and that map looks cold. (A dynamic link, I assume.)

The stories not getting much press:
  • huge amounts of military gear being sent to police departments in the Ferguson area
  • Ebola monitoring in the US
  • the war for northern Iraq, Syria -- the Mideast map is being re-drawn
  • the president's golf schedule
Remember: it's the "militarized" police departments that drive otherwise peace-abiding people to loot high-end electronics stores.

The Mideast map is being redrawn -- just as the map of Eurasia had be be redrawn after the fall of the USSR -- and it's not being reported on the nightly news. As far as I know. Where is T.E. Lawrence when we need him to help draw maps? Memo to self: send a note to Al Franken.

... and then the market..... oil approaching $50. Market down slightly. 

Natural Gas Fill Rate Hits A Milestone -- December 31, 2014

Natural gas fill rate: -26.  A dynamic link.

This is a big week in the "natural gas fill rate" sage. When you get to the dynamic link above, scroll down to the graph. Do you see what I see? Huge story.

The "blue line" (this year's/current data) finally edges its way into the low end of the five-year historical grey area. You have to go all the way back to mid-2013 / late-2013 to see this happen.

The question: are we entering into a quarter or two (three to six months) of low energy prices, or are we about to enter a decade of low energy prices?

Before you answer that question: remember, a lot of deep-sea oil projects begun back in the early days of the Obama administration are now just beginning to come on line. Also, remember, WB seems to be rather bearish when it comes to major integrated oil companies, but very bullish on See's Candy.

Yes, supply and demand will tend to balance things out. But things are truly pointing to a decade of low energy prices. As Hillary would phrase it: it's a "re-set."

It's hard for me to believe that cheap energy won't have huge effects on the global economy.

Disclaimer: I have no background or experience in "natural gas fill rate." Except for one number on this page (-26) and that has not been verified -- it comes from the Obama administration, everything else on this page is my interpretation of the data. And my opinion. This is not an investment site. Do not make any investment, financial, or relationship decisions based on the natural gas fill rate and what I wrote above, or for that matter, whatever I write on all the other pages of the blog. Caveat emptor.

Change In Plans -- December 31, 2014

Because of the "bone-chilling temperatures" here in southern California (30 degrees) and the snow blocking the mountain passes out of Los Angeles (now about 2 inches deep), May and I will have to change our route back to Dallas.

We will now head south to San Diego, cross into Baja California at Tijuana, ferry across the Gulf of California (alternatively drive through banditland, the Sonora, and then across Mexico, following the age-old routes of undocumented immigrants, and then cross the Rio Grande at an undisclosed location and head north to the land of big airplanes.

The Tijuana Brass

Robots Writing Weekly Fiction Disguised As News Articles -- December 31, 2014 -- Jobless Claims Surge; No One Knows Why -- Bloomberg

This is so incredibly cool, when the pieces to the puzzle start fitting together -- I owe it to a reader for sending me a story from Platts this morning. I will get to it later, in another stand-alone post, but it's a big story.

The Weekly Jobs Report

But first, from the Department of Weekly Fiction. This is the headline, LOL, I can't make this stuff up:

U.S. jobless claims rise, but labor market still strengthening

Say what?

I don't know if readers in general know this, but the major news services do use robots to write their re-occurring news articles. From Slate:
One of the world’s largest news organizations is letting the robots take over the task [of writing business stories], at least for certain types of articles.
The Associated Press announced last month that “the majority of U.S. corporate earnings stories for our business news report will eventually be produced using automation technology.”
In the coming weeks, its first machine-written articles—written with software supplied by the Durham, North Carolina­–based startup Automated Insights and corporate earnings data from Zacks Investment Research—will go live on the AP’s global news wires.
I can't make that up either: the tag line/teaser for that article --  “Robots” are surprisingly good at writing news stories, but humans still have one big edge. LOL. I can't wait to see what that "one big edge" is. I assume the one big edge is slanted reporting, to push an agenda; robots simply report the facts, the who, what, where, but not the "why." [One major exception: I do believe the New York Times uses robots to write their editorials; they are all the same; it is a fact that all global warming stories are written by robots.]

Now back to the story written by robots (there's another gem hidden in this story -- another piece of the puzzle falls into place). This is the jobs data as reported by the robots:
Initial claims for state unemployment benefits increased by 17,000 to a seasonally adjusted 298,000 for the week ended Dec. 27, the Labor Department said on Wednesday. That followed four straight weeks of declines.
So, that's the robotic data.

