Tuesday Morning Links, News, and Commentary

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read, or think you read, at the MillionDollarWay. I am continuing the Bakken blog purely for the enjoyment of it all. The blog has met (actually, exceeded) its objectives as spelled out in the Welcome/Disclaimer pages.

Rarely do I have a day that something about the Bakken does not surprise me.

But today, it's even more exciting than usual. I try to post links to interesting stories I read in my hard copy of The Wall Street Journal, the only print media to which I subscribe.  If you are at all interested in the Bakken, you need to read the articles at the links below that concern oil. They are really quite remarkable. Over the weekend, I connected the dots from several different stories, coming across something that I have not seen posted elsewhere ... until today. And even today, it's a bit subtle, without a graphic, or with out a map. Suffice it to say, there are some exciting things going on in the North American oil patch. I am referring to the "Heard on the Street Article, Buffett's lesson for Canadian oil" article linked below. But that is just one of several very, very interesting stories on oil today.

Most coincidental was the RBN Energy link on Brent pricing today, and the WSJ article on the same subject: Brent pricing. Both are linked below.

********************

The "wind article" was sent to me by a reader, reported by Bloomberg. Thank you. Again, the article points out that there is no redeeming value for these slicers and dicers.

********************

Time to "buy oil"? Oh, yeah. -- Yahoo!Finance - Breakout.

WSJ Links

Section D (Personal Journal):

• Good news for some: once banned, silicone breast implants make a comeback 
• Music: the unflinching Ashley Monroe; songs as daring now as Loretta Lynn's were back in the 1960s.
• LA in a day -- by bike: six hours; 32 miles; 2,000 calories;
  

Section C (Money & Investing):

• Brent barrels to prominence; nice story to go along with the current RBN Energy series on Brent pricing:
• Buffett's lesson for Canadian oil, heard on the street: great, great article. Note the reference to Quebec, and the St Lawrence Seaway which I posted a couple days ago; that may have been the best story I posted in the past several weeks.
  

Section B (Marketplace):

• 787 probe narrows its focus
• Best photo of the day at "meet the new mobile workers"; yes, that's an iPad; MDW blogged about this two years ago, maybe longer; might have been on the original blog; regardless, a most pleasant photograph; the photograph/story is opposite a full-;age BlackBerry ad -- the story will do  more than the ad; 
• US refiners tap Canadian oil by rail;
  

Section A:

• Obama's Capitol Hill foray; for a "grand bargain," the president needs to convince his own party; good luck; won't happen
• I guess if North Korea declares war truce 'invalid,' we're back to war; no link; story everywhere; so much white noise. A bigger story is the 3,300 dead pigs that were found in the river that supplies water to Shanghai (China); no link; the blurb says it all
• Op-ed: the ethanol gas-pump surcharge; the 2007 mandate is needlessly raising US gasoline prices; unfortunately, the WSJ does not get it; this is what the Obama administration wants; the only way folks will give up their cars is to price them out of gasoline; is it even worth linking? Is it even worth reading? Must have been a slow news day for the journal yesterday.
• About that baby who was 'cured' of HIV; the baby was treated to an exposure to the virus; the baby did not have the disease

Wells Coming Off Confidential List Tuesday, KOG With a Nice Smokey Well; Oasis With A Gusher; Hess With a Huge Well;

RBN Energy: part III in the series on ICE Brent pricing. Also, in the WSJ today: Brent barrels to prominence;

Note the small amount of sand used by Hess in the Ellingsberg well below.

Wells coming off confidential list today:

• 21393, 1,950, KOG, Smokey 15-7-19-15H, Pembroke, t12/12; cum 34K 1/13;
• 22088, 2,530, Oasis, Dubuque 5300 14-22B, Willow Creek, t9/12; cum 53K 1/13; 36 stages; 4.4 million lbs; sand/ceramic;
• 22888, drl, Hess, LK-Wing 146-97-2215H-6, Little Knife, no production data;
• 22916, drl, BEXP, Roger Sorenson 8-5 3H, Alger, no production data;
• 22937, 770, Oasis, State 5792 11-15H, Cottonwood; t8/12; cum 30K 1/13; 4.5 million lbs;
• 23324, 653, Hess, SC-Ellingsberg 154-98-3239H-2, Truax; t1/13; cum 29K 1/13; 30 stages; 1.7 million lbs; sand
• 23519, 581, CLR, Jack 4-9H, Murphy Creek, t2/13; cum 8K 1/13;

Active rigs: 189

******************************

21393, see above, KOG, Smokey 15-7-19-15H, Pembroke, on a gas line;

Date	Oil Runs	MCF Sold
1-2013	12822	27940
12-2012	21231	14552

22088, see above, Oasis, Dubuque 5300 14-22B, Willow Creek, on a gas line:

Date	Oil Runs	MCF Sold
1-2013	4177	4341
12-2012	13012	11851
11-2012	7966	5358
10-2012	13796	2667
9-2012	12877	507

22937, see above, Oasis, State 5792 11-15H, Cottonwood; on gas line:

Date	Oil Runs	MCF Sold
1-2013	4736	3456
12-2012	5389	3280
11-2012	5618	4137
10-2012	5585	1816
9-2012	6973	0

23324, see above, Hess, SC-Ellingsberg 154-98-3239H-2, on a gas line:

Date	Oil Runs	MCF Sold
1-2013	27400	20217
12-2012	815	0

Nine (9) New Permits -- The Williston Basin, North Dakota, USA

Heckmanm webcast, March 11, 2013 (click here).

