Friday, January 17, 2014

Of All The Gin Joints In All The Towns In All The World, She Walks Into Mine; The Decision Has Been Made: The Keystone XL Will Not Be Approved By This Administration -- Tea Leaves; And It Never Rains In Southern California

What a great evening. All caught up with my blogging, and then I saw another great story on the Keystone XL 2.0 North.

But first this. Rigzone is reporting:
The Dutch government announced Friday afternoon that production from gas fields in Groningen province will be reduced over the next three years.
The move has come after earthquakes recorded in the north of the Netherlands have become more intense and more frequent in recent years. Residents, environmental activists and politicians have blamed onshore drilling in the area.
In a statement sent to Rigzone, the Dutch government said it has decided that production in those areas most at risk will be reduced by 80 percent during the next three years. In addition, limits will be placed on total gas production from the Groningen field so that output will reduce to 42.5 billion cubic meters in 2014 and to 40 billion cubic meters in 2015. In 2013 production from the Groningen field reached nearly 54 billion cubic meters.
The government has also agreed to make $1.6 billion available to reinforce homes and other buildings and strengthen infrastructure in Groningen province.
Is it just me, or is a decrease from 42 billion to 40 billion all that much of a decrease? And that was from 54 billion cubic meters last year. The big decrease will come in 2016, it appears, when they have to get down to 10 billion cubic meters. On another note, the media, including The New York Times, try to associate fracking with these Dutch earthquakes. In fact, they are not fracking in the Netherlands.

Groningen was discovered in 1959; it is the largest natural gas field in Europe; it is the 10th largest in the world. "Closing" this natural gas field is not trivial but it turns out that enough natural gas will continue to be produced to meet the needs of the Dutch.

The Keystone Update ... as if it matters

Now, back to the Keystone story. The decision has been made: the Keystone XL 2.0 North will not be approved by this administration. At least that's what the tea leaves reveal. The AP via Rigzone is reporting:
Brushing aside pressure from Canada, Secretary of State John Kerry said Friday that the United States will not be pushed into making a decision on the long-delayed Keystone XL pipeline.
At a joint appearance with Canada's foreign affairs minister, John Baird, Kerry said he has not received a crucial environmental report on the $7 billion pipeline, which would carry oil from western Canada to refineries in Texas.
At the linked article, Kerry says he hasn't received the "crucial" environmental report -- no doubt it is being edited at 1600 Pennsylvania Avenue NW. If Kerry hasn't gotten the "crucial" environmental report by now, there's no way he can read through it before November 7, 2014.


I wasn't going to post this story until I remembered the great song that could be posted. USA Today is reporting: 
"All I can report to you is it's not raining today and it's not likely to rain for several weeks," Brown said in a news conference in San Francisco. On Thursday, the National Weather Service's Climate Prediction Center forecast below normal precipitation for two-thirds of California through April.
Mr Brown went to on to say that it never seems to rain in southern California, but, girl, don't they warn you?
Brown's proclamation allows California to request a broad emergency declaration from President Barack Obama, which would expedite some water transfers, provide financial assistance and suspend some state and federal regulations.
The situation in most of California and northern Nevada is extremely dry, according to the most recent report Thursday from the U.S. Drought Monitor, a federal website that tracks drought nationwide. Almost 99% of California is considered abnormally dry or worse; almost two-thirds of the state is in extreme drought.
2013 became the driest year on record in California; San Francisco had the least rain since record keeping there began during the gold rush of 1849.
Just for the record, Mr Brown never said "it never seems to rain in southern California." I made that part up.

It Never Rains in Southern California, Albert Hammond

A Note to the Granddaughters

I have often remarked that men become more romantic, more sentimental as they age. Women, just the opposite. With age, women become more careful, more circumspect, more cautious in their relationships.

I saw it again tonight during my monthly viewing of Casablanca.

Every time I watch this movie, I see something new, or hear a different line. Tonight, I was captivated by the way Rick and Ilsa looked at each other when they first saw each other at Rick's, and listened carefully to what they said and how they said it. He was incredibly romantic, sentimental; she was cool as a cucumber, as they say.

It's hard to believe they were acting. 

Wow, I love this movie.

CasablancaPlay It, Sam

Time To Clean Out The Mail

It's 8:38 p.m. I think Starbucks closes at 9:00, maybe 10:00 p.m. I will work as fast as I can. (I just noted the time stamp is still eastern standard time.)

I will simply post the links, perhaps make a short comment and move on. Most of the links will break over time, so if you are interested, you better look at them this week.

First, Steve has sent me links to a series of articles on the huge transmission line folks in New Hampshire are fighting. I posted the link to the first of the three installments earlier. This is the third installment. From the third installment, you can probably find the first and second. I've lost interest in activist environmentalists fighting the energy companies. I've noted a few things. First, the journalists are generally young, idealistic, and looking for a story. Second, the number of activist environmentalists on most issues can probably be counted on one hand. Those are the two or three people the young, idealistic, and naive journalists quote. Third, the vast majority of Americans are probably tired of seeing their energy bills go up, and they know why their utility bills are going up, but they are too busy just trying to survive, hold a job, raise a family to fight the activist environmentalists who have outside, out-of-state, and out-of-country funding. Here's the second installment.

Steve sent me this incredible story: ATT and Verizon capitalizing on the Bakken.
Bloomberg reported that Verizon, which has extensive DFW operations, has hit the oil patch in the northern United States where it has installed 17 new cellular towers in North Dakota and eastern Montana. There aren't many humans in the area, but there are plenty of machines involved in oil exploration and production, and that's where Verizon hopes it can drill into new profits.
"It's amazing, when you look around here and see the massive amounts of equipment," Mark Bartolomeo, a vice president at Verizon Communications (NYSE: VZ) told Bloomberg.
Bartolomeo said the company is pitching its LTE wireless coverage in North Dakota and eastern Montana as a network for oil companies' Web-capable smart sensors and pumps.
Yes, the operators can control their North Dakota pumps from their headquarters in Oklahoma and Texas. At least that's what I've been told.


