April 9, 2016: a reader has provided a most insightful answer to this question; much appreciated. See first comment; I've brought it up here to make it google-searchable:
I have received some bankruptcy papers from emerald and they have
requested that the bankruptcy court allow them to give payment priority
to mineral owners. They state this is necessary to protect the value of
the assets in bankrupcty as a lack of payment could cause contracts and
leases to lapse. I would expect payment to be made but they maybe
delayed. On the other hand they shut in some of their wells in stark
county in March. No production = no royalty payment needed anyway.
I don't own any minerals, and although I have my thoughts on what it means, I thought it would be best for those with experience in this area provide your thoughts.
Ominous black spots on wind turbines in the Thumb have raised a few eyebrows.
Huron
County Building and Zoning Director Jeff Smith says residents have
questioned what look like grease stains on six or seven turbines between
Sebewaing and Owendale.
“It was disturbing to see that,” Smith said, adding he drove through the area Monday.
Seals on the turbine were coming out of bearing holders, Smith said,
comparing it to a vehicle with a bad wheel bearing. He said he’s not
sure if the bearings on the turbines are faulty or defective.
“GE
knew but did not tell us,” Smith said of turbine manufacturer General
Electric, adding he got an email from NextEra Energy stating a cleaning
crew is coming.
There are 32 turbines in Exelon Wind Generation’s
Harvest 1 project in Oliver and Chandler townships. A 400-foot,
485,000-pound turbine that fell on Feb. 25 spilled 25 gallons of
greases, oil and coolant, according to the DEQ. The spill posed “no imminent drinking water or environmental health threat,” a DEQ official told the Tribune.
Exelon says the fallen turbine held about 400 gallons of oil.
The leaks aren’t limited to just Huron County.
See more at the link.
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The Starbucks Page
For the record, I am back at Starbucks. Regular readers know that I "gave up" on Starbucks some months ago, saying I would never return, after they announced yet another price increase.
But I'm back.
McDonald's coffee still tastes slightly better and the senior cup is only 50 cents vs $2.00 for a "tall" (smallest size) Starbucks coffee.
But I'm back. Lots of reasons. Right now, the biggest reason probably has to do with the location: at 5.0 miles to the one in Southlake, and 5.5 miles to the one in Grapevine, their locations are the perfect distance for a bike ride. I could find a McDonald's about the same distance away, but the ambience at a Starbucks is still better.
I was reminded of that when a couple of articles on Starbucks were posted over the last few days.
Most Tuesday afternoons, in the lazy late hour between the end of
school and the start of Brownies, you can find me ensconced in the café
of the local Marks and Spencer, sipping a hot chocolate with the younger
Miss Harford.
Recently, the café has taken the unusual step of radically
simplifying the drinks menu. All the standards are there, of course:
tea, cappuccino, hot chocolate. But the size options have been covered
over with masking tape. Gone are the “small” and the “large”. Now you
can have any size of hot beverage you like, as long as it’s medium.
Perhaps M&S hopes to save money by rationalising the crockery. Or
perhaps they simply guess that simplicity is attractive. A few years
ago, Debenhams, another British household name with a frumpy image,
tried the slogan “Say goodbye to coffee confusion”. Debenhams rebranded
cappuccino as “frothy coffee” and caffè latte as “really, really milky
coffee”, winning headlines for the most patronising publicity stunt in
living memory.
But simplicity can sell. A famous study by
psychologists Sheena Iyengar and Mark Lepper offered samples of
speciality jam to customers of a high-end supermarket. (Loyal readers
may recall the column I wrote about this in November 2009.)
Offered a choice of six types of jam, a third of customers went on to
make a purchase. Offered a choice of 24, almost nobody did. Iyengar and
Lepper concluded that choice can overwhelm and discourage us.
Yet it is unclear how widespread this “choice demotivates” effect is.
The original Iyengar-Lepper results, like many in psychology, seem to
be fragile. Several follow-up studies have failed to find evidence for
the effect. (There is no shame in this; that’s science at work.)
