Tuesday, March 24, 2015

Relevant To The Whiting Announcement? -- March 24, 2015

Reuters / Rigzone is reporting:
Despite a 50 percent slide in crude prices since last summer, U.S. shale oil producers are enjoying remarkably easy access to capital markets and this will allow them to avoid getting squeezed when banks reset their loans in April.
A surge in equity issuance so far this year by oil and gas companies has surprised many who in December thought the price drop would hurt the ability of producers to tap capital markets. But investor appetite has held up in the first quarter, amounting to a vote of confidence in the ability of shale oil companies to weather the storm by relying on hedges and slashing spending to show a commitment to capital discipline.
"Because the capital markets are so good companies that are more worried about their borrowing base are able to ... raise either debt or equity, take those proceeds, and reduce their borrowing base," said Timothy Perry, a managing director for energy investment banking at Credit Suisse in Houston.
He said one client had reduced its borrowing base by two-thirds after doing a capital market deal.
Maybe the capital markets "know" something the rest of us don't know.

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

Halliburton Closing It's Minot Shop -- March 24, 2015

The Dickinson Press is reporting:
Halliburton will suspend operations in Minot starting April 1 and close the facility, a spokeswoman confirmed Tuesday.
The oilfield services company will transfer a majority of Minot employees to Halliburton locations in Williston and Dickinson.
Two data points (not mentioned in the story):
  • BHI and Halliburton are merging 
  • BHI built a huge new Minot facility about the same time they built the Williston facility (if I remember correctly) 
This from a 2013 post elsewhere:
I do work at the Minot [BHI] location. First thing I would like to comment on is the replies. We have not laid off 60 people due to any issues with zoning. In fact we are expanding to meet the demands. We have all ready out grown our facility in Minot.
The Minot facility is made up of several different product lines. We chose the location in Minot for several different reasons. One of those reasons is to try take advantage of retiring Air Force personal who wanted to remain in the Minot area. We also felt that Minot would be an appealing place to draw and retain skilled people that wanted an opportunity to expand their career locally.
One of our product lines does use SOS for hiring their employees and the other four product lines hire direct.
Please go to Bakerhughes.com and search careers in Minot. We are looking for talented hard working people who want to live in North Dakota. The main office # 1-(701)-420-8000.
Baker Hughes is proud to have nearly 250 employees in Minot and nearly 1050 employees that live in North Dakota. This is a great community to raise a family, and one of the best choices I have made in my career by moving here to Minot.
Another Government Bureaucracy Out Of Control

Every veteran knew the intent of Congress when the 40-mile rule was adopted -- the folks at the VA found a way to circumvent that intent. Fortunately Congress caught the VA at their little game. Fox News is reporting:
Responding to pressure from Congress and veterans groups, the Department of Veterans Affairs is relaxing a rule that makes it hard for some veterans in rural areas to prove they live at least 40 miles from a VA health site. 
The change comes amid complaints from lawmakers and advocates who say the VA's current policy has prevented thousands of veterans from taking advantage of a new law intended to allow veterans in remote areas to gain access to federally paid medical care from local doctors. 
The VA said it will now measure the 40-mile trip by driving miles as calculated by Google maps or other sites, rather than as the crow flies, as currently interpreted. The rule change is expected to roughly double the number of eligible veterans. 
I hope it triples or quadruples the number of eligible veterans.

The "Other" North Dakota Industry -- March 24, 2015

A big "thank you" to a reader for sending me this; ChinaDaily is reporting:
Before the Bakken shale formation transformed North Dakota into an energy giant, the state was mostly known as a provider of soybeans, corn and other crops. North Dakota remains an agriculture powerhouse and during the week of March 30 a delegation will travel to Qingdao in Shandong province in China to showcase the state's agricultural commodities and food products.
The 2015 China - North Dakota Better for You Food Ingredients event is organized by the North Dakota Trade Office, Northern Crops Institute and the North Dakota Department of Agriculture.
Dean Gorder, executive director of the trade office, said this will be the third time he has led a delegation of mainly small and medium-sized family-owned North Dakota companies to China.
"North Dakota is a significant producer of specialty crops like flax, sunflowers and lentils," he told China Daily in an interview. "Part of our mission is to demonstrate how the Chinese can incorporate these crops into their food. They are just starting to learn about them."
To accomplish that, Gorder said specialists from the Northern Crops Institute (a collaborative effort among Minnesota, Montana, and North and South Dakota to support the promotion of crops grown in the four states) will give presentations to Chinese buyers and other officials representing food manufacturers in the mainland. "They will actually prepare dishes for them made with the North Dakota ingredients so they can experience the taste and nutrition they can bring to a meal," he said. 
I was hoping they would have also mentioned chickpeas.

New Permits In Past Six Weeks By Operator -- March 24, 2015

Disclaimer: this is from my database. There are likely to be typographical and factual errors. If this information is important to you, go to the source. 

