Friday -- Part V -- The Drudge Report And Nothing But The Drudge Report

What a crock. Now the White House says the president did not know the extent of surveillance, according to TruthRevolt. He is either incompetent, a liar, or ... (but I repeat myself). He is certainly in over his head. He didn't know about the Obamacare website either, but he certainly knows how to move money to Solyndra (see the list of 38).

The best news: the countdown clock at the sidebar at the right is finally under 1100 days. Wow, by now George W. would have been impeached had all this been going on under his watch. MSNBC, led by Rachel, would have had tingling feelings up and down their legs.

UPS blames profit miss on six fewer shopping days between Thanksgiving and Christmas. [Drudge has the headline wrong, by the way.] BloombergBusinessWeek had a several-page story on calendar-obsessiveness by UPS before this debacle. It was in the hard copy I had; let me see if I can find it on-line. Yes, here it is:

If Abell can’t come up with a viable scheme, UPS is in trouble. The company expects to ship more than 132 million parcels globally during the week before Christmas alone. If it can’t find space for them all, retailers will almost surely turn to FedEx. In addition, Abell must keep a lid on costs. In the past some investors have worried that UPS is too e-commerce focused.

David Vernon, an analyst for AllianceBernstein, notes that it’s usually more profitable to carry large shipments to businesses than to transport books to the cozy homes of Internet shoppers. But he says UPS is managing to turn a profit on the latter with careful planning. “I think some of those fears are starting to recede,” he says.

Maintaining profitability is especially difficult during peak season when UPS’s delivery expenses rise. This year, UPS is adding 55,000 part-time holiday workers, leasing 23 extra planes, and effectively building a second trucking fleet to handle the seasonal package flow. None of this is cheap. It’s up to Mr. Peak to plan accordingly. 

Talk about EGG ON FACE. 

From Breitbart: New Jersey is least economically solvent state in the US. Can you spell "moretaxes"?

Well, his threat worked. If Congress won't act, he said he will, by executive order ... and his approval rating is back into the 30's.

On global warming:

• scientists baffled
• "solar lulls" coincide with bitterly cold weather
• "sun gone to sleep" -- BBC

And that's it. Not much over at Drudge today. Except a gazillion stories on the NSA, Oprah, and the NFL.

Friday -- Part IV -- Housing Starts, Largest Decline Since April -- Reuters; Weather Stalls Housing

More from Schlumberger, from the very, very long report:

In the Bakken shale play in North Dakota, a combination of Schlumberger technologies was specifically designed for use by Continental Resources to execute the largest ever downhole microseismic monitoring operation in the history of the industry.

The hydraulic fracture growth and optimum well spacing were tested in the Bakken and Three Forks formations using three Wireline VSI* versatile seismic imager receiver arrays simultaneously conveyed in three wells using TuffTRAC* cased hole services technology.

The VSI technology acquired high quality data over 3,000 ft from the location of the microseismic events. The operation was successfully completed in 63 days and included 293 fracturing stages with the Wireline monitoring services efficiently conveyed in excess of 300,000 lateral ft.

This is a big, big deal when an international company like Schlumberger specifically mentions the Bakken and then has a comment that is that long. And that important.

Don tells me that Cramer, this morning on CNBC, said Harold Hamm/CLR was using a lot of this Schlumberger technology. Fascinating. 

Random look at some incredible wells. I continue to update wells that went to DRL status last year and are now completed. It is absolutely incredible how good some of these wells are. Forget about IPs. Look at early production. When I first started blogging, 100,000 bbls of oil by the end of the first year was the gold standard. Look at the "test" date and then look at the cumulative production/date in the following. For example, HRC's FB 147-94-1B12-3H with 158,000 bbls by November, 2013, and it was fracked/completed tested about six months earlier:

• 23382, 2,710, HRC, Fort Berthold 147-94-1B-12-3H, McGregory Buttes, t5/13; cum 158K 11/13; 
• 23505, 2,147, HRC, Fort Berthold 152-93-17D-08-7H, Four Bears, t9/13; cum 58K 11/13; 
• 24949, 2,274, QEP, Patsy 2-29-32BH, the Helis Grail, t9/13; cum 59K 11/13;

Reuters is reporting:

U.S. housing starts fell less than expected in December, pausing after recent strong gains that had propelled home building activity to multi-year highs.

The Commerce Department said on Friday groundbreaking dropped 9.8 percent to a seasonally adjusted annual rate of 999,000-unit pace.

