For Investors Only -- The Story In Venezuela Looks Fairly Dire

Reuters is reporting:

Schlumberger Ltd, the world's largest oilfield services company, said on Monday it expects first-quarter earnings to be much higher than in the same period last year, as it takes market share from rivals and cuts costs.

Much of the growth will come from state-owned and independent energy companies that are spending to develop shale and other resources around the world, rather than multinational energy companies, most of whom are cutting spending, Schlumberger Chief Executive Paal Kibsgaard said at an energy conference in New Orleans.

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

Houston channel closure is quite significant; it will be interesting to see if it affects the price of gasoline in the US or Europe. Reuters is reporting:

The closure of the channel on Saturday has led to a queue of more than 80 vessels trying to move into or out of the Gulf of Mexico. Shipping delays forced Exxon Mobil Corp to cut production at its largest refinery.

Exxon said production at its 560,500 barrel per day Baytown, Texas, refinery had been cut on Monday due to the closure of the Houston Ship Channel. The company expects further production cuts by mid-week if the channel remains shut.

Weatherford is cutting back operations in Venezuela; the situation looks fairly dire. I don't watch CNBC. I wonder if the Venezuela story is getting as much air time as the Greek story did all last year? Reuters is reporting:

Oilfield services provider Weatherford International Ltd said on Monday it was reducing operations in Venezuela and expects its Russian business to grow this year. The Swiss-headquartered company, which competes with Schlumberger and Halliburton, said the "serious liquidity situation in Venezuela" is causing it to pare back services it provides inside the OPEC country, Chief Executive Bernard Duroc-Danner said at the Howard Weil conference in New Orleans on Monday.

Reuters is also reporting (blogged earlier; the proposed route is quite interesting):

MDU Resources Group Inc is looking for more natural gas producers to sign up to use capacity on a planned $650 million pipeline that would transport the fuel through North Dakota to Minnesota, the company's chief executive said on Monday.

The company in January launched a 120-day period for prospective customers of the pipeline to sign supply agreements to transport natural gas.

"We're encouraged by the reaction of the marketplace, but I'd be getting ahead of myself if I said we're ready to build" the pipeline, Dave Goodin, MDU's chief executive, said during an interview at the Howard Weil energy conference in New Orleans.

"We need some binding commitments." Goodin declined to specify how much business the proposed pipeline has inked so far. Given that roughly a third of all natural gas produced in North Dakota's Bakken shale is flared, pressure has been strong from political and environmental groups to build new pipelines. Yet with the cost of natural gas near decade-lows, producers have been reluctant to spend significant amounts of money to address the issue.

Bakken Economy: Energy Impact Grants Of $11 Millions For Watford City/McKenzie County Public School District Infrastructure For New High School

The Bismarck Tribune is reporting:

The Board of University and School Lands Monday awarded an energy impact grant of $8 million to Watford City and the McKenzie County Public School District for street, water and sewer infrastructure that will support the construction of a new high school and residential development.

The Land Board also committed to providing another $3 million in grants next year to help cover the utility construction costs.

All This Talk Of Liquid Natural Gas Export: Political Theater

Updates

March 26, 2014: some background links --

• coal export terminal at Jordan Cove never came to fruition
• the Jordan Cove LNG story in more detail

Original Post 

Flashback, February 26, 2014: President Obama said he would make a decision on Keystone XL pipeline "in a couple of months."

It's been a month. One more month to go. LOL.

On another note, the US approves a permit for a seventh (7th) LNG export terminal. The Wall Street Journal is reporting:

The Obama administration's approval of a seventh application to export natural gas drew cautious praise from a number of U.S. lawmakers who have been putting pressure on President Barack Obama to allow more gas exports as a way to weaken Russia's power over Ukraine.

"I am proud that the U.S. Department of Energy has heeded my calls to speed its approval of pending liquefied-natural-gas export terminals," Sen. Mark Udall, (D., Colo.) said in a statement following the Energy Department's announcement Monday that it was granting conditional approval for Jordan Cove, a proposed project to export natural gas out of Oregon.

"This newly approved LNG [liquefied natural gas] terminal is a step in the right direction, but there is more to do. I will keep fighting to ensure the White House continues to prioritize the development and approval of additional natural-gas export facilities."

Mr. Udall's statement is notable because he is one of a number of Democrats facing a tough re-election fight this year, and Republicans have targeted his seat as they try to capture a majority of the Senate. Mr. Udall hasn't always been so outspoken on this issue and he is widely viewed as aligned with environmentalists and renewable-energy interests just as much, if not more, than the natural-gas sector.

Mr. Udall will face Rep. Cory Gardner, (R., Colo.), who recently announced his candidacy.

Jordan Cove is the seventh application, of more than 20, to receive the Energy Department's conditional approval, which allows the project to move forward but doesn't guarantee it will.

