Eleven (11) New Permits -- November 18, 2015

Active rigs:

	11/18/2015	11/18/2014	11/18/2013	11/18/2012	11/18/2011
Active Rigs	65	184	183	187	203

Wells coming off confidential list Thursday:

• 28557, 832, Oasis, Wade Federal 5300 41-30 7T, Baker, TF 1st bench; the target was 20' under the base of the Pronghorn member of the Bakken formation, 36 stages, 4 million lbs, t7/15; cum 31K 9/15;
• 28893, 18 (no typo), Oasis, Kemper 6193 14-14B, Leaf Mountain, 36 stages, 3.6 million lbs, t6/15; cum 15K 9/15
• 29311, 420, Liberty Resources, ND State 158-95-21-28-2TFH, McGregor, 36 stages, 3.9 million lbs, t5/15; cum 35K 9/15; 
• 29625, 40 (no typo), Oasis, Kukuk 6192 43-21B, Foothills, 36 stages, 3.7 million lbs, t6/15; cum 34K 9/15;

Eleven (11) new permits --

• Operators: XTO (8), Slawson (3)
• Fields: Tobacco Garden (McKenzie), Heart Butte (Dunn), Big Bend (Mountrail)
  Comments:Slawson has seasonally appropriate names for the wells with the three permits today: one Gobbler, and two Goblins

QEP canceled nine (9) permits -- they were all KDM permits in McKenzie County, section 7-149-95. However, QEP also resurveyed two KDM locations in the same section, 7-149-95.

Four (4) producing wells were completed:

• 28534, 1,118, Hess, HA-Sanford 152-96-1819H-4, t10/15; cum --
• 28536, 1,290, Hess, HA-Sanford-LE-152-96-1819H-1, t10/15; cum --
• 29277, 1,078, Hess, BL-Iverson C-155-96-1423H-3, t11/15; cum --
• 31099, 886, Hess, BL-Iverson C-155-96-1423H-4, a Devonian well, t11/15; cum --

Petro-Hunt temporarily abandoned this one:

• 28017, TA, USA 153-95-22D-15-5H, no production to date; API 33-053-05784; has not been fracked; this might be one of those that is TA due to price slump and relaxed NDIC rules;

SolarCity Gets $113 Million Cash Rescue From Silver Lake, Musk, and Rive -- Bloomberg -- November 18, 2015

Updates

July 25, 2017: dead and gone. Shareholders won't get a thing ... except a huge tax loss they can carry forward. LOL. 

March 29, 2016: SunEdison may file for bankruptcy. 

TerraForm Global, citing SunEdison's liquidity issues, said it would join its parent in delaying its annual report for the year ended Dec. 31.

November 19, 2015: SunEdison closes below $3. Just 10 days earlier it traded at $7.50.

November 19, 2015: SunEdison is tanking again.

Shares in solar energy company SunEdison are down 11% in after hours trading, as a rumor that sent the stock upwards during the day was denied.

The stock gained 7% during Wednesday's trading session on a rumor that Blackstone's credit arm GSO planned to backstop SunEdison's debt. The solar company has seen its stock fall 83% since the start of the year.

After the close Reuters reported that GSO was not looking to invest in SunEdison.

Original Post

 

Last night I posted what we would be talking about today, re-posted below the "fold." Now today Bloomberg reports that SolarCity gets $113 million from Silver Lake, Musk, and Rive:

SolarCity Corp. got a $113 cash infusion from Silver Lake and top executives after the company’s announcement of a strategic slowdown to focus on making a profit sent investors fleeing.

Chairman Elon Musk and Chief Executive Officer Lyndon Rive contributed $10 million and $3 million, respectively, adding to $100 million from Silver Lake’s Kraftwerk fund in the purchase of zero coupon convertible notes, the San Mateo, California-based company said in a statement Wednesday.

The investment comes as the biggest U.S. rooftop solar installer takes a strategic turn. SolarCity has focused on rapid growth since its initial public offering in December 2012, with surging installations driving up costs at the expense of profit. At the end of October, the company said it would slow down, forecasting about 40 percent installation growth for next year compared with as much as 79 percent this year. The shares have slumped 29 percent since then.

As noted above, this is what I posted last night, Tuesday:

What We Will Be Talking About Wednesday

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.

Barron's is reporting:

Shares of solar installation firm SunEdison are down $1.51, or 33%, at $3.05, continuing to feel the after-effects of a disappointing Q3 report on November 10th, that has been followed by stock sales by prominent hedge funds.

