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Monday, April 20, 2015

Hospital Consolidation -- The ObamaCare Effect -- April 20, 2015

As predicted, ObamaCare is resulting in hospital consolidation.

The WSJ is reporting:
During the 2008 financial crisis, “too big to fail” became a familiar phrase in the U.S. financial system. Now the U.S. health-care system is heading down the same path with a record number of hospital mergers and acquisitions—95 last year—some creating regional monopolies that, as in all monopolies, will likely result in higher prices from decreased competition.
Hospital consolidation, done properly in a competitive marketplace, can have positive effects. Multi-hospital conglomerates can quickly disseminate best practices and quality initiatives, for example. But competition and the choices it provides can also disappear.
Health-care conglomeration aligns with the Affordable Care Act, which created incentives for physicians and hospitals to work together in “accountable care organizations.” But an important and often forgotten prerequisite for this model is hospital competition.
Some see the dangers. In a rare move, Massachusetts Superior Court Judge Janet Sanders recently blocked Partners HealthCare—Harvard’s affiliated 10-hospital conglomerate and Massachusetts’ largest private employer—from acquiring three competitor hospitals. Judge Sanders argued that the expansion “would cement Partners’ already strong position in the health-care market and give it the ability, because of this market muscle, to exact higher prices.” This threat is even greater in rural areas where one hospital is often the only provider.
Today’s frenzy of hospital mergers and physician practice acquisitions is giving hospital systems even greater leverage to inflate opaque “charge-master” medical bills that even hospitals are sometimes unable to itemize sensibly. With no mechanism to allow free-market forces to keep prices in check, this translates into higher health-insurance deductibles and copays for insured Americans, and in the case of Medicare and Medicaid, higher taxes.
This is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

To see just how well the health care industry has done under ObamaCare, click here.

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Finally?
 
It's hard to believe that Greece won't default this time based on all the headlines, but it is interesting how the deadline keeps moving. The original deadline (in this current episode) was April 9th. Then it moved to April 24th.

Now, The [Europe] Times is reporting:
Greek debt costs leapt yesterday as the French central bank warned that the banking sector in Athens is on the verge of collapse. The euro fell 0.6 per cent to $1.074 after International Monetary Fund and G20 meetings in Washington held out little progress on the prospect of Greece satisfying creditors to unlock €7.2 billion in financial aid by the end of the month. 
April 30th?

Five Of Six Bakken Wells To Go To Drill Status Tuesday, April 20, 2015

Active rigs:


4/20/201504/20/201404/20/201304/20/201204/20/2011
Active Rigs93188185210175

Six (6) new oil and gas permits:
  • Operators: Hess (3), Samson Resources (3) 
  • Fields: Beaver Lodge (Williams), Ambrose (Divide)
  • Comments:
In addition to these six new oil and gas permits, there were two permits for salt water disposal wells. Using the slowdown to get caught up with infrastructure?

Eight (8) producing wells completed:
  • 28486, 1,241, Hess, HA-Dahl-152-95-0706H, Hawkeye, t3/15; cum --
  • 28720, 617, Hess, EN-Neset-196-94-0706H-4, Big Butte, t3/15; cum --
  • 28350, 2 (no typo/see below), Anschutz, Jacobson 1-29-134-104, Wildcat, 29-134-104, a Red River well, far southwest corner of state, 9 miles northeast of Marmarth, application to test Icebox Shale, Red River, Tyler, and Lodgepole, looks like plans to plug and abandon this well, t1/15; cum --
  • 28180,  1,122, Hess, HA-Rolfsrud-152-96-1720H-4, Westberg, t3/15; cum --
  • 28587, 906, Hess, LK-A Qtr CCir-147-96-1807H-4, Big Gulch, t3/15; cum --
  • 28586, 914, Hess, LK-A Qtr Cir-147-96-1807H-5, Big Gulch, t3/15; cum --
  • 28487, 1,434, Hess, HA-Dahl-LW-152-95-0706H-1, Hawkeye, 4 sections, t3/15; cum --
  • 20769, 144, CLR, Pronghorn 41-23H, Cedar Hills, a Red River B well, t4/15; cum --
Wells coming off the confidential list Tuesday:
  • 26042, drl, CLR, Patterson Federal 5-13H, Camp, no production data,
  • 26620, drl, Petro-Hunt, Glovatsky 145-98-24D-13-2H, Little Knife, no production data,
  • 29172, drl, MRO, Berlin 41-25H, Reunion Bay, no production data,
  • 29435, drl, Slawson, Vixen Federal 1 SLH, Big Bend, no production data,
  • 29566, 362, CLR, Odegard 1-20H1, Bluffton, t3/15; cum --
  • 29567, drl, SHD, Java 24-30H, Deep Water Creek Bay, no production, data,
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Formation Depths In Southwest North Dakota Based On 
Anschutz #28350, Jacobson 1-29-134-104, Wildcat

