Tuesday, February 25, 2014

Nation's Largest Municipal Health System (NYC) Budget Deficit To Triple In Four Years

Bloomberg is reporting:
New York City’s Health and Hospitals Corp., which operates the biggest municipal health system in the U.S., said its budget deficit will more than triple to $1.4 billion in four years.
The system, which served 1.4 million patients last year, including 500,000 without health insurance, is suffering from Medicaid reimbursement cuts and “astronomical increases” in pension and employee health-insurance costs, Alan Aviles, president of the agency, said today in written testimony for the city council health committee.
“The safety-net role of our public hospital system has made HHC especially vulnerable to deep cuts to Medicaid, the cost of serving a rising tide of uninsured patients and the erosion of federal funding,” Aviles said.
The hospital corporation’s woes add to the fiscal strains facing Mayor Bill de Blasio, whose $74 billion preliminary budget doesn’t account for settling expired contracts with more than 150 public employee unions. Providing retroactive pay may cost more than $6 billion, according to the Independent Budget Office, a city-funded fiscal monitor.
An $8 billion federal Medicaid waiver announced two weeks ago may help HHC weather its fiscal storm, de Blasio said when he presented his first budget on Feb. 12. The waiver will allow New York to restructure its health-care system, de Blasio said. About 80 percent of HHC’s patients are on Medicaid, the federal-state health insurance program for the poor, or are uninsured, according to HHC.

Random Data Points Regarding The Bakken -- Director, NDIC, Recent Speech

From The Dickinson Press:

“With 15,000 square miles of North Dakota, the Bakken play is the biggest oil field in the world,” Helms said. “There are a lot of oil fields in the world and a lot of oil-producing areas in the world, but there is no continuous oil field of that size anywhere else in the world.”


“What I want to impress on you is that our current rig count of 190 will take an entire generation to drill all those wells,” Helms said. “For the millennials in the room, by the time we’re done drilling those wells, your children, my grandchildren, will be working in the oil business. It’s pretty mind-boggling. From what we call discovery to the end of phase three is really a three-generation process."


Helms detailed a Marathon Oil Corp. site in western North Dakota on a seven-mile stretch of road where, he said, about 140 surface acres will likely eventually provide access to nearly 18,000 mineral acres.

“That’s a footprint of eight-tenths of 1 percent,” Helms said. “In the oil business, that is incredibly small. That really hasn’t ever happened anywhere else in the world in the oil and gas business. That’s a significant impact, but the typical historical oil field footprint was 10 percent. From 1901 through 2001, we were looking at 10 percent. It is a 20-year process to develop those multi-well pads.”


The North Dakota portion of the Bakken is estimated to hold somewhere in the neighborhood of 300 billion barrels of oil and Helms said the industry currently hopes to recover between eight and 14 billion barrels from the Peace Garden State.

“Enhanced oil recovery holds the hope of recovering twice as much oil or three times as much without having any increase, really, in the landscape,” Helms said. “Every 1 percent increase represents three billion barrels of oil. Another formation that is just getting underway, and is in its discovery phase, is the Tyler formation. The first two wells have been drilled, but have not been completed yet. There’s a lot of different theories about what the aerial extent of the Tyler will be, but time will tell.”


Helms said the state’s current level of 190 active rigs is not expected to change much over the course of the next two decades.


 “I had the chance to visit recently with most of the major companies that are drilling in the Bakken and Three Forks formations in North Dakota,” Helms said. “The shortest drilling inventory I heard about was seven years, but most were in the 17- to 27-year range of drilling inventory based on the number of leaseholds that have.

Eight (8) New Permits -- The Williston Basin, North Dakota, USA

Wells coming off confidential list Wednesday:
  • 25207, drl,  HRC, Fort Berthold 148-95-27B-34-4H, Eagle Nest, no production data,
  • 25927, drl, Petro-Hunt, Dolezal 145-97-17A-20-2H, Little Knife,
  • 26003, 99, Legacy, Legacy Et Al Berge 4-6H, North Souris, a Spearfish well; t10/13; cum 7K 12/13;
Active rigs in North Dakota:

Active Rigs19018120416996

Eight (8) new permits --
  • Operators: XTO ( 7), Newfield
  • Fields: Corral Creek (Dunn) West Capa (Williams), Sandrocks (McKenzie)
  • Comments:
Wells coming off confidential list today were posted earlier; summary will be found at sidebar at the right.

One producing well completed:
  • 23814, 373, Triangle, Steen 149-101-13-24-4H, Antelope, t2/13; cum --
Four well name changes, including two by HRC suggesting two middle Bakken wells will now target the Three Forks in Dunn County.

