Enbridge Sandpiper Pipeline Ruled "Needed" -- April 14, 2015

The StarTribune is reporting:

Enbridge Energy’s plans for a new pipeline to carry North Dakota crude oil across northern Minnesota got a major boost Monday when an administrative judge concluded that the Sandpiper project is needed — and that other proposed routes are not as good.

The finding by Administrative Law Judge Eric Lipman is not the final word on the $2.6 billion proposed pipeline. But it was a clear defeat for environmental groups, which questioned the need, pointed to the risk of spills and suggested six alternative routes.

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CSX

CSX beats by $0.01, reports revs in-line; Increases dividend and announces $2 bln share repruchase : Reports Q1 (Mar) earnings of $0.45 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.44; revenues increases 0.5% year/year to $3.027 bln vs the $3.01 bln consensus. Revenue was driven by growth across many of CSX's markets and an improved pricing environment, partially offset by the impact of low natural gas prices, lower fuel recoveries and the strong U.S. dollar. At the same time, the benefit of lower fuel prices and cost-saving initiatives more than offset higher inflation and volume-related costs in the quarter.

• The CSX Board of Directors has approved an increase in the quarterly dividend and a new share repurchase program. The 13 percent increase in the dividend, to $0.18 per share, is payable on June 15, 2015 to shareholders of record at the close of business on May 29, 2015. 
• The new, $2 billion share repurchase program is expected to be completed over the next 24 months.

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

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ObamaCare, Pharmaceuticals, and Hillary Converge

Wow, talk about a PhotoShopped "photo."

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Founding Fathers Blew It

They set a minimum age to serve as US President but failed to set maximum age:

• Jeb: 64
• Hillary: 69
• Joe: 74
• RR: 69 years 349 days

My hunch is that Hillary will pay Joe to enter the race just to make her look young.

Oasis Maintains/Increases Borrowing Base At Mid-Year Redetermination -- April 14, 2015

From a press release:

Oasis Petroleum Inc. today announced that the lenders under its revolving credit agreement completed their regular semi-annual redetermination of the borrowing base, resulting in a borrowing base of $1,700 million.  The Company increased the lenders' aggregate elected commitment to $1,525 million from $1,500 million.  The lenders' aggregate commitment can be increased to the full $1,700 million borrowing base by increasing the commitment of one or more lenders. 

Additionally, the Company extended the maturity date of the facility from April 2018 to April 2020, provided that the Company's 2019 Senior Notes are retired or refinanced 90 days prior to the maturity of the 2019 Senior Notes.  Oasis' borrowing base facility is supported by 18 financial institutions.  The next redetermination of the borrowing base is scheduled for October 1, 2015.

This is so cool. Fits the story line that was first posted some weeks ago. 

A thank you to Don for this link as well as the link regarding EOG's share of the 900 wells waiting to be fracked.

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Very, Very Interesting -- Saudi Arabia Watching With Anxiety

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

From Seeking Alpha:

• The price of oil will recover but not back to triple-digits, Citigroup says, leading the firm to recommend ConocoPhillips, Devon Energy, Total, and Statoilwhile downgrading BP.
• Many companies have not left enough headroom to deal with a lower oil price environment after the hot pursuit of growth in recent years, the firm says, believing those most challenged in the new paradigm are players focused on liquefied natural gas and heavy oil, as well as most of the big oil names.
• Citi says “shale is the core of the survivors' party,” and that investors can get "good value exposure” by buying COP and DVN; self-help also will be part of surviving $60-$75 oil, pointing to TOT and STO as having the most potential.
• The firm cuts BP to Neutral because it thinks all its potential self-help has been priced into the stock.

Saudi won't do well on $60 oil. 

Ten (10) New Permits -- North Dakota; April 14, 2015; Percy Sledge Passes Away

Active rigs:

	4/14/2015	04/14/2014	04/14/2013	04/14/2012	04/14/2011
Active Rigs	91	188	186	206	174

Six (6) Slawson Battleax / Chariot permits canceled in McKenzie County.

