Thursday, April 3, 2014

The Oasis Helling Trust Federal Wells, Alkali Creek


February 9, 2017: post-shut-in-production-jump in a Helling Trust well

October 1, 2014:  This is what the Alkali Creek looks like "today" -- where the Helling Trust wells are located:

In the portion of section 22 that can be seen, there is a:
  • 4-well pad with a rig on site;
  • another 4-well pad with a rig on site;
  • a 2-well pad, both wells producing;
  • a toe of a long lateral coming from the north, producing;
  • another 4-well pad with a rig on site; and,
  • another 3-well pad with a rig on site, one well on DRL status, and one well on CONF status.
And, of course, just to the south of that, in the far northeast corner of section 27, two 3-well pads; and, in the far northwest corner of section 26, two 5-well pads (one pad, all five wells are producing; on the other pad, a rig is on site).

Original Post

17636, 1,731, Oasis, Helling trust 11-15H, t10/11; cum 396K 9/20; sited in section 15; ends in section 22
28061, 961, Oasis, Helling Trust Federal 5494 43-22 16T3. Three Forks B3, Alkali Creek, sited in section 22, will run north into sections 15 and 22, t2/15; cum 353K 9/20;
28062, 1,029, Oasis, Helling Trust Federal 5494 43-22 10T, Alkali Creek, t2/15; cum 363K 9/20;
28063, SI/NC--> SI/AB, Oasis, Helling Trust Federal 5454 43-22 13T2, Three Forks B2, Alkali Creek,
28064, 1,476, Oasis, Helling Trust Federal 5494 43-22 4B, Alkali Creek, t11/15; cum 321K 9/20;
28068, 1,519, Oasis, Helling Trust Federal 5494 43-22 5B, Alkali Creek, t11/15; cum 233K 9/20;
28069, 1,848, Oasis, Helling Trust Federal 5494 43-22 6B, Alkali Creek, t2/15; cum 402K 9/20;
28079, AB/689, Oasis, Helling Trust Federal 5494 43-22 7B, Alkali Creek, t12/15; cum 4K after 8 days; went inactive after those 8 days; though 12/18 off-line; but as of 12/18 moved from IA to A; back to IA; now AB,
28077, SI/NC--> SI/AB, Helling Trust Federal 5494 43-22 15T3, Alkali Creek, no production data,
28078, AB/849, Oasis, Helling Trust Federal 5494 43-22 9T, Alkali Creek, t11/15; cum 3K after 9 days; went inactive after those 9 days; though 12/18 off-line; remains off line 7/19;
28079, AB/689, Oasis, Helling Trust Federal 5494 43-22 12T2, Alkali Creek, t12/15; cum 4K after 4 days; went inactive after those 4 days; though 12/18 off-line; but status moved from IA to A; back to IA; remains off line 11/19; what a huge disappointment;

28080, 2,067, Oasis, Helling Trust Federal 5494 43-22 3B, Alkali Creek, t10/15; cum 191K 9/20;

If Only ...

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA; KOG Transfers Several Wells To Emerald Oil (Operator Transfer)

Active rigs:

Active Rigs190185207170103

Fourteen (14) new permits --
  • Operators: Oasis (7), Hess (3), Samson (2), EOG, Zargon,
  • Alkali Creek (Mountrail), Alger (Mountrail), Parshall (Mountrail), Blooming Prairie (Divide), Mackobee Coulee (Renville)
  • Comments:
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Samson Resources transferred two wells to Hess, both still on the confidential list (transfer operator):
  • 25020, Stanley 2821-5H
  • 25022, Stanley 2821-3H
KOG transferred ten (10) wells to Emerald Oil (one was a SWD well) (transfer operator)
  • 12806, Grizzly 1-25SWD, a Madison well spud in 1990; t81K bbls
  • 16162, Kodiak Grizzly 13-6H, Mondak, t63K 2/14; 300 bbls/month
  • 16169, Kodiak Federal 4-11H, Mondak, t141K 2/14; 500 bbls/month
  • 18923, Grizzly Federal 1-27H-R, Mondak, t91K 2/14; 1,000 bbls/month
  • 19295, Jeanie 25-36 2H, Pierre Creek, t76K 2/14; 1,000 bbls/month
  • 19509, East Grizzly Federal 3-25-36-15H, Mondak, t63K 2/14; c2,700 bbls/month
  • 19508, East Grizzly Federal 3-25-13-3H, Mondak, t32K 2/14; 600 bbls/month
  • 21658, Grizzly 149-104-15-12-1-2H, Mondak, t60K 2/14; 1,500 bbls/month
  • 23174, Grizzly 147-103-14-22-15-4H3, Mondak, t27K 2/14; 2,600 bbls/month
  • 23977, Grizzly 147-103-16-21-16-1H3, Mondak, t58K 2/14; 3,500 bbls/month
Wells coming off the confidential list Friday:
  • 23679, 1,249, WPX, Martin Fox 20-17HZ, Mandaree, t2/14; cum 11K 2/14;
  • 23874, 217, Samson Resources, Almos Farms 0112-3TFH, Ambrose, t1/14; cum 7K 2/14;
  • 26010, 1,478, Whiting, Curl 21-14-2H, Ellsworth, t10/13; cum 44K 2/14;
  • 26197, 337, American Eagle, Bryce 3-2-163-102, Wildcat, t12/13; cum 26K 2/14, far northwest corner of the state,
  • 26288, 2,046, MRO, Ell 21-1H, Murphy Creek, no production data,

