Wednesday, April 29, 2015

Traveling -- April 29, 2015

I am driving back to Texas; less blogging and I won't get to all e-mail for awhile, but I will eventually get caught up. Same with discussion group.

Apple could be in a bit of trouble: google apple watch issues and tax issues (EU). 

Bakken Video

Video from truck bypass northwest of Williston. 

Whiting, Williams, Questar; QEP Earnings -- April 29, 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. 

Whiting Petroleum beats by $0.09, misses on revs; Record Q1 2015 production of 166,930 BOE/d exceeds high end of guidance: Reports Q1 (Mar) loss of $0.23 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus Estimate of ($0.32); revenues fell 28.5% year/year to $529.2 mln vs the $557.47 mln consensus.
  • The co's borrowing base was reaffirmed at $4.5 billion, zero drawn at March 31, 2015.
  • Production in the first quarter 2015 totaled 15.0 million barrels of oil equivalent (:MMBOE), 88% crude oil/natural gas liquids (NGLs). First quarter 2015 production averaged 166,930 barrels of oil equivalent per day (BOE/d). This represents a 3% pro forma increase over the full fourth quarter 2014.
  • Redtail Niobrara field production of 13,000 BOE/d in Q1 2015, up 28% over Q4 2014
  • Co sees Q2 production at 14.8-15.2 MMBOE
  • Co sees 2015 production at 58.8-59.4 MMBOE
  • Whiting's full-year 2015 capital budget is at $2.0 billion
Williams Cos beats by $0.04: Reports Q1 (Mar) earnings of $0.16 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.12.
  • Williams is reaffirming its guidance for the years 2015 through 2017 provided on Feb. 18, 2015. We expect Williams Partners' 2015 adjusted EBITDA and distributable cash flow to be near the low end of the range due to the extended Geismar ramp-up and the effects of low commodity prices on volumes and margins.
  • Co sees 2015 adj. EBITDA guidance at $4.3-4.7 bln, sees 2016 adj. EBITDA guidance at $5.2-5.6 bln, sees 2017 adj. EBITDA guidance at $5.8-6.3 bln.
  • Reaffirming Williams Partners adjusted EBITDA guidance for 2015-2017 with 2015 expected to be near low end of range on extended Geismar ramp-up and effects of low commodity prices
  • Reaffirming Williams dividend guidance of $2.38 per share in 2015 with 10% to 15% annual dividend growth through 2017 with growing coverage
Questar reports EPS in-line, misses on revs; reaffirms FY15 EPS guidance: Reports Q1 (Mar) earnings of $0.48 per share, in-line with the Capital IQ Consensus Estimate of $0.48; revenues fell 6.2% year/year to $428.6 mln vs the $457.99 mln consensus.
  • Co issues reaffirms guidance for FY15, sees EPS of $1.20-1.30 vs. $1.29 Capital IQ Consensus Estimate. 
  • Adjusted EBITDA for the quarter were down 1% to $203.6 million compared to $206.3 million in the year-ago period. 
  • Co increased its quarterly dividend by 11% to $0.21, and raised its target payout ratio to 65%. 
QEP Resources reports Q1 (Mar) results, misses on revs: Reports Q1 (Mar) loss of $0.05 per share, may not be comparable to the Capital IQ Consensus Estimate of ($0.30); revenues fell 39.9% year/year to $491.6 mln vs the $663.2 mln consensus.
  • The Company reported a net loss from continuing operations of $55.6 million, or $0.32 per diluted share, for the first quarter 2015 compared with net income from continuing operations of $12.7 million, or $0.07 per diluted share, in the first quarter 2014. Net income or loss includes non-cash gains and losses associated with the change in the fair value of derivative instruments, gains and losses from asset sales, and impairment charges. Excluding these items, the Company's first quarter 2015 Adjusted Net Loss (a non-GAAP measure) was $8.7 million, or $0.05 per diluted share, compared with Adjusted Net Income from continuing operations of $41.1 million, or $0.23 per diluted share, for the comparable 2014 period.
  • Adjusted EBITDA (a non-GAAP measure) for the first quarter 2015 was $222.8 million, compared with $333.1 million on a continuing operations basis in the first quarter 2014, a 33% decrease.