New permits by operator since February 1, 2015, through today:

Armstrong: 1
BR: 25
BTA: 8
CLR: 9
Corinthian: 8
Crescent Point: 3
Denbury: 1
Emerald: 3
Enduro: 2
Enerplus: 4
EOG: 18
Hess: 16
Halcon: 9
Liberty Resources: 5
Missouri River Resources: 2
MRO: 11
Newfield: 11
Noah Energy: 2
North Plains: 1
Petro-Hunt: 1
QEP: 12
Sedalia: 1
Sinclair: 2
Slawson: 12
SM Energy: 8
Statoil: 15
Whiting: 68
WPX: 14
XTO: 52

Maybe I'm in the minority, but I think there are a lot of story lines in this list.

  • last permit, and it was a single permit that day: March 16, 2015
  • prior to that, three permits on March 12, 2015
  • a single permit, March 11, 2015
  • a single permit, March 9, 2015
  • deep pockets (financially)
  • most Whiting permits are for pad drilling, 4 - 6 wells per pad
  • 14 consecutive permits between March 4 and March 6, inclusive, 2015
  • all pad drilling
  • pad drilling
  • last permit, a singleton, March 12, 2015
  • last permit, prior to that, a singleton, February 6, 2015
  • six permits, pad drilling, Alkali Creek, February 4, 2015

I developed the list to try to undertand WLL's decision to issue 35 million shares and to issue $1.75 billion more in debt.

Massachusetts Asks Washington For Global Warming Disaster Relief -- March 24, 2015

The AP is reporting:
Massachusetts will seek a federal disaster declaration for the record-setting snowstorms that wreaked havoc on the state and piled up what state officials estimate to be $400 million in snow removal costs and other damage.
Governor Baker planned to send a letter to President Barack Obama by the end of the week asking for the disaster declaration for 10 counties, an area encompassing about 250 cities and towns. The letter would be submitted to the Federal Emergency Management Agency, with the final decision on the request to be made by the president. [This is a no-brainer.]
In what the administration acknowledges is an unusual request, the state is asking the federal government to treat the several weeks of storms that began in late January as a single disaster, compounded by frigid temperatures that prevented any immediate melting.
Global warmists predicted much more precipitation. That was this year. Last year they predicted less precipitation. Whatever. The discussion is closed. 

States WIth Federal Lands Producing Oil Subject To New Fracking Rules -- March 24, 2015

CNBC provides this data:
The state that could be most affected by proposed federal fracking rules is not top U.S. crude producer Texas or booming North Dakota. It's Wyoming
The U.S. government released its first regulations for hydraulic fracturing.
The new guidelines apply only to exploration on federal and Native American land.
Wyoming was home to the most oil- and gas-producing acreage on federal lands in fiscal year 2014. More than 4 million acres were producing oil and gas in the state last year. New Mexico came in second, with 3.7 million million acres, followed by Colorado's 1.5 million acres.
Acres producing oil and gas on federal land (source: Bureau of Land Management, FY 2014):
  • Wyoming: 4,033,994
  • New Mexico, 3,727,864
  • Colorado: 1,478,105
  • Utah: 1,119,366
  • Montana: 766,544
  • North Dakota: 570,645
  • Texas: 162,102
  • Oklahoma: 141,496
  • Arkansas: 121,558
  • Kansas: 109,552
Since 1985, Wyoming has issued the most permits to drill on U.S. government-owned turf by far. It approved 40,360 permits over the last two decades, compared with New Mexico's 28,066 approvals and Utah's 10,957.

Lovin' The Euphemisms -- Now It's A "Pause" In The Plan To Leave Afghanistan -- March 24, 2015

Active rigs:

Active Rigs100197187206171

Seven (7) new permits --
Operators: Whiting (4), EOG (2), Sedalia Energy, LLC
Fields: Stockyard Creek (Williams), Bully, Parshall (Mountrail), Lake Darling
Comments: Sedalia Energy, LLC, has a long history in North Dakota, but this is the first time in a long the company has a new permit -- this one is for a well in Lake Darling, in the southwest corner of Renville County. From SFCPartners site:
In March 2014, SFC Energy Partners II made an equity investment in Sedalia Energy, LLC.  Sedalia is a privately held company based in Denver, Colorado and will be focused on the acquisition and development of oil properties in the Northern Williston Basin of North Dakota.
Wells coming off the confidential list Wednesday:
  • 27480, 1,461, WPX, Kale Bad Brave 19-18HX2, Squaw Creek, t2/15; cum 6K 1/15;
  • 28142, 1,110, Hess, HA-Swenson-152-95-1819H-7, Hawkeye, 35 stages; 2.4 million lbs; Three Forks, 9 days to reach TD; upper Bakken might have oil here; 100% in the second bench;  t2/15; cum 11K in five days
  • 28169, 1,246, Emerald, D Annunzio 5-7-6H, Boxcar Butte, t9/14; cum 28K 1/15;
  • 28772, drl, XTO, Ranger 21X-18A, Tobacco Garden, no production data,
  • 28926, 110, Legacy, Legacy Et Al Berge 12-31 2H, North Souris, a Spearfish well, t11/14; cum 9K 1/15;
  • 29009, 217, CLR, Heyerdahl 1-10H1, Bluffton, t2/15; cum 1K 1/15;
  • 29220, drl, BR, CCU Golden creek 4-23MBH, Corral Creek, no production data,
Elsewhere -- Non-Bakken

