Sunday, January 12, 2014

Sunday

The Bakken

Don sent me a couple of nice items this morning. Perhaps the most interesting, The Dickinson Press is reporting:
North Dakota passed a milestone recently by exceeding 10,000 births, a benchmark that last was reached almost 25 years ago.
The moment happened in 2012, when 10,072 resident births were recorded. North Dakota last surpassed 10,000 births in 1988, when 10,111 babies were born.
North Dakota again exceeded 10,000 births in 2013, although the official figure has yet to be compiled.
I remember when I first started blogging about the Bakken, pundits said spouses would not come, families would not stay.

Speaking of families, look at the wonderful photo accompanying this article:
Paul and Marcia Whitcomb thought they’d be temporary North Dakotans, working in the oilfield to earn money and someday returning to Arkansas.
But now the couple and their four children are permanent Williston residents, working oilfield jobs that will be around long after drilling is over and finally living in a house after two years in an RV.
“We couldn’t have the jobs we have or live this way or live in a house this nice anywhere else we went in the country right now,” Paul said.
But getting to this point required some sacrifices, a fact the family knew when they decided to move to North Dakota. Paul, formerly an over-the-road truck driver, had delivered tanks for hydraulic fracturing to the area and knew about the housing shortage.
“I knew that the living situation would be difficult,” Paul said.
One thing not mentioned was the fact how good the schools are in Williston and how much the children will enjoying growing up there. I certainly look back at Williston with very, very fond memories.
The Wall Street Journal

Hiring slowdown blurs growth view. Dismal jobs report raises questions over economy's strength as year ended.  This graphic from the linked article pretty much says it all: not even back to wehre we were in 2008, and not even close where we need to be:

The good news: the unemployment rate is down to an incredible 6.7%. And "incredible" is exactly the right word.

Op-Ed: the latest jobs miss. The fifth year of the Obama recovery brings more dispiriting news.
The current recovery never fails. Just when you think it might shift into higher gear, the economy delivers a thud like Friday's disappointing jobs report for December. The Labor Department says the U.S. produced only 74,000 net new jobs in the month, while the jobless rate fell to 6.7% from 7% mainly because some 347,000 Americans left the labor force.
The saving grace may be that winter weather is responsible for some of the sharp decline from the recent monthly trend closer to 190,000 new jobs, and it's possible the numbers will be revised upward as they were last December and this November. Recent economic indicators, including the private ADP jobs survey and consumer confidence, had suggested better job news.
There was probably a whole lot more in yesterday's edition but I sure didn't see much that interested me in the on-line edition.

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A Note to the Granddaughters

I flew back to Dallas-Ft Worth (from Long Beach, California) last night on US Airways. I left the car out in California (I had driven from Dallas to Los Angeles a couple of weeks ago for the holidays). It will save me one cross-country trip, though I enjoy the trips. I flew back to "Big-D-little-a-double-l-a-s" to be in place to take care of the granddaughters this next week.

Later in the month (or early February) I will fly back to Long Beach, pick up the car, and drive cross country to Williston, North Dakota, to see my dad, and the Bakken. After a long week in Williston, I will drive back to Texas.

The flight was uneventful. US Airways is now, or soon will be, part of American Airlines. I guess it already is; they just have to re-paint the planes, get new uniforms for the employees, etc. My understanding is that employees of both American Airlines and US Airways are thrilled with the "merger."

May gave me a copy of Bill Bryson's A Lost Continent, as a Christmas present. I started reading this book some years ago, but never got past the first chapter, but on the flight last night enjoyed it, and am about halfway through. Bryson moved to England some years ago but writes frequently about the United States: I think he rose to national prominence with Notes From a Small Island, or A Walk In The Woods.

For A Lost Continent, he flew back to Iowa, and then began a cross-country trip in his mother's Chevette. Maybe I enjoy the book more this time because we have now visited or lived in most, if not all, of the states he travels through and writes about. From Des Moines (my mother was born and raised in northwestern North Dakota) he drove to Illinois, and then south through Kentucky and Tennessee to Mississippi and Alabama, and then up to the coast through Georgia, North Carolina, and Virginia to where he is now (halfway through the book: Washington, DC).

