OKE Earnings Are Better Than Okay -- February 23, 2015; 4/4 Wells Go To DRL Status

OKE earnings, forecase 36 cents: fourth-quarter 2014 net income attributable to ONEOK of $94.5 million, or 45 cents per diluted share, which includes income from discontinued operations of $0.8 million.

Fourth-quarter 2013 net income attributable to ONEOK was $90.7 million, or 43 cents per diluted share, which includes income from discontinued operations of $17.1 million, or 8 cents per diluted share.

Income from continuing operations attributable to ONEOK was $93.7 million in the fourth quarter 2014, compared with $73.7 million in the fourth quarter 2013.

Active rigs:

	2/23/2015	02/23/2014	02/23/2013	02/23/2012	02/23/2011
Active Rigs	126	187	181	204	168

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

Wells coming off the confidential list Tuesday:

• 28016, drl, Petro-Hunt, USA 153-95-22D-15-5H, Charlson, no production data,
• 28412, drl, Hess, SC-JCB-154-98-1720H-2, Truax, no production data,
• 28777, drl, Slawson, Holst 2-33MLH, Big Bend, no production data,
• 29151, drl, Slawson, Rainmaker Federal 10-36-25TF2H, Big Bend, no production data,

Nine (9) new permits --

• Operators: BR (4), Whiting (3), EOG (2)
• Fields: Corral Creek (Dunn), Twin Valley (McKenzie), Parshall (Mountrail)
• Comments:

Oasis canceled six (6) permits:

• 27643 - 27645: Banks permits in Mountrail County
• 24971: Celia Horob in Williams County
• 24907: Jenny Vaughn in WIlliams County
• 26451: Ranger in McKenzie

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Water Project To Go Forward

Bakken.com is reporting:

An expected reduction in state oil tax revenues due to a global drop in oil prices could mean less money for the Northwest Area Water Supply project.

Gov. Jack Dalrymple’s budget included $18 million for NAWS, but the Legislature is considering $10 million. However, there still should be enough money to go ahead with a proposed $20 million expansion of the city’s water treatment plant.

The $14 million remaining from the current two-year budget and $10 million in new funding would bring the total to $24 million, more than enough to pay for design and construction at the water plant.

The NAWS project is to bring Missouri River water to northwestern North Dakota. Officials in Missouri and Canada have held up the project in the courts for years over environmental concerns, but a federal judge is allowing some construction work to proceed because the upgrades are needed in the area that’s on the edge of the oil patch.

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RBN Energy, Part 2, Refiners
Link here

While producers are licking their wounds after a more than 50% oil price crash, refiners have continued to enjoy healthy margins – even in the face of the largest refinery strike since 1980. Strong refining margins, supported by an ongoing boom in refined product exports, continue to encourage high levels of refinery utilization in the Gulf Coast region – home to more than 50% of U.S. refining capacity. Today we look at how Gulf Coast refiners are faring after the oil price crash.

In Episode 1 of this two part series we noted an uptick in domestic U.S. demand for gasoline and distillates during December 2014 and January 2015, presumably spurred by lower prices following the crude price crash during the latter half of 2014. That surge in demand goes against a longer-term decline trend in the use of these fuels and it remains unclear if it will be sustained in 2015.

What is clear from looking at crack spreads for a typical Midwest refinery is that refiners are still prospering in that region even as the upstream side of the hydrocarbons business suffers after the crude price crash. Midwest refiners have been used to making good margins over the past three years because of their access to cheaper advantaged crude. Following the crude price crash the spread between prices for inland and coastal crudes declined – removing most of that advantage.

However, refiners still fared well by benefitting from the lag between refined product prices (slower to fall) and crude. Now the growing crude surplus being added to Cushing inventories to take advantage of contango market storage will likely keep the lid on Midwest crude prices to the benefit of refining margins.

In this second installment we take a closer look at how Gulf Coast refineries are weathering the crude price crash.

The Gulf Coast region is home to more than 50% of U.S. refining capacity (over 9 MMb/d) but has only in the past two years begun to take full advantage of the shale era boom in U.S. domestic crude production.

While – as we described last time - Midwest refiners have enjoyed access to low priced advantaged crude since 2011, Gulf Coast refiners had to await the build out of pipeline and rail infrastructure to get access to cheaper crude supplies. Nevertheless, as we detailed in a two-part analysis last April, Gulf Coast refineries have enjoyed an export led boom since 2012 - largely driven by increased demand for diesel from Latin America.

And although some of that boom was driven by lower U.S. crude prices, Gulf Coast refinery sophistication and lower fuel costs (using cheap natural gas) were equally important ingredients for success. In the past two years as infrastructure was built out, Gulf Coast refineries became destination central for a flood of new domestic and Canadian production looking for a market.

This year new pipelines such as the 300 Mb/d Magellan/Plains BridgeTex from the Permian Basin and the Enbridge/Enterprise 450 Mb/d Seaway Twin from the Midcontinent continue to increase crude flows to the Gulf Coast.

These new flows are competing with and gradually replacing imported crude supplies. However, a mismatch between refineries configured to process heavy crude and an incoming surplus of lighter crudes has kept downward pressure on crude prices –leaving refiners in the cat bird seat to pick and choose from among competing suppliers and make limited capital investments to increase their throughput of lighter crudes.

 Again, this article will be archived at the source.

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The Oscars

My wife loves the Academy Awards; it might be the only show for which she might skip my funeral. LOL. I very much enjoy watching it with her, but I doubt I would watch it alone. I was thrilled to see The Grand Hotel Budapest won four Oscars, tying with Birdman, for most Oscars, 2015:

The film won the Golden Globe Award for Best Motion Picture – Musical or Comedy and garnered three more Golden Globe Award nominations, including Best Director for Anderson. It also garnered nine Academy Award nominations, the joint most for the ceremony, including Best Picture and Best Director. It won the Academy Awards for Best Production Design, Best Original Score, Best Costume Design and Best Makeup and Hairstyling.It tied with Birdman or (The Unexpected Virtue Of Ignorance) for the most wins (4) this year.

I love GHB; when I get in the mood to see it again, I will watch it three or four or five times in succession over several days.

I did not see Birdman. Some big name actors -- Naomi Watts, for example.

I haven't seen American Sniper; something tells me the Academy was uncomfortable with it. The Academy is about 75% white male; median age about 62 years old.

I don't know how a show-opening joke about the white audience went over for the Oprah Winfrey crowd. But according to the critics it was a joke that had to be done. Sort of "check that box," "get that out of the way," and then get on with the show.

Best part of the evening for me: GBH winning four Oscars early in the show. Best part of the evening for my wife: Eddie Redmayne, best actor, for his portrayal of Stephen Hawking. I can't argue. Absolutely incredible.

Biggest snub: not including Joan Rivers -- a two-second slide -- in the "memoriam" segment. The Academy said there was not enough time.

The show ran over by about 20 minutes.