Another "red line in the sand" covered with ... sand .. or simply blown away by political hot air. Fox News is reporting:
President Obama announced Tuesday that the U.S. will keep nearly 10,000 troops in Afghanistan through the end of the year, hitting pause on the scheduled drawdown after Afghan President Ashraf Ghani voiced security concerns. 
The president, saying Afghanistan remains a "dangerous place," announced the move in a joint press conference with Ghani. The two met earlier in the Oval Office, during Ghani's first White House visit since being elected president of the war-torn country. 
Obama stressed that his goal of finishing the drawdown by the end of his term has not changed, but said hitting pause this year is "well worth it," as the spring fighting season approaches.
I wonder if the 100 US Special Forces pulled from Yemen -- "never particularly democratic" -- will return to the US via Afghanistan?

Reason #35 Why I Love To Blog -- March 24, 2015


March 25, 2015: more on that crude oil storage shortage -- Bloomberg is reporting:
Just as Wall Street says the U.S. is running out of room to store oil, it turns out there’s another 20 million barrels of empty space. 
Where? Right at the top of the tanks. 
A supply glut has dragged U.S. crude for May delivery almost $10 a barrel below contracts a year out. This market structure, known as contango, has encouraged traders to shove the most oil in 80 years into storage so they can sell it for more in the future. The problem is, tanks are filling up, according to banks from Bank of America Corp. to Citigroup Inc. and Goldman Sachs Group Inc. That’s where the extra space comes in.
There’s the normal “working” capacity. And then there’s “contingency” space, a buffer between the working storage and the tank tops that typically sits empty to keep oil from spilling out. The company that built most of the tanks at Cushing, Oklahoma, the biggest U.S. oil hub, says the buffer is about 3 to 5 percent of storage space. That’s equivalent to about 20 million barrels of room in tanks across the country.
Original Post
On March 8, 2015, I was curious about all that talk about US crude oil storage reaching capacity by May, 2015, if not by April, 2015.

The post at the link had this screenshot:

 So, now we have this story today, Business Insider is reporting:
Crude oil storage inventories in the US are at their highest levels in decades. Is that going to cause the price of West Texas Intermediate crude to crash?
Probably not, according to Robert Rapier of Energy Trends Insider.
In fact, we're not even close.
Rapier writes that "oil producers could continue to add a million barrels a week (which is about the average over the past year) for nearly four years before crude oil storage is actually full."
The best-known storage facility, in Cushing, Oklahoma, would run out of space much sooner than that at the current rate (about four months from now). But that still isn't going to happen, according to Rapier:
We are currently in the season when refinery utilization is lowest. Refiners take equipment offline in fall and spring to do maintenance, so they use less crude oil at this time of year. This maintenance usually peaks in March, and then crude oil demand picks back up as refiners gear up for the summer driving season. The difference in refinery demand between this time of year and summer is generally around a million barrels per day, so even if nothing else changes that storage build should start to flatten.
In other words, we may have already hit peak crude storage here in the US, and if not, we're getting very close. 
So incredibly interesting.

Spot Price For Bakken Crude Oil -- March 24, 2015


March 25, 2015: down at the bottom of this post I mentioned that only a psychiatrist could explain Obama's "thinking." I wasn't too far off: it took a neurosurgeon

Original Post

A reader asked if I had a link for Bakken crude oil spot price. This was my reply:

Unfortunately I don't have a specific Bakken crude oil price link.

The best is probably PAA: http://www.paalp.com/customer-center/crude-oil-price-bulletins-1363.html. At that site, the current rate is effective March 23, 2015.

In the "old days," Clearbrook spot price was the Bakken price and Bloomberg published it for free. I linked it for quite some time. Then Bloomberg took the Clearbrook crude oil down from its "free" site and required a subscription -- which, of course, was very, very expensive.

Even the link below (SemGroup/Rose Rock) used to include Bakken but no longer does -- I think part of the reason SemGroup does not include Bakken is because Bakken crude goes to so many different locations; there is no central location for pricing.

The best I can suggest is:
  • search Clearbrook and you might find something
  • I doubt the spot price has changed much from most recent Director's Cut -- the Director's Cut provides "today's" price and that was only two weeks ago
  • finally, I doubt Bakken crude is much different than Kansas Sweet, which can be found at this site: SemGroup/Rose Rock.
Maybe a reader has a link?