Ten (10) new permits --

• Operators: MRO (5), SM Energy (3), Whiting, Denbury
• Fields: Antelope (McKenzie), Poe (McKenzie), Pembroke (McKenzie), Cedar Hills (Bowman)
• Comments:

Two (2) wells coming off the confidential list Wednesday:

• 25073, 1,034, Newfield, Sand Creek State 153-96-16-10H, Sand Creek, t1/15; cum 26K 2/15;
• 29320, drl, Statoil, Folvag 5-8 6TFH, Stony Creek, no production data,

Four (4) producing wells completed:

• 29778, 2,171, Whiting, Arnegard 21-26-2H, Timber Creek, t3/15; cum --
• 29777, 1,013, Whiting, Arnegard 21-26-3H, Timber Creek, t3/15; cum --
• 27409, 1,672, Whiting, Koala 4-4-28-4H, Poe, t3/15; cum --
• 25081, 1,312, Statoil, Field Trust 7-6 3TFH, Todd, t3/15; cum -- 

In addition, eight more Whiting wells plugged or producing.

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25073, see above, Newfield, Sand Creek State 153-96-16-10H, Sand Creek:

Date	Oil Runs	MCF Sold
2-2015	8700	0
1-2015	17260	0

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This is quite coincidental. All week I've been listening to Percy Sledge on Muscle Shoals (DVD). Today, I hear that he has died. Very, very sad. I mentioned to my wife that we owe a debt of thanks to the producer/director of that documentary to capture some of these giants on screen.

When A Man Loves A Woman, Percy Sledge

Pretty Cool, Mark Your Calendar -- Looks Like The 3rd Annual State Conference, National Association Of Royalty Owners, June 25 - 26, 2015

This is pretty cool. This must be the third annual state conference of the National Association of Royalty Owners to be held in Minot, June 25 -26, 2015. I see on a google search the first annual state conference was held back in 2013, so ... this must be the third.

I don't see a note on the web yet, but according to a note I received, the speakers will address issues specific to the North Dakota mineral ownership.

NARO website. 

North Dakota NARO website.

For older mineral owners: 

Mony, Mony, Tommy James & the Shondells
For somewhat younger mineral owners:

Money Changes Everything, Cyndi Lauper

The US Is On The Verge Of Energy Independence -- April 14, 2015

Yahoo!Finance is reporting:

The long anticipated decline in the growth of U.S.crude oil production is within sight and is already being priced into West Texas Intermediate. U.S. shale oil production has slowed dramatically in recent weeks as a result of ongoing rig count reductions. As a result, crude prices have continued to firm. Yesterday WTI closed with a modest gain at $52.10/bbl.

According to the EIA report issued on Monday, production in the Bakken formation will decline by nearly 60,000 barrels a day next month. Other major producing fields are also reflecting a significant slowdown in production. For example, the Eagle Ford oilfield in Texas is expected to see production contraction of 30,000 barrels a day next month as well.

This slowdown in production, coupled with a significant increase in refining capacity will alleviate one of the largest gluts of crude oil in U.S. history. The good news for U.S. consumers is that they have enjoyed sharply lower fuel costs. However and more importantly, the specter of $100/bbl fuel in the future is nearly non-existent, as a result of the enormous proven energy assets in several key formations, Eagle Ford, Bakken, Permian and others. The rigs that have been turned off line can be put back into production if prices merit it. In addition there are nearly 3,000 uncompleted wells that could supply energy well into the future if need be.

In short, the United States is not only on the verge of energy independence it is also assured of an uninterrupted supply of domestic crude oil for generations. For the first time in many Americans’ lives the price of crude will virtually immediately trigger online production and in the process place a ceiling on the price of that crude.

No mention of renewable energy.

Most interesting: we are on the "verge" of energy independence, but with the Keystone XL we would have been completely free of the need for Mideast imports.

