From InPlay -- TPLM Update -- For Investors Only; Note WTI Vs Realized Bakken; Analyst Raises Price Target On EOG ($240 Pre-Split/$120 Post-Split)

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.

Triangle Petroleum provides Q4 operations update and full fiscal year operating results:

Select Fourth Quarter and Full Fiscal Year 2014 Operating Results

• FY 2014 average daily production of 5,286 Boepd 
• Q4 2014 average daily production of 7,254 Boepd 
• January 31, 2014 exit rate production of 8,193 Boepd (21-day trailing average) 
• Net proved reserves increased to ~40,300 Mboe as of January 31, 2014 (~40% PDP) 
• Increased proved reserves SEC PV-10 to ~$678 mln 
• Ended the year with ~$82 mln of cash and ~$205 mln drawn on credit facilities (90% E&P Segment, 10% RockPile Energy Services) 

Preliminary Consolidated Fourth Quarter Results 

• WTI NYMEX ($/Bbl): $95.59
• Oil Differential ($/Bbl): ($15.98)
• Realized Oil Price ($/Bbl): $79.61
• Realized Oil Equivalent Price ($/Boe): $73.98
• RockPile Gross Profit (000's): $6,853

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

Stifel analysts: EOG Resources, which is reporting record oil and gas production and revolutionizing the U.S. energy position, is upped to $120 from $100.

From Motley Fool:

EOG Resources has bet its future on the Eagle Ford, which is looking like a smarter decision with each passing quarter considering the massive potential of the region. To put it into some perspective, EOG's current reserve potential is almost four times what the company initially thought when it discovered the play just four years ago. And, EOG is essentially doubling down on the Eagle Ford this year. It's planning to build as many as 520 net wells there during 2014. 

How does that compare with EOG in the Bakken. Through the end of the first calendar quarter, EOG had 34 new permits in the Bakken which puts it on track to add a paltry 136 wells this year. EOG's Eagle Ford wells are probably 10 - 15% better (maybe more) than Bakken wells in terms of production.

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

ObamaCare Results In Loss of Insurance For 1,800 Kids in New Jersey

Breitbart is reporting:

Obamacare's new mandated requirements killed New Jersey's low-cost children's insurance coverage plan, FamilyCare Advantage.

The plan, offered by Horizon Blue Cross Blue Shield of New Jersey, was designed for children whose parents make too much money to qualify for Medicaid and offered medical, dental, and vision coverage for just $144 a month.

The program, which was the first of its kind in the nation, was implemented six years ago and considered a model for others states seeking economical ways to provide quality coverage for kids from working class families.

Yet, since FamilyCare Advantage lacked things like mental health services, Obamacare deemed the children's 1,800 plans illegal and the program shuttered last week. 

"This is enormously disappointing, said NJ state Sen. Joseph Vitale (D) who co-sponsored the bill that created the program. "It was $5 for doctor visits, $1 for pharmacy and no deductible or cost sharing."

Many, many story lines. The biggest story line, something I've opined about for years: the biggest expense in medical care is not AIDS or the "big C" but mental health. Besides not offering mental health care coverage for children, it probably also did not cover costs associated with a pregnancy for the boys.  The Democratic state senator will rail against the travesty but nothing will change. It's water under the bridge.

ETP -- Bakken To Illinois -- Dakota Access Pipeline -- The Bakken

Updates

March 24, 2015: ETP, Bakken-to-Illinois, Dakota Access Pipeline, miles of pipeline being brought in, stored near Aberdeen, SD; South Dakota state has until December 15, 2015, to make decision.

August 30, 2014: Iowa activists trying to stop the ETP pipeline. 
 

Original Post

Platts is reporting:

Just two months after Koch Pipeline scrapped construction plans for a 250,000 b/d North Dakota-to-Illinois crude pipeline without saying why, some US crude market participants may have deja vu as they review the terms of an open season for a nearly identical pipeline project.

They also might wonder how competitor Energy Transfer Partners expects to get backing for its new crude pipeline that would run a nearly identical route as Koch’s abandoned project. The project is being proposed by ETP subsidiary Dakota Access.

When asked about the project’s validity by Platts, ETP spokeswoman Vicki Granado said:  ”The answers to your questions will be determined by the interest we receive during the open season. I have no further details at this time.”

Koch said last year in a statement that it “intended to explore” a connection for Dakota Express at Patoka, Illinois, to Energy Transfer Partners’ proposed Eastern Gulf Crude Access pipeline (EGCAP) project, which is expected to deliver Bakken crude to Nederland, Texas, from Patoka.

Bakken crude via a proposed Koch's pipeline to Patoka, IL, to tie up with competitor ETP's pipeline to take Bakken crude to Nederland, TX. 