6/8 Bakken Wells To DRL Status Thursday -- April 29, 2015; "NC" Now Being Used For Bakken Wells

Active rigs:

Active Rigs86189186209173

Nine (9) new permits--
  • Operators: Whiting (5), HRC (4)
  • Fields: Bell (Stark), Eagle Nest (Dunn), McGregory Buttes (Dunn)
  • Comments:
Wells coming off the confidential list Thursday:
  • 28472, 435, Triangle, State 152-102-36-25-7H, Elk, t11/14; cum 62K 3/15;
  • 28793, drl, Abraxas, Jore Federal 2-11-6H, North Fork, no production data,
  • 28979, 272, Slawson, Ironbank 6-14-13TFH, Stockyard Creek, t2/15; cum 2K 2/15;
  • 29108, drl, Hess, EN-Uran A-154-93-2215H-5, Robinson Lake, no production data,
  • 29438, drl, XTO, Sorenson 14X-33F, Siverston, no production data,
  • 29489, drl, Statoil, Bures 20-29 7H, Alger, no production data,
  • 29588, SI/NC, EOG, Fertile 59-033H, Parshall, no production data,
  • 29645, SI/NC, SM Energy, Riley 2B-16HS, West Ambrose, no production data, 
NOTE: "NC" = not completed (drilled to TD, awaiting completion). 

Two (2) producing wells completed:
  • 29993, 888, Triangle, Lee 151-101-8-5-10TFH, Ragged Butte, t4/15; cum --
  • 27970, 168, Emerald Oil, Cameron Frye 2-36-25H, Pierre Creek, t2/15; cum 1K 3/15;

100% Better Than Forecast -- April 29, 2015; Today's EIA "Energy Cookie"; Video Of Truck Bypass Northwest Of Williston

GDP came in at 0.2%.
Gross domestic product expanded at an only 0.2 percent annual rate, the Commerce Department said on Wednesday. That was a big step down from the fourth quarter's 2.2 percent pace and marked the weakest reading in a year.
GDPNow forecast 0.1% so 0.2% is twice what was forecast. Incredible that "they" could be off by that much. 100%. LOL. 

The market was not impressed; down over a hundred points as soon as the number was announced. I won't even bother with posting the "excuses" that pundits have already come up with to explain this.

What are we? Six years into the recovery? After a gazillion dollars in stimulus. 750 new jobs created by the stimulus? If President Obama can get the Iranian deal he wants, he will have single-handedly been responsible for more new oil and gas jobs in Iran than all the jobs he has created directly or indirectly in the US oil and gas industry. I don't have the data to back up that statement. I'm probably wrong.

The Daily "Energy Cookie"

Today's EIA energy note:
U.S. energy consumption has slowed recently and is not anticipated to return to growth levels seen in the second half of the 20th century. E
IA's Reference case projections in the Annual Energy Outlook 2015 (AEO2015) show that domestic consumption is expected to grow at a modest 0.3% per year through 2040, less than half the rate of population growth.
Energy used in homes is essentially flat, and transportation consumption will decline slightly, meaning that energy consumption growth will be concentrated in U.S. businesses and industries. --- EIA

Truck Bypass Northwest of Williston

Video taken about 7:30 p.m. Tuesday evening.