For Investors Only: Barnes And Noble Is Burning

On January 9, 2014, I said Barnes and Noble was on it's last legs. Today Yahoo!Finance is reporting that "Barnes is burning":
Barnes & Noble: the bookseller's shares are burning, down more than 11% on news that John Malone's Liberty Media is selling the bulk of its stake. As part of the move Liberty will surrender two seats on the Barnes and Noble's board. CEO Leonard Riggio says Liberty's exit will give Barnes & Noble "more flexibility" in its desperate search for a sustainable business model.
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.

WTI will close almost 3/4 of a percent today. 

Something Different Today 
The Flory Nighten-ale at the Battle of the Bulge

Battle of the Bulge, Bastogne Museum, Vince Speranza

I visited the Bastogne Museum years ago; a magnificent museum. I did not know about "airborne beer" then; I wish I had.  

A Note To The Granddaughters: "The Bakken Experiment"; US Oil Imports Have Fallen To Lowest Level In More Than 20 Years

HoustonBizJournal is reporting:
Increased domestic growth in oil and gas production has led to the lowest level of net energy imports in more than 20 years, the Energy Information Administration said in a  new report.
Overall, net imports of petroleum and natural gas dropped 19 percent from 2012 to 2013.
“Crude oil production grew 15 percent, about the same pace as in 2012, which led imports of crude oil to decrease by 12 percent, accounting for much of the overall decline in imports,” the EIA reports.
Meanwhile, U.S. energy consumption increased 2.4 percent after declining in 2011 and 2012. Renewable energy provided the largest percentage increase.
The graph at the link goes back to 1950.  I was born in 1951.


Over the years I've opined that the gap between the "haves" and the "have-nots" in the US continues to widen.

While riding my bike this morning past the elementary school - middle school - high school complex where my granddaughters attend school, I had another thought (yes, I know: I need to get a life). As with individuals in the US, that gap between the "haves" and the "have-nots" also exists among nations. Having just read the article on the South African 200-wagon coal train (the Shongololo), I wondered if the top three impediments to national prosperity might not be: a) conflict; b) government fraud; and, c) operating under the wrong economic theory. I'm not sure if I would add "democracy" to that short list or not. It depends.

It goes without saying that conflict sets a developing country back years, if not decades. There might be one exception in today's modern world: Israel. Israel has somehow turned "conflict" into fortune. It's not an easy trick, but somehow Israel has done it. For them, "success from conflict" has become an art form.

Russia's economic success may have been permanently damaged by operating under the wrong economic theory for 70 years, from approximately 1917 to 1987, a time during which the western world was leap-frogging the rest of the world, only temporarily slowed by two world wars. Of course, Cuba continues to operate under the wrong economic theory. Some South American countries are at risk (e.g., Venezuela).

Government fraud setting back a country's prosperity: too many examples to even begin to list.

In my investing lifetime it seems there were only two lengthy periods when the US failed to live up to its potential: the lost decade (2000 - 2008) to be followed by another lost near-decade (2009 - 2016). Those two periods were lost due to different causes, and the outcomes, though the same, were also due to different reasons.

