Early News For Tuesday, July 29, 2014; Early Morning Trading -- AAPL Could Hit $100 Today; ATT Spikes

For Investors Only
Early Morning Trading

It looks like this is the day AAPL could hit $100 ($700 - pre-split). But the big news is the 6% spike in ATT. And just yesterday Wall Street Cheat Sheet wrote: 

Here's why no one is buying ATT's sponsored data plan. The companies AT&T was hoping to entice into signing up have yet to do so. In fact, the program has failed to attract any of the big-name companies the telecom giant had hoped. There have been a handful of smaller companies that have hopped on board, but the public at large remains unconvinced that the idea has much merit.

It turns out ATT is up because Windstream got a favorable IRS ruling allowing to spin off some of its assets as a REIT. ATT is likely to follow. I used to own a lot of WIN. I don't know if I still have it or not.

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.

Another Essay On Price Of Oil Going Forward

Rigzone has a nice essay on the downward pressure the shale revolution is having on the price of oil. Two words are missing from the essay: Saudi Arabia. One data point is missing: China's growing affluent population.  Rigzone takes issue with:

"The world of energy may have changed forever," according to Professor James Hamilton of the University of California.

"Hundred dollar oil is here to stay." Hamilton, who is one of the most respected economists writing about oil, made his bold prediction in a paper on "The Changing Face of World Oil Markets", published on July 20.

John Kemp, a columnist for Rigzone, argues that the price of oil could fall significantly due to the "glut" caused by the shale revolution.

So, pay your money, take your chances: everyone is in agreement. The price of oil might go up; it might go down.  

The Wall Street Journal

News and Comment (Mostly Comment)

Ukraine setbacks afflict Putin.

Electricity sales look anemic for the seventh year in a row, despite Americans' love of gadgets and an improving unemployment rate. Americans do love gadgets; that is true. I'm not so sure how "true" the reports are that the unemployment rate is improving all that much.

Medicare's trust fund has rebounded strongly; Social Security's disability fund is on the brink of exhaustion. This will be interesting to see how this plays out.

Washington Bureau Chief looks at increasingly fraught US-Israel relations and finds mutual distrust stemming from a broken peace process and ongoing talks over the fate of Iran's nuclear program.

Taxpayers will share $17 billion of their income to fix the VA. Most of that will probably go for a federal website for veterans to book their own appointments.

Israel is escalating its Gaza campaign, telling its citizens to prepare for a prolonged operation, defying international demands for an immediate cease-fire. Did Hamas miscalculate this time when they started this round of fighting? Hamas overlooked the fact that the US president and his SecState have lost all credibility and the world is pre-occupied with at least two, maybe three, other shooting wars, and the shoot-down of a commercial airliner. Another week of Gaza operations and the mainstream media will have grown tired of this and moved on to the next crisis.

Wow, Darden Restaurants chief to depart in shake-up. Clarence Otis will depart, no doubt to spend more time with his family.

The Los Angeles Times

So sue me!

When President Obama signed the Affordable Care Act, its requirement that large employers provide health coverage or pay a penalty seemed to many supporters a key pillar of the effort to guarantee health coverage to Americans.

Four years later and after repeated delays, the so-called employer mandate has become something of an orphan, reviled by the law's opponents and increasingly seen as unnecessary by many of its backers.

Twice in the last two years, the Obama administration has put off the penalties, citing difficulties enforcing the mandate.

House Republicans plan to sue the president, largely over his suspension of the mandate, saying he has broken the law by failing to enforce a requirement that they bitterly oppose.

What a mess. In the big scheme of things, ObamaCare pretty much ended up doing two things: a) taxing medical devices (I guess; I'm not even sure about that anymore); and, b) teaching engineers how to write software code for websites. Websites that didn't work. The GOP is wrong on this one; this will simply hurt union workers and they will blame the GOP. Leave it alone. Move on. We have ObamaCareLite and it seems to be working just fine -- hung up in court.

Okay, Drop Whatever You're Doing -- Top Story Of The Summer; Also, Watford City To Alexander Four-Lane To Be Completed This Summer -- Posted July 28, 2014

Take me out to the ball game ..


