Update On The Toyota Announcement About Leaving California

Updates

May 10, 2014: two interesting items that don't have anything to do with the original post except that they both relate to Toyota. First, do you all remember this back in 2012: Toyota bails on the all-electric vehicle, saying it had misread the consumer. And then this item today: car sales are doing so well in the US, Subaru needs all the US factory capacity it can find. Therefore, it has asked Toyota leave its Indiana plant. Toyota will move Camry production from Indiana to Kentucky. 

 

Original Post

From the blog earlier today:

Five weeks ago, Torrance, CA, Mayor Frank Scotto was celebrating the opening of the city's new athletic fields with officials of Toyota Motor Corp. 

The city's biggest employer and a prime benefactor had given a half-million dollars toward the project. This week, Mr. Scotto has had a less pleasant duty to perform: Figuring out how Torrance can fill the 101-acre hole the giant auto maker will leave behind when it vacates its sprawling campus and moves 3,000 jobs to a new North American headquarters in Texas. 

Toyota's decision to consolidate much of its U.S. operations in Plano, Texas, by 2017, officially announced Monday, caught Mr. Scotto by surprise. Toyota's own employees in Torrance were informed just minutes after the mayor got a courtesy call. State of California officials, too, had been in the dark about the move, which Toyota had been exploring for the past year.

From CarpeDiem:

An interesting and revealing market-based measure of the relative attractiveness (and migration patterns) of the two states is to compare the cost of a one-way U-Haul truck going from California to Texas vs. the cost going in the other direction. To rent a 26-foot truck one-way, here are the current prices being quoted by U-Haul for June 18:

Torrance, CA to Plano, TX: $2,626
Plano, TX to Torrance, CA: $1,264

Los Angeles, CA to Dallas, TX: $2,558
Dallas TX to Los Angeles: $1,232

Bottom Line: The cost of a one-way U-Haul truck leaving California for Texas is more than twice the cost to rent that same truck going from Texas to California, suggesting that there are twice as many trucks and people leaving California for Texas than vice-versa. Based on the huge difference in demand for one-way truck rentals, there is a premium of more than 100% for Californians to rent trucks going to Texas, and large discounts for trucks going in the opposite direction to California. U-Haul’s market-based pricing seems to confirm the California exodus to Texas of jobs, people and businesses like Toyota and Occidental.

ONEOK's Seventh Natural Gas Liquid Facility, Lonesome Creek, Watford City, Update; Will Be North Dakota's Second Largest NGL Facility

For background to this new story, start here, which was posted just a few months ago, back in December, 2014. At that time I wrote:

This is sort of like, according to our sources, ONEOK will soon announce another investment of $2 - $3 billion in the Bakken.  

Here's a start. I think this story refers to the seventh (7th) ONEOK facility announced November 19, 2013.

The Dickinson Press is reporting:

The North Dakota Public Service Commission has scheduled a June 18 public hearing for a proposed $280 million natural gas processing plant near Watford City that PSC Chairman Brian Kalk said will play an important role in efforts to reduce flaring.

The Lonesome Creek Plant proposed by ONEOK Rockies Midstream LLC would process up to 200 million cubic feet of natural gas per day, making it the state’s second largest gas processing plant behind Hess Corp.’s plant at Tioga, which was recently expanded from 115 million cubic feet per day to 250 million cubic feet per day.

The volume of natural gas flared in the state during February was 10.95 billion cubic feet, or about 391 million cubic feet per day.

ONEOK’s plant would raise the company’s total processing capacity in North Dakota to 800 million cubic feet per day, said Danette Welsh, governmental affairs manager for ONEOK.

A Beautiful Day In The Bakken; Eleven (11) New Permits; Two BR Permits Cancelled

Active rigs:

	5/1/2014	05/01/2013	05/01/2012	05/01/2011	05/01/2010
Active Rigs	187	189	209	173	112

Eleven (11) new permits --

• Operators: XTO (3), Hess (2), HRC (2), CLR (2), Emerald Oil (2)
• Fields: Lost Bridge (Dunn), Ellsworth (McKenzie), Eagle Nest (Dunn), Edge (McKenzie), Heart River (Stark)
• Comments:

Wells coming off confidential list were reported earlier; see sidebar at the right.