Annual Energy Outlook 2015 Released Today -- April 14, 2015

See EIA blurb below. Reuters is reporting:

The United States will transition from a net importer of natural gas to a net exporter of the fuel by 2017 as the nation's shale gas production continues to grow, the U.S. Energy Information Administration said on Tuesday in its Annual Energy Outlook.

In its 2014 outlook, the EIA forecast the U.S. would become a net exporter of gas before 2020.

The EIA said increases in domestic gas production are expected to reduce demand for gas imports from Canada and support growth in exports to Mexico, Asia and Europe.

Net gas exports would continue to grow after 2017, with annual net exports reaching 3.0 trillion cubic feet to 13.1 tcf in 2040.

The United States produced a total of 24.4 tcf of dry gas in 2013 and was expected to produce between 31.9 tcf to 50.6 tcf in 2040, according to the report.

There are four LNG export terminals under construction in the United States in Maryland, Louisiana and Texas. The four terminals have contracts to export gas to customers in Asia and Europe and are expected to enter service between 2016 and 2019.

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The EIA blurb today:

EIA’s AEO2015 projects that U.S. energy imports and exports come into balance, a first since the 1950s, because of continued oil and natural gas production growth and slow growth in energy demand.

WASHINGTON, DC - The Annual Energy Outlook 2015 (AEO2015) released today by the U.S. Energy Information Administration (EIA) presents updated projections for U.S. energy markets through 2040 based on six cases (Reference, Low and High Economic Growth, Low and High Oil Price, and High Oil and Gas Resource) that reflect updated scenarios for future crude oil prices.

“EIA’s AEO2015 shows that the advanced technologies are reshaping the U.S. energy economy,” said EIA Administrator Adam Sieminski. “With continued growth in oil and natural gas production, growth in the use of renewables, and the application of demand-side efficiencies, the projections show the potential to eliminate net U.S. energy imports in the 2020 to 2030 timeframe. The United States has been a net importer of energy since the 1950s. In cases with the highest supply and lowest demand outlooks, the United States becomes a significant net exporter of energy,” said Mr. Sieminski.

The full report can be viewed on EIA's website at: http://www.eia.gov/forecasts/aeo/

Some key findings:

U.S. net energy imports decline and ultimately end in most AEO2015 cases, driven by growth in U.S. energy production—led by crude oil and natural gas—increased use of renewables, and only modest growth in demand. Net energy imports end before 2030 in the AEO2015 Reference case and before 2020 in the High Oil Price and High Oil and Gas Resource cases. Significant net energy imports persist only in the Low Oil Price and High Economic Growth cases, where U.S. supply is lower and demand is higher.

Continued strong growth in domestic production of crude oil from tight formations reduces net imports of petroleum and other liquids. Through 2020, strong growth in domestic crude oil production from tight formations leads to a decline in net petroleum imports and growth in product exports in all AEO2015 cases. The net import share of petroleum and other liquids product supplied falls from 26% in 2014 to 15% in 2025 and then rises slightly to 17% in 2040 in the Reference case. With greater U.S. crude oil production in the High Oil Price and High Oil and Gas Resource cases, the United States becomes a net petroleum exporter after 2020.

Net natural gas trade, including LNG exports, depends largely on the effects of resource levels and oil prices. The United States transitions from being a net importer of natural gas to a net exporter by 2017 in all cases. U.S. natural gas net export growth continues after 2017, with annual net exports in 2040 ranging from 3.0 trillion cubic feet (Tcf) in the Low Oil Price case to 13.1 Tcf in the High Oil and Gas Resource case.
Regional variations in domestic crude oil and natural gas production can force significant shifts in crude oil and natural gas flows between U.S. regions, requiring investment in or realignment of pipelines and other midstream infrastructure. In most AEO2015 cases, Lower 48 crude oil production shows the strongest growth in the Dakotas/Rocky Mountains region, followed by the Southwest region. The strongest growth of natural gas production occurs in the East region, followed by the Gulf Coast onshore and the Dakotas/Rocky Mountains regions. Interregional flows to serve downstream markets vary significantly among the cases.