Feedback From A Reader On Recent Posts

I can't recall if I replied to the reader who sent me a very, very long note regarding a recent post. He brought up a lot of great points which I will summarize here:

Bakken completions: You have fairly recently said Hess has realized significant improvement in their recoveries over the last 8 - 10 months, or whatever time period, and I believe you have indicated Continental needs to improve their completions.  At Continental's Q3 2013 earnings call, the one where Harold Hamm laid out his "ears pinned back" program, I am sure you know they acknowledged this need and indicated they have already begun trying new approaches, and will employ and measure varying completion techniques in 20% of their 2014 wells.

Global competition for resources to develop oil fields: a recent WSJ article which noted the concerns big oil companies expressed at an IHS conference regarding the high costs of their global projects -- $5 billion plus. Germaine to your piece was a comment that these 35 or so large companies are "competing for the same service contractors, engineers and equipment...."

Cost inflation: On another note the WSJ article indicated one place where cost inflation wasn't at the forefront of discussions was the U.S. shale energy development.  In line with the conclusion of one of your recent posts, an adviser to Halliburton's CEO said "the industry has successfully driven down costs in the U.S.  Now it needs to 'make better wells' that produce more oil and gas."

Better completions: The greatest contributor to future Bakken production is improved recovery, and I believe it will happen.  My understanding is that service companies lead the way with their technology R&D in this area, and that among them Schlumberger makes the largest R&D commitment.  This will be interesting to watch.

Triple-A Supply Chains:

Of course, other aspects E&P's should bear in mind in their quest for production growth are Hau Lee's observations in his "The Triple-A Supply Chain".  In studies from the inside of more than 60 leading companies he observes, "All those companies and initiatives persistently aimed at greater speed and cost-effectiveness -- the popular grails of supply chain management."

He states, "... companies whose supply chains became more efficient and cost-effective didn't gain a sustainable advantage over their rivals.  In fact, the performance of those supply chains steadily deteriorated."

Lee says, "Only supply chains that are agile, adaptable, and aligned provide companies with sustainable competitive advantage....  Most companies continue to focus on the speed and costs of their supply chains without realizing that they pay a big price for disregarding agility, adaptability and alignment."

Finally: The adviser to Halliburton's CEO is correct; efficiency and cost-effectiveness alone will not drive greater Bakken production -- in this case improved recovery is essential.

That was from the reader. I enjoy the feedback. (The fact that there were no spelling errors or grammatical errors was remarkable for such a long, long reply. I can only assume the reader was a) not using an iPhone to write the comments; and, b) graduated from the North Dakota or Iowa public school system. And had a very, very strict 5th grade teacher.) I apologize if I did not reply with a "thank you" to the e-mail. I believe this note maintain anonymity but if the reader wants it removed, I will remove it. [A very smart reader noted I was wrong -- there may be one spelling error; "germaine" is considered obsolete. "Germane" is the appropriate word.]

Monday, Monday -- April 7, 2014 -- Last Day That Starbucks Coffee Is On Sale (This Cycle)

Tea leaves suggest geo-politics will be big story this week: from China to the Crimean.

Active rigs:

	4/7/2014	04/07/2013	04/07/2012	04/07/2011	04/07/2010
Active Rigs	192	187	208	171	103

RBN Energy: the four barriers to ethane export.

• Terminal infrastructure: There is little or no trading of waterborne ethane today
• Shipping: For the same reason there are no ethane unloading docks today, there are no ethane ships.
• Pricing:
• Petrochemical demand:

The Wall Street Journal

Top story: Hillary's phantom campaign squeezes other candidates; by the way, all photos of Hillary suggest a "Thatcher" look

Phony calls from ObamaPhones plaguing 911 centers

Some dems fight Obama over Medicare: worried about higher premiums for seniors

Investors clamoring for dividend-paying companies

News From Readers

Cove Point, MD, to become first operational natural gas export facility on east coast; Chesapeake; 2015. Huge story, reported in BuffaloNews.  

Regarding the new transloading facility east of east Fairview (on the ND side of the state line):

This property starts north of Hwy 200 just out of Fairview, MT and runs north for approximately  1 3/4 miles with acreage on east and west of existing railroad track. Google Northstar Loading. They have a site map you can view.

15 billion bbls of recoverable oil in the Monterey Shale -- LA Times. Might as well be on the moon. Three obstacles:

• activist environmentalists against Big Oil
• fear of earthquakes by "everyone"
• tectonics resulting in very, very confusing geology; ground constantly shifts

I can never get this site to load, but there are "two burgeoning markets that stress rail": wheat and ethanol competing for CBR space.

I think this is a much bigger story than many folks realize. AirProducts completes the $1 billion hydrogen pipeline running from north Louisiana to south Louisiana. I remember talking about the hydrogen shortage just two years ago. Hydrogen, in addition to all its other uses, is used for cooling high-tech equipment.