Two BR permits cancelled:

• 27716, PNC, BR, Bullrush 14-10TFH, Elidah,
• 27715, PNC, BR, Sivertson Rush 14-10MBH ULW, Elidah,

Wells coming off confidential list Friday:

• 22707, drl, HRC, Fort Berthold 151-94-26B-35-3H, Antelope, no production data,
• 22708, drl, HRC, Fort Berthold 151-94-26B-35-2H, Antelope, no production data,
• 26346, drl, Statoil, Cvancara 20-17 7H, Alger, no production data,
• 26622, drl, Enduro, MRPSU 30-11, Mouse River Park, a Madison well, no production data,
• 26691, drl, CLR, Marlene 4-3H1, Stoneview, no production data,

A beautiful day in the Bakken; up to 65 degrees! Sunny, calm.

In The Summertime, Mungo Jerry

For The Archives: First Fracked Horizontal Well In The Bakken; Harold Hamm; Divide County, Early 2004

For the archives.

A couple days ago, I wrote:

I thought it was EOG who made the Parshall discovery that started the Bakken boom in North Dakota. Not taking anything away from Harold Hamm who quietly bought up a lot of leases over the years prior to the boom, but I thought it was EOG who had the "discovery" well as it were. But, the Bakken has any number of drillers who say they were first. 

A reader refers me to this PDF: http://www.willistonnd.com/usrimages/hammmonument.pdf:

In March 2004, Continental Resources’ Robert Heuer 1-17R in Divide County was the first commercially successful well in the North Dakota Bakken to be both horizontally drilled and fracture stimulated. “After many failed attempts, this one proved that a Bakken well could be a commercial success,” says Harold Hamm.

• 8201, 87, CRL, Robert Heuer 1-17R, a re-entry in a Madison -- DRY -- hole; Sadler field, 319,444 lbs of 20/40 sand; short lateral; t3/04; cum 112K 3/14; 

For Investors Only; Was KOG A Miss? That's Quite A Beat By COP And XOM; CVX Increases Dividend

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. 

Companies reporting earnings Thursday:

• Baytex Energy (BTE.TO): 38 cents vs 8 cents one year earlier; beats by one cent;
• Black Hills Corporation: 93 cents; after market close
• CenterPoint Energy: 31 cents before market open; actual -- beats  by 11 cents;
• COP: $1.56 before market open; actual "easily beat"; $1.71; beats by 26 cents;
• Enterprise Products Partners: forecast 75 cents; beats by 2 cents;
• XOM: $1.88 before market open; actual: "handily beat" -- $2.10; beats by 22 cents;
• KOG: forecast -- 18 cents after market close; big miss? actual 11 cents/share
• Linn Energy LLC: 38 cents,
• Marathon Petroleum Corp (MPC): $1.05 before market open; actual: misses by 39 cents; refinery maintenance
• Targa Resources Partners (NGLS): forecast 49 cents; actual beats by 18 cents;
• Ultra Petroleum (UPL): beats by 16 cents; 

Comment: KOG could be a disappointment.

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Was KOG A Miss?

The problem is making sure we are measuring the same thing. According to Yahoo!Finance, the expectations for KOG were 18 cents/share net income. According to the press release, 11 cents/share net income. But sometimes there are one-time items that affect the comparison. [Yes, SeekingAlpha says KOG missed by 7 cents. KOG is down over 7% in after-hour trading, down almost a buck to $11.55.]

The press release:

For the first quarter-ended March 31, 2014, the Company reported oil and gas sales of $257.0 million, as compared to $165.1 million during the same period in 2013, representing an increase of 56%. 

Kodiak reported an overall 57% increase in quarter-over-quarter equivalent sales volumes with 3.1 million barrels of oil equivalent (MMBOE) sold, or an average of 34.0 MBOE per day (MBOE/d) during the first quarter of 2014, as compared to 2.0 MMBOE, or an average of 21.7 MBOE/d in the first quarter of 2013.  

