Tuesday, April 29, 2014

For Investors Only -- Earnings Wednesday -- Some Interesting Ones; Recent High In Active Rigs In North Dakota; Someday, I Will Be President -- V. Stiviano

Fiery freight train derailment in Lynchberg, VA; forces evacuations ... tanker cars derailed in downtown Lynchburg in central Virginia on Wednesday afternoon.

Active rigs:

Active Rigs189185210173112

RBN Energy: Permian pipeline build-out; the Permian is at 1.5 million bopd
Permian Basin crude producers are currently churning out over 1.5 MMb/d of crude from a basin that has produced oil since the 1920’s but is the center of a recent renaissance. With new production comes new demand for takeaway capacity and between January 2013 and the end of 2015, about 1 million barrels of new pipeline has been constructed or will come online directed towards Houston, Nederland and Corpus Christi, TX. 
About a dozen new gathering systems are being constructed to help get new production from the wellhead to the larger takeaway pipelines. Today we continue our series on new Permian gathering infrastructure.
Earnings to be reported today:
  • Enbridge Energy Partners (EEP): expectations, 20 cents; time not supplied;
  • Hess: expectations, $1.02; actual -- profit drops from a year ago; results boosted by gain from sale of some properties; net income comes in at $1.20/share (compared to $3.72/share one year ago)
  • MDU: expectations, 33 cents; after market close;
  • Murphy Oil: expectations, 96 cents; after market close;
  • PSX: expectations, $1.34; actual: $1.47/share but without excluding a one-time gain, the actual earnings were $2.23/share.
  • Whiting: expectations, 96 cents; after market close
  • Williams Companies: expectations, 26 cents; after market close
Investment stories:
The Dickinson Press  is reporting:
  • Gravel pit near national park ranch resurfaces: US Forest Service says mine would have ‘no significant impact’ on area. Roger Lothspeich of Miles City, Mont., and his partner, Peggy Braunberger, own mineral rights to the land, located near the ranch, about 25 miles north of Medora. The 26th U.S. president spent several years on the ranch during the 1880s. [Update, January 7, 2015: link here.]
 The Wall Street Journal

Top story, front page: EPA ruling on coal. Big political win for the Obama administration.

Americans want to pull back from world stage, WSJ poll -- not surprising. I still don't know why"we" are in the Crimean. This will end badly for the US.

Alstom accepts GE's bid for power business -- should be biggest story of the week in the WSJ.

Another old white man interested in buying another NBA basketball team.

Boehner makes amends for GOP immigration gibes. I have no idea why he maintains leadership.

Minimum wage fight, not gaining traction at national level, is being pushed quietly at the local level.

US homeownership rate: lowest since mid-1990s.A reminder that despite two years of recovery thre is still a way to go before the housing market is back to normal.

In drug mergers, there's one sure bet: the layoffs.

Apple returns to the bond market; the company completed its second blockbusgter bond sale in a year, tapping robust investor demand that has propelled corporate debt in 2014 to a larger gain than US stocks.

Dow rose yesterday, but falls shy of record. [Closes at all-time record today.]

The Los Angeles Times

Memo to self: file under "they're all crazy." The Los Angeles Times is reporting:
With paparazzi tracking her every move, V. Stiviano -- friend of sanctioned Clippers owner Donald Sterling -- roller-skated in her driveway Tuesday and said she wanted to be president.
“One day, I will become president of the United States of America and I will change the legislation and laws,” Stiviano said in one of several odd encounters with media camped outside her home. “Modern day history. Civil rights movement.”
And then this:
Calabasas lawyer Mac Nehoray told The Times that, contrary to some media reports, Stiviano was not in a romantic relationship with Sterling.
"It's nothing like it's been portrayed," Nehoray said. "She's not the type of person everyone says."
Crazy, Kat Dahlia
So many versions, but this one is pretty straight forward ...
Crazy, Gnarls Barkley, Danger Mouse and Cee-Lo

EOR In Nebraska

A reader sent me this interesting story:
Elk Petroleum Limited is pleased to announce that it has acquired the Singleton Unit in Nebraska. The effective date of the transaction is 1 May 2014, when the company will take over operatorship of the Unit.  
The company plans to develop the remaining oil potential in the Singleton Oil Field using CO2 enhanced oil recovery (EOR) techniques. The source for the CO2 for the project is the Bridgeport Ethanol plant, located 25 miles to the northeast of the Singleton Unit.  
The Singleton Oil Field has produced 10.9 million barrels of oil and is historically the largest oil field in the Panhandle of Nebraska.
I do believe the proposed route for the Keystone, killed by activist environmentalists, was through the Panhandle of Nebraska.

