Wednesday, July 16, 2014

July 16, 2014: Eleven (11) New Permits; Ten (10) Producing Wells Completed; Statoil, XTO Each With One "High IP" Well; BR With A Gusher In Corral Creek

Wells coming off the confidential list Thursday:
  • 25491, drl, QEP, Johnson 2-4-9BH, Grail, no production data,
  • 25866, conf, Hess, HA-Thompson 152-95-2017H-5, Hawkeye, no production data,
  • 26093, drl, XTO, Loomer 24X-34A, Tobacco Garden, no production data,
  • 27267, 2,525, BR, CCU Red River 34-9MBH, Corral Creek, no production data,

Active rigs:

Active Rigs192189213178132

Eleven (11) new permits --
  • Operators: Oasis (4), Zavanna (3), SM Energy (3), Petro-Hunt
  • Fields: Leaf Mountain (Burke), Missouri Ridge (Williams), East Fork (Williams), Poe (McKenzie), North Tioga (Burke)
  • Comments:
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Ten (10) producing wells completed:
  • 25087, 3,091, Statoil, Edna 11-2 6H, Camp, t6/14; cum --
  • 26456, 3,027, XTO, Broderson 31X-27H, Siverston, t6/14; cum --
  • 27180, 480, EOG, Austin 91-01H, Parshall, one section, t7/14; cum --
  • 27093, 380, EOG, Austin 78-18H, Parshall, one section, t6/14; cum --
  • 27189, 416, EOG, Austin 32-31H, Parshall, one section, t6/14; cum --
  • 27092, 608, EOG, Austin 135-18H, Parshall, one section , t6/14; cum --
  • 27179, 767, EOG, Austin 90-01H, Parshall, one section, t6/14; cum --
  • 23996, 1,356, Statoil, Margaret 5-8 5TFH, Spring Creek, t6/14; cum --
  • 26190, 788, CLR, Montpelier 4-14H, Indian Hill, t6/14; cum --
  • 26771, 1,060, CLR, Winston 7012H, Long Creek, t7/14; cum --
One (1)  recompleted well:
  • 25940, 56, Luff Exploration, State Miller M-16H, State Line, a Red River well, t11/13; cum 10K 5/14
Change of operator:
  • KOG transferred two wells to HRC, both in Williams County
For Investors Only

KMI/KMP: 24/7 Wall Street  and Wall Street Journal interpreted the results differently. 24/7 Wall Street's headline got it wrong, in my opinion; The Wall Street Journal got it right. Bottom line: great earnings report for KMI/KMP, as far as I'm concerned.

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

Trading at new highs today: Alcoa, CSX, CNI, CAT, COP, HAL, JOY, KOG, NSC, WLL.

Global Warming
A summertime version of the polar vortex will continue to set record low temperatures in the Plains and Midwest this week. Cool air will also reach into the South and Appalachians.
The air will feel refreshing to some people but downright chilly and autumnlike to others.
According to AccuWeather Meteorologist Steve Travis, "Many residents and visitors will be toting jackets and long sleeves."[This is July, isn't it?]
Rather than days of hazy sunshine and high humidity, typical of mid-July, many areas will experience a deep blue sky, at times, low humidity and a cool breeze.
Yup, more of that global warming. More cognitive dissonance for the warmists. Don't you just love it? When it's warmer, it's due to global warming; when it's colder, it's due to an anomaly called the polar vortex. And, it's not open for discussion. The subject is closed.

Coming right on cue, by the way: record cold temperatures set in Kansas City, Kansas, today and yesterday. IceAgeNow is reporting:
The thermometer dropped to 54 degrees F yesterday at Kansas City International Airport, a new low for July 15, according to the National Weather Service.
That beat the old record of 56 degrees set in 1990.
Yet another record fell this morning, when the mercury dropped to 55 degrees, breaking the previous record low for this date of 57 degrees set in 1985.
St. Joseph also tied its record low for this date (July 16) of 54 degrees, set in 1970.
It was back in 1990 or thereabouts that the earth quit "warming." I can't make this stuff up. 