The drop in the price of crude oil started to drop in October, 2014. I assume Bakken operators were protected by hedges through April, 2015 (six months) but after June, 2015, my hunch is that some of that protection will be lost.

Global Warming
Climate Change
Ice Age Now

New England experiencing most cold March since 1984.

Flights grounded at O'Hare due to snow -- it is spring, isn't it?

Lake Ontario frozen over.

The Orwellian Presidency

Under Mr. Obama, friends are enemies, denial is wisdom, capitulation is victory. Orwell would have understood the president's upside-down thinking.
No, Orwell would not have been able to understand Obama's thinking. A psychiatrist might be able to explain Obama's thinking, but not a novelist.
The humiliating denouement to America’s involvement in Yemen came over the weekend, when U.S. Special Forces were forced to evacuate a base from which they had operated against the local branch of al Qaeda. This is the same branch that claimed responsibility for the January attack on Charlie Hebdo and has long been considered to pose the most direct threat to Europe and the United States.
So who should Barack Obama be declaring war on in the Middle East other than the state of Israel?
There is an upside-down quality to this president’s world view. His administration is now on better terms with Iran—whose Houthi proxies, with the slogan “God is great, death to America, death to Israel, damn the Jews, power to Islam,” just deposed Yemen’s legitimate president—than it is with Israel.
He claims we are winning the war against Islamic State even as the group continues to extend its reach into Libya, Yemen and Nigeria.
He treats Republicans in the Senate as an enemy when it comes to the Iranian nuclear negotiations, while treating the Russian foreign ministry as a diplomatic partner. He favors the moral legitimacy of the United Nations Security Council to that of the U.S. Congress. He is facilitating Bashar Assad’s war on his own people by targeting ISIS so the Syrian dictator can train his fire on our ostensible allies in the Free Syrian Army.
He was prepared to embrace a Muslim Brother as president of Egypt but maintains an arm’s-length relationship with his popular pro-American successor.
He has no problem keeping company with Al Sharpton and tagging an American police department as comprehensively racist but is nothing if not adamant that the words “Islamic” and “terrorism” must on no account ever be conjoined.
The deeper that Russian forces advance into Ukraine, the more they violate cease-fires, the weaker the Kiev government becomes, the more insistent he is that his response to Russia is working.
To adapt George Orwell’s motto for Oceania: Under Mr. Obama, friends are enemies, denial is wisdom, capitulation is victory.
Perhaps better said, America's enemies are Mr Obama's friends. Remember: everything one learns about life is learned by the time one graduates from kindergarten. He may have been born in Hawaii, but he was certainly not raised there.

Gasoline Prices Rise For The First Time Since June, 2014 -- March 24, 2015

In the Bakken: 50,000 bopd pipeline proposed for Divide and Burke counties.
The [46-mile] pipeline would carry crude from the Divide Pump Station, about 10 miles southeast of Fortuna, to the Basin Transload Rail Facility about 2 miles southeast of Columbus. The $33 million project would include the construction of one above-ground tank with a storage capacity of 400 barrels. 
For Investors

Disclaimer: this is not an investment site. See the blog's disclaimer.

Dow futures are falling -- this is probably the reason, Reuters/Yahoo!Finance is reporting:
U.S. consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation pressures, which could keep a June interest rate increase on the table.
In the 12 months through February, the CPI was unchanged after slipping 0.1 percent in January. Economists polled by Reuters had expected the CPI to rise 0.2 percent from January and slip 0.1 percent from a year ago.
Federal Reserve officials have long viewed the energy-driven weakness in inflation as transitory. The U.S. central bank, which has a 2 percent inflation target, has kept its short-term interest rate near zero since December 2008.
Fed Chair Janet Yellen said last week policymakers could raise interest rates when they had "seen further improvement in the labor market" and were "reasonably confident that inflation will move back to its 2 percent objective over the medium term."
The verbiage about CPI, inflation, targets, Janet Yellen interests me not at this particular moment. What caught my eye was the same thing I posted just a few days ago -- in that first paragraph above:  as gasoline prices rose for the first time since June.
Oil prices continued to slump and "gasoline prices rose for the first time since June." 

It all sounds a bit ... fishy? Not really. There may be a reason of which long-time readers of the blog are aware, and was pointed out by RBN Energy the other day: a mismatch in the "right type" of oil reaching the nation's refineries. Very interesting.

Greece Has More Lives Than A Cat

Reuters reports that Greece has enough cash to last through April 20, 2015. 