This link will close out the last of three stories sent in this particular note from Steve. Again, a very interesting perspective from The Washington Post: "Energy is gradually decoupling from economic growth."
Here's what this graph is showing: Ever since the 1970s, the world appears to be using less and less energy to produce a given unit of economic activity. Much of that has likely been achieved through technology — more fuel-efficient trucks, more efficient power plants, more energy-efficient manufacturing techniques. That allows us to do more with less.
One question is whether this trend will continue in the future. The analysts at BP are predicting the decoupling will accelerate in the next two decades: "Energy consumption grows less rapidly than the global economy," they note, "with GDP growth averaging 3.5% p.a. 2012-35. As a result energy intensity, the amount of energy required per unit of GDP, declines by 36% (1.9% p.a.) between 2012 and 2035."
Considering that Obama has effectively shut down all job growth in this country outside of energy, I doubt the US will be able to decouple growth from energy any time soon. And he's doing his best to shut down job growth in the energy sector also.


A reader just sent me this link: Canadian environment groups challenge oil pipeline approvals. No longer interests me. Let Canada do what it wants to do. Let activist environmentalists do what they want to do. I don't have a dog in that fight. See my first entry above regarding the story from New Hampshire that Steve sent me.


Don sent me this blurb from GE's earnings call:
Our earnings for the quarter were about $31 billion, a record. We also ended the year with a record high backlog of $244 billion. We had growth in both equipment and services. There was real strength in power and water. We ended the year with 125 orders for heavy duty gas turbines. Power gen services grew by 9%, which was actually 16% excluding Europe.

For service, 6% revenue growth was the best quarterly result in 2013. Highlights include 54 advanced gas paths. Aviation spares grew by 17%. The oil and gas services grew by 17%.

(Many US wind farms were granted tax credits for starting construction in 2013, even though they may not produce electricity until late 2014. The one located near Hettinger, ND is one of these.) 
Wind orders were up 63%. We had orders for 779 wind turbines versus 412 in the fourth quarter of ’12, principally driven by U.S. demand. And wind backlog was up 43% for the year.
I no longer care about wind energy: companies are simply buying wind farms for the tax credits. I know longer care about solar energy: after twenty years of investment, solar energy provides 0.1% of the electricity for the US. GE can talk all they want about wind and solar; they are making their money from conventional energy sources.


Don sent me this link on TPLM in SeekingAlpha. I've posted it at my TPLM web page.

Don also me this link -- the propane story -- I posted a stand-alone post on this one. This is a huge story. A must read.

Steve sent me this article on SolarCity. A lot of money will be made in the renewable energy niche for nimble traders. I am neither: neither nimble nor a trader. Good luck to those who are.


I will continue to post global warming stories just to tweak the warmists, but as with solar energy and wind energy, I no longer care about global warming. It's obvious that the warmists belong to a cult; global warming is a religion, and I don't post much on religion on the blog. But for those interested, Antarctic ice has set another record. And for the record, the Arctic ice cap is inconsequential compared to the Antarctic ice cap. Let the Arctic all melt and life will go on. Perhaps not for the polar bears.


This is probably the craziest story this week -- a company was fined for dumping sand into a river


Oh, yes, I remember this article on solar power. I posted/linked it earlier. It tells me all I need to know about solar energy as a viable energy source for the United States. This article, from among all I've read, pretty much ends my interest in solar, though I will still post articles on renewable energy. But this story has the 0.1% data point.


Don sent me a number of articles on global warming and the resurgence of the automobile market. Automobile manufacturing will set new records. I won't post the links. Suffice it to say, the global warming cultists will be driving those automobiles next year and for the next 30 years. And many of those cultists will be driving SUVs with gasoline engines. I know Algore has several. SUVs.


This is probably my favorite story. Proves my point on so many issues. Bloomberg is reporting:
Electricity prices in Boston, which reached record premiums to New York costs last month, are poised to remain at all-time highs through March because of bottlenecks on natural-gas pipelines.
New England’s reliance on the fuel for power generation has grown to 52 percent from about 30 percent in 2001, though there have been no new pipelines transporting gas to the six-state region in 40 years.
In New York, lines from wells in the Marcellus shale deposits of Pennsylvania and West Virginia boosted deliveries by more than 1 billion cubic feet a day this winter, enough to heat about 3 million homes.
Wholesale power in Boston is trading at the highest January premium to New York since at least 2005, according to grid data compiled by Bloomberg.
Prices in New York recovered faster from a blast of arctic cold last week because of the increased gas supplies. The power premium may widen later this year and into 2015 as a Vermont nuclear reactor and one of the region’s largest coal plants are set to close, according to BNP Paribas SA. A new gas pipeline to New England isn’t scheduled to begin operations until 2016.
I have blogged about this extensively. The New England problem is all man-made. Presidents come and go. Governors come and go. Bloomberg might have also noted that New York continues to ban fracking. Let them eat cake. Best story of the week.


Don sent me this link on Chevron in SeekingAlpha. If I had to liquidate all my holdings, Chevron would be the last one I would liquidate. I would probably fall on my USAF ceremonial sword before I sold Chevron: seppuku. My wife and daughters would collect a lot of insurance. Yes, after holding life insurance for two years, it is my understanding that insurance companies pay out on life insurance even if seppuku is noted by the coroner on the death certificate.


I have not forgotten about ObamaCare. The only metric worth noting will be the increased premiums in October, 2014. Everything else is background noise.


