Sunday, July 6, 2014

Random Look At Oasis Well In Section 33-157-102, Under The River Southwest Of Williston

To be completed.

In the May, 2014, lease sale, four parcels of land in sections 28/33 (a stand-up 1280-acre parcel) - 157-102 (Eightmile oil field, under the river), all bought by Vitesse Oil, LLC:
  • 159.77 acres at $14,000/acre, Missouri River in NE4
  • 159.77 acres at $14,000/acre, Missouri River in SE4
  • 138.08 acres at $14,000/acre, Missouri River in NE4
  • 23.91 acres at $14,000/acre, Missouri river, in SE4
  • 482 acres total x $14,000 = $6.7 million
482 acres is not quite a section. Eventually there could be anywhere from 4 to 16 wells (or more) on this parcel.

Currently, there are no wells in this 1280-acre unit, but there is confidential well in 33-153-102:
  • 24296, conf, Oasis, Lake Trenton 33-28H, Eightmile, no production data,

Random Look At Parcel Of Land Recently Leased -- Little Knife Oil Field; July 6, 2014

In the North Dakota lease sales of May, 2014, one of the highest bids was for a parcel of land in section 18-145-97, the northeast quarter, Wildcat Oil and Gas, LLC, $13,100/acre for 80 acres. Tonight there is a rig on a 5-well pad:
  • 28573, rig on site, Petro-Hunt, Dolezal 145-97-7D-6-3H, Little Knife,
  • 28578, conf, Petro-Hunt, Dolezal 145-97-7D-6-2H, Little Knife,
  • 27275, conf, Petro-Hunt, Klatt 145-97-18A-19-2H, Little Knife,
  • 28579, conf, Petro-Hunt, Dolezal 145-97-7D-6-1H, Little Knife,
  • 24683, conf, Petro-Hunt, Klatt 145-97-18A-19-1H, Little Knife,
There are no other horizontal Bakken wells in this section, but less than a mile to the east is this well:
  • 22201, 996, Hess, LK-Dolezal-145-97-0805H-1, Little Knife, t5/12; cum 193K 5/14; sundry form dated April, 2014, states that remedial cement work will be needed; 34 stages; 2 million lbs sand/ceramic; background gas as high as 3,000 units; 5' - 20' flare, and occasionally significantly higher; "this strong hydrocarbon show indicates that the LK-Dolezal is likely to be a very productive well after fracture stimulation."
Back to 18-145-97, Some folks may wonder why this 80-acre parcel went for $13,100/acre. This might provide a hint. In that same section, there are several vertical wells, one of which is still producing:
  • 6082, 491, Petro-Hunt, Martin Weber 1-18-1C, a Madison well, t5/77; cum 925K 5/14; still producing 650 bbls/month.
This well, drilled almost 40 years ago, is still producing, and is nearing the one-million-bbl milestone. This well, by the way, is being tracked at "Monster Wells."

There is another active Madison well in the same section:
  • 12949, 73, CLR, Dolezal 1-18, a Madison well, transferred from Chesapeake to CLR in 2008, the permit was originally issued to Comdisco (Denver) and has has passed through many hands since first drilled; t10/90; cum 508K 5/14; and still producing a 1,000 bbls per month; 
I don't think I've made an error on this but it's hard to believe that the parcel was obtained in May, 2014, and there is now a rig on a 5-well pad in this area. It's possible I've made a mistake but I've checked the GIS map a couple of times, and the lease results and they seem to match.  If this is correct, there is no way federal permitting would have ever been this fast.

2Q14 Earnings

All 2Q14 earnings will be reported at this page; the link will be on the sidebar at the right, under "Earnings Central." When we start to see earnings reports for any quarter, the "Earnings Central" link is moved to the top of the sidebar until the earning season is over.

I don't have time to check/update earnings on all companies listed below. If you see one that I have missed, feel free to send it in (anonymous comment or by e-mail) and I will post it.


Miscellaneous articles:
General update (dates subject to change)
  • AAPL:
  • Apple reported stronger-than-expected earnings growth late Tuesday, but fiscal Q3 sales of the iPhone and iPad lagged estimates as consumers and investors look ahead to the next smartphone models.
    Apple earned $1.28 a share in the quarter ended June 28, up 19.6% from a year earlier. That beat the consensus estimate of $1.23. It was the strongest gain in seven quarters, improving from 15%, 5%, -5% and -20% in the prior four periods.
  • AAPL, elsewhere:
    Apple today announced financial results for the second calendar quarter and third fiscal quarter of 2014. For the quarter, Apple posted revenue of $37.4 billion and net quarterly profit of $7.7 billion, or $1.28 per diluted share, compared to revenue of $35.3 billion and net quarterly profit of $6.9 billion, or $1.07 per diluted share in the year-ago quarter.