How does the US State Department and mainstream media slant it?  The number was way higher than expected, way, way higher, but the trend, yes, the trend, that four-week average, the trend remained consistent with sustained strength, yes, sustained strength, in the labor market. Ignore the number, trust us; the labor market is strengthening.

So, how about that "trend." It went UP.  LOL. But only a little.  But with the huge number this week, the four-week average will trend up over the next few weeks. 
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 250 to 290,750 last week. It has remained below the 300,000 mark for 16 straight weeks.
Back to the headline. It all makes sense. When I saw the headline that jobs claims rose way more than expected but and yet the headline said the "labor market was still strengthening," I experienced what is called cognitive dissonance. Many people had never heard of cognitive dissonance until Barack Obama became president. In elementary school, most of us learned that lack of common sense was synonymous with cognitive dissonance.

But then I realized: from the robot that wrote the story and the headline, it was entirely accurate. Robots continue to replace tasks that Americans don't want to do, and thus for robots, the "robot labor market is strengthening."

It finally makes sense.

So, for jobs Americans don't want:
  • do those tasks in China;
  • for tasks that can't be shipped to China, shift to undocumented immigrants; and,
  • for tasks that even undocumented immigrants don't want, hire robots.
 And let the robots write the weekly jobs article AND the headlines.

Bloomberg's Spin

Bloomberg's spin: the numbers don't make sense this time of year.
More Americans filed applications for unemployment benefits for the first time in five weeks, displaying the typical year-end holiday swings that make the data difficult to interpret.
Jobless claims rose by 17,000 to 298,000 in the week ended December 27, 2014, from a revised 281,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 22 economists surveyed by Bloomberg called for 290,000. No states estimated data and there was nothing unusual in the report, a spokesman said as the figures were released.

The number of applications can fluctuate during this time of year as the holidays make it tough to adjust the data for seasonal variations. Employers are dismissing fewer workers and adding staff as household purchases pick up, driven by a drop in gasoline costs that will keep boosting the economic expansion.
By the way, what was the revision. Bloomberg didn't say. The original report was 289,000. The revision was 281,000. I have to assume those numbers were correct. But that means there was a decrease in the number of applications between the original report and the revised report. One has to ask how 8,000 applications disappeared between the original report and the revised report.

This is the answer. Remember: this is not raw data. The raw data is massaged to give us the "seasonally adjusted numbers." 

Disclaimer: I am not denigrating robots. It's just the way it is. Some of my best friends are robots. With regard to everything else in the post above, don't make any investment, financial, or relationship decisions based on that data. I do not have any formal training in reporting labor statistics and I assume my interpretation(s) above are really, really wrong.

By the way, I'm not going to go through the explanation, but the analysts' forecasts were not all that wrong, despite the "surprise." It has to do with the government's revision of the previous weeks' number. Seriously.

New Year's Eve -- December 31, 2014 -- Links To Start The Day

Links to start the day:
Other than 2014 and 2015 (two calendar years) and "... the upper 2,700 feet of the world's oceans" this writer was able to write an entire Scientific American article on global warming without once using any number. LOL. And they call me a denier. LMAO.
This warms the cockles of my heart; this is called China-Russia hegemony; it's been one of the "Big Stories" I have followed for quite some time

More Hype From Mainstream Media -- December 31, 2014; Active Rigs In North Dakota Break 170 -- Going Down; Now At 169

Active rigs:

Active Rigs169187183197156

Graphs and Headlines

A reader spotted this.

Look at this graph:

Now, look at the headline at the link.

In case the link breaks, or the story is archived, here's the headline:
US Oil Rigs Are Shutting Down Like Crazy
And here's the narrative: "Here is the chart for US rig use, which now shows a noticeable drawdown over the last month, even on a 14-year time scale."


One of the comments:
LOL. This is sensationalism at its best. I work in the oil field and most of the rig shutdowns this time of year are end-of-contract affairs and rig maintenance. It does this every year. I personally know of 3 rigs on this list that are going back to their maintenance facilities to get fitted for skidding packages. This allows the rigs to move themselves from hole to hole on a pad rather than having to be torn down and reassembled just to move over 15 feet. Please review facts before writing this #$%$.