Adjusted EBITDA was $179.9 million for the first quarter 2014, as compared to $124.4 million in the same period in 2013. 

For the first quarter 2014, the Company reported net income of $29.1 million, or $0.11 per diluted share, compared to net income of $19.4 million, or $0.07 per diluted share, for the same period in 2013. 

Kodiak reported net cash provided by operating activities during the first quarter 2014 of $163.5 million, as compared to $114.6 million during the same period in 2013, an increase of 43%.

**********************************

Twelve companies announced increased dividend or distribution increases, including XOM (previously posted) and a huge 7% increase announcement by CVX, from $1.00/share to $1.07. Sweet. Cracker Barrel increased its dividend from 75 cents to a dollar. Huge. WW Grainger incrased its dividend from 93 cents to $1.08.

Despite a pretty flat day on the market, and a further drop in the price of oil, the following companies traded at a new 52-week high: ENB, MPC, NFX, OKE, WIN, WMB. It's been a long time since I've seen ENB trade at a new 52-week high. Let's see if there are any headlines to explain this?

*****************************************

Severe Weather Impacts Genesee & Wyoming

Genesee & Wyoming misses by $0.14, reports revs in-line -- co breaks out weather impact: Reports Q1 (Mar) earnings of $0.70 per share, excluding non-recurring items, $0.14 worse than the Capital IQ Consensus Estimate of $0.84; revenues rose 0.3% year/year to $376.3 mln vs the $379.67 mln consensus. 

• Severe winter weather in North America resulted in significant disruptions to several G&W operating regions, reducing EPS in Q1 by an estimated $0.23 to $0.26 from a combination of lower revenues and higher operating costs. 
• Estimated revenue reduction due to weather was ~$15 million to $20 million, primarily driven by temporary line closures, congestion in the North American rail network which impeded interchange with connecting carriers, and reduced supply of available freight cars. Lost profit margin from the lower revenues reduced diluted EPS by ~$0.10 to $0.13. 
• Estimated higher operating costs due to weather were ~$12 million, primarily due to increased overtime, higher diesel fuel consumption, higher car hire and extensive snow removal. The increased winter expenses reduced diluted EPS by ~$0.13.

Three Forks Potential In Burke County; Three TF Benches Are Discernable -- A Reader

I did not listen to the April NDIC hearings, so I appreciated this note from a reader who did:

In other news from Burke County, Oasis appears to be gearing up for development with 4, 6 and 8 wells on its spacing units. See # 22252 in S15/16 - 160 - 93, for example. [See below.]

The rather typical docket item for Wednesday, March 26th, 2014, was Case No. 21914;

Oasis request for proper spacing units and redefining of field limits for the Black Slough Field. The audio of the hearing, however, made mention of an exhibit which illustrated a potential 10-well development plan for units of the Black Slough-Bakken Pool that included three wells in each of the first and 2nd TF benches and the MB.

The lower TF benches were not included, at this time. It should be noted that NDIC Orders in this matter are pending and, even if approved, development probably wouldn't begin until sometime in 2015.

One might add, "if at all," because many of the spacing units are yet to be secured by an initial well.

For me, the biggest take-away from the hearing, in this case, was testimony that differentiated the benches of the Three Forks so far from the core areas to the west and southwest, where pilots are testing commercial productivity levels for at least three (3) Three Forks benches and trying to get the read on optimum well densities, including both vertical and horizontal spacing.

It may be old hat to everybody else, but this is the strongest confirmation I have come across that the benches of the Three Forks are discernible and being differentiated for drilling and development purposes that far from the deepest areas of the Bakken and half way into Burke County, from south to north, as well as diagonally.

The reader noted 10-well density in 15/16-160-93, Gros Ventre, Burke County:

The Delta 6093 34-15 H is on a single well pad. To the north are two multiple-well pads (one with a rig on site; one pad with 3 wells; one pad with 4 wells) and to the south, another three-well pad: a total of 11 wells in this section / drilling unit.

