Samson Oil & Gas To Sell Montana Acreage; Use Proceeds To Develop Stockyard Creek

From the 8-K:

On June 24, 2013, Samson Oil & Gas Limited entered into an Asset Purchase and Sale Agreement, dated as of June 21, 2013, to sell its interests in the Roosevelt Project in Montana for $13.533 million in cash, subject to the completion of specified due diligence by the buyer. 

Market action for SSN. It will be interesting to look at this company a year from now. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you might have read here. 

See snapshot of SSN and other Bakken operators here. 

Friday Night Reading

A reader sent me this link a week or so ago after I mentioned Krugman. It's a long article, but very, very interesting. This is the kind of article that goes nicely on the iPad and then you lay in bed and read it until you fall asleep. In the morning, when you wake up, you finish the article. There is much more to the article, but this, near the beginning, caught my attention:

His proposal is so simple you could write it on the back of a napkin: raise margin requirements on any financial asset – stocks, real estate or whatever – as its price goes up beyond its mean-reverting (average historical) valuation.  Reduce the amount of permissible leverage in proportion to the degree of deviation from the mean.  "If housing prices go up, then you would have to keep putting more and more money down, which would kill the psychology of the bubble," Brock said. 

The same requirement would, of course, prevent Wall Street from leveraging its collective balance sheets by a 50-1 margin leading into the next financial crisis.  "On Wall Street, the objection you hear is: oh, we can't tell when we're in a bubble," Brock argued.  "I say, who cares?  What you do know is that theoretically and in the data, the average PE is 15 for the stock markets of the 10 largest countries for the past century.  So if a PE of 15 is the norm," Brock continued, "and the market goes to 20, then you have to put more down if you want to buy stocks.  When the PE goes up to 34, as it did in 2000, you bloody well better be putting 95% down, and in doing that, you deflate the tech bubble."

You might be surprised to learn that this proposal has historical precedent.  A review of margin requirements  shows that investors who could put virtually nothing down to buy shares of stocks before the 1929 crash were later required to limit their margin accounts as low as 0% and as high as 55%, with the figures moving around as the markets did.  Brock pointed out that in January, 1958, when the Dow was at 440, a person could buy stock with 50% down.  By August, when the Dow had breached 510, the investor had to put down 70%, and by December, when the Dow was trading around 580, the requirement had grown to 90%.  "When everybody has to put 90% down," said Brock, "You no longer have a bubble."

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Economists come and go, but this song will never go old:

Phantom 309, Red Sovine

Years ago when I did a lot of hitchhiking, I got a lot of truck rides -- never with Phantom 309, sad to say. Back in the early 70's. Truckers won't pick up hitchhikers any more: liability issues. Sad.

Bulletproof

I happened to catch a bit of the Sean Hannity radio "show" today -- only because a) I was "surfing" through radio stations looking for some music; and, b) I had just finished listening to a bit of Rush.

I say all that because I want to make it clear I do not care for Sean Hannity.

But this was pretty neat. I "see" Sean has "new" music as a lead-in to his segments. The song: "Bulletproof."

This could be a) a trailer for a new Jimmy Neutron movie; and/or b) an ad for tennis shoes.

Bulletproof, La Roux
The song and the video have been around, like, forever (released in 2009).

I think Elly Jackson could be a formidable NASCAR icon. She has the walk, the swagger, the suit, the look.

From wiki:

He went on to give five points on why the song is good: marvellous verses, marvellous chorus, the music serves the song brilliantly, less shrill to the singing, and the vocoder breakdown. "Bulletproof" was listed at number twenty-five on Rolling Stone's list of The 25 Best Songs of 2009.

I posted it at my music site on November 7, 2009. [Warning: do not click on that music site link unless you have a very fast internet connection. Otherwise, it will really mess up your browsing experience.]

Two More CBR Facilities In The Bakken; CBR Capacity Jumps By 50 Percent; CBR Near 500,000 BOPD; Could Reach 700,000 BOPD By Year-End

From the ND Commerce Department, where the motto is: "North Dakota is open for business."