What Everyone Was Waiting For -- December 30, 2014; Apple Wins Christmas -- Apple (51%); Samsung (18%); Microsoft (6%)

24/7 Wall Street has an update on the top five producers in the Bakken. From the article:
Another factor influencing Bakken producers is debt. Excluding Statoil, long-term debt levels and interest expense at the end of the third quarter were:
  • EOG: $5.9 billion in long-term debt; interest expense of $49.7 million
  • Hess: $5.9 billion debt; $75 million interest expense
  • Continental: $4.7 billion debt; $73.9 million interest expense
  • Whiting: $2.75 billion debt; $39.6 million interest expense
These are not particularly high levels for EOG, Hess or Continental, which have market caps of $56.4 billion, $50.4 billion and $22.3 billion, respectively. The much smaller Whiting, with a market cap of $4 billion, may be pushing the envelope.
Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. Financial data for operators is included to help me learn about the Bakken. Whenever my granddaughters do not understand something, I tell them to:
  • follow the money
  • ask "why now?"
  • google it 
Some other data points from the article.

Crude oil from the Bakken (Williston Basin Sweet) is priced at a discount to benchmark oil that is roughly equal to the cost of transporting the oil to its destination. For example, Bakken light sweet crude headed to the east coast of the United States by rail last Friday brought a price to the producer of around $40 a barrel, based on a $59 per barrel price for Brent crude and a total transportation cost for the Bakken crude of $19 a barrel.
Another example: Shipping Bakken crude by pipeline to the Gulf coast cost $11 a barrel, and the price of benchmark Louisiana Light Sweet Crude last Friday was $57 a barrel. That translates to a netback to the producer of $46 a barrel
Whiting Petroleum Co. completed its acquisition of Kodiak Oil & Gas early in December, and as a result it is expected to become the Bakken’s largest producer at more than 107,000 barrels of oil a day from a total of 885,000 net acres in the Bakken play.
In the third quarter of 2014, the company produced 8.5 million barrels of oil, with all but about 1.6 million of those barrels coming from the Bakken shale play. Whiting reported that its average sales price per barrel fell from $97.69 in 2013 to $86.78 this year and that the average price per barrel of WTI on the NYMEX exchange fell from $105.82 a barrel a year ago to $97.21 in 2014.
Whiting’s costs totaled $48.06 a barrel in the third quarter, down from $51.59 in the third quarter of 2013. The company’s margin per barrel works out to $38.72 in the third quarter of this year, compared with $46.10 per barrel a year ago. Neither amount includes transportation costs.
CLR is the largest leaseholder in the Bakken, with net acreage of 1.2 million acres. The company’s average daily production of crude oil totaled 127,788 barrels a day in the third quarter, up by about 27% year-over-year. The average price per barrel, however, dropped from $98.02 to $85.49. 
Production costs in the third quarter of 2014 totaled $37.19, which includes production expenses of $5.80 a barrel, DD&A of $21.65 a barrel, G&A of $1.82, non-cash equity compensation cost of $0.82 a barrel and production taxes of 8.3%, which works out to around $7.10 a barrel. Margin per barrel works out to $48.30.
Hess Corp. has shed all its refining operations and is now a pure-play exploration and production company, with 640,000 net acres in the Bakken play. Hess produced 63,000 of its total oil production of 74,000 barrels a day in the Bakken play. The company’s average selling price per onshore U.S. barrel came to $86.07, compared with $96.01 a year ago.
Cash operating costs totaled $21.76 a barrel in the third quarter, and DD&A costs came in at $28.48, for a total production cost of $50.24 per barrel. Margin per barrel totaled $35.83.
EOG Resources Inc. holds a core total of 110,000 net acres in the Bakken play. The company reports production on the basis of oil and condensates added together and does not differentiate among its U.S. fields. The company reported crude oil and condensate U.S. production of 293,500 barrels a day in the third quarter at an average selling price of $97.33.
Total operating and other expenses came to $31.93, which includes $0.88 per barrel in interest expense. EOG’s margin, then, came to $65.40 a barrel.
Statoil ASA is Norway’s state-controlled integrated energy firm, and the company holds leases on 355,000 net acres in the Bakken play. Production totals around 50,000 barrels a day, and the company received $87.40 per barrel for its international (non-North Sea) production in the third quarter. As a percentage of international production, U.S. barrels are less than a third of Statoil’s total equity production of 557,000 barrels a day. 
Production costs per U.S. barrel are not available.
There are a lot of story lines in those data points. Hess, for example, is a global company. Look at how much of their total global production comes out of the Bakken.

