Tuesday, September 22, 2015

Active rigs:

	9/22/2015	09/22/2014	09/22/2013	09/22/2012	09/22/2011
Active Rigs	68	196	185	185	195

RBN Energy: Update on the Utica; 3Q15 Growth Spurt

U.S. Lower 48 natural gas production is averaging a record 74.2 Bcf/d in September to date, according to PointLogic Energy. Meanwhile, CME’s Henry Hub natural gas futures contract has languished at an average of $2.68/MMBtu this month to date, the lowest for any September since 2001. Much of the recent gain in natural gas production has come from  new Utica Shale output.  In today’s blog, we drill down into the region’s pipeline flow data to see where exactly the growth is coming from, what’s driving it and what it could mean for natural gas supply.

In our latest natural gas supply and demand balance update, using data from our friends at PointLogic, we showed that U.S. dry gas production has remained relatively flat through the summer despite the dramatic rig count decline earlier this year. We also alluded to the likelihood of oversupply persisting through the summer storage injection season. Subsequently, we wrote about the potential for an uptick in production volumes in 4Q2015, enabled by higher demand, higher prices, improved price spreads and more pipeline takeaway capacity. Indications are that any growth would likely come from the Northeast. We mentioned that much of the growth in Northeast production this year to date has come from the Utica Shale in particular, buoyed by new drilling and recent record initial production (IP – the first 30 days of output) numbers from wells primarily targeting dry gas. Today’s blog dives deeper into the Utica production spurt and early indications of where it is headed, starting at the region level and then drilling down into the specific counties driving dry gas production, this time with the help of our friends at Genscape.

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ObamaCare, As Predicted, Health-Care Providers, Insurers Supersize

Remember: Big Health Wrote The Bill No One Read

The Wall Street Journal is reporting:

Five years after the Affordable Care Act helped set off a health-care merger frenzy, the pace of consolidation is accelerating, transforming the medical marketplace into a land of giants.

The trend is under a new spotlight now, as Congress zeroes in on the competitive and cost impact of proposed deals that would collapse the health-insurance industry’s top five players into just three massive companies, each with more than $100 billion in annual revenue. On Tuesday, a Senate subcommittee is set to hear testimony from the chief executives of Aetna Inc., which plans to acquire Humana Inc., and Anthem Inc., which is seeking to buy Cigna Corp. , as well as the head of the American Hospital Association.

The other big insurer, which isn’t testifying, is UnitedHealth Group Inc.
The managed-care deals parallel what has been happening among health-care providers—2015 is on pace to notch the most U.S. hospital deals since 1999, with 71 announced through the end of August, according to Irving Levin Associates, a research firm that tracks health-care transactions. That comes on top of an already torrid spate of deal-making—in 2010, the year the health law passed, there were 72 hospital acquisitions, up from just 50 the year before. Last year, there were 100.

The supersizing, which hasn’t been slowed so far by signals of regulatory concern about health-care consolidation, reflects efforts by companies in both industries to gain the scale and heft to succeed amid changes unleashed or accelerated by the health law. Those include growing pressures to constrain costs, and new forms of payment that require providers to meet efficiency and care-quality goals. Health systems are adding hospitals, doctor practices and a range of other services that enable them to manage all of a patient’s care. And each industry is bulking up to amass leverage in contract negotiations against the other.

Great opportunities for investors.

By the way, we saw this in the military's healthcare system, Tricare. When Tricare was inaugurated, the continental US was divided into 12 regions, with a multitude of health care companies competing for each region. By the time I retired in 2007, it was down to two regions, one east of the Mississippi, and one west of the Mississippi, and down to a handful (maybe two?) healthcare insurers vying for these huge, huge contract. 

Oh, and even as the government permits all these mergers and buyouts, HAL-BHI not allowed.

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Getting To The Bottom Of The Global Warming Scam

One name: Michael Mann.

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Who Will Get Scott Walker's Supporters?

Polling less than 1%, it probably doesn't matter. 

Later: the bigger question -- who will the Koch Bros support. Most likely Rubio. ABB -- anyone but Bush.