    Gross margin for the quarter was 39.4 percent compared to 36.9 percent in the year-ago quarter, with international sales accounting for 59 percent of revenue. Apple also declared an upcoming dividend payment of $0.47 per share, payable on August 14 to shareholders of record as of August 11. The company currently holds $164.5 billion in cash and marketable securities.
  • Alcoa:  
  • Wells Fargo: 

EPS estimates in parentheses following the ticker symbol (according to Yahoo!Finance) -- typographical errors likely.

American Railcar Industries:

APA ($1.66): July 31

AXAS ($0.08): Aug 4

AMZG ($0.04): 

Baytex ($0.61): July 31

BAX ($1.22): beats by 4 cents; shares hit all-time high later that week;

BCEI ($0.65): August 4 

BHI ($0.89): beat by 3 cents;

BK ($0.56): beat by 6 cents;

BKH: see this post

CHK ($0.44): misses; 36 cents; raises guidance; Zacks;

CLNE (-$0.28):August 6

CLR ($1.69): see this post;

CNI (Canadian National Railway) ($0.97): no date

CNP ($0.25): CNP, forecast 23 cents, beats by 7 cents; beats on revs, raises FY14 EPS
COP ($1.58): July 28

Crescent Point:

CRR ($0.96): if report of 80 cents/share earnings is correct, huge miss, but it did not affect share price

CVX ($2.75): Aug 1

DNR ($0.27): misses; 26 cents; Zacks;
DVN ($1.40): in-line; $1.40; Zacks;

ECA ($0.28):  

EEP ($0.25): July 31

ENB ($0.38): 

EOG ($1.33):  see this post;

EPD ($0.75): July 31

EOX (Emerald) ($0.04): August 4 

EPD ($0.75): July 31

ERF ($0.17): 

GEOI (bought by Halcon [HK], below)


HAL ($0.91):  Halliburton hit a "lifetime" high today. HAL's profit climbed 20 percent. Announced stock buyback. From The AP:
The Houston-based company said earnings increased to $774 million, or 91 cents per share, from $644 million, or 69 cents per share, a year ago.
The average per-share estimate of analysts surveyed by Zacks Investment Research was for a profit of 92 cents.
HES ($1.15): Shares of the New York-based oil producer rose 4.2 percent to $103.62 at 9:09 a.m. before the start of regular trading in New York. Excluding one-time items, per-share profit for the second quarter was $1.38, exceeding the average of 24 analysts’ estimates by 20 cents.

HP ($1.62): July 31

HK (Halcon; previously GEOI) ($0.04): huge beat; 7 cents; beat by two or three cents;

Kinder Morgan - KMI ($0.29): see KMP -- the headline seems more negative than the results suggest over at 24/7 Wall Street; The WSJ, on the other hand, has it right. KMI profit rises 2.5%. Kinder Morgan Inc. said second-quarter profit rose 2.5%, though the U.S. pipeline company's growth was muted by a comparison with a year earlier period that included a big one-time gain. Transcript.

Kinder Morgan - KMP ($0.58): misses by 15 cents ($0.43) but the gain last year was due to an extraordinary gain. Beat on revenues. 

KOG ($0.18): July 31, after market close

Legacy/Bowood ($0.09): August 11 

LINE ($0.41): August 6

MDU ($0.29): transcript; MDU: SeekingAlpha here.
MDU Resources Group, Inc. today reported second quarter consolidated adjusted earnings of $56.7 million, or 29 cents per common share, compared to $47.2 million, or 25 cents per common share for the second quarter of 2013. Consolidated GAAP earnings were $53.9 million, or 28 cents per common share, compared to $46.3 million, or 24 cents per common share for the second quarter of 2013.
Adjusted earnings for the six months ended June 30 were $117.4 million, or 61 cents per share, compared to $107.3 million, or 57 cents per share a year ago. Consolidated year-to-date GAAP earnings were $110.4 million, or 58 cents per share, compared to $102.7 million, or 54 cents per share in 2013.
MHR (Magnum Hunter) (-$0.17): August 5 

MMR (McMoRan) ( ): 

MPC (Marathon Petroleum ($2.60): July 31

MPO: see this post

MRO (Marathon Oil) ($0.72): Press release here. Easily beats analysts' forecasts of 75 cents.

MUR ($1.14): July 30

NE ($0.66): July 30

NBL: beats by 8 cents;

NBR ($0.23): beats by 1 cent;

NFX ($0.45): July 29  

NOG ($0.23): August 7

NOV ($1.45): July 29

OAS ( $0.72): see this post

OKE ($0.37): see this post;

OKS ($0.67): see this post

OTTR ($0.23): August 4

OXY ($.179): July 30

PAA ($0.50): August 6

PSX ($1.97): posted adjusted second-quarter 2014 earnings of $1.51 per share, lagging the Zacks Consensus Estimate of $1.69 by 11%. However, the figure compared favorably with $1.47 per share earned a year ago, owing to higher profits in the midstream and chemicals businesses.