Many successful businesses, from supermarkets to Starbucks, offer a
vast range without scaring away their customers. A first-time visitor to
Starbucks might be confused, but regulars work it out. And clever
design can prevent choice seeming overwhelming. Starbucks offers about
100,000 drink combinations — millions, once the syrups are taken into
account — but the menu seems much simpler than that.
With its Reserve Roastery and Tasting Room in Seattle, Starbucks (NASDAQ: SBUX) has created a location that works on multiple levels.
It's partly a retail destination for which consumers may travel much farther than they would for a traditional store. On the top of that, it's also a bit of a museum or temple for coffee and an active production facility that roasts beans for sale throughout the region.
Now, the company has announced plans for a new Roastery in New York City that will open in 2018.
The Roastery locations give consumers a window into where Starbucks coffee comes from. They also position the brand as "elite" and clearly differentiate it from rivals like Dunkin' Donuts. This is coffee as art, coffee-making as theater.
"Our Seattle Roastery experience created something that had never been done before, transforming a retail environment into something far beyond just a coffeeshop and into the single best retail experience of any kind," said CEO Howard Schultz in a press release.
"In New York, we want to take elements from what we originally created and build something even bigger and bolder, celebrating coffee and craft in a completely unique and differentiated way. We want this experience to tell our customers that we're coming to Broadway."
The New York facility, which will be located in "the heart of the Meatpacking District at 61 Ninth Avenue, which is currently under development," according to the company. It will be a 20,000 square-foot store that will "build upon everything Starbucks has learned from integrating coffee roasting, manufacturing, education and retail, while ensuring an experience that is locally relevant to the market."
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Those Who Fail To Study History
JRR Tolkien began writing The Lord of the Rings in December, 1937. It was very slow going at first. Only as WWII was drawing closer did he move the story along. The story really goes nowhere in the first book, but finally there is a sense of urgency shown in the second chapter of the second book with the Council of Elond.
The Council of Elond was convened to discuss the ominous signs of war, of Sauron.
From JRR Tolkien: Author of the Century, by Tom Shippey, c. 2000:
There is a suggestion by the host, Saruman, “that perhaps the members of the Council might be able to persuade, direct, control Sauron — though he does not say Sauron, he says ‘the Power’.
The idea of anyone, however wise, persuading Sauron, would sound simply silly if it were said in so many words. No sillier, though, than the repeated conviction of many British intellectuals before and after this time that they could somehow get along with Stalin, or with Hitler.”
I had read that passage before (based on my notes in the margin) but this time I saw something new. One wonders if twenty years from now, or fifty years from now, historians will write the same thing about American intellectuals in the Obama administration who felt “they could somehow get along with the 21st century Iranians”?
***********************************
How Deep Is Your Love -- 1977 -- It Seems Like Only Yesterday
Oil prices rose more than 6 percent on Friday to end with the biggest weekly gain in a month as drawdowns in U.S. crude stockpiles fed hopes that a punishing global oversupply may be approaching a tipping point after nearly two years.
The shutdown of the Keystone crude pipeline to Cushing, Oklahoma supported U.S. crude futures. Oil also drew support after Russia said its crude output fell in April.
Brent crude futures settled up $2.51, or 6.4 percent, at $41.94 a barrel, hitting a session high above $42.
U.S. crude futures closed up $2.46, or 6.6 percent, to $39.72. Earlier, it rose to nearly $40.
For the week, both benchmarks rose about 8 percent, their most since the week ended March 4.
"We are starting to draw crude inventories in the U.S." said Scott Shelton, energy broker with ICAP in Durham, North Carolina. "Run rates are rising and U.S. production is falling."
"This is very different I think than what was expected. The market perceives that these draws may continue as the Keystone outage will increase the likelihood," Shelton said. U.S. crude stockpiles fell by nearly 5 million barrels last week versus analysts forecasts for a build of 3.2 million barrels.
U.S. energy firms cut oil drilling rigs for a third week in a row, adding to improving fundamentals.