Kentucky is about the only state in which we have not spent much time. My son-in-law is from Louisville, and that's where the granddaughters' other grandparents live. My favorite author, perhaps, Hunter S. Thompson, is also from Louisville.

[Speaking of HST, I don't know if one can have a favorite author any more. I wonder if it's better to say we have favorite books from favorite writers. Hunter is on my short list but I only enjoyed two books of his, Hell's Angels and Fear and Loathing in Las Vegas. I don't remember the second so much because the movie has overwritten in my brain whatever I had previously read in the book.]

[Likewise, I used to say that Virginia Woolf was my favorite writer, but again, I enjoyed a couple of her books, notably Mrs Dalloway, but that was about it.]

Like Bill Bryson, we were surprised how wonderful Mississippi was. We visited Mississippi on one memorable occasion while living for two years in Montgomery (Prattville), Alabama.

Bryson says Charleston, South Carolina, was one of the most charming cities he had visited up to that time. We lived in Charleston for four years and I would have to agree that the city was one of the most charming we have ever lived in.

Bryson writes well, and at times, he writes very, very well. I wish I could write half as well. Be that as it may, he probably doesn't know much about the Bakken.

Saturday, January 11, 2014

North Dakota Seeds Record Amount Of Winter Wheat: Looks Like Oil Activity Not Interfering With Wheat Farming (?)

KUSI is reporting:
The first acreage estimate of the growing season shows U.S. farmers planted fewer acres of winter wheat for harvest this year, according to a report from the National Agricultural Statistics Service released Friday.
The agency reported that the 41.9 million planted acres are down 2 percent overall from last year. Seeding began in August for the 2014 winter wheat crop, which is harvested in late spring and early summer across the nation.
But plantings of hard red winter wheat, the type primarily used to make bread, were estimated to be up 2 percent at 30.1 million acres.
Significantly more hard red wheat acres were seeded in Colorado, Montana and North Dakota, the agency reported. Those helped offset large acreage decreases in Kansas, Oklahoma and South Dakota.
Utah had a record low acreage, while North Dakota seeded a record high number of wheat acres.
The report goes on to say that weather may have played a role. 

Other data points from the North Dakota Wheat Commission:
  • Nationally, North Dakota typically ranks second to Kansas in total wheat production, though there are years when the state has come out on top, depending on growing conditions. North Dakota was the top wheat producing state in 2009 and 2010.
  • North Dakota is number one in the production of two wheat classes: hard red spring and durum. On average, the state's farmers grow nearly half of the nation's hard red spring wheat (250 million bushels) and two-thirds of the durum (50 million bushels).
So, with large decreases in Kansas and record seeding in North Dakota, it will be interesting to see which state comes out on top in 2014. 

Stats / A Snapshot In Time: Confidential Wells And Active Rigs By Operator -- January 11, 2014

From the NDIC website, Saturday, January 11, 2014. This list includes all operators active that date according to the NDIC including rigs drilling salt water disposal wells. I did not double-check the list, but it's probably pretty close.  I think I've read that CLR has 20 rigs; on this date, assuming I counted correctly, CLR had 19 active rigs. 

Active Rigs:
  • Abraxas: 1
  • American Eagle: 2
  • Baytex: 1
  • BR: 10
  • CLR: 19
  • Corinthian: 1
  • Cornerstone: 1
  • Emerald Oil: 2
  • Enduro: 1
  • Enerplus: 2
  • EOG: 9
  • Fidelity: 3
  • Gadeco: 1
  • Hess: 16
  • HRC: 6
  • Hunt: 3
  • KOG: 8
  • Legacy: 1
  • MRO: 6
  • Mountain Divide: 1
  • Murex: 1
  • Newfield: 4
  • Oasis: 16
  • OXY USA: 6
  • Pembroke: 1
  • Petro Harvester: 1
  • Petro Hunt: 8
  • QEP: 8
  • Samson Resources: 1
  • Sequel: 1
  • Sinclair: 1
  • Slawson: 6
  • SM Energy: 4
  • Statoil: 5
  • Triangle: 3
  • True Oil: 1
  • Whiting: 15
  • WPX: 4
  • XTO: 11
  • Zavanna: 1