QEP ($0.31): beats by 5 cents; beats on revs;

Range Resources:

RIG ($1.12): profits rises sharply; beats by 49 cents; beats on revs;

SD ($0.03): beat by 2 cents;

SLB ($1.36):
Schlumberger on Thursday reported profit that declined by 24 percent in its second quarter, and beat analysts' expectations.
The Houston-based company said earnings decreased to $1.6 billion, or $1.21 per share, from $2.1 billion, or $1.57 per share, in the same quarter a year ago.
Earnings, adjusted to account for discontinued operations, came to $1.37 per share. The average per-share estimate of analysts surveyed by Zacks Investment Research was for profit of $1.35.
SM ($1.58):
SM Energy misses by $0.03, beats on revs : Reports Q2 (Jun) earnings of $1.56 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $1.59; revenues rose 20.7% year/year to $674.98 mln vs the $625.1 mln consensus.
  • Co reported Average daily production (MBOE/d) of 147.0, Total production (:MMBOE) of 13.38
    • Average daily production increased by 6% from production of 138.6 MBOE per day in the first quarter of 2014. In the second quarter of 2014, SM Energy's reported production mix was 29% oil/condensate, 24% NGLs, and 47% natural gas."
  • In the second quarter, the Company reported per unit costs in-line or slightly below its previously announced guidance range.
  • As of the end of the second quarter, the Company had $163.8 million of cash on hand and outstanding borrowings of $1.6 billion, which were comprised entirely of long term notes.
  • Earlier today, the Company entered into an agreement to acquire approximately 61,000 net acres in Divide and Williams Counties, North Dakota directly adjacent to its Gooseneck area for $330 million.
SRE ($1.16): August 8



STO (BEXP) ($0.58):  Statoil beats 2Q14 earnings estimates but misses on revenues. Reports earning 63 cents.

STR ($0.23): beats on earnings by one cent; beats on revenue;

Starbucks ($0.66): beat by one cent;

T ($0.65):
  • ATT, at 68 cents beat consensus by 5 cents; a huge quarter, though after-market trading has not confirmed such; from the press release -- best-ever postpaid churn drives strongest postpaid net adds in nearly five years and continued U-verse gains highlight AT&T’s second quarter as business transformation continues. [When you get right down to it, there's not much choice when choosing a cellular plan if one does a lot of traveling.]
Targa Resources Partners (NGLS):

TPLM ($0.16): September 9

TransCanada (TRP.TO) ($0.53): July 21

Ultra Petroleum (UPL) ($0.59): July 29

UNP ($1.42): in-line at $1.43

USEG ($0.02): 

VLO ($1.57): July 30 



WFT ($0.21): beats by 3 cents



WLL ($1.17): huge beat, $1.40; record production at 110,000 boepd

WMB ($0.23): in-line or some say missed slightly; due to new projects not yet on line or something to that effect, not a big deal;

WPX (-$0.10): see this post;  

XOM ($1.55): July 31

XLNX ($0.61): beat expectations; soft on guidance; shares plunge 20%; bad, bad day for XLNX investors.

Germany To Severely And Intentionally Cripple Their Economy; Will Limit Locally-Produced Natural Gas; To Ban Fracking -- New York Times; Potpourri; July 6, 2014

A recurrent theme that readers will recognize is the widening gap between the EU and the rest of the world when it comes to energy. In fact, it's one of "The Big Stories" that I follow: Europe at a tipping point.

It seems that business writers often ignore the two biggest stories when writing about global macro-economics. In the US, the big stories are ObamaCare and the energy revolution. In Europe, the big story is the continent's contrarian view of energy. The New York Times provides another glimpse of that contrarian view in a story published just the other day in which the headline noted that Germany will severely and intentionally cripple their economy curtail fracking:
Germany’s ministers for energy and the environment are seeking a ban on shale gas and oil drilling over the next seven years because of worries that the practice could pollute drinking water and damage the environment.
Chancellor Angela Merkel’s government had planned to introduce legislation in the autumn to regulate hydraulic fracturing, or fracking, bringing an end to a de facto moratorium on the practice.
But Barbara Hendricks, minister for the environment and a member of the Social Democratic Party, part of the governing coalition, said at a news conference on Friday that a framework of key points on the legislation agreed to with Sigmar Gabriel, the economy and energy minister, would result in the “strictest regulations we have ever set.”
“There will be no fracking for economic purposes in Germany in the near future,” Ms. Hendricks said. But she said that shale drilling could be used for exploration.
Ms Merkel and the country of Germany is in a world of hurt. Expect to see more German manufacturing move overseas, which is fine: Germany's economy will become more strongly tied to the tourism industry. My hunch is the Germans will be using more and more coal over time.