Aside from planned oilfield maintenance works in Norway and Britain that are supporting Brent, global crude prices have also been helped by last month's disruptions in Nigerian supplies at a venture operated by Royal Dutch Shell.
"Put Doha on top of it, and your eyes are looking towards the tightening of the market," -- analyst.
*********************************
Gun-Free Installations
I thought the bureaucrat-in-chief had declared US military installations gun-free zones. Breaking now:
SAN ANTONIO
(AP) -- Texas authorities say at least one person has been killed
in a shooting at an Air Force base in Texas.
Bexar
(bayr) County sheriff's spokesman James Keith said Friday that deputies
have responded to reports of an active shooter at Joint Base San
Antonio-Lackland, which is the home of Air Force basic training.
For newbies, this is an important well. Short history of the "Bakken."
When the Saudis turned on the spigots in October, 2014, the middle Bakken was pretty much mapped out. That doesn't mean operators/frackers knew the best way to complete a middle Bakken, but they pretty much had it mapped out. They were just beginning to start that process in the first bench of the Three Forks; they were already going down that road, but for all intents and purposes, had only just begun, as Karen Carpenter would say. A few operators, notably CLR, had started testing the second and third bench of the Three Forks but the slump in oil prices has probably extended that
process by another decade, if not longer. Early Three Forks wells and
comments by Lynn Helms suggested to me that the first bench would rival
the middle Bakken (on a well-by-well comparison, not total formation
production; it appears the Three Forks is a smaller formation); the
third bench might be good in certain areas, but the second bench might
not be all that exciting. For the record, the well below is said to be a
second bench well.
This well comes off the confidential list today:
30776, 1,345, Whiting, Flatland Federal 11-4-3TFH, Twin Valley, Three Forks 2nd cycle, 31 stages, 4.2 million lbs, t10/15; cum 134K 2/16; only 24 days in February, 16 days in November, 8 days in October. Drilled to vertical depth and the curve in five days. Total depth of the south lateral was reached in ten days from spud. Gas: 800 to 1,000 units. Connection gases as high as 7,958 units, with a 3' to 5' flare. At 21,505 feet it's a lot of pipe.
The price reduction marks the
end of a special program that since 2014 had allowed the USPS to
temporarily increase postage prices to make up for revenue it lost when
mail volume declined sharply during the Great Recession of 2008 and ’09.
But regulators capped the amount the USPS could recoup with the
surcharge at $4.6 billion--a total that the Postal Service is set to hit
by this Sunday, April 10.
Once
the USPS reaches that ceiling, it is required to roll back the 4.3%
surcharge it had tacked on to first-class mail and commercial postage
rates. That means that the cost of a stamp to mail a standard letter
will decrease from 49 cents to 47 cents this Sunday.
The price of
sending a postcard will also drop by a penny, to 34 cents, while
international mail will go down by a nickel, to $1.15 per letter instead
of the current $1.20.
Tweeting now:
From the hound of Baskerville: the most interesting "thing" to note about the graphic above -- the Obama doctrine -- no off-shore drilling in the Atlantic.
*****************************
Amazing Fact
I find this quite incredible. South Korea accounted for 15% of liquid natural gas (LNG) trade in 2014. Fifty million people. About the same as California-Arizona. Just saying. 15%.
*****************************
Mezcal
I mentioned in a personal e-mail to a reader the other day that about six weeks ago I began a strict/severe weight reduction program. I hit the first plateau at about two weeks, and I've been at that "weight range" for the past several weeks. I plan to stay at this weight until I adjust to it, and then work to get to the next "plateau."
The first two things I did: worked on shrinking the size of my stomach -- thus things like popcorn, diet cola, etc., had to go; and, all alcohol intake had to be stopped.
In 2015, my goal was to "understand" Scotch; I accomplished that goal. But Scotch is "out."
In 2016, my goal was to "understand" the martini. I accomplished that goal. So, martinis are "out."
I honestly do not recall when I last had a beer. I guess it was with my best childhood friend when I was last in the Bakken in February, 2016. One and a half beers if I recall correctly.
