Wednesday, August 17, 2016

This Seems Pretty Straightforward -- Massachusetts Says "No" To New Natural Gas Pipelines -- August 17, 2016

The highest court in Massachusetts is blocking electric utilities from passing on to ratepayers the costs of building new natural gas pipelines.
The Supreme Judicial Court in its unanimous decision on Wednesday said state regulators made a mistake in approving the tariffs and authorizing utilities to sign long-term contracts for natural gas generating capacity.
The decision was cheered by environmental groups including the Conservation Law Foundation, which filed suit to stop what it dubbed a “pipeline tax” on consumers.

QEP Reports Two Nice Wells In Heart Butte; Amazon Expands Restaurant Delivery; US Women's Water Polo Advances To Finals After Decisive Win Over Physical Hungary -- August 17, 2016

Active rigs:

Active Rigs3274194183199

One well coming off confidential list Thursday:
  • 20087, SI/NC, Enerplus, Hudson 13-21H, Mandaree, no production data,
Five new permits:
  • Operators: WHiting (3), BR (2)
  • Fields: Poe (McKenzie), Sand Creek (McKenzie)
  • Comments:
Two producing wells completed:
  • 26362, 1,215, QEP, MHA 6-28-29H-148-92, Heart Butte, t7/16; cum -- 
  • 26363, 1,260, QEP, MHA 6-28-29H-148-92, Heart Butte, t7/16; cum -- 

Amazon Prime Expands Restaurant Delivery

The StarTribune is reporting:
Amazon is adding another perk to entice Twin Cities residents to join its Prime membership program: free restaurant delivery within an hour.
It's the latest addition to a growing portfolio of services that Amazon has rolled out in the region in the last year as the online behemoth looks to persuade consumers to shop from its website and app and not anywhere else.
Amazon's restaurant delivery, a service it first rolled out last year in its hometown of Seattle, is now up and running in about a dozen U.S. cities such as Portland, Los Angeles, Chicago and New York.
In Minneapolis, where the service launches today, Amazon has partnered with dozens of local eateries including Hell's Kitchen, Keys Cafe and Bakery, the Lowry, Common Roots Cafe, Gandhi Mahal, Broders' Pasta Bar, Manny's Tortas, French Meadow and select Leeann Chin locations.
It is only available to members of its $99-a-year Prime program and in certain Minneapolis neighborhoods such as Calhoun-Isles, Uptown, Linden Hills and Dinkytown. But the company is planning to expand the delivery region in the coming weeks.
I was unaware that Amazon was doing this anywhere. I see Portland is already on the list. Interesting.

This is going to put huge pressure on pizza deliveries.

I see this as the continuing tale of "two" Americas. Not only do you have to be able to afford $99 membership (which is likely to go up in price) but you have to live in the right neighborhoods to get some of the "freebies." Something tells me this will never be offered in some areas in Baltimore, Ferguson, or Milwaukee.

Wednesday Energy Tweets -- August 17, 2016

John Kemp:
  • commercial crude oil stocks still well above 2015 levels; no sign of inventory drawdown
  • distillate fuel oil stocks rise; well above 10-year median, but narrowing to 2015 levels
  • crude oil imports decelerated but still very high
  • US refinery throughput rose; reversing previous week's decline; in line iwht 2015; well above 10-year average
  • gasoline supplied about the same as previous week; at 9.77 million bopd
  • US midwest gasoline stocks fell significantly; now just 1.6% above 10-year average
  • US gasoline stocks falling faster than normal; approaching 10-year average
Oil & Gas Journal:
  • commercial crude oil inventories down 2.5 million bbls in week ended August 12
Close but no cigar: it looks like we won't quite hit the 10 million bopd four-week average this summer; we came close; in the report released today, the number was 9.770 million bopd compared with 9.776 the previous week, and historically, from here on out, until early next spring, the number will continue to fall.

On the other hand, as a reader reminded me some time ago, we have hit the 10 million bopd threshold for "weekly US refiner and blender adjusted net production of finished motor gasoline" on several occasions. The link is here: At the link, one will see we hit 10 million bopd:
  • May, June, July, and August, 2015 (not the entire months; but some weeks)
  • 2016, February, third week
  • 2016, March, second week
  • 2016, May, first week
  • 2016, June, first and third week
  • 2016, July, the first four weeks of the "five-week" month
  • 2016, August, the first two weeks, so far

Does Anyone Really Think Solar Has A Significant Energy Role To Play In The Future? The Saudi Perspective -- August 17, 2016

Some time ago, Saudi canceled a $109 billion solar energy project -- to be more precise, delayed the project for eight years.

