Wednesday, November 20, 2013

Another Monster Well Goes Inactive

This well was taken off-line, July, 2013:
  • 7447, 932/IA, Whiting, Big Stick (Madison) Unit 3002, t10/80 cum 1.08 million 7/13;
I bring this up because Whiting just reported another completion in the Big Stick oil field in southwest North Dakota. For newbies, here are few examples of some monster wells in this area:
  • 7123, 450, Whiting, Big Stick (Madison) Unit 9550, t4/80; cum 1.81 million 9/13;
  • 7274, 1,100/PA, Whiting, Big Stick (Madison) Unit 2502, t5/80; cum 2.05 million 11/94
  • 7447, 932/IA, Whiting, Big Stick (Madison) Unit 3002, t10/80 cum 1.08 million 7/13;
  • 7485, 702, Whiting, Big Stick (Madison) Unit 1302, t5/81; cum 2.23 million 9/13;
  • 7495, 368, Sequel Energy, Flat Top Butte 15-24, Madison, t8/80; cum 750K 3/13
  • 11059, 377, SM Energy, Anderson 10 32, Camp, t9/84; cum 694K 3/13; 1,000 bbls/month
  • 12487, 272, Petro-Hunt, Texaco Otto Boss 18-1, Stockyard Creek, Madison; t9/88; cum 662K 8/13;
Note #7274, a vertical well produced more than 2 million bbls in less than 15 years. It's not just the Bakken.

Quick Metric

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or what you think you may have read here.  See expanded "disclaimer" here. The notes below are not accurate in any sense of the word "accuracy" and should not be used by anyone to make decisions or opinions about anything. It was simply a quick look for my use only. I assume the numbers are quite inaccurate.

Operator: Market cap: Net acres: Ratio
  • American Eagle (AMZG):$198 million: 35,000: $5,657/acre
  • Emerald (EOX): $508 million: 48,800: $10,409/acre
  • Halcon (HK): $1.85 billion: 150,000: $12,333/acre
  • Kodiak (KOG): $3.04 billion: 195,000: $15,590/acre
  • Northern (NOG): $966 million: 180,000: $5,367/acre
  • Oasis (OAS): $4.48 billion: 492,000: $9,106/acre
  • Triangle Petroleum (TPLM): $829 million: 144,350: $5,743/acre
Comments:
  • American Eagle: Divide County, Three Forks, northwest North Dakota
  • HK: generally Williams, McKenzie
  • KOG: Dunn, McKenzie; many of the sweet spots of the Bakken
  • Northern: throughout the Bakken
  • Oasis: Williams, Mountrail, McKenzie
  • Triangle: in one of the newer sweet spots in the Bakken

Wednesday, Continued; GOP Will Let The Trainwreck Dominate The Headlines; No Government Shutdown; Jobs Reports Disappointing -- Bernanke

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.

Breaking News

" ... at least two more South Floridians had successfully signed up for the ObamaCare."  I can't make this stuff up. They are counting new enrollees one by one over at MiamiCBSLocal. 

Fox News more than doubles CNN and MSNBC's combined prime time viewers Monday:
As TVNewser reported, FNC averaged 2.3 million viewers Monday compared to MSNBC's 688K and CNN's 373K.
In the all important demographic of folks aged 25 to 54, FNC averaged 391k prime time viewers, MSNBC 189K, and CNN 111K.
Fox also dominated in the total day viewers nearly doubling the combined average of MSNBC and CNN.
FNC averaged 1.5 million, MSNBC 456K and CNN 340K.