Technology and policy promote slower growth of energy demand. U.S. energy use grows at 0.3%/year from 2013 through 2040 in the Reference case, far below the rates of economic growth (2.4%/year) and population growth (0.7%/year). Decreases in transportation and residential sector energy consumption partially offset growth in other sectors. Declines in energy use reflect the use of more energy-efficient technologies as well as the effect of existing policies that promote increased energy efficiency. Fuel economy standards and changing driver behavior keep motor gasoline consumption below recent levels through 2040 in the Reference case.

Renewables meet much of the growth in electricity demand. Rising long-term natural gas prices, the high capital costs of new coal and nuclear generation capacity, state-level policies, and cost reductions for renewable generation in a market characterized by relatively slow electricity demand growth favor increased use of renewables.

Energy-related carbon dioxide emissions stabilize with improvements in energy and carbon intensity of electricity generation. Improved efficiency in the end-use sectors and a shift away from more carbon-intensive fuels help to stabilize U.S. energy-related carbon dioxide (CO2) emissions, which remain below the 2005 level through 2040.

Other AEO2015 highlights:

• In the AEO2015 Reference case, the price of global marker Brent crude oil is $56/barrel (bbl) (in 2013 dollars) in 2015 (Figure 4). Prices rise steadily after 2015 in response to growth in demand; however, downward price pressure from rising U.S. crude oil production keeps the Brent price below $80/bbl through 2020. U.S. crude oil production starts to decline after 2020, but increased output from non-OECD and OPEC producers helps to keep the Brent price below $100/bbl through most of the next decade and limits price increases through 2040, when Brent reaches roughly $140/bbl. There is significant variation in the alternative cases. In the Low Oil Price case, the Brent price is $52/bbl in 2015 and reaches $76/bbl in 2040. In the High Oil Price case, the Brent price reaches $252/bbl in 2040. In the High Oil and Gas Resource case, with significantly more U.S. production than the Reference case, Brent is under $130/bbl in 2040, more than $10/bbl below its Reference case price.

• Total U.S. primary energy consumption grows from 97.1 quadrillion Btu in 2013 to 105.7 quadrillion Btu in 2040 in the AEO2015 Reference case with most of the growth in natural gas and renewable energy use. In the High Oil Price case, total primary energy use is 3.9 quadrillion Btu higher in 2040 than in the Reference case, even though liquids consumption is 3.3 quadrillion Btu lower. Total primary energy consumption is very sensitive to economic growth assumptions, with projected levels in 2040 ranging from 98.0 quadrillion Btu in the Low Economic Growth case to 116.2 quadrillion Btu in the High Economic Growth case.

• In the AEO2015 Reference case, energy use per dollar of GDP declines at an annual rate of 2.0% from 2013 through 2040, as per capita energy use declines at an annual rate of 0.4%. Energy intensity declines at a lower rate in the Low Economic Growth case and at a slightly higher rate in the High Economic Growth case.

• In the AEO2015 Reference case projection, U.S. energy-related CO2 emissions are roughly 5,550 million metric tons (mt) in 2040. As renewable fuels and natural gas account for larger shares of total energy consumption, CO2 emissions per unit of GDP decline by 2.3%/year from 2013 to 2040. Among the alternative cases, emissions show the greatest sensitivity to levels of economic growth, with 2040 totals varying from roughly 5,980 million mt in the High Economic Growth case to 5,160 million mt in the Low Economic Growth case. In all the AEO2015 cases, emissions remain below the 2005 level of 5,993 million mt.