There will always be exceptions. For example, maybe one martini once a month when we have sushi at Kobeya, South Lake. The one "resolution" I failed: giving up diet sodas. But volume intake has decreased significantly.
I say all that to say this. I've never understood tequila. But in this week's issue of The New Yorker there's an 8-page article on a 31-year-old woman, who at age 26, introduced mexcal to US drinkers and never looked back. An incredible success story.
Bricia Lopez is the mezcal queen of Los Angeles.
Five years ago, Lopez,
who is thirty-one and imposingly savvy, persuaded her father to let her
build a mezcal bar at Guelaguetza, the restaurant that he opened when
the family moved north from Oaxaca, a center of mezcal culture, in the
mid-nineties.
He didn’t know if Americans would like mezcal, or if
Mexicans would admit that they did. But he decided to trust Bricia, and
she focussed her offerings on premium mezcals—high proof, small lots, no
worm.
At that point, there were only a handful of brands on the market.
Since then, mezcal imports have spiked, and labels have proliferated.
Lopez now carries thirty. When I visited her at the bar the other day,
she was in the midst of a renovation, doubling its size.
My wife once spent a summer in Oaxaca -- during her college years -- she almost ended up staying there. It's a long story, for another time.
So, over the next few months I plan to learn all I can about mexcal. On less than an ounce per week. LOL.
By the way, mezcal with a worm in the bottle is for tourists only, silly rabbit.
[Update, April 22, 2016: I finally got around to tasting Mezcal -- first time in my life. I was looking for a "recipe" but the only recipe I was interested in called for yellow Chartreuse which I could not find at the "only" spirits store in the area. When they carry it, it costs close to $60/bottle and that's why they generally don't carry it. I asked one of the more senior employees -- who says he gave up drinking 25 years ago -- if he knew any Mezcal recipes. He said, "not really." When I mentioned the recipe (tequila/mezcal/yellow Chartreuse) and he did not have yellow Chartreuse, he suggested substituting Triple Sec. And so I did: in a ratio of 1/1/0.5. The first think I noticed was that Mezcal added a Islay-like Scotch peatiness. I was surprised. I immediately google whether Mezcal is like Islay-like Scotch ... and yes, it is googable with 149,000 hits in 0.79 seconds. What a great country.
It’s
just one week until Cinco de Mayo, and this year I’ll be drinking
something different. I’m no expert on artisanal mezcal – until my last
trip to Mexico I’d never tasted one. But I’m glad I did, and I’ve been
trying them ever since at bars that serve them, which these days is a
lot of bars.
Good mezcal is to other popular agave-based spirits (tequila, cheap
mezcal) what (most) single malt Scotch is to (most) blended whisky:
smokier, heavier and more fiery but also capable of a much deeper,
multi-layered set of complex flavors.
In single malts you can get
regional influences like salt, iodine, smoke, along with all the
complexities added by the wood chosen for aging, from charred American
bourbon barrels to recycled sherry, port and Madeira casks.
Because the
agave used for making mezcal is roasted in a pit in the ground prior to
distillation, the spirit has an inherently smoky character that
inevitably draws valid comparisons to Scotch whisky – read a review of
almost any mezcal and you will see this reference. While the laws
governing the production of Scotch are very strict, the geographic
variety and creativity of the distiller still allow for wide latitude in
the results. Same with mezcal.
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Notes to the Granddaughters
This is probably going to be one of those meandering notes that I wish no one would read. It's not ready for prime time, and probably never will be.
My mind is now exploding with neurons firing on JRR Tolkien's The Lord of the Rings; Beowulf; the proposed new airport for Williston; woman friends; Yorkshire (England); and, "within and without" from The Great Gatsby.
I'm back in my Beowulf phase. I finally sat down last week, before the move, and "seriously" read the translation by JRR Tolkien, and the commentary on that version by his son, Christopher. I finally feel much better about Beowulf.
That led me back to Tolkien and The Lord of the Rings. I won't re-read the entire TLOTR now (or maybe ever) but I will read bits and pieces of it, and will continue to read critiques and analyses of that work.