If you go to the link on "Europe at a tipping point" (above), note: Europe may be the only continent in the world to depend on imported energy -- EU Council President.

If you go to that link, scroll up and down the headlines from the past two years: it's not a pretty site/sight.

Even op-ed at WSJ thinks Germany is nuts: German's fracking follies (July 8, 2014). Actually, it probably is not that big a deal. From the op-ed: Germany already imports 90% of its gas supply. Thus, banning fracking will not change the equation. It will simply prolong the misery.

Of course, Germany's fracking follies is not helping the EU's "united" stand against Putin in the Ukraine. LOL. The AP, over at Yahoo!Finance is reporting, July 8, 2014:
A clutch of countries is breaking ranks with the EU's efforts to put economic and diplomatic pressure on Russia over Ukraine and building a pipeline meant to carry huge amounts of Russian gas to their doorstep.
Their defiance of a European Union stop work order is more significant than just another missed chance for Europe to call out the Kremlin. Russian natural gas already accounts for around a third of the EU's needs. The South Stream pipeline could increase Russian supplies to Europe by another 25 percent, potentially boosting Moscow's leverage long after the Ukraine crisis fades.
Adding to the skein of Russian pipelines already ending in Europe, South Stream would go through Bulgaria, Serbia, Hungary, Slovenia, Austria and Italy in one leg and Croatia, Macedonia, Greece and Turkey in a second. The European Commission, the EU executive, has ordered a construction moratorium over concerns with Russia's dual role as pipeline owner and gas supplier. It has also delayed some political talks on the pipeline amid the crisis in Ukraine.
For a related post on this chess match between Putin and Obama, click here.
Peggy Noonan Piece In Weekend Edition, Wall Street Edition

Ms Merkel will soon go the way of Mr Obama, I assume.
I don't know if we sufficiently understand how weird and strange, how historically unparalleled, this presidency has become.
We've got a sitting president who was just judged in a major poll to be the worst since World War II. [That list would include ... George W. and ... drum roll ... Jimmy Carter.]
The worst president in 70 years! Quinnipiac University's respondents also said, by 54% to 44%, that the Obama administration is not competent to run the government.
A Zogby Analytics survey asked if respondents are proud or ashamed of the president. Those under 50 were proud, while those over 50, who have of course the longest experienced sense of American history, were ashamed.
We all know the reasons behind the numbers. The scandals that suggest poor stewardship and, in the case of the IRS, destructive political mischief. The president's signature legislation [ObamaCare], which popularly bears his name and contains within it the heart of his political meaning, continues to wreak havoc in marketplaces and to be unpopular with the public. He is incapable of working with Congress, the worst at this crucial aspect of the job since Jimmy Carter, though Mr. Carter at least could work with the Mideast and produced the Camp David Accords. Mr. Obama has no regard for Republicans and doesn't like to be with Democrats. Internationally, small states that have traditionally been the locus of trouble (the Mideast) are producing more of it, while large states that have been more stable in their actions (Russia, China) are newly, starkly aggressive. That's a long way of saying nothing's working.
Which I'm sure you've noticed.
Yes, I did notice. This op-ed dovetails perfectly with a note I posted the other day about military commanders taking an oath, as it were, to make things better than they found it when they take a new command.  More from Peggy Noonan:
This is a president with 2½ years to go who shows every sign of running out the clock. Normally in a game you run out the clock when you're winning. He's running it out when he's losing.
All this is weird, unprecedented. The president shows no sign—none—of being overwhelmingly concerned and anxious at his predicaments or challenges. Every president before him would have been. They'd be questioning what they're doing wrong, changing tack. They'd be ordering frantic aides to meet and come up with what to change, how to change it, how to find common ground not only with Congress but with the electorate.
Instead he seems disinterested, disengaged almost to the point of disembodied. He is fatalistic, passive, minimalist. He talks about hitting "singles" and "doubles" in foreign policy.
I assume everyone, on both sides of the aisle have seen this; it's just that Ms Noonan articulates it so well.  I said the same thing, a long time ago, that Mr Obama is simply "hoping" that the last two years of his administration is uneventful.

Piling on. The theme continues with other writers. On Monday, July 7, 2014, Texas Governor Perry is quoted as saying that President Obama is either "inept" or "doesn't care" with regard to the US southern borders breaking down. I think we are seeing, for the first time among modern presidents, a sitting president simply walking away (or golfing away) from the presidency. Apparently Eisenhower did much the same thing but one might argue things were a bit different then.

Update, July 25, 2014: I originally posted this elsewhere but felt it was poorly written and wanted to bury it here --
On October 21, 2013, I had a post on the lame duck presidency. Recently I posted a note suggesting that years from now one might be able to go back and determine the "exact" day the president walked off the international stage. Peggy Noonan also wrote about that which I linked on July 6, 2014.