Market -- April 29, 2015 -- This Is NOT An Investment Site

Hess: beats by 9 cents; shares up in pre-market trading. The AP is reporting:
Hess Corp. on Wednesday reported a first-quarter loss of $389 million, after reporting a profit in the same period a year earlier.
The New York-based company said it had a loss of $1.37 per share. Losses, adjusted for non-recurring costs and to account for discontinued operations, came to 98 cents per share.
The results surpassed Wall Street expectations.
The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of $1.09 per share.
The oil and gas producer posted revenue of $1.55 billion in the period, also beating Street forecasts. Three analysts surveyed by Zacks expected $1.44 billion.
Linn Energy misses by 85 cents:
Linn Energy misses by $0.85: Reports Q1 (Mar) loss of $1.03 per share, $0.85 worse than the Capital IQ Consensus Estimate of ($0.18).
  • Grew average daily production by two percent to approximately 1,201 MMcfe/d for the first quarter 2015, compared to the estimated year-end 2014 exit rate of approximately 1,180 MMcfe/d, while decreasing the budget for total oil and natural gas capital expenditures by approximately 65 percent for 2015 compared to 2014.
Anthem shares surging (ObamaCare proxy): 
Anthem beats by $0.45, misses on revs; guides FY15 EPS above consensus: Reports Q1 (Mar) earnings of $3.14 per share, excluding non-recurring items, $0.45 better than the Capital IQ Consensus Estimate of $2.69; revenues rose 6.8% year/year to $18.85 bln vs the $19.28 bln consensus.
  • Co issues upside guidance for FY15, sees EPS of more than $9.90, excluding non-recurring items, vs. $9.85 Capital IQ Consensus Estimate. Medical membership is now expected to be in the range of 38,200,000 -- 38,400,000. Fully insured membership is expected to be in the range of 14,750,000 -- 14,850,000 and self-funded membership is now expected to be in the range of 23,450,000 -- 23,550,000.
  • Medical membership is now expected to be in the range of 38,200,000 -- 38,400,000. Fully insured membership is expected to be in the range of 14,750,000 -- 14,850,000 and self-funded membership is now expected to be in the range of 23,450,000 -- 23,550,000. The benefit expense ratio was 80.2 percent in the first quarter of 2015, a decrease of 250 basis points from 82.7 percent in the prior year quarter.
Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here. Do not make any travel plans based on what you read here. Do not make any relationship changes based on what you think you may have read here. And most importantly, don't choose your ObamaCare health plan based on what you read here or think you may have read. 

Book Corner

I picked up another incredible book from Books on Broadway in Williston.

Terrible Injustice: Sioux Chiefs and US Soldiers On The Upper Missouri, 1854 - 1868, Doreen Chaky, University of Oklahoma Press, c. 2012; has just come out in soft cover.

This is an incredibly good scholarly work -- I think I can say that after having only read the first 37 pages including the preface and introduction.

Ironically (is that the right word?) there are lessons to be drawn from the Indian wars and what is going on in Baltimore, Maryland, this week.

Chapter 1 begins:
When one culture infringes on another's perceived rights and traditions, conflict is inevitable. When each party's sense of justice differs from the other's and they find no common ground, escalation ensues.
Wow -- does that not describe what is going on in Baltimore and Ferguson these days?

Besides the really, really good content, I already love the book for the following reasons:
  • the font and feel of the book
  • the author's use of grammar and punctuation mirrors what I was taught 
  • really, really good writing
As soon as I thumbed through it, I knew I was going to buy it. And then I saw that the author makes Williston her home. Wow. Who wudda thought?

Notes to the Granddaughters

Books on Broadway is still the best bookstore around. In a sense, it's better than Powell's in Portland. Chuck Wilder somehow manages to bring the best books to market. Take all the books in Powell's and then select the top 1% of those books and you might have the inventory at Books on Broadway. But the intimacy and relaxing atmosphere in the coffee bar really, really cements the deal.

You know, it's funny. I think the #1 reason I like coming back to Williston is to visit Books on Broadway. After a while, one kind of knows what to expect in the oil fields, but it never ceases to amaze me what I find at Wilder's bookstore.

By the way, while I'm rambling, a bit more. I had planned to leave Williston at 6:00 a.m. this morning but yesterday I realized I had not yet had coffee at the donut shop two doors down from Books on Broadway. The donut shop next to Books on Broadway may have the best donuts in the world. Their story is a long story, and perhaps a personal story, so I won't go into it here, but that little donut shop encompasses all that is "right" with Williston.

So, yesterday, when I realized that I had not visited the donut shop yet (there was a reason for that) I had to delay my departure. They are open early enough in the morning that I could have stopped there on the way out of town, to leave shortly after my planned departure of 6:00 a.m.