Business News
  • Nine companies announce increased dividends/distributions, including Wells Fargo preferred from 22 to 37 cents.
  • Retailers (Lowe's, Staples, others, reporting mixed results) Lowe's profits surge 26%. Deere posts higher Q4 profits, huge quarter. Volvo reports October truck deliveries increased 13% year-over-year to 20,897 vehicles.
  • Futures -- oil is holding steady at around $93. 
Keep on stimulating, no "tapering." CNN Money is reporting:
Forget that strong October jobs report. It wasn't strong enough to convince Ben Bernanke to slow the Federal Reserve's stimulus program.
The latest data show the economy added an average of 200,000 jobs each of the last three months -- marking a sudden breakout for the labor market after months of weaker reports.
Immediately after the October report was released, Fed watchers started speculating that it may just be the good news the Fed has been waiting for: Would the Fed start winding down its stimulus program at its next meeting in December?
Now, it doesn't sound like it.
Political News

The Hill is reporting:
President Obama’s relationship with congressional Democrats has worsened to an unprecedented low, Democratic aides say.
They are letting it be known that House and Senate Democrats are increasingly frustrated, bitter and angry with the White House over ObamaCare’s botched rollout, and that the president’s mea culpa in a news conference last week failed to soothe any ill will.
Sources who attended a meeting of House chiefs of staff on Monday say the room was seething with anger over the immense damage being done to the Democratic Party and talk was of scrapping rollout events for the Affordable Care Act. 
“Here we are, we’re supposed to be selling this to people, and it’s all screwed up,” one chief of staff ranted. “This either gets fixed or this could be the demise of the Democratic Party.
“It’s probably the worst I’ve ever seen it,” the aide said of the recent mood on Capitol Hill. “It’s bad. It’s really bad.”
I think this is what bothers them a tad:
ObamaCare enrollment site: a) 40% still needs to "built." And there was a surge to "fix" it when it failed in early October. This means that this site was in much more trouble than was initially reported: b) it was known throughout the administration that the site did not have the "pay" module up and running when it went live. Apparently Congress did not know; and, c) hackers can access the "cloud" where personal information transits; Consumer Reports is on record advising folks to "avoid" the ObamaCare webite. But despite that, the President told his supporters, from prepared noted, that more than 100 million Americans have successfully enrolled. The President was enjoying the success of the ObamaCare roll out so much he shelved plans to attend the 150th anniversary of Gettysburg, perhaps the most important battlefield engagement on US soil. 
The Hill, with a headline, "Ryan Caves, No Budget Cuts, No Threat of Another Government Shutdown," reports:
House Budget Committee Chairman Paul Ryan (R-Wis.) said Tuesday that the country doesn’t need to worry about another government shutdown in January when the current stopgap spending bill runs out.
The government shutdown lasted for 16 days in October after Republicans demanded that President Obama defund his signature healthcare law.
To avoid another shutdown, Ryan said either he and Senate Budget Chairwoman Patty Murray (D-Wash.) would strike a budget deal or Congress would pass a stopgap keeping existing spending levels.
Smartest move ever. Budget cuts don't amount to a hill of beans, and the ObamaCare story would be diluted. GOP just needs to step aside and let the trainwreck occur.

A Huge Update On The Permian -- The Wall Street Journal

A huge update on the Permian:
 One of Texas' oldest oil fields, in decline for decades, has become one of the hottest places in the country to drill for crude, as energy companies create clusters of wells with layers of horizontal branches. The Permian Basin—86,000 square miles centered on Midland, Texas—has been pumping oil since the 1920s, though production peaked at about 2 million barrels a day in the early 1970s. For decades, geologists have known that oil could be found in different layers of rock piled up like a stack of geologic pancakes.
  • Occidental Petroleum Inc., the largest producer in the Permian, said it plans to spend $500 million there in 2014 and has created a new "exploitation team" to identify more drilling locations. 
  • Concho Resources Inc., one of dozens of smaller producers focusing on the Permian, is accelerating its growth plans over the next three years to double oil output by 2016. 
  • And Apache Corp., the second-largest producer in the region, said its daily oil production in the Permian grew 18% to hit a record; it plans to increase its investments there following the recent sale of operations in Canada and Egypt.