Fortunately, the US will not be set back significantly due to these two lost decades. From Sylvia Nasar's Grand Pursuit, pp 189 - 190:
So the question was not just what process could increase productive power by multiples in the course of two or three generations, but why the processes operated so much faster in some countries than others.
The traditional answer would have been that a nation's development depended on its resources. Schumpeter took the opposite view. What mattered was not what a nation had, but what it did with what it had. He identified three local elements of "industrial and commercial life" that drove the process: innovation, entrepreneurs, and credit. The distinctive feature of capitalism, he believed, was "incessant innovation," the famous "perennial gale of creative destruction." Marx too had observed that "the bourgeoisie cannot exist without constantly revolutionizing the instruments of production" but he had had min mind primarily factory automation. Schumpeter took a broader view.
"Innovation," by which he meant the profitable application of new ideas rather than invention per se, could involve many types of change, he pointed out: a new product, production process, supply source, market, or type of organization.
Marshall, whose motto was that nature took no leaps, had stressed continual incremental improvements by managers, and skilled workers that accumulated over time. Schmpeter stressed innovative leaps that were dramatic, disruptive, and discontinuous.
When I read that passage, I immediately thought of what I call "the Bakken experiment."

Hard To Forecast Tight Oil EURs -- Bloomberg


Later, 7:04 p.m. central time: I've really enjoyed the blog. Thinking again about the Arps equation -- if you go the linked fekete page below you will see a page full of integral calculus (at least I think it's all integral). I try to read a book on math at least once every year. I took calculus in college, got an "A" both semesters, and never understood what it was good for. It was only years later, after reading several books, that I finally understood it. It obviously makes sense why one would need calculus to calculate depletion of an oil well that was non-linear. Newton and Leibniz would have been proud. 

Later, 3:39 p.m. central time: a reader sent me a nice note regarding Arps equation. That note spurred me to look at the equation at fekete. The math was more than I had seen since my days in Calculus 101 -- first year college.  Wow, a new appreciation for those who calculate EURs.

I have an idea there are least five EUR's to be cognizant of:
a) the EUR of a specific well
b) the EURs of wells in the same drilling unit
c) the EURs of wells in the same oil field (to include same formation)
d) the average EURS of wells in the same basin (Williston vs Permian vs...)
e) the average EURs of wells operated by the same operator across the globe
.. and there would be different (and multiple) reasons for calculating the various EURs at all levels.

I have learned so much from the blog. The take-away in this discussion: there is no "average" EUR of a Bakken well. The best we can perhaps do is determine the average EURs of wells in the same drilling unit. In the Bakken, the EURs can vary widely even in the same oil field (I'm thinking of two fields, as examples, the Parshall [east-west], and the Cottonwood [north-south]). Within the same drilling units, the EURs will evolve over time as technology and processes improve.

Original Post

A reader sent me this link. I wasn't going to post it at first; the headline, as usual had more "tease" than the article had "meat." But I can never resist the opportunity to comment on the banality of some of these articles. Bloomberg is reporting on old math:
In 1945, Arps, then a 33-year-old petroleum engineer for British-American Oil Producing Co., published a formula to predict how much crude a well will produce and when it will run dry. The Arps method has become one of the most widely used measures in the industry. Companies rely on it to predict the profitability of drilling, secure loans and report reserves to regulators. When Representative Ed Royce, a California Republican, said at a March 26 hearing in Washington that the U.S. should start exporting its oil to undermine Russian influence, his forecast of “increasing U.S. energy production” can be traced back to Arps.
The problem is the Arps equation has been twisted to apply to shale technology, which didn’t exist when Arps died in 1976. John Lee, a University of Houston engineering professor and an authority on estimating reserves, said billions of barrels of untapped shale oil in the U.S. are counted by companies relying on limited drilling history and tweaks to Arps’s formula that exaggerate future production. That casts doubt on how close the U.S. will get to energy independence, a goal that’s nearer than at any time since 1985, according to data from the U.S. Energy Information Administration.
I would like to see the "proof" that the Arps equation has been twisted to apply to shale technology. Perhaps, but my hunch it's become a lot more sophisticated than "tweaks" to Arps' formula. My hunch is that estimating EURs in the Bakken will be a lot like weather forecasting. Despite the jokes, weather forecasting is pretty darn good. Operators now have seven solid years of production from 6,000 wells in the Bakken.

