Thursday, September 10, 2015

Idle Chatter -- September 10, 2015

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.

I heard on the radio earlier this week that shares in Barnes and Noble slumped 14% (they may have recovered, I don't know) but they did slump significantly. The 30-second sound bite suggested the company blamed poor performance on continuing losses in the ebook (Nook) sector. That's very, very likely. Who am I to disagree? But, I think BKS has a much bigger problem than the Nook. There are comparisons, I think with Best Buy, another shopping window for Amazon.

Years ago, I thought Best Buy would not survive, but it appears to be the last tech store standing. Circuit City and all the rest have closed. Best Buy is now Best Window where folks can window shop for electronic gadgets, get good (?) advice from employees, and then go home and order off Amazon. It appears that a closer relationship Apple may have saved Best Buy's bacon.

Barnes and Noble does not have any way to tie in with Apple, unless, I suppose they ditch the Nook and set up Apple iPad kiosks in the stores, but that will never happen.

I've said it a million times and I will say it again: if Barnes and Noble wants to survive, they need to change their business model. I've opined on my thoughts on a better business model but won't bring it up again in this note.

Meanwhile, when it comes to Apple shares, Joe Kernen (CNBC) proves once again how most investors are emotion-driven rather than fact-driven. I don't get get television at home; I only see TV when I'm traveling. This morning was the first time in six months, I suppose, that I caught about 15 minutes of CNBC. I was surprised by how emotional Kernen gets when it comes to Apple. He must have missed that boat twenty years ago and never moved on.

Based on a single conversation in Williston this morning, folks may want to follow the story at this link.

Netflix shares have been volatile the past few days; there are headlines that Netflix sagged after Apple announced new Apple Television. I don't think Netflix has a thing to worry about Apple Televison ... yet. The market "looks" ahead six months, but I doubt Apple Television will have much new market penetration even a year from now. Even then, in the out years, I think Netflix and Apple have two different business models; there is more than enough room for both if done right.

Idle chatter.  I don't trade. I invest. I don't own shares in any of the companies discussed above except for one of them ... and such a small amount even if share prices doubled overnight, would make little difference to me. I just write about these companies because I find the companies and/or their business models interesting.

Active Rigs One Away From Tying All-Time Post-Boom Low Record; Whiting, Hess Report Nice Wells; 3/6 Wells To DUC/DRL Status -- September 10, 2015

Air fares: I heard that air fares into Williston have increased, at least on some flights. A flight from out-of-state into Williston, North Dakota, that used to cost $500 is now $700. After hearing that this morning in "Coffee Addiction" coffee shop on Main Street, Williston, I came across this WSJ story from today: airline consolidation hits smaller cities hardest.

Active rigs:

Active Rigs69199184192199

Wells coming off the confidential list Friday:
  • 28407, 1,339, Whiting, P Wood 154-98-4E-26-15-4H, Truax, 4 sections, t3/15; cum 36K 7/15;
  • 28408, 1,362, Whiting, P Wood 154-98-4E-26-35-14H3, Truax,2 sections, t3/15; cum 39K 7/15;
  • 30446, SI/NC, EOG, Shell 12-3225H, Parshall, no production data,
  • 30452, SI/NC, Hess, EN-D Cvancara S-154-93-0904H-10, Robinson Lake, no production data,
  • 30499, 1,086, Hess, LK-A Qtr Cir-147-96-1807H-11, Big Gulch, producing, 17K first 11 days;
  • 30624, SI/NC, Statoil, Banks State 16-21 6TFH, Banks, no production data,
My hunch is that these Whiting/KOG P Wood wells are choked way back. 

28407, see above, Whiting, P Wood 154-98-4E-26-15-4H, Truax, 

DateOil RunsMCF Sold

28408, see above, Whiting, P Wood 154-98-4E-26-35-14H3, Truax:

DateOil RunsMCF Sold

Huge Drop In North Dakota Rig Count; US Imports More Saudi Oil In June, Year-Over-Year -- September 10, 2015

EIA data this week (links dynamic):
  • natural gas fill rate: 68; trending above the 5-year average; in the East Region, stocks were 37 Bcf below the 5-year average following net injections of 49 Bcf
  • gasoline demand: wow, big drop; I'm surprised; well above last year, but still, the decline is quite striking; week ending 9/04 (doesn't include Labor Day weekend): 9.017 vs 9.438 the week before, and 8.611 one year ago; 

OPEC import data updated as of June, 2015:

  • OPEC, June, 2014: 97.5 million bbls
  • OPEC, June, 2015: 86.0 million bbls

  • Saudi imports, June, 2013: 42.9 million bbls
  • Saudi imports, June, 2014: 30.5 million bbls
  • Saudi imports, June, 2015: 32.0 million bbls

  • Venezuela imports, June, 2013: 27.0 million bbls
  • Venezuela imports, June, 2014: 22.4 million bbls
  • Venezuela imports, June, 2015: 22.7 million bbls

Jobs: in-line; first-time claims drop 6,000 to 275,000; the four-week moving average was little changed at 275,750 last week.