Wednesday: Something Big Was Going To Happen Today But I Forget -- Oh, Yes, AMZG Will Begin Trading On NYSE; Devon To Buy GeoSouthern Energy, Largest Oil And Gas Deal This Year; Supreme Court Upholds Texas Abortion Law; CBS -- Obama Support Slumps To 37%

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

Shale play: Devon Energy is nearing a deal to buy GeoSouthern Energy for approximately $6 billion, which would be the largest U.S. oil and gas transaction of the year. -- WSJ
  • Devon was the first to drill horizontally and frack; quickly fell behind competitors
  • GeoSouthern: privately held; almost all acreage in the Eagle Ford; not public information, its acreage
The deal could mark a turning point in the shale sector. Private-equity firms started entering the market in a large way in 2008 and 2009, and many are looking for a way to sell their investments.
International oil companies, which in the past snapped up shale assets, have lost some of their appetite for such deals, especially in the wake of Royal Dutch Shell's decision earlier this year to write down the value of its U.S. shale stakes by $2 billion.
It has also been a weak year for oil and gas acquisition activity. Only 390 oil and gas deals have been announced in the U.S. this year, valued at a total of $71.6 billion, according to Dealogic. At this point last year, 520 deals had been announced for $96.2 billion.
Several public oil and gas explorers have hung for-sale signs in the past year without finding buyers, including Whiting Petroleum Corp. and Kodiak Oil & Gas Corp. KOG, both of which are focused on drilling North Dakota's Williston Basin.
"If you are private right now and you can sell yourself, you do," says David Tameron, an energy analyst at Wells Fargo. "If I'm a buyer and there are a lot of people who want out the door, it's a good time to be buying."
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Active rigs: 184

RBN Energy: Marathon's plans for the Ohio Utica.
Finding a home for growing condensate range material being produced in the Ohio Utica shale play involves local refinery deliveries as well as new transport routes to markets outside the region as far away as Canada. Midstream companies are busy developing infrastructure plans to gather both wellhead condensate and output from natural gas processing plants in the region. Today we detail MPLX and its sponsor Marathon Petroleum Corporation’s (MPC) recently announced Utica shale plans.
Some Catching Up To Do

Regular readers might remember Washington, DC, community activists trying to stop Wal-Mart from moving in. Wal-Mart won that battle and is now open for business. It is harder to get a job at Wal-Mart than get admitted to Harvard University according to this story. For the 600 Wal-Mart jobs, there were 23,000 applications (most of which were successfully done on-line, I imagine): that's an acceptance rate of 2.6%. On the other hand, almost three times that many (on a percent basis) are accepted to Harvard, 6.1%. The minimum wage is $8.50. One wonders how many more applicants there would have been had the starting wage been $10.00?

ObamaCare enrollment site:
a) 40% still needs to "built." And there was a surge to "fix" it when it failed in early October. This means that this site was in much more trouble than was initially reported:
b) it was known throughout the administration that the site did not have the "pay" module up and running when it went live. Apparently Congress did not know; and,
c) hackers can access the "cloud" where personal information transits; Consumer Reports is on record advising folks to "avoid" the ObamaCare webite. 
But despite that, the President told his supporters, from prepared noted, that more than 100 million Americans across 57 states have successfully enrolled. The President was enjoying the success of the ObamaCare roll out so much he shelved plans to attend the 150th anniversary of Gettysburg, perhaps the most important battlefield engagement on US soil.

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This may all account for Obama's approval rating slumping to 37%. I thought by definition, his approval rating could not drop below 47%, much less 40%.

The biggest Bakken story of the year might have been announced yesterday: ONEOK is going to invest close to $1 billion to gather, process, and transport natural gas. I might be going out on a limb here, but this suggests to me that ONEOK thinks the Bakken is going to be around for another year or so. The plant will be located where the following operators are working: XTO, Triangle Petroleum, KOG, Slawson, and Zenergy. I assume CLR is in the area as well as many others.

The Wall Street Journal

After his ObamaCare debacle, President Obama agrees to piecemeal immigration overhaul. Anything to get his mind, and our minds, off the health care trainwreck.