This is another huge story not on the radar scope of many folks: Texas will benefit as Pemex monopoly comes to an end. The San Antonio Express-News is reporting:

As Mexico moves forward to allow foreign investment in its energy industry — including shale development — the change will be a great economic benefit to Texas, Railroad Commissioner David Porter said Tuesday.

The state's booming Eagle Ford Shale formation doesn't end at the border; it continues into Mexico. As it and other shale plays in Mexico are tapped, “there is potential for U.S. companies and technologies to go there to work,” said Porter, who spoke at a meeting of the Eagle Ford Task Force in San Antonio.

The Los Angeles Times

Security holes in power grid have federal officials scrambling. So the LA Times will do its part in shouting the alarm to terrorists: you better move fast. The feds are tightening security.

Perhaps the top story of the day: "Captain America" sequel shatters records with $96.2-million debut. BloomsbergBusinessweek has an excellent cover story / five-page story on the man who saved Marvel Comics. This story alone might entice me to renew my subscription to BloomsbergBusinessweek; I wish it wasn't filled with so much fluff. Two regular columns that irritate the heck out of me: "How I became a billionaire"; and, "How I dress for work." Who cares?

Another Obama re-election ad looking like a news story: number of Americans without health insurance reaches new low.

Mickey Rooney dies at age 93; he ruined "Breakfast at Tiffaney's," though George Peppard was about as cold a fish as one sees in a chick flick. Audrey beautiful to look at, but not much chemistry. "Casablanca" remains in a league of its own.

George Strait takes entertainer trophy at 49th ACM Awards. By the way, the resurgence of country music was a front page story in the New York Times yesterday.

I am not sure why the LA Times continues to print stories on the Los Angeles Lakers.

I love the spin on this caption of a teaser-photo: "The slain journalist who did her best work in George W. Bush's war." Haven't heard a thing about the four or five wars that Obama is waging / has waged. Cognitive dissonance. Nobel Peace Prize. Five wars in six years.

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

A Note to the Granddaughters

The NASCAR race -- just a few miles to the west of us -- was rained out yesterday -- Texas Speedway.

Today, a beautiful day but light rain predicted this afternoon.

I'm still sore from all the physical activities we did this past weekend.

The cakes we baked last evening are incredible.  Arianna pretty much did all the mixing, though Olivia used the electric mixer to complete the porject. They each frosted half the cake, and then we brought it over to their house. When I got back home, I made another cake to use up the other half of the frosting. The granddaughters came back at 8:00 p.m. to watch Cosmos. It was the second best in the series so far, of the four shown. The topic was "light." Much yet needs to be discussed/shown on Cosmos regarding "light." I understand another 1% about light bringing my understanding of light up to about 4% of what probably needs to be understood. I could be wrong, but I think the narrator said physicists understood what moved an electron from an inner shell to an outer shelling (heat) giving off a photon (light) but said that physicists did not understand what "caused" the electron to fall back from the outer shell to an inner shell. I could be wrong, but I think that's what he said. I find that interesting if that is true. I find it interesting that light bends when it hits a prism, and thus a rainbow. I assume neutrinos go straight through. If light did not bend going through a prism, one wonders how much longer it would have taken scientists to figure out the science of light. I told the girls that Newton was very, very interested in optics, but he got it wrong. The narrator on Cosmos didn't actually get optics "wrong." He merely said that Newton failed to make the discovery that was within his grasp. He was probably interrupted by a call for dinner just as he was about to ....

The Dickinson Press

I normally don't link these stories; there are just way too many of them. Regular readers can find "faces of the Bakken" at The Dickinson Press on a regular basis.  But just to remind folks:

POWERS LAKE, N.D. – When Carolynn Robinson and her husband moved from Washington state to North Dakota to work in the oilfields, they thought it would just be a summer gig.

But the move worked out so well, they decided to stay.

“We’re getting more and more attached to North Dakota,” said Robinson, who moved to the state about two years ago.

Lack of work in their home state prompted them to move to North Dakota.

Robinson’s husband, Travis, came to North Dakota first, and now works as a pipeline welder.

For the granddaughters:

The International Space Station (ISS) returns this week to highlight the evening sky. Outside of Venus and the moon, the ISS is the brightest, star-like object in the nighttime sky. It orbits from west to east, the same direction the Earth rotates, and crosses the sky in about five minutes. At an altitude of about 250 miles, the station orbits above most of the auroras we see which is why astronauts get such cool photos of the northern and southern lights from orbit.

The new evening observing season begins for many locations across the northern hemisphere with passes happening once or twice a night. To watch the space station, og out a couple minutes before it's expected to appear and look for a pale yellow "star" bright than any other moving form west to east across the sky.

The best way to see these events: go on a cross-country drive, and drive all night. I have had some spectacular views doing just that over the years.

Vern Whitten Photography Has New Website Format

The farmland photographs are simply spectacular.