Rig count in North Dakota:

Active Rigs69199184192199

North Dakota rigs are tracked here

RBN Energy: coal vs natural gas in the US.

EIA "energy cookie":
U.S.-Mexico crude oil swaps approved last month by the U.S. Department of Commerce's Bureau of Industry and Security will likely involve exchanges of U.S. light sweet crude for Mexican heavy sour crude that is already being exported to the United States.
The swaps, which are provided for under longstanding regulations governing U.S. crude oil exports, are expected to be both economically and environmentally beneficial to both parties because of differences in crude oil qualities as well as differences in each country's petroleum refineries.
The swaps will allow a greater degree of operational efficiency in both Mexico and the United States while allowing for increased supply of lower-sulfur gasoline from Mexican refineries. --- EIA


May 11, 2016: another small airport buys into solar energy. These stories are almost comical. Some data points:
  • at best, the project might result in 1MW of solar electricity
  • if it hits 1MW, it will come close to providing 3% (a rounding) error of the area's electricity need
  • it will provide the city $57/acre vs $20/acre (from hay sales)
  • $2 million project
  • Pierre, SD
  • first solar project for Missouri River Energy Services
  • five acres in size
  • largest solar project in South Dakota?
September 14, 2015: smaller airports cannot hide high costs of intermittent energy.

Original Post

MSP to put in more solar energy.
A huge solar power development at the Twin Cities airport is proposed to get even bigger.
A Metropolitan Airports Commission panel has given preliminary approval to a 1.3 megawatt solar installation on top of the parking ramp at Terminal 2. It is expected to provide about half the terminal's peak power need.
That's in addition to a 3 megawatt installation at Terminal 1. Together, they're nearly twice the size of the largest existing solar project in Minnesota. 
Airports are another perfect spot to place solar panels to meet state mandates. The cost overruns and more expensive electricity can be buried in the total operating costs of the airport. These costs will be matched by increased landing fees, and, of course, these landing fees, will be apportioned across thousands of airline passengers. At a couple of dollars per person per flight, the increased cost in electricity will not be noticed. It's a win-win for everyone.

To help meet the EPA standards in North Dakota, I would hope that solar power at every North Dakota air strip is part of the overall plan.

Preaching To The Choir

I posted this link yesterday but with the MSP airport story above, I just want folks to be reminded how much this tilting at windmills is going to cost them. This is a story out of California but with California and Minnesota apparently joined at the hip when it comes to making energy decisions, this applies to Minnesota as well:
With oil prices falling by 45 percent in the last year, the California Public Utilities Commission (PUC) just decided the way utilities priced energy for 100 years is wrong and intend to mandate that 70 percent of Californians pay much more for energy.
The PUC “time-of-use” electricity pricing will also disproportionately increase residential energy costs on Democrat voters to pay for more wildly expensive  [intermittent] energy.
Established in 2002, accelerated in 2006 and expanded in 2011, California’s Renewables Portfolio Standard (RPS) is the most ambitious renewables requirement in the United States. The RPS program is trying to set a worldwide standard by requiring investor-owned utilities, electric service providers, and municipal power companies to double California’s percentage of “renewable” electric power from 18.8% to 33% over the next five years. Gov. Brown wants over half of the state’s power coming from renewable sources by 2030.
The “capacity factor” for direct costs of producing electricity from wind is 4.2 times and solar is 9 times more expensive than natural gas. But since renewables are very “intermittent and often non-dispatchable,” due to variations in wind and sunlight, the full renewables cost must also include indirect “stand-by” costs for fossil fuel capacity.
The comparative “combined cost” for wind is 12.3 times and for solar 33.8 times as expensive as natural gas power generation.
The US, Germany and the UK as the world’s renewable leaders have converted 5.8 percent of their total power generation to renewable sources since 2002. The “combined cost” for this renewables initiative was $500 billion. But had conventional natural gas technology been used for the equivalent 31 giga watts of power, the combined cost would have been $31 billion, 1/16 as much.
Scientists Discover Old Set Of Bones; Appear "Weird" And "Bizarre"

Oh, never mind. I thought this was a story about a secret burial site below the Capitol in Washington, DC, but now I see it's a story about old bones in South Africa.