• The AEO2015 cases generally reflect current policies, including final regulations and the sunset of tax credits under current law. Consistent with this approach, EPA’s proposed Clean Power Plan rules for existing fossil-fired electric generating units or the effects of relaxing current limits on crude oil exports are not considered in AEO2015. These topics will be addressed in forthcoming EIA service reports. 

To focus more resources on rapidly changing energy markets and the ways in which they might evolve over the next few years, EIA has revised the schedule and approach for production of the AEO. Starting with AEO2015, EIA is adopting a two-year release cycle for the AEO, with a full edition of the AEO produced in alternating years and a shorter edition in the other years. AEO2015 is a shorter edition of the AEO.  

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The Beginning Of The End

This is the beginning of the end of his campaign. I will vote for Hillary before I vote for Christie with this kind of platform. [In case the link is broken, Christie wants to means-test social security starting at $80,000 for individuals and raising retirement age from 67 to 69. Means-testing might be appropriate at some level -- might be, but I won't support it -- but raising retirement age to 69 hurts the folks who most depend on social security. Tighter rules on disability might make more sense.]

You Better Move On, The Rolling Stones

Comments On Today's Director's Cut -- April 14, 2015

Updates

Later, 4:28 p.m. CT: Reuters is reporting that largest share of the 900 unfracked wells belong to EOG: 

Wells owned by oil producer EOG Resources Inc comprise the largest number of an estimated 900 North Dakota wells waiting to be fracked, state officials said on Tuesday.

The number of new wells that have been drilled but waiting to be fracked has risen in recent months amidst a more than 50 percent drop in crude prices and an expect $5.3 billion industry tax break in June.

While the estimate of unfracked wells had been published monthly, it wasn't clear until Tuesday which companies were delaying fracking. Oilfield service companies have aggressively sought the information, hoping to drum up new business with those delaying.

EOG is "able to drill a lot of wells and maintain production, while still bank a lot of wells for future price increases," Lynn Helms, head of the state's Department of Mineral Resources, said on a conference call with reporters.

Thank you, Mr Helms for helping elucidate.
 

Original Post

Some quick comments on today's Director's Cut (data for February, 2015).

The Red Queen is still upright on the treadmill. Note that production decreased only 1% month-over-month despite the huge decrease in the number of completions. At the height of the boom one could expect 175 completions/month. In February, the number of completions was 42. Wow. NDIC suggests that 110 - 120 well completions/month are needed to maintain 1.2 million bopd production.

In the past, NDIC suggested that 115 well completions / month were needed to maintain 1.2 million bopd production. That number has now changed to a range of 110 - 120.

Flaring capture rate statewide is 81%. Flaring capture on the reservation (FBIR) is now 83%. The FBIR used to be the long pole in the tent when it came to flaring capture but that looks to have been resolved (most likely due to decrease in well completions, choking back, etc).

The director does not break it out, but my hunch is the low price of oil drives the number of active rigs, and where they drill; but, the NDIC flaring rules have a greater impact on well completions. There's no way to know, but one would think that if one is going to drill a well, one would want to complete it, all things being equal.

The number of wells waiting completion continues to increase, now up to 900. There is no precedent so there is really no way to predict when this number will peak. For folks who hope that the price of oil will rise, this is perhaps not a good omen.

The director did not mention operators discussing re-fracking older wells. Whiting alone may have as many as 115 wells that could be suitable for re-fracking. Long before the slump in oil prices, Marathon announced a re-fracking program.

The number of producing wells continues to increase.

Although permitting is down, it is not down significantly; this is probably due to pad drilling.

Today's price for Bakken ($36) is higher than the price one month ago ($32).

This was a particularly interesting comment from the Director's Cut:

"As you are aware the exploration well in Emmons County is not longer on confidentail status as of 12/23/14. The well has not been completed yet, but appears to contain 2 pay sections totaling about 80 feet thick with very good gas shows."

Director's Cut Is Out; February, 2015, Data

Link here.

Disclaimer: this update is always done in haste; typographical errors are likely. This is for my use only. If this is important to you, you should go to the source. 