North Dakota's capacity to export oil by rail has jumped more than 50 percent in June as shippers in the state increasingly turn to mile-long trains to move crude to markets not linked by pipelines.

The increase comes with a pair of crude-to-rail facilities built by Texas companies to move oil from the rich Bakken and Three Forks formations in western North Dakota's oil patch.

North Dakota now has the ability to ship at least 470,000 barrels of oil daily by rail, up from about 310,000 barrels. The capacity could increase to 710,000 barrels by year's end with the addition of two other planned crude-to-rail projects.

The press release continues:

Houston-based Musket Corp. increased capacity at its crude-to-rail facility at Dore from 10,000 barrels to 60,000 barrels per day, with the first full shipment leaving the terminal in early June.

Musket built the facility in 2008 and had been sending small so-called manifest shipments of North Dakota crude. The company now is loading full unit trains which typically consist of up to 104 railcars laden with 60,000 barrels of crude.

"We have successfully loaded and returned our initial unit trains to the Gulf Coast, East Coast and Canada from Dore with turn times of 10 to 17 days," Turner said.

And then this:

Rangeland Energy LLC, which is based in Sugar Land, Texas, began shipping crude-laden trains from its facility near Epping earlier this month.

The facility, which includes five 120,000-barrel storage tanks and a sixth near Tioga, had been under construction for about a year, said Casey Nikoloric, a company spokeswoman.

The terminal has the capacity to ship in excess of 120,000 barrels daily by rail, Nikoloric said.

And still more pipeline projects:

Kringstad said while six major pipeline projects are proposed to move North Dakota crude, railroads have taken a formidable foothold in the state.

I still vividly recall the comment from a reader two years ago who opined that crude-by-rail would be a temporary phenomenon. Okay.

Headlines From The Williston Wire

For newbies: the current Bakken boom began in Montana in 2000; it began in North Dakota in 2007. Whether one says the boom has been going on for 13 years or 6 years, it is incredible that we are still seeing the type of activity note below. With all that has happened in the past decade, look at what keeps coming in:

Headlines from The Williston Wire. No links. It is easy to subscribe The Williston Wire.

A ground breaking ceremony was held recently for the Renaissance Heights Apartments project in Williston.  

The first phase of the development will feature 288 units in five buildings. The luxury apartment complex will have a clubhouse with an indoor pool and spa. 

Holiday Stationstores, an industry leader in convenience stores, has signed a commitment to open a new location on the NEC of Hwy 2 and Chandler Blvd in Willstion.

Holiday Stationstores will develop a 6,000+ square foot convenience store with multiple fuel pumps and a car wash. The Holiday development is part of a larger 25 acre commercial development called Chandler Field.

The fate of the 18th Street/West Dakota Parkway intersection took one giant leap forward when the Williston City Commission approved the latest recommendation for an underpass during a recent meeting. 

The recommendation was made by Public Works Director Monte Meiers on behalf of a special committee established by the commission to identify an agreeable solution. The proposal would align 18th Street West to Bison Drive, which would convert 18th Street to the Bison Corridor on the west side.

A public hearing will be held to discuss potential improvements and impacts associated with construction of the proposed bypass route connecting US Highway 85 and ND Highway 23 south of Watford City, ND.

Murex Petroleum Corporation would like to build an oil field supply service and shop that may bring 25 to 30 employees and their families to the Fortuna area within the next few years.  In addition to the facility, the company plans on building seven to 14 homes to accommodate employees and their families.

Eagle Landing, a new $20 million housing facility for oil field workers rising from the prairie outside of Sidney, Montana, isn't a typical man camp, Scott Willard explains. It's not, he says, a man camp at all.

"It's another living option for oil workers," Willard says. "But it's a subdivision instead of a man camp."

Eleven (11) new refineries, port terminals in Pacific Northwest will receive Bakken crude by rail.

North Dakota's capacity to export oil by rail jumped by 50% in June. The increase came from a pair of new CBR facilities. This brings the number of CBR terminals to 17 in  built in the state since 2008.