This next story tells me all I need to know about the future of solar energy.

Russian Press TV is reporting:
Saudi Arabia says it will construct the reactors over the next 20 years at a cost of more than $80 billion, with the first reactor expected to come online in 2022.

Russia says it is interested in Saudi plans to build 16 nuclear reactors as part of the kingdom’s purported aspirations to develop civilian nuclear technologies.

"We support the Saudi Arabian initiative aimed at the use of the civilian nuclear power sector,” Russian Energy Minister Alexander Novak said in an interview with the leading pan-Arab newspaper Asharq al-Awsat on Monday.

“The ambitions of the Saudi government speak for themselves: The kingdom plans to build 16 nuclear reactors in 25 years. They will produce 20 percent of required electric power," Novak said.

Novak said Saudi Arabia has no nuclear power infrastructure that makes the project challenging, adding Russia “has rich experience in developing such a base.”

Russia helped Iran bring the first nuclear power plant in the Persian Gulf online in 2011. The two countries plan to build two more nuclear reactors in Bushehr as part of a broader deal for up to eight reactors in Iran.
Sixteen nuclear reactors:
  • at a cost of $80 billion;
  • will take 25 years to complete;
  • first one to come on-line no soon than 2022; and,
  • will only produce 20% of Saudi's total electricity demand.
Anyone truly think solar power can compete with nuclear energy? Solar can't match the scale and it is not available on demand.

Also, as a side note: Russia, China, Germany, and North Korea will compete to get the Saudi nuclear contracts. Obama will be out of office; Hillary won't pursue. She will help Iran counter.

Breakeven Prices Continue Lower In The US -- Mike Filloon; Saudi Strikes Out On Its Own After Being Abandoned By Obama -- August 17, 2016


August 17, 2016: Cisco says it will layoff 5,500 employees, much fewer than the rumored 14,000, and in line with previous summer layoffs. Seems to be a non-story. 
Original Post
NOG ex-CEO facing SEC sanctions, from a press release:
On August 16, 2016, Northern Oil fired its Chief Executive Officer, Michael Reger, after he admitted to the Company that he is facing sanctions in a U.S. Securities and Exchange Commission investigation.  Northern Oil said that Reger was sent a Wells Notice from the SEC regarding its 2012 investigation of Dakota Plains Holdings Inc. Reger was an investor in Dakota Plains Holdings Inc. since 2008.  Northern Oil announced that Reger was removed from its board, effective immediately, and that Northern Oil does not believe that Reger will be entitled to any severance payment.  Following this news, Northern Oil stock dropped as much $0.31 per share, or 7.79%, to $3.67 during intraday trading on August 16, 2016.
NOG, from a press release dated August 16, 2016: 
Northern Oil and Gas, Inc.announced today that Michael L. Reger has been terminated as Northern's Chief Executive Officer and has ceased being a member of Northern's Board of Directors, effective immediately.
Thomas W. Stoelk has been named Interim Chief Executive Officer. Mr. Stoelk has served in several executive positions in the oil and gas industry over the last 25 years and has been Northern's Chief Financial Officer since December 2011.
Prior to joining Northern, Mr. Stoelk served as the Vice President of Finance and Chief Financial Officer at Superior Well Services, Inc. from 2005 to 2011, as the Chief Financial Officer of Great Lakes Energy Partners, LLC from 1999 to 2005 and as the Senior Vice President of Finance and Administration for Range Resources Corporation from 1994 to 1999.
Chad Allen, Northern's existing Corporate Controller, has been named to the position of Chief Accounting Officer. Chad has over 10 years of public accounting experience with firms servicing public companies.

Breaking news: Russian government sees sale of country's largest oil producer Rosneft as top priority. Over at Reuters.


Active rigs:

Active Rigs3274194183199

RBN Energy: LNG exports impact US natural gas supply, demand and price.