Don sent me this link. KXNET is reporting:

A North Dakota-based snack food company has inked a deal with a third Major League Baseball team.

Giants Snacks Inc. is now the official provider of sunflower seeds to the Texas Rangers. The Wahpeton company partnered with the Minnesota Twins in 2004 and with the Colorado Rockies in 2007.

Giants Snacks is eyeing California as a possible next target.

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Speaking Of Top Stories

Another top story this summer will be the completion of the four-lane highway from Watford City to Alexander. The other half, from Alexander to Williston will be completed next year. McKenzie County Farmer is reporting:

North Dakota is currently undergoing a record amount of road construction across the state. The North Dakota Department of Transportation (NDDOT) will have performed nearly $800 million in road construction by the end of 2014. 

“The NDDOT is undertaking these projects to address the transportation needs of a growing population and traffic increase,” Pizza said. “We will be constructing one of our largest programs in state history with over $500 million being bid out this year in western North Dakota alone.”

Phase One of the four-lane Highway 85 project, from Watford City to County Road 16, is projected to be complete by fall 2014. 

Phase Two of this project, from County Road 16 to Williston - including the Lewis & Clark Bridge, was put out for bid on July 15. The highway portion of Phase Two is scheduled for completion in 2015.

But the Lewis & Clark Bridge isn’t slated for completion until 2016.

As of last week, the apparent low bid for the Lewis & Clark Bridge was $66.3 million, submitted by the Texas Johnson Brothers Corp. And the apparent high bid was $79 million submitted by the Wisconsin-based Lunda Construction Co.

For the remainder of the Highway 85 project, Phase Two, Minnesota’s Central Specialties’ apparent low bid was $36 million, and Northern Improvement Co. of Fargo’s apparent high bid was $43 million.

Overall, the four-lane Highway 85 project is estimated at $300 million.

OXY USA Will Report A Nice Well Tuesday -- July 28, 2014

Wells coming off the confidential list Tuesday:

• 23056, 354, OXY USA, Federal Bud 2-32-29H-143-96, Fayette, t1/14; cum 41K 5/14;
• 27212, 100, Legacy, Legacy Et Al Bernstein Barbot 13-8 2H, Red Rock, a Spearfish well, t2/14; cum 12K 5/14;
• 27315, drl, Hess, EN-Joyce-2560-156-94-1720-1621H-2, Manitou, no production data,
• 27461, drl, Hess, LK-bice-147-97-1201H-7, Big Gulch, no production data, (ex-Mayor Bloomberg wanted to ban the "Big Gulp," not the "Big Gulch")

Active rigs:

	7/28/2014	07/28/2012	07/28/2011	07/28/2010	07/28/2009
Active Rigs	195	207	181	139	40

Ten (10) new permits --

• Operators: WPX (4), CLR (3), Slawson (2), North Plains
• Fields: Spotted Horn (Dunn), Brooklyn (Williams), Stockyard Creek (Williams), Bell (Stark) Alexandria (Divide)
• Comments: wow, how many more wells can they squeeze into Stockyard Creek? (The newest Stockyard Creek permits were issued to Slawson.) CLR continues to drill out the Brooklyn.

Wells coming off the confidential list over the weekend, Monday were posted earlier; see sidebar at the right.

Seven (7) permits were cancelled. The most interesting:

• 26059, PNC, Whiting, Nielsen Federal 24-28, Golden Valley County

Four (4) producing wells completed:

• 27441, 446, EOG, Parshall 65-14H, Parshall, short lateral, t7/14; no production data; no frack data;
• 27442, 394, EOG, Parshall 66-14H, Parshall, short lateral, t7/14; no production data, no frack data;
• 27888, 75, OXY USA, Maurice Hecker 2-19-18H-142-97, Willmen, t6/14; no production data,
• 28037, 132, OXY USA, Martin 6-31-30H-144-96, Cabernet, t6/14;  no production data,

XOM Flirts With New High Despite Sanctions On Russia; AAPL Comes Close To Hitting The Century Mark (Again); War On Coal Claims Another Victim, "Update" On the "Sleeping Giant" -- July 28, 2014

For Geo-Political Wonks And Investors Only

With regard to the market today, I think the most interesting story today was XOM up over a percent/over a dollar; almost hit a new high.

