Monday, February 2, 2015

MDU, Anadarko, Black Hills, And Cliff Natural Resources Report Earnings -- February 2, 2015

See disclaimer.
Reporting today (Monday -- February 2, 2015):
  • Anadarko Petroleum (APC), forecast 86 cents; reported disappointing fourth-quarter results as it coped with the fallout from sinking oil prices. The Houston-based oil and natural gas company reported a loss of $395 million, or 78 cents per share, for the quarter versus a loss of $770 million, or $1.53 per share, last year. After adjusting for a number of items, it earned 37 cents per share versus 74 cents per share last year. That fell far short of market forecasts — analysts polled by FactSet were anticipating earnings of 80 cents per share
  • Black Hills Corp (BKH), forecast 77 cents, fourth-quarter earnings of $34 million. On a per-share basis, the Rapid City, South Dakota-based company said it had net income of 76 cents. The energy company posted revenue of $378.1 million in the period. For the year, the company reported profit of $128.8 million, or $2.89 per share. Revenue was reported as $1.39 billion. Black Hills expects full-year earnings in the range of $2.80 to $3 per share. 
  • Cliffs Natural Resources (CLF), forecast 13 cents; U.S. miner Cliffs Natural Resources Inc reported a fourth-quarter loss, hurt partly by asset impairment charges. Net loss attributable to shareholders was $1.26 billion, or $8.25 per share, in the quarter ended Dec. 31, compared with a profit of $30.5 million, or 20 cents per share, a year earlier. Revenue fell nearly 15 percent to $1.28 billion, but edged past average analyst estimate of $1.21 billion, according to Thomson Reuters I/B/E/S. 
  • MDU, forecast 39 cents; MDU Resources Group Inc. (MDU) on Monday reported fourth-quarter net income of $84.3 million; profit of 43 cents per share. Earnings, adjusted for non-recurring gains and to account for discontinued operations, came to 35 cents per share.

MDU/Fidelity Sells 81 Gross Wells, 4,363 Acres To Lime Rock; Sixteen (16) New Permits; Sixteen (16) Producing Wells Completed; Two New Operators In North Dakota -- February 2, 2015

MDU sale of assets to Lime Rock: Fidelity Exploration transferred about 81 gross wells, of which 49 are operated by Fidelity to Lime Rock Resources III-A. All of these were in Mountrail County; 6 in Alger field, 43 in Stanley field. The sale included 4,363 acres with production of about 2,000 bopd. The earlier permit/well file number was #17359; the most recent permit/well file number was #27192. According to the NDIC, Lime Rock has 51 wells/permits, so this is a new operator in North Dakota, also. Or it appears to be a new operator. If this is their website, the company previously had three core areas, all outside of the Bakken (mid-continent -- Louisiana, Arkansas, Mississippi); the Permian Basin; and, the Texas Gulf Coast). If this is the right company, this is their first property in the Bakken. [Update: Don sent me the link to the original press release which provides more background information:]
Update: Don sent me an update on Lime Rock's production, comparing December, 2014, and January 2015, production from 49 operated wells:
  • in December, 2014, Lime Rock had well production 1464 days and produced 173,042 bbls of oil, and sold 118,159 Mcft of natural gas
  • in January, 2015, Lime Rock had well production 1463 days, and had 169,688 bbls of oil and 117,521 mcft of natural gas
  • production from non-operated wells not included
Wells coming off the confidential list Tuesday:
  • 28483, drl, Hess, HA-Dahl-152-95-0706H-4, Hawkeye, no production data,
  • 28484, drl, Hess, HA-Dahl-152-95-0706H-5, Hawkeye, no production data,
  • 28487, drl, Hess, HA-Dahl-LW-152-95-0706H-1, Hawkeye, no production data,
  • 28875, 761, WPX, Mandaree 30-31HA, Reunion Bay, t11/14; cum 8K 12/14;
Sixteen (17) new permits:Operators:
  • Newfield (6), Liberty Resources (5), Crescent Point (2), Statoil (2), Whiting, Noah Energy
  • Fields: Sand Creek (McKenzie), McGregor (Williams), West Ambrose (Divide), Banks (McKenzie), Bully (McKenzie), North Haas (Bottineau)
  • Comments: this is the first permit for Noah Energy in North Dakota; the permit is for a well in North Haas oil field, near the Canadian border, in Bottineau County near the Renville County border
Wells coming off the confidential list over the weekend, today, were posted earlier; see sidebar at the right.