Again, remember, this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. If this is important to you, go to the source. Data from the Bakken is always dynamic and what you are reading at the moment may be much different over the next 12 hours. 

Apple Wins Christmas -- New Device Activations? 51% Belong To Apple

Yahoo!Finance is reporting:
It’s clear that Santa is no longer into cookies - he prefers Apples. It was a banner Christmas for the Apple, the company that started the mobile revolution with the introduction of the first  iPhone in 2007.
Seven years later, Apple accounted for 51% of the new device activations worldwide Flurry recognized in the week leading up to and including Christmas Day (December 19th - 25th).
Samsung held the #2 position with 18% of new device activations, and Microsoft (Nokia) rounded out the top three with 5.8% share for mostly Lumia devices.
After the top three manufacturers, the device market becomes increasingly fragmented with only Sony and LG commanding more than one percent share of new activations on Christmas Day. Up-and-comers Xiaomi, Huawei, and HTC all had less than one percent share on Christmas Day. One reason is surely their popularity in Asian markets where December 25th is not the biggest gift-giving day of the year.
Flu -- A Bit Of CDC Hysteria?

Here's the hype from The Wall Street Journal:  
This year’s influenza season started earlier than expected and is sending more patients to the hospital, raising concerns this could be a more severe outbreak than in recent years.
Thirty-six states are now experiencing high levels of flu activity, according to the Centers for Disease Control and Prevention in Atlanta, as this year’s flu vaccine may not fully protect against a strain known as influenza A H3N2 that is currently circulating and tends to be more severe.
Fifteen children age 18 and under have died from the flu as of Dec. 20, compared with four such deaths around the same time last year, according to the CDC. A number of hospitals are outpacing previous years, with some restricting visitors to prevent the spread of the virus.
The google flu trend shows the "epidemic" has peaked and is starting to turn down. Of course, who really knows? Time will tell.

Tuesday, December 30, 2014

Global Warming Hits Denver -- December 30, 2014; Earthquake Hits The Homestead; No Fracking In The Immediate Area

Tweeting now:
The temperature at Denver International dropped to a record -19° at 9:05 pm MT, breaking the previous mark (-11°) set on this date in 1898 - @NWSBoulder
1898 AD. That's like more than a hundred years ago. 

Just think, with global warming, the record -19 would have only been a -17.

A Note to the Granddaughters

That's cool, but this is even cooler. I felt my first California earthquake todayThe Los Angeles Times is reporting:
A shallow magnitude 3.9 earthquake was reported Tuesday afternoon 12 miles off the coast from San Pedro, according to the U.S. Geological Survey. The temblor occurred at 3:26 p.m. Pacific time at a depth of 1.9 miles.
According to the USGS, the epicenter was 14 miles from Rancho Palos Verdes, 15 miles from Long Beach and 16 miles from Seal Beach.
Shallow earthquakes do not result in tsunamics, if I recall correctly; it's the deep earthquakes.

We're spending Christmas in San Pedro. My son-in-law, younger daughter, and I were visiting a hobby store in downtown San Pedro when the earthquake shook -- about 3:20 p.m. (I see the article gave the exact time. Sorry.)

it was very, very, short, maybe measured in one second -- maybe two seconds, but that might be a stretch. We thought it was construction workers on the roof of the building. Our daughter saw the huge front department store window "move." No damage. We really didn't know that it was an earthquake until we heard it on the news moments later (the store owner had his television set on). 

Prior to visiting the hobby store, we were out visiting Cabrillo Beach Aquarium and Research Library, perhaps one of the best marine research libraries in the United States. We were told that the aquarium has the largest student program in the US. It's a small museum in one sense, but a huge museum in another sense. For all its press, the aquarium at Woods Hole, Massachusetts, is about the size of a large closet compared to the very good-sized Cabrillo Aquarium. Just saying. In addition, at Woods Hole, there's really nothing to visit unless one is a research scientist from what I could tell after a couple of visits; on the other hand, the Cabrillo Aquarium is all about hands on.

The Cabrillo Aquarium is free, though it's nice to donate $5/adult to visit. Parking: $1/hour. 