The other majors were down and price of crude oil was flat to down.

XOM has the most to lose with Russian sanctions, as far as I know, based on close relationship between XOM and Russian operators (in Russia). XOM has said it won't back away from its contracts/commitments to Russia (at least to the best of my knowledge).

So, XOM's price action becomes a big story on at least three levels:

•  XOM says "no" to Obama; "yes" to Putin (not directly, of course) 
• or XOM says "no" to Obama; "yes to its investors
• investors think XOM is making the right financial decision; this tells us what investors think about the sanctions 

By the way, that second bullet is not trivial: XOM is an international company that just happens to have its roots and headquarters in the US. As a publicly traded company it has a fiduciary responsibility to its owners, the shareholders.

The question is this: what is this telling us that XOM says it won't back away from its commitments, and investors think XOM is doing the right thing?

[Obviously, there may be "real" / actionable reasons for XOM to have risen today, completely unrelated to geopolitical events, which is very likely, but for discussion's sake, let's assume there was no other news to explain the 1.15% jump.]

I think this tells us that:

• investors know that sanctions may be very, very, very painful, but at the end of the day, the "only" energy in Eurasia is Russian (Libya, by the way, supplying much oil to Italy, France continues to implode) 
• (OPEC services the world, and my hunch is that Russia plays a more dominant energy role in Europe than OPEC) 
•  if sanctions are really, really tough on Russia, Putin holds the trump card: energy -- let Europe go three days without natural gas this winter and the point will be made 
• Russia probably needs to pump more oil/natural gas to make up for loss revenue elsewhere, 
• Russia needs US expertise (XOM) to pump more oil/natural gas

And then this, the real reason investors bid XOM up today:

• they know Russia will be around for another 100 years
• they know Putin will be around for another dozen years, plus/minus a few
• they know President Obama has ... drum roll ... 906 days left in office, most of which will be spent golfing, or on vacation, or defending himself in court

For Investors Only

Wow, AAPL was less than 80 cents from $100/share today. 

The market managed to eke out a winning day.

Some of the Bakken operators are getting "cheap" enough:

• for small mom-and-pop investors to start accumulating again,
• or large hedge funds or Warren-Buffett-like investors to start buying en bloc

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

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Navajo Nation Loses Another War To The White Man

Updates

November 4, 2019: This (the original post) was a pretty good post, back in July, 2014 -- background on the Navajo coal plant in Arizona.

This is nothing new, this story by the AP, November 2, 2014. It appears there are two arguments with regard to this issue:

• global warming
• water

Closing this plant will have no effect whatsoever on global warming. Period. Dot. But that's what sold the decision some years ago.

Water. Not mentioned in the article except as part of history and hydroelectricity. My hunch: water was the bigger story, but closing the coal plant was sold on global warming.

Only one national political figure was mentioned in this article, President Trump, and he had nothing to do with this story, except that he is on record as supporting the coal industry.

March 24, 2016: for some reason we are starting to see a lot of stories on the Navajo power plants due to be closed by the EPA. Here is the latest, from Forbes:

Unlike prior regulatory efforts to improve air quality by reducing toxic emissions, the EPA’s Clean Power Plan (CPP) aims to cut non-toxic carbon dioxide emissions by about a third. The stated reason is to slow the increase of the Earth’s temperature by 0.018 degrees Celsius by 2100.

One place where the EPA’s 1,500-page regulatory diktat will hit particularly hard is the Navajo Nation, at 27,000 square miles, an area larger than West Virginia in northeast Arizona and adjoining slices of Utah and New Mexico. Home to 174,000 people, many of them without electricity, running water or steady work, the Navajo Nation is also host to two large coal-fired power plants and the two coal mines that feed them. These energy sector activities provide well-paying jobs as well as more than half of the Navajo Nation’s governmental income.

Even before the threat from the Clean Power Plan, the Navajo power plants have been under sustained environmental pressure. The larger of the two, the Navajo Generating Station, installed more than $700 million of air quality equipment in the past 20 years to improve winter visibility over the Grand Canyon to levels not seen since the onset of mankind’s influence over the environment, as if we actually know what visibility was over the Grand Canyon 300 years ago.