Fillooon: Bakken update -- breakeven prices continue to lower in the US.
  • Mega-Frac well designs continue to impress in all US unconventional plays from the Bakken and Eagle Ford to the Wolfcamp
  • Although the Permian and STACK plays have been better, the Bakken/Three Forks are seeing huge production improvements
  • This analysis of core Three Forks locations in North Dakota shows the Mega-Frac well design produces over 200K barrels of oil in the first 365 producing days
  • The core Three Forks, at 365 producing days, seems to model near the middle Bakken in areas of higher well pressures
  • Mega-Fracs are significantly improving decline rates and breakeven prices

ObamaCare is killing jobs. Over at Yahoo!Finance.

Turkey will release 38,000 prisoners to make room for coup plotters. Over at Los Angeles Times.

Aetna foreshadowed ObamaCare exit if merger denied. Over at The Huffington Post.

Perfect timing. Note the time this story was posted yesterday, August 16, 2016, at 1:32 p.m. Eastern Time. The Cisco story that the company would layoff 20% of its workforce (14,000 employees) hit the wires just after midnight, early this morning, August 17, 2016. Futures were up about 30 points before the Cisco story. Immediately after the story was posted, futures were down about 80 points (a swing of over 100 points). On opening, CSCO is down about 2%.

Barnes and Noble ousts CEO after a year. Story over at CBS Money Watch.

Saudi strikes back. Story over at Yahoo!

Chariot on fire. Video over at Fox News.

XLNX up about half a percent on a day a) the market is down about 80 points on opening; and, b) reports that Cisco could layoff 14,000 employees.

TGT: down a staggering 6%; losing $4.60. Wow. Target cuts outlook as it sees fewer customers in stores. Social media is all over Target: apparently the transgender bathroom policy emanating from Minnesota not impressing folks. Bigger problem: folks shop once or twice a month at Target; fresh produce spoils in between visits. Both my older daughter and I prefer produce at Wal-Mart compared to that of Target. [Update, later, 4:50 p.m. Central Time: Target has announced it will add private bathrooms to quell transgender debate. Comment: I think the damage has already been done. This company is making as many "PR" mistakes it seems as Fidelity/MDU made operational mistakes. Just my personal opinion.]

Barnes And Noble

Barnes and Noble ousts CEO after a year. Story over at CBS Money Watch.