I took advantage of the opportunity to learn a bit more about the history of the San Pedro area. It turns out that the whole southland (from Compton and Torrance, south to the Pacific Ocean; east to the Los Angeles River (separating Wilmington and Long Beach); and west to the Pacific Ocean, began as one large Spanish land grant to a Manuel Dominguez, or at least I think it was Manuel. It was definitely Dominguez. The area was composed of two Spanish ranches, Rancho Palos Verdes and Rancho San Pedro. The "ranch" encompassed about 118 square miles. Manhattan Island, in comparison, bought for $24 in trinkets and beads (obviously an apocryphal story), is 23 square miles in comparison.

By the way, there is no fracking in the immediate San Pedro area. At least as far as I know. There are a few vertical wells that were drilled a long, long time ago, but no rigs in the immediate area either.

As long as I'm rambling, I might as well mention we also visited the marine mammal care center at the southern tip of San Pedro, overlooking the Pacific Ocean. There are seven such centers up and down the California coast; the largest is in Sausalito; the San Pedro care center is the second largest. They are expanding, building two more pens. The fur seals were sleeping, seemed content. A few sea lions were enjoying the water, but most were also dozing. I think I can finally tell the difference between seals and sea lions: think ears and the two rear extremities. The marine mammal care center is one of my favorite places to visit when in San Pedro.

The UE Boom

By the way, the other day I mentioned how "perfect" the UE Boom speaker is -- the gift I gave my wife. She was curious whether it works with the MacBook Pro laptop. It does. At first I couldn't get it to work, trying to figure it out intuitively. A quick google search provided the answer. Done. It's an incredible speaker.

Gotta Know The Denominator -- December 30, 2014

This must be a fact. I read it elsewhere. is reporting:
There have been 25 traffic crash fatalities on the U.S. Highway 85 corridor in the past two years. The Department of Transportation this month launched a safety review that officials say will continue into January and February.
The review will include an evaluation of the portion of the highway between Williston and Watford City, which officials are spending about $300 million on to make it four lanes. The review will be done by a team of local law enforcement officials and local, state and federal highway officials.
“The recently constructed portions of the US 85 corridor were designed to meet all federal safety requirements."
I can't recall if the $300 million includes the four-lane bridge that will have to be built across the wide Missouri southwest of Williston. 

It would be interesting to know the number of crash fatalities per passenger mile traveled in the two years between Williston and Watford City and compare it to the crash fatality data between Bitburg, Germany, and Trier, Germany.

Just What We Need -- More Oil -- December 30, 2014

Disclaimer: a lot of stuff in my blog is opinion. Just 'cause I say it or write it doesn't mean it's a fact. It can be difficult telling the difference between fact and opinion in a blog. Sometimes even in Washington, DC. If something seems wrong, it probably is. On the other hand, if something seems wrong, it could be an opinion. If this stuff is important to you, go to the source. This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. And always assume there are typographical and/or factual errors. This site is for entertainment purposes only; mostly to entertain the author.

Yes, .... oil down to $30.

Just what we need, more oil.

First, from Reuters at Rigzone:
BP has started producing oil from its Kinnoull field in the central North Sea bringing on stream a new field that feeds into BP's existing Andrew platform off the coast of Scotland.
Oil and gas produced at Andrew and Kinnoull is expected to peak at over 50,000 barrels of oil equivalent per day and will be transported to the mainland via the Forties oil pipeline and CATS gas pipeline.
The contribution from Kinnoull should help to offset some of the decline in Forties production from the Nexen-operated Buzzard field. Forties is the biggest of the four crude streams that underpin the price of dated Brent and Brent futures so fluctuations in Forties supply can impact global oil prices.
Traders said that Buzzard is becoming well-constrained and is currently pumping at about 180,000 barrels per day (bpd), down from its previous maximum operating capacity of about 205,000 bpd. The latest updates on the Forties Pipeline System website indicate a smaller contribution to the Forties blend from Buzzard in the first quarter of 2015, dropping to around 30 percent in April from 43 percent in the week Dec. 22-28.
BP said it was investing, together with project partners, more than 7 billion pounds ($10.9 billion) in the North Sea over the next five years and that it had won licences in 7 new North Sea blocks in the government's latest allocation round.
And even more oil, from Rigzone:
BG Group announced Tuesday that its partner Petróleo Brasileiro S.A. (Petrobras), as the operator of block BM-S-11 in the pre-salt Santos Basin, has submitted the Declarations of Commerciality (DoC) to the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) for three separate oil and gas accumulations in the Iara area, offshore Brazil.
As part of the DoC, the consortium has suggested that the new fields be designated Berbigão, Sururu and Atapú West.
The Iara area is located approximately 155 miles (250 kilometers) off the coast of Rio de Janeiro, in water depths of around 7,448 feet (2,270 meters). All fields contain good quality oil, of approximately 24 to 30 degrees API. The DoC submission follows an exploration and appraisal program which began in 2008 and consisted of acquiring 3D seismic data, drilling seven wells as well as performing an extended well test. The encouraging results from this program continue to reinforce BG Group’s view of gross recoverable volumes in the BM-S-11 Iara area. The DoC notification to the ANP includes the operator’s estimates of total recoverable volumes of the three accumulations.
Peak oil? What peak oil? Drill, baby, drill -- this would make that old guy on the Kudlow Report happy. 