Regulators want another $1.1 billion in additional air quality upgrades with very tenuous cost-benefit ratios at best. The other power plant was recently forced to prematurely shut down 3 of 5 boilers, making the nearby coal mine operations less profitable and forcing the Navajo Nation to buy out the mine from BHP Billiton to keep the mine—and the power plant—open and preserve the jobs.

The bigger issue environmentalists have with the Navajo Generation Station is that it is responsible for pumping Colorado River water uphill from Arizona’s border with California—water that sustains 5 million people and lucrative farms in the desert. For primeval idealists, this is a mortal sin against the gods of sustainability made worse by the fact that affordable and reliable coal energy makes it all possible.

Should the EPA and environmentalists get their way and power output from the Navajo Generation Station is cut back, they propose replacing the lost power with wind. This challenge is two-fold: one, the best spot for wind turbines on the Navajo Nation overlaps an important eagle migratory path; and two, wind is notoriously erratic, making wind power uniquely unsuited to power the Central Arizona Project’s massive water works.

Four words: the eagles will lose. They don't vote.

Original Post

Ah, yes, the war on coal claims another victim -- this time the Navajo Nation. The AP is reporting:

The largest coal-fired power plant in the West will produce one-third less energy by 2020 and is on track to cease operations in 2044 under a proposal that the federal government adopted to cut haze-causing emissions of nitrogen oxide at places like the Grand Canyon.

The U.S. Environmental Protection Agency announced Monday that the owners of the Navajo Generating Station could either shut down one of the plant's 750-megawatt units or reduce power generation by an equal amount by 2020.

The owners would have until 2030 to install pollution controls that would cut nitrogen-oxide emissions by 80 percent.

EPA regional administrator Jared Blumenfeld in San Francisco said a final decision didn't come easily and required flexibility. Along with meeting energy demands in the West, the 2,250-megawatt plant powers a series of canals that deliver water to Phoenix and Tucson, fuels the economies of the Navajo and Hopi Tribes, and helps fulfill American Indian water-rights settlements with the federal government.

"This" decisions sounds wrong on so many levels, but it is what it is. 

Reducing power generation by one-third should come easily because the Los Angeles Department of Water and Power and NV Energy have announced their intention to cut ties with the coal plant by 2019. Together, they own almost one-third of the plant near Page, run by the Salt River Project, one of Arizona's largest utility companies. None of the other owners would lose any power generation as a result.

The final rule means the Navajo Nation ultimately will see less revenue from coal that feeds the power plant. But the executive director of the tribe's Environmental Protection Agency, Stephen Etsitty, said it provides a better chance of the power plant continuing operations.

Well, there's always more casino operations, and a light rail operation to the bottom of the Grand Canyon to generate income for the Navajo Nation.

My hunch is that by 2044, California will either be going back to nuclear energy (much, much more expensive to start from scratch) or will return to coal. Regardless, by 2044, I probably won't be much more than a spectator.

Meanwhile, Tucson and Phoenix better start planning for much more expensive water AND electricity.

This is a bit of background with regard to Los Angeles severing ties with coal. Unfortunately, it does not say what will replace coal (note: nuclear plants are also closing). Wind and solar are vastly inadequate (and for every 1 mW of "new" wind/solar in place, it requires another 0.5 mW of fossil fuel (or nuclear fuel) as back up. Obviously nuclear fuel is not in the cards as things stand now, so that means only one thing: natural gas. Unless California plans on burning the sequoia trees for energy. So, -- disclaimer -- this is not an investment site -- don't make any investment decisions based on what you read here or what you think you may have read here -- but it seems investors might want to follow the natural gas industry just a bit more closely with this news. 

According to wiki:

Navajo Generating Station is a 2250-megawatt-coal-fired powerplant located on the Navajo Indian Reservation, near Page, Arizona, United States. This plant provides electrical power to customers in Arizona, Nevada, and California. It also provides the power for pumping Colorado River water for the Central Arizona Project, supplying about 1.5 million acre feet (1.85 km3) of water annually to central and southern Arizona. As of 2013 permission to operate as a conventional coal-fired plant is anticipated until December 22, 2044.

My hunch is that water and energy will be the big, big stories in the latter half of the 21st century. 