Active rigs:

Active Rigs145192187201166

Three (3) permit renewals: one was a Enerplus Fool Bear permit (#20376); two were Petro-Hunt Marinenko permits (#27595 and #27596)

Sixteen (16) producing wells completed:
  • 27301, 1,265, Zavanna, Husky 33-28 6H, Williston, t1/15; cum --
  • 27302, 1,764, Zavanna, Husky 33-28 4TFH, Williston, t1/15; cum -- 
  • 27683, 762, Hess, EN-Pederson-LW-154-94-0408H-4, Alkali creek, t1/15; cum 6K 12/14; 
  • 27802, 438, Oasis, Andre HSepherd 55-1 14-7 2T, Missouri Ridge, t12/14; cum -- 
  • 28097, 596, Hess, EN-Dobrovolny A-155-94-2413H-5, Manitou, t1/15; cum 4K 12/14;
  • 28098, 726, Hess, EN-Dobrovolny A-155-94-2413H-6, Manitou, t1/15; cum -- 
  • 28299, 1,749, XTO, Omlid 41X-13H, Siverston, t1/15; cum -- 
  • 28328, 1,368, Hess, EN-Freda-154-94-2635H-7, Alkali Creek, t1/15; cum 1K 12/14;
  • 28395, 969, Hess, EN-Evenson-LW-152-95-1003H-2, Antelope, 4 sections, a a Sanish well, t1/15; cum --
  • 28645, 704, Whiting, Hansen 44-28-3H, Sanish, t1/15; cum --
  • 28646, 1,030, Whiting, Hansen 44-28TFH, Sanish, t12/14; cum -- 
  • 28647, 1,176, Whiting, Hansen 44-2H, Sanish, t1/15; cum --
  • 28746, 708, EOG, Wayzetta 53-3334HX, Parshall, t12/14; cum 13K 12/14;
  • 29019, 1,549, Whiting, Mrachek 21-26-3HR, Nameless, t12/14; cum -- 
  • 29020, 1,617, Whiting, Mrachek 21-26H, Nameless, t1/15; cum -- 
  • 29056, IA, Van Hook 25-1319H, Parshall, 1920-acre spacing; status date 11/14; apparently reached total depth; not sure why shut in; no evidence of being tracked;

Statoil re-surveyed locations for three Panzer wells in Mountrail County (#30454-30456)

Fourteen (14) more wells either plugged or producing.

A Honey Of A Story -- Best Story Of The Day -- February 2, 2015

Our older granddaughter has a particular interest in honey. Since about age four she listened to stories about honey and honeybees and then started reading about honey on her own. While in Boston we found a little store near Harvard Square that sold honey from around the world. Expensive, but she loved it.

So, this story was of particular interest. Multiple sources are reporting, this is from The Grand Forks Herald:
Kloten Apiaries, which started making honey here about four decades ago, is still buzzing along and recently landed a sweet national award.
Elizabeth Stromme, whose family founded Kloten Apiaries 38 years ago, said they entered this year’s Good Food Awards contest in San Francisco on a whim, after Kloten Apiaries was invited to submit honey for judging.
“It was just something that came out of left field and I said, ‘OK, let’s send a couple jars,’ ” Stromme said.
Kloten Apiaries ended up being one of a dozen honey producers in the country to receive a Good Food Award this year, with the winners determined by an organization comprised of representatives from a cross-section of the food industry.
Much, much more at the link. 

Active Rigs In North Dakota Down To 145; XOM Shares Rise In Pre-Market Trading -- February 2, 2015

Russia and Saudi Arabia are competing for the Chinese market -- WSJ is reporting:
Chinese customs data released Friday show that China’s crude imports from some big OPEC nations have plummeted, while imports from Russia surged 36% in 2014.
Meanwhile, imports from Saudi Arabia fell 8% and those from Venezuela dropped 11%.
As American companies have pumped soaring amounts of oil from shale, U.S. imports of Saudi Arabia’s crude oil and petroleum products have also fallen, dropping to 25.6 million barrels a month in October, from more than 42 million barrels a year earlier.
The changing pattern in China’s imports is one result of Russian President Vladimir Putin turning to China as an economic lifeline as Moscow is shunned by the West over the Ukraine crisis.
That has tilted in China’s favor the relationship between two countries that for decades have jousted for influence in Asia.
For its part, Beijing wants to make sure Russia’s economy doesn’t deteriorate further as that could threaten stability on China’s borders, security scholars say. In addition, buying more of its oil from Russia helps China lessen dependence on seaborne imports from the Middle East, which it fears are susceptible to supply disruptions.
Lots of moving pieces. 


Apple trivia: in 4Q14, Apple sold nearly 75 million iPhones -- that works out to ten iPhones EVERY SECOND for three months, seven days a week, 24 hours/day. Source

Wells coming off confidential list over the weekend, today have been posted. 7/14 Bakken wells to DRL status; CLR has a dry well due to surface casing failure. 

Reuters is reporting on the strikes at refineries across the US.
The walkouts were the first in support of a nationwide pact since 1980 and targeted plants with a combined 10 percent of U.S. refining capacity. One of the plants, Tesoro Corp's 166,000-barrel-per-day Martinez, California, refinery, was being shut because it was in the midst of planned maintenance work. The other refineries appeared set to continue running normally as operators initiated contingency plans, calling on trained managers as replacement workers. U.S. gasoline and diesel fuel prices rose on Monday on concerns over supply, as well as a bounce in crude.
This was a headline story over at Yahoo!Finance. It won't amount to a hill of beans. The targeted plants account for 10 percent of US refining capacity. One plant will shut down but that was "planned" maintenance. The others will continue operating using "trained" managers.


