Tuesday, January 27, 2015

Check Out The Winds Tonight, To See A Real Nor' Easter -- January 27, 2015

Link here (a dynamic link). You can click on the map and see the instantaneous wind speed.

Why Ocean Warming And Sea Level Rise From CO2 Is Not Possible 
Dutch Scientists
In Plain English

The Dutch "Climate Fraud" site explains why infrared back-radiation from greenhouse gases cannot heat the oceans or cause sea-level rise from thermal expansion, including:

Thank Goodness CO2 Doesn't Cross International Borders -- January 27, 2015

The country that is just off the radar screen it seems: India. And India won't buy into President Obama's global warming crusade.

BBC News is reporting:
India has already embarked on a major plan that would actually increase its carbon output.
The new government wants to double coal production - the dirtiest of fossil fuels - to one billion tonnes annually within five years.
"Increasing domestic production of coal will be a big step towards long-term energy security of India," Indian power minister Piyush Goyal.
"India has the third largest coal reserves in the world, yet we import billions of dollars of thermal coal, impacting our foreign exchange reserves."
More than 80% of electricity generation in India comes from fossil fuels and the power sector consumed nearly 70% of the coal the country produced in 2011.
With an installed electricity generation capacity of nearly 250 gigaWatts (gW), it plans to add more than 70 gW to its grid by 2017, with almost all of it from coal-fired power plants.
As India's National Planning Commission says: "The dominance of coal in the energy mix is likely to continue in foreseeable future."

Seven (7) New Permits -- January 27, 2015; 3/5 Wells To DRL Status

Wow, that was fast. President Obama announced his intentions to end the "529 College Savings Program" for middle class Americans in his address, January 20, 2015. Today it is announced he has changed his mind; won't end the program Changed his mind in one week.

Tweeting now, the storm:
With 23.3 inches of snow reported in Boston, blizzard becomes city's 6th biggest storm

Active rigs:

Active Rigs154187190204164

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

Seven (7) new permits:
  • Operators: XTO (2), Hess (2), CLR (2), Whiting
  • Fields: Garden (McKenzie), Blue Buttes (McKenzie), Capa (Williams), Pershing (McKenzie), Sanish (Mountrail)
  • Comments:
Wells coming off confidential list Wednesday:
  • 27206, 277, EOG, Parshall 51-1114H, Parshall, another well with an interesting production profile, t8/14; cum 50K 11/14;
  • 27424, 1,869, Whiting, Talkington Federal 41-25PH, Park, t8/14; cum 71K 11/14;
  • 28549, drl, XTO, Schettler 14X-9G, Cedar Coulee, no production data,
  • 28679, drl, CLR, Bjella 3-13H1, Northwest McGregor, no production data,
  • 28776, drl, XTO, Ranger 21X-18G, Tobacco Garden, no production data,

27424, see below, Whiting, Talkington Federal 41-25PH, Park:

DateOil RunsMCF Sold

Apple Crushes Expectations -- January 27, 2015; Revenues Of $75 Billion In Three Months -- Compare With Google ($66 Billion In A Full Year)

Crushes earnings.
Apple sold 74.4 million iPhones, up 46% compared to the year prior, its biggest ever quarter by 23.4 million units. Analysts were only expecting 65 million units sold.
The strength of the iPhone business led to Apple delivering $74.6 billion in revenue, up 30% year-over-year, soundly beating expectations of $67.5 billion in revenue. 
Apple's net income for the quarter was $18 billion, which is most ever earned by a company in history.
The stock is up 5% after market. 
Apple said it collected $74.6 billion in sales, up 30% from last year, and net income of $18 billion, up 37%, in its fiscal first quarter -- its biggest of the year. Earnings per share hit $3.06 versus expectations of $2.60.

More Apple

Here, via Bloomberg, is what analysts are expecting :
  • Revenue:  $67.5 billion, which would be up 17%  year over year. Actual: $74.6 billion, up 30% over last year.
  • Earnings Per Share:  $2.60, which would be up 25% year over year. Actual: $3.06.
  • iPhone units:  65 million, which would be up 27% year over year  (whisper number is closer to 69 million). Actual: 74.5 million.
  • iPhone average selling price (ASP): $668 (it was $602.92 for the previous quarter).
  • iPad units:  22 million, down 14% year over year. Actual: 21.4 million.
  • iPad ASP: $436
  • Mac units:  5.5 million units, up 15% year over year. Actual: 5.5 million.
  • iPod units: 3.5 million.
  • Gross Margin:  38.5%. Actual: 39.9%
  • March quarter revenue guidance:  $53.70 billion. Actual: $52 - $55 billion.
To put these numbers in context, analysts estimate Google did $66.4 billion in revenue for all of 2014. Apple is going to generate more revenue in a three-month period if it meets analyst expectations.