Active rigs: 189 (very nice, somewhat surprising, up nicely)

Nine (9) new permits --

• Operators: CLR (5), Triangle (3), Whiting
• Fields: Sanish (Mountrail), Pronghorn (McKenzie), Baker (McKenzie)
  Comments:

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

Producing well completed:

• 21983, 504, CLR, Alpha 2-14H, Camp, middle Bakken, 4-section spacing, t2/13; cum -- runs south;

Note: CLR's Alpha 2-14H is on a six-well pad; the four-section spacing unit is a stand-up (vertical; sections 2, 11, 14, and 23; that means that an individual owning mineral acres in section 2 will participate in royalties for oil from section 23 as much as four miles away); if one has minerals for any one of these wells, one has minerals for all six wells; one well is still DRL status; the other five:

• 21977, 1,016, CLR, Florida 3-11H, middle Bakken, t1/13; cum -- ; runs north
• 21979, 338, CLR, Alpha 3-14H, middle Bakken, t1/13 cum --; runs south
• 21980, 569, CLR, Florida 1-11H, Three Forks, t1/13; cum -- ;runs north
• 21981, 377, CLR, Alpha 1-14H, Three Forks, t1/13; cum --; runs south,
• 21982, drl, CLR, Florida 2-11H, should run north;

These six wells are on the eastern half of the four sections; there is room for similar wells in the western half, or six more wells; twelve total. Eight of the twelve will be middle Bakken; four of the twelve will be upper Three Forks (or possible six/six).  Depending on the geology, one could think about six more wells in each half of the sections, targeting the 2nd and 3rd benches of the lower Three Forks. Therefore, if the geology supports it, this one spacing unit could see 24 wells. That works out to 6 wells/section which is about what folks are expecting with current technology in the best Bakken. One can make a case for even more wells if the geology and the production supports it, but I don't want to get ahead of myself.

Clever: Keystone XL Proposal; The Sequester and the Market; Cronies Parking Corporate Money Overseas

Isn't this interesting?

I always find it fascinating how statesmen can find ways to work around very, very difficult issues.

House Republicans have co-sponsored a bill with friends across the aisle which would "argue" that former SecState Hillary Clinton's "approval" of the Keystone XL is sufficient to allow TransCanada to complete the controversial pipeline. The link takes you to an Oil & Gas Journal article.

One could even go so far as to make it veto-proof, with the president's approval, so he could say he vetoed it, but Congress over-ruled him. It would all be done with a blink of an eye (or the simultaneous blink of many eyes) and life would go on. If the price of gasoline hits new records on Memorial Day (having just set new records in February), all sides might feel this is not a bad outcome. Even John Kerry would be able to remain aloof of this very difficult dilemma.

************************

On a completely different, the stock market has been hitting new highs, almost every day since the sequester went into effect, starting back on Monday, March 4, 2013, the first full day of business follow the date the sequester went into effect.

************************

The President's economic adviser "parks" $108 billion of the company's money overseas to avoid taxes.  [GE is referred to as the Jedi master of US tax avoidance.] That would be true of many other companies whose CEOs have publicly supported this president. Sort of like Warren Buffett who advocates higher taxes but then fights the IRS on disallowed write-offs. Whatever. Most investors don't mind, as long as their investments do well for them. From the linked article:

Microsoft Corporation  increased its stockpile to $61 billion, up 36 percent from 2011 and up from $30 billion in 2010. 

Apple Inc. raised its ante to $40 billion, up 73 percent from 2011. Sixty of the country’s largest nonfinancial corporations kept $166 billion in cash outside of the U.S. last year, shielding more than 40 percent of their profits from taxes, according to a report in Monday’s Wall Street Journal.

And that’s from total overseas earnings of $1.3 trillion, up 15 percent from 2011. A separate analysis of 83 of the largest nonfinancial corporations found that companies increased by $183 billion their foreign-based cash accumulations, representing a 14.4 percent rise from 2011, according to Bloomberg.

Microsoft, Apple and Google Inc. together hold $134.5 billion in cash abroad.

I believe the CEOs of all three companies vigorously supported the re-election of the president. 

Lack of Expertise In China To Drill Shale

Results of wells coming off the confidential list have been posted.

Reuters is reporting:

China's plans to unlock what could be the world's biggest shale gas reserves risk running further off track after 16 firms awarded exploration rights in the latest auction lacked one core skill - not one has drilled a gas well before.

Beijing is hoping shale gas can transform the country in the same way as the U.S. boom, though to date there has been little commercial production and a target of producing 6.5 billion cubic metres of gas by 2015 in the world's biggest energy consumer looks out of reach, according to industry experts.

The lack of experience exploiting shale among new firms scrambling to enter the sector will make it an even bigger challenge to get at the gas, and if they fail to deliver China will struggle to reduce its dependence on expensive imports of oil, liquefied natural gas and coal.