But I wanted to take my dad. If Books on Broadway is the #1 reason for coming back to Williston, my dad is the #1 reason why it's hard to leave.

His day starts about 6:00 a.m. also, but he's generally not ready to go into the office until 10:30, so I did not want to hurry him just for a donut.

My dad might have retired about the time he reached his 83rd birthday. I doubt anyone knows when/if he retired; the problem is the definition of "retired." He had long turned over "official" responsibilities of his agency to others by the time he reached his 83rd birthday but he was still going into the office every day at 9:30 a.m. He was still responsible for going down to the US Post Office every day to pick up the mail for the office. I have long forgotten his salary for that job but it was probably worth about  ($20/day x 6 days x 4 weeks) $480/month but he was probably paid closer to $250/month after various government taxes and deductions. I honestly don't recall.

Somewhere around his 90th birthday, someone else got the "mail job." It may have been due to a "transportation issue." Somewhere around his 90th birthday, the state of North Dakota and Dad came to some sort of an agreement. If he no longer drove his Ford F-150 (or whatever it was) they would quit making him go to "driver's class" every year if he wanted his driver's license renewed. Driver's class had something to do with the various state and city law enforcement agencies issuing him tickets every time he drove through a stop sign. Before the boom, stop signs in Williston were sort of there for folks who had never lived on a farm.

Actually, I'm exaggerating. The state did not get involved. There was a notable incident about three years ago which led my sister to permanently change my dad's transportation routine. But that's a story for another time.

So where was I? Oh, yes, why I'm not leaving until after 11:00 this morning. As I was saying, after his 83rd birthday, or thereabouts, he was coming in to the office every day at 9:30. Finally, sometime this past year, my sister suggested to dad he did not have to come in so early. Dad now comes in at 10:30 every day.

My plans are to meet him at the office at 10:30 and take him over for coffee and donuts on Broadway next to Books on Broadway. And then head south about noon.


One last note: while touring the Bakken last evening, Dad said his goal was to reach his 100th birthday. I suggested that at 93, he should aim for 103. I told him anyone can get to 100 but it's a real accomplishment to get to 103. He wasn't so sure. I told him the hard part was over. Think about it. On a percentage basis. Take all the folks that reach their 63rd birthday; what percent will go on to hit their 103rd birthday? Then take all the folks that reach their 93rd birthday; what percent of those will go on to reach their 100th birthday?

He thought about it. We didn't know the answer. I said the life insurance companies probably know.

He laughed. And then started talking about the new office building he was going to build.

Put A Fork In It And Call It Done -- The Missus Loses Her Appeal -- April 29, 2015

USA Today  reports:
Harold Hamm's ex-wife Tuesday lost her appeal for even more than the nearly $1 billion she won in a divorce battle with the wealthy CEO and founder of oil giant Continental Resources.
Sue Ann Arnall waived her legal bid to reopen the case when she cashed the nine-figure check Hamm was ordered to give her in a November decision that capped a nearly two-month divorce trial, the Oklahoma Supreme Court ruled.
She "took possession or title of the real property and deposited the check for property-division alimony," the court's majority opinion concluded. "The judgment is now satisfied."
Tuesday's ruling, however, allowed Hamm to continue his own appeal of the decision that had appeared to bring a legal end to the former couple's 26-year marriage.
Never should have cashed that check.

Disclaimer: this is not a "legal advice" website. Do not make any decisions regarding your own relationships based on anything you read here or think you might have read here. However, if someone gives you a billion-dollar check, think twice before cashing it. 

The Bakken Bust -- April 29, 2015

Over the course of the next few days, I will post video taken in the Williston area, April 26, 2015 - April 29, 2015, to record for posterity evidence of the Bakken bust. Below is the first random photo taken while waiting to head south at the "new" four-mile corner west of Williston.

The most noticeable thing: no water trucks. Fracking has come to a standstill and more and more fracking water is being delivered by pipe. In addition, much of the truck traffic should no longer be heading through Williston. The truck bypasses have been operational for quite some time now.