Confidential Wells (includes salt water disposal wells):
  • Abraxas: 7
  • American Eagle: 29
  • Arsenal Energy: 2
  • Bakken Hunter: 11
  • Ballard Petroleum: 1
  • Baytex: 5
  • Buffalo Hills: 1
  • BR: 128
  • CLR: 261
  • Corinthian: 20
  • Cornerstone: 6
  • Crescent Point Energy: 9
  • Cypress: 1
  • Denbury Onshore: 4
  • Emerald Oil: 14
  • Enduro: 12
  • Enerplus: 57
  • EOG: 36
  • Fidelity: 17
  • Flatirons: 3
  • Fram Operating: 7
  • Gadeco: 2
  • GMX Resources: 8
  • Harris: 1
  • Hess Bakken Investments: 89
  • Hess Corporation: 96
  • HRC: 87
  • Hunt: 22
  • KOG: 90
  • Legacy: 9
  • Luff: 1
  • Mann: 1
  • MRO: 76
  • Missouri Basin Well: 1
  • Mountain Divide: 5
  • Murex: 7
  • Newfield: 60
  • North Plains Energy: 6
  • Oasis: 67
  • Omimex: 1
  • OXY USA: 23
  • Pembroke: 1
  • Petro Harvester: 2
  • Petro-Hunt: 93
  • PetroGulf: 2
  • Prairie Disposal: 1
  • QEP: 77
  • R360: 1
  • Resolute: 3
  • Samson Oil and Gas: 27
  • SHD: 10
  • Sinclair: 8
  • Slawson: 78
  • SM Energy: 28
  • Statoil: 117
  • Stephens: 1
  • Strata-X: 4
  • Strike Oil: 1
  • Texakota: 9
  • Triangle: 13
  • True Oil: 4
  • Wesco: 1
  • Whiting: 95
  • WPX: 79
  • XTO: 138
  • Zavanna: 31
Ratio of wells on confidential status / active rigs:
  • BR: 128/10 = 12.8
  • CLR: 261/19 = 13.7
  • EOG: 36/9 = 4.0
  • Halcon (HRC):  87/6 = 14.5
  • Hess: 185/16 = 11.6
  • KOG: 90/8 = 11.3
  • MRO: 76/6 = 12.7
  • Oasis: 67/16 = 4.2
  • OXY USA: 23/6 =  3.8
  • Petro Hunt: 93/8 = 11.6
  • QEP: 77/8 = 9.6
  • Slawson: 78/6 =  13.0
  • Statoil: 117/5 =23.4
  • Triangle: 13/3 = 4.3
  • Whiting: 95/15 = 6.3

Insurers Are Baffled About Low Number Of ObamaCare Enrollments; Mainstream Media Worries About Early Flu Season

Updates

January 12, 2014: the numbers are low, but what is worse is the fact that the demographics are wrong -- too many old, high risk folks signing up for ObamaCare; not enough young folks enrolling. Predictable. Reuters is reporting:
Now that more than 2 million people have signed up for private insurance plans created by President Barack Obama's healthcare law, a crucial next check-up for the new marketplace will be to see how old customers are.
Early data from a handful of state exchanges shows the administration needs more young adults to sign up in the next three months to help offset costs from older enrollees and prevent insurers from raising their rates.
Critics of Obama's Affordable Care Act say the market won't attract enough young people to keep it financially viable, putting more pressure on government funds to compensate for any insurer losses.
Data from seven states and the District of Columbia, which are running their own marketplaces, show that of more than 200,000 enrollees, nearly 22 percent are 18 to 34 years old, according to a Reuters analysis.
The administration had hoped that over 38 percent, or 2.7 million, of all enrollees in 2014 would be 18 to 35 years old, based on a Congressional Budget Office estimate that 7 million people would sign up by the end of March.
Again, this is not a problem. The insurers are protected by the law: a bailout is guaranteed. The insurers will simply become "pass-through" entities for ObamaCare. The folks who crafted this bill were no dummies, and with a president who was given a free pass on every executive decision modifying the law, things are working out just fine for ObamaCare.

 
Original Post

The Dickinson Press is reporting: yup, insurers are baffled about the low number of enrollees. Let's count the ways:
  • the websites didn't work
  • the federal website was taken off-line for the first three weeks
  • the ObamaCare website has more security risks than the Target breach
  • original website required private data submission before viewing plans
  • majority of folks who thought they would qualify, do not qualify (income is required)
  • the most affordable plans had a $12,000 annual deductible
But the big reason North Dakota folks did not enroll: with the Bakken boom, everyone in North Dakota is a millionaire (some billionaires) and do not qualify for subsidies, so why sign up?

