Tuesday, November 22, 2016

Texas Judge Blocks Obama's Overtime Rule; David Muir on ABC News -- Any Mention Of The "Trump Rally" -- November 22, 2016

Thank goodness, for Texas: Texas judge blocks Obama administration's new overtime rule from taking effect. Amazing. Wow, I just love Texas.

I Will Follow Him, Little Peggy March

Yes, Virginia, There Is A Trump Rally

David Muir on ABC News:

Bus killing. 24-years-old drive; five children killed; six in critical condition; driver in recent accident; just got bus-driving job in recent weeks. Driver left scene without helping. Parents already had posted numerous complaints. Blaming: lack of seat belts. Wow.

Winter storm. New "system." "Global warming" not mentioned. Minnesota to Wisconsin. Severe storms farther south.

Deadly ambush on police San Antonio officer, assassination/execution: no mention of #BlackLivesMatter.

Trump "about-face." Won't "lock-up Hillary." Flip-flop? Worries about divisiveness of the country. I'm impressed. Then morphs into Nazi salutes at Trump rallies. Give me a break. On torture? Changes his mind.

Trump: on conflict-of-interest. "The law is on my side. The president can't have conflict of interest." Say what?  There is no law with regard to "conflict-of-interest" and the "presidency."

Homeland security: urging vigilance. Okay, that's pretty helpful.

Wall Street: record high. New administration will favor business and investors.

I'm impressed. David Muir mentioned it before the first break. End of post.


I would have to say that the "American Medal of Freedom" is more exciting, more noteworthy than the Nobel Prize. Make America great again!

Venezuela Oil Company Delays Bond Payments -- Oh, Oh -- November 22, 2016

Link here.

Out And About

Wow, did we have fun! Best day in weeks!

From President-Elect Over On Twitter -- November 22, 2016

From president-elect Trump:
I am seriously considering Dr. Ben Carson as the head of HUD. I've gotten to know him well--he's a greatly talented person who loves people!
This is pretty cool. I love the direct tweets -- by-passing mainstream media. Wait until ISIS starts reading his tweets. Should be interesting.

Also this:
The meeting with the New York Times is back on at 12:30 today. Look forward to it!
Say what you want, but this president-elect knows how to use social media. And I think he may be older than I am.

Wow, he had a lot of tweets today. His comments on global warming are going to throw MSNBC "Morning Joe" into a tizzy. Not even president yet, and he's already establishing the narrative. Is Barack Obama back in Washington, yet? Haven't heard a thing from him in days.

XTO With Two High-IP DUCs; Nine New Permits; Thirty-Six Active Rigs -- November 22, 2016

Active rigs:

Active Rigs3665191184183

Nine new permits:
  • Operators: BR (5), Crescent Point Energy (4)
    Fields: Little Knife (Dunn), Winner (Williams)
  • Comments: all five BR permits in section 36-147-97 (SE quadrant)
Two producing wells (DUCs) reported as completed:
  • 31223, 1,474, XTO, Harley Federal 24X-15F, Sand Creek, F=Three Forks, t10/16; cum --; this is the final lateral of the Harley Federal pad; the three other laterals were all used while steering this lateral; high pressure, 2,888 units at 16,261 feet;
  • 31224, 1,242, XTO, Harley Federal 24X-15B, Sand Creek, middle Bakken, high pressure, 2,572 units at 15,907 feet; 100% of the lateral within the target zone; t11/16; cum -- 
No permits renewed.

No permits canceled.

Suitable For Framing -- November 22, 2016

This is now being called the "Trump rally." He's  not yet in office, and not one of his policies is yet in place. In addition, the Fed will raise rates in December, and yet the market surges past 19,000 for the first time ever.

I can't wait to see a) if ABC News mentions this story; and, b) if David Muir does mention it, how is it covered?

Other News of The Day

One has to love this headline from The Washington Post: Trump wants to lift restrictions on 'clean coal.' Whatever that is.

The Washington Post must not know that some folks fact-check on the internet: President Obama will tell The Washington Post was "clean coal" is and why he loves it -- from August 17, 2016, about four months ago.
The Obama administration continues to invest billions of dollars toward the development of so-called “clean coal” technologies designed to make coal-fired plants more climate friendly by capturing carbon dioxide emissions and storing them before they are released into the atmosphere.
Despite the industry’s woes and the steady decline in coal use for electricity production in the U.S. — largely the result of cheap natural gas — coal is still a major power source, and it is responsible for 26 percent of U.S. energy-related CO2 emissions, and 42 percent of total global emissions.

Update On Kurdistan -- November 22, 2016

"The Kurds Are Nearly There"
Christian Caryl
The New York Review of Books
December 8, 2016

This is an excellent recap of Kurdistan, bringing us up to date, just as one US administration comes to an end, to be replaced by another administration.

