Friday, July 29, 2016

Twelve Permits Renewed; Three New Permits; New Operator in North Dakota -- July 29, 2016

Active rigs:

Active Rigs3573192179179

Three new permits:
  • Operator: Enerplus
  • Fields: Spotted Horn (McKenzie)
  • Comments:
Twelve (12) permits renewed:
  • CLR (6): three Bang permits and three Carus permits, all in Dunn County
  • Hess (2): two EN-Leo permits in Mountrail County
  • EOG (2): two Riverview permits in Mckenzie County
  • Enerplus: a Mars permit in Dunn County
  • Crescent Point Energy: an Aldag permit in Divide County
One producing well completed:
  • 29684, 2,052, Statoil, Chryl 17-20 XW 1TFH, Banks, t7/16; cum -- 
Transfer of wells: Whiting transferred 42 wells to Foundation Energy Management
  • all older wells, permit numbers between 11410 and 14870
  • mostly in Mountrail County
  • a couple in Ward County
  • the few I checked were all Madison wells
  • it looks like this is a new operator in North Dakota
  • these are the only wells for Foundation Energy 
  • website for Foundation Energy Management
  • Dallas, TX?
  • this company has been previously mentioned on the blog: see Bakken operators;

Statoil To Buy Majority Interest Off Brazil; License Had Been Held By Petrobras; $2.5 Billion -- July 29, 2016

Link here. Statoil:
It has 30° API oil and associated gas “in a thick reservoir with excellent properties.”
From an earlier article:
Petrobras in 2012 encountered 400 meters of continuous oil pay at the Carcara discovery well.
It's Just Business

From the guy who says his secretary is overtaxed.  

Reuters is reporting:
Duracell said it plans to close a battery-making plant in South Carolina that employs 430 people, making the announcement fewer than five months after being acquired by Warren Buffett's Berkshire Hathaway Inc.
The shutdown of the Lancaster, South Carolina, plant, which made AA batteries, will begin in March and should be completed by the middle of 2019.
Duracell is consolidating its North American production of AA and AAA batteries into a plant in LaGrange, Georgia.
"This was a very difficult decision," Robert Lorch, Duracell's president of global operations, said in a statement. "We're taking this important step to position the Duracell business for growth."
Duracell said the move will lead to "some" job growth in LaGrange, which is about 330 miles southwest of Lancaster, and that Lancaster workers will be encouraged to apply for work there.
Sure. Pretty sad. 

Idle Rambling About Apple, Amazon -- Nothing About The Bakken -- At Least Not Much Except In Passing -- July 29, 2016

Bezos is where Jobs was: neither seemed interested in financial statements, quarterly reports, revenue, and net income from quarter to quarter. Both of these guys, it seemed, were/are focused on their customers.

This story over at Quartz is a great example.
As it always does, Amazon punctuated its latest results with flashy tidbits that don’t give you any insight into performance. Amazon’s wireless Alexa speaker now has “over 1,900 third party skills.” Its on-demand “Dash” ordering button added 50 new brands, including Campbell’s Soup and Play-Doh. AmazonFresh, the company’s grocery delivery service, debuted in London. And Amazon Studios, its video production arm, earned 16 Emmy nominations.
But investors don’t care about these things. What they care about is Amazon Web Services and Amazon Prime, and on the latter the company refused to engage. During Thursday’s earnings call, CFO Brian Olsavsky repeatedly dodged inquiries on Prime’s metrics. Instead, he praised Amazon’s second-annual Prime Day (“a great day for customers globally”) and nodded vaguely to the program’s strength (“we are seeing great acceptance of Prime, and usage of Prime benefits”).
Understanding Prime has become increasingly vital to understanding Amazon writ large. Bezos made clear earlier this year that Prime is a priority, writing in his letter to shareholders, “We want Prime to be such a good value, you’d be irresponsible not to be a member.”
After Jobs moved to the heavenly cloud, Apple seemed to be more interested in quarterly financial reports and less interested in "gee whiz" excitement of its products. Apple has seemed to move into a "value" story, not a "growth" story. Not that there's anything wrong with that. Of course that will all change when the Apple EV is announced and delivered.