If you have time, look at the list of the coal-fired power plants in the world, over at wiki. It is interactive, and you can re-sort the list to place the plants in order of decreasing size. Unless I counted wrong (which is possible), there are 197 coal plants worldwide listed. 197.

115 of them (again, I may have miscounted by one or two) are in China (not counting Taiwan).

115 in China. Of the 197 worldwide.

The US has 17.

One has to scroll through 51 coal-fired power plants before one finally gets to a coal-fired plant in the US, based on size: Plant Bowen in Georgia.

China continues to build coal-powered power plants faster than I can count, so closing the Navajo Generating Station will do nothing for CO2 emissions worldwide, assuming CO2 can freely cross international borders, but it will make some folks feel better. But, again, the plant will be closed due to the haze it causes near the Grand Canyon, not to lower global CO2 emissions.

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Seriously: once one gets past all the politics, and deals with the realities, cities like Tucson and Phoenix, need to start thinking about how their water needs and energy needs as resources become tighter and tighter. Trying to replace coal with solar/wind does not add up, and nuclear being out of favor, only one thing is left: natural gas.

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Speaking of natural gas, Strata-X has discovered natural gas in southeastern North Dakota, outside the "limits of the Bakken." This has previously been reported; it is not particularly new news, and much more needs to be done to determine if the source is economical. I would not have posted this because it's been posted before, from a different source, but if I don't post it, I will receive a gazillion comments and e-mails linking me to this site. Regardless, it has a nice map/graphic.

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By the way, back to the Navajo Generation Station. Presidents come and go. Energy is going to get tighter and tighter. My hunch is that the next EPA administrator -- or the next one after her -- or the next one -- will end up granting a waiver to extend the deadline.  Although it's very possible, the Navajo Nation will look at converting part of that plant to burn natural gas.

Reader With Question About EOG Seismograph Work Southwest Of Kenmare, North Dakota (East Of The Bakken Sweet Spots), July 28, 2014.

Because not everyone remembers to check the "discussion group," I will bring this question over to the blog: has anyone heard anything about EOG having done some seismographing west and south of Kenmare?

For newbies, Kenmare is about 45 miles northwest of Minot, and pretty far east of the sweet spots in the Bakken. However, having said that this is quite interesting: there is a designated oil field southwest of Kenmare, Spencer oil field with one well on that 2-section field:

• 17342, 84, Hess, IM-Grubb-159-89-0805H-1, Spencer, open hole frack with about 1.1 million lbs sand and proppant, t9/08; cum 88K; it's on a pump and still producing about 1,000 bbls/month

The Spencer oil field is about 7 miles southwest of Kenmare. Slightly farther southwest is the well-known Clear Water-Bakken field. The Clear Water is pretty much "owned" by EOG; it appears that almost every drilling unit in Clear Water has a producing horizontal well, about half of which are long laterals and half of which are short laterals.

Much of the area is "devoid" of any designated oil field, so the other question is whether EOG did the seismographic work inside a designated oil field or outside?

A reader pointed out that one can find out the status of these seismography studies at the NDIC site: https://www.dmr.nd.gov/oilgas/seismic/seismicstats.asp.

Update On The Proposed $65-Million Development Project For Main Street, Watford City, North Dakota, July 28, 2014

I think this came to me from "anonymous" as a comment, but now I can't find the original e-mail. Fortunately, I posted the link and saved the link. McKenzie County Farmer is reporting:

Three New York developers are planning to make a $65 million investment on Watford City’s Main Street that will consist of seven apartment buildings, as well as two, three to six-story office/retail buildings that will meet this growing community’s needs for housing and commercial space.

According to Israel Weinberger, who is partners with his brother, Johnathan, and Steven Neuman of Coltown Properties, the New York-based development company has already begun construction on Madison Heights Apartments, which is located north of the Watford Veterinary Clinic.

“Madison Heights, which will cost $45 million, will ultimately consist of seven, three to four-story apartment buildings with a total of 325 apartments,” states Weinberger. “Three of the apartment buildings are currently under construction, with the first building to be open in September, while the second phase of the project is expected to begin this fall.”

But it is Coltown Properties’ intention to construct two, three to six-story office/retail buildings on Watford City’s Main Street, that has Curt Moen, city planner, excited.