Today’s news brings some potentially troubling findings about the company’s debt position, and some worrying signs from Vivint Solar, the residential installation firm that SunEdison is acquiring for $2.2 billion.

Yesterday afternoon, Vivint reported Q3 revenue that topped analysts’ expectations, and profit that was short by a couple pennies. The stock today is down $1.16, or 12%, at $8.42.

The results “severely call into question the health of the Vivint Solar organization (especially in the context of strong results from Sunrun and SolarCity)” writes Credit Suisse’s Patrick Jobin, who has a Neutral rating on the shares.

In particular, installations of only 61 megawatts in the quarter, and a 7% decline in megawatts booked, suggest that “For the company to still achieve prior 2015 guidance of 290-310 MW, Q4 installations would have to be 118-138 MW (+95-128% sequential), a very long putt in our view.”

Jobin thinks the poor showing implies the acquisition itself may be hurting operations, and also that SunEdison investors should be concerned about what the company is likely to be acquiring at this point.

This was from just a few days ago (November 10, 2015): SunEdison Tanks --

Despite revenues increasing more than expected, shares tank. Business Insider is reporting:

SunEdison shares dropped by more than 22% in trading on Tuesday. 

The renewable-energy firm reported third-quarter results before the market open, and posted a wider-than expected loss (excluding some items) of $0.92, versus the estimate for $0.65, according to Bloomberg.

Revenues of $476 million beat the consensus forecast for $452.6 million.

Data points:

• at $5.59/share; lowest in more than two years
• announced last month to lay off 15% of its workforce 
• major investor: hedge fund, Greenlight Capital
• Greenlight Capital recorded its worst monthly performance since October, 2008, most due to SunEdison
• shares popped by as much as 6% on October 30, 2015, on rumors that another hedge fund billionaire had bought a position in SunEdison

For more on Vivant and Solar City (both with similar business models), see this dismal outlook as reported by Motley Fool.

Long term, I think it's becoming clear that leases and power purchase agreements won't be the dominant financing option for homeowners. SolarCity may already be playing from behind with these market changes.

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Xilinx Most Likely Next Chip Target -- Barron's 

Citigroup chip analyst Christopher Danely this morning reflects on M&A and concludes that he doesn’t expect analog chip maker Maxim Integrated Products to get bought, and that “Xilinx is the only large-cap semiconductor company left with all of the attributes of a good takeover target.”

Diclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you read here. Do not make any travel plans without checking with Homeland Security and the French Tourist Bureau.

TransCanada Withdraws Its Keystone XL Application. Check. -- November 18, 2015

Flashback to November 9, 2012, I posted the EPA to-do checklist. EPA's goal go kill the Keystone XL can now be checked off -- I had checked it off earlier, because it was obvious the Keystone XL was dead as long ago as 2012, but now it's official. Oil & Gas Journal is reporting:

TransCanada Corp. formally notified Nebraska’s Public Service Commission that it is withdrawing its revised route application for the proposed Keystone XL crude oil pipeline. The move came after the Obama administration’s Nov. 6 denial of the project’s cross-border permit after more than 7 years of delays.

The company, filed the application with Nebraska’s PSC in early October, said on Nov. 18 that it did not seem appropriate to keep it active following the administration’s permit denial action.

That was easy.

As long as we are doing flashbacks, here's an April Fool's day flashback, from April 1, 2013:

I can't make this stuff up. President Obama proclaims the month of April to be the month to teach young people how to budget responsibly:

President Barack Obama, who has increased the national debt by $53,377 per household, has proclaimed April “National Financial Capability Month,” during which his administration will do things such as teach young people “how to budget responsibly."

“I call upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices,” Obama said in an official proclamation released Friday.

Maybe That Dead Eagle At The Base Of The Wind Turbine Might Have Been Hit By "A Vehicle" -- Certainly The Wind Turbine Did Not Kill That Eagle -- November 18, 2015

I'm sure this link will be broken some years from now. The Bismark Tribune provides an update on the proposed 59-turbine, 100 MW wind farm on 15,000 acres of land between Rolette and Rugby. The concern is that the wind farm will kill golden eagles and other birds. Apparently the wind farm is only two miles from nesting golden eagles.

The number of bald eagle nests in North Dakota has soared in the past decade along with a big increase in electric-generating wind towers, raising concerns that more birds might run into turbine blades.