Estimates are just educated guesses.  The fact that SM Energy revised its EURs four times in a year (or whatever it was) suggests that SM Energy was simply issuing too many press releases, too much information. Smile.

SM Energy needs to keep its focus on improving its wells; the EURs will take care of themselves. The article didn't mention EOG which has seen incredibly good EURs. The article didn't mention the significant increase in EURs in the Bakken from 2007 to 2013.

I would think it will be impossible to sort out EURs in tight oil. In the Bakken, the sweet spots are very different from other areas, and these areas are sometimes separated by less than a mile. Mostly it has to do with natural fracturing, but also with porosity and permeability. Thickness of the seam is less variable and TOC is probably fairly consistent, within a range, and those are the five parameters (natural fractures, porosity, permeability, thickness, and TOC) before we even get to "competence" of the drillers and the frackers.

Idle chatter.

A Note to the Granddaughters
Joseph Schumpeter, A Contemporary of Albert Einstein's
From Sylvia Nasar's  Grand Pursuit, pp 186 - 190

In 1908, Schumpeter posed two questions that have relevance today:
  • could one prove the existence of economic development in the sense that growth could be traced to economic rather than demographic, political, or other external causes? and, 
  • was it possible to devise a plausible narrative of economic evolution under the assumption that existing social arrangements -- capitalism and democracy would persist?
His provisional answer: a strong affirmative.

A nation's ability to provide its citizens with a high standard of living depended first and foremost on its productive power, which enabled the economy to produce more and more with the same resources, like the porridge pot in the Grimm brothers' fairy tale. Output per worker had doubled or tripled in his own lifetime after more or less stagnating for nearly two thousand years between the births of Christ and [Queen] Victoria. ... Schumpeter treated economic development as a fact rather than a theoretical possibility. By contrast, Malthus was convinced that technological improvement wold fail to counteract the fateful law of decreasing returns and that a stationary state was near at hand.
And, then,
If development were being driven mainly by globalization, as Marx had hypothesized, and local conditions mattered little, average living standards should become more, not less, similar. But anyone who had recently lived in Cairo as well as London, Cernowitz, and Vienne had to be struck by the stunning differences in the level and rate of economic development of different countries. In 1820, the average standard of living in the world's richest country -- still Holland -- was roughly three and a half times that of the poorest nations of Africa and Asia. By 1910, however, the lead of the richest over the poorest had grown to more than eight-fold. These differences in living standards primarily reflected differences in productive power rather than in territory, natural resources, or populations [compare Russia with North Dakota]. For any given amount of capital and labor, the most efficient economies could produce many times as much as the least efficient ones.

For Investors Only: Oil Back Up Over $100; Bakken Operators Show Improvment; Whiting To Increase Capacitiy At Robinson Lake Natural Gas Processing Plant

Isn't this interesting: WTI is back over $100. It is not due to a weak dollar: the Dollar Index has hit its best levels in five weeks following dovish commentary by ECB President Mario Draghi. 11:46AM Crude oil prices just spiked to new session highs... May contract hit $100.04/barrel and is now +0.4% at $99.98/barrel

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

Johnny Cash Album Released 2014
I normally don't do this, put in a plug for a new CD, but this is too good to delay posting. This is vintage Johnny Cash: Out Among The Stars. If you like Johnny Cash, buy this CD. It's available at I had heard one song on the album and based on that song alone, I bought the CD at Starbucks this morning. Wow, not disappointed at all. It is vintage Johnny Cash, not the songs from the albums he was producing in the last years of his life. These could have been produced at the peak of his popularity and the quality seems better than one would expect from songs recorded long ago: all selections previously unreleased. Original recordings produced by Billy Sherrill. Produced for release by John Carter Cash and Steve Berkowitz. There are three duets: two with June Carter Cash and the recording is crystal clear. She was the man behind his success, I am convinced. The third duet was with Waylon Jennings. Wow, great songs. Did I say it was vintage Johnny. Perhaps a bit too country for some modern listeners. But if you grew up with Johnny Cash like I did you will love the album. Trust me.

Oh, I didn't notice this: the reason I bought the album was for one song, "She Used To Love Me A Lot." It turns out the song is found twice on the album: the way I first heard it, and then as a "bonus track," the JC/EC version.


Newfield is moving today. A reader asked me for my thoughts. My reply:
I think the fast-frequency traders meant to trade Netflix, new Newfield.