I was reminded of all of this when I read the story that the president has penciled in a two-week August vacation at Martha's Vineyard. The fact that he has booked a two-week vacation does not bother me in the least: a president is never on vacation; a two-week vacation is the American norm; and, everything pretty much comes to a stop in Washington, DC, anyway, in August.

However, what caught my attention was that the mainstream media is starting to catch up with Peggy Noonan, noting that "the president shows no sign—none—of being overwhelmingly concerned and anxious at his predicaments or challenges." The AP writes:
The White House says Obama will head north on August 9 and stay until August 24, when he returns to Washington. It will be the longest summer vacation of his presidency [and could have added, "coming right at the time there are three shooting wars overseas, and an OPEN BORDERS / OPEN ARMS policy closer to home that seems to be running out of control"].
There are three shooting wars -- all of which are pretty significant -- Iraq, Israel-Hamas, and the Ukraine -- and the US is pretty much taking a spectator role in all three. Not that the US could do much even if it wanted, but the president seems very, very aloof. His aides suggest that aloofness reassures the American public that things are not in dire straits internationally. Today's Gallup poll shows the president has a 39% approval rating.

I don't think the actual fact -- that he's going on an extended vacation -- is as interesting as the fact that the mainstream press is starting to report -- by extension, define -- a new chapter in the Obama presidency

I think one can argue that the date can be easily pinpointed; a very specific date, in fact. I think it was when he turned down Maliki's request for fighter aircraft to go after the insurgents building up in the north of Baghdad. That decision made it clear that Obama had decided "enough was enough" and that he was no longer interested in "big events" and was going to enjoy the last two years of his presidency. 

So, I think he decided some time ago to "quit" as it were, and enjoy the good life. The press is now finally starting to realize that. Whether that is accurate or not, if the press "believes" that and starts to write articles with that common them, that will define Obama's last two years as president. 

The president runs the risk of letting the mainstream media define his last two years as president. He better start writing another book.
Great Lakes Rising ... To Everyone's Surprise
Even Scientists Suprised

The Star Tribune is reporting:
Predicting water levels more than six months into the future is all but impossible.
Except for Algore and The National Geographic which can predict how much the oceans will rise one hundred years from now. LOL.

"Predicting water levels more than six months into the future is all but impossible." -- their words, not mine.

But I digress. To everyone's delight, and scientists' surprise, global warming has resulted in rising water in the Great Lakes:
Lake Superior may be the one spot in this waterlogged state where people are happy to see the waters rising.
After years of parched shorelines, water levels in the Great Lakes have come rushing back. The crowds that flock to the Superior shoreline this holiday weekend will find harbors deeper and beaches narrower than they’ve been in 15 years.
“I hope this lasts,” said Dave Tersteeg, director of parks and recreation for the Arrowhead resort town of Grand Marais. Water levels have been so low in recent years, he said, “there was some real fear that we’d have to dredge the harbor.”
Boats bob in the town harbor beside ramps that are nearly level with the lake surface. Last summer, the ramps tilted toward the depleted waterline at such a steep angle, Tersteeg worried for boaters’ safety. The water’s deep enough now that even the largest sailboats can pull in to refuel. Last year, he said, they risked scraping the harbor floor.
Superior’s water levels are almost a foot higher than they were at this time last summer and 7 inches higher than average.
And, yes, the writer says it's all due to global warming (now called climate change, apparently since the earth stopped warming in 6 A.G. 

And more:
The waters have rushed back at speeds that astonished and delighted residents, scientists, ports and resorts. Heavy rainfall fed the lake’s tributaries and the severe winter capped Superior with thick sheets of ice that slowed evaporation.
A reader points out that whether the ice is one-half inch thick or six feet thick, there is no evaporation from the water below the ice.


Even in a state where fracking is banned, they are experiencing earthquakes.

There is a report of an earthquake, over the weekend, magnitude 2.5, in New York State. Fracking is banned in the state. George W. Bush is not visiting the state. Inexplicable.

I'm sure the link will soon break; here's the story:
The Lamont-Doherty Cooperative Seismographic Network says a 2.5-magnitude earthquake was recorded at 10:46 in a heavily wooded area of Garrison, about 3 miles beneath the Appalachian Trail and a few miles north of Peekskill in Westchester County.
Seismologist Leonardo Seeber told the Journal News it wasn’t along any known fault lines.
The United States Geological Survey told 1010 WINS the tremor is “normal” and such occurrences happen around the world all the time.
That's interesting: I thought earthquakes were found only where they were fracking.