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For those of you who want to know how bad the ObamaCare website really is, front page, front section, "New Tech Worries Loom for Health Law."
One particular challenge that remains is building a payment system to transfer those subsidies to insurance companies. Mr. Chao said those "financial management" parts of the system aren't needed right away, but officials acknowledged that they must be running by January, when insurers will be expecting the subsidies to start flowing in.
Kevin Lucia, a senior research fellow at Georgetown University's Center for Health Insurance Reforms, said that "if HealthCare.gov is functional on the front end, the next critical question is whether the back end functions are working, too. Are issuers getting paid? Are they getting enrollment info from HealthCare.gov? Is it accurate?"
Mr. Obama, speaking Tuesday at The Wall Street Journal CEO Council, said of the website, "By the end of this month it will be functioning for the majority of people who are using it." Some insurers are worried that the website's troubles may be turning off healthy customers while older or sicker ones may persist to sign up for policies, since insurers no longer can turn away people with existing health issues.
And then this:
Joseph Swedish, chief executive of WellPoint Inc., said the insurer, the nation's second-largest, is backing away from advertising its new offerings that it makes via the federal marketplace. "We have pulled back from marketing, not knowing how to get people enrolled at the moment," he said on the sidelines of the Journal's gathering.
One big trainwreck.
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This will be a stand-alone later: a huge update on the Permian:
 One of Texas' oldest oil fields, in decline for decades, has become one of the hottest places in the country to drill for crude, as energy companies create clusters of wells with layers of horizontal branches. The Permian Basin—86,000 square miles centered on Midland, Texas—has been pumping oil since the 1920s, though production peaked at about 2 million barrels a day in the early 1970s. For decades, geologists have known that oil could be found in different layers of rock piled up like a stack of geologic pancakes.
Because of the Permian's many thick layers—Wolfcamp, Cline and Spraberry are the names of just a few—a group of wells on one site can potentially tap into several different oil reservoirs, each wellbore going down just far enough to reach its targeted layer and then turning sideways.
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The Los Angeles Times

Wow, wow, wow -- the US Supreme Court upholds Texas abortion law.
The Supreme Court, by a 5-4 decision, rejects a Planned Parenthood appeal to block a Texas law that places restrictions on clinics that perform abortions.The measure, adopted by Texas lawmakers in July, requires that abortion providers have a doctor on their staffs who has admitting privileges at a hospital within 30 miles of the clinic. By rejecting the request, the justices signaled they do not think the Texas law puts an unconstitutional barrier before women seeking an abortion. The Planned Parenthood Federation said the law had forced 12 of the state's 36 licensed abortion providers to stop offering abortions.
In my mind, the portion of the law seems like common sense, but I never thought the judges would have that much common sense. It's just not politically correct to put mother's safety ahead of an elective procedure. Very, very elective.

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So, did they or didn't they? Did Desert Hot Springs vote to declare bankruptcy or not? I can't find it in the LA Times, but the Miami Herald has the news:
This financially troubled city declared a fiscal emergency Tuesday in an effort to avert a second federal bankruptcy filing.
The City Council voted unanimously to declare the emergency as the city grapples with a $6 million gap between revenues and spending.
Interim City Manager Bob Adams has said declaring a fiscal emergency would enable the city to negotiate with contractors and labor groups to cut expenses.
If no action is taken, the city of 27,000 people near Palm Springs will run out of money by March, officials said.
The city previously filed for bankruptcy in 2001 after a legal judgment.
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The New York Times

Top story in today's NYT: the "gold plan" for our elected leaders in Washington, DC. 
While millions of Americans have been left to fend for themselves and go through the frustrating experience of trying to navigate the federal exchange, members of Congress and their aides have all sorts of assistance to help them sort through their options and enroll.
Lawmakers and the employees who work in their “official offices” will receive coverage next year through the small-business marketplace of the local insurance exchange, known as D.C. Health Link, which has staff members close at hand for guidance.
“D.C. Health Link set up shop right here in Congress,” said Eleanor Holmes Norton, the delegate to the House from the nation’s capital.
Insurers routinely offer “member services” to enrollees. But on Capitol Hill, the phrase has special meaning, indicating concierge-type services for members of Congress.
If lawmakers have questions about Aetna plan benefits and provider networks, they can call a special phone number that provides “member services for members of Congress and staff.”