And that's it -- turn on the lights, put on the backpack, put on the reflective tape, and start pedaling.

Good luck to all. I hope to be around in the a.m. to post the top stories of the week and quote the Saturday edition of The Wall Street Journal. I see the Democrat-led Senate was unable to pass a bill to extend unemployment insurance. A lot of struggling families tonight; the Senators will be feasting at fundraisers this long weekend. Sad.

By the way, that reminds me. I have a wonderful quote from a German historian from a book on classical Athens. If I remember, I will post it sometime. But not tonight.


A reader asked me if I had any ideas why Halcon shares were down 50%. I normally don't get into this stuff, but I am really, really bored this evening. I hate going into long weekends. Maybe it was getting up at 4:30 a.m. this morning, and I'm just tired....but I hate to waste a perfectly good evening, so against my better judgement --

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.

This was how I responded to the query about Halcon:
I haven't looked at the market in the past two weeks (not individual stocks, for the most part; some exceptions). I have not looked at any of the Bakken operators in the past two weeks that I can recall (there are probably exceptions) -- I mentioned on one of my posts that I generally don't look at individual Bakken stocks when the market is down or when oil is down, unless I have a specific reason, like to buy more shares in some company.

Having said that ... too much to write I will do a stand-alone post.
So, here goes. 

1. The best general information about investing in the Bakken might be found at SeekingAlpha, especially Mike Filloon, Bret Jensen, and Michael Fitzsimmons. 

2. I am investor, not a trader. I accumulate shares. I seldom sell. MDU was one of the first companies I ever invested in and probably held for 20 years before I finally sold. Another one of my very first holdings was BNI and I never would have sold, except Warren Buffett bought the railroad. I did trade KOG and no longer hold any shares in KOG, so I suppose that's an exception. I probably hold shares in about six Bakken operators and plan to hold them "forever." Even if they go bust, I will have something to write off. Smile.

3. Why would Halcon be down 50%? I don't know what it's trading at today -- I mentioned above I haven't looked at any of the Bakken operators since the beginning of the year when the market dropped and the price of oil fell to $92 pretty quickly. So I don't know where Halcon is trading. 

4. I think the better question from an investor's point of view is this: is Halcon still a good company to invest in, despite being 50% down? If it is down that much, and one thinks it is a good company to invest it, one certainly starts to think about entry points.

5. Here are some thoughts, in the spirit of the blog as noted at the "welcome/disclaimer":
a. Sector rotation: a lot of companies have had tremendous runs; if movers and shakers are still investing (not selling), they may simply be moving to new sectors, moving out of energy into something else
b. The Bakken is under huge pressure right now with concern about CBR, fracking regulations
c. The weather in the Bakken has scared a fair number of folks; there are warnings from other operators in other plays that the severe weather in December will affect 4Q13 earnings
d. Oil companies in general are under pressure; the TV crawler shows WTI has dropped from almost $100/bbl late last year to almost $92/bbl this past week
e. Investors are concerned about the cash flow required in the Bakken; it's a huge challenge for small operators
f. Recent articles from SeekingAlpha, elsewhere, suggest that the big Bakken operators will put pricing pressure on the smaller operators 
g. I would love to check HK and see how it's doing, do some calculations, but as noted earlier, I don't do that in this kind of market; I don't need the anxiety -- I say that because the first thing I would do is figure out the value of their acreage vs their key financial statistics -- however, if I have cash next week to invest, I would look at the smaller operators in the Bakken: HK, TPLM, AMZG, EOX. 
I think (b), (c), (d), and (e) are the primary reasons companies like HK might be down significantly from their highs. Again, just idle rambling. I'm not the one you want to ask when it comes to investing. I do the blog because I wanted to learn about the Bakken, not for investing. I assume 95% of my investments are managed by others (pensions, IRAs, etc); the other 5% that I manage probably has less than 10% in the Bakken. Again, search articles by Filloon, Jensen, and Fitzsimmons over at SeekingAlpha to see what they have to say about the Bakken.

Friday Night Ramblings -- OXY USA Will Report Several Nice Wells Next Week; EOG Has A Huge Well [100,000 Bbls In Four (4) Months]

I'm not sure where my ramblings will lead tonight. I'm not particularly energized to post anything, but I have all this free time, no television, and I'm really not in the mood to stay home and read. I made the 10-mile round trip to Starbucks this morning and had a wonderful Greek lunch with my daughter, and saw the grandchildren play with the neighbor's new dog last this afternoon. And now, to get out of the house, I put on my reflective "tape," turned on the multiple lights, and jumped on the bike and rode to the nearer Starbucks, just a half-mile away.

Two young Asian women -- probably Chinese -- are outside -- hugging and pointing to the sky. I spend so much time looking at the heavens at night with my older granddaughter identifying stars and planets, I thought that's what they were doing. I couldn't see the hand that was pointing to the sky due to some obstruction. Then it dawned on me: they were taking selfies. LOL. How absolutely wonderful, to be young again, carefree on a Friday evening. My mind can quickly wander. But I post those memories at another site.

Jimmy Johnson, the NASCAR driver is working on his computer across the way from me, here in Starbucks. I would ask for his autograph but he would probably think I was crazy, and sign "Bill Smith" or "John Jones." It took me several minutes to figure out what sports figure he was -- I recognized him immediately but couldn't quite place him. It's funny how the mind works. Finally the neurons starting clicking in the left temporal lobe, gathering data from the sports area, then narrowed it down to NASCAR. Once in the NASCAR area of the left temporal lobe, Jimmy Johnson was easily found. But it took a fair amount of struggling to get to the NASCAR "clue" as it were. 