Someone has a sense of humor.

And this will make everyone feel better:
Having completed the acquisition of the Singleton Unit and secured the CO2 supply, Elk Petroleum is now in a position to attract external funding for development of the project. The corn‐ethanol source of the CO2 for the project makes the CO2‐EOR process a carbon sequestration project, with the implication that the oil produced from the Singleton Field will be carbon negative. This aspect of the project makes it attractive to green energy funds, which have a mandate to develop energy sources that result in reduced CO2 emissions. Elk has started conversations with several green energy funds in the United States regarding the development of the project.
Some feel that the Bakken will also be a candidate for EOR somewhere down the line.

Amateur Videos Of The New $70-Million Williston Area Recreation Center

Williston is now home to the largest indoor recreation facility owned and operated by any metropolitan park district in the entire United States.

Williston Area Recreation Center, from the outside:

Williston Area Recreation Center, general:

Williston Area Recreation Center, indoor track, basketball courts, volleyball, tennis:

Williston Area Recreation Center, indoor baseball and walking:

Note the badminton nets that swing down, so folks can play badminton on turf.

Williston Area Recreation Center, treadmills, general fitness:

Williston Area Recreation Center, children's swim and water play area; with wave generator:

Active Rigs In North Dakota Take Huge Jump; Statoil, XTO Each With Two High-IP Wells

Active rigs:

Active Rigs189186209173111

Seven (7) new permits --
  • Operators: QEP (4), XTO (3)
  • Fields: Grail (McKenzie), Antelope (McKenzie)
  • Comments: the four QEP Grail wells will be sited in section 15-149-95. This is strange. There is/was one short lateral sited in that section -- #16856. This was a Helis well. The frack was aborted after one stage. The plan was to come back and re-frack. There is no evidence that this well was ever fracked after that aborted one attempt. This well produced about 83K in four years (it was spud and tested in 2008, and taken off-line in December, 2011 (only two days of production in December, 2011). That's a pretty good well for a) being a short lateral; and, b) not being fracked. I did not find any reason why the decision was to plug and abandon the well. So, now QEP will site two wells in this section. One completed Moberg well ends in this section (begins in section 22; there is a parallel well on DRL status.
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Seven (7) producing wells completed:
  • 22577, 3,129, Statoil, Gungerson 15-22 4TFH, Banks, t4/14; cum --
  • 23844, 497, OXY USA, Nels Wold 1-36-25H-141-97, St Anthony, t3/14; cum --
  • 24983, 2,238, Statoil, Jack Cvancara 19-18 5TFH, Alger, t4/14; cum --
  • 25417, 3,001, XTO, Rolfsrud State 14X-36F, Sand Creek, t3/14; cum --,
  • 25836, 2,595, XTO, Duke 34X-31B, Siverston, t3/14; cum --
  • 26893, 607, OXY USA, Leiss 4-26-23H-143-96, Fayette, t3/14; cum --
  • 26894, 424, OXY USA, Robert Sadowsky 2-35-2H-143-96, Manning, t3/14; cum --
Note the Rolfsrud well. Sited in section 36 which explains the "14X-36F." But the 14X must mean there are 14 Rolfsrud wells planned for this group.

The OX USA IPs are typical of OXY USA wells.

Wells coming off the confidential list Wednesday:
  • 25987, drl, Hess, EN-Frandson-154-93-2116H-6, Robinson Lake, no production data, 
  • 26259, 63, Hunt, Alexandria 161-100-23-14H-1, Alexandria, t12/13; cum 28K 3/14;
  • 26672, drl, Hess, BW-Sharon-2560-150-100-2536-3031H-1, South Tobacco Garden, no production data,
  • 26688, drl, CLR, Schroeder 2-34H, Stoneview, no production data,
  • 26726, drl, MRO, Edwards 44-34TFH, Killdeer, no production data,

General (Ret) David Petraeus Visited The Bakken To Check On "His" Property; Random Photos Of A Statoil Four-Well Pad; And A Probable Statoil Eight-Well Pad -- April 29, 2014

The Dickinson Press is reporting:
Retired four-star general and former CIA Director David Petraeus visited the Oil Patch on Tuesday and met with local officials at a private event in Williston.
Petraeus was hosted by North Dakota State Treasurer Kelly Schmidt.
Petraeus has a tie to the Bakken through private equity firm Kohlberg Kravis Roberts & Co., which is partnering with other investors on a 164-acre housing development in Williston. Petraeus works for KKR as chairman of the KKR Global Institute.
One more swirling tea leaf that suggests the boom is just beginning.