Hillary MIA

Link here.  This is quite interesting. The writer failed to mention the most likely reason that Hillary has not been seen for quite some time: some minor plastic surgery. Some work on her crow's feet; some neck tightening; some eyelid lifts. She will look different the next time we see here; it won't be major but it will be noticeable.

Warren Beats IRS (Again)

Link here.

NetJets Inc, the private jet-sharing company owned by Warren Buffett's Berkshire Hathaway Inc, has defeated a U.S. Internal Revenue Service lawsuit attempting to recoup more than $500 million of unpaid taxes, penalties and interest.
U.S. District Judge Edmund Sargus in Columbus, Ohio, said on Monday that the IRS was bound by guidance it gave a NetJets predecessor in 1992 over when to collect federal transportation excise taxes, and could not impose more taxes retroactively.
The judge's 37-page decision was not a complete victory for NetJets. Sargus rejected a claim by the company that it deserved a $219.5 million refund plus interest on taxes already paid because its services were not "taxable transportation."
Good for him.

Hess Cuts Budget By 16 Percent, Keeps Most Spending In Bakken - Reuters Headline -- January 27, 2015

Link here. In-line with earlier posting on the blog.
Oil and natural gas producer Hess Corp cut its capital budget by 16 percent on Monday, saying it has balanced concerns about slipping crude prices with growth projects in places like North Dakota crucial to the company's future.
The oil industry is grappling with a more-than 60 percent drop in crude oil prices since last June amidst global oversupply concerns, with many producers opting to sharply reduce spending and hope for a price rebound.
In that context, the decision by Hess to only cut 16 percent of its budget was a far-less dramatic step than peers. Continental Resources Inc, for instance, slashed its 2015 budget by nearly 50 percent.
Hess, which operates in the U.S. Gulf of Mexico, Denmark and Norway, among other places, plans to spend $4.7 billion this year.

American Eagle Sells Non-Core Acreage In Divide County, About $8,000/Acre; Some Sweaty Palms Out There -- Apple Reports This Afternoon -- January 27, 2015

From the press release:
American Eagle Energy Corporation (NYSE MKT: AMZG) announces that it recently closed the sale of certain non-core, non-operated working interests in oil and gas properties located in Divide County, North Dakota, to an independent exploration and production company for a total sales price of $9.5 million in cash.
The transaction closed on January 22, 2015, with an effective date of November 1, 2014. The Properties represent approximately 120 net barrels of oil equivalent per day produced from approximately 25 gross (1.45 net) wells that consist of non-operated working interests in approximately 1,185 net leasehold acres.
$9.5 million / 1,185 de-risked net acres  = $8,000/acre.

This is kind of cool; compare with the Magnum Hunter sale last September (2014), for about the same price/acre.

US Strippers Wells Being Shut In

From Reuters:
Now, with U.S. crude around $46 a barrel, operators are already closing some small old wells, known as strippers, and tens of thousands of similar wells are on the verge of losing money. A further slide could, by some estimates, idle an equivalent of up to 2 percent of U.S. supply, slowing overall output growth more than expected or even leaving it flat.
Ray Lasseigne, an oilfield veteran and president of TMR Exploration Inc in Louisiana, is deciding which wells to close. TMR looks to close old wells, which produce so much saltwater that disposal costs exceed what the oil can fetch today.
His most expensive stripper wells need oil around $70 to be profitable.
Back on January 12, 2015, I suggested stripper wells might be the first to go.

Apple Could Set Record

Apple is set to report its financial results this afternoon for Q1 2015, a three-month period spanning October through December that directly followed the launch of the highly-anticipated iPhone 6 and iPhone 6 Plus. Despite offering guidance of between $63.5 to $66.5 billion in total sales, many analysts are predicting that Apple outpaced those numbers in what could amount to a record-breaking quarter.