Amazon on the other hand seems to still be in a "growth" stage, always looking for innovative ways to improve their customers' experience. And not particularly concerned about their bottom line. Amazon continues to put its money back into the company.

Yes, the quarterly numbers at Amazon are incredibly impressive, but it's the way they talk about their company that impresses me.

That's what it was like in the early days in the Bakken Boom. We didn't hear much about "bottom lines" and costs to complete wells. The emphasis was on the excitement of what the Bakken could become. But now, the quarterly conference calls have pretty much turned into MBA discussions of operating cash flow and not much about the excitement of the Bakken.

Amazon Prime

Some time ago I posted that I accidentally signed up for Prime. I clicked on the wrong button and couldn't "back out." I suppose I could have talked to Amazon and got out of Prime, but the more I used it, the more impressed I became.

I no longer wait to add products to "my cart" to get free shipping. I order things when I want. And they generally show up in two days. The video streaming is incredible. And my hunch is there is a whole lot more to Prime of which I am unaware. 

One of my "problems" with Apple is that their products last "forever." I know folks update their iPhones every year or so, but I don't have a smart phone. I'm talking about their iPads and their laptop/desktop computers. My iPad is a second generation iPad -- it is several years old and does everything I need it to do. I really, really want to upgrade to a newer iPad but to date, there is just no compelling reason. Same with my MacBook Air -- a few years old, and it seems brand new.

Ayurvedic and Ogive and Operon

Okay, so here's a new word for me: ayurvedic. From Siddhartha Mukherjee's The Gene: An Intimate History.

From google/wiki: Ayurvedic medicine -- also known as Ayurveda -- is one of the world's oldest holistic (whole-body) healing systems. It was developed thousands of years ago in India. It is based on the belief that health and wellness depend on a delicate balance between the mind, body, and spirit.

And now a second new word from the same book: ogive. Ogive is a pointed or Gothic arch. In biology it means a "cumulative frequency graph." We usually referred to them as "S-shaped" graphs in Biology 101.  

Years ago I understood an operon but somewhere along the way, I forgot.  From Mukherjee, page 175:
Surprisingly, all the genes dedicated to a particular metabolic pathway were physically present next to each other on the bacterial chromosome -- like library books stacked by subject -- and they were induced simultaneously in cells. The metabolic alteration produced a profound genetic alteration in a cell. It wasn't just a cutlery switch; the whole dinner service was altered in a single swoop. A functional circuit of genes was switched on and off, as of operated by a common spool or master switch. Jacques Mono called one such gene module an operon
The author then goes on to talk about how a repressor protein keeps the operon in a "locked" position, much like a photoelectric cell or a smoke alarm system.  

A Book For Aunt Laura

Original Post
For The Glory: Eric Liddell's Journey From Olympic Champion to Modern Martyr, Duncan Hamilton, c. 2016.

It takes off where Chariots of Fire ended.  


October 8, 2106: in this week's issue of London Review of Books has a long essay on Emil Zatopek, another runner and the subject of two new books:
Today We Die A Little: The Rise and Fall of Emil Zatopek, Olympic Legend, by Richard Askwith
Endurance: The Extraordinary life and Times of Emil Zatopek, by Rick Broadbent

The News Coming Out Of The Panama Canal Expansion Is Staggering -- To Say The Least -- It's Only Just Begun -- July 29, 2016

This story was linked earlier, but it will be lost in the chaff. Here is it again, as a stand-alone, from Platts.
It has been quite a year for the US LNG industry.
In February, Cheniere’s Sabine Pass LNG terminal exported the continental US’ first commercial cargo of LNG.
Since February, Cheniere’s Train 1 at Sabine Pass, the only fully commissioned operating US LNG export terminal, has exported 19 cargoes to eight different nations on three continents.
While South America has so far received more US LNG cargoes than any other region, the re-opening of the newly expanded Panama Canal could drive new competition from North Asian markets. While many expected the majority of Cheniere’s cargoes to end up on Europe, ten of the first 16 cargoes (three are out at sea) have delivered into South America, specifically Brazil, Chile and Argentina. Only two cargoes have delivered into Europe.

