Wednesday, December 31, 2014

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.

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