Seriously, today's movement is due to the upgrade by UBS, and the fact that oil reversed.

The question is why UBS upgraded Newfield.

Newfield is an interesting story. I know nothing about it except what little play it has in the Bakken. Two or three years ago, Newfield CEO sounded absolutely frustrated with his investment in the Bakken and it sounded like he was ready to leave the Bakken. Shortly after that, Newfield "turned around" in the Bakken: better wells, and better conference calls.

I believe the Bakken is only a small part of Newfield's assets, but I like to think that Wall Street investors are starting to note that the Bakken might be bigger than they originally thought. Again, most of the operators in the Bakken are not well known names on Wall Street.

Look at KOG today; I think Wall Street knows KOG and is looking for other players in the Bakken. 
Zack's also provided this note back on March 10, 2014:
The company should benefit from the positive results of the Uinta Basin, South Cana, Bakken and Eagle Ford. We expect the yields from these plays to nearly double in 2014. Further, Newfield’s international asset divestitures like the Malaysia business, which was reducing earnings, will help in improving profitability.

Trading at new highs today: BHI, ECA, EOG, NFX, PSX, SLB, and even WLL! Yahoo!Finance shows KOG has had a 52-week high of just over $14. EOG is now solidly over $100, equal to a $200/share, pre-split valuation. It's been a slog for WLL -- as low as $56 back in February; now $71.

Whiting will expand its Robinson Lake natural gas plant to over 100 million cubic feet per day (for newbies: the "standard size" of a natural gas processing plant in North Dakota is 100 million cubic feet per day). Whiting says they can increase that amount of capacity and not expand the footprint. According to Whiting's 2013 annual report:
The Robinson Lake plant located in our Sanish field has a current processing capacity of approximately 90 MMcf/d, and we have projects underway to increase this processing capability to 110 MMcf/d by mid-year 2014.
Our Belfield Plant located near the Pronghorn field has a processing capacity of 35 MMcf/d. Both plants have fractionation capability to convert NGLs into propane and butane, which end products can then be sold locally for higher realized prices.

Bloomberg is reporting:
Back in April 2007, in the midst of the greatest commodities rally on record, OAO Gazprom's deputy chief executive officer, Alexander Medvedev, was talking big.
Russia's natural-gas export monopoly aspired to be the world's largest company, he said while offering up a prediction: its market value would quadruple to $1 trillion in as little as seven years. 
Medvedev was off by $910 billion. Since he made that forecast, no company among the world's top 5,000 has suffered a bigger collapse in market capitalization than Gazprom, a $154 billion plunge that's become emblematic of the malaise that has overtaken President Vladimir Putin's economy. The state-run company has tumbled three straight years in the stock market as it stepped up spending on everything from the Olympic games in Sochi to projects in Siberia.
The timing of the story is interesting, isn't it?

A 200-Coal-Hopper Unit Train; US LNG Exports To Increase; Global Warming Dumps Record Amount Of Snow On Minnesota (Probably US, Too)

I'm not sure what to blog next -- either a meandering musing I've been thinking about for quite some time, or a link/comment to a story Don sent me.

I guess I will go with the story, this one from South Africa. Bloomberg is reporting on an $18-billion rail plan to expedite coal exports. This is an incredible story. For me, this is simply another story of the futility of warmists' goal to cut emissions from coal. Look at the size of this endeavor:
In more than 40 years driving trains in South Africa, Jacobus Cornelius van der Merwe has never seen anything like the Shongololo.
The train, whose name means millipede in Zulu, carries 200 coal wagons, is as long as eight Eiffel Towers laid end-to-end and can haul 16,800 metric tons of coal at 80 kilometers (50 miles) an hour non-stop to the country’s main export port.
The 580-kilometer Shongololo journeys from mines in Mpumalanga southeast to Richards Bay Coal Terminal on the coast, without having to change locomotives because some lines use alternating current and some direct. About 110 dual-powered trains made by Toshiba Corp. been put in service since 2009, while diesel locomotives on the coal route will be replaced with General Electric Co. models. 
That's an incredible story with many, many story lines, least of which is a reminder that US presidents come and go, but entrepreneurs never give up.

Look at all the diesel locomotives GE will build. Wow. Shon-go-lo-lo.

Leader of the Pack, Shangri-Las

I can only imagine how many wind farms one would have to see in the US to match what the South Africans are doing with their coal.

