Monday, May 19, 2014

Statoil Shuts Down Platform Off-Shore: Unstable Soil Shift, Then Leak

Rigzone is reporting:
Norwegian energy firm Statoil shut oil production at its Snorre B platform in the North Sea and evacuated a quarter of the personnel there after detecting a soil shift under a drilling template and then oil leak, the company said on Monday.
The Snorre field in the northern part of the North Sea is Norway's fourth-biggest oil producer with output averaging 88,000 barrels of oil per day in 2013, data from Norwegian Petroleum Directorate (NPD) showed.
Statoil has two platform in this field: Snorre A and Snorre B. Snorre A is operating normally. Statoil did not break down how much of the 88K bopd comes from "A" and how much comes from "B."

Maps of the Day

Carpe Diem has some interesting "maps of the day." At the link, note the 3rd map, the map of migration patterns. There is but a handful of states in which there is a net movement in: eight to be exact. North Carolina fascinates me. North Carolina continues to attract new folks; I'm not sure exactly why. The other state that caught my eye was New Hampshire. Having spent much of the last four years in Boston, off and on, taking care of our granddaughters, the reason is obvious. From Boston it is a very, very short drive to New Hampshire, and it's a beautiful state. In addition, New Hampshire has no income tax and no statewide sales tax.  

If you haven't visited Carpe Diem recently, simply start at the top of today's Carpe Diem post, and scroll down quickly. I think you will find it very, very interesting, perhaps one of the best blogs on the net.

Enable In The Bakken -- The Bakken Simply Does Not Quit

A huge thanks to Steve for sending me this link. I never would have seen it, and I almost missed the key part of the story which comes about midway through the article. is reporting:
Looking to take advantage of this windfall is Enable Midstream Partners (ENBL), a limited partnership that owns pipelines and processing and storage assets used to deliver and store crude oil and natural gas for clients.
Enable, which had its initial public offering last month, provides gathering and processing services primarily in the Anadarko, Arkoma and Ark-La-Tex basins in the U.S. West and South.
The company has around 11,000 miles of gathering lines, 12 processing plants, 7,900 miles of interstate pipelines and 2,300 miles of intrastate pipelines. Its eight storage sites can house about 86.5 billion cubic feet of natural gas.
Enable was created via a joint venture formed by CenterPoint Energy and OGE Energy, which hold 58.3% and 28.5% limited partner interest, respectively. ArcLight Capital Partners has 13.2%. I vaguely recall that I owned CNP years ago; I can't recall if I still hold any CNP. Seriously. I don't own any Enable. Yet.

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.

But this is the good part:
Bakken has already paid off for Enable. The firm has signed two long-term agreements with XTO Energy, a subsidiary of Exxon Mobil, to gather XTO's crude-oil production in the Bakken.
The second of those deals, announced in March, calls for Enable to provide services to XTO through a new crude-oil gathering system to be constructed in Williams and Mountrail counties of North Dakota. The system will have a capacity of up to 30,000 barrels per day of crude-oil gathering and include 85 miles of crude gathering lines.
The agreement also includes the construction of a water gathering and transport system for produced water. The water system will include 75 miles of gathering lines.
"These new contracts allow us to expand our asset infrastructure and to increase our crude-oil and water service offerings in the Williston Basin," Enable CEO Lynn Bourdon said in a statement. "Having a successful customer like XTO sign up as an anchor tenant on a second gathering system in this region demonstrates their confidence in our abilities as a service provider."
Democratic Congressman: Ignore Laws When It Comes To Illegal Immigrants

Breitbart is reporting: Representative Luis Gutierrez (who, I believe, swore to uphold and defend the US constitution, but I could be wrong; and he could have had his fingers crossed), advocates that all government agencies ignore laws that adversely affect DREAMers.