Comments on today's Director's Cut can be found here. 

Oil:

• February, 2015: 1,177,094 (preliminary --
• January, 2015: 1,191,198 (all time high was last month)
• December, 2014: revised, 1,227,483 (preliminary - 1,227,344 bopd - preliminary, new all-time high)
• delta: 14,104 bopd; decrease of 1%.

Producing wells: 

• February, 2015: 12,197 (preliminary -- new all-time high)
• January, 2015: 12,181 (preliminary -- new all-time high)
• December, 2014: 12,134 (preliminary, new all-time high)
• November, 2014: 11,951 (revised); 11,942 (preliminary, new all-time high)
• October, 2014: 11,892; revised 11,942 (preliminary, new all-time high)
• September, 2014: 11,758 (revised); 11,741 (preliminary; new all-time high)
• August, 2014: 11,565

Permitting:

• March, 2015: 190
• February, 2015: 197
• January, 2015: 246
• December, 2014: 251
• November, 2014: 235
• October, 2014: 328
• September, 2014: 261
• August, 2014: 273
• All-time high was 370 in 10/2012
  

Pricing:

• Today, 2015: $36.25 (lowest since February, 2009, and January, 2015) (all-time high was $136.29 7/3/2008)
• March, 2015: $31.47
• February, 2015: $34.11
• January, 2015: $31.41
• December, 2014: $40.74
• November, 2014: $60.61
• October, 2014: $68.94
• Sept, 2014: $74.85
• August, 2014: $78.46

Rig count:

• Today: 91(lowest since January 2010) (all time high was 218 on 5/29/2012) 
• March: 108
• February: 133
• January: 160
• December, 2014: 181
• November, 2014: 188
• October, 2014: 191
• Sept, 2014: 193
• August, 2014: 193
• July, 2014:  192

Director's comments:

Oil price is by far the biggest driver behind the slow-down, with operators reporting postponed completion work to avoid high initial oil production at very low prices and to achieve NDIC gas capture goals.

Drilling rig count:

• dropped 17 from March to today
• dropped 25 from February to March
• dropped 27 from January to February
• dropped 7 from November to December
• dropped 21 from December to January
• dropped 23 from January to today

Rig utilization:

• has fallen rapidly
• 20,000+ feet rigs: 50%
• shallow well rigs: 30%

Well completions:

• February: 42
• January: 63
• December: 173 (preliminary)
• November: 48

Weather:

• no major precipitation events
• only 5 days with wind speeds in excess of 35 mph (too high for completion work)
• 8 days with temperatures below -10F

Wells waiting to be completed:

• At end of February, an estimated 900 wells waiting to be completed, an increase of 75
• March, 2015, Director's Cut -- 825 wells -- an increase of 75-- January data
• Previous Director's Cut -- 750, a decrease of 25
• Red Queen: 110 - 120 completions per month to maintain 1.2 million bopd (note: completions are down to 42 in February)

Flaring:

• decreased to 19%
• Tioga gas plant increased to 84% of full capacity
• expansion of gas gathering from south of Lake Sakakawea is still delayed

Gas capture statistics:

• statewide: 81% (October 2014 target was 74%; January 2015 capture target is 77%)
• FBIR: 83% (up from 79% last month, which was up from 77% the month before)

Top 100 Oil Fields, 2009 - 2013, EIA; A Look At The Truax Field

EIA pdf document.

Previously discussed.

This is a document to keep.

A few days ago a reader sent me a note suggesting how stunning the Bakken really is. The reader has interests in the Truax oil field. Here is part of that note:

But now when I look at the article more, and look at the Top 10, I am so confused. Are we really comparing a small field (Truax, basically a 6 mile by 6 mile township) to a huge field like Eagleville or Spraberry in TX or Prudhoe Bay in Alaska? I read in the article where it labeled a "field" based on a single reservoir, but it seems strange that tiny Truax would be compared to fields that encompass many counties (I believe it said either Eagleville or Spraberry in Texas covers 14 counties).