I have a lot of stories that readers have sent me to post, but I'm not in the mood to do much with them right now. A reader asked about wells coming off the confidential list over the weekend (because I did not include them with the daily activity list like I usually do). I replied that I don't normally post them until the night before because they would get buried in the blog. But maybe that will energize me. So, here they are, these are the wells that will be reported Tuesday afternoon, after the long weekend (they will not be updated at this post; the IPs will be posted at a new post):

Tuesday, January 21, 2014
22110, conf, Petro-Hunt, Frderickson 160-94-33D-28-5H, North Tioga, a nice well,
23310, conf, WPX, Good Bird 36-25HZ, Moccasin Creek, a very nice well;
24850, conf, QEP, MHA 6-06-07H-147-92, Heart Butte, a nice well,
25475, conf, CLR, Josephine 2-17H1, Sauk, no production data,
25531, conf, SM Energy, Meadow Valley 3-1H, West Ambrose, producing,
25678, conf, BR, Washburn 41-36TFH,  Charlson, no production data,

Monday, January 20, 2014
25485, conf, MRO, Kari 11-13TFH, Big Bend, a nice well;
25751, conf, Legacy, Legacy Et Al Schillander 5-18 2H, Red Rock, a Spearfish well; a very nice well;

Sunday, January 19, 2014
22687, conf, Hess, EN-Jeffrey-155-94-2215H-1, Alkali Creek, no production data,
22918, conf, OXY USA, Matthew Schmidt 3-35-2H-144-97, Cabernet, a very nice well;
22926, conf, OXY USA, Brew 3-13-12H-143-96, Murphy Creek, a very nice well;
23309, conf, WPX, Good Bird 36-25HD, Moccasin Creek, a huge well;
24124, conf, Gadeco, Alexander 26-35-3H, Epping, no production data,
24694, conf, OXY USA, Henry Kovash 2-6-7H-142-95,  Manning, no production data,
25660, conf, Oasis, Safely USA 5-8H, Foreman Butte, a big well

Saturday, January 18, 2014
22917, conf, OXY USA, Matthew Schmidt 2-35-2H-144-97, Cabernet, a nice well;
23269, see below, EOG, Bear Den 24-1621H, Spotted Horn, a huge well
24642, conf, Murex, Jennifer Abigail 16-21H,


23269, see above, EOG, Bear Den 24-1621H, Spotted Horn:

DateOil RunsMCF Sold


Speaking of how the mind works, I was trying to remember the name of an F-15 pilot I flew with on numerous occasions while assigned to Bitburg Air Base many, many years ago (I was there when President Reagan visited and laid a wreath at the cemetery).  He was one of the finest pilots I ever flew with and I could not remember his name. It was driving me nuts. While typing the data of the wells above, I was listening to the Top Gun soundtrack in the background. His name flashed in front of me: Ted Hailes. I don't think he would mind having his name in the blog. It would be a hoot if he did a "google selfie" and found his name here.

A Nice Update On Williston In The International Business Times

A reader sent me the link to this story in the International Business Times: how the oil industry is transforming a small North Dakota town -- Williston. (I couldn't get this article to open in Firefox; I had to use Safari.)

Wow, what a great story, a real breath of fresh air. I particularly enjoyed the first of two photographs that accompany the photo, an aerial photo of the industrial parks on the west side of town. It may be hard for folks to realize, but this was all ranch land, farm land, or pasture with some minor exceptions just two years ago. Two years ago I was driving around this area, among the Caterpillars that were moving the dirt, building roads, and pads for new buildings.

Some operators, that built then, have had to rebuild in new locations or expand in their original locations to meet ever-increasing requirements. The best examples were Baker Hughes and Schlumberger. That is quite a photograph at the linked article.

And it is just one area in Williston that has grown over the past two years. There are similar areas north, south, and east of Williston. In fact, there was a whole "new town" going up several miles north of Williston; the city added another 4,000 acres or something like that north of Williston in the past couple of years; I forget the details.

A well costs about $10 million. About 200 wells are drilled each month. Most of that money, I assume, is spent in the Bakken, not elsewhere. $2,000 million is $2 billion every month going into the Bakken every month, and this has been going on since 2007, at least to some extent. It started to really take off in 2010.

Perhaps the best metric is the number of active rigs drilling on any given day. The NDIC recently added historical data when providing the daily count:

Active Rigs18718520116380

Thirteen (13) New Permits -- The Williston Basin, North Dakota, USA

Active rigs: 1987

Thirteen (13) new permits --
  • Operators: Hess (5), KOG (4), Murex (2), Slawson (2)
  • Fields: Epping (Williams), Writing Rock (Divide), Daneville (Divide), Big Bend (Mountrail), Robinson Lake, (Mountrail)
  • Comments: It's very early in the year, but it's very possible Hess will be the most interesting operator in 2014. EOG had the title in 2013, but Hess is really coming on strong, especially when you look at the results of some of their wells.
Wells coming off confidential list were posted earlier; see sidebar at the right.

Two (2) producing wells were completed:
  • 25001, 907, SM Energy, Annie 12-18H, Poe, t11/13; cum 24K 11/13;
  • 25850, 990, XTO, Wallace 21X-2E, West Capa, t12/13; cum 2K 11/13;

A Canary In The Coal Mine: Park Rapids, Minnesota, Ground Zero For Nationwide Propane Shortage

For background to the story Don sent me to day:
This is the story Don sent me today: "A Nationwide Propane Shortage Hits Park Rapids."

RBN Energy anticipated this shortage; the industry reported on the reversal of the propane pipeline for quite some time, starting as far back as 2012, and suggesting there might be shortages in the US in 2014. Here it is, not every 20 days into 2014 and we are seeing serious shortages. There were warning signs in the autumn as farmers started reporting a shortage of propane which they needed to dry their harvest.

