Random Update Of New Mexico's Shale Revolution -- August 16, 2014

Note: Clear Creek oil field has been updated. Click here. 

Las Cruces Sun-News is reporting:

New Mexico is currently undergoing an oil and gas boom — oil production is up nearly 70 percent from 2008 and is projected to increase by 20 percent in 2014. Most of the increase is attributable to new technology that allows producers to extract more oil and gas — specifically hydraulic fracturing, commonly called fracking, and horizontal drilling techniques which allow drillers to tap previously unreachable reserves. 

It's a fairly nice, balanced article. I found some interesting data points regarding wind, which I've touched on before:

Wind and solar are free raw materials which should be used. The current difficulty is in getting the electricity generated to larger, urban markets to be sold.

"I think we are running into some success," Porter said. "We are now getting better at wind and solar, but you also lose energy in the grid. A lot of the things talked about in Washington nowadays is how do you get more efficient grid dynamics." 

But work is progressing to correct the transmission deficiencies to better allow development of renewable energy in the state.

I have talked about this progression in the past: the transmission / energy / electricity grid will gradually be improved because of the emphasis on wind and solar energy. Several generations from now, the solar and wind farms can be replaced by small nuclear electricity-generating sites, taking up a fraction (like 1%) of the land that is required by wind/solar.  By then, perhaps even the shale revolution will have run its course and close to 100% of electricity will be generated by nuclear energy.

I digress, but I remember back during the OPEC embargo, I was concerned about the energy situation here in the states, and to some extent, I suppose, globally. It now appears that there are solutions. I can take that off my list of things about which to worry.

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The Wall Street Journal

Top story: Ebola crisis -- health staff might be saved if they had such basics as gloves

Now that Maliki has stepped down, the US will increase aid; looks like it was all about the oil after all

Ukrainian artillery hits Putin's convoy of "aid."

Texas governor Perry indicted; all politics, but it sounds like it's a legitimate indictment

I guess Europe hasn't gotten the memo: sanctions don't work; ready to impose new sanctions on Putin

Wow! I said this to my brother-in-law last year -- are pro golfers too bulked up? Recent injuries have some wondering if Tour players are working out too much and wearing down their bodies. I think they are putting stresses on their bodies in disproportionate ways; Tiger has withdrawn from the Ryder Cup

Kinder Morgan CEO Richer Kinder could collect almost one-half billion dollars in consolidation

Hmmm.... it looks like Wal-Mart finally got the memo -- will staff every cash register from the day after Thanksgiving through the days just before Christmas during peak shopping times. That's my #1 complaint about Wal-Mart -- the check-out lines are way too long; no one goes there any more because the lines are too long.

Mexico To Import US Light Oil? Kurds To Ramp Up Oil Production Now That US Has Stopped ISIS Advance In The Oil Fields -- August 15, 2014

Two interesting stories being reported by Reuters over at Rigzone.

First, Mexico's Pemex may be getting ready to import light oil from the US:

Mexico's state-owned oil company, Pemex, is poised to abandon a decades-old devotion to self-sufficiency in crude oil, entering talks with U.S. companies about importing light crude from its northern neighbor, where output is booming. Chief Executive Emilio Lozoya said in an interview late on Thursday that Pemex was very likely to start importing light crude from the United States in the next few months, to generate more value from the Mexico's six domestic refineries.

Lozoya said importing light crude from the United States was "a very good idea" that Pemex was analyzing, noting that it could help the company's refining unit boost output of products it is often forced to import, including gasoline and diesel.

"There has been a very big prejudice within Pemex to import crude," he said, pointing to an opportunity for Pemex given booming light crude output in the United States, particularly in the Eagle Ford Formation in Texas.

Analysts have said that light crude imports from the United States could increase gradually to 200,000 barrels per day over the course of the next year.

Second, despite the ISIS advance in Iraq, the Kurds say things are going so well, they plan to ramp up oil exports:

Oil production at Iraqi Kurdistan's largest-producing field is set to rise to as much as 140,000 barrels per day (bpd) by the end of the month despite the advance of Islamist militants, the general manager of the operating company told Reuters.

"We have a target to ramp up production towards 140,000 bpd and I believe we would achieve this by the end of the month," Onder Tekeli from Taq Taq Operating Co (TTOPCO), a joint venture of Anglo-Turkish Genel Energy and Sinopec's Addax Petroleum said late on Thursday.

Radical Sunni militants of the Islamic State last week advanced to within a half hour's drive of Arbil, the capital of Iraq's Kurdish region and a hub for international oil companies, before U.S. military air strikes thwarted their advance.

Several Western oil companies including U.S. giants like ExxonMobil and Chevron operating in the previously stable Kurdish enclave have evacuated some of their staff while some smaller producers like Afren have halted production. 

Call me cynical but I will believe it when I see it. On the other hand, it certainly looks like the Baraq Iraq re-engagement is all about the oil, American air strikes coming just when it looked like ISIS might be icing the Kurdish oil fields.