Plane Crash

German airline, Lufthansa subsidiary. ~ 150 souls on board.
  • distress signal before dropping off radar. Comment/opinion: Authorities minimize what that "distress signal" was; if it was mechanical problem, generally not "immediately catastrophic" and crew able to discuss with ground controllers; authorities would release that information immediately to reassure flyers if that information known
  • origin: Barcelona, Spain
  • destination: Dusseldorf, Germany
  • passengers: Spaniards, Germans, Turks
  • weather not an issue
  • cruising altitude -- Comment/opinion: planes simply do not have mechanical problems or pilot error at cruising altitude
  • crashed in most difficult area to search
  • Airbus 320: workhorse of the industry
  • witnesses: describe "strange" noises before the plane went down
  • dropped 14,000 feet in minutes suggesting the plane was gliding, "crew" possibly in control, looking for place to land (or crash); the plane was 32 miles from a 11,000-foot runway; the plane was in the air for eight minutes -- on a glide path -- before it was lost 
More idle chatter on this plane crash:
Go to Google maps:

Put in
  • Barcelona (where it took off)
  • Dignes-les-Baines - the Alps where it crashed
  • Dusseldorf (where it was headed)
1. The crash was way too far away to think that the pilots were in a long descent toward the airport. They were nowhere close to Dusseldorf. They weren't even in Germany yet.

2. There was no reason to be flying over the Alps -- it's a straight shot over flat France and flat Germany -- going over the Alps is definitely out of the way to the east.

3. The first question I would ask is whether this plane was on its pre-flight flight plan. If the answer is yes, I would ask air controllers, Lufthansa why a flight like this is routed over the Alps.
The synopsis, the plane sent out no distress signal. The distress signal was from the air traffic controllers:
  • 10.01am CET Flight 4U 9525 takes off
  • 10.44am Plane reaches cruising altitude
  • 10.45am Plane begins unexplained descent
  • 10.47am Air traffic controllers issue ‘third phase’ distress call
  • 10.53am Radar and radio contact breaks off
A long descent
According to [a spokesperson], the plane started to descend very shortly [yeah, like one minute] after it reached its cruising altitude – and continued to do so for eight minutes until it crashed into the mountain at an altitude of some 5,000ft.
He said there was no explanation for why this descent from 38,000ft began, but said the 24-year-old plane was checked the day before the flight and that the captain on board was very experienced, with more than 10 years’ service and 6,000 hours of flying time.
Black boxes found
  • #1: voice data recorder -- last transmission was normal
  • #2: data recorder -- found badly damaged, memory card missing; tweeting:  Germanwings flight's 2nd black box found but severely damaged, memory card dislodged and missing - @nytimes
On March 24, 2015, I wrote this to a reader in an e-mail:
Was the pilot suicidal and just as he reached cruising altitude, the co-pilot walks back to use the bathroom when the checklists are all complete and it's now on autopilot, leaving a single suicidal man in the cockpit (locked cockpit doors). 
Tonight, March 25, 2015: that's exactly what happened; one of the pilots left to use the bathroom (or some other reason) just as they reached cruising altitude -- it's almost standard operating procedure in the past -- and the other pilot locked out the other one, and then suicidally brought the plane into the mountain. It will be interesting to get the background story on the pilot that flew the plane into the mountain.

March 26, 2015, 9:16 a.m.: We now know what happened; over the next 48 hours we might learn why it happened. I follow the story elsewhere and because it has nothing to do with the Bakken I won't link the post where I track the story. As for me, the story is pretty much closed. [Early on I mentioned that the pilot better have a non-Arabic name, a happy marriage, two non-adult children at home, and no skeletons in his/her closet. Interestingly enough, the easiest thing to release -- the name of the pilot alone in the cockpit -- has not been released. Update, March 26, 2015, 9:16 a.m.: co-pilot's name is released -- Andreas Lubitz. Why is it, the British papers do such a better job on-line reporting the news -- the Daily Mail in this case.]

March 26, 2015, 11:14: would you knowingly fly with a co-pilot who dropped out of flight training for 11 months due to depression, and during that time, worked as a flight attendant? Reuters is reporting:
He said the co-pilot had taken an 11-month break, during which he worked as a flight attendant but that he passed all the relevant checks upon restarting. Spohr said the break was not unusual and declined to give details of the reasons behind the pause in training. 
It was a bit unclear when he took the 11-month break, but it sounds like it was during flight training. The co-pilot only had 600 hours of flight time -- sounds like he was depressed most of that time.

March 30, 2015: at this point it's Lufthansa lawyers vs the victims' families' lawyers. Lufthansa starting to dig in their heels -- international limits at $175,000; US history suggests upwards of $5 to $10 million/victim. I think it will be closer to $3 million average, and it's going to be an international scandal if Spaniards are awarded $150,000; Germans $200,000; and, the three US citizens, $5 million each.

March 30, 2015: there is evidence that the co-pilot had been treated for suicidal tendencies in the past; if prosecutors can find the smoking gun that Lufthansa was aware of this prior to hiring him as a pilot, all bets are off with regard for liability.

March 31, 2015: it's now being reported that the co-pilot had sexual identity issues; not a bit surprising; predictable.