Fortune has averaged the estimates of 35 analysts, including 20 professionals and 15 amateurs, and determined that expectations are for Apple to report earnings of $2.68 per share, a nearly 30% year-over-year increase, and revenue of $68.7 billion, about a 20% increase from the year-ago quarter and $2.2 billion higher than Apple's high-end forecast.

Calling It A Day For Now -- Back Later -- January 27, 2015 ... But Before I Go ....

Just last week I said that 2015 "will be the year of [job] cutbacks." Today this headline: IBM plans biggest corporate lay-off in history and Forbes has the story.

Other headlines:
  • illegal released during deportation hearings now charged with murder; accused of killing store clerk over pack of cigarettes; freed on bond after prior burglary conviction
  • NYC blizzard? A snow job. NYC live cam shows almost no snow at the moment, 12 hours into the blizzard; update: #41 or a "weak" category 2;
  • stock market plunges
  • Patriots owner demands apology; this has to do with accusation the deflated footballs were used
  • phone company outraged by fraud, abuse uncovered ObamaPhone program
  • revealed: Russian oil firm tied to US "green movement". This has been previously reported: that foreign oil companies are funneling money to obstruct North American shale and Canadian oil sands
  • measles panic in California spreads (at least it's hard to catch)
Memo to self: place a "smiley face" here.

A Reader Has A Question On Four Zavanna Wells In Stony Creek -- January 27, 2015

Over at the discussion board:
Permits #29507-8-9-10: These diagonal wells are listed for sections 3 and 11 only (T155-R100). However, I don't see how they can avoid going through section 2 as well. Anyone know what's going on there? Would this end up being 3 sections sharing production equally?
The wells in question:
  • 29507, SI/NC, Zavanna, Shepherd 3-11 1H, Stony Creek, API: 33-105-03771, middle Bakken; estimated to be 41 feet thick; sMarch 26, 2015; re-entered to drill the vertical and curve on May 12, 2015; a 4-foot target; gas averaged 1,000 units; trip gases as high as 5,696 units; TD reached on May 29, 2015; borehole exposed to 94% of ideal target zone; permit application shows this well to be a 1920-acre spaced well; sections 3/2/11-155-100
  • 29508, SI/NC, Zavanna, Shepherd 3-11 2TFH, Stony Creek, API: 33-105-03772, Three Forks 1st bench, sMarch 25, 2015, low gas units during lateral; first bench is estimated to be 23 feet thick; target zone is 6 feet; wellbore exposed to 70% of the productive first bench, but only 7% to the ideal target zone (there were some challenges drilling this lateral); re-entered on June 2, 2015, to begin the lateral; reached TD on June 12, 2015; permit application shows this well to be a 1920-acre spaced well; sections 3/2/11-155-100
  • 29509, SI/NC, Zavanna, Shepherd 3-11 3H, Stony Creek, API: 33-105-03773, middle Bakken; sMarch 22, 2015; re-entered for vertical hole and curve on March 25, 2015; largest gas show was 1,504 units; middle Bakken is estimated to be 41 feet in thickness; target zone is 4-feet thick; re-entered on June 17, 2015, to drill the lateral; 60% of the lateral borehole exposed to ideal target zone; permit application shows this well to be a 1920-acre spaced well; sections 3/2/11-155-100
  • 29510, SI/NC, Zavanna, Shepherd 3-11 4TFH, Stony Creek,  API: 33-105-03774, Three Forks 1st bench, sMarch 19, 2015, re-entered for the vertical and curve segments on April 12, 2015; re-entered for the lateral segment on June 24, 2015; reached TD on June 30, 2015; 69% of the lateral borehole exposed to ideal target zone, total drilling days: 24; permit application shows this well to be a 1920-acre spaced well; sections 3/2/11-155-100
Because these wells are the confidential list, I cannot see the application to see the spacing.
However, by using the NDIC GIS map server one can get a pretty good hunch what is going on.

Bottom line: these four wells -- all on the same pad in section 3-155-100 -- will be 1920-acre spacing, and folks with acreage in sections 2, 3, and 11 will receive royalties from these wells based on 1920-acre spacing.

See graphics below.

With regard to the nomenclature of wells: operators have their own way of naming wells, but generally when the horizontal crosses more than one section, the first section number is where the well will be sited (or nearest section to where production will start) and the second section number is where the horizontal will end. Intervening/adjacent sections affected are generally not in the name of the well.