TD: 10,794 feet.

Dakota: 5,100
Pine: 6,438
Tyler: 7,341
Otter: 7,494
Lodgepole: 8,627
False Bakken: 9,015
Scallion: 9,179
Three Forks: 9,210
Nisku: 9,279 (I think this is also called Birdbear)
Duperow: 9,310
....

Red River: 10,159
Red River A; 10,170
Red River B: 10,202
Red River C: 10,259
Red River D: 10,338
Roughlock: 10,685
Icebox: 10,707 (which was their primary target (or at least the first target they put on the application)
Black Island: 10,815
Deadwood: 10,885


It is interesting to note that the Middle Bakken was not listed; the Middle Bakken probably does not extend this far southwest.

China: Stimulus -- April 20, 2015; Market Responds

This is kind of cool. I've talked about it before. AFP is reporting:
Oil prices rose Monday, extending recent strong gains, as the market assessed fresh stimulus action by China against a background of a US crude supply glut.
Disclaimer: this is not an investment site. Do not make any investment or financial decision based on what you read here or think you may have read here.

Meanwhile, in the Mideast, speaking quietly but wielding a huge stick, the AP is reporting:
The U.S. Navy aircraft carrier USS Theodore Roosevelt is steaming toward the waters off Yemen to beef up security and join other American ships that are prepared to intercept any Iranian vessels carrying weapons to the Houthi rebels fighting in Yemen.
Gulf of Tonkin redux?

Zeits On The Global Gas And Oil "Situation" -- April 20, 2015

Zeits is writing:
In the past few years, U.S. shales have remained one of the most popular headline themes in the oil-focused financial media. 
With shale oil being the industry's most dynamic "new kid on the block," some of that attention is well deserved. However, the intense coverage has also been due to the simple fact that the U.S. Oil & Gas is one of the world's most "investable," fragmented and open industries. As a result, hundreds of publicly-traded companies offer rich streams of information to a very large universe of interested investors, fueling an intense information dissemination. 
However, oil is a global commodity and it is important not to lose perspective on its global fundamentals by focusing too much on U.S. tight oil. It would be particularly precarious to extrapolate the dynamics that one can currently observe in the North American Land segment onto the rest of the global oil industry, which is often less visible and less understood by investors. 
While all industry participants feel the pain of the low oil prices, the following anecdotal data points show that the cycle may be playing out differently in the U.S. shales than in the rest of the world:
  • Saudi Arabia and several other GCC producers appear to be quite busy increasing their investment in production capacity.
  • Russia's activity in legacy operating areas remains steady.
  • U.S. Gulf of Mexico deepwater activity is on the rise (although focus is apparently shifting towards development projects, away from exploration).
  • By contrast, U.S. operators reduced the aggregate oil-directed rig count two-fold in a matter of just three months, a dramatic adjustment given the industry's sheer size.
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Apple Page

I just spent a most delightful hour in the Apple retail store in Southlake (Texas) still trying to get a handle on problems with the MacBook Pro that I "work to death." Every time I go into the store to be helped (rather than just browsing) I am blown away by how "good" they really are.

Their methods may not suit everyone, but considering the volume of customers they need to serve, and the vast continuum of knowledge of their consumers (from no knowledge to quite smart about Apple products, hardware and software) they do quite well.

When working a problem at the genius bar, it takes awhile to for systems to install and then reboot. It's always a challenge to get the genius to engage in small talk but if one is successful, it's very, very rewarding.