For those interested, these notes on TLOTR might be interesting. I will now look for evidence to support my "theory" but I think the kernel that led to the idea of TLOTR for Tolkien was his translation of Beowulf. Even if inaccurate, it helps me "connect" the two works; it helps me understand both works better.
At the time I did not know it, but I spent many hours and days walking in Yorkshire, walking in the very same areas that Tolkien walked in the early 20th century.
In a 1955 letter, Tolkien explained to his publisher the origin of one of the legends in TLOTR:
The kernel of the mythology, the matter of Luthien Tinuviel and Beren,
arose from a small woodland glade filled with 'hemlocks' (or other
white umbellifers) near Roos on the Holderness peninsula -- to which I
occasionally went when free from regimental duties while in the Humber
Garrison in 1918.
From wiki:
Holderness is an area of the East Riding of Yorkshire, on the east coast
of England. An area of rich agricultural land, Holderness was marshland
until it was drained in the Middle Ages. Topographically, Holderness
has more in common with the Netherlands than other parts of Yorkshire.
To the north and west are the Yorkshire Wolds.
From wiki: Roos is a village and civil parish in the East Riding of
Yorkshire, England. It is situated 12 miles (19 km) east from Kingston-upon-Hull city centre and 3.5 miles (6 km) north-west from Withernsea,
and on the B1242 road.
The mythology (and associated languages) first began to take shape during the 1914 - 1918 war. The Fall of Gondolin (and the birth of Earendil) was written in hospital and on leave after surviving the Battle of the Somme in 1916.
Over the course of four years, I must have walked hundreds of miles in rural Yorkshire. Yorkshire is among the top ten places I would like to explore again; where in the top list depends on my mood. [The top ten include the far tip of Cape Cod; Incirlik, Turkey; Boston; Santa Fe, NM.]
Tie A Yellow Ribbon Round The Old Oak Tree, Tony Orlando & Dawn
Maybe I'll stop here for nowso I can explore the association of Beowulf with TLOTR by reading again, JRR Tolkien: Author of the Century, Tom Shippey, c. 2000.
For newbies, this is an important well. Short history of the "Bakken."
When the Saudis turned on the spigots in October, 2014, the middle Bakken was pretty much mapped out. That doesn't mean operators/frackers knew the best way to complete a middle Bakken, but they pretty much had it mapped out. They were just beginning to start that process in the first bench of the Three Forks; they were already going down that road, but for all intents and purposes, had only just begun, as Karen Carpenter would say.
A few operators, notably CLR, had started testing the second and third bench of the Three Forks but the slump in oil prices has probably extended that process by another decade, if not longer. Early Three Forks wells and comments by Lynn Helms suggested to me that the first bench would rival the middle Bakken (on a well-by-well comparison, not total formation production; it appears the Three Forks is a smaller formation); the third bench might be good in certain areas, but the second bench might not be all that exciting. For the record, the well below is said to be a second bench well.
This well comes off the confidential list today (April 8, 2016):
30776, 1,345, Whiting, Flatland Federal 11-4-3TFH, Twin Valley, Three Forks 2nd cycle, 31 stages, 4.2 million lbs, t10/15; cum 206K 9/16; only 24 days in February, 16 days in November, 8 days in October, 2015. Whiting took all Flatland wells off-line in August and September, 2016. Drilled to vertical depth and the curve in five days. Total depth of the south lateral was reached in ten days from spud. Gas: 800 to 1,000 units. Connection gases as high as 7,958 units, with a 3' to 5' flare. At 21,505 feet it's a lot of pipe.
The world’s second-most populous nation is increasingly becoming the center for oil demand growth as its economy expands by luring the type of manufacturing that China is trying to shun. And just like China a decade ago, India is trying to hedge its future energy needs by investing in new production at home and abroad.
India may have one advantage its neighbor to the northeast didn’t. While China’s binge came during a commodity super-cycle that saw WTI crude reach a high of $147.27 a barrel in 2008 -- due in no small part to its demand -- India’s spurt comes during the biggest energy price crash in a generation.