“We (the city) want to keep Watford City’s downtown as a destination,” states Moen.

“While we are going to see retail expand into other areas of the city, we want to see the professional businesses, dining and boutique shops located downtown, which is what you see in other larger communities.”

According to Weinberger, Coltown Properties has purchased both sides of Main Street from Park Avenue south to the Children’s Playground on the east side of Main Street, and to the Long X Visitor Center on the west side.

“The first phase of the Main Street project will be on the east side of Main Street,” states Weinberger. “We expect to break ground on that phase  in 2014, with development of the east side of Main Street to follow.”

Go to the link for the rest of the story. Frequently these stories in regional and local newspapers are archived and difficult to access in the future.

Someone mentioned to me about three years ago that once "Wall Street" and New York investors discover the Bakken, we're going to see some "serious" money flow into housing and urban development. It looks like "Wall Street" and New York investors have discovered the Bakken.

Completed Well Data For 1Q14 Updated

IPs for 1Q14 have been updated.

A few things jump out:

• increased activity and better IPs in Blue Buttes oil field
• incredible Sanish wells being drilled by Halcon
• a disproportionate number of Zavanna wells remain on DRL status
• WPX completed only 12 wells in 1Q14; WPX owns 7% of the reservation

An example of a Halcon Sanish well in Antelope oil field:

• 25524, 2,584, HRC, Fort Berthold 152-94-11B-14-5H, Antelope field, a Sanish formation well, t3/14; cum 156K 6/14;

The scout ticket:

NDIC File No: 25524    
Well Type: OG     Well Status: A     Status Date: 3/6/2014     Wellbore type: Horizontal
Location: SESW 2-152-94    
Current Operator: HRC OPERATING, LLC
Current Well Name: FORT BERTHOLD 152-94-11B-14-5H
Total Depth: 21295     Field: ANTELOPE
Spud Date(s):  9/1/2013
Completion Data
   Pool: SANISH     Comp: 3/6/2014     Status: F     Date: 3/6/2014     Spacing: 2SEC
Cumulative Production Data
   Pool: SANISH     Cum Oil: 156487     Cum MCF Gas: 170069     Cum Water: 68195
Production Test Data
   IP Test Date: 3/6/2014     Pool: SANISH     IP Oil: 2584     IP MCF: 3935     IP Water: 2405

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	6-2014	30	27257	27293	9013	29733	13302	16222
SANISH	5-2014	31	37328	37437	11174	35773	30183	5373
SANISH	4-2014	29	47155	46760	16104	46972	0	46769
SANISH	3-2014	29	44747	43905	31904	57591	6466	50922

July 28, 2014 -- A Very, Very Quiet Monday Morning -- Except For Those Holding Family Dollar (Being Bought By Dollar Tree); Buffett Buys Canadian Utility (AltaLink); Pending Home Sales Post First Drop In Four Months

Active rigs:

	7/28/2014	07/28/2012	07/28/2011	07/28/2010	07/28/2009
Active Rigs	193	207	181	139	40

RBN Energy:

In 2013, refineries in Eastern Canada imported 642 Mb/d of light crude. Today there are no pipelines connecting western Canadian crude supplies to the East Coast. By the end of 2014 the Enbridge Line 9 pipeline will link Canadian supplies from Alberta and Bakken supplies from North Dakota to refineries in Montreal. By 2018 the Energy East pipeline could be flowing 1.1 MMb/d to Canada’s Atlantic Coast and beyond.

Today we begin a new series on eastern Canadian transport options by reviewing existing crude supply.

There are 9 refineries in Eastern Canada with combined capacity of about 1.3 MMb/d.

Although Canada produces far more crude than it consumes, much of this output is heavy crude from Western Canada.  

Eastern refineries are not configured to process this type of crude but instead mostly consume light crude supplied from a mixture of offshore Atlantic seaboard production, imports from international suppliers and increasingly – imports of light crude from the US. Offshore eastern Canadian production averaged 240 Mb/d in 2013 and East Coast refiners processed about 47 percent of that - mostly light sweet crude. Eastern refiners have also traditionally processed imports from the Atlantic basin – particularly light crudes from West Africa.  