On a scale of 1 to 10, the genius who helped me today was a 5 or 6 but with some coaxing, he became a 7 or 8 but kept his remarks serious. His buddy, who is relatively new, and who I really like a lot, is easily a 10, but is not nearly as knowledgeable about the Apple as others working that area. Last week, the individual who helped me was a) either having a bad day, or b) that was simply his personality. He worked my problem very hard, but didn't seem much interested in anything else. It would have been better just to leave the computer at the store, fix the problem, and then pick it up later. Be that as it may, I'm never disappointed; I just have better experiences some day than others.

Some trivia.

The genius who I enjoy talking to most is really enamored with the new MacBook. We didn't get a chance to really discuss it, but he says it's a bit early to say for sure how much he will end up liking it, but right now, he really, really likes it. I'm not sold on it yet ... no Sandisk slot is the biggest negative for me.

He also agrees with me that the Apple Retail stores are in need of a re-boot to match the luxuriousness of the new watches.

The genius who worked with me today and is perhaps one of the two best I've met at the retail store here in Southlake agreed with me that the "current" MacBook Air is excellent. The "original" MacBook Airs were not good in his estimation.

He also remarked that it's very important that if folks have marginal understanding of the capability of today's computers, they spend a bit of time discussing it with Apple employees -- and several Apple employees -- to determine which product is best any one individual. For example, a heavy, heavy older user (like me) might find the MacBook Air more than adequate but for someone going off to college, no. At least a MacBook Pro. College students need a whole lot more memory than what the Air will provide. But as folks get used to pushing more and more stuff to the cloud, even this becomes less of an issue.

Boomboxes? Sometime ago I bought the UE for my wife and we love it. I had gone in to buy the Pill by Beats but the Apple employee that day recommended the UE. Today, out of curiosity I asked the two employees working that area which they prefer: Beats Pill or the UE. Hands down, without even pausing, both said the UE.

I see Apple now says that some watches will be arriving in the mail as promised on April 24th. They are starting to ship to be at the fulfillment centers on April 23rd and then delivered the next day. Much more of the story here, but it sounds like Ms Ahrendts is earning her pay.

By the way, speaking of the Apple Watch -- run through these most recently announced apps. Quite impressive to say the least -- and note, even Microsoft has a photo app for the Apple Watch.

Monday, Monday -- April 20, 2015

I guess the Chinese economy is back on track and Greece will be able to pay its creditors: those were the two reasons the market dropped 300 points on Friday, and today in early trading the market is up 200 points.

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.

I didn't see the race; they talked about it on local radio station this morning -- it must have been a disaster with weather delays, etc, but, wow, it was a great finish for some of the "old" names: Matt Kenseth took first, followed by Jimmy Johnson and teammate Jeff Gordon. And then Tony Stewart at #6 of all things, and even Danica Patrick at #9, among the top 10.

Two interesting things that will show up on today's daily activity report. First, it looks like a new operator in North Dakota has a very, very nice Spearfish well up in Bottineau County. This is the first permit for Resonance Exploration in North Dakota; they have a permit for a second well in the same general location, #30228, currently on confidential status.

Here is their first well:
  • 29452, A, Resonance Exploration (North Dakota), LLC, Resonance Ballantyne 13-20H, wildcat, no test date; active as of 11/19/2014; a Spearfish well, 20-163-80, cum 15K 2/15
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SPEARFISH3-2015293866417433865250233
SPEARFISH2-2015273989359731105010231
SPEARFISH1-2015284795522838666250339
SPEARFISH12-2014122204169614232700150


The second interesting thing is a new acronym, at least new to me, regarding status of a well:
  • 26041, DNA, CLR, Patterson Federal 4-13H1, Camp, no production data, 
We'll have to wait for the file report to see what it means, unless a reader knows and wants to write in. Since there is no production, perhaps it means "Did Not Attempt," but that makes no sense to me. If they did not attempt, they could have canceled the permit, or it could have simply expired. I suppose it could be "don't (k)no(w) anything" about this well. LOL. Unless, of course, it simply means Data Not Available which is most likely now that I've rambled on. See first comment below: DNA means "Disposal Now Abandoned."