A Real Bust

Back on April 22, 2015, the Daily Caller noted the dismal demise of the EV. Today The Detroit News confirms
It's a buyer's market for drivers interested in new or used electrics and hybrids.
Sales of new electric cars and hybrids, according to automotive research and shopping site, are at their lowest level since 2011 — the first full year of sales for the groundbreaking Chevrolet Volt plug-in hybrid and Nissan's all-electric Leaf. So carmakers are paring prices in an effort to get them moving.
Furthermore, motorists who leased those first-generation cars, and have decided not to buy them, are turning them in. They're on dealer lots with still relatively low mileage, and at prices considerably cheaper than the new ones.
Even with $7,500 federal tax credits and other incentives, automakers such as General Motors Co., Ford Motor Co. and Nissan have dropped prices in an attempt to move their new hybrids and electrics. Cadillac became the most recent to reduce the sticker on an electric car, when it whacked $9,000 off its ELR plug-in hybrid last week.
Rent Increases In Williston

The other day I was told a young Williston resident received a notice that her apartment rent was increasing. Yes, increasing.

What's going on? The Dickinson Press has been reporting the end of the opportunity in the Bakken. Everything's shutting down; oil service companies laying off folks. Doom and gloom.

My hunch: man-camps are closing. I'll talk about this later; some counter-intuitive story lines and some observations others aren't making.

But, for now, I have to move on.

In Case You Missed It

From Zap2it:
Miss North Dakota will be taking home the Miss Congeniality award from the Miss America 2015 scholarship pageant. Jacky Arness was voted a winner by her fellow contestants and was given the award during the "Countdown to Miss America" presentation.  
Pretty cool. But it gets better:
Though Miss North Dakota did not make it into the initial 15 semi-finalists, Miss America 2015 host Chris Harrison announced that if the judges could vote unanimously they could add one more contestant to the semi-finals. The judges voted Miss North Dakota into the bonus spot so she is allowed to continue on in competition. 

Incredible Natural Gas Story -- RBN Energy -- April 29, 2015; Vacancy At The El Rancho Hotel In "Old Williston

Active rigs:

Active Rigs87189186209173

RBN Energy: How natural gas production trumped storage withdrawal this past winter. Regular readers have followed the weekly "NG fill rate." RBN Energy discusses it as length today, at the link.
As a result of the record cold winter last year, stockpiles began this winter at a five-year low and at a deficit of about 240 Bcf compared to the previous year.
However, by December, a year-over-year (yoy) surplus in storage began to emerge and continued to grow through the course of the winter. By the time the traditional gas winter withdrawal season ended March 31, inventories were more than 600 Bcf above the previous year, and the yoy surplus has continued to grow since then. Stockpiles as of EIA’s April 17 weekly gas storage update are 1,629 Bcf, which is about 100 Bcf below the five-year average, but a whopping 737 Bcf above year-ago inventory levels.
This is startling given that demand this winter was the second highest in gas market history, 0.8 Bcf/d shy of the record-high demand set last year. How did we get to this point?
Figure 2 [at the link] begins to answer that question. The chart illustrates how supply and demand fundamentals shaped up in the U.S. Lower 48 over the past couple of winters.
Another excellent post by RBN Energy. Again, the post will be archived by the source, at the source.


1Q15 GDP will be released today. I believe this is the "initial estimate." It will be revised at least twice more before "it" becomes official. I could be wrong on that, but it seems like I've read that somewhere else before.

Be that as it may, "GDPNow" forecast 0.1% growth. It will be interesting to see how accurate their new tool is.

I got a kick out of early morning talk shows, talking about the 1Q15 GDP.  For newbies, a growth of 0.1% in a nation which should be in the middle of a gangbuster economy is pathetic. Already the spin is beginning. They are going to blame the poor growth on a) winter; and, b) work stoppage at west coast ports. Winter, huh? I thought global warming would have tempered things by now. Whatever.

So, we will wait for the report and the spin.

The following is no spin. I think it's been five years since I've seen this, "vacancy" at the El Rancho on the north side of "old Williston."

The photo was taken about 8:30 p.m., Tuesday, April 28, 2015.