It said fields are defined differently by the states, but I have to assume I am not understanding this correctly as it makes about as much sense as comparing the number of fish in, for example, Spring Lake in Williston to number of fish in Lake Superior.

Yes, they are both lakes, but... unfair to compare unless size is factored in. But if there is no factoring in size, and we are really comparing huge areas of land to tiny Truax (or any of the other ND fields I would guess), it makes the list of Top 100 even more stunning for us!

It's possible that I'm mis-reading the EIA report at the link but I don't think so.

The most frustrating thing about the report is that it provides estimated production for the year 2013, but does not provide estimated proved reserves, and that is how the 100 top oil fields are ranked -- by estimated proved reserves, not by production (which, of course, makes sense, but begs the question why the EIA did not include EPR).

Having said that, if I'm reading the data correctly, the EIA report suggests just how incredible the Bakken really is.

The EIA report was based on data through 2013. In that report, the EIA reported that the estimated production from Truax oil field for the entire year was 4,011,000 bbls.

So, let's see what production was for 2014:

• January: 456,703
  February: 437,447
• March: 445,838
• April: 463,018
• May: 489,026
• June: 412,166
• July: 385,748
• August: 404,418
• September: 497,791
• October: 497,244
• November: 723,244 (no typo)
• December: 602,736

Total: 5,815,379 bbls (a 45% increase year-over-year)

If the field would have produced at 700,000 bbls/month (see November, 2014): > 8 million bbls.

The Truax field was ranked #41 of the top 100. There were many fields in the top 100 from Alaska and California. Many of those fields were legacy fields and one can assume production in those fields are declining whereas the Bakken is relatively new and one can only expect production to increase. Technically, the rankings should not change much because the rankings are based on estimated proved reserves. However, it is very possible the estimates for the fields in the Bakken will be revised upward.

Disclaimer: I often make factual or typographical errors on posts with lots of data. I often make simple arithmetic errors. I did not double-check the data above. If this information is important to you, go to the source. 

Tuesday -- Miscellaneous -- April 14, 2015

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

Netflix is surging again today.

Samson Oil & Gas provides monthly update; 7 wells remain shut in: Co reports its net production for March continued to grow as the results of the 2014 infill drilling in North Stockyard are incorporated. Seven wells remain shut in as the operator manages the field with minimal operating cost in response to the current oil price. Given that all of the wells have been drilled and fracked, the individual well reports will be discontinued, however we will provide mid-monthly production reports with commentary.

Wells Fargo beats by 6 cents.

Detroit, Stockton -- tip of the iceberg? Reuters is reporting:

The municipal bankruptcies in Detroit and Stockton, California, may foretell more widespread problems in the United States than is implied by current bond ratings, a top Federal Reserve official said on Monday.

Monthly Review Of CBR Data -- April 14, 2015

Active rigs:

	4/14/2015	04/14/2014	04/14/2013	04/14/2012	04/14/2011
Active Rigs	91	188	186	206	174

RBN Energy: monthly review of CBR data.

Data from the new Energy Information Administration (EIA) monthly report on crude-by-rail (CBR) shows that shipments from Canada increased from less than 10 Mb/d two years ago in January 2012 to over 130 Mb/d in January 2015. The increase in CBR movements mirrors increasing Canadian crude exports to the U.S. – the majority of which are still pipeline movements. Today we look at the destination markets for Canadian CBR in the light of congested pipeline capacity out of Western Canada.

In Episode 1 of this series we introduced new EIA monthly data on CBR movements in the U.S. and Canada. The data derives from carload rail movements captured by the Surface Transportation Board (STB) and various estimates of Bbl per carload. The EIA report is updated monthly with recent months being estimates based on historical correlations. We found that the growth in U.S. CBR shipments (up from 20 Mb/d in January 2010 to just under 1 MMb/d in December 2014) closely tracked expanding U.S. crude production (up 71%) over the past four years. CBR has proven to be a flexible solution for producers waiting on pipeline infrastructure. But while the volume of CBR movements increased, favored origins and destinations changed considerably over that time period.