A Note to Readers

I apologize for limited blogging for the past few days. Unfortunately it will continue for at least ten more days.  At a minimum the daily activity report will be summarized each day, but after that, it's hard to say. We have the two granddaughters in California for the month of July, and other family members are in and out during that time period.

My day is full. I have a couple hours free to blog between 6:30 a.m. and 8:30 a.m. PDT but after that there is no blogging until we get home, and after we have dinner, do math, do crafts, play board games, and put the granddaughters to bed about 11:00 p.m.

Of course, I am exhausted. But there is so much I want to write about but I simply am too exhausted to get started. I play my favorite music -- and I play it loudly -- hoping to get energized, but it barely helps.

I am a newsaholic. There seems to be some major "disconnects" -- the likes of which I have seldom seen before.

Here are the disconnects I see when I check the news on-line:
  • there are three fairly significant shooting "wars" going on right now: Ukraine, Iraq, Israel-Hamas -- and yet, none of these stories make for many headlines on the CNN, Fox News, WSJ, LA Times websites or the Drudge Report
  • there are three fairly significant shooting "wars" going on right now, and the US stock market keeps hitting new highs (including another new high today)
  • the Mideast seems worse than ever and yet the price of oil dropped fairly quickly from $106 to $99  (although it seems to have bottomed out and is now increasing again)
  • Afghanistan, once so important, now makes news only because SecState John Kerry is counting votes; no one seems to care any more
  • the Fed and so many other "entities" are concerned about the US economy, and yet the Dow keeps on hitting new highs (including another new high today)
  • OPEN BORDERS is a resounding success in the minds of some political leaders (notably the president, Harry Reid, and Ms Pelosi) but OPEN ARMS is causing significant consternation among communities across the United States
  • everyone has noticed the commander-in-chief is AWOL and yet the mainstream media (CNN, Fox News, WSJ, LA Times) never mentions it in a "straight" news story; only Peggy Noonan in The WSJ has mentioned it, and that was in an op-ed piece
One individual who appears to being taking advantage of these disconnects is Russia's Vladimir Putin. Following a very successful winter Olympics, he was emboldened to take the Ukraine back. When there was no push-back from the US on that invasion, he filled the void in Iraq by selling the Iraqis jets when the US would not. When there was no push-back from the US on that gambit, he visited Central America, starting with Cuba and erasing 90% of Cuba's foreign debt, and announced he would start drilling for oil 90 miles from Florida. I think I read somewhere Russia is a "third-world country with oil" and yet, Mr Putin seems not to notice.

I did not read Cheney's op-ed -- I assume it was Dick, not Lynn, who wrote it, but Drudge says "Cheney" considered Mr Obama the worse among modern presidents. That was incredibly inflammatory and regardless of what side one takes, it's hard to deny that the United States is pretty much a spectator of world events at the moment. Maybe that's not a bad thing. But it can't be denied.

This may have been the strangest headline I've seen in a long time: the US is importing coal from Russia. This was reported by Bloomberg, perhaps the most trusted name in business news, and linked on the blog earlier. This was not a puff piece by Fox News; it was reported by Bloomberg. The US is importing coal from Russia. That pretty much sums up the "disconnects" I'm seeing. These "disconnects" all have one thing in common: they defy explanation.  

Much more could be written; many more examples could be given. But if anyone can explain why the US is importing coal from Russia that would be a good start. If an explanation is attempted, please include a discussion of the sanctions that Mr Obama has imposed on Russia. If an explanation is attempted, please include a discussion why New England activists don't want new natural gas pipelines but aren't upset about Russian coal ending up in their furnaces. I find myself listening to Lana Del Rey and laughing: Mr Obama hates coal so much he has been at war with King Coal for twenty years, and here he is, imposing sanctions on Russia, but not doing anything about importing coal from Russia. Heaven forbid, however, importing oil from our friends to the north.

Yes, a lot of "disconnects."

Everyone knows.

Everyone Knows, Leonard Cohen

A Note to the Granddaughters

Another full day in southern California. Today, much of of it was spent in Surf City, USA: Huntington Beach, CA.