Spain: So Much For Windmills
Meanwhile, Good News Continues To Flow From The US Gulf Coast

Houston Business Journal is reporting: Cheniere inks LNG export deal with Spanish company.
Houston-based Cheniere Energy Inc. has signed another major customer for its Corpus Christi liquefied natural gas export facility.
Spain-based Endesa Generacion S.A. agreed to buy about 1.5 million tones per annum of LNG from Cheniere subsidiary Corpus Christi Liquefaction LLC once the facility’s operations commence.
The agreement lasts for 20 years from the date of first commercial delivery, and it has an extension option of up to 10 years. Deliveries are expected to begin as early as 2018.

Global Warming Dumps Record Amount of Snow on Minnesota

Don: "If they do not stop global warming soon, the snow will be so deep I will never get out of my driveway." He could have added, " ... and my wife is shoveling as fast as she can." LOL.

CBS Minnesota is reporting
The Artist Formerly Known As Prince was wrong. It’s not “Sometimes It Snows In April.” It “Always Snows In April.”
OK, it only seems that way after the brutal winter we had this year, and the extended winter we had last year. But many Minnesotans are understandably at the breaking point with the news that a spring snowstorm is expected to dump possibly more than a foot of snow in many parts of the state.
The National Weather Service has issued winter storm warnings for most of the state, including the Twin Cities. The warning is in effect from Thursday afternoon until Friday night.
WCCO director of meteorology Mike Augustyniak says that the storm should begin with a wintry mix in the Twin Cities. Then it will eventually begin to turn over into heavy, wet snow late Thursday into Friday morning. The period of accumulating snow could last up to 12 hours, Augustyniak said.

US Employers Say ObamaCare Will Cost Them $5,000 More/Employee

TheFreeBeacon is reporting:
Obamacare will cost large companies between $4,800 and $5,900 more per employee and add hundreds of millions to their overhead, according to a new survey.
The American Health Policy Institute conducted a confidential survey of 100 large employers—those with 10,000 or more employees—asking what costs they expect to incur from Obamacare over the next decade.
Factoring in the health care law’s added mandates, fees, and regulatory burdens, employers anticipate cost hikes between $163 million and $200 million in 2016, a 4.3 percent increase. By 2023, employers will be paying 8.4 percent more than “what they would otherwise be spending” for their employees’ health care.
Health care is so incredibly unpredictable, there is no way one could predict health care costs in 2023. 

I don't quite understand all the whining. It's my understanding that corporations can opt out. The Supreme Court justice Sotomayor told Hobby Lobby that it could opt out of ObamaCare and simply pay the penalty, which is around $2,000/employee, a whole lot less than what insurance will cost.

It's also my understanding that companies are in compliance with ObamaCare if they provide a monthly stipdend for employees to purchase their own health care insurance through ObamaCare websites (assuming the websites work). 

Fifty weeks x 40 hours/week = 2,000 hours, or $2.50/hour. Minimum wage is about $7.50, but in reality is probably closer to $9.00. The Senate doesn't have the votes for a $10.10-minimum-wage but $9.00 plus $2.50 is not a whole lot more than the minimum wage, and except for businesses like McDonald's, I doubt most employees have a preponderance of minimum-wage employees.

In addition., the additional expense is an expense which decreases taxes for a corporation. 

I think folks forget that the primary reason driving ObamaCare in the first place was the unpredictably of ever-increasing health premiums that came out every October. The high cost of health care was a problem but it could always be passed on to the consumer (if the playing field was level); it was the unpredictability of the premiums that created havoc.

So, now the cost of health care is squarely in the hands of the employer. Ms Sotomayor says employers can opt out and pay the penalty. This is not rocket science. 

[I think ObamaCare is a total scam, fraud, a trainwreck as the Montana Democratic Senator said, but it was a godsend for the Corporate America.]

A Most Interesting Unemployment Claims Report; The Rise In First Time Claims Double What Analysts Forecast

Read the story at the link very closely. See if you can see what seems very, very strange.

Remember, this is an administration that is thinking politics 100% of the time. This is an administration that would allow the IRS to target a political party. There is a mid-term election just a few months from now. With those hints, did you see what seems to be very, very strange?