Unfortunately, the Kurds are not nearly there. They are no closer today than they were in 2009 but it makes for a nice "headline." This way, if at the end of the Trump administration, they are no closer, Trump can be blamed.

After reading the article, summary interspersed with my comments:
  • biggest obstacle to Kurdistan: Celtic culture (tribal, clannish; unable to come together, compromise, organize)
  • 21st century setback: emergence of ISIS; due specifically to Mideast vacuum created by President Obama pulling American troops out early in his first term
  • 2nd Iraq War -- George W Bush -- 2003
  • after Turkey refused to help, US reached out to Kurds
  • resulted in 15 years of goodwill between US and Kurds
  • Kurds rightfully proud that the US military did not lose a single serviceman on Kurdish territory during the war
  • George H. W. Bush -- old-school foreign policy -- no intention of supporting Kurdish self-determination --  he used the Kurds and Shias to try to defeat Saddam / Baghdad -- then abandoned the Kurds to Saddam's wrath
Kurds' Grand Compromise (at least four parts). For Kurdistan to happen, several things have to happen:
  • Baghdad / Erbil come to agreement -- that is actually fairly close right now
  • Erbil gets its Syrian province -- US / Russia have to agree -- Trump / Putin negotiate
  • Erbil gets it small Iranian province or at least border security guarantees -- sanctions at risk -- Trump, again, a negotiator
  • that leaves Turkey-- probably a bridge too far -- but negotiate "oil to sea" for "peace"; again, Trump good negotiator; perhaps appoint personal emissary to Turkey to hammer out this deal
  • 30 million Kurds around the world; mostly in Turkey, Iran, Iraq, and Syria
  • vast global diaspora: 800,000 in Germany; largest concentration in the US is a population of around 10,000 in Nashville, TN
  • PKK -- Kurdistan's Workers Party: 4-decade-long insurgency vs Ankara; Erdogan -- at first sympathetic -- has now re-ignited war with PKK (see last bullet in this section below)
  • Syrian Kurds: distinguished themselves with US/Russian allies in war vs ISIS
  • KDP -- Iraqi Kurds -- Kurdistan Regional Government (KRG) -- Erbil; Masoud Barzani -- will call for elections soon; Obama administration: adamantly opposed to break-up of Iraq (notable exception: former car salesman Joe Biden); KDP: Kurdistan Democratic Party
  • Iranian Kurds: perhaps ethnically closest relationship -- Iran & Kurds
  • PUK -- 1975: critics of KDP's ascendancy gave rise to the rival Talabani clan, become the Patriotic Union of Kurdistan (PUK)
  • in Turkey: harsh oppression led to rise of another resistance leader -- Abdullah Öcalan , founded the PKK (see third bullet in this section) in 1978; the PKK started off as a classic Marxist-Leninist party with strong nationalist claims; result: PKK was ruthless against all other Kurdish factions; Öcalan in Turkish prison since 1999
Eyes Wide Shut

Three page article, pages 42 - 44 in the periodical noted above. On page 44, in part 3 of this 3-part article, it beings a four-paragraph summary of sorts:
  • 1st paragraph: George H. W. Bush, by name, 1st Gulf War
  • 2nd paragraph: Operation Provide Comfort (April, 1991, Bush I)
  • 3rd paragraph: "Washington's Iraq containment strategy (no president named, but the dates suggest this was the Clinton presidency)
  • 4th paragraph: George W. Bush
  • For the rest of the article, which continues for quite some time, no mention of President Obama or the past eight years. The last date given is 2003, "after the US-led invasion" 
There is barely one thing in the article about President Obama's policies in the Mideast for the past eight years, and that was in the opening paragraphs and back to 2014. There was no mention that not only did President Obama abandon the Kurds; considered them a "JV team" (ask the Kurds if they agreed?); Obama "left" the Mideast, resulting in a vacuum, which resulted in the rise of ISIS. (Unless I missed it, President Obama is not mentioned by name in this very, very long article.)

Earlier in the article we learn that "the Islamic State, which is dominated by Salafist Sunni Arabs, has always regarded the Kurds as mortal enemies, and when the jihadists (ISIS) stages their surprise attack in 2014, the momentum of their offensive brought them just a few miles of the Iraqi Kurdish capital of Erbil. It took a series of hasty American air strikes to stop the jihadists from going further."

The Caliphate

See this post, from October 15, 2016.

Whiting Sells Two NG Plants In North Dakota; Vietnam Cancels Two Nuclear Power Plants -- Coal Is Much, Much Cheaper -- November 22, 2016

Breaking news: Trump will not investigate Ms Clinton's "server" issue

Coal: Vietnam's National Assembly halt plans to build 2 multi-billion-dollar nuclear power plants with Russia and Japan, parliament delegates say, citing lower demand, rising costs and safety concerns - Reuters, Breaking News.
This comes on the heels of the UN climate scam in disarray and the decision to delay implementation of the new climate plan scam by a full year.
Kashagan oil field begins commercial output. Reuters.