But imports of US crude into Canada – primarily used to supply Eastern Canadian refineries reached a record 268 Mb/d in April 2014, double the level a year earlier, according to the Energy Information Administration (EIA). As we described last December, eastern Canadian refiners have been importing US crude even as exports of local offshore production have increased.

The blog discusses the Canadian refineries (three "buckets") and what the Enbridge 9A reversal means.

The Wall Street Journal

US push for Gaza truce yields little. Hamas starting firing rockets as soon as the truce ended.

The Los Angeles Times

How much water do golf courses use? This is an interesting bit of trivia.

Then there is San Juan Capistrano, which the state said had a 37% increase in water use. City officials, however, note that May was an outlier. A new golf course opened in the city, and there was an unusual amount of construction.

Los Angeles Metro (subway; light rail) uses "honor system" for riders; wondering why they are losing money. Last year: 115 million riders; 70 million paid.

Reducing fare jumping as much as possible has become increasingly important to Metro, which is under pressure to boost ticket revenue as its rail network rapidly expands.

Income from fares covers just 26% of Metro’s bus and rail system operating expenses, one of the lowest rates of any major world city. That ratio must increase in the next few years or the agency risks losing crucial federal funding needed to continue building and operating the train network.

“This isn’t Chicago or New York, where you can’t get through unless you pay,” Fields said.

I can't make this stuff up.

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Non-Bakken Stuff; For Investors Only

AAPL flirting with $100 ($700 pre-split). 

WTI crude oil at $101 -- trending toward $100. Again.

Pending home sales: first decline in four (4) months. Analysts had expected an increase:

The pending home sales index slipped 1.1% from an index reading of 103.8 in May to the June reading of 102.7. That is 7.3% lower than in June 2013, when the index reading was 110.8. The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

About 30 companies -- much longer list than usual -- announce increased dividends.

Warren buys Alberta (Canada) utility:

The federal government [Candad] has signed off on the controversial $3.2-billion sale of Alberta’s largest electricity transmission provider to a company owned by U.S. billionaire Warren Buffett.

The approval, however, comes with a long list of conditions, including the guarantee that buyer Berkshire Hathaway Energy must reinvest every penny it earns from AltaLink in the company, the province or Canada, if it is allowed to complete the purchase from Quebec-based SNC Lavalin.

AltaLink president Scott Thon said the approval should reassure Albertans who fear the image of a big American company milking the province’s infrastructure for its enrichment.

Samson Oil & Gas provides Q2 update: Co files its Q2 quarterly report.

• 72% increase in oil production in the June 2014 quarter over the March 2014 quarter
• 75% increase in estimated oil revenue in the June 2014 quarter over the March 2014 quarter.

Investors dumped this stock (data from Yahoo!Finance which might lag a quarter)

• market cap: $148 billion
• enterprise value: $145 billion
• annual revenue: $82 billion
• total cash: $8 billion
• total debt: $3 billion
• operating cash flow: $5 billion
• forward P/E: 149; trailing P/E: 500

Darling of Wall Street (data from Yahoo!Finance which might lag a quarter)

• market cap: $4.2 billion
• enterprise value: $6.5 billion
• annual revenue: $1 billion
• total cash: $15 million
• total debt: $2.3 billion (almost as much as the company above with a market cap of $148 billion)
• operating cash flow: $600 million
• forward P/E: 15; trailing P/E: 28

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The 20:15 Train Wreck

The AP is reporting, two data points from this article on ObamaCare:

• Automatic enrollment for ObamaCare enrollees for 2015I could be a new twist on an old public relations headache for the White House: You keep the health plan you like but get billed way more.
• Even with such generous subsidies [see below -- monthly premiums as low as $82 are too onerous for many], about 4 in 10 who bought a health law plan say they have trouble paying their premiums, according to a poll by the nonpartisan Kaiser Family Foundation.

But much more serious:

In the 36 states served by the federal insurance exchange, the tax credits average $264 a month, reducing the average monthly premium of $346 to just $82.