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Investing 301

This is pretty complicated stuff and something I knew nothing about. But having accumulated a fair amount of BNI before Warren Buffett bought the railroad, this article in SeekingAlpha explained a lot. It's very possible this article will disappear shortly so you may want to look at it sooner than later. The summary:

• Warren Buffett is generating new sources of float in capital intensive businesses using depreciation
• Thanks to 'Uncle Sam', deferred taxes will soon surpass insurance as the primary float generator
• Understanding how deferred taxes work for fixed assets will be crucial to valuation going forward
• Why Buffett is spending large amounts of capex on BNSF and MidAmerican to grow tax float.
• What is the intrinsic value of deferred tax float, and valuation implications for Berkshire Hathaway

Week 33: August 10, 2014 -- August 16, 2014

Operations
Director's Cut: June data
Hess is getting very active in the Bakken
Pace of drilling in the Bakken 
Initial production numbers getting better and better
Random update of EOG's Wayzetta wells in Parshall oil field
Random update of KOG's P Vance wells in Truax oil field

Bakken economy
Photo of 5-lane bypass southeast of Watford City

Hess Is Getting Very, Very Active In The Bakken -- August 15, 2014

Active rigs:

	8/15/2014	08/15/2013	08/15/2012	08/15/2011	08/15/2010
Active Rigs	194	185	203	191	142

Ten (10) new permits --

• Operators: Hess (8), Corinthian, Newfield
• Fields: Blue Buttes (McKenzie), Truax (Williams), North Souris (Bottineau), Clear Creek (McKenzie)
  Comments:

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Three (3) producing wells completed:

• 27081, 1,080, Arsenal, Craig Allen 10-3H, Stanley, t7/14; cum 16K 6/14;
• 27843, 600, Whiting, Fladeland 42-9TFH, Sanish, t7/14; cum --
• 24919, 660, Slawson, Jeriyote 7-5-32TFH, Big Bend, t7/14; cum --

Hess is getting very active in the Bakken (also, look at recent random "look" at Hess):

• on 11 August: 10 new permits; of those, 6 to Hess (all in Robinson Lake)
• on 13 August: 18 new permits; of those, 10 to Hess (6 in Cherry Creek; 4 in Ellsworth)
• on 15 August: 10 new permits; of those, 8 to Hess (5 in Blue Buttes; 3 in Truax)

Name changes:

• OXY USA is changing three well names (#19710, #28163, #28164) from the Alina Tormaschy wells to "Federal Bud" wells, in 32-143-96 and 20-143-96, Dunn County.

For Investors Only -- August 15, 2014; Economists' Forecasts For 2H14 - A Wash; Whatever Happened To Global Warming?

Economists raising estimates of GDP for 3Q14. The headline is more stimulating than the article. In fact, the body of the article suggests the headline should read: it's a wash; economy remains on same trajectory -- 3% GDP for last half of 2014.  Reuters is reporting:

Economists raised their forecasts for U.S. economic growth in the third quarter but trimmed their estimates for the balance of 2014, though the outlook for both job growth and lower unemployment was strengthened.

Analysts see the economy growing at an annual rate of 3.0 percent in the current quarter, up from a previous estimate of 2.9 percent.

The same boilerplate on job growth and unemployment. I don't think that boilerplate has changed in five years.

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

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Oil & Gas E & P Stagnation in the Mideast

A great Reuters review of how things are going in the Mideast -- with regard to oil and gas exploration and production: not good. Essay by John Kemp:

Following four decades of war, sanctions, nationalization and unrest, oil and gas producers are gradually adjusting to rely less on the Middle East.

The countries around the Persian Gulf and on the Arabian Peninsula still contain the greatest concentration of giant and super-giant fields anywhere in the world and have some of the most attractive oil and gas geology.

But the increasingly hostile political environment above ground has forced oil and gas companies to hunt for new reserves in other parts of the world where the geology is tougher but political conditions are much easier.

Diversification away from the Middle East is one of the main reasons why oil prices have remained virtually unchanged as unrest has spread across much of the region since 2011.

The article is full of interesting statistics, as well as a historical review. The North American shale revolution is mentioned, but I didn't see a specific reference to the Bakken or the Eagle Ford.

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It Wasn't My Imagination

Just the other day I posted that it was my perception that we weren't getting the stories we used to get of super-hot days in NYC, Chicago, Washington (DC), when the elderly were dying and there were photos of inner-city children playing in fire hydrants opened by the fire department to help folks cool off. I remember all those stories when I was growing up in Williston; now we don't seem to see them any more.

It turns out it wasn't my imagination. The Washington Post is reporting:

There’s one constant about D.C. summer, and that’s a lot of hot days. Right?

Not always.

While 2014′s average temperature for meteorological summer (Jun-Aug) is running fairly close to “normal,” as defined by the 1981-2010 climate period, it’s undoubtedly been among the more pleasant in recent memory when it comes to daytime heat.

With only 16 days featuring high temperatures at or above 90 degrees this year, we’re a week behind last year’s tally year-to-date, and 32 days (more than a month!) behind the pace of the scorching 2010-2012 summers.  

The average year-to-date total is around 29.

Of course, the crazy summers that kicked off the 2010s averaged about three weeks more 90 degree days than the average around 36 days. 2010 even gave us a tie for the most on record at 67.

Two words for the warmists: cognitive dissonance.

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Meanwhile, CBSlocalPittsburgh is reporting a record "cold" summer:

Pittsburgh is dealing with one of the coldest summers in history, and it’s having an effect on the trees.

Friday morning temperatures fell into the 40s in Western Pennsylvania.

Meteorologists say these cold temperatures are leading to trees changing colors in the middle of August.

I can't make this stuff up.

Eighteen years of cooling.

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The Truth Will Out

ObamaCare

The Weekly Standard is reporting:

The National Treasury Employees Union is an independent union representing, according to its own figures, "some 150,000" federal workers from many different agencies.

With a Republican-controlled House of Representatives that was elected on a message of reining in federal spending, the NTEU's been on alert for any and all legislation that proposes reducing pay and benefits for federal workers.

Among the bills is H.R. 1780, sponsored by Michigan Republican Dave Camp. The NTEU says the bill could hurt workers because it would "require most federal employees to leave the Federal Employees Health Benefits Program...and instead join health plans established under the Affordable Care Act."

I can't make this stuff up. It's still a trainwreck (their word, not mine).