Unrelated Photos

In the old days (two years ago), each well pad had one or two signs designating one or two wells. This is how Statoil is  identifying multiple wells on a single pad. In the foreground to the right is a pad with three pumpers; a fourth well is waiting for a pump. Note the Statoil sign, the second picture that shows three of the Rose wells and one State well.

These four wells (three Rose wells -- one TFH, two middle Bakken wells; and one State well -- a TFH well) are located in Avoca oil field east of Williston, right next to the prolific Stockyard Creek field, just to the east.

To the left, in the far background is a well pad with four pumpers in place. Those four are also Statoil Rose wells, all in spacing unit 12-154-100 in the Avoca oil field.

I don't recall any flaring for any of these eight wells. 
Interestingly, the GIS map server shows only four wells on each pad, though the Statoil sign at the Rose/State pad clearly slows a "key" for eight wells. 

For Apple Folks

WallStreet Cheat Sheet is reporting:
The newest MacBook Air is faster and cheaper, with the most recent price tag of $899 for the base model of the 2014 MacBook Air making it closer in price to fellow laptop makers HP, Samsung, and Lenovo.
While portable computers options continue to spring up at prices ranging from $199 netbooks to $1,500+ for more high-end offerings, Apple’s slow downward trickle suggests that it’s more than just cheaper technology at work here. Apple may be attempting to become a more mainstream competitor in the laptop market.
Apple previously carried a lower priced laptop in the form of the MacBook, the predecessor to the MacBook Pro and MacBook Air. They were quietly discontinued in 2011. The downward pricing of the latest MacBook Air starts to put it at prices below the original MacBook, with an initial price of $1,099 before taxes. Three MacBook Air options are that price or lower today.
There may be another reason. Apple users know that Apple computers last "forever." I have had my MacBook Pro for two years, and I love it. I have no reason to get something different. However, I love my wife's MacBook Air and was thinking about buying one this summer (after federal taxes, property taxes, etc are paid). I had convinced myself that the $999 price was "doable" but the new price, $899 -- although not that much different in the big scheme of things -- has convinced me to get an MacBook Air.

Coming down in price, Apple is not only looking for new customers, but is enticing Apple users who have no need to upgrade but were thinking about it. For Apple users, that's a big, big deal, and, it appears, Apple knows exactly what they are doing. I'm impressed.

For Investors Only; Energy Is Doing Quite Well Right Now; Oil Up Slightly

Energy Select Sector edges above last week's peak at 94.24 to set new multi-year high of 94.41: Oil Service OIH is also providing early leadership with its reaching 52.53 this morning.  Its multi-year high from last week is at 52.76. 

Reporting today:
  • Cheniere Energy (LNG): -0.27; time not supplied; not reported
  • Plum Creek Timber (PCL): beats by 2 cents; investors happy
Seven companies announced increased dividends/distributions.

Trading at 52-week highs today: AAPL, AEP, BRK.B, COP, ERF, MDU, OKE, SLB, SRE, XOM.

EPD, ENB, and CVX also traded nicely.

El Paso Electric: EPA air permit issued to EE to build Montana power station becomes effective: The EPA previously issued greenhouse gas (GHG) permit for El Paso Electric's four-unit natural gas burning Montana Power Station became effective on April 25, 2014 when no appeals were filed prior to the expiration of the appeals period.
EPE may now commence construction of the first two units, which it expects to bring online by the summer peak of 2015. The issuance of the EPA permit allows EPE to stay on track to effectively meet the growing needs of the communities it serves. EPA's permit action follows the Texas Commission on Environmental Quality's decision in January 2014 to issue a separate permit for emissions other than GHG. 
El Paso Electric is pleased to announce its next investment to prepare for the region’s economic growth and to meet our customers’ growing demands for electricity in west Texas and southern New Mexico. The investment is a new power station located in east El Paso. The plant will be located adjacent to Montana Avenue, just east of Zaragoza Avenue.
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.

Abbreviated Post Today; Minimal Posting Today -- Back In The Bakken, Tuesday, April 29, 2014

Note: this post was done in haste; there may be more typographical errors than usual.