While oil has tumbled more than 50 percent from mid-2014 levels, the South Asian nation spent $60 billion less on crude imports in 2015 than the previous year even while buying 4 percent more.
In 1999, China’s economy was less than a 10th of its current size of more than $10 trillion, and bicycles vied for space with taxis and buses on crowded streets in major cities like Shanghai. In the ensuing 17 years the economy, spurred on by foreign investment in manufacturing, grew from the seventh largest in the world to No. 2. Vehicle sales surged and oil demand has nearly tripled since then, positioning the country to overtake the U.S. as the world’s largest crude importer this year.
A few years ago, natural gas storage was one of the hottest segments of
midstream infrastructure development. But along came shale, then
oversupply, then depressed prices. The forward curve flattened out,
killing off new storage development projects and putting a lot of
financial pressure on those companies that own or lease storage
capacity. But recently things have shifted, at least part of the way
back to the good ole days.
The summer/winter spread currently sits at
$0.63/MMBtu (April 7, 2016), the highest level since 2012, and up
significantly from the past years average of around $0.30/MMBtu.
Midstream companies with available storage should be able to lock in
higher prices compared to past years. In today’s blog, we look at the
situation now facing natural gas storage operators and show how recent
shifts in the market may affect their returns.
A study by the U.S. Geological Survey identifying the potential for
natural and human-induced earthquakes identifies wastewater
injection—not fracking—as the primary cause of increased tremors in the
south central U.S.
In a first-of-its-kind study, USGS examined the potential for
human-induced and natural earthquakes for a one-year period to
supplement its standard 50-year forecast. Within the central and eastern
U.S. (CEUS)—an area populated by 7 million people—the agency’s report
said there’s a chance of damage from all types of earthquakes similar to
the natural earthquakes in the high-hazard areas of California.
The maps released with the study show that east of the Rocky
Mountains, much of the seismic activity is in Oklahoma, Kansas and
Texas. Although this activity is sometimes attributed to hydraulic
fracturing conducted by the oil and gas industry, USGS said “this
process is only rarely the cause of felt earthquakes.”
According to the report, “Wastewater disposal is thought to be the
primary reason for the recent increase in earthquakes in the CEUS.”
Bakken average production costs lowest among shale plays: again, for the archives; previously posted from a different source; this from Bakken Magazine:
Oil and gas industry upstream costs in 2015 were 25 percent to 30
percent below 2012 levels in the Bakken and four other onshore areas
evaluated.
To better understand the costs of upstream drilling and production
activity, EIA commissioned IHS to study costs on a per-well basis in the
Bakken, Eagle Ford, Marcellus and Permian (Delaware and Midland basins)
plays. Titled “Trends in U.S. oil and natural gas upstream costs,” the
report is available here.
The period studied is from 2006 through 2015, with forecasts to 2018. Well costs in the regions studied were:
- Bakken wells costs were $7.1 million in 2014, but will drop to $ 5.9 million in 2015.
- Eagle Ford wells averaged $7.6 million in 2014, but will fall to $ 6.5 million in 2015.
- Marcellus wells will cost $6.1 million in 2015 after having an average cost of $6.6 million in 2014.
- Midland Basin wells were $7.7 million in 2014, but will drop to $ 7.2 million in 2015.
- Delaware Basin wells cost $6.6 million in 2014 and will drop to $5.2 million during 2015.
Yips. for my brother-in-law, from ESPN, the video will go viral --
Ernie Els
made dubious Masters history in the opening round Thursday by scoring a
9 on the par-4 first hole -- the highest in 80 years of the tournament.
Els,
46, a World Golf Hall of Famer who has won four major championships,
six-putted the first green at Augusta National after chipping from off
the green to within 3 feet for what appeared to be an easy par.
It
could have been worse. The Masters live scoring had it listed as a 10
all day, until officials conferred, reviewed videotape and determined
that Els had taken just six putts, instead of seven. He finished with an
8-over-par 80 and is tied for 81st.