From the Park Rapids story, reported by the Park Rapids Enterprise:
A critical nationwide shortage of propane, coupled with one of the coldest winters on record, is giving rural Minnesotans the chills.
And things are about to get worse.
The Cochin Pipeline, which services up to 50 percent of propane needs from Canada into the U.S., is scheduled to shut down permanently in April, mostly due to the emergence of shale markets. That main artery has been functionally inert for much of the winter, forcing propane suppliers to hunt all over the country for alternate sources.
“The line has seen varying usage over the past many years for Minnesota marketers depending upon crop drying, weather-related needs and pricing differentials,” Cochin’s website says.
“In recent times the average daily draw on the line from the two Minnesota terminals at Benson and Mankato has totaled about 8,000 barrels per day. This equates to about 120,000,000 gallons of propane per year. In reality this draw happens on a sporadic basis with large amounts of product being drawn at peak times, and then the system going for days or weeks with little or no propane drawn at either terminal.”

Friday -- Part V -- The Drudge Report And Nothing But The Drudge Report

What a crock. Now the White House says the president did not know the extent of surveillance, according to TruthRevolt. He is either incompetent, a liar, or ... (but I repeat myself). He is certainly in over his head. He didn't know about the Obamacare website either, but he certainly knows how to move money to Solyndra (see the list of 38).

The best news: the countdown clock at the sidebar at the right is finally under 1100 days. Wow, by now George W. would have been impeached had all this been going on under his watch. MSNBC, led by Rachel, would have had tingling feelings up and down their legs.

UPS blames profit miss on six fewer shopping days between Thanksgiving and Christmas. [Drudge has the headline wrong, by the way.] BloombergBusinessWeek had a several-page story on calendar-obsessiveness by UPS before this debacle. It was in the hard copy I had; let me see if I can find it on-line. Yes, here it is:
If Abell can’t come up with a viable scheme, UPS is in trouble. The company expects to ship more than 132 million parcels globally during the week before Christmas alone. If it can’t find space for them all, retailers will almost surely turn to FedEx. In addition, Abell must keep a lid on costs. In the past some investors have worried that UPS is too e-commerce focused.
David Vernon, an analyst for AllianceBernstein, notes that it’s usually more profitable to carry large shipments to businesses than to transport books to the cozy homes of Internet shoppers. But he says UPS is managing to turn a profit on the latter with careful planning. “I think some of those fears are starting to recede,” he says.
Maintaining profitability is especially difficult during peak season when UPS’s delivery expenses rise. This year, UPS is adding 55,000 part-time holiday workers, leasing 23 extra planes, and effectively building a second trucking fleet to handle the seasonal package flow. None of this is cheap. It’s up to Mr. Peak to plan accordingly. 
Talk about EGG ON FACE. 

From Breitbart: New Jersey is least economically solvent state in the US. Can you spell "moretaxes"?

Well, his threat worked. If Congress won't act, he said he will, by executive order ... and his approval rating is back into the 30's.

On global warming:
  • scientists baffled
  • "solar lulls" coincide with bitterly cold weather
  • "sun gone to sleep" -- BBC
And that's it. Not much over at Drudge today. Except a gazillion stories on the NSA, Oprah, and the NFL.

Friday -- Part IV -- Housing Starts, Largest Decline Since April -- Reuters; Weather Stalls Housing

More from Schlumberger, from the very, very long report:
In the Bakken shale play in North Dakota, a combination of Schlumberger technologies was specifically designed for use by Continental Resources to execute the largest ever downhole microseismic monitoring operation in the history of the industry.
The hydraulic fracture growth and optimum well spacing were tested in the Bakken and Three Forks formations using three Wireline VSI* versatile seismic imager receiver arrays simultaneously conveyed in three wells using TuffTRAC* cased hole services technology.
The VSI technology acquired high quality data over 3,000 ft from the location of the microseismic events. The operation was successfully completed in 63 days and included 293 fracturing stages with the Wireline monitoring services efficiently conveyed in excess of 300,000 lateral ft.
This is a big, big deal when an international company like Schlumberger specifically mentions the Bakken and then has a comment that is that long. And that important.

Don tells me that Cramer, this morning on CNBC, said Harold Hamm/CLR was using a lot of this Schlumberger technology. Fascinating. 

Random look at some incredible wells. I continue to update wells that went to DRL status last year and are now completed. It is absolutely incredible how good some of these wells are. Forget about IPs. Look at early production. When I first started blogging, 100,000 bbls of oil by the end of the first year was the gold standard. Look at the "test" date and then look at the cumulative production/date in the following. For example, HRC's FB 147-94-1B12-3H with 158,000 bbls by November, 2013, and it was fracked/completed tested about six months earlier:
  • 23382, 2,710, HRC, Fort Berthold 147-94-1B-12-3H, McGregory Buttes, t5/13; cum 158K 11/13; 
  • 23505, 2,147, HRC, Fort Berthold 152-93-17D-08-7H, Four Bears, t9/13; cum 58K 11/13; 
  • 24949, 2,274, QEP, Patsy 2-29-32BH, the Helis Grail, t9/13; cum 59K 11/13;
Reuters is reporting:
U.S. housing starts fell less than expected in December, pausing after recent strong gains that had propelled home building activity to multi-year highs.
The Commerce Department said on Friday groundbreaking dropped 9.8 percent to a seasonally adjusted annual rate of 999,000-unit pace.
It was the largest percentage decline since April.
Economists polled by Reuters had expected starts to fall to a 990,000-unit rate in December. For all of 2013, starts increased 18.3 percent to an average of 923,400-units.
It's all that global warming.