Graphics and Background

Because these wells are on the confidential list, we do not know the spacing of these wells. From the name of the wells, we can surmise the beginning and the end of the horizontal lateral (as noted above): the wells will start in section 3 and end in section 11.

So, let's go to the NDIC GIS map server. In North Dakota, the entire Bakken is pretty much spaced at 640-, 1280-, 1920-, or 2560-acre spacing. There are some variations in special circumstances.

In the graphics below, the red arrow points to the four-well Zavanna pad in question.

640-Acre Spacing Graphic

So, at the NDIC GIS map server, click on 640-acre spacing for this area. Yes, these sections are spaced at 640-acres but with the name ("3-11") it is very, very unlikely these would be spaced at 640 acres. So ignore this graphic.

1280-Acre Spacing

For 1280-acre spacing in this area. Without looking at the map, there was a remote possibility that the spacing could have been 1280 acres (very, very, very remote, as the reader at the discussion board noted) but when you see the NDIC GIS server map, it is clear this is not going to happen. These sections are not even spaced for 1280-acre spacing. So, ignore this graphic and 1280-acre spacing.

That leaves 1920-acre and 2560-acre spacing, both of which were possible and very likely either could have been. But looking at the map, we might be able to predict.

1920-Acre Spacing

First, 1920-acre spacing in this area. It fits perfectly. Interestingly, of note, there is no surrounding 1920-acre spacing identified, but there is 1920-acre spacing for these wells. The red arrow is moved a bit lower so it would not hide the "**1920** -- that means this is a case before the NDIC for approval, for 1920-acre spacing. Now to check the other possibility (see the last graphic on this page).

2560-Acre Spacing

Finally, for 2560-acre spacing in this area. Note that this area is not even spaced for 2560-acre spacing. Could there be a mistake on my part, clicking the wrong spacing? Nope, there is an example of 2560-acre spacing (to the west) but it does not affect the wells in question.

So, bottom line, my hunch -- and all it is is a hunch because these wells are still on the confidential list: these four wells will be 1920-acre spaced wells affecting sections 2, 3, and 11 in T155N-R100W.

This 1920-acre spacing does not change/affect earlier wells that are already producing and spaced at 640-acre (first graphic above).

Tuesday -- January 27, 2015; Futures Plummet -- Probably On CAT, BTU News

I'm not there so I don't know but the news out of NYC this morning suggests the "storm" is much less than what was forecast 24 hours ago. Link here.

However, the science is settled on the forecast for global temperatures to rise by 1 degree 100 years from now according to Agore who has honorary degrees in climatology, meteorology, oceanography, and sciencetology.

“My deepest apologies to many key decision makers and so many members of the general public,” [meteorologist-in-charge at the National Weather Service in Mt. Holly, New Jersey] tweeted. “You made a lot of tough decisions expecting us to get it right, and we didn’t. Once again, I’m sorry.”

But we stand by "the one degree more in 100 years" forecast. 


Active rigs:

Active Rigs156187190204164

RBN Energy: will the NGL surplus and cheap oil derail export plans?

For those who missed it, yesterday's NDIC daily activity report starting with all the PNC wells certainly caught my eye.

Reporting today:

  • Big miss: Peabody Energy (BTU), expectation, - 35 cents; The company's net loss attributable to common stockholders narrowed to $514.6 million, or $1.92 per share, in the fourth quarter ended Dec. 31, from $565.7 million, or $2.12 per share, a year earlier. The results fell short of Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for a loss of 36 cents per share.
  • Big miss: Caterpillar (CAT), expectation, $1.55, Caterpillar took a hit in the fourth quarter from restructuring costs and the heavy machinery maker issued a weak outlook for 2015, citing the tumbling price of commodities. Shares slumped more than 7 percent Tuesday before the markets opened. Caterpillar earned $757 million, or $1.23 per share, for the three-month period. A year earlier the Peoria, Illinois, company earned $1 billion, or $1.54 per share.
  • Apple (AAPL), expectation, $2.59, crushes expectations. See this post.
  • AT&T (T), expectation, 55 cents, posts slight beat;The second-largest U.S. wireless carrier posted a net loss of $4 billion, or 77 cents per share, in the fourth quarter, compared with net income $6.9 billion, or $1.31 per share, a year ago.
    Shares in AT&T were up 2 percent in after-hours trading after closing at $32.81 on the New York Stock Exchange. AT&T said it had added more than 2 million new wireless customers and 854,000 contract subscribers in the quarter.
  • Canadian National Railway (CNR.TO), expectation, 97 cents; earnings up; raises dividend;
    Net income rose to C$844 million ($681 million), or C$1.03 a share, from C$635 million, or 76 Canadian cents, a year earlier. Revenue rose to C$3.21 billion from C$2.75 billion. The railway boosted its quarterly dividend by 25 percent, to 31.25 Canadian cents per common share.
See disclaimer.