We might as well start with letting folks get on commercial aircraft without a TSA screening. 
A Note for the Granddaughters

I'm in a great mood. Almost euphoric. Okay, euphoric. I was probably moving into a manic phase anyway, but all the energy news this past week, I suppose, has pushed me over the top. It was quite a week. I think the fact that Baker Hughes actually increased its dividend for the first time since 2008 was the tipping point.

It was a busy weekend: soccer and swimming. The younger granddaughter posed with her soccer team's trophy and the older granddaughter improved on her personal best times in the breast stroke and the back stroke.

Then today, they came home from school with medals for reading a gazillion pages this past year. On a weekly basis, they kept track of how many pages of "outside" reading they did; it was all computed; and, with over 3,500 pages each, they each got a medal.

For Investors Only -- Halcon

I may be jumping the gun because it could always be a typographical error, but right now NDIC is reporting an IP of almost 4,000 bopd for a producing Halcon well that was completed in the Bakken and announced today. The sundry form is not yet available at the file.

For an XOM or a COP, this well would hardly be noteworthy; but for a small company like Halcon, coming on the heels of a great earnings report, and their play in the Tuscaloosa Marine Shale, this could be a big deal. If the overall market tomorrow is NOT a factor, it will be interesting to see what HK does tomorrow.

Two things happened last month: a) GDP reported a huge well in Tuscaloosa Marine Shale where Halcon has a big position; and, b) Halcon tested this well on April 12, 2014. Although still not officially released by that time it was off the confidential list and it would have been hard to keep a Halcon well of that magnitude a secret, especially with all the activity going on out there. Take your pick: it was something that caused HK to surge more than 11% on May 8, about the time all this was happening.

Regular readers note that I've been posting a few notes about Halcon lately.

In passing, I noted the significantly better EURs Halcon is reporting. Halcon seemed to suggest it was having to revise (upward) EURs every time they mapped out a new well once they had the first four months of production.

Last week I posted a screen shot of something I seldom do (this might have been the first time); a screen shot of an individual stock, Halcon when it surged more than 11%.

WKRB13 is reporting:
Research analysts at KLR Group boosted their target price on shares of Halcon Resources Corp from $0.25 to $3.50 in a report released on Tuesday, AnalystRatingsNetwork reports. KLR Group’s price target indicates a potential downside of 39.13% from the stock’s previous close.
Several other analysts have also recently commented on the stock. Analysts at RBC Capital raised their price target on shares of Halcon Resources Corp from $3.50 to $4.50 in a research note on Friday. Separately, analysts at Canaccord Genuity raised their price target on shares of Halcon Resources Corp from $4.75 to $5.50 in a research note on Friday.
Finally, analysts at BMO Capital Markets raised their price target on shares of Halcon Resources Corp from $6.00 to $7.00 in a research note on Friday. Five analysts have rated the stock with a hold rating and two have issued a buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and a consensus target price of $5.56.
Halcon Resources Corp traded up 4.17% on Tuesday, hitting $5.99. 10,317,939 shares of the company’s stock traded hands. Halcon Resources Corp has a 1-year low of $3.16 and a 1-year high of $6.75. The stock’s 50-day moving average is $4.90 and its 200-day moving average is $4.19. The company’s market cap is $2.519 billion.
For those interested, Zeits had a column on Halcon's 1Q14 earnings. The transcript is here.

Motley Fool had a short puff piece suggesting Tuscaloosa Marine Shale might be the "best of the lot," where Halcon has a lot of acreage, and GDP just reported a fantastic well. Another article on Halcon and TMS here.

Coincidentally, this SeekingAlpha article discussed Halcon today, comparing Halcon wells with those of EOG and CLR.