It was the largest percentage decline since April.

Economists polled by Reuters had expected starts to fall to a 990,000-unit rate in December. For all of 2013, starts increased 18.3 percent to an average of 923,400-units.

It's all that global warming.

Reuters headline: Schlumberger's profit surges.

Schlumberger Ltd, the world's largest oilfield services company, posted a better-than-expected fourth-quarter profit on Friday as robust international activity offset stiff competition in North America.

Fracking, drilling seismic studies and other lucrative services for oil producers across most of the Middle East, Asia and Latin America helped the company's profit top analysts' estimates for the ninth straight quarter.

Intense competition with Halliburton Co and Baker Hughes Inc for work in North America's vast shale fields, though, combined with weak natural gas prices, eroded regional results. Without strong sales from the U.S. Gulf of Mexico, North American revenue would have dipped.

"In the United States, we see no change in fundamentals, with any meaningful recovery in dry gas drilling activity some way out in the future," Chief Executive Paal Kibsgaard said in a statement.

Schlumberger has the lowest exposure to North America among the big four oilfield service providers. International markets brought in about two-thirds of Schlumberger's 2013 revenue of $45.27 billion.

Among the majors, it seems XOM is the gold standard; among the oil service companies, it appears SLB is the gold standard. This does not mean they are the "best" in which to invest.

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. 

As noted earlier:

The Board of Directors of Schlumberger Limited today approved a 28% increase of the quarterly dividend. The increased dividend of $0.40 per share of outstanding common stock is payable on April 11, 2014 to stockholders of record at the close of business on February 19, 2014.  

On tap next week, earnings will be reported for the following companies of interest:

• Baker Hughes
• Cheney's former company
• Delta
• Xylinx
• Netflix
• Baxter
• Starbucks
• Union Pacific
• Kansas City Southern

I own shares in two of the companies listed above.  Make that three; I forgot about one.

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

The Dickinson Press is reporting:

Theodore Roosevelt Regional Airport will soon have a third daily round-trip flight option with both of its major airlines.

Airport manager Matthew Remynse said United Airlines and Delta Air Lines have both decided to add a third flight to and from Dickinson during Thursday’s Dickinson Airport Authority Commission meeting at City Hall.

Friday -- Part III -- JCP: "A Large, Burning Ship Going Full Steam To Reach Dock Before It Sinks"; The "Floating Null" In Natural Gas

The Wall Street Journal

Obama wrestles with NSA overhaul. What a crock. If Bush was doing this, he would be impeached. Today on NPR, the 4:45 a.m. segment or about that time, NPR had what sounded like a news story, but if one listened closely, it was a public service announcement supporting Obama's plan to listen in on all Americans. I have no dog in that fight. I turn off my cell phone -- it's a 1990's clam shell model that I bought in 2009 or thereabouts -- I don't think it has the stuff necessary for the NSA to track, especially when it's turned off.

I talked about this yesterday: retailers confront new world of reduced shopper traffic. Brick-and-mortar stores (Best Buy, Barnes and Noble, particularly) are show-rooms for Amazon. I spent more than usual this past Christmas on gifts for my younger daughter and her husband, and 95% was spent "at" Amazon.

Best Buy Co. on Thursday became the latest retailer to chime in with weak holiday results. Like other chains, the electronics retailer blamed the race to offer the deepest discounts, a game of brinkmanship that hurt profit margins and held back revenue.

But there is a deeper malaise at work: A long-term change in shopper habits has reduced store traffic—perhaps permanently—and shifted pricing power away from malls and big-box retailers.

Consumers' rush to e-commerce is a challenge that brick-and-mortar retailers have wrestled with for years. Across a number of retailers, their defensive strategies don't seem to be panning out. Best Buy, for example, overhauled its store layouts and marketing in the past year, even inviting shoppers to "showroom" the electronics retailer—co-opting the term for people who try out products in stores and then buy them for less online.

I have the answer for Barnes and Noble but I doubt they will listen. I've posted it for those interested. My wife does not agree. She's wrong. But don't tell her I said that: life would be less pleasant if she knew I said that. On the blog.

Wow, I have to listen to some Shirley Bassey:

Goldfinger, Shirley Bassey
America's eating habits are turning healthier, study finds. Yes, I've switched to bagels instead of donuts at Starbucks.

I don't believe it. The Wall Street Journal  has the story that I posted yesterday: where to marry a millionaire -- North Dakota.