March 31, 2015: early reports suggest Lufthansa was very aware of the co-pilot's past mental health history.

April 3, 2015: this provides some insight into the incredible lack of psychiatric insight investigators have. WTOP is reporting:
The co-pilot of the doomed Germanwings flight repeatedly sped up the plane as he used the automatic pilot to descend the A320 into the Alps, the French air accident investigation agency said Friday.
The chilling new detail from the BEA agency is based on an initial reading of the plane’s “black box” data recorder, found blackened and buried at the crash site Thursday.
It strengthens investigators’ initial suspicions that co-pilot Andreas Lubitz intentionally destroyed the plane — though prosecutors are still trying to figure out why. All 150 people aboard Flight 9525 from Barcelona to Duesseldorf were killed in the March 24 crash. 
Let's review the clues:
  • history of psychiatric depression requiring 18 months of intensive therapy
  • suicidal ideation
  • 11 months as a flight attendant when flight training interrupted due to severe depression
  • likelihood of losing his job due to eye problems (likely to have been psychosomatic)
  • "fear of flying"
  • sexual identity issues
  • broke up with his girlfriend almost immediately before the flight
  • doctor's recommendation that he not fly (had this come to attention of his employer, it should have ended his flying career
  • he said that all he ever wanted to do in life was fly for Lufthansa
  • not yet flying for Lufthansa per se, but a subsidiary airline
  • a loser 
April 5, 2015: a mood disorder or a personality disorder -- The Los Angeles Times
"We need to stop talking as if this was a suicidal guy with access to an airplane," said Dr. Jeff Victoroff, a neuropsychiatrist at USC's Keck School of Medicine and a leading researcher on aggression. "This was a murderous guy who probably had elements of a mood disorder and personality disorders."
"People who have depression alone are much, much more likely to bring harm to themselves alone," said Dr. Steven E. Pitt, a forensic psychiatrist who consults with the Phoenix Police Department and conducted the Columbine Psychiatric Autopsy Project after the 1999 high school shootings in Colorado. "There has to be a maladaptive character defect, a character disorder here."

The Century Mark -- 100 Active Rigs -- March 24, 2015

Active rigs:

Active Rigs100197187206171

The NDIC GIS map was not available earlier this morning; it is now active. It was probably being updated.

RBN Energy: "wet" natural gas processing the Marcellus and the Utica.
Fast-rising hydrocarbon production of “wet” natural gas in the eastern Utica and southwestern Marcellus has been creating tremendous opportunities for the small group of midstream firms that saw what was coming—and pounced. Gas processing capacity in the Utica/Marcellus as a whole now tops 7.6 Bcf/d, more than 12 times higher than five years ago. The processing-capacity expansion is continuing, as is the build-out of NGL extraction plants and pipelines, and a broader, well-thought-out plan to integrate all this new infrastructure to allow the region to operate without the luxury of significant NGL storage capacity is finally coming into focus. Today, we continue our look at infrastructure development in the nation’s fastest-growing gas and NGL play.
Driving through the bucolic hills of the Upper Ohio River Valley a short jaunt southwest of Pittsburgh, you’d never guess you were in the heart of what has become a massive, well-planned and well-oiled machine capable of processing ever-increasing volumes of natural gas and separating out purity natural gas liquids (NGLs). Just five years ago there was only 600 MMcf/d of gas processing capacity in the entire northeast region. Most of that capacity was scattered widely, with each facility operating pretty much on a stand-alone basis. Since then, however, gas production in the overall Utica/Marcellus region has seen a 10-fold increase (from 2 Bcf/d to nearly 20 Bcf/d).  Production of dry Marcellus gas (which needs little or no processing before being piped to consumers) in northeastern Pennsylvania seems to be holding its own, even though local prices (TGP Zone 4 Marcellus) have averaged less than $1.30/MMbtu since the first of the year.  But the big growth is coming from the wet Marcellus in southwestern Pennsylvania and northern West Virginia and in the Utica in eastern Ohio (mostly so producers can benefit from the financial uplift of selling NGLs as well as gas).
The wet or NGL-rich gas in these plays has supported a multibillion-dollar build-out of new gas processing facilities to remove ethane, propane and other NGLs from the raw gas so the resulting processed gas meets pipeline specifications, and the NGLs can be sold at what are mostly higher prices than gas on a BTU basis.
Terrorism List

DFW talk radio: Hezbollah and Iran taken off US terrorist list. US government says Hezbollah and Iran taken off the list due to "formatting" changes; John Bolton says it was a John Kerry concession to Iran to get the nuclear deal done. 