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Miscellaneous

I can't follow the price of crude oil any more. The headlines are all over the place. The pundits can't keep up. Two comments: oil did not fall to $20 (yet) as some pundits predicted; and, a trend for the price of oil may be developing. The good news: the price of oil did not fall to $20 (yet) as some pundits predicted; the bad news: did the price of oil not plummet to $20 because of the Desert War III that we are hearing so little about?

Earnings, HAL:
Halliburton Co. reported first-quarter 2015 results before markets opened Monday. The oil and gas services company posted adjusted diluted earnings per share of $0.49 on revenues of $7.05 billion. In the same period a year ago, the company reported EPS of $0.73 on revenues of $7.35 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.37 and $6.99 billion in revenues.

On a GAAP basis, the firm posted a net loss of $639 million ($0.75 per share) on inventory write-downs, asset write-offs, impairments of intangible assets, severance costs, Venezuelan currency devaluation, costs related to the acquisition of Baker-Hughes and other charges.
The company did not provide guidance in its earnings release, but the second-quarter consensus estimates call for EPS of $0.22 on revenues of $6.13 billion. For the full year, EPS is estimated at $1.14 on revenues of $24.96 billion.
In the five years since natural gas production began to take off in Appalachia, volumes in the Marcellus and Utica basins have increased by a factor of 9X. Much of that natural gas production growth is “wet” gas containing significant volumes of NGLs. 
Consequently NGL production volumes have skyrocketed and midstream development has been booming. But building all this midstream infrastructure in Appalachia does not work the way it does in other high-growth shale plays. Making sense out of Marcellus/Utica midstream infrastructure is the subject of RBN Energy’s latest Drill Down report, “Join Together With Demand--The Who and How of Marcellus/Utica Midstream”. 
In today’s blog, we provide highlights of the report and discuss what’s in store for the Marcellus/Utica over the next couple of years using our new Pipeline GIS mapping system to help tie all of the assets together. 
They say that necessity is the mother of invention, and that proverb has certainly proved itself in the Shale Era. Examples abound. Building new rail-loading terminals to move stranded Bakken crude to market. Reversing the direction of major natural gas pipelines. Re-plumbing much of the Gulf Coast to reflect changing sources of crude oil. 
And our topic today, innovative approaches to meet the unique challenges of Marcellus/Utica midstream. In the Drill Down report we release today, we examine in detail all that has been done—and is being done still—to support the very rapid expansion of gas and NGL production in the Marcellus/Utica. Over the past five years, the Upper Ohio River Valley has been transformed from an energy backwater to a production leader, both for natural gas and NGLs.
I'm placing this with the "Bakken101" tag because of all the background information that also pertains to the Bakken. The entire article will be archived at the source.

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Zeits On Global Oil And Gas Trends

I'm going to post this on this page, as well as a stand-alone. It's that important.

Zeits is writing:
In the past few years, U.S. shales have remained one of the most popular headline themes in the oil-focused financial media. 
With shale oil being the industry's most dynamic "new kid on the block," some of that attention is well deserved. However, the intense coverage has also been due to the simple fact that the U.S. Oil & Gas is one of the world's most "investable," fragmented and open industries. As a result, hundreds of publicly-traded companies offer rich streams of information to a very large universe of interested investors, fueling an intense information dissemination. 
However, oil is a global commodity and it is important not to lose perspective on its global fundamentals by focusing too much on U.S. tight oil. It would be particularly precarious to extrapolate the dynamics that one can currently observe in the North American Land segment onto the rest of the global oil industry, which is often less visible and less understood by investors. 
While all industry participants feel the pain of the low oil prices, the following anecdotal data points show that the cycle may be playing out differently in the U.S. shales than in the rest of the world:
  • Saudi Arabia and several other GCC producers appear to be quite busy increasing their investment in production capacity.
  • Russia's activity in legacy operating areas remains steady.
  • U.S. Gulf of Mexico deepwater activity is on the rise (although focus is apparently shifting towards development projects, away from exploration).
  • By contrast, U.S. operators reduced the aggregate oil-directed rig count two-fold in a matter of just three months, a dramatic adjustment given the industry's sheer size.
 As noted, this will be posted as a stand-alone. It will be archived at the source.