You know borrowing rates are low when Apple issues more debt. Apple is prepared to sell $5 billion 5-year fixed and/or 7-, 10-, and 30-year debt. Perhaps they will use it to pay taxes on their overseas cash. LOL. Why? 24/7 Wall Street is reporting:
Apple has filed to sell a multi-traunch offering of notes and bonds, and the reported amount is $5 billion. This would be smaller than the $12 billion it raised in 2014 and the $17 billion in 2013.
If you go back to Apple’s earnings release analysis, it showed that international sales were 65% of revenues. This means that much of Apple’s cash treasure trove is stored outside of the United States. Apple would have to pay a huge penalty to bring that money back into the country.


I won't bother to link the stories but both President Obama and France agree with Bloomberg that Greece needs to be given a break. Give me a break.

See disclaimer.

Link here to earnings.
Exxon Mobil Corporation today announced estimated full-year 2014 earnings of $32.5 billion compared with $32.6 billion a year earlier, reflecting the strength of its integrated business model in a lower price environment.  ExxonMobil completed a record eight major Upstream projects during the year, including the Papua New Guinea liquefied natural gas project, and achieved its full-year plan to produce 4 million oil-equivalent barrels per day. Fourth quarter earnings were $6.6 billion, or $1.56 per diluted share, down from $8.4 billion in the year-ago quarter. Lower commodity prices in the Upstream and higher planned maintenance costs in the Downstream were partially offset by improved Chemical margins. During 2014, the corporation distributed $23.6 billion to shareholders in the form of dividends and share purchases to reduce shares outstanding, resulting in a total shareholder distribution yield of 5.4 percent.
Back To The Bakken

Active rigs:

Active Rigs145192187201166

RBN Energy: the floating crude oil storage trade.
With crude prices close to six year lows and the futures market pointing higher, a number of the larger commodities trading houses are buying and holding cheap crude in huge floating tankers for later sale. For the trade to work, prices today must be lower than they are in the future and the spread must cover the storage cost and other expenses. Players in the floating storage game have to be high rollers – the minimum cost of a bet at this table is ~$100 million. Today we complete a two-part series on contango-spread trades with a look at floating storage.
Something Doesn't Ring True

Bloomberg is reporting that a 56-year-old couple are saving $500/month in gasoline bills:
Charles and Cheryl Saul are reaping a timely windfall: an extra $500 a month thanks to cheap gasoline.
The couple, both 56 and from Emmaus, Pennsylvania, drive a lot so filling the tank didn’t leave much room for fun. Now they’re splurging after years of staycations, minor-league baseball games and free concerts. In October, they visited Disney World, their priciest vacation in ages. They’re also planning to renovate, meaning more trips to Home Depot Inc.
Let's do the math:

With a drop in the price of gasoline from $4.00/gallon to $2.00/gallon, that means a savings of $2.00/gallon.

$500 / month divided by $2.00 = 250 gallons of gasoline they buy each month.

If their car (truck) gets a measly 20 mpg, then 250 gallons x 20 mpg = 5,000 miles / month or 60,000 miles per year.

If they are really that tight -- based on the story -- giving up so many luxuries in life -- like eating out once in awhile, one would assume their vehicle is getting at least 30 mpg.

250 x 30 = 7,500 miles/month = 90,000 miles/year.


If they are putting 90,000 miles on their car (non-business), they got bigger problems than the price of gasoline. If this is a business expense, then there are tax "consequences." But at 90,000 miles per year (personal or business) they are buying a new car every year if the average individual sells/trades his/her car with less than 100,000 miles on it.

Global Warming
Extreme Weather
Ice Age Now

WGN TV is reporting that the "2015 Super Bowl Blizzard" was officially Chicago's 5th largest snowstorm:  
1. 23.0 inches January 26-27, 1967: The Big Snow
2. 21.6 inches January 1-3, 1999: The New Year’s Storm
3. 21.2 inches January 31-February 2, 2011: Groundhog Day Blizzard
4. 20.3 inches January 12-14, 1979: Blizzard of '79
5. 19.3 inches January 31-February 2, 2015: The Super Bowl Blizzard
6. 19.2 inches March 25-26, 1930
7. 16.2 inches March 7-8, 1931
8. 14.9 inches January 30, 1939
9. 14.9 inches January 6-7, 1918
10. 14.8 inches December 17-19, 1929 
Many of these storms have occurred during a period of rising CO2 levels and after Agore won his Nobel Prize for his PowerPoint Presentation.

And regular readers know this story very, very well. Icecap is reporting:
The theme had been snows were diminishing due to global warming.
Flashback 2000: ‘Snowfalls are now just a thing of the past’: According to Dr David Viner, a senior research scientist at the climatic research unit (CRU) of the University of East Anglia, within a few years winter snowfall will become ‘a very rare and exciting event. Children just aren’t going to know what snow is.’
The IPCC and US government reports through 2007 had projected snows would become much less common as the climate warms especially in the cities. 
Environmentalist from Princeton Michael Oppenheimer and RFK Jr, in the year before the Snomageddon winter both bemoaned there children would never get to enjoy sledding like they did as young in the 1960s.
 At least the RFK, JR, kids won't have to looks at windmills off Martha's Vineyard.