2016 US LNG exports (YTD)

Cheniere’s first cargo was delivered to Rio de Janeiro, Brazil’s furthest regasification terminal from Sabine Pass. Depending on what terminal you deliver into Brazil, shipping a cargo of LNG from the US Gulf Coast can take between 11 and 16 days. Delivery into either of Argentina’s two terminals takes roughly 21 days.
The expanded Panama Canal will allow US LNG producers to deliver their cargoes to select destinations in South America and Asia faster and cheaper. Chile is a good example: when travelling around the southern tip of South America, an LNG vessel departing from Sabine Pass must travel 9,507 nautical miles over 30 days to deliver into Chile’s Mejillones terminal. Through the Panama Canal, the trip is cut down to just 3,607 nautical miles, lasting about 11 days.
A shorter trip to North Asia through the Panama Canal means South American LNG importers will now face new competition for US LNG supply.
Before the opening of the Panama Canal, the idea of sending a cargo of US LNG to North Asia seemed like a pretty far off idea. Via the Suez Canal, a US Gulf Coast laden LNG vessel must travel around 47 days and 14,500 miles to reach Tokyo Bay. Around the Cape of Good Hope, the trip is 15,689 nautical miles, lasting 50 days. Through the Panama Canal, the trip is cut down to 29 days and a distance of 9,214 nautical miles.
Much, much more at the link. 

Global Warming Update; 1Q17 -- July 29, 2016

From John Kemp, over at Twitter:

I guess it depends where one places the thermometers.

Coal To Newcastle? -- US Exporting LNG To The Mideast -- EIA -- July 29, 2016

I can't make this stuff up. Tag: Panama Canal Expansion. A big whoop.

Asian Notes Over At Twitter

Japan's July fuel oil demand for power surges 22% year-over-year.

South Korea's crude oil imports from Africa and Latin America surge in 1H16 in efforts to diversify supply sources beyond the Middle East.

Panama Canal expansion opens premium Asian markets to US LNG: over at Platts.

They Said It Couldn't Be Done -- Update On New Williston Airport -- July 29, 2016

Project location:
Final master plan, April, 2016:

From The Williston Wire:
It has been a big week for the new Williston Basin International Airport project. The airport is moving from the land acquisition phase to the construction phase as the property owners signed purchase agreements from the City of Williston and a ceremonial ground breaking was scheduled for Oct. 10, 2016.
Federal, state and local dignitaries have been invited to the historic endeavor that is being called "Taking Flight." Watch for more details in the Williston Wire. 
The Williston Herald is reporting:
Construction is officially due to start on Williston's new airport this fall. Airport and city officials say purchase agreements are signed for about 1,500 acres of land, and a groundbreaking date has been set for October. Negotiations with eight landowners wrapped up in mid-July, clearing the way for the relocation project to move into its first building phase. Officials, citing various loose ends that have yet to be finalized in the deals, won't yet say how much the city paid for the tracts of farm and pasture land.
And this:
In the meantime, bidding will start on several facets of construction, including the terminal building foundation, preliminary road construction and other staging areas. Those projects are expected to be complete by the end of this year.
Grading work and a re-route of 59th Street will also be up for bid this year, bringing 2016’s construction costs to $18.5 million. 
Kjergaard, who was among a group from Williston that met with members of the Federal Aviation Administration in Washington, D.C., earlier this month, said project heads are hoping to pay for the first phase of construction with federal money.
The project’s total price tag has dropped to an estimated $240 million, down from $265 million that the city was banking on several weeks ago.
As a reminder, here is the link to the Williston Airport Relocation page

Shock! -- Drudge Report; Disappointing -- WSJ; Horrendous -- Reality -- July 29, 2016

The government's first estimate for 2Q16 GDP is absolutely horrendous. Horrendous.

GDP Now almost got it right but was too optimistic. The Wall Street Journal was way too optimistic.

See this post, posted just before the 2Q16 GDP figures were released. GDP Now lowered the forecast from 2.3% to 1.8% one day after new numbers were released.

The WSJ forecast an incredible 2.6% growth.

In fact, the economy responded less than half the 2.6% growth predicted by The WSJ. The story at Bloomberg:
The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.
Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.
Makes me wonder about the economists surveyed by Bloomberg. 

Had this happened under a Republican administration after putting us $20 trillion in debt, Bloomberg would have hammered the GOP. But I guess under this administration, its just part of the business cycle. 