Saving the best for last? I generally don't care for Motley Fool all that much but periodically they do have a "free" column that is very, very good. Today was one of those days, and coincidentally it was a great article on Halcon. The article is full of great data points, but for investors, this may be the most important:
Halcon is growing production at an impressive clip, but can the company manage? The company's debt, which is 4.4 times EBITDA, is all in the form of senior notes or bonds. All rates are fixed, so interest rate fluctuations will not effect them.
Furthermore, few bond obligations are due until 2020 and 2021. This means that Halcon has about six years to turn itself significantly cash-positive and either pay off that debt or roll the debt over in a refinance according to whatever rates may be in 2020.
While predicting conditions six years from now is difficult, Halcon is successfully developing its Eagle Ford and Bakken acreage and is positioning itself so that this debt will not be a problem down the line. One other thing worth noting is that Halcon does have a revolving credit facility of $800 million, and it is entirely untapped.
Financial data, selected:
  • Halcon: market cap, $2.46 billion; debt, $3.53 billion; cash on hand, $370 million; operating cash flow, $600 million; shares outstanding, 420 million (half owned by insiders)
  • KOG: market cap, $3.3 billion; debt, $2.25 billion; cash on hand, $16 million; operating cash flow, $600 million; shares outstanding, 266 million (2% held by insiders)
  • OAS: market cap, $4.82 billion; debt, $2.6 billion; cash on hand, $56 million; operating cash flow, $735 million; shares outstanding, 101 million (5% held by insiders)
I cannot stress enough: 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. My intentions when I started the blog was not to incorporate the stock market, but it soon became obvious, that to follow the Bakken, one had to follow the money. Unlike politics, where talk is cheap, when investors, operators, and venture capitalists plunk down $10 million for a well, someone is putting money where there mouth is. Following the money helps me understand the Bakken.

Halcon Has Huge Gusher In The Bakken; Shivers Up My Spine; Four Of Eight Wells to DRL Status

Wells coming off the confidential list Tuesday:
  • 25239, 307, Oasis, Metz 6094 13-1H, Viking, t11/13; cum 21K 3/14;
  • 25597, drl, HRC, Fort Berthold 147-94-2B-11-4H, McGregory Buttes, no production data,
  • 25670, drl, Statoil, Larsen 3-10 3TFH, Williston, no production data,
  • 25903, 587, EOG, Fertile 54-20H, Parshall, one section, t12/13; cum 40K 3/14;
  • 25929, 1,252, Petro-Hunt, Dolezal 145-97-17A-20-4H, Little Knife, t3/14; cum --
  • 26098, drl, Petro-Hunt, Syverson 156-99-30B-31-4H, East Fork, no production data,
  • 26147, 1,681, WPX, Alfred Old Dog 19-18HC, Reunion Bay, t4/14; cum --
  • 26402, drl, CLR, Raleigh 3-20H, Dollar Joe, no production data,
Active rigs:

Active Rigs191189209176111

Nine (9) new permits --
  • Operators: KOG (4), Hess (3), BR (2)
  • Fields: Truax (Williams), Keene (McKenzie)
  • Comments: all four of KOG's new permits and all three of Hess' new permits are for wells in the Truax field
Wells coming off the confidential list were posted earlier; see sidebar at the right.


One (1) producing well completed:
  • 25209, 3,719, HRC, Fort Berthold 148-95-27B-34-5H, Middle Bakken, 1240-acre-spacing, Eagle Nest, 22-148-95; t4/12; I am assuming this is not a typo at NDIC; I don't see the sundry form in the file report
Other wells in that area:

A six-well pad:
  • 26322, conf, HRC, Fort Berthold 148-95-27B-34-8H, Eagle Nest,
  • 26323, conf, HRC, Fort Berthold 148-95-27B-34-8H, Eagle Nest,
  • 25207, conf, HRC, Fort Berthold 148-95-22C-15-9H, Eagle Nest,
  • 25208, drl, HRC, Fort Berthold 148-95-22C-15-4H, Eagle Nest,
  • 25209, 3,719, HRC, Fort Berthold 148-95-27B-34-5H, Eagle Nest, t4/14; cum --
  • 25210, drl, HRC, Fort Berthold 148-95-22C-15-5H, Eagle Nest,
A six-well pad:
  • 18969, 802, HRC, Fort Berthold 148-95-27A-34-1H, Eagle Nest, t9/12; cum 125K 3/14;
  • 18968, 875, HRC, Fort Berthold 148-95-22D-15-1H, Eagle Nest, t9/12; cum 137K 3/14;
  • 22298, 1,095, HRC, Fort Berthold 148-95-27A-34-2H, Eagle Nest, t10/12; cum 98K 3/14;
  • 22300, conf, HRC, Fort Berthold 148-95-22D-15-2H, Eagle Nest,
  • 22301, conf, HRC, Fort Berthold 148-95-22D-15-3H, Eagle Nest,
  • 22299, l,615, HRC, Fort Berthold 148-95-27A-34-3H, Eagle Nest, t10/12; cum 98K 3/14;
Two five-well pads stretching into a long 10-well pad:
  • 27431, loc, HRC, Fort Berthold 148-95-23C-14-3H, Eagle Nest,
  • 27432, loc, HRC, Fort Berthold 148-95-23C-14-8TFH, Eagle Nest,
  • 27433, loc, HRC, Fort Berthold 148-95-23C-14-4H, Eagle Nest,
  • 27434, loc, HRC, Fort Berthold 148-95-23C-14-9TFH, Eagle Nest,
  • 27435, loc, HRC, Fort Berthold 148-95-23C-14-5H, Eagle Nest,
  • 27456, loc, HRC, Fort Berthold 148-95-26B-35-3H, Eagle Nest,
  • 27458, loc, HRC, Fort Berthold 148-95-26B-35-4H, Eagle Nest,
  • 27460, loc, HRC, Fort Berthold 148-95-26B-35-5H, Eagle Nest,
  • 27459, loc, HRC, Fort Berthold 148-95-26B-35-8TFH, Eagle Nest,
  • 27457, loc, HRC, Fort Berthold 148-95-26B-35-9TFH, Eagle Nest,
A 2-well pad just north of a 6-well pad:
  • 20173, 836, HRC, Fort Berthold 148-95-26A-35-1H, Eagle Nest, t6/12; cum 117K 3/14;
  • 20172, 1,260, HRC, Fort Berthold 148-95-23D-14-1H, Eagle Nest, t6/12; cum 125K 3/14;
  • 27646, loc, HRC, Fort Berthold 148-95-26A-35-14H, Eagle Nest,
  • 27125, loc, HRC, Fort Berthold 148-95-23D-14-6H, Eagle Nest,
  • 27126, loc, HRC, Fort Berthold 148-95-26A-35-10TFH, Eagle Nest,
  • 27127, loc, HRC, Fort Berthold 148-95-23D-14-7TFH, Eagle Nest,
  • 21963, conf, HRC, Fort Berthold 148-95-26A-35-2H, Eagle Nest,
  • 20866, loc, HRC, Fort Berthold 148-95-23D-14-2H, Eagle Nest,
A single-well pad, a 2-well pad, and a 6-well pad running NW to SE:
  • 22504, conf, HRC, Fort Berthold 148-95-24C-13-2H, Eagle Nest,
  • 20918, 607, HRC, Fort Berthold 148-95-24C-13-1H, Eagle Nest, t10/13; cum 92K 3/14;
  • 20919, 1,547, HRC, Fort Berthold 148-95-25B-36-1H, Eagle Nest, t10/12; cum 155K 3/14;
  • 22503, conf, HRC, Fort Berthold 148-95-25B-36-2H, Eagle Nest,
  • 27417, loc, HRC, Fort Berthold 148-95-25B-36-3H, Eagle Nest,
  • 27416, loc, HRC, Fort Berthold 148-95-25B-36-4H, Eagle Nest,
  • 27415, loc, HRC, Fort Berthold 148-95-25B-36-5H, Eagle Nest,
  • 27414, loc, HRC, Fort Berthold 148-95-25B-36-6H, Eagle Nest,
  • 27412, loc, HRC, Fort Berthold 148-95-25B-36-7H, Eagle Nest,
A 3-well pad:
  • 25504, conf, HRC, Fort Berthold 148-95-25A-36-5H, Eagle Nest,
  • 25505, conf, HRC, Fort Berthold 148-95-25A-36-4H, Eagle Nest,
  • 25506, conf, HRC, Fort Berthold 148-95-25A-36-3H, Eagle Nest,
A 3-well pad:
  • 24298, 1,615, HRC, Fort Berthold 148-95-13A-24-4H, Eagle Nest, t9/13; cum 46K 3/14;
  • 24297, 1,967, HRC, Fort Berthold 148-95-13A-24-5H, Eagle Nest, t9/13; cum 85K 3/14;
  • 24299, 1,687, HRC, Fort Berthold 148-95-13A-24-3H, Eagle Nest, t9/13; cum 46K 3/14;
The screenshot this date, May 19, 2014, looks like this:

Zooming in:

And this is the 6-well pad on which the newest well is located (May 19, 2014): 

Thank Goodness The Decision Was Not Left Up To POTUS

The president would still be pondering a decision a year from now.

But the New York Racing Commission will let California Chrome race with nasal strips.

If NASCAR were involved, they would let California Chrome run with racing stripes, also.

Excellent Story At The Bismarck Tribune On BNSF Efforts To Improve Service

The Bismarck Tribune is reporting, from Ross, North Dakota:
If that weren’t enough for a town with dirt streets that are rutted and ragged — partly because oil workers have swelled the population from 50 people to 600 — the railroad is laying new track alongside town.
The project is its most ambitious expansion here since the days when the railroad was built with steam shovels and men swinging pick axes.
A second, side-by-side track will double BNSF’s capacity between Minot and Glendive, Mont., and hopefully unclog congestion, at least through the Bakken.
The railway’s been under some pressure to get better service to elevators to move grain out and fertilizer in. It reported this month that it was still running an average of 26 days late.
It’s investing $620 million along the northern corridor route to improve that schedule. Sections of the new track will be usable this year and all of it will be by next year, said BNSF spokeswoman Amy Mcbeth.
Overall, BNSF invested $4 billion in expansion and maintenance last year and $5 billion this year, exceeding any historical investments in the industry by any railroad, she said.

Shale Is A US Phenomenon (Excluding California and New York State)

A reader sent me this link, shale is a US phenomenon. FuelFix is reporting:
Shale drilling is an American phenomenon, and likely will stay that way for several more years, geopolitical strategist Peter Zeihan said this week in San Antonio.
Zeihan, who spoke at South Texas Money Management’s annual Energy Symposium at the San Antonio Country Club, said that no place else in the world has the combination the U.S. does – the capital, engineers, geologists, chemists, a legal system that recognizes mineral rights, pipelines, midstream infrastructure and a ready market.
“This is not something that your average state-run thug can do,” he said.
“We have more petroleum engineers than the rest of the countries put together. Of all of the horizontal wells that have been drilled in the last five years, 99 percent of them are in the United States. Of all the wells that have ever been drilled ever, three quarters are in the United States.”
Zeihan said that U.S. shale fields have taken off for a number of factors, starting with the fact that shale wells cost “a metric butt ton of money” to drill, and there happens to be a lot of U.S. money looking for an investment.
He said that Mexico – because it’s next to Texas – is the country where shale drilling will take off next.
If the Bakken has taught me nothing else, it taught me that after "location, location, location," it's all about engineers. And even if one is in the right location, without the engineers nothing is guaranteed. 

We also have the best roughnecks and truckers in the world, also, with a sense of urgency and a "can-do" attitude.

By the way, I think one can modify the headline: excluding California and New York state, shale is a US phenomenon. 