Also Inexplicable

Danica Patrick crossed the Daytona finish line before Jeff Gordon, Jimmie Johnson, Tony Stewart, Dale Earnhardt, Jr; Brad Keselowski, and a host of others, at the Coke Zero 400. One of her finest finishes, she finished #8.

Ten Of Sixteen Wells Coming Off Confidential List Monday Have No Production Data; EOG Austin Well Should Be A Big Well -- July 6, 2014

By the way, the EIA tracks this metric also: new-well oil / gas production per rig, by region. At the time of this posting (July 6, 2014), the Bakken led all regions for oil, even beating out the Eagle Ford, although just barely (if I am not misreading the graphs).  [Again, another "thank you" to Don for finding this link; it's something I never would have thought of looking up. It appears the EIA has only been tracking this metric since October, 2013, which also speaks volumes about how things are changing in the US oil patch.]

Monday, July 7, 2014
  • 26269, 188, Whiting, McDonald Family Trust Federal 31-3PH, Roosevelt, t3/14; cum 8K 5/15;
  • 26710, drl, Hess, BW-Arnegard State-151-100-3625H-4, Sandrocks, no production data,
  • 26822, drl, XTO, Boe State 31X-16H, Beaver Lodge, no production data,
  • 27337, drl, Slawson, Hunter 8-8-17TF2H, Big Bend, no production data,
Sunday, July 6, 2014
  • 24476, drl, Statoil, M. Olson 20-29 6H, Painted Woods, no production data,
  • 24508, drl, CLR, Norfolk 4-1H, North Tobacco Garden, no production data,
  • 24831, 910, Petro-Hunt, Dolezal 145-97-20C-17-1H, Little Knife, t5/14; cum 3K 5/15;
  • 25898, drl, MRO, Azure USA 31-15H, Moccasin Creek, producing,
  • 26243, drl, KOG, Koala 16-32-29-2H3, Poe, no production data,
  • 26324, 480, EOG, Austin 77-1708H, Parshall, t2/14; cum 40K 5/14;
  • 26947, conf, XTO, Lucy 14X-32B, Siverston, producing,
  • 27091, conf, Hess, GN-Alice-158-97-1324H-1, New Home, no production data,
Saturday, July 5, 2014
  • 27096, drl, BR, Ole Boe 44-14MBH-ULW, Haystack Butte, no production data,
Friday, July 4, 2014
  • 26492, 26, Corinthian Exploration, Corinthian Berg 16-32 1H, Northeast Landa, a Spearfish/Madison well; t3/14; cum --
  • 26853, drl, SM Energy, Bonner 9X-12HB, Poe, no production data,
  • 27074, drl, MRO, Adamson 14-24TFH, Chimney Butte, no production data,

26324, see above, EOG, Austin 77-1708H, Parshall:

DateOil RunsMCF Sold


The McDonald Family Trust Whiting well in Roosevelt oil field should be an interesting well to watch. This well is on the southern fringes of the middle Bakken. There is one other horizontal well in this section. The Whiting Short Fee 31-3 well tested the Bakken in 1989, was minimally productive, and now PNA. The well was re-entered and tested the Birdbear in 2005, is still active:
  • 12495, 248, Whiting, Short Fee 31-3 (no "H" designation); Roosevelt, a Birdbear well (Nisku "A"), t4/05; cum 111K 5/14; vertical depth around 11,000 feet; TD - 15,350 feet; a sundry form suggests the Bakken was a vertical well only, and not a horizontal; although this Bakken was PNA, the geologist's report suggest this well should be conducive to stimulation; they were optimistic about the Bakken in this area with this well back in 1989. 
The Great Gatsby -- Again

Tonight, for whatever reason, I'm in my "Great Gatsby" phase, watching the Baz Luhrmann movie. 

Young and Beautiful, Lana Del Rey

A good companion piece is the 2014 history: Supreme City: How Jazz Age Manhattan Gave Birth to Modern American. (Of course, it should go without saying, the F. Scott Fitzgerald novels would come first, as it were.)

For Investors Only -- July 6, 2014 -- "Sell In May, Stay Away" -- Perhaps Not So Much This Year