Reminds me of the day some weeks ago when the jobs number for May was released. Shocking.

So, let's see how the market is taking this. I can only imagine. Hold on to your hats buckaroos.
  • S & P 500: down almost 4 points, to 2,166
  • Dow: down almost 60 points, to 18,398
  • WTI: down another 45 cents; below $41, and now about $40.69
Back to the Bakken

Active rigs:

Active Rigs3573192179179

RBN Energy: update on pricing and takeaway capacity for natural gas in the northeast, Marcellus and the Utica. 

Are You Kidding Me?

UPS blames "higher fuel costs cut into its profits." Really? Fuel has never been so inexpensive. Sure, it might have gone up a bit quarter-over-quarter (albeit very little) but year-over-year? From The WSJ
United Parcel Service Inc. on Friday reported profit rose 3.2% in the latest period, though higher fuel costs cut into climbing revenue from its U.S. and international package deliveries.

Oil prices rose during the latest quarter, and UPS said lower fuel surcharges in the quarter hurt results. The company’s fuel surcharges are typically tacked onto shipments to cover that cost, but they lag rising fuel prices by a couple months.
Revenue rose 2.4% in the U.S. package segment and 1.1% in the international package segment.
Over all for the June period, UPS posted earnings of $1.27 billion, or $1.43 a share, compared with $1.23 billion, or $1.35 a share, a year earlier. The per-share figure was helped by a lower share count in the latest period. 
You mean to tell me that with gasoline and diesel fuel at incredibly low prices, UPS is still able to "tack on fuel surcharges"? I could see that when gasoline was selling for $4.00/gallon and $100-oil, but we're seeing gasoline now well below $2.00/gallon. Obviously I'm missing something; The WSJ wouldn't report this if it weren't true.

Book Recommendation: Letters Home From Lt William R Larson, WWII, Pacific Theater -- July 29, 2016

This is pretty cool. An alumnus of Williston High School, Don J Larson -- Class of 1986 -- has recently completed a biography of his uncle who served in WWII: Lt William R Larson, USNR, a torpedo bomber fighter pilot. The book is Lucky's LIfe: Letters Home From Lt William R Larson, Squadron VC 38.

The subject of the book, Lt William Larson grew up on a farm in Divide County, just north of Williston.

The letters "home" were to his parents and his brother Lloyd, the father of the author of the biography. The fact that Bill Larson never returned home from the Pacific would make his letters that much more compelling. I was alerted to the biography of "Bill" Larson by his nephew who shares his uncle's name.

A very, very nice write-up in the Williston Herald is available at this link:

A Facebook page devoted to Lt William Larson is at this link:

The book is available at Amazon, and even better, the paperback edition, I am told, is available at Books On Broadway in Williston, North Dakota. The Kindle edition is less than $5.00, I believe.

The paperback is 630 pages long. That is simply incredible: 630 pages. One can read much more about the book at this post:

Personal note: in 1943, Larson participated in bombing runs during the Bougainville Campaign. It just so happens that Larson would have been providing air support to the Americal Division, US Army, to which my father-in-law, Flavio Garcia, was assigned.

According to a biographical note I wrote many years ago The Americal Division had its origin in Task Force 6813, formed January 14, 1942, with the mission of occupying and defending New Caledonia.
Task Fork 6813 was disbanded May 27, 1942, once the Americal Division was up and running.

Gaudalcanal ground offensive: The 164th Infantry (North Dakota) arrived on Guadalcanal on October, 13, 1942, under air attack. Division headquarters and the 132nd (Illinois) landed on Guadalcanal on December 8, 1942. The 35th Regiment Infantry Division relieved the 132nd Infantry Regiment, in early 1943. The 132nd reached Tenaro Village by February 9, 1943, and that ended the Guadalcanal ground struggle.

Bougainville: the Americal Division moved to the Fiji Islands in March / April, 1943, and then moved to Bougainville in December, 1943 - January, 1944, first the 182nd Infantry Regiment (Massachusetts) and then the 132nd Infantry Regiment.

The division was relieved by the Australian 3rd Division on December 10, 1944, and the division conducted amphibious training and prepared to move to the Philippines. 