For Investors Only: AAPL Surges Almost 1.6%, Up Over $9; Market Cap Significantly Exceeds That Of XOM

The price of oil is up about half a percent today. Interesting. Everybody says it should be coming down. Must be those speculators.

However, dynamic changes in natural gas are occurring. Bloomberg is reporting that natural gas production will exceed demand as the summer wears on, mitigating fears of a shortage next winter.  SRE is trading about a percent lower today.

Trading at 52-week highs: AAPL, TRN, UNP, WMB.


Over at SeekingAlpha -- how do Halcon wells compare with wells completed by EOG, CLR?  A lot of good information; I may go back to this article later to update my posts on Halcon but something in this paragraph had me scratching my head:
One of the reasons for the improvement in the results year-over-year is that HK has recently gone to slickback fracking. Further, HK has managed to lower development costs at the same time it has been increasing results. HK says it is on track for a 5%-10% additional decrease in well costs by year-end 2014.


AXAS remains on a tear; it's up another 2% today.

WMB is up over 1% today; options trading last week suggested it might happen.  Pays 3.5%.

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.

UNP: interesting article at Fortune with nice photograph:
In an old-guard industry with over 150 years of history, railroad companies like Union Pacific Corporation are embracing technology to promote fuel efficiency in the 21st century. The aim: to lower costs and cut fossil fuel gas emissions.
Union Pacific Railroad, the nation's largest railroad company, has over 8,000 locomotives and serves 23 states west of Chicago, IL, and New Orleans, LA.
Take the work of Michael Iden, the general director of car and locomotive engineering, as one way the industry is challenging itself to think creatively. Iden and a team of other engineers have developed Arrowedge over the last few years, a technology that is intended to make freight trains carrying containers stacked one on top of the other more aerodynamic and therefore more fuel efficient.
After building balsa wood models by hand, Iden took the project to Brigham Young University to tweak further with the help of graduate engineering students. There, they conducted wind tunnel testing for six months to try to perfect the design, which Union Pacific has patented. "The thing that it ultimately shook down into is the streamlined shape, which is kind of like a wedge," said Iden.
UNP announced a 2-1 stock split last week.

AAPL's surge is very, very interesting. Solidly above $600 again. Market cap for AAPL ($523B) now significantly higher than XOM ($434B).

Speaking of XOM: it's also in the green today, and though it is not at a new 52-week high, it is in the ballpark.

PSX, up over 1%, is also having a great day.

OAS: flat, slightly to the upside.

TPLM: up over 4%. This is quite remarkable. I wonder if it has anything to do with the recent series on TPLM. This is a link to one part in a series on TPLM. This particular essay looks at the wholly owned subsidiaries of Triangle Petroleum: TUSA (E&P); RockPile (services, fracking); and Caliber Midstream (gathering, transporting, and processing).

  • Argus raises its stock target price for ConocoPhillips (COP +1.2%) to $90 from $80, maintaining its Buy rating, as the firm believes COP has successfully differentiated itself from other large-cap peers (
  • COP is the largest independent pure-play E&P company in the world, it is increasingly levered to high-margin liquids production, and it has most of its proven reserves in low-risk, OECD countries, the firm says.
Global Warming

Without question, one of the best essays on the global warming debate is by Nate Silver, in his 2012 book, The Signal and the Noise: Why So Many Predictions Fail - But Some Don't.

He devotes pages 370 - 411 in this 534-page book which includes almost 60 pages of notes backing up this narrative to Chapter 12: A Climate of Healthy Skepticism.

According to the book jacket, Nate Silver is a statistician, writer, and founder of The New York Times political blog Silver also developed PECOTA, a system for forecasting baseball performance that was bought by Baseball Prospectus. He was named one of the world's 100 Most Influential People by Time magazine.