Only one project has final federal approval to export natural gas and it is expected to begin doing so in late 2015. Before Jordan Cove and the other five projects that have won conditional approval can be built, they must get final clearance from the Federal Energy Regulatory Commission.

This is all political theater. Putin's move into the Crimean is measured in hours; his move into the Ukraine is measured in days, maybe weeks. Meanwhile, the earliest any of our natural gas will be exported is late 2015. This is all political theater.

However, as I told Don, I think this is incredibly ironic. Obama is doing everything he can to slow down fossil fuel development in this country and now it's Putin that's finally forcing Obama to approve some LNG exports.

In fact there are something like 20 permits waiting to be approved and the new DOE secretary said some time ago that he was going to expedite LNG permit approval, so Obama is simply using the Crimean "crisis" as cover for approving more LNG permits. Approving #7 is probably not that big a deal. It will probably be a drop in the barrel compared to all the NG that Russia could export/embargo if they want.

But I get a kick out of this. Things are moving quickly, all of a sudden, internationally. It looks like Mr Putin will invigorate the fossil fuel sector in this country -- even as Mr Obama keeps trying to slow it down.

The next thing we will see is the "need to approve the Keystone in light of the Russian aggression."

For Investors Only -- Volatility Of EOG; Ten (10) New Permits -- The Williston Basin, North Dakota, USA

EOG lost $2.00 (1% before market close) but after market trading EOG was up $3.00 (1.7%).  CLR was down today, but nothing particularly remarkable; the divorce news that came out Friday might have had some effect. The Bakken operators I looked at were all down today; Oasis down 4%.

Oil was pretty much flat today, right at $99.

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.

Active rigs:

	3/24/2014	03/24/2013	03/24/2012	03/24/2011	03/24/2010
Active Rigs	197	187	206	171	103

Ten (10) new permits --

• Operators: CLR (4), XTO (3), OXY USA (2), Cornerstone
• Fields: Elm Tree (McKenzie), Tioga (Williams), Manning (Dunn), Customs (Burke)
• Comments:

Wells coming off the confidential list the past three days were posted earlier; see sidebar at the right.

Wells coming off the confidential list Tuesday:

• 25170, 397, Baytex, Pulv 32-29-162-99H 1NC, Ambrose, t10/13; cum 34K 1/14;
• 26006, 2,928, BR, Archer 24-25MBH, Charlson, t2/14; cum -- ICO
• 26033, drl, Cornerstone, Hinds C-0631-6190, Northeast Foothills, no production data,
• 26361, drl, XTO, Rink 13X-4B, Garden, no production data,

Update On Reef Oil & Gas

Earlier I posted a note regarding Reef Oil & Gas. The company was nice enough to forward me a copy of the full press release, dated March 17, 2014:

Reef Oil & Gas Companies announces favorable results of recent drilling operations in the Bakken-Three Forks formation in North Dakota.

These operations are part of the initial phase of the Reef Oil and Gas Drilling and Income Fund, L.P. We are pleased with the results of the funds first project, says Michael Mauceli, CEO of Reef.

The first six wells have been drilled and tested and we are now in the completion phase, he continues, and although we are still in the early stages of this program, we anticipate achieving positive results throughout the entire drilling operation. Conoco-Phillips has completed testing of the projects first six wells and is currently running production tubing and installing the production facilities.

Initial oil production test rates have been published for three of the wells at 2,312 and 2,592 and 2,880 barrels per day and a combined natural gas test rate of more than 10 million cubic feet per day.

These operations are part of a Reef-sponsored partnership called the Reef Oil & Gas Drilling and Income Fund, L.P., which was formed to drill and own interests in oil and natural gas properties located in the United States with a focus primarily on the Bakken-Three Forks in North Dakota.

The primary purpose of the partnership is to generate revenue from the production of oil and gas, and provide partners with cash distributions and available tax benefits.

Within the last few years, Reef has taken advantage of several opportunities to make acquisitions in the Bakken-Three Forks.

Reef and its partnerships own interests in more than 10% (822 wells) of all wells drilled to date in the Bakken-Three Forks. Reef and its partnerships have also participated in the drilling of more than 400 wells in the Bakken-Three Forks since the fourth quarter of 2011. The Bakken-Three Forks formation is one of the largest contiguous deposits of oil and natural gas surveyed by the U.S. Geological Survey (USGS).

That's pretty impressive: more than 400 Bakken-Three Forks wells since 2011. And it's pretty impressive that Reef owns interests in more than 10% of all wells drilled to day in the Bakken-Three Forks. I would assume that means Reef is "partnering" with more operators in the Williston Basin than just COP (BR).

A big "thank you" to the company marketing director to send me the press release.  It is much appreciated.