The most recent court ruling says that subsidies paid by the "federal insurance exchange" (in 36 states, by the way), is unlawful. [Update: A three-judge panel for the U.S. Court of Appeals in Washington ruled Tuesday that subsidies may not be offered in the federal health exchange. That was the ruling I was referring to. It turns out that "hours later the Fourth Circuit Court of Appeals offered its own decision, which upholds the Obama administration's arguments that subsidies can be applied in the federal exchange." I assume this will head to the Supreme Court; regardless, it puts the few million that are actually enrolled into more turmoil. A huge "thank you" to a reader for alerting me to the "most recent" ruling. That explains the "split ruling" that hit the news about the same time. For now, the subsidies remain in effect.]

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Ignorance Is Bliss

Easy Come, Easy Go

Almost Half Of ObamaCare Enrollees Receiving Subsidies Don't Even Know They Are Receiving Subsidies -- Think How Much They Would Like The President If They Only Knew

I make so few errors when blogging that when I do make an error it bothers me for days. I will be upset for a month on how I wrote the ObamaCare update above before a reader caught an error. But I'm in very good company it seems. I can't make this up.

I just now received this next link from another reader. CNBC is reporting:

Nearly 40 percent of Obamacare enrollees who receive federal financial assistance to help pay for insurance sold through HealthCare.gov don't even know they're getting any such aid, a survey stunningly found. [Really, stunningly?] (UC-Irvine -- really?]

That finding means that about 2.1 million people—at the very least—are unaware that they stand to lose thousands of dollars worth of aid that makes their health insurance affordable if the Supreme Court upholds a new court decision that said such subsidies are illegal under the Affordable Care Act. [I think that's almost exactly what I wrote. Memo to self: send a note to CNBC: hey, look at the Fourth Circuit Court of Appeals ruling.]

Ignorance is bliss.

Easy come, easy go, if the subsidies are lost.

I can't make this stuff up.

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A Note for the Granddaughters

Virginia Woolf remains my favorite author, or perhaps better said, the author that is most important for me.

I have transcribed -- completely, word for word -- two of her novels: Mrs Dalloway and The Waves. In transcribing Mrs Dalloway I discovered on my own that it was a "prose poem," something I did not know existed until then, and then discovered I had "re-invented the wheel," as they say. Having said that, it was one of the best "literature" things I have ever done, transcribing Mrs Dalloway in free verse.

I transcribed The Waves for a number of reasons. It is perhaps the most difficult to follow, and yet it is considered by many to be her best novel. In addition, closer to home, a close family friend, Ellen, considers it her favorite novel.

Mostly because I could not understand it, I transcribed The Waves.

Today I added the following to that transcription:

Perhaps somewhere else I tried to correlate the Greek party-goers and the characters in The Waves with Virginia Woolf’s circle, but if I did not, a couple of thoughts:

Jinny: serial lover of men, can only be Nessa, (Vanessa, Virginia’s sister; who had at least three lovers)

Percival: can only be Thoby; a he-man who died falling off a horse; Virginia worshipped her brother Thoby

Neville: homosexual; could only be Clive Bell, Nessa’s husband

Susan: possibly Virginia – Jinny’s life partner through extension of Greek counterparts

Socrates: could Virginia’s husband Leonard Woolf be Socrates?

Bernard is the storyteller in The Waves which is most likely Lytton Strachey. From wiki: he is best known for establishing a new form of biography in which psychological insight and sympathy are combined with irreverence and wit. His biography Queen Victoria (1921) was awarded the James Tait Black Memorial Prize. He was perhaps best known for his Eminent Victorians.

Rhoda is the youngest; I can’t think of a third woman in Virginia Woolf's circle; it was just Virginia and Vanessa, and many men: Leslie, Thoby, Adrian, Clive, Duncan Grant, Lytton Strachey. Roger Fry was also one of Vanessa’s lovers – she had at least three lovers: Clive, whom she married; Duncan Grant, whom she probably loved most, if I remember correctly; and, Roger Fry. There were several women in the group, but less well-known: Dora Carrington, Angelica Garnett, Julia Strachey, Molly (Mary) MacCarthy, Lydia Lopokova. Based on the linked essay below, Mary MacCarthy. 

A superb essay, by the way on The Waves and the Bloomsbury Group: Utopian Wholes: Virginia Woolf's The Waves and the Bloomsbury Group.