Just joking. The big reason folks did not enroll: sticker shock.

The insurers are not concerned: the law provides for a bailout if the insurers lose money on this scheme.

In the end, the insurers will simply be "pass-through" entities for national health care.

In case the above link is broken:
The Sanford Health Plan enrolled 92 in North Dakota through the new marketplace exchange.
By the way, Sanford Health has the monopoly in North Dakota for Medicaid; Blue Cross Blue Shield pulled out of Medicaid coverage in North Dakota.

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Mainstream media seems to be reporting that the flu season might be earlier and worst than previous seasons. See for yourself at Google flu trends, probably a better source than the government's own statistics. Right now, the flu season this year is much, much less severe than what it was this time last year.

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One would think that with the highest corporate tax rate in the world, the US would have no trouble paying universal health care, or at least subsidizing it. 
The U.S. has the highest corporate tax rate in the developed world. After Japan lowered its tax rate last year, the combined federal and average state tax rate of 39.2% in the U.S. was the highest of any nation in the Organization for Economic Co-operation and Development.
Some mega-corporations pay billions of dollars every year in federal and state taxes. In its most recent fiscal year, Exxon Mobil reported $31 billion in corporate income tax expenses.
Some large corporations, on the other hand, paid no taxes at all and even received tax benefits.
General Motors, which had annual revenue of more than $150 billion, received a tax benefit of $28.6 billion. 24/7 Wall St. examined the 10 U.S.-based, publicly traded companies with tax expenses of more than $5 billion in their most recently reported fiscal year, and the 10 companies that received a benefit of at least $5 million.
The ten (10) companies paying the most income tax, from least to most: Microsoft, IBM, Berkshire Hathaway, JPMorgan, ConocoPhillips, Wal-Mart, Wells Fargo, Apple, Chevron, Exxon Mobil. I doubt we will ever see a wind energy or solar energy corporation make the top 10 list.

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Speaking of corporate taxes, these corporations are also well known for philanthropy. As just one minor example, The Bismarck Tribune is reporting:
State leaders recognized an energy company Wednesday for its $1 million contribution to the Housing Incentive Fund which fills out the portion of the fund to be capitalized through tax credits.
Members of the North Dakota Industrial Commission recognized Denver-based QEP Resources for its contribution.
Earlier this week it was announced that the $20 million in state tax credits authorized by the Legislature through taxpayer contributions had been reached. These HIF dollars are in addition to a $15.4 million direct appropriation made to the fund for this biennium.
Gov. Jack Dalrympe said the $1 million from QEP Resources put the fund over the threshold.
I've been remiss in not reporting corporate philanthropy since the boom began -- mostly because it was hardly news -- there were so many companies donating at so many levels. But a reader pointed out that we haven't seen any donations from renewable energy companies in North Dakota. I'll watch for them. North Dakota is one of the leading wind energy states in the US.
 

Week 2: January 5, 2014 -- January 11, 2014

Operations
Spring flooding in the Bakken not a concern?
Abraxas provides an update on the Lillibridge pad
Random look at siting of wells for new KOG Koala pad
Number of active rigs in North Dakota continues to rise despite frigid temperatures
Part 1 of a two-part series on the Bakken -- Mike Filloon

Bakken deals
Emerald Oil acquires 20,800 net acres in McKenzie, Williams counties
Petro-Hunt transferred about 30 wells to Whiting

Economy
Fargo, Bismarck top US in low unemployment rates
Williston #1 in North Dakota for taxable sales, purchases for 9th consecutive quarter

For investors only
Disclaimer: this is not an investment site; do not make any investment decisions based on anything you read here or think you might have read here.
Some COP, OXY USA rumors surface late Friday night
ONEOK spins off its natural gas distribution system
Flashback: a look at Hess' 3Q13 earnings conference call transcript

Bakken101
MarketRealist has a 14-part series on the Bakken operators
Blue Buttes oil field has been updated
CLR's density projects listed, linked
Legacy fund?

Miscellaneous
"The Bakken" puts 16 European refiners out of business