Welcome to North Dakota, which jumped 14 spots in the annual ranking of millionaire households per capita released by Phoenix Marketing International. There were roughly 53,000 more millionaire households in the U.S. last year than in 2012, for a total 6.15 million, according to Phoenix, which derives its figures from the Federal Reserve, Census Bureau and polling firm Nielsen Co. That means 1 of every 20 U.S. households has more than $1 million of investible assets. Those figures don't include the value of real estate. Large movements by many states made the latest ranking unusual.

Maine climbed 11 spots over a single year to No. 25 in 2013. Louisiana jumped 10 spots to No. 32. Meanwhile, Nevada fell 20 places to No. 39. Arizona, Florida, Idaho and Michigan all fell by more than 10 positions. From 2011 to 2012, no state changed its rank by more than two slots.

CBR to make safety changes. 

The line for Starbucks coffee now stretches almost to the door.

Target breach was part of a large, sophisticated attack; hit multiple retailers. Unfortunately, Target took the brunt. Be that as it may, I canceled my Target account, not because of the breach per se, but how it responded. It was a week or so before Target acknowledged the breach and initially denied personal information was stolen. Some two to three weeks later we learn from other sources that much personal information was stolen and Target finally acknowledged that. I was unable to reach Target in the early days following the breach and I could not access my on-line account. I finally reached Target, after a 45-minute hold. As soon as I told the male Target representative I wanted to cancel my account, the line went dead. Others blogged the same thing. I had more success calling Target's automated line to report a stolen card. I never spoke to a human but succeeded in canceling my account. Or so I thought. They "canceled" that account but sent me a new card with a new number. Now that things have settled down, I will cancel this account.

Speaking of which, I will also cancel one of my three other credit cards. The credit card companies response to this attack: monitor your accounts daily. Well, I can't do that very easily if I have multiple credit cards, so I will go to two credit cards: one for gasoline and one for "emergencies," like refilling my Starbucks card.

Blackrock fourth-quarter income rises 22% in fourth quarter. I still haven't found the fourth quarter results for North Dakota's "Legacy Fund."

The Los Angeles Times

My wife told me the fire was so bad in Pasadena yesterday that her car was covered with ash in south Los Angeles (San Pedro). Apparently the fire was started by one of three homeless folks starting a fire to keep warm. Five houses destroyed. The Times:

More than 700 firefighters battle the blaze, which burns 1,700 acres and destroys five homes. Three men are arrested on suspicion of starting the fire.

About 30% contained as of last night.

"New" Ohio execution method took 15 minutes to kill first inmate. Well, that's not going to last, is it?

Are JC Penney's turnaround moves wise or foolish?

It's not looking pretty for J.C. Penney.

The Plano, Texas, company said this week that it plans to close 33 under-performing stores around the country by early May and shave 2,000 jobs off its books. Chief Executive Myron Ullman called the move — designed to save the company $65 million a year — a key step in J.C. Penney's "progress toward long-term profitable growth."
Several analysts, however, say it's a sign that the retailer's turnaround may be more like a turndown.

"J.C. Penney's rebirth is unfolding, but the huge issue is that it's moving extremely slowly, causing inefficiencies at the store that diminish the promotional and marketing initiatives being undertaken by management to rebuild customer relationships," Brian Sozzi, chief executive of Belus Capital Advisors, said in a note to clients.

Sozzi characterized the company as "a large, burning ship going full steam to reach dock before it sinks."

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

Morgan Stanley beats by $0.08, misses on revs : Reports Q4 (Dec) earnings of $0.50 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of $0.42; revenues rose 12.4% year/year to $7.83 bln vs the $7.99 bln consensus.

BNY Mellon reports EPS in-line: Reports Q4 (Dec) earnings of $0.54 per share, excluding after-tax loss of $115 mln, or $0.10 per diluted common share, in-line with the Capital IQ Consensus Estimate consensus of $0.54.

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

A reminder: today's RBN Energy post is a must read. It concludes:

So, while Spectra and NextEra’s Sabal Trail is clearly an important project (it will boost Florida’s ability to receive gas inflows by 1.1 Bcf/d, or roughly 25%), Williams’ Atlantic Sunrise plan may well have a much bigger effect on gas markets and gas pipeline operations.