Two stories of interest, perhaps, for investors. The first is another forecast/speech by IMF's Christine Lagarde:
International Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution’s global growth forecasts as investment remains weak.
“The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment” spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France.
The remarks underline the risks to global economic growth at a time when the U.S. Federal Reserve is trimming stimulus and the European Central Bank is fighting inflation that is less than half its targeted level. The IMF is preparing to update its economic forecasts this month after predicting April 8 that the global economy will expand 3.6 percent this year and 3.9 percent in 2015.
The second is a more interesting article from The Wall Street Journal in which it as noted that when the Dow hit 17,000, that was the seventh-fastest 1000-point gain in the history of the blue-chip index:
The stock market is rolling into the second half of the year in stronger shape than many investors dared to hope in January.
The widely followed S&P 500 index has gained 7.4% for the year so far, building on last year's 30% spike.
The more concentrated Dow Jones Industrial Average is up 3%, after pushing through 17000 for the first time on Thursday.
The Dow's move came just 153 trading sessions since it first closed above 16000 on Nov. 21, 2013, making it the seventh-fastest 1000-point gain in the blue-chip barometer's history.
With signs that the U.S. economy is recovering from a winter contraction and the Federal Reserve expected to keep interest rates low for at least another year, many investors are betting the five-year bull market has more room to run. They are reluctant bulls, seeing few alternatives to equities.
The jobs data largely put to rest concerns among investors about the health of the economy, after U.S. gross domestic product fell at a seasonally adjusted annual rate of 2.9% in the first quarter, the fastest rate of decline since the recession. The S&P 500 eked out a 1.3% gain in the first quarter, the smallest quarterly increase by stocks since a decline in the fourth quarter of 2012.
By the way, the expectation that the Federal Reserve may "keep interest rates low for at least another year" is quite incredible. 

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.

There is an article elsewhere in which Bill Gross of Pimco fame thinks low interest rates are the "new norm." 


There were three interesting stories in the last couple of days regarding CBR. First, the excellent RBN Energy post on gradual shift from CBR to pipeline in the Bakken. "Shift" might be too strong a word; "gradual shift" is closer to reality perhaps, but even that might suggest to some that CBR is waning more than one might imagine. Unless new flaring rules change things, I think the Bakken will need all the rail / pipeline they can finance.

The second story was a Bloomberg story sent to me by Don the other day:
When Aurora Mayor Tom Weisner sees rail cars full of crude oil rumble down the tracks that criss-cross his Chicago-area town, he often thinks about the derailment that killed 47 people almost a year ago in Canada.
The disaster focused attention on the design of the oil tankers, yet two-thirds of the tank cars in use today are still older models that safety experts say are vulnerable to puncture. The July 6 derailment last year in Quebec and seven other major ones in the U.S. and Canada since then have spilled more than 3 million gallons of oil, with some cars catching fire or exploding.
“You can see tanker car after tanker car go by on that rail constantly,” said Weisner, whose city is 40 miles (64 kilometers) southwest of Chicago and second to it in population in Illinois. [Tanker car after tanker car go by on that rail constantly: a hat tip to the environmentalists who apparently prefer rail to pipe.]
It's a very, very long Bloomberg story and well worth the read. 

Note to newbies: when news organizations report on spills, they often report the size of the spill in terms of gallons rather than barrels (gallons make the spill appear 42-times bigger than it really is). Three million gallons of oil = 70,000 bbls.

The three million gallons of spilled oil works out to about 85 cars, less than one unit train. Four accidents accounted for almost the entire amount including one spill of low-volatility western Canadian oil. [Spoiler alert: perhaps I'm overly sensitive, but that wiki-entry has a hint of anti-CBR bias.]

As long as I'm digressing, it's important to note that news articles tend not to provide denominators. For example, according to the article, in the past year, 3 million gallons of oil have been spilled by CBR. There is no number given for how much oil is shipped by rail. Remember, that 3 million gallons (70,000 bbls) is for an entire year in BOTH the US and Canada. To put that in perspective, the US alone is producing upwards of 9 million bbls/day, and importing about 6 million bbls (from memory; could be very wrong on exact amounts. That's per day. Seventy-thousand bbls represents and infinitesimal amount of the total amount of oil moving across the US and Canada each day. My hunch is that parking lots across the entire US see more dripping oil than that. [Disclaimer: I often make simply arithmetic errors.]

Finally the third article was in the July 4, 2014, issue of The Wall Street Journal:
LAC-MÉGANTIC, Quebec—A year after an oil-train explosion killed 47 people in this small town, residents are waking up to a new reality: The oil trains are probably coming back.
That upsets many of the town's 6,000 residents, who lost family, friends and neighbors when a 74-car train carrying crude derailed in the early morning of July 6.
But Lac-Mégantic probably has no choice.
Businesses here depend on the railroad; the railroad depends on crude. The region's sawmills and farms don't provide enough business for the railroad to be viable if it isn't also carrying lucrative crude oil, town officials say.
In mid-June, trains carrying nonhazardous cargo began travel through town on rebuilt track eastbound to the U.S. In all likelihood, service including crude will resume in January 2016, when a moratorium on carrying it through town expires. Lac-Mégantic wants to build an 8-mile-long detour to skirt the town and still serve regional businesses. But the chance that it will be finished in time is slim, if it gets built at all.
"We are working very hard to move this track but we are not in control," says Town Councilor André Desjardins. "If we don't have the train here, forget it, 1,000 employees will be without jobs." [Again, the town's population: 6,000.]
And so it goes. 