Reuters is reporting:
The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend continued to point to some strength in the labor market. Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 326,000, the Labor Department said on Thursday.
Claims for the week ended March 22 were revised to show 1,000 fewer applications received than previously reported. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 317,000 in the week ended March 29. 
First the spin: the story does not point out how badly this new number was. The analysts had expected a rise of only 7,000 -- which is pretty bad in itself considering the time of the year and considering where we are in the economic recovery. 

A rise of 16,000 is/was more than double the expected 7,000.

More spin, despite the four-week average getting worse, Reuters interprets the number differently than I would have:
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, nudged up 250 to 319,500. This indicates a firmer bias in the labor market. 
If one assumes the administration has known for quite some time that unemployment numbers through 2014, an election year, would be bad, one can only assume an administration that sics the IRS on a political party would also massage the unemployment numbers if they could.

Did you see the interesting data point in the article alluded to earlier? Another hint: depending on how you count paragraphs, it's in the sixth paragraph.

Okay, here it is:
The government made revisions to the model it uses to smooth the claims data for seasonal fluctuations. It also revised claims data going back to 2009.
Do you think this administration would change the model to actually make things look worse than they are? LOL.

I assume that's why the four-week average only "nudged up" despite the most recent initial unemployment claims came in twice as much as expected.

[By the way, the four-week average does not make sense. Going back to the original Bloomberg source last week, the four week average was 317,750. I reported last week:
March 27, 2014: claims drop by an astounding 11,000, unexpected. Now down to 311,000; analysts expected 323,000. Four-week average is 317,750, the lowest since September 28, 2013.
Today the government says the four-week average nudged up 250 to 319,500. If the "250" is correct, then the massaging of the numbers affected last week's four-week average. In fact, jump from 317,750 to 319,500 is 1,750, a bit more than a nudge.]

Disclaimer: I often make simple arithmetic errors. The sources are linked if one is interested in checking the data.

An Inconvenient Truth

ClimateDepot is reporting:
Green guru and geophysicist James Lovelock, considered one of the pioneering scientists of the 20th century, has officially turned his back on man-made global warming claims and the green movement’s focus on renewable energy. Lovelock conceived the Gaia theory back in the 1970s, describing the Earth’s biosphere as “an active, adaptive control system able to maintain the earth in homeostasis.”
In an April 3, 2014 BBC TV interview, Lovelock has come out swinging at his fellow environmentalists, accusing the new UN IPCC global warming report of plagiarizing his now retracted climate claims from his 2006 book The Revenge of Gaia.
"The last IPCC report is very similar to the (now retracted) statements I made in my book about 8 years ago, called The Revenge of Gaia. It's almost as if they've copied it," Lovelock told BBC Newsnight television program on April 3. 
BBC interviewer Jeremy Paxman noted to Lovelock during the April 3 program:  ”Sure. But you then, after publishing these apocalyptic predictions, you then retracted them.”
The newly skeptical Lovelock responded: ”Well, that’s my privilege. You see, I’m an independent scientist. I’m not funded by some government department or commercial body or anything like that. If I make a mistake, then I can go public with it. And you have to, because it is only by making mistakes that you can move ahead.”

Now, An Update On The Eagle Ford -- Zeits

Over at SeekingAlpha:
The East Texas Eagle Ford play has received endorsement from a new important participant, Apache Corporation. Apache, who is a significant leaseholder in the Giddings area of East Texas, has confirmed its plans to ramp up drilling activity targeting the Eagle Ford in 2014. Apache is already running three rigs in the play, and plans to bring in a fourth rig next month. This will make Apache the most active driller in the play, alongside Halcon Resources, who is currently operating three rigs. Apache plans to spend $300 million in 2014 to drill 40+ gross horizontal wells. The company's initial focus will be on the portion of its acreage that is immediately adjacent to Halcon's original focus area.
Apache's participation in the play is important from two perspectives:
  • First, the E&P heavyweight's vote of confidence is credible. Apache has significant technical knowledge of the East Texas Eagle Ford, and takes credit for discovering this play six years ago (drilling results for Apache's first-generation wells are discussed at the end of this note). Apache's renewed interest in the play - which seems inspired by Halcon's and Clayton Williams' success - sends a positive signal regarding the potential upside this emerging play may offer.
  • Second, the addition of another "anchor" operator with a deep technical bench and extensive financial resources will accelerate the play's delineation and contribute to the well design and completion optimization effort.
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or what you think you may have read here. I have no plans to invest in Apache, but the article certainly got my attention regarding EOG, HK, Clayton Williams.