Personal Note

The New York Times is reporting:
Now, a physicist who helped devise the [atom bomb] more than half a century ago has defied a federal order to cut from his new book material that the government says teems with thermonuclear secrets.
The author, Kenneth W. Ford, 88, spent his career in academia and has not worked on weapons since 1953. His memoir, Building the H Bomb: A Personal History, is his 10th book. The others are physics texts, elucidations of popular science and a reminiscence on flying small planes.
He said he included the disputed material because it had already been disclosed elsewhere and helped him paint a fuller picture of an important chapter of American history. But after he volunteered the manuscript for a security review, federal officials told him to remove about 10 percent of the text, or roughly 5,000 words.
The book:
World Scientific, a publisher in Singapore, recently made Dr. Ford’s book public in electronic form, with print versions to follow. Reporters and book review editors have received page proofs.
The Department of Energy, the keeper of the nation’s nuclear secrets, declined to comment on the book’s publication.
I must have been in my "nuclear-interest phase" back in 2013. I see I added these books plus many other general physics books to my library that year:
  • Inventing Los Alamos: The Growth of an Atomic Community, Jon Hunner, 2003
  • Robert Oppenheimer: A Life Inside The Center, Ray Monk, c. 2012
A big "thank you" to a reader for alerting me to the book. I will watch for it. On another note, now that I'm in my John le Carré / Tinker Tailor Soldier Spy phase, I will be ordering a copy of the book next time I place an Amazon order.

Monday's Review -- March 23, 2015

Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. My long notes often have typographical and/or factual errors. If this information is important to you go to the source. Do not past go. Do not collect $200. Skip this post. Go directly to the source.

This is going to be a long rambling post. Sorry.

Some days there is just too much to blog and this is one of those days. In addition, family commitments are such that a major portion of each of my days for the next two to three weeks could severely limit my blogging.

1. The Whiting story. This story seems to have more twists and turns than any story in the Bakken. It seems from "day 1" there was talk of Whiting looking to be sold. And we are still talking about it and a sale seems further away than ever. Note the disclaimer at the link and the blog's disclaimer. [Update: on DFW talk radio, it is being reported that WLL in pre-market trading is down 20% on Tuesday morning -- the morning after the announcement -- talk radio says this will have a ripple effect through the oil and gas industry.]

2. The Bakken as a laboratory. There are several stories coming out in the last 72 hours that look at the Bakken as a laboratory. These articles are very superficial but they might provide a bit of insight into the Bakken. This might be the most important for the general follower of the Bakken or the newbie: how Bakken operators are working to thwart OPEC. (The story is printed also at Rigzone.) I brushed over it in passing at this post but it deserves another "shout out." Perhaps if you have time to read only one article on the Bakken this week, this might be the one to read. From the linked article:
OPEC and lower global oil prices delivered a one-two punch to the drillers in North Dakota and Texas who brought the U.S. one of the biggest booms in the history of the global oil industry.
Now they -- the US drillers -- are fighting back.
Companies are leaning on new techniques and technology to get more oil out of every well they drill, and furiously cutting costs in an effort to keep U.S. oil competitive with much lower-cost oil flowing out of the Middle East, Russia and elsewhere.
“Everybody gets a little more imaginative, because they need to,” says Hans-Christian Freitag, vice president of technology for the drilling services company Baker Hughes.
Spurred by rising global oil prices U.S. drillers learned to tap crude trapped in shale starting in the middle of last decade and brought about a surprising boom that made the U.S. the biggest oil and gas producer in the world.
The increase alone in daily U.S. production since 2008 — nearly 4.5 million barrels per day — is more than any OPEC country produces other than Saudi Arabia.
But as oil flowed out and revenue poured in, costs weren’t the main concern. Drilling in shale, also known as “tight rock,” is expensive because the rock must be fractured with high-pressure water and chemicals to get oil to flow. It became more expensive as the drilling frenzy pushed up costs for labor, material, equipment and services. In a dash to get to oil quickly, drillers didn’t always take the time to use the best technology to analyze each well.
When I first start blogging, it took 45 - 60 days drill a well to total depth, and the majority of those were short laterals (about a mile). Now they are drilling two-mile lateral two miles down in ten (10) or less. Completion (fracking) tacks only a few additional days but may be delayed for weeks or months, for operational reason or financial reasons.

Different processes are being used for completion: keep your eye on coiled tubing.

When I first started blogging, I was used to seeing one (1) million lbs or less of proppant and 14 stages or less; now the standard seems to be around four (4) million lbs of proppant and 30 stages, but EOG is completing two-mile (long) laterals with 48 stages and upwards of 15 million lbs of sand.

When I first started blogging, there was a backlog of around 250 wells that needed to be fracked each month. The backlog was simply because of a shortage of frack spreads. The backlog increased over time, to 450 wells that needed to be fracked, and most attributed this to operational reasons (pad drilling). The consensus seemed to be that the frack teams could keep up but operationally (pad drilling) necessitated a delay in fracking. Suddenly, with the slump in oil prices the backlog went to 750 (in December, 2014) and then, incredibly, to 850 in the most recent report (January, 2015). North Dakota rules/regulations require that wells be completed / fracked within a year after they have been drilled. It will be interesting to see if a) that rule is not waived; and, b) if not waived, what happens this summer as the deadline approaches for an increasing number of wells.