These are the wells:

• 27530, drl, Oasis, Delta 6093 14-15 11B, middle Bakken, Gros Ventre,
• 27531, drl, Oasis, Delta 6093 14-15 10T, Three Forks B1, Gros Ventre,
• 28146, drl, Oasis, Delta 6093 14-15 9B, middle Bakken, Gros Ventre,

• 26897, conf, Oasis, Delta 6093 24-15 2T, Three Forks B1, Gros Ventre, well file is available;
• 26898, conf, Oasis, Delta 6093 24-15 3B, middle Bakken, Gros Ventre, well file is available,
• 27157, ros, Oasis, Delta 6093 24-15 4T2, Three Forks B2, Gros Ventre, well file is available,
• 26899, drl, Oasis, Delta 6093 24-15 5T, Three Forks B1, Gros Ventre,well file is available,

• 22252, 603, Oasis, Delta 6093 23-15H, middle Bakken, t12/12; cum 35K 6/14;

• 27677, drl, Oasis, Delta 6093 44-15 8T, Three Forks B1, Gros Ventre, well file is available;
• 27678, drl, Oasis, Delta 6093 44-15 7B, middle Bakken, Gros Ventre, well file is available;
• 28145, drl, Oasis, Delta 6093 44-15 6T, Three Forks B1, Gros Ventre, well file is available;

There are several story lines here but I will let folks study these for awhile; see if folks see what I'm seeing.

Random Note On Two Wells In The Catwalk

Per a reader's request.

This is a screenshot of two neighboring wells in the Catwalk:

This is an old Statoil Bakken well just a few feet east of the Madison well below:

NDIC File No: 19008     API No: 33-105-01842-00-00     CTB No: 119008
Well Type: OG     Well Status: A     Status Date: 12/2/2010     Wellbore type: Horizontal
Location: SENE 30-154-100    
Current Operator: STATOIL OIL & GAS LP
Current Well Name: BRAKKEN 30-31 1-H
Elevation(s): 1884 KB   1858 GR   1858 GL     Total Depth: 19690    

Field: CATWALK
Spud Date(s):  8/1/2010
Casing String(s): 9.625" 1900'   7" 10880'  
Completion Data
   Pool: BAKKEN     Perfs: 10880-19690     Comp: 12/2/2010     Status: AL     Date: 6/13/2012     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 176996     Cum MCF Gas: 169258     Cum Water: 146926
Production Test Data
   IP Test Date: 12/3/2010     Pool: BAKKEN     IP Oil: 2804     IP MCF: 4610     IP Water: 5118