"Without The Bakken, Prices At The Pump Would Be Completely Unaffordable" -- EIA

This is truly an incredible story that some of us have been reporting on for quite some time. Bloomberg is reporting:
The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery, Bank of America Corp. said.
U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report today. The country became the world’s largest natural gas producer in 2010. The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.
“The shale boom is playing a key role in the U.S. recovery. If the U.S. didn’t have this energy supply, prices at the pump would be completely unaffordable.”
Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking. The surge in supply combined with restrictions on exporting crude is curbing the price of West Texas Intermediate, America’s oil benchmark. The U.S., the world’s largest oil consumer, still imported an average of 7.5 million barrels a day of crude in April, according to the Department of Energy’s statistical arm. 
U.S. oil output will surge to 13.1 million barrels a day in 2019 and plateau thereafter, according to the IEA, a Paris-based adviser to 29 nations. The country will lose its top-producer ranking at the start of the 2030s. [We will?]

Rebuttal To "Bakken Well Efficiency Has Topped Out"

[Another related link: the EIA tracks this metric also: new-well oil / gas production per rig, by region. At the time of this posting (July 6, 2014), the Bakken led all regions for oil, even beating out the Eagle Ford, although just barely (if I am not misreading the graphs).  [Again, another "thank you" to Don for finding this link; it's something I never would have thought of looking up. It appears the EIA has only been tracking this metric since October, 2013, which also speaks volumes about how things are changing in the US oil patch.]

Readers couldn't help but notice that headline yesterday, "Bakken well efficiency has topped out."

I either laughed out loud or did a double-take, as they say, when I saw that headline. I don't remember what my reaction was. Most likely, it was simply a look of disbelief. Everything I've read suggests Bakken wells are getting better. I suppose the time frame is important. Perhaps the writer who suggests that Bakken well efficiency has topped out is comparing last week's wells with wells from two weeks ago.

A huge "thank you" to a reader who caught my sarcasm when I agreed to agree that petroleum engineers and drillers, in just four or five years, had learned all the secrets to drilling out the Bakken. Coffeeguyzz provided a nice rebuttal in a comment but I brought it up here where it is easier to access and google:
As regards "well efficiency topping out" in the Bakken" ... the phrase alone should demonstrate the most profound ignorance of the writer. Along with your blog (and daily reads of Zero Hedge), I have become a keenly interested observer of the shale revolution on a world-wide, daily basis, and I can most emphatically state that the technological breakthroughs have barely begun. 
Remember that 60-stage frac that Whiting disclosed a few weeks ago? The company that makes the BHA tool - NCS Energy Services - just announced a few days back that they did a 92-stage frac in the Eagle Ford. Both their website and Baker Hughes Optiport BHA videos show clearly and concisely how revolutionary this technique/hardware may prove to be ... especially in the multiple, economical re-fracs that this process will enable operators to perform in years to come.
The precision of the latest generation RSS hardware and software is allowing 4-mile total depth wells to be drilled with one-foot deviation in both vertical and horizontal planes
The early research on EOR - particularly in regards to CO2 usage - shows potential recovery rates that are absolutely mind-blowing.
With regard to "one-foot deviation in both vertical and horizontal planes," I have seen the same thing in the geologist's reports and the driller's report: they are drilling some great wells in some very, very narrow seams, some as thin as four-feet vertically.

This is just the Bakken. My understanding is that "they" have yet to reach the same "efficiency" in such large basins as the Tuscaloosa Marine Shale. That, too, will happen. And, of course, the Permian, once thought to be on its last legs, may end up being the biggest oil producer in the country due to Bakken technology.

One of the problems with arm-chair analysis of well efficiency in the Bakken based on production is the fact that none of us outside the industry know to what extent wells are being choked back. Some wells are being choked back, I assume, due to market conditions (supply and demand), and it's possible that some wells are being choked back due to lack of adequate infrastructure.

Anyway, be that as it may, I strongly doubt that Bakken well efficiency has topped out.

By the way, Coffeeguyzz said that he, too, was watching the global shale revolution on a daily basis. I've said that before: by blogging day-in / day-out, I've gotten a feel for the Bakken. I have not kept up with the technology and I don't understand it all, but I think I have a pretty good feel for what is going on. As Coffeeguyzz has implied, checking in on the oil industry every few months just doesn't provide adequate insight to really understand the shale revolution. I watch it daily and I still can't keep up.

EIA Tracks Oil Production Per Rig, By Region

By the way, the EIA tracks this metric also: new-well oil / gas production per rig, by region. At the time of this posting (July 6, 2014), the Bakken led all regions for oil.

From St Elsewhere

Snow In Maine, July 5, 2014
2014 C.E.
22 A.G. 

For those who missed it, there is report of snow in Maine at the lower-upper elevations in the 22nd year of Algore.