Reuters headline: Schlumberger's profit surges.
Schlumberger Ltd, the world's largest oilfield services company, posted a better-than-expected fourth-quarter profit on Friday as robust international activity offset stiff competition in North America.
Fracking, drilling seismic studies and other lucrative services for oil producers across most of the Middle East, Asia and Latin America helped the company's profit top analysts' estimates for the ninth straight quarter.
Intense competition with Halliburton Co and Baker Hughes Inc for work in North America's vast shale fields, though, combined with weak natural gas prices, eroded regional results. Without strong sales from the U.S. Gulf of Mexico, North American revenue would have dipped.
"In the United States, we see no change in fundamentals, with any meaningful recovery in dry gas drilling activity some way out in the future," Chief Executive Paal Kibsgaard said in a statement.
Schlumberger has the lowest exposure to North America among the big four oilfield service providers. International markets brought in about two-thirds of Schlumberger's 2013 revenue of $45.27 billion.
Among the majors, it seems XOM is the gold standard; among the oil service companies, it appears SLB is the gold standard. This does not mean they are the "best" in which to invest.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you might have read here. 

As noted earlier:
The Board of Directors of Schlumberger Limited today approved a 28% increase of the quarterly dividend. The increased dividend of $0.40 per share of outstanding common stock is payable on April 11, 2014 to stockholders of record at the close of business on February 19, 2014.  
On tap next week, earnings will be reported for the following companies of interest:
  • Baker Hughes
  • Cheney's former company
  • Delta
  • Xylinx
  • Netflix
  • Baxter
  • Starbucks
  • Union Pacific
  • Kansas City Southern
I own shares in two of the companies listed above.  Make that three; I forgot about one.

The Dickinson Press is reporting:
Theodore Roosevelt Regional Airport will soon have a third daily round-trip flight option with both of its major airlines.
Airport manager Matthew Remynse said United Airlines and Delta Air Lines have both decided to add a third flight to and from Dickinson during Thursday’s Dickinson Airport Authority Commission meeting at City Hall.

Friday -- Part III -- JCP: "A Large, Burning Ship Going Full Steam To Reach Dock Before It Sinks"; The "Floating Null" In Natural Gas

The Wall Street Journal

Obama wrestles with NSA overhaul. What a crock. If Bush was doing this, he would be impeached. Today on NPR, the 4:45 a.m. segment or about that time, NPR had what sounded like a news story, but if one listened closely, it was a public service announcement supporting Obama's plan to listen in on all Americans. I have no dog in that fight. I turn off my cell phone -- it's a 1990's clam shell model that I bought in 2009 or thereabouts -- I don't think it has the stuff necessary for the NSA to track, especially when it's turned off.

I talked about this yesterday: retailers confront new world of reduced shopper traffic. Brick-and-mortar stores (Best Buy, Barnes and Noble, particularly) are show-rooms for Amazon. I spent more than usual this past Christmas on gifts for my younger daughter and her husband, and 95% was spent "at" Amazon.
Best Buy Co. on Thursday became the latest retailer to chime in with weak holiday results. Like other chains, the electronics retailer blamed the race to offer the deepest discounts, a game of brinkmanship that hurt profit margins and held back revenue.
But there is a deeper malaise at work: A long-term change in shopper habits has reduced store traffic—perhaps permanently—and shifted pricing power away from malls and big-box retailers.
Consumers' rush to e-commerce is a challenge that brick-and-mortar retailers have wrestled with for years. Across a number of retailers, their defensive strategies don't seem to be panning out. Best Buy, for example, overhauled its store layouts and marketing in the past year, even inviting shoppers to "showroom" the electronics retailer—co-opting the term for people who try out products in stores and then buy them for less online.
I have the answer for Barnes and Noble but I doubt they will listen. I've posted it for those interested. My wife does not agree. She's wrong. But don't tell her I said that: life would be less pleasant if she knew I said that. On the blog.

Wow, I have to listen to some Shirley Bassey:

Goldfinger, Shirley Bassey

America's eating habits are turning healthier, study finds. Yes, I've switched to bagels instead of donuts at Starbucks.

I don't believe it. The Wall Street Journal  has the story that I posted yesterday: where to marry a millionaire -- North Dakota.
Welcome to North Dakota, which jumped 14 spots in the annual ranking of millionaire households per capita released by Phoenix Marketing International. There were roughly 53,000 more millionaire households in the U.S. last year than in 2012, for a total 6.15 million, according to Phoenix, which derives its figures from the Federal Reserve, Census Bureau and polling firm Nielsen Co. That means 1 of every 20 U.S. households has more than $1 million of investible assets. Those figures don't include the value of real estate. Large movements by many states made the latest ranking unusual.
Maine climbed 11 spots over a single year to No. 25 in 2013. Louisiana jumped 10 spots to No. 32. Meanwhile, Nevada fell 20 places to No. 39. Arizona, Florida, Idaho and Michigan all fell by more than 10 positions. From 2011 to 2012, no state changed its rank by more than two slots.
CBR to make safety changes

The line for Starbucks coffee now stretches almost to the door.

Target breach was part of a large, sophisticated attack; hit multiple retailers. Unfortunately, Target took the brunt. Be that as it may, I canceled my Target account, not because of the breach per se, but how it responded. It was a week or so before Target acknowledged the breach and initially denied personal information was stolen. Some two to three weeks later we learn from other sources that much personal information was stolen and Target finally acknowledged that. I was unable to reach Target in the early days following the breach and I could not access my on-line account. I finally reached Target, after a 45-minute hold. As soon as I told the male Target representative I wanted to cancel my account, the line went dead. Others blogged the same thing. I had more success calling Target's automated line to report a stolen card. I never spoke to a human but succeeded in canceling my account. Or so I thought. They "canceled" that account but sent me a new card with a new number. Now that things have settled down, I will cancel this account.