Monthly Production Data Pool Date Days BBLS Oil Runs BBLS Water MCF Prod MCF Sold Vent/Flare BAKKEN 3-2014 31 2204 2649 2420 0 0 0 BAKKEN 2-2014 28 2052 2429 2245 2852 577 2275 BAKKEN 1-2014 24 2020 1533 2177 2601 1165 1436 BAKKEN 12-2013 31 2228 2470 2069 2491 107 2384 BAKKEN 11-2013 30 2419 1797 2243 3122 1 3121 BAKKEN 10-2013 27 2290 3126 2506 2344 4 2340 BAKKEN 9-2013 30 2757 2161 3001 2639 0 2639 BAKKEN 8-2013 30 2626 3454 3532 1797 0 1797 BAKKEN 7-2013 31 1976 1694 2648 1026 0 1026 BAKKEN 6-2013 17 1237 625 1487 573 9 564 BAKKEN 5-2013 31 1929 2366 2712 1684 6 1678 BAKKEN 4-2013 30 2622 2533 1975 3449 48 3401 BAKKEN 3-2013 31 2672 2923 1948 3216 0 3216 BAKKEN 2-2013 28 2808 2652 1854 3302 19 3283 BAKKEN 1-2013 29 2949 2963 1544 2523 482 2041 BAKKEN 12-2012 31 3089 3036 2221 2746 4 2742 BAKKEN 11-2012 30 3162 3143 2069 2997 469 2528 BAKKEN 10-2012 25 2483 2184 1799 2348 2022 326 BAKKEN 9-2012 30 3492 3697 2502 5018 3097 1921 BAKKEN 8-2012 31 4916 5092 3271 7423 2332 5091 BAKKEN 7-2012 31 4926 4948 3117 4591 325 4266 BAKKEN 6-2012 20 4374 3989 2910 3766 27 3739 BAKKEN 5-2012 29 1670 1866 1513 678 171 507 BAKKEN 4-2012 28 1716 3020 1780 472 0 472 BAKKEN 3-2012 31 5505 4815 3453 2883 0 2883 BAKKEN 2-2012 15 4207 3302 3054 2107 0 2107 BAKKEN 1-2012 20 5890 6290 4036 2250 0 2250 BAKKEN 12-2011 8 2542 3100 1551 613 0 613 BAKKEN 11-2011 30 5532 5404 2488 1817 0 1817 BAKKEN 10-2011 14 2797 2660 2509 828 0 828 BAKKEN 9-2011 30 6484 6349 6931 3424 0 3424 BAKKEN 8-2011 31 7072 8132 8290 3889 0 3889 BAKKEN 7-2011 10 3547 2171 3923 1743 0 1743 BAKKEN 6-2011 1 344 0 33 0 0 0 BAKKEN 5-2011 16 2740 3084 3978 2464 0 2464 BAKKEN 4-2011 24 4339 4437 3283 3077 0 3077 BAKKEN 3-2011 31 8266 8952 7737 6708 0 6708 BAKKEN 2-2011 28 11103 11723 8761 9657 0 9657 BAKKEN 1-2011 28 12123 11545 9242 14882 0 14882 BAKKEN 12-2010 31 29888 28285 22114 49258 0 49258

This is an old Madison well:

NDIC File No: 10279     API No: 33-105-01079-00-00     CTB No: 110279
Well Type: OG     Well Status: A     Status Date: 9/27/1983     Wellbore type: Vertical
Location: SENE 30-154-100    
Current Operator: CITATION OIL & GAS CORP.
Current Well Name: BRAKKEN 24-30
Elevation(s): 1872 KB     Total Depth: 9645     Field: CATWALK
Spud Date(s):  8/12/1983
Completion Data
   Pool: MADISON     Perfs: 9205-9563 G     Comp: 9/27/1983     Status: AL     Date: 9/27/1983     Spacing: NE
Cumulative Production Data
   Pool: MADISON     Cum Oil: 141592     Cum MCF Gas: 125605     Cum Water: 122709
Production Test Data
   IP Test Date: 9/27/1983     Pool: MADISON     IP Oil: 155     IP MCF: 0     IP Water: 52

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
MADISON	3-2014	31	139	162	257	230	0	150
MADISON	2-2014	28	128	252	250	230	0	150
MADISON	1-2014	31	161	0	288	230	0	150
MADISON	12-2013	31	146	235	288	230	0	150
MADISON	11-2013	30	138	233	259	230	0	150
MADISON	10-2013	31	155	0	268	230	0	150
MADISON	9-2013	30	152	229	290	230	0	150
MADISON	8-2013	31	157	0	292	230	0	150
MADISON	7-2013	30	161	234	286	173	0	93
MADISON	6-2013	30	151	213	263	170	0	90
MADISON	5-2013	31	149	216	288	153	0	93

Unemployment Claims Spike -- Up 14,000, After Last Week's Surge Of 24,000

Drudge called this a "spike," up 14,000. In fact, last week the number was an even more incredible 24,000 (increase) -- first time unemployment claims.

In fact, the report was worse than folks would lead you to believe. Analysts forecast that first time claims would drop to 315,000. Not only did they not decrease, first-time claims surged.

Wow, the spin continues. The AP is reporting:

The number of Americans applying for unemployment benefits rose last week to the highest level since February, a dose of mixed news for an economy that appears to be gaining momentum.

The Labor Department said Thursday that a seasonally adjusted 344,000 people applied for benefits, up 14,000 from the previous week and the most since late February.

The less-volatile four-week average rose by 3,000 to 320,000, a figure that's still consistent with a steadily improving job market. The number of people applying for benefits has risen three straight weeks, but Ian Shepherdson, chief economist at Pantheon Macroeconomics, said last week's numbers might have been warped by the Easter holiday.