Active rigs:

Active Rigs184186209173111

RBN Energy: Jordan Cove LNG export project in Oregon
The success of an LNG export project is founded on many things. Good connections to natural gas supply. Easy access to LNG buyers. A competitive delivered cost. Timing matters too, and may turn out to be a critical factor for Veresen’s Jordan Cove LNG export project in Oregon. Not only is it the first greenfield project to win the approval of the US Department of Energy (earlier DOE approvals went to projects to convert existing import terminals to export facilities), Jordan Cove also would be the first new LNG export terminal on the US West Coast—days closer to key buyers in the Asia/Pacific region than its Gulf Coast competitors. And it appears likely to beat out the first LNG export projects in British Columbia. Today in the first of a two-part blog series, we take a look at the Jordan Cove plan—its gas supply sources, the pipelines feeding it, the project’s economics, and its likely fate.
A race is on among prospective LNG exporters in the US and Canada to secure regulatory approvals, lock in LNG buyers and gas suppliers, and build the needed infrastructure. Being among the first at the finish line is a do-or-die matter, because realistically there will be limits to the number of LNG export projects approved, the volume of LNG that will be allowed to be exported, and demand from major LNG buyers. LNG buyers in Asia, Europe, and Latin America have options--Qatar, Australia, and Malaysia among them—and, in their quest for sourcing diversity and low prices, they are constantly sizing up the North American LNG export projects under development to see how they might fit into their gas-supply mix.
Jordan Cove is a 6 MMTPA (or million metric tons per annum - about 800Mcf/d) LNG export terminal (expandable to 9 MMTPA, 1.2 Bcf/d) to be built within the Port of Coos Bay on the Oregon coast. (The project was first envisioned as an LNG import terminal a few years ago, but the US and Western Canadian shale boom put the kibosh on that.) In March, Veresen, ,the project’s owner, a Canadian midstream natural gas infrastructure company, received DOE’s approval to export up to 800 Mcf/d of LNG to non-Free Trade Agreement (FTA) countries for 20 years. (That approval is critical for exports to the Asian market where only Singapore and South Korea are FTA countries.) Veresen this fall expects to get Federal Energy Regulatory Commission’s approval to build Jordan Cove. If all goes according to plan, Veresen’s financial investment decision and construction start will come in the first quarter of 2015, and the first LNG will be shipped in late 2018 or early 2019. Figure #1, from a recent presentation by the owner, helps us tell the story.
The Wall Street Journal

Top story: US, Europe raise stakes with Putin. Talk radio throughout the night provided a perspective. I arrived in the Bakken about 8:00 a.m. this morning after driving straight through from Dallas -- blizzard north of Rapid City / south of Buffalo. Will write more about snow conditions in the Bakken later.

This was on talk radio during the night and in the WSJ this morning: Pfizer will see huge tax savings if it buys AstraZeneca; the company will move to Europe, save taxes.

Boom time in Texas: jobs, traffic, water worries.

Tribes' new negotiating power cots utilities.

Kerry must not know history. He sees Ukraine crisis as uniquely Putin's. Wrong. He also doesn't know Israeli history: rues "apartheid" remark; bristles at criticism.

Wisconsin race signals historic shift in power of unions.

Texas to pay $10,000 for each Toyota job. Less than what the trillions in Obama-stimulus cost American taxpayers. 

Natural-gas prices climb. Regular readers know why.
Natural-gas prices jumped to a two-month high as investors wagered that supplies wouldn't bounce back fast enough from their lowest levels in 11 years. Inventories are just starting to climb after an unusually cold winter drove demand for the heating fuel to records.
Supplies are at about half their normal level for late April, even as U.S. gas production hits a record. Investors in the $52.1 billion natural-gas futures market are turning increasingly bullish, questioning whether producers are up to the task of replenishing stockpiles.
Analysts said producers would need to add an extra 20 billion to 35 billion cubic feet a week above the average for six months to ensure power plants have enough gas on hand to meet another frigid winter. Some investors said prices could climb this summer should a hot summer drive up air-conditioning demand, reducing the amount of gas left over for winter.
For Investors Only

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

Early trading: market up another 80 points after yesterday's 80-point rise. Oil up over 1%.

Trading at 52-week highs: SRE, PSX, COP, KOG, BRK-B,
Oasis is up nicely. UNP is up nicely.

Abbreviated post today.

First view of the Bakken for me today

Southwest North Dakota, April 29, 2014

  Southwest North Dakota, April 29, 2014