State Game and Fish department data show 171 bald eagle nests have been identified this year, up from 28 in 2005. Over roughly the same period, nearly 1,000 turbines in some 20 counties have been erected with the capacity to generate a combined total of nearly 2,000 megawatts of wind power.

More than additional 1,000 wind turbines are planned or under construction.

I would not have posted this story except for the last paragraph:

Shelley said only one bald eagle has been killed within a wind farm area. It happened this spring in the western part of the state, where the eagle was found within 150 feet of a wind turbine but a necropsy failed to determine if the bird was killed by the turbine or hit by a vehicle.

So, we have a dead eagle at the bottom of wind turbine out in the middle of nowhere and experts suggest "a vehicle" could have hit it. I can't make this stuff up.

On another note, having to decide between dozens of species of migratory birds, the golden and bald eagles, the sand cranes, etc., and the sage grouse, I would have to side with the former. Extraordinary efforts are being undertaken to destroy the domestic oil and gas industry under the guise of saving the sage grouse, and yet wind farms are given a free pass. Some birds -- like the sage grouse -- appear determined to fade away no matter how hard humans try to save them. At some point, we need to say, we did all we could, and then move on. The piping plover on Cape Cod, Massachusetts, is another great example, which has been noted by many folks living on the cape.

The First Mile: One Reason Why We Are Seeing Fewer Trucks On The Road In The Bakken -- November 18, 2015

The Dickinson Press is reporting:

More oil is now gathered by pipeline than truck in western North Dakota, taking pressure off Oil Patch communities faced with congestion, traffic fatalities and dust.

New figures from the North Dakota Pipeline Authority show that for the first time in several years, more oil is leaving well sites by pipeline, and that trend is expected to continue.

An estimated 441,644 barrels of oil left well sites by truck each day in April, while 725,743 barrels per day were transported by gathering pipelines to either a transmission pipeline or a rail-loading terminal. These are the most recent figures available.

All counties saw a reduction in oil truck traffic in 2015, with the exception of McKenzie County, which still had an average of 892 oil truckloads each day in April.

McKenzie County, the state’s busiest oil county, saw significant growth with pipelines between 2012 and this year, but not enough to keep up with the growth in oil production.

A year from now it's possible that even McKenzie County will have more pipeline than trucks taking oil from the pads. 

Much more at the link. 

State May Test Clean-Lignite / CO2 Power Generation; Texas Already Testing -- November 18, 2015

The Bismarck Tribune is reporting:

 State researchers and regional energy companies want to take a promising carbon dioxide capturing technology to the lab.

The Allam Cycle, invented by 8 Rivers, uses pressurized carbon dioxide rather than steam to generate power. It is said to be more efficient, less expensive, and "clearner." 

It is already being tested on a $140 million, 50-megawatt natural gas-fired power plant in La Porte, Texas. 

Now there's an opportunity for North Dakota to test this technology using lignite.

The Lignite Research Council voted unanimously to recommend state funding of the research project Tuesday. It will go on to the Industrial Commission for final approval.

The partners in this test (dollar amounts rounded):

• Grand Forks-based Energy & Environmental Research Center (EERC), funding from DOE: $1 million
• Basin Electric Power Cooperative: %150,000
• 8 Rivers (HQ in Durham, North Carolina), funding from DOE $500,000
• ALLETE with subsidiaries BNI Coal and Minnesota Power: $150,000
• request for state funding: $1.5 million

This group plans to evaluate how the fuel difference of gasified lignite might affect the Allam Cycle technology.

For Investors Only -- Nothing To Do With The Bakken -- November 18, 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.

247WallStreet is suggesting we could see significant dividend increases in six well-known companies before year-end. This one caught my attention due to its recent  DirecTV acquisition:

AT&T Inc. is fresh off its DirecTV acquisition, and the opinion of 24/7 Wall St. long before the deal closed was that DirecTV actually would bring stronger dividend coverage. In October, the third-quarter earnings report noted that AT&T’s free cash flow dividend payout ratio was 57% year to date, improved from 67% in the second quarter. The company even increased its adjusted EPS and free cash flow outlook for the year to adjusted EPS in the $2.68 to $2.74 range and free cash flow in the $15 billion range or better. The corresponding dividend hike in prior years has been in mid-December, and 2014 was AT&T’s 31st straight annual hike, with a 2.2% payout hike.

Shares of AT&T were closed most recently at $33.26, with a consensus analyst price target of $36.96 and a 52-week trading range of $30.97 to $36.45. The company has a dividend yield of 5.8% and a market cap of $204 billion.