Seriously, this is very interesting. It seems back in 2008 or thereabouts, the oil companies were investing a lot of CAPEX into deep-sea drilling. Now, just as shale oil hits its stride, deep-sea oil projects are coming on line. Let's hope they keep having problems in Kashagan. Can I say that without anyone getting angry with me?

By the way, there are winners and losers in all of this. Also from Rigzone:
The slump in international oil prices and increased domestic output will reduce Argentina's energy trade deficit by 16 percent next year to $5.6 billion, the government said on Tuesday, helping to ease strains on the balance of payments. Argentina is grappling with pressure on its foreign currency reserves after being largely shut out from global debt markets for more than a decade and with tight trade and currency controls stifling investment and stunting exports. 
Maybe the slump in the price of oil will also help Greece. LOL. 

So Many Story Lines In This Article, Starting With "Mid-Term Elections" -- December 30, 2014; Will He Or Won't He: "Ban Oil Exports?

Printed in full now, but will be truncated in a day or so.

From Rigzone:

WASHINGTON, Dec 30 (Reuters) -
The Obama administration on Tuesday bowed to months of growing pressure over a 40-year-old ban on exports of most domestic crude, taking two steps expected to unleash a wave of ultra-light shale oil onto global markets.
The Bureau of Industry and Security, or BIS, which regulates export controls, said it had granted permission to "some" companies to sell lightly treated condensate abroad. Condensate is a form of ultra-light crude.
Some two dozen energy companies had asked the agency for clarification on permissible exports earlier this year, but until Tuesday those requests had been put on indefinite hold.
The BIS also released guidance in the form of frequently asked questions, or FAQs, to explain what kind of oil was generally allowed under the ban, the first effort by the administration to clarify an issue that has caused confusion and consternation in energy markets for more than a year.
The two measures are clearest signs yet that the administration is ready to allow more of the booming U.S. shale oil production to be sold overseas, where drillers have said it can fetch a premium of $10 a barrel or more.
They follow a year of murky messages and widespread uncertainty over what is or is not allowed under a trade restriction that critics say is a relic of a bygone age, when oil was seen as scarce after the 1970s Arab oil embargo.
A domestic drilling boom of the past six years has transformed the United States into an energy powerhouse, boosting U.S. production by more than 50 percent and reversing decades of decline.
Output of very light oil has been especially strong, leading to a glut that threatens to overwhelm domestic demand. The constraints helped fuel bumper profits for refiners such as Valero Energy Corp and PBF Energy Inc, but angered drillers such as Hess Corp that say they were selling at a discount.
Jamie Webster, the senior director of oil markets at research firm IHS, said the FAQ "takes the leash off of (the U.S. Department of) Commerce" and signals it may take additional action on crude exports after several months of inaction.
While likely to draw broad support from many quarters, the measures also open the Obama administration to attack by environmentalists and Democrats who may see it encouraging more hydraulic fracking and as a sop to big oil companies.