3. Then there's this fascinating story: why is North Dakota so stable? Tectonically speaking. With regard to earthquakes. This is in the Pioneer Press:
Swarms of earthquakes have been rattling Oklahoma, Texas and other central states with a history of little or no seismic activity. The recent quakes, according to scientists, may be the fault of deep underground injections of wastewater left over from fracking.
But in North Dakota, where wastewater injection wells are abundant, the ground has remained largely unshaken.
So why are other oil-producing regions significantly more wobbly?
"It's actually a really good question," said Michael Stickney, director of earthquake studies for the Montana Bureau of Mines and Geology. "And I don't know that I have a good answer to it."
As it happens, a study published last month by researchers at the University of Texas at Austin explored the question, comparing drilling activity in Oklahoma and the Williston Basin, which holds the oil-rich Bakken Formation.
The study found no definitive explanation as to why earthquakes are rare in the Bakken, but one reason may be that higher volumes of wastewater are injected into some Oklahoma wells. 
Due to constraints of time, I will leave it at that. 

4. With regard to CBR, there has been a suggestion by our good neighbors in Minnesota, and specifically, a former writer for Saturday Night Live that trains should be re-routed around the Twin Cities. The Star Tribune via Bakken.com is reporting:
Government-ordered rerouting of private rail traffic is not exactly a snowball in hell. It is more like a blizzard in Bahrain — possible, but unprecedented.
In Minnesota and around the country, “rerouting issues ought to be high on everyone’s agenda,” said rail safety expert Fred Millar, who fought unsuccessfully against railroads to move chlorine trains out of the District of Columbia.
“But rerouting has been pushed off the table.”Congress created the Federal Railroad Administration in 1966. In nearly half a century it does not appear to have forced any railroads to reroute trains around big cities for safety reasons, despite computer modeling that estimates routing changes could lower citizens’ risks to hazardous materials derailments by 25 to 50 percent and reduce casualties in an actual derailment by half.
If CBR is important to you, a) be happy that Obama is preoccupied with Netanyahu and the Lynch-for-attorney-general nomination; and, b) Warren Buffett runs the Bakken Railroad.

4.  The 3% reduction in North Dakota oil production month-over-month (December, 2014 - January, 2015) means nothing. I won't be impressed with month-over-month production decreases until we see a) production decreases each month from here on out; or, b) production decreases of more than 5% month-over-month from here on out; or, c) a drop in production to less than 1 million bbls/day.

5. New metrics of interest to me: a) projected number of new oil permits for 2015; and, b) the number of wells waiting to be fracked each month. We are approaching the century mark: 100 active rigs in North Dakota. One-hundred rigs in 2015 can produce as much oil as 175 rigs did back in 2010.

6. Another story to follow: closing of man-camps. This was always the way it was planned. Man-camps during the boom, but once the boom ended, then workers in man-camps would migrate to fixed structures (motels, hotels, apartments, houses) as overall number of roughnecks and truck drivers in the Bakken decreased.

7. I am not going to the link the stories, but there is more and more "evidence" suggesting that Saudi Arabia is coming under more and more pressure from other OPEC countries and non-OPEC oil producing countries regarding the price of oil. "Everyone" blames Saudi Arabia for current slump in oil prices; Saudi Arabia refuses to take sole blame / responsibility. I can see Saudi Arabia's point, but I don't know why they are so defensive.

8. It seems there are two big stories that are inter-related and yet the mainstream media never connects the two. The first story is the slump in oil prices due to glut of global oil; the second is the unrest in the Middle East. If the prize for ISIS is Saudi Arabia, things could get very interesting very soon.

9. This will be a most interesting story to follow. Some say this will hurt the Seattle restaurant industry. Others say "not to worry." The Los Angeles Times is on record as saying the $15 minimum wage won't have any effect on restaurant industry in Seattle. Fox News is reporting:
Seattle restaurants are warning that the looming hike in the city’s minimum wage to $15 an hour could soon force them to cut back their staffs and raise prices. 
For an industry with a slim profit margin to start with, the wage hike could have a profound effect, even as supporters say it will benefit the economy in the long run. 
The increase, up from $9.32 an hour, is set to be phased in starting April 1. The initial minimum wage will be $11 an hour. Employers with 500 or fewer workers must increase their pay to $15 an hour by January 2019. Larger employers, having 501 or more workers, have just two years to raise their worker compensation to $15. 
If this law applies to McDonald's -- minimum wage of $15 / hour -- my hunch is that we will finally see iPad kiosk ordering. For the life of me, I've never understood why we haven't see this already.

Seattle's minimum wage increase is "somewhat gradual," compared to what they did in Oakland. Carpe Diem takes up the story from here