Philippines: the division moved to the Philippines in January, 1945. The following units are mentioned by the veterans’ association: the 1st Battalion, 182nd Infantry Regiment; the 1st Battalion, 132nd Infantry Regiment; the 3rd Battalion, 164th Infantry Regiment (North Dakota).
My own father was serving on the USS Wakefield on the Atlantic Ocean during this time, but in 1946 was in the Pacific Theater bringing US Marines back home. 

Note: there may be typographical and factual errors in this note.

Last "GDP Now" Foreast Before "Official" 2Q16 GDP Released -- July 29, 2016

For all that talk about civil disobedience and demonstrations and #BlackLivesMatter, the two political conventions came off pretty well.

2Q16 GDP

The last update before the "official" 2Q16 GDP is released. This was released July 28, 2016:
The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.8 percent on July 28, down from 2.3 percent on July 27.
After the U.S. Census Bureau's inaugural release of its advance economic indicators report, which covers retail and wholesale inventories and foreign trade in goods, the nowcast of the contribution of net exports to second-quarter real GDP growth declined from 0.17 percentage points to –0.10 percentage points and the nowcast of the contribution of inventory investment to growth declined from –0.63 percentage points to –0.79 percentage points.
I think The Wall Street Journal is a bit more optimistic.
U.S. economic growth appears to have accelerated in the second quarter after a weak start this year. Gross domestic product, a broad measure of economic output, is projected to have advanced at a 2.6% annualized pace this spring, according to economists surveyed by The Wall Street Journal. The economy grew at 1.1% in the first three months of the year.
Then this:
If the economy advanced at the rate economists forecast, it would be the fastest pace in a year. That’s significant because in the prior two quarters, U.S. output increases came in below the relatively lackluster roughly 2% pace averaged during most of the expansion, which began in 2009. An improvement in growth would suggest the economy has stabilized, as opposed to gradually slowing into a contraction.
I believe 1Q16 GDP was -- after all revisions -- 0.8%. If 2Q16 GDP really comes in at 2.5% .... well, it would be interesting. And encouraging.

Helicopter Money

After reading this article in The Wall Street Journal I was pretty sure Japan would be dropping some helicopter money, but Japan has decided not to. Futures are down (early morning, Friday, July 29, 2016; and oil is pennies away from going below $40).

Microsoft Dismantling Its Telephone Division

From The Wall Street Journal: Microsoft to Shed 2,850 Additional Jobs. Layoffs come as company retools sales operations, dismantles mobile phone hardware business. From The Verge, May 25, 2015, Microsoft wasted at least $8 billion on its failed Nokia experiment.
Microsoft is taking another almost $1 billion hit on its failed Nokia acquisition today. The software maker is "streamlining" its smartphone business, writing off $950 million and cutting 1,850 jobs. The cuts come almost a year after Microsoft wrote off $7.6 billion and cut 7,800 jobs.
Only a small number of former Nokia employees will remain at Microsoft, and the company's consumer phone making days are over.
Microsoft has wasted at least $8 billion on its failed Nokia experiment, including the costs of restructuring and severance payments for thousands of employees. Microsoft originally hired 25,000 Nokia employees as part of its $7.2 billion acquisition of Nokia's phone business, but a series of layoffs over the past two years has triggered the end of Microsoft's mobile subsidiary.
Microsoft's Nokia phone business acquisition was always tricky and risky, but it was a deal organized by former CEO Steve Ballmer. It has been clear from the start that Satya Nadella, Microsoft's new CEO, wasn't interested in running a phone business.
Nadella announced a strategy shift away from a "devices and services" focus just a couple of months after the Nokia acquisition finalized, and last year the strategy shifted even further away from producing multiple handsets.
Many will argue Microsoft had no choice, as Nokia controlled more than 90 percent of the Windows Phone market and had been rumored to be considering switching to Android.
Google's experiment with making its own Android phones resulted in the search giant selling Motorola to Lenovo for $2.91 billion, less than two years after paying $12.5 billion to acquire it. While Google's investment was primarily driven by the need to obtain key patents, it's not clear how Microsoft has benefited from its Nokia deal.
No mention of Apple or the iPhone.

Ballmer on the iPhone