Speaking of which, I will also cancel one of my three other credit cards. The credit card companies response to this attack: monitor your accounts daily. Well, I can't do that very easily if I have multiple credit cards, so I will go to two credit cards: one for gasoline and one for "emergencies," like refilling my Starbucks card.

Blackrock fourth-quarter income rises 22% in fourth quarter. I still haven't found the fourth quarter results for North Dakota's "Legacy Fund."

The Los Angeles Times

My wife told me the fire was so bad in Pasadena yesterday that her car was covered with ash in south Los Angeles (San Pedro). Apparently the fire was started by one of three homeless folks starting a fire to keep warm. Five houses destroyed. The Times:
More than 700 firefighters battle the blaze, which burns 1,700 acres and destroys five homes. Three men are arrested on suspicion of starting the fire.
About 30% contained as of last night.

"New" Ohio execution method took 15 minutes to kill first inmate. Well, that's not going to last, is it?

Are JC Penney's turnaround moves wise or foolish?
It's not looking pretty for J.C. Penney.
The Plano, Texas, company said this week that it plans to close 33 under-performing stores around the country by early May and shave 2,000 jobs off its books. Chief Executive Myron Ullman called the move — designed to save the company $65 million a year — a key step in J.C. Penney's "progress toward long-term profitable growth."
Several analysts, however, say it's a sign that the retailer's turnaround may be more like a turndown.
"J.C. Penney's rebirth is unfolding, but the huge issue is that it's moving extremely slowly, causing inefficiencies at the store that diminish the promotional and marketing initiatives being undertaken by management to rebuild customer relationships," Brian Sozzi, chief executive of Belus Capital Advisors, said in a note to clients.
Sozzi characterized the company as "a large, burning ship going full steam to reach dock before it sinks."

Morgan Stanley beats by $0.08, misses on revs : Reports Q4 (Dec) earnings of $0.50 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of $0.42; revenues rose 12.4% year/year to $7.83 bln vs the $7.99 bln consensus.

BNY Mellon reports EPS in-line: Reports Q4 (Dec) earnings of $0.54 per share, excluding after-tax loss of $115 mln, or $0.10 per diluted common share, in-line with the Capital IQ Consensus Estimate consensus of $0.54.


A reminder: today's RBN Energy post is a must read. It concludes:
So, while Spectra and NextEra’s Sabal Trail is clearly an important project (it will boost Florida’s ability to receive gas inflows by 1.1 Bcf/d, or roughly 25%), Williams’ Atlantic Sunrise plan may well have a much bigger effect on gas markets and gas pipeline operations.
In the next episode in this series, we will delve into detailed information Williams is providing about  changing gas-flow trends on the Transco mainline, and into projections Williams is making on how the mainline will operate very differently as it becomes bi-directional through zones 4 and 5. Fair warning: That discussion will take us back to what we’ve called “the most arcane of our natural gas flow terms,” the pipeline flow “null point,” sometimes called the “floating null.”  As we said in “Upside-Down: Natural Gas Pipeline Backhauls, Reversals and Null Points,” a floating null occurs when you start injecting a lot of gas at what had historically been the market end of a mainline, and reverse enough compressors so that some of the pipeline can flow gas one way and another part of the pipeline can flow gas the other way.
More next time on Transco’s coming transformation into a floating null system, in which system demands and operations will determine how far Marcellus gas flows south and how far Mid-Continent gas flows north.
One word: fascinating. The "floating null."

Friday -- Part II -- Huge Natural Gas Story Reported By RNB Energy

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you might have read here.

A reader, in response to my note about Ghiradelli double chocolate brownies, suggested using two eggs instead of one. I always thought about adding a second egg but I did not know if one "was allowed" to do that, deviate from a proprietary recipe.

When I was stationed in eastern Turkey, I smuggled medications sewn in my parka, into Kurdistan. But deviating from a proprietary recipe seemed to be beyond the pale, as they say. Now that a reader says it's okay, I may try that next time.

Active rigs:

Active Rigs18718520116380

RBN Energy: Miami, 2017 -- Marcellus gas heading to Florida.
Spectra Energy and NextEra Energy’s planned Sabal Trail natural gas pipeline from near Transco Station 85 in southwestern Alabama to near Orlando in central Florida will do more than provide additional gas-delivery capacity to Florida and the welcomed redundancy of a third pipeline to the Sunshine State. The big news is that Williams’ Atlantic Sunrise project by July 2017 will enable large volumes of Marcellus-sourced gas to be shipped south (backwards!) along the Transco pipeline all the way to Station 85. That (and Sabal Trail) will give Marcellus producers something unthinkable until now: access to major gas users as far south as Miami. Today we lay out the basics of what is being planned.
I see I've won another million dollars from some Nigerian lottery, and I can get The New Yorks Times for $2 for some unspecified period of time.

General Electric reports EPS in-line, revs in-line; 2014 framework remains unchanged: Reports Q4 (Dec) earnings of $0.53 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.53; revenues rose 3.1% year/year to $40.38 bln vs the $40.21 bln consensus. 

By the way, an objective review of Warren Buffet's Berkshire Hathaway returns have not been as good as generally believed, over the last 10 years. Google it if interested.

Here's the Reuters story on GE
General Electric Co (GE) posted a rise in quarterly net profit on Friday, helped by strength in its businesses selling oil pumps and jet engines.
The U.S. conglomerate said net earnings rose to $4.2 billion, or 41 cents per share, from $4.01 billion, or 38 cents a share, a year earlier.
Excluding items, earnings of 53 cents per share were in line with the average expectation of analysts, according to Thomson Reuters I/B/E/S.
One word: lackluster. Okay three words: lackluster. Oil pumps. Without the latter, it would have been a bad quarter.