Previous posts on B & N:
Saudi Strikes Back
Mideast On Edge

Saudi strikes back. Story over at Yahoo!
For those concerned about the fallout from President Barack Obama and his administration’s nuclear deal with Iran — the Joint Comprehensive Plan of Action, or JCPOA — the hits just keep on coming. The recent revelation that the United States handed over $400 million in cash to Iran on the same day that it was releasing four American captives is but the latest disturbing detail in the saga that has become Obama’s extended experiment in appeasing the mullahs.
Add it to the long list of other threatening post-deal developments, including the intensification of Iran’s ballistic missile program, the continuation of its efforts to illicitly procure nuclear materials, and the expansion of its aggressive and destabilizing activities across the Middle East. Oh, and don’t forget the detention of three new American hostages, of course.
Somewhat less noticed in the JCPOA’s aftermath, but potentially no less consequential for regional security, has been the steadily escalating confrontation between Saudi Arabia and Iran. This was not a wholly unexpected development. Many analysts warned that the Saudis would not look kindly on a U.S.-Iranian agreement, negotiated largely behind their backs, that ended up leaving the country’s arch-enemy, the Shiite theocracy across the Gulf, with a large nuclear infrastructure, hundreds of billions of dollars in sanctions relief, and a more or less open field to indulge its quest for regional hegemony. The Saudis, inevitably, would read it as America abandoning its historical role as the guarantor of Gulf security in favor of some new dispensation with an unreconstructed Iran — one that threatened to irreversibly alter the region’s correlation of forces in Iran’s favor.
Obama’s penchant for stoking Saudi paranoia and fears has no doubt made matters much worse: Declaring, for example, that his aim was to establish an “equilibrium” between the Saudis, a longstanding U.S. ally, and Iran, a revolutionary power that has systematically attacked U.S. interests for four decades. Or publicly complaining about the fact that he’s “compelled” to treat Saudi Arabia as an ally at all. Instead, Obama has opted to diss the Saudis repeatedly as free-riders who seek to exploit American muscle for their own narrow, sectarian purposes. In Obama’s telling, the Iranians — handmaidens to the Bashar al-Assad regime’s multi-year campaign of war crimes and mass murder — have legitimate “equities” in places like Syria that deserve to be protected (Could he mean the land bridge via Damascus by which Iran supplies its Lebanese client, the terrorist group Hezbollah, with tens of thousands of missiles and rockets that will be used in its next war with Israel?). Rather than seeking to counter Iran’s revisionist agenda, Obama’s view is that the Saudis need to accommodate themselves to “sharing” the Gulf with the world’s leading state sponsor of terrorism.
Needless to say, the Saudis beg to differ. Confronted with a newly empowered Iran and a retrenching America, the kingdom is striking back, not rolling over. It believes Obama’s policies have purposefully created a dangerous vacuum in the region, one that is primarily being filled by an Iran bent on sowing chaos and destruction, ultimately targeting the downfall of the House of Saud itself.
No longer able to rely on Pax Americana, and unwilling to watch passively as the mullahs slip the noose over their collective neck, the Saudis have increasingly taken matters into their own hands, especially since the ascension of King Salman bin Abdulaziz Al Saud in 2015, adopting a much more assertive and high-risk, even provocative, national security posture with a single-minded mission to challenge and confront Iran.
The opening shot (literally) in Salman’s new anti-Iran campaign was fired even before the JCPOA was finalized in July 2015. In March of last year, the Saudis intervened in Yemen to stop Iran-backed Houthi rebels from taking control of the country. The Obama administration subsequently supported the effort, reluctantly, by supplying intelligence and military equipment. Though the Saudis — and a handful of Sunni allies, led by the United Arab Emirates — succeeded in rolling back rebel gains in southern Yemen, the war has been bogged down for months, with the Houthis still entrenched in the capital, Sanaa, as well as their strongholds in the north, including strategic positions on the Saudi border. Peace talks and ceasefires have come and gone.
Prospects for a political settlement appear dim. Desperately poor and dysfunctional even before the war, Yemen has largely been laid to waste, a failed state that — already home to one of al Qaida’s most dangerous affiliates — appears destined to be a fertile breeding ground for jihadism, sectarian conflict, and regional instability for yeas to come.
Much more at the link.

Blind Spot
To Say The Least, This Is Really Strange

Over at Yahoo!Finance, reporting:
Target reported disappointing Q2 earnings on Wednesday, and management placed part of the blame squarely on Apple.
Comparable store sales at Target overall fell by 1.1%, but Target executives noted that electronic sales decreased by double digits and “accounted for 70 basis points [0.7%] of overall comp decline.”
Even more notably, Target specifically pointed out that Apple product sales were down by “more than 20%” year-over-year and were to blame for a third of the overall plunge of electronic sales at Target.
Apple’s growth has been running into a bit of trouble recently, as the astounding success of the iPhone 6 has made for tough comparisons. Earnings growth for the tech giant was bad enough in the second quarter to shift overall tech sector year-over-year earnings growth from positive to negative.
Disclaimer: this is not an investment site. Do not make any investment, financial, relationship, travel, or job changes or decisions based on what you read here. For the record, I bought shares in Target for the first time back on June 9, 2014, and sold all shares that I had in TGT two days ago, August 15, 2016. I no longer own any shares in Target and have no plans to initiate a new position in TGT. I did use that cash to buy something else, not in retail and not in energy. 

The Market

Closing: will probably close slightly up, about 15 points. NYSE:
  • new highs: 73, including BKR (a big whoop); CAT; Enerplus; Pioneer Natural Resources; WPX (a huge whoop); XLNX is trading near its 52-week intraday high; it may close at a new closing high (a big, huge whoop -- at $52.19 closing, I see an intra-day high of $52.43 in the past 52 weeks, but no closing higher than $51.74)
  • new lows: 11 (somewhat of a surprise, so few; after all, the market was down 80 points in early trading)
Mid-day trading: this is almost predictable. Once traders got the Cisco story behind them they move on. Market up is (barely) by about 10 points.

Opening: market opens down almost 80 points after futures being up about 30 points last evening; that all changed with story that Cisco likely to layoff 14,000 workers (20% of its workforce).