Oasis Announces 4Q13 And Year Ending 2013 Earnings

Press release.
  • Increased revenue by 66% to $1,142.0 million in 2013, up from $686.7 million in the prior year.
  • Grew adjusted EBITDA by 60% to $821.9 million in 2013, up from $512.3 million in the prior year.
  • Increased net income by 49% to $228.0 million in 2013, up from $153.4 million in the prior year.
  • Adjusted EBITDA for the fourth quarter of 2013 was $225.4 million, an increase of $61.9 million, or 38%, over the fourth quarter of 2012 of $163.5 million

Tuesday In The Bakken -- February 25, 2014; Global Warming; ObamaCare Notes

EOG discusses 4Q14 results -- earnings call transcript.

RBN Energy: crude pipeline wars in North Dakota.
Since the start of 2014 two competing pipeline projects designed to provide crude producers in North Dakota with additional takeaway capacity have met with very different fates. The first proposal – the Sandpiper project launched by Enbridge in late 2012 has completed a successful Open Season and petitioned federal regulators for approval of its tariff structure. Sponsor Koch Industries quietly canceled the second competing proposal – the Dakota Express pipeline first proposed in July 2013. Looking at rail and pipeline takeaway capacity versus crude production in North Dakota, both these pipelines are “nice to have” not “need to have”. Today we begin a two part analysis of these competing projects.
For Investors Only
Disclaimer: this is not an investment site; do not make any investment decisions based on anything you read here or think you may have read here.

Fourteen (14) companies announce increased dividends or distributions, including EOG and Home Depot.

Weatherford reports EPS in-line, misses on revs; reaffirms FY14 EPS guidance: Reports Q4 (Dec) earnings of $0.07 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.07, in line with guidance for $0.05-0.08; revenues fell 7.8% year/year to $3.74 bln vs the $3.82 bln consensus.

QEP Midstream Partners misses by $0.01, beats on revs: Reports Q4 (Dec) earnings of $0.23 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.24; revenues fell 20.4% year/year to $31.7 mln vs the $30.4 mln consensus.

Newfield Expl reports year-end 2013 proved reserves; PV10 grows 44% as domestic proved reserves increase 8% to 576 MMBOE: Co announced that its proved reserves from continuing operations, Dec 31, 2013, were 576 MMBOE, an 8% increase over the prior year-end. Proved reserves at year-end 2013 associated with discontinued operations were 36 MMBOE, up 4% over year-end 2012.

Newport Exploration highlights from the co's year-end 2013 proved reserves report include:
  • The pre-tax present value of domestic reserves (discounted at 10%) increased 44% y/y to $6.6 bln. 
  • Domestic liquids reserves increased 26% y/y and represent 52% of domestic proved reserves. 
  • Domestic proved developed reserves increased 15% y/y and 56% of domestic reserves are now proved developed. 
  • Domestic reserves account for 94% of Newfield's total proved reserves. 
  • The co's domestic proved reserve life index is ~ 14 years. 
Newfield invested ~ $1.6 bln in continuing operations in 2013, excluding $176 mln in asset retirement obligations and capitalized interest and overhead. ~ $178 mln was invested in acquisitions, land and seismic. The invested capital generated 87 MMBOE of "new" proved developed reserves. The full-year 2013 investments also generated 96 MMBOE of reserves associated with new proved undeveloped locations. Future development capital associated with the new undeveloped locations is ~ $1.6 bln.
Some companies trading at new highs: BP, ERF, NFLX.

Global Warming

Chicago might get record-breaking lows
Rough weather to lag into March
Cold weather delays start of Connecticut's maple syrup season
Snow pack in Wyoming, 2013 - 2014
Snow precipitation / snow water equivalent, Montana rivers flowing into the Bakken
Winter misery index: in beleaguered Detroit, it's the worst


Health care premiums will soar for small- and medium-size businesses -- Forbes:
Yesterday, the Obama Administration’s Centers for Medicare and Medicaid Services released a six-page report predicting that Obamacare could cause premiums to increase for nearly two-thirds of small- to medium-sized businesses. “This results in roughly 11 million individuals whose premiums are estimated to be higher as a result of the ACA and about 6 million individuals who are estimated to have lower premiums,” CMS writes. But CMS’ projections almost certainly understate the problem, one that will begin to affect millions of workers in the second half of 2014.
Forbes lists the factors and then notes:
These were among the factors that led Delta Air Lines to estimate that it will spend $100 million more on health coverage in 2014 than it did in 2013. And Delta is a large employer, not a small employer; large employers should face relatively lower rate hikes than small ones.
Companies are simply going to cost-shift the health care expenses.