Chapter 12 on Global Warming has several sub-sections:
  • the noise and the signal
  • the greenhouse effect is here
  • this isn't rocket science
  • three types of climate skepticism
  • a forecaster's critique of global warming forecasts
  • all the climate scientists agree on some of the findings
  • climate scientists are skeptical about computer models
  • climate science and complexity
  • beyond a cookbook approach to forecasting
  • uncertainty in climate forecasts
  • a note on the temperature record
  • James Hansen's predictions
  • the IPCC's 1990 predictions
  • the lessons of "global cooling"
  • a simple climate forecast
  • an inconvenient truth about the temperature record
  • yet another reason why estimating uncertainty is essential
  • "we're in a street fight with these people"
  • the difference between science and politics
In Chapter 8, Nate Silver, gets to the nut of his theme, the way successful gamblers think, in a chapter titled, "Less and Less and Less Wrong."

Silver takes a look at a very successful gambler, Haralabos "Bob" Voulgaris:
But although there isn't any one particular key to why Voulgaris might or might not bet on a given game, there is a particular type of thought process that helps govern his decisions. It is called Bayesian reasoning.

Thomas Bayes was an English minister who was probably born in 1701 -- although it may have been 1702. Very little is certain about Bayes's life, even though he lent his name to an entire branch of statistics and perhaps its most famous theorem. It is not even clear that anybody knows what Bayes looked like; the portrait of him that is commonly used in encyclopedia articles may have been misattributed.

Bayes's much more famous work (much more famous than "Divine Benevolence"), "An Essay toward Solving a Problem in the Doctrine of Chances," was not published until after his death, when it was brought to the Royal Society's attention in 1763 (Isaac Newton had died in 1727) by a friend of his named Richard Price. It concerned how we formulate probabilistic beliefs about the world when we encounter new data.

The argument made by Bayes and Price is not that the world is intrinsically probabilistic or uncertain. Bayes was a believer in divine perfection; he was also an advocate of Isaac Newton's work, which had seemed to suggest that nature follows regular and predictable laws. It is, rather, a statement -- expressed both mathematically and philosophically -- about how we learn about the universe: that we learn about it through approximation, getting closer and closer to the truth as we gather more evidence.

This contrasted with the more skeptical viewpoint of the Scottish philosopher David Hume, who argues that since we could not be certain that the sun would rise again, a prediction that it would (rise again) as inherently no more rational than one that it wouldn't (rise again). The Bayesian viewpoint, instead, regards rationality as a probabilistic matter. In essence, Bayes and Price are telling Hume, don't blame nature because you are too daft to understand it; if you step out of your skeptical shell and some some predictions about its behavior, perhaps you will get a little closer to the truth.
Silver has chapters on poker, chess, baseball, basketball, earthquakes, the Japanese attack on Pearl Harbor, 9/11 and terroism.

He asks the question many of us in the US have asked: why don't terrorists blow up shopping malls. The answer may surprise you. His graph on page 442, terror attack frequency by death toll in Israel, 1979 - 2009 is striking, and shows that "the fact that Israel's power-law graph looks so distinct is evidence that our strategic choices do make some difference." This gets back to his chapter on chess phenom Kasparov winning against Big Blue: Kasparov won because of a strategic decision; Big Blue was programmed to make tactical decisions.

Some Nice "High-IP" Wells Reported Today; Welcome Back, Big Oil -- WSJ

Of interest is the Otter field well. I track the Otter field here:
  • 26439, 2,084, BR, CCU Four Aces 14-21TFH, Corral Creek, t4/14; cum --
  • 26727, 2,403, MRO, Herb 14-35H, Killdeer, 4 sections, t4/14; cum -- 
  • 26235, 2,270, QEP, Moberg 3-18BH, Grail, a huge well, t11/13; cum 91K 3/14;
  • 26342, 2,706, HRC, Miller 157-101-12D-1-2H, middle Bakken, 35 stages; 4 million lbs, Otter, t2/14; cum 17K 3/14;
  • 26438, 2,405, BR, CCU William 44-20MBH, Corral Creek, t4/14; cum --  
The HRC Miller well was spud December 11, 2013; TD reached December 27th. "Dead oil staining through the Mission Canyon was observed which is common to this area." Started drilling the horizontal on December 22. Background gas averaged 1,234 units; reached as high as 4,209 units. 
The Wall Street Journal

The fourth section, the "Journal Report" is devoted almost entirely to "Big Oil." This is, of course, one of the "big stories" which I track here.  