In the next episode in this series, we will delve into detailed information Williams is providing about  changing gas-flow trends on the Transco mainline, and into projections Williams is making on how the mainline will operate very differently as it becomes bi-directional through zones 4 and 5. Fair warning: That discussion will take us back to what we’ve called “the most arcane of our natural gas flow terms,” the pipeline flow “null point,” sometimes called the “floating null.”  As we said in “Upside-Down: Natural Gas Pipeline Backhauls, Reversals and Null Points,” a floating null occurs when you start injecting a lot of gas at what had historically been the market end of a mainline, and reverse enough compressors so that some of the pipeline can flow gas one way and another part of the pipeline can flow gas the other way.

More next time on Transco’s coming transformation into a floating null system, in which system demands and operations will determine how far Marcellus gas flows south and how far Mid-Continent gas flows north.

One word: fascinating. The "floating null."

Friday -- Part II -- Huge Natural Gas Story Reported By RNB Energy

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

A reader, in response to my note about Ghiradelli double chocolate brownies, suggested using two eggs instead of one. I always thought about adding a second egg but I did not know if one "was allowed" to do that, deviate from a proprietary recipe.

When I was stationed in eastern Turkey, I smuggled medications sewn in my parka, into Kurdistan. But deviating from a proprietary recipe seemed to be beyond the pale, as they say. Now that a reader says it's okay, I may try that next time.

Active rigs:

	1/17/2014	01/17/2013	01/17/2012	01/17/2011	01/17/2010
Active Rigs	187	185	201	163	80

RBN Energy: Miami, 2017 -- Marcellus gas heading to Florida.

Spectra Energy and NextEra Energy’s planned Sabal Trail natural gas pipeline from near Transco Station 85 in southwestern Alabama to near Orlando in central Florida will do more than provide additional gas-delivery capacity to Florida and the welcomed redundancy of a third pipeline to the Sunshine State. The big news is that Williams’ Atlantic Sunrise project by July 2017 will enable large volumes of Marcellus-sourced gas to be shipped south (backwards!) along the Transco pipeline all the way to Station 85. That (and Sabal Trail) will give Marcellus producers something unthinkable until now: access to major gas users as far south as Miami. Today we lay out the basics of what is being planned.

I see I've won another million dollars from some Nigerian lottery, and I can get The New Yorks Times for $2 for some unspecified period of time.

General Electric reports EPS in-line, revs in-line; 2014 framework remains unchanged: Reports Q4 (Dec) earnings of $0.53 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.53; revenues rose 3.1% year/year to $40.38 bln vs the $40.21 bln consensus. 

By the way, an objective review of Warren Buffet's Berkshire Hathaway returns have not been as good as generally believed, over the last 10 years. Google it if interested.

Here's the Reuters story on GE: 

General Electric Co (GE) posted a rise in quarterly net profit on Friday, helped by strength in its businesses selling oil pumps and jet engines.

The U.S. conglomerate said net earnings rose to $4.2 billion, or 41 cents per share, from $4.01 billion, or 38 cents a share, a year earlier.

Excluding items, earnings of 53 cents per share were in line with the average expectation of analysts, according to Thomson Reuters I/B/E/S.

One word: lackluster. Okay three words: lackluster. Oil pumps. Without the latter, it would have been a bad quarter.

Wow, did you see this? Nintendo will slash Wii sales estimates for the year from 9 million to less than 3 million. That's the headline. Won't read the story. But that's the headline.

Thirty-one minutes of Arvo Part:

Te Deum, Arvo Part When I first heard this years ago, I was blown away when the voices came in at 4:54.    Then, again, when the strings come in at 12:30.    I heard Arvo Part's Te Deum live in Ripon Cathedral, Yorkshire, England. 
I most enjoyed listening to this at midnight in a small church near the River Nidd in Pateley Bridge.
SLB is up about a percent in pre-market trading.

By the way, there's a reason for inserting those YouTube videos. It has to do with the old versions of the iPad in which multi-tasking is impossible.

Ya gotta love this: Apache says cold weather in Texas and Oklahoma hurt production. I can't make this stuff up. Cold weather in Texas and Oklahoma. Yeah, life is tough all over. I assume -50 degrees in North Dakota and wind gusts up to 60 mph hurt production in North Dakota earlier this month, but for December, North Dakota posted another all-time record in crude oil production.

I just read the Apache story: that was for the fourth quarter. Hmmm. As I said, life is tough all over.

What's RSB doing? It's down almost 2% in pre-market trading. Shell posted a huge profit warning. It pays almost 5%. Wow, look at the chart. Looks like an old fashioned wood saw.