"We think the underlying trend (in applications) is falling, but only slowly," Shepherdson wrote in a research note.

Boiler-plate press release week after week for the past two years:

• for an economy that appears to be gaining momentum
• the less-volatile four-week average
• still consistent with a steadily improving job market
• the underlying trend is falling
• but only slowly

These phrases are the same phrases we have been reading for the past two years.  Wow, I'm glad I don't have access to television: I would hate to listen to the Obama administration spokesperson say how good the job market is.

Deeper in the article:

Another Labor Department report shows that layoffs are running nearly 40 percent below their peak in 2009. Though they've stopped cutting jobs, employers have been slower to add new ones: Hiring remains well below pre-recession levels.

Six years into the recovery?

Trivia: the AP report did not mention that analysts forecast a fall to 315,000.

North Dakota On Track To Set Record In New Oil And Gas Permits -- Almost 3,000 For Calendar Year 2014 Projected

For newbies: be sure to scroll down through several posts -- wells coming off the confidential list for the last couple of days have all been updated.

This is a big day for earnings reports; those reporting before the market opened, have been posted. The general trend: a huge quarter for oil and gas despite a tough winter.

KOG reports earnings after hours today.

So, where do we stand with permits in North Dakota as of April 30, 2014?

As of April 30, 2014, the state of North Dakota issued 917 oil and gas permits. This does not include permits for salt water disposal wells. It does include at least one permit for a well that will be used strictly for monitoring and will not expected to be a producer. With 917 permits, the state is on track to issue 2,789 permits this calendar year. I assume approximately 50 of these new permits will be canceled at some point in the future.

At this same date in 2013, 820 permits had been issued which projected 2,494 by year's end (2013).

At this same date in 2012, 687 permits had been issued which projected 2,090 by year's end (2012).

Thursday, May 1, 2014

Active rigs:

	5/1/2014	05/01/2013	05/01/2012	05/01/2011	05/01/2010
Active Rigs	187	189	209	173	112

RBN Energy: the crude oil tsunami.

Yesterday (April 30, 2014) the Energy Information Administration (EIA) reported yet another increase in Gulf Coast inventories as of April 25 - adding 5.7 MMBbl to set a new record of over 215 MMBbl of crude. Stocks in the region are now 27 MMBbl above the 5-year average and even if refiners cranked up output to the highest levels ever (96.5 percent utilization) the surplus would take at least 3 months to get back to “normal”. Crude prices are being impacted as the premium of Light Louisiana Sweet (LLS) crude at the Gulf Coast over West Texas Intermediate (WTI) delivered to Cushing, OK has narrowed close to $2/Bbl. With no crude exports allowed to ease the surplus it looks like Gulf Coast prices will remain under pressure. Today we look at prospects of reducing the crude surplus.

The Wall Street Journal

Five weeks ago, Torrance, CA, Mayor Frank Scotto was celebrating the opening of the city's new athletic fields with officials of Toyota Motor Corp. The city's biggest employer and a prime benefactor had given a half-million dollars toward the project. This week, Mr. Scotto has had a less pleasant duty to perform: Figuring out how Torrance can fill the 101-acre hole the giant auto maker will leave behind when it vacates its sprawling campus and moves 3,000 jobs to a new North American headquarters in Texas. Toyota's decision to consolidate much of its U.S. operations in Plano, Texas, by 2017, officially announced Monday, caught Mr. Scotto by surprise. Toyota's own employees in Torrance were informed just minutes after the mayor got a courtesy call. State of California officials, too, had been in the dark about the move, which Toyota had been exploring for the past year.

GOP says one-third of ObamaCare enrollees did not pay first-month premium. Comment: and by the fifth month the number will continue to increase -- the number who do not pay.

Crude oil CBR derailment in Lynchburg, VA. -- previously posted. First reports: no injuries, no deaths. Compare with deaths of four people in aircraft mishap -- private plane flies into wind turbine in South Dakota. Did that story get reported in the national press?