For Investors Only: Do Readers Remember That Article In Seeking Alpha -- Last Nail In Halcon's Coffin?


April 14, 2014: this is quite remarkable. The contributor at the SeekingAlpha article linked below suggested that the Tuscaloosa Marine Shale would be the final nail in Halcon's coffin. Today a huge well was reported in the TMS and Halcon surged 10%. The SeekingAlpha article was posted March 21, 2014; Halcon was trading at $3.88 that day. Today, Halcon is trading at an even $5.00 ($1.12/$3.88 = almost 30% on the "upside"). 
Original Post

Do readers remember that SeekingAlpha artice: "last nail in Halcon's coffin?" Maybe it will be different a year from now, but HK has risen the past two days.

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.

Select oil/gas related names showing strength: NBR +1.7%, ESV +1.7%, CHK +0.8%, WFT +0.7% (approves change of jurisdiction of incorporation from Switzerland to Ireland),  DVN +0.6%, NFX +0.6% (upgraded to Buy from Neutral at UBS).

Thursday, April 3, 2014 -- The Number Of Active Rigs Are Trending Down; Spring Road Restrictions?

Active rigs:

Active Rigs191185207170103

RBN Energy: exporting Marcellus LNG.
With Marcellus natural gas production expected to continue increasing, several companies are proposing projects to pipe a portion of the output through New England to Canada’s Maritime Provinces, where the gas would be liquefied and exported to Europe, Latin America and maybe even Asia. Some offshore Atlantic Basin gas production from Sable Island and Deep Panuke would be mixed in too. Such plans for as many as four new LNG export facilities in Nova Scotia and New Brunswick hinge on the development of new pipeline capacity through New England to the existing Maritimes & Northeast Pipeline (MNP), which would be reversed to flow north. Is this a golden opportunity or an overreach?  Today we examine prospects for exporting Marcellus gas through new Eastern Canadian LNG facilities.
It is no secret that natural gas markets in the U.S. Northeast and the Canadian Maritimes have been turned on their heads the past few years. Back in 2000, virtually all of the gas consumed in the Mid-Atlantic States and New England was piped in long distances, mostly from the Gulf Coast, and the Sable Offshore Energy Project (SOEP) was just starting to move gas from off the Nova Scotia coast down into New Brunswick and New England via the new Maritimes & Northeast Pipeline (MNP).
Fast-forward 14 years and Marcellus gas has come to dominate the northeastern U.S., the flow of Gulf Coast gas into the region has slowed, SOEP output is declining, and gas from Deep Panuke--the newer offshore production area in the Maritimes—is facing competition it had not expected in New England. The MNP itself, which was built primarily to move SOEP gas down to near Boston, is likely to be flowing north before long.
The Wall Street Journal

High court ends overall limits on political donations.

Democrats, without enough votes for $10.10, consider smaller minimum wage increase.

Detroit gets approval to borrow $120 million. Remember the story yesterday: there has been more job growth in Detroit, since 1990, than in Los Angeles.

Russia says sanctions had effect on its economy: slower economic growth and drove up inflation. Really? All of that in less than 30 days? It takes that long just to compile data in the US. Something stinks.


Court sides with airlines on frequent flier miles in a case involving the rabbi who was booted out of Delta's rewards program.
Northwest revoked the Platinum Elite membership of Rabbi Binyomin Ginsberg in 2008, relying on a clause that said the airline "in its sole judgment" could remove a customer who abused the program. The rabbi, who logged around 75 flights a year on Northwest, said the airline told he him he was being kicked out because he complained too much about travel problems and sought excessive compensation from the airline.
Something tells me even his congregation was glad to seem him booted; he was giving them all a bad name.

Investors pull $7.3 billion from Pimco; latest setback underscores the challenges confronting Pimco following a year of record redemptions. I actually brought this up several years ago. I have never understood bonds and apparently a lot of investors finally admitted the same thing.

The Los Angeles Times

This will be interesting as a stand-alone post later, but here is the headline over at the LA Times: "jobless claims rise but 'remain low' heading into Friday's jobs report." Just below that somber news, is this one: "US trade deficit hit $42.3 billion in February." On top of all this, the President knows that only 60 - 75% of "enrollees" will actually pay their first month premium on time. It is going to be a long summer.