Steps to Clarify

How the measures will affect flows of condensate is uncertain, particularly given the dramatic slump in global oil markets, where prices have nearly halved since the summer.
An administration official said that the oil market - not a "fairly arcane clarification" in guidelines - would ultimately determine how much oil is exported. That echoed the Obama administration's policy on exports of liquefied natural gas, or LNG, which are also now generally allowed.
The steps on Tuesday were "certainly not designed to add or detract from what can be exported. We are trying to make the boundary line clearer," said the official.
In its FAQ, which the agency has been working on for most of this year, the BIS confirmed or clarified a number of nuanced issues related to the rules, including:
* Confirmation that lease condensate processed through a distillation tower is considered a petroleum product, and therefore can be exported without constraint.
* Clarification of what constitutes "distillation" for export, including the fact that pressure reduction alone, and flash drums with so-called heater-treaters or separators, would not be sufficient to qualify oil for overseas sales.
* A reminder that most petroleum products may be "exported to most of the world without a license," a message seen by many analysts as blessing the process of self-certification.
* And clarification that "a minimum amount of mixing" between exportable foreign crude and restricted domestic crude may be allowed, a note likely making it easier to ship Canadian crude through U.S. pipelines and ports.
(For the FAQ, see:

Frustration Building

Uncertainty about what kind of petroleum can be shipped abroad has frustrated oil market players since the BIS, an office of the Commerce Department, quietly gave permission in 2013 to a small company, Peaker Energy, to export minimally treated light oil called condensate.
Last spring BIS gave permission to export treated condensate in private letters to two other companies, Pioneer Natural Resources Co and Enterprise Products Partners LP .
The private nature of the communications between the government and the three energy companies left a wide range of other drillers in the dark about investing in expensive infrastructure to process condensate.
One company, Australia's BHP, said last month it would press ahead with exports without having received a formal approval from the BIS, but other energy companies have been reluctant to follow suit without further guidance.
Domestic pressure has also grown. Several lawmakers in the House of Representatives and Senate have said that unless energy companies can export oil to Asia and Europe, the drilling boom will eventually choke on its own output.

"They Didn't Build It" -- December 30, 2014

Disclaimer: an op-ed. Just an opinion. Nothing more, nothing less. Numbers rounded. This and $1.89 will get you a cup of Starbucks coffee. 

I doubt anyone cares; it's just a number, but I think it's pretty remarkable: 3,000 oil and gas permits in 2014. The boom was supposed to have ended two years ago according to The Atlantic Monthly.

3,000 permits in 2014. I thought last year was supposed to be the big year. I thought the year before that was supposed to be the peak of the boom. And the year before that? Every year, until this year: about 2,000 permits.

This year: 3,000 permits.

That's a 50% increase in the number of permits. You can argue the effect the price of oil had either way -- either it affected the number of permits or it didn't. The price of oil started to slide in June, 2014, which was more than enough time for permits to drop off; they didn't drop off (in fact, they surged in October, November, December).

Or you can argue that the real plunge in the price of oil began after the OPEC meeting at the end of November, clearly not enough time to make a huge effect on the total number of permits this year. So, say what you want. I think 3,000 permits -- for a 30-second sound bite, almost 50% more than each of the previous three years -- is pretty remarkable. For newbies: permits are only issued by the NDIC if "they" think the operator has the capability of drilling those wells in the "near future," which generally means in the next 6 to 12 months.

And remember, the drilling is much more effective in 2014 than it was in 2011. I've discussed this before; won't go through it again.

Of course, if you told some folks in Washington, DC, that North Dakota did that much work in one year, I'm sure we would get ....

They Didn't Build That

By the way, what a great way to finish the year with regard to Statoil IPs. Did you all see this in today's daily activity report:
  • 26155, 4,076, Johnston 7-6 6H, Banks, t11/14; cum --
  • 26156, 3,657, Johnston 7-6 5TFH, Banks, t11/14; cum -- 
Disclaimer: if you feel IPs mean squat, ignore the last couple of bullets. 

Did "We" Do It? Did "We" Get Nine (9) More Permits --- December 30, 2014

I haven't looked at today's daily activity report until ... now ... let's see if we got nine (9) oil and gas permits which would put "us" over 3,000 permits for calendar year 2014 ... here we go ..

... but first ..

Active rigs:

Active Rigs170187187197156

Twelve (12) new permits --
  • Operators: Hess (4), Hunt (3), Enduro (2), CLR (2), Samson Resources,
  • Fields: Beaver Lodge (Williams), Writing Rock (Divide), Mouse River Park (Renville), Dollar Joe (Williams), Ambrose (Divide)
  • Comments: Nothing to necessarily indicate the slump in oil price is having a specific effect on permits (note number of permits, and locations of permits)
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Three (3) producing wells completed:
  • 26155, 4,076, Johnston 7-6 6H, Banks, t11/14; cum --
  • 26156, 3,657, Johnston 7-6 5TFH, Banks, t11/14; cum --
  • 27709, 1,440, BR, Haydon 44-22TFH-ULW, 4 sections,  Elidah, t12/14; cum --
Four (4) permits were canceled, none of which excites me one way or the other. Enduro canceled two permits in Renville and one permit in Bottineau County, but they have new permits today. OXY USA canceled one permit (#24682, Carrol Jones) in Dunn County.