ATT in $50 million deal for DirecTV.

New probe south in 1961 plane crash that killed U Thant sought after suggestions of foul play found. Which reminds me: I'm no conspiracy theorist (in general) but I'm reading Jim Marrs Crossfire: The Plot That Killed Kennedy. Fascinating. It sure seems the media and the general public were very gullible and very "believing" back in the 60's, the era of free love.

Exxon unit in Canada seeks deep Arctic well.

The Los Angeles Times

Did he just blink? Cuban missile crisis déjà vu? Putin orders troops to pull back from Ukraine border.

The Dickinson Press

Reminds us to buckle our seat belts in the national parks in western North Dakota where the speed limit is 20 mph. That tells me things are "ok" in the oil patch. 

Excellent Update On The Permian; Monday, May 19, 2014

Active rigs:

Active Rigs191189209176111

RBN Energy: excellent update on the Permian. The Permian is having the same problem as the Bakken does/did -- with takeaway capacity:
One of the most exploited oil plays in history, the Permian Basin in West Texas and New Mexico has recently become ground zero for some of the most exciting new “unconventional” oil and gas development in North America. Horizontal drilling and vastly improved completion techniques have vaulted the Permian once again to the fastest-growing oil and gas production region of the U.S.  In today’s Permian-focused blog, we review key conclusions from RBN Energy’s latest “Drill Down” Report and Production Economics Model.
On Friday, May 18, the price for West Texas Intermediate (WTI) crude oil in Midland, TX was $94.70/bbl, or about $7.30 below the price of WTI in Cushing, OK.   It was not that long ago (last year through mid-September in fact), when that discount was only about 18 cents/barrel.  But since September 2013 the discount has ballooned out with Midland selling for $11/bbl under Cushing in March 2014.
The problem is pipeline takeaway capacity, or lack thereof.  We reviewed some of the reasons for the pipeline congestion problems in recent blogs in our Come Gather ‘Round Pipelines (in the Permian) series, including Part 1 – Price Differentials and Takeaway Capacity, Part 2 - Gathering Systems, and Part 3 – Plains Expansions.  The bottom line is that crude oil production in the Permian is growing rapidly and today there is not enough pipeline takeaway capacity to efficiently handle the volume.  Although that takeaway situation will likely correct itself in a few weeks when new pipelines come online, the underlying cause – rapid growth in Permian production – will not be going away.  In fact, that trend is picking up steam all across the Permian basin.
From SeekingAlpha: it turns out that earlier reports that Libya was ready to begin exporting oil again -- never mind.
  • Brent crude rises above $110/bbl on renewed concerns over Libya's oil output following some of the worst violence in Tripoli since Gaddafi's ouster in 2011
  • Gunmen stormed Libya's parliament yesterday and demanded its suspension, claiming loyalty to a renegade army general
  • An end to a month-long blockade of major oil ports in eastern Libya last month raised the prospect of higher crude exports, but just-opened oil fields have been closed again as clashes erupt
  • Also helping push crude prices are potential Norwegian strikes and the shutdown of BP's Foinaven field for maintenance
New link: a reader sent me a reminder about archived articles at IPAA:
IPAA (Independent Petroleum Association of America) has archived meetings and sometimes some interesting stuff gets said at those shows. I think you would like the Pioneer presentation at the April OGIS meeting.

Easy to find: google IPAA. Tab at top for "Meetings and Events." Click on April OGIS.