Almost 6% now. Since 2011 (that's all the farther I went back), ATT has raised its annual dividend by one penny each year.

John Kemp's Weekly Energy Tweets -- November 18, 2015

John Kemp's tweets:

• California's gasoline demand growth slowed over the summer. Article at Reuters.
• US gasoline stocks are in line with long-term seasonal average when adjusted for increased consumption. [There are several story lines in that sentence.]
• US refined products stocks -- the line if off the graph -- were unchanged last week after 8 straight weeks of drawdowns.
• US commercial crude stocks were unchanged last week after seven weeks of large builds.The line is still almost off the chart.
• US refiners continued to return from maintenance with processing up another 137,000 bopd to 16.1 million bopd. The line is slightly above last's year line, which set the top for the past ten years.
• US propane market remains severely oversupplied with another counterseasonal build to a new record of 104 million bbls. The graph is incredibly staggering. Last year, propane stocks set a 10-year record at 80 million bbls; last week: 104 million bbls. The 10-year low was around 25 million bbls.
• Residual fuel oil stocks continue to climb and are now at the highest seasonal level for more than a decade (for this time of the year; stocks have been higher in the second quarter in the last decade.
• US distillate stocks were little changed last week either nationally or along the East Coast.
• Polar vortex could see temperatures plunge early in 2016. Times of Malta is reporting.
• Rhine River (Germany, Europe) water levels are at record low disrupting fuel shipments to central European markets.

Platts is tweeting:

• Saudi Arabian crude oil exports were up 113,000 bopd to 7.11 million bopd; total output fell to 10.226 million bopd fro 10.265 million bopd.

EIA is tweeting:

• US commercial crude oil inventories were up 300,000 bbls; refinery utilization at 90%.

PennEnergy is tweeting:

• BP to sell its Decatur, AL, petrochem complex as part of broad reorganization.
• Apple (the computer company) will open a retail store in Singapore powered only by the sun.

  Here Comes The Sun, George Harrison

Wednesday, November 18, 2015

Active rigs:

	11/18/2015	11/18/2014	11/18/2013	11/18/2012	11/18/2011
Active Rigs	64	184	183	187	203

RBN Energy: update on oil sector upstream CAPEX.

Four companies in our universe have announced both capital spending and production guidance in 2016. These four companies (Cabot Oil & Gas, Devon Energy, Hess Corp and Concho Resources) are indicating a one-third reduction in capital spending from 2015. For the most part this represents continued reduction in the cost of drilling and completion that has been reported to date in 2015.

Consequently we are not expecting a serious change in activity levels in the industry. These companies are estimating a 1% decline in oil and gas production for 2016.

In summary, it does not appear that today’s punishingly low crude and gas prices has yet to materially discourage oil and gas production in the major shale plays.

Note: Yahoo!Finance/247 Wall Street also addresses this RBN Energy story.

Target reports earnings today, right in line at 86 cents. Traffic "increased" but not as much as previous quarter and shares dropped 5% on the news.

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Russia To Sell Its Last Large Oilfield in West Siberia

Reuters/Rigzone is reporting:

Russia will sell its last large oilfield in West Siberia early next year, a Natural Resources Ministry official said, in an auction that could fetch as much as $1 billion.

The sale of Erginskoye, with estimated reserves of 755 million barrels under Russian standards, had initially been planned back in the early 1990s.

However, it never took place because the state was mindful of the increasingly depleted oil deposit of West Siberia, where the country - one of the world's largest oil producers - extracts around 80 percent of its crude oil.

Analysts from UralSib said the field, located west of the major Priobskoye field, developed by Rosneft and Gazprom Neft, close to existing transportation infrastructure, would unlikely be eligible for tax breaks applicable to remote fields or hard-to-recover reserves.

The last large oilfield in West Siberia is estimated to have reserves of 755 million bbls.

To put that in perspective, back in 2010, the Parshall oil field in North Dakota had 211 sections, and at that time (2010) EOG announced plans to put 3 wells in each section. EURs back then would have been around 500,000 bbls but one can argue that 3 wells is a very, very conservative number, and 500,000 bbls is also quite conservative. At 211 sections x 3 well/section = 633 wells. With EURs of one million bbls and staying at 3 wells/section, or doubling the number of wells to 6 wells/section and staying with EURs of 500,000 bbls, one comes up with 633 million bbls. [It should be noted that much of the eastern Parshall may not be particularly productive. This little exercise is not meant to be an accurate representation of Parshall's potential, but to help me put the Russian oil field into perspective.]