A New Record! 3,000 Oil And Gas Permits For North Dakota In One Calendar Year -- December 30, 2014

Link here.

More Of The Same -- Saudi's Deficit -- December 30, 2014

This whole crude oil price "thingie" has me stumped. "Everyone" seems worried about Saudi Arabia and about the Bakken now. We should be seeing stories about how this -- the slump in oil prices -- is going to help the global economy. Something feels weird this time. Something doesn't feel right.

What we need is a commentary from the silver-haired oracle, no, not WB, but Louis Rukeyser -- but like that's going to happen. He died one year before the Bakken boom began in North Dakota.

If not Louis Rukeyser, then how about Peggy Noonan? She would get it right. She could probably take one of her old columns and substitute "slump in oil price" for  "George W. Bush" or "Barack Obama." I'm thinking of those columns in which she said, "there's something not right with Barack Obama's platitudes." She could just say, "there's something not right with the slump in oil prices this time."

Out here in California, gasoline seems as expensive as ever, about $3.00/gallon, but that's because when I was last here I saw signs for $5-gasoline in west Los Angeles and out in the desert. Back in Oklahoma and 17 other states, gasoline is selling at/below $1.99, or so I've read.

I think the reason the slump in oil prices feels weird this time: no one believes that Saudi Arabia is going to give their only resource away for the next ten years. The question is whether they continue to give it away for the next ten months?

See also: losing $110 million/day.

The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history.
The budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion.
Oil prices have been dropping since June because of a market glut, caused in part because of prodigious oil extraction in the United States from shale formations.

As a result of this glut, OPEC was urged to cut production levels at its Nov. 27 meeting in Vienna in an effort to shore up prices, but wealthy members of the cartel, led by Saudi Arabia, decided to keep production at its nearly two-year-old level of 30 million barrels a day.
Saudi Oil Minister Ali al-Naimi has since explained that the OPEC strategy was to reclaim market share. Fracking has made the United States, once the cartel’s largest customer, nearly self-sufficient in oil. But fracking is expensive, and many believe it can’t be profitable if the price of oil falls much below its current level of around $60 per barrel.
Oil is the principal, if not the only, resource in Saudi Arabia, so it’s clear that the price of oil has a strong influence on how the country’s annual budget is drawn up. Different analyses, however, provide different answers to how Riyadh has forecast the commodity’s value. Four of these reports say the Saudi budget is predicated on oil averaging $55 to $63 per barrel in 2015.

Re-Posting From This Past Weekend -- December 30, 2014

Re-Posting (with some editing)
Original Post
Over the past couple of years everything I have posted on the blog has been done in good faith, and for the purpose of getting a better understanding of the Bakken.

I now have a good feeling for the Bakken, so as of January 1, 2015, I will be closing the blog. (I closed it a couple days early due to some concerns.)


December 28, 2014: just to clarify -- shutting down the blog has nothing to do with anything that was said. It has to do with other issues.

December 28, 2014: as expected, I'm getting a fair number of e-mails about the blog "going off the air." I appreciate that. I won't reply to any e-mail now. I apologize. I'm at a Starbucks and do not have a power cord for my computer so I am on limited power. I will probably reply to some of the e-amail later. I apologize for not replying to everyone.

December 28, 2014: I'm going on hiatus with regard to the blog for awhile. I don't know if after this week I will start it up again or not, but I had a few concerns about the site, so I decided to bring it down.  So, we'll see. The number of page views would have gone over 7 million in early January, 2015, but my concern for the site was not worth waiting for that milestone.

For all I know the Bakken will implode and the state will go broke, but the more I've learned about the Bakken in the last few weeks suggests that the Bakken is in much better shape than people realize. Investors in companies that are operating in the Bakken are doing badly, of course, and I can list a lot of bad things going on in the Bakken, but what list I develop would hold true for the entire oil and gas industry.


I will keep track of some metrics at a new site.