We went out to the pier to see about fishing from the pier. Our older granddaughter had done her homework, researching the internet, and told us that it was free to fish from the pier, and did not require a fishing license. So, we went to the pier to find out. That was accurate: fishing from the pier is free and requires no license. We had planned not to fish until next week, but the "bait shop" made it so easy, it was impossible to resist. We rented a pole and bought bait (squid) and the older granddaughter began to fish. Within minutes a fish, but it got away.

It was so much fun I went back and rented a pole for myself; the younger granddaughter wanted to play in the surf.

The city is setting up for the Vans US Open Surfing Championship, July 26 - August 3, 2014. So, while we were fishing, we could watch the men -- and yes, it was all men, I believe -- surfing on the south side of the pier, practicing for the US Open starting next weekend.

Wipeout, The Ventures

Lease Sales In Northeast North Dakota -- Towner County -- July, 2014


July 17, 2014: A reader who works in the Minot area wrote to say that workers for an oil services company (as in seismic), two years ago, working out of Minot, said they were working in the Towner County area, suggesting someone thinks the Spearfish may extend that far east.
Original Post

A reader noted this and sent me this comment:
This may become a top story or at least a time-date stamp. If you look at the state mineral leases someone is bidding on some North east North Dakota land in the county of Towner. I have not made the time to research it further yet but it is interesting because of the area.
The link is here: At the link, click on the "PDF."

The screenshot of the PDF regarding Towner County:

Bloomberg Impressed With North Dakota Production -- July 16, 2014

See Director's Cut for May, 2014, data (posted in July, 2014).

Bloomberg is reporting:
North Dakota, the second-largest oil-producing state in the U.S., expects output to surge through the summer as more benign weather gives roughnecks extra time to work in the field.
Output rose about 3.6 percent to 1.04 million barrels a day in May, the state’s Department of Mineral Resources reported yesterday. It was the largest increase since August.
The growth came even as rain and high winds kept well-completion crews out of the fields for several days during the month. Better summer weather will lead to production growth in the region of 5 to 6 percent a month in June, July and August, said Lynn Helms, director of the state’s Department of Mineral Resources.
“We still expect the big surge to come in June, July and August in terms of completions and some really rapid production increases,” Helms said on a conference call with reporters yesterday.
Much more at the linked article. A big "thank you" to Don for spotting this over at a message board.

A Note to the Granddaughters

About a month ago my wife told me the automatic door locks were not working on the 2005 Chrysler minivan. I assumed we would be taking it into the dealer to get the locks working again. Then, this morning, while having coffee, it struck me. Google it.

Google: "Chrysler minivan automatic door locks ...

and then, surprise, surprise ... Google completed the search query with "...not working" which immediately told me I was not the first to ask this question.

It turns out that this is a well-known issue. And the fix is simple. Simply remove the appropriate fuse for ten seconds and then place the same fuse back into the slot. Problem fixed.

The internet never fails to impress me.

The big question is why Chrysler doesn't simply send a form letter to all owners of 2005 Chrysler minivans to alert them to the "fix."

Random Reminder Of "Top Stories" Link

One of the most difficult tasks I am required to do by contract is update the top stories of the week, the month, and the year. I find it incredibly difficult to pick and choose the top stories. Be that as it may, it is amazing to scroll through the stop stories each month. Do you remember these stories from June, 2014?
Top Stories for June, 2014
"Top Stories" are tabbed at the top of the blog. 

July 16, 2014: Crude Oil Inventories Decreased 7.5 Million Bbls; Weekly Petroleum Report -- EIA; Gasoline Demand Continues To Increase

Just a reminder (and a placeholder for me): the EIA's weekly petroleum report is released at 10:30 a.m. EDT later this morning. Oh, I guess it's already "later" this morning on the east coast -- here's the report for the week ending July 11, 2014:
  • refinery inputs increased 374,000 bpd over previous week
  • refineries operated at almost 94% capacity (a high number)
  • gasoline production decreased last week
  • crude oil imports averaged over 7.4 million bpd, up by 142,000 bpd from previous week
  • however, the four-week average for imports shows a 5% decrease compared to last year
  • crude oil inventories decreased by 7.5 million bbls from the previous week, but inventories remain near the upper limit of the average for this time of year
Comment: unremarkable.