I'll "do" The Wall Street Journal in Part III.

I just talked to the woman working behind the Starbucks counter about "cold weather in Texas." She says Texans are ''....." when it comes to cold. [I don't know how to spell the word she used to describe Texans when it comes to cold.] She says she spent ten years in Minneapolis before coming to Texas, and has lived in Boise, Idaho, and some other place, I think she said New Mexico, or maybe it was just Mexico, and she said Texans are "......" when it comes to cold. If Apache says production was hurt in  the fourth quarter in Oklahoma and Texas due to cold weather -- these reports of global warming are seriously exaggerated.

Wow, this stuff never quits. Now Norway says huge costs to drill in the Arctic will hurt production. Yeah, life is tough all over. Every Norwegian is a millionaire.

Okay, on to Part III.

Friday -- Part I -- SLB Raises Their Dividend 28 Percent; Life Is Tough For Shell

I remember Rush designating Fridays as the day for his listeners. He said he would take calls on any subject, and then seldom took calls. I guess it will be the reverse for me.

Today is my day, dispensed with the meds, and will go gonzo. Well, not really, but it will be different.

I will "re-fresh" as I go along. If you don't like the constant refreshing, come back in 45 minutes. I should be done by then.

I went to bed early last night, maybe about 11:00 p.m. I was eager to get up this morning. I looked forward to Friday all week: SLB would report earnings.

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

Wow, what a surprise! SLB reports earnings which looked okay on first glance and raised their dividend 28%. I will come back to SLB later. Memo to self: put some of this in bold.

Schlumberger beats by $0.02, reports revs in-line: Reports Q4 (Dec) earnings of $1.35 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $1.33; revenues rose 7.4% year/year to $11.91 bln vs the $11.98 bln consensus. 

The market hit a new high (apparently) this week, but my energy portfolio was mostly down. As I've said before, when the market is down, or the energy market is down, I generally don't look at individual stocks, and I definitely don't look at my portfolio unless I have something specific to do. Today, I will watch SLB.

The pull back in energy has been wonderful for investors: an opportunity to get in. The pull back may not be so good for mineral owners, but that's on a case-by-case basis. I don't own any minerals, so I wouldn't know.

It will be interesting to see how Shell does today. It posted a huge profit warning.

Royal Dutch Shell expects profitability to be significantly lower than levels : Co updates on its expected 2013 results. Fourth quarter 2013 figures, which are expected to be published on January 30, 2014 , are expected to be significantly lower than recent levels of profitability, considering current oil and gas prices and the downstream oil products industry environment.

Yeah, life is tough.

I normally bicycle to the Starbucks 0.75 miles (five or take a quarter mile) from the apartment complex where I have my man-cave. But it's impossible to get any work done there - too many interruptions by folks who think I'm interested in their plans for the day. So, now I've been riding to the Starbucks that is 4.5 miles from home. It might be 5.0 miles, but I don't like to exaggerate distances on the bike. I exaggerate everything else.

Folks discuss the merits of the iPad. Folks, there's no discussion. [Marilyn: "It's not true that I had nothing on. I had the radio on." ] I sleep with my iPad. If my wife is with me, the iPad is on the floor; if she is out in California like she is now, the iPad is on "her" pillow. Try reading the paper edition of The Wall Street Journal in bed. Now, try reading The Wall Street Journal on the iPad in bed. Case closed.

So, at 4:30 a.m. I am checking to see if SLB has reported. I don't know what time the inside traders got the news, but officially it was 5:00 a.m. central time when SLB reported. By 5:05 a.m. I was out of bed, and by 5:15 a.m. on my bike. I arrived at Starbucks at 5:49 a.m. (that is when I checked my cell phone time; the other times are estimates). I know it was 5:49 because I checked to see how long I would have to wait until this Starbucks opened at 6:00 a.m.

The bicycle ride was wonderful: cool, calm, and very, very dark. It was not quite "pitch" dark -- like the late evening walks in Yorkshire (England) many years ago. I would walk late in the evening; it was so far north, that it was dark by 5:00 p.m. On a moonless night, it was pitch black; one walked the trail along the river by memory. I learned to count the number of strides from a certain curve to the one gate along the trail. Some nights were miserably cold and I found respite in a small English church. I would listen to Arvo Part's Te Deum on my portable CD player, but I digress.

One last comment, then a new page. No, I'm going to quit here.