Our analysis showed that increasing volumes of crude moved by rail out of the Midwest (mainly from North Dakota) were destined for the East and West Coasts –routes that have no competition from pipelines and where refiners have invested in unloading infrastructure meaning they are more committed to rail. We noted that volumes shipped to the Gulf Coast from North Dakota fell off after crude price differentials between the inland market represented by West Texas Intermediate (WTI) crude at Cushing and the coastal market represented by Brent crude, narrowed. In situations where CBR competes directly with pipelines the higher cost of rail is a disadvantage, unless pipeline congestion increases crude price differentials enough to justify higher rail freight costs. This time we look at the growth of rail movements out of Canada.

In summary, the EIA data provides additional insight into CBR deliveries to the U.S. from Canada – suggesting that in spite of a continued build out of rail loading capacity in Western Canada and congestion on pipelines out of Alberta, rail movements are still only expanding slowly. CBR shipments to the Gulf Coast (including the Midwest) still only match those to the smaller East Coast refining market. The West Coast also remains a minor market for Canadian CBR. All indications are that unless Canadian pipeline projects progress through permitting more rapidly than expected, CBR movements should see still more expansion in the next year.

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EIA Forecasts End Of Boom

Bloomberg is reporting:

Output from the prolific tight-rock formations such as North Dakota’s Bakken shale will decline 57,000 barrels a day in May, the Energy Information Administration said Monday. It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013.

Deutsche Bank AG, Goldman Sachs Group Inc. and IHS Inc. have projected that U.S. oil production growth will end, at least temporarily, with futures near a six-year low. The plunge in prices has already forced half the country’s drilling rigs offline and wiped out thousands of jobs. The retreat in America’s oil boom is necessary to correct a supply glut and rebalance global oil markets, according to Goldman.

“U.S. production can return quickly with any price recovery,” Adam Longson, an analyst at Morgan Stanley in New York, said in an April 13 research note. “A backlog of uncompleted wells, falling service costs, hedging opportunities and plenty of capital on the sidelines should all support investment, perhaps more than the market expects.”

Output from the Eagle Ford in Texas, the second-largest oil field in the U.S., is expected to fall 33,000 barrels a day in May to 1.69 million. Production in the Bakken region of North Dakota will decline 23,000 to 1.3 million, the EIA said.

Yield from the Permian Basin in West Texas and New Mexico, the largest U.S. oil field, will continue to rise, by 11,000 barrels a day to 1.99 million.

I could be wrong but I believe production from North Dakota decreased month-over-month in the most recent Director's Cut (data from January, 2015). 

Data for February in the April, 2015, Director's Cut could be released as early as today but will certainly be released by the end of this week.

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Affordable Care Act

As predicted, ObamaCare has been a boon to the heath care industry in general, and the pharmaceutical industry in particular. Isn't inflation running close to zero percent? Not for the pharmaceutical companies. Everywhere one can find stories reporting the same "news": US prescription drug spending jumped to $374B in 2014.

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

Back in March, 2015, I talked about the incredible opportunities for young investors with the passage of ObamaCare. This is not rocket science.

Triangle Petroleum Beats By One Cent -- April 14, 2015

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

From Yahoo!In-Play:

Triangle Petroleum beats by $0.01, beats on revs: Reports Q4 (Jan) earnings of $0.06 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.05; revenues rose 83.6% year/year to $156.99 mln vs the $154.27 mln consensus.

• Increased Q4 2015 volumes to 1,357 Mboe (+103% y/y) from 667 Mboe in Q4 2014. Q4 2015 average daily volumes were 14,747 Boepd as compared to 7,249 Boepd in Q4 2014