A Note To The Granddaughters

This is really cool. I saw the asteroid last night. JPL/NASA is reporting:
Scientists working with NASA's 230-foot-wide Deep Space Network antenna at Goldstone, California, have released the first radar images of asteroid 2004 BL86.
The images show the asteroid, which made its closest approach on Jan. 26, 2015 at 11:19 a.m. EST at a distance of about 745,000 miles (3 times the distance from Earth to the moon), has its own small moon.
The 20 individual images used in the movie were generated from data collected at Goldstone on Jan. 26, 2015. They show the primary body is approximately 1,100 feet across and has a small moon approximately 230 feet across.
In the near-Earth population, about 16 percent of asteroids that are about 655 feet or larger are a binary (the primary asteroid with a smaller asteroid moon orbiting it) or even triple systems (two moons). The resolution on the radar images is 13 feet per pixel.
The trajectory of asteroid 2004 BL86 is well understood. Monday's flyby was the closest approach the asteroid will make to Earth for at least the next two centuries. It is also the closest a known asteroid this size will come to Earth until asteroid 1999 AN10 flies past our planet in 2027.
I can't believe the luck. Last night the weather in the Dallas-Ft Worth area was very, very warm. I was able to lay down (lie down) on the grass and stare at the heavens.

Second, the skies were absolutely clear; no clouds.

Finally, the best viewing time according to the note above was 11:00 p.m. ET according to earlier reports for this area. I wanted to see if Letterman would be live despite the snowstorm in NYC, so I had a 30-minute window from 10:00 p.m. to 10:30 p.m. to look for the asteroid.

We were told that the asteroid would be seen "between Jupiter and Gemini." Earlier in the day I had checked the sky charts (a dynamic link; different now than it was yesterday) and it was going to be easy to find Jupiter. Find the moon, go to the left, find Orion (probably the easiest constellation in the northern sky) and then continue left on that same line toward a very bright object: Jupiter.  Above Jupiter and way to the left of Orion was Gemini.

I've never really been able to find Gemini in the past (because I was never all that serious about looking for it) but last night it was easy to find. And there, between Gemini and Jupiter, two bright objects, one of which would have been the asteroid.

And if it wasn't, I'll never know. As far as I'm concerned I saw the asteroid. I'm glad I caught it: I probably won't be around two centuries from now to see it again. By that time global warming will have destroyed the earth, the earth being two degrees warmer then than it is now.

And, yes, despite the storm, Letterman was "live." Fallon, also from NYC, was not "live" -- it was a taped re-run.

Reporting Tomorrow -- Yahoo!Finance -- January 27, 2015

Keystone XL Fails To Advance In The Senate

CNN is reporting
Senate Democrats blocked an effort by Republicans to end debate on a bill to approve the Keystone XL pipeline, a setback for GOP leaders who must rely on a handful of Democrats who have supported the project in the past in order to get approval of their top legislative priority of the new Congress.
60 votes were needed on a pair of procedural motions to end Democratic filibusters, but each failed on a 53-39 tally.
How did the Democratic Senator from North Dakota vote?
Only four of the nine Democrats who voted with Republicans to begin debate voted with them to end it. They were Joe Manchin of West Virginia, Joe Donnelly of Indiana, Michael Bennet of Colorado, and Heidi Heitkamp of North Dakota.
From the LA Times:
Complicating matters was the absence of key Republican senators, including Sen. Marco Rubio of Florida, who was making a campaign fundraising swing through California as a potential presidential contender.
Say what? The GOP Senate Majority Leader took this to a vote knowing that not all his people would be there?

Okay, time to move on.