Wow, did you see this? Nintendo will slash Wii sales estimates for the year from 9 million to less than 3 million. That's the headline. Won't read the story. But that's the headline.

Thirty-one minutes of Arvo Part:

Te Deum, Arvo Part When I first heard this years ago, I was blown away when the voices came in at 4:54.   
Then, again, when the strings come in at 12:30.   
I heard Arvo Part's Te Deum live in Ripon Cathedral, Yorkshire, England. 
I most enjoyed listening to this at midnight in a small church near the River Nidd in Pateley Bridge.

SLB is up about a percent in pre-market trading.

By the way, there's a reason for inserting those YouTube videos. It has to do with the old versions of the iPad in which multi-tasking is impossible.

Ya gotta love this: Apache says cold weather in Texas and Oklahoma hurt production. I can't make this stuff up. Cold weather in Texas and Oklahoma. Yeah, life is tough all over. I assume -50 degrees in North Dakota and wind gusts up to 60 mph hurt production in North Dakota earlier this month, but for December, North Dakota posted another all-time record in crude oil production.

I just read the Apache story: that was for the fourth quarter. Hmmm. As I said, life is tough all over.

What's RSB doing? It's down almost 2% in pre-market trading. Shell posted a huge profit warning. It pays almost 5%. Wow, look at the chart. Looks like an old fashioned wood saw.

I'll "do" The Wall Street Journal in Part III.

I just talked to the woman working behind the Starbucks counter about "cold weather in Texas." She says Texans are ''....." when it comes to cold. [I don't know how to spell the word she used to describe Texans when it comes to cold.] She says she spent ten years in Minneapolis before coming to Texas, and has lived in Boise, Idaho, and some other place, I think she said New Mexico, or maybe it was just Mexico, and she said Texans are "......" when it comes to cold. If Apache says production was hurt in  the fourth quarter in Oklahoma and Texas due to cold weather -- these reports of global warming are seriously exaggerated.

Wow, this stuff never quits. Now Norway says huge costs to drill in the Arctic will hurt production. Yeah, life is tough all over. Every Norwegian is a millionaire.

Okay, on to Part III.

Friday -- Part I -- SLB Raises Their Dividend 28 Percent; Life Is Tough For Shell

I remember Rush designating Fridays as the day for his listeners. He said he would take calls on any subject, and then seldom took calls. I guess it will be the reverse for me.

Today is my day, dispensed with the meds, and will go gonzo. Well, not really, but it will be different.

I will "re-fresh" as I go along. If you don't like the constant refreshing, come back in 45 minutes. I should be done by then.

I went to bed early last night, maybe about 11:00 p.m. I was eager to get up this morning. I looked forward to Friday all week: SLB would report earnings.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you might have read here.

Wow, what a surprise! SLB reports earnings which looked okay on first glance and raised their dividend 28%. I will come back to SLB later. Memo to self: put some of this in bold.
Schlumberger beats by $0.02, reports revs in-line: Reports Q4 (Dec) earnings of $1.35 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $1.33; revenues rose 7.4% year/year to $11.91 bln vs the $11.98 bln consensus. 
The market hit a new high (apparently) this week, but my energy portfolio was mostly down. As I've said before, when the market is down, or the energy market is down, I generally don't look at individual stocks, and I definitely don't look at my portfolio unless I have something specific to do. Today, I will watch SLB.

The pull back in energy has been wonderful for investors: an opportunity to get in. The pull back may not be so good for mineral owners, but that's on a case-by-case basis. I don't own any minerals, so I wouldn't know.

It will be interesting to see how Shell does today. It posted a huge profit warning.
Royal Dutch Shell expects profitability to be significantly lower than levels : Co updates on its expected 2013 results. Fourth quarter 2013 figures, which are expected to be published on January 30, 2014 , are expected to be significantly lower than recent levels of profitability, considering current oil and gas prices and the downstream oil products industry environment.
Yeah, life is tough.

I normally bicycle to the Starbucks 0.75 miles (five or take a quarter mile) from the apartment complex where I have my man-cave. But it's impossible to get any work done there - too many interruptions by folks who think I'm interested in their plans for the day. So, now I've been riding to the Starbucks that is 4.5 miles from home. It might be 5.0 miles, but I don't like to exaggerate distances on the bike. I exaggerate everything else.

Folks discuss the merits of the iPad. Folks, there's no discussion. [Marilyn: "It's not true that I had nothing on. I had the radio on." ] I sleep with my iPad. If my wife is with me, the iPad is on the floor; if she is out in California like she is now, the iPad is on "her" pillow. Try reading the paper edition of The Wall Street Journal in bed. Now, try reading The Wall Street Journal on the iPad in bed. Case closed.

So, at 4:30 a.m. I am checking to see if SLB has reported. I don't know what time the inside traders got the news, but officially it was 5:00 a.m. central time when SLB reported. By 5:05 a.m. I was out of bed, and by 5:15 a.m. on my bike. I arrived at Starbucks at 5:49 a.m. (that is when I checked my cell phone time; the other times are estimates). I know it was 5:49 because I checked to see how long I would have to wait until this Starbucks opened at 6:00 a.m.

The bicycle ride was wonderful: cool, calm, and very, very dark. It was not quite "pitch" dark -- like the late evening walks in Yorkshire (England) many years ago. I would walk late in the evening; it was so far north, that it was dark by 5:00 p.m. On a moonless night, it was pitch black; one walked the trail along the river by memory. I learned to count the number of strides from a certain curve to the one gate along the trail. Some nights were miserably cold and I found respite in a small English church. I would listen to Arvo Part's Te Deum on my portable CD player, but I digress.

One last comment, then a new page. No, I'm going to quit here.