OPEC meeting: Production freeze (Russia, Iraq, Iran) vs production cut (Saudi Arabia).

Developer says DAPL will not be re-routed. This is a re-print of an earlier story. One wonders if the recent news report that Sunoco will acquire ETP changes things?

Russian Northern Fleet: no change; remains off the coast of Syria. Most recent ping, 18 minutes ago. Tug at 8.8 knots, heading south. If it's heading anywhere, it's heading back to Tartus.

Global warming: for those paying attention to the weather over the past ten years, three things stand out:
  • NOAA keeps "re-adjusting global temperatures;
  • the weather has really settled down; fewer big storms ("no" historic hurricanes in over a decade; very quiet summer tornado seasons); and, 
  • earlier winter snowstorms and more snow earlier
Today: Tokyo sees "first November" snow in 54 years. Link here.
Back To The Bakken

Active rigs:

Active Rigs3865191184183

RBN Energy: more lessons learned from five years of crude oil, natural gas, and NGL forecasts.

Whiting Sells Midstream Assets in the Bakken

Zeit's take on Whiting's divestiture over at SeekingAlpha.
  • Whiting has brought to fruition another important deleveraging initiative, further reducing the risk of financial distress
  • The price received - ~6.4x-7.0x estimated 2017 EBITDA - is somewhat disappointing, but represents an outcome of a broadly marketed auction
  • The news gives certainty with regard to a long anticipated divestiture
  • Overall, the announcement is likely to have neutral to modestly positive implications for the stock
Over at Seeking Alpha: Whiting's midstream assets -- selling the Belfield and Robinson Lake gas plants.
  • Sale of Whiting's remaining 50% interest in Belfield and Robinson Lake gas plants announced. $700M in total proceeds, Whiting to receive $375 million
  • A potential sale was discussed at the recent Bank of America Merrill Lynch Conference.
  • Sale proceeds can be used to repay portion of 2018 Notes, and reduction of interest expense relieves pressure on financial covenants in 2017
  • Whiting Petroleum presented at the Bank of America Merrill Lynch Global Energy Conference on Thursday, November 17, and the presentation touched on many topics
One, in particular, piqued our interest. We've known for a while now that Whiting has been preparing its two natural gas processing plants in North Dakota for sale, the Belfield plant in the Pronghorn field and the Robinson Lake plant in the Spanish field. The Robinson Lake plant has a 130 mmcf/d capacity, whereas the Belfield plant has a 30 mmcf/d capacity.
Whiting has a 50% interest in each of the plants, having sold the other half in Robinson Lake in 2009 and Belfield in 2012.
Lo and behold, four days later, Whiting announces the sale of the plants for $700 million to an affiliate of Tesoro Logistics Rockies, LLC. Whiting's share of the sales proceeds will total $375 million.
Last year, Oppenheimer estimated that together the two plants generated close to $50 million in EBITDA, and at the BAML Conference, Michael Stevens, Whiting CFO, stated that a fair multiple would be 8x-10x. As such, we believe the likely increase in value was due to Whiting's efforts to reconfigure its contracts with third-party producers.
Whiting shares soared 12%

Saudi Needs $74-Oil To Balance Its Current Reserves -- November 21, 2016

Note: this post was originally posted at 8:20 a.m. November 21, 2016. For some reason it was not showing up int the blog, so it is being re-posted.


Katie Ledecki smashes two more records.
Back to the Bakken

Active rigs:

Active Rigs3965191184181

RBN Energy: China's teapot refiners making ripples overseas.

Saudi Arabia: until it sees $74 oil, the kingdom is going to spend upwards of $5 billion/month out of its cash reserves to meet payroll -- Reuters, via Twitter.

Brent pipeline system -- to close tomorrow and remained closed for three weeks for maintenance -- Reuters, via Twitter. System carries 80,000 bopd. Big assist to OPEC.

Gasoline is down to $1.64 / gallon in north Texas. Not everywhere, but easily found. Generally, about $1.85 at major names along high-cost corridors.

The Market

Note: the election was on a Tuesday (9 - 11; 14 - 18; 21). I count nine business days since the election. I've lost track but the market has only closed down, maybe only, once in those nine days (if it closes higher again today).

At the close: records smashed. Dow 30 less than 50 points from 19,000. NASDAQ up an astounding 47 points to an all-time high of 5,369. WTI up over 4% to 48.33.

Wow! The market is off and running.

Dow 30 up another 50 points, less than 80 points from 19,000 just after the opening. NADAQ hits another record high.

Meanwhile, oil surging another 3%, up about $1.32, one cent over $47.00.