Gasoline demand in graphic representation can be found here. At that link, scroll to the very bottom. Gasoline demand continues to increase.

WTI crude oil seems to have hit bottom after just dipping below $100. Over the past 24 hours, WTI was trending up once again, now up about 1% from yesterday, slightly over $100. The weekly oil report did not seem to move the needle much, if any. [Update: at 11:13 a.m. EDT, WTI was up about 1.3%.]

Israel getting ready to stomp on Gaza: Israel warns 100,000 Palestinians to leave northern Gaza. The Syrian president is sworn in for another seven years. This is the guy that President Obama said "had to go" back in 2011.  So, it looks like this guy will go ... in seven years. Because the US appears no longer interested in Iraq, not much news coming out of that country (mainstream media doesn't report on it at all; CNN is focused on missing planes; FOX News is focused on politics, fair and balanced; and even The WSJ doesn't have a lot to say about Iraq). The last thing I heard on Libya was that it was about ready to implode: even the UN has pulled out. About the only news: John Kerry is counting votes in Afghanistan.

Whatever Happened To Flip?

Yahoo!Finance is reporting:
At Cisco Systems, it was the iPhone’s simple camera that cut deep. Cisco CEO John Chambers shuttered his company’s consumer-oriented Flip camera division in 2011, just two years after he bought the business for almost $600 million.
Flip was Cisco’s play to become more than just a corporate-focused company and to sell directly to consumers. “The window was open to play in the consumer as data, voice [and] video came together in the home,” Chambers explained.
But Steve Jobs was holding up a Flip camera as his prime target as he added better and smaller cameras to iPhones, iPods and the iPads. The “free” camera feature in all the Apple devices crushed Flip’s market.
Ballmer's take at the time:
Back in January 2007, when Jobs first showed the new device, he pitched it as a combination phone, music player and Internet communicator.
But competitors including Microsoft's then-CEO Steve Ballmer and Motorola's former CEO Ed Zander could barely contain their disdain. "There's no chance that the iPhone is going to get any significant market share," Ballmer said of the lineup that has since sold more than 500 million devices. 
 I came close to buying a Flip -- but it seemed difficult to use. The iPhone/iPad camera/movie app: 1. push the icon. 2. point and shoot. Insanely simple.

AAPL, by the way, is on a tear, nearing the $100 mark -- or $700/share pre-split. Pre-market trading it was up as much as $14/share (on a pre-split basis; now it's up about $8).

Wednesday, July 16, 2014; New CBR Rules Will Stifle Bakken Production -- RBN Energy; US Importing Coal From Russia (So Much For Those Ukrainian Sanctions)

The road to New England: Bloomberg is reporting --
When New Hampshire’s largest utility needed to rebuild coal supplies after the past frigid winter, it turned to Russia rather than Appalachia in the U.S. Northeast or Wyoming’s Powder River Basin.
The Doric Victory, a bulk carrier the length of two football fields, transported the fuel almost 4,000 miles (6,436 kilometers) from Riga, Latvia, last month to Public Service of New Hampshire’s Schiller power plant in Portsmouth, a 150-megawatt facility that’s produced electricity since 1952.
Utilities in the U.S. are scrambling for coal, on pace to increase imports 26 percent this year, as railroad bottlenecks slow deliveries and electricity demand climbs with an improving economy. Russia, the world’s third-largest exporter of the fuel, will boost shipments 3.9 percent to 106 million metric tons this year, IHS Energy forecasts, part of President Vladimir Putin’s plan to expand Russia’s role in the global coal market.
Active rigs in North Dakota:

Active Rigs192189213178132
If as appears likely, US regulators impose new rail tank car safety standards by the end of 2014 including the phasing out of older designs, the cost for a new car could be as much as $150,000. Retrofitting older designs to meet new standards could range between $20,000 and $60,000 per car. The resulting higher lease costs, concerns about safety and lingering logistics issues from this past winter are leading to producers looking more favorably at pipeline projects. The latest data this week from North Dakota indicates crude-by-rail traffic out of that State fell by 11.5 % from 693 Mb/d in November 2013 to 614 Mb/d in May 2014. Today we look at the impact of these changes on future crude-by-rail traffic.
Rail tank car owners should be able to comply with new regulations to replace or retrofit older tank cars within two or three years after 2015 – depending on how many new builds are required and based on the assumption that growth in the rail tank car fleet is tapering off. The costs will be passed on from lease companies to shippers – increasing the cost of shipping crude by rail. The combination of these increased costs, public safety concerns and the advent of new pipeline capacity threatens to stifle crude-by-rail traffic growth – at least in North Dakota. The best hope for continued growth is the more pipeline constrained Western Canadian market. It remains to be seen whether the rail tank car industry will return to the levels of growth witnessed between 2011 and 2013. 
The Wall Street Journal

Fed's Yellen hedges her view on rates. And this is a headline?

Israel getting ready to stomp Hamas; has ordered tens of thousands of Palestinians in northern Gaza it may be best to "clear out" by Wednesday morning. Memo to self: avoid the Beit Lahiya-to-Nuseirat commute Wednesday morning.

Front page news: "JP Morgan and Goldman Sachs posted better-than-expected quarterly results, driven by an unforeseen uptick in key trading businesses in June. Had the results not been good, pundits were ready to blame the weather.

Hold off on the Algore lockbox: Medicare is expected to remain financially solvent through 2030, five years longer than previously expected. That takes me to age ... 63 + 16 = 79. Okay. Whew.

President Obama urges immediate action on "inversions." Why doesn't he just unilaterally
ban "inversions" through an executive order. What's the House gonna do? Impeach him? LOL.

Walgreen weighs riding "inversion" wave. Walgreen may relocated to Switzerland if it ends up buying the remainder of Swiss-based peer Alliance Boots, a move that would help the retailer lower its US tax bill. I say, "go for it."

The Pentagon scuttled the highly anticipated international debut of its advanced F-35 fighter jet, citing safety concerns arising from a recent fire in its Pratt & Whitney engine. Now that's a chariot on fire!


Huge story:
Carbon dioxide isn't just a greenhouse gas that federal officials want to curb: It is also highly prized by the energy industry, which injects it into aging oil fields to increase their output.
Coal-fired power plants vent carbon dioxide to the atmosphere, while oil drillers generally have gotten their CO2 from underground caverns or industrial plants. But electricity producer NRG Energy Inc. is trying to change that.
With a new Japanese partner it disclosed Tuesday, NRG is planning to capture some of the carbon dioxide produced by one of its coal-burning power plants outside Houston and then pipe the gas to an oil field about 80 miles away. In return, NRG and partner JX Nippon Oil & Gas Exploration Corp. will get a share of the extra oil that the carbon dioxide helps produce.
 For activist environmentalists, this must be the acme of cognitive dissonance. Reminds me of the "buttered cat paradox."

The Los Angeles Times

Job losses surge in California; productivity up 73% in last 15 years.
The output of state factories has surged 73% during the last 15 years — twice as fast as the rest of the nation — even as the sector bleeds jobs, according to a new report from the Los Angeles County Economic Development Corp. Employment declined nearly 34% during the same period.
The surge in production owes itself to innovations in machinery and materials, digitization and computing power, along with a strong network of industry clusters.
Under pressure from automation, offshoring and aggressive cost-cutting, the state's manufacturing workforce shriveled to 1.2 million in 2012 from 2.1 million jobs in 1990 — a faster rate of decline than the nation as a whole.
The difference exceeds the total number of current manufacturing positions in all of Southern California.
Hmmmm...... one sometimes wonder if overt/covert "job actions" actually hurt productivity?

Million Dollar Man, Lana Del Rey