Really Cool -- A Rig Spotted Outside Of Dickinson -- June 24, 2015

I assume the rig is there; don't know for sure. From a reader:

According to the NDIC, Stark County will have the Armstrong Operating drilling a Wildcat just southwest of Dickinson adjacent to their wells out by the golf course.  It has a spud date of 6/22/2015, but no file has been started.  The rig is Canelson 40 and shows a start date of 6/16/2015.

The graphic below shows the new rig in relationship to Dickinson.

In addition, just some of the "monster" wells in this area. I track "monster wells" here.

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Another Day, Another Dollar

We all have jobs to do, no matter how young, how old, rich or poor.

One of Sophia's chores is to inventory the refrigerator every so often with the help of her older sister. Sophia is only eleven months old but takes her job very seriously, vigorously throwing anything across the kitchen that does not meet her expectations.

Cashwise In Dickinson, North Dakota Opens

The Dickinson Press is reporting:

The Dickinson location has been in the making since March, when Coborn’s, a family owned St. Cloud, Minn.-based grocery retailer, acquired the site of the former Kmart in the Prairie Hills Mall.

Sellers, who was brought on to the project in April, said he has directed eight stores in the past and has opened 12.

He said the Dickinson store will be one of the largest Cash Wise locations at 100,000 total square feet with a 70,000-square-foot sales floor.

Next time I'm in the Dickinson area I will stop by; compare this Cashwise with the one in Williston. 

It looks like Cashwise is along I-94 and I-98.

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EIA "Energy Cookie"

Today's "energy cookie":

Sanctions imposed by the United States and the European Union (EU) at the end of 2011 and during the summer of 2012, respectively, led to the displacement of more than 1.0 million barrels per day (b/d) of Iranian crude oil on the global market.

Iran's main buyers in Asia, Europe, and elsewhere have replaced Iranian crude oil with barrels from other members of the Organization of the Petroleum Exporting Countries (OPEC).

If oil-related sanctions are lifted, Iran will look to regain export market share, competing with other OPEC members with similar crude oil grades…Iran's crude oil and condensate exports averaged 1.4 million b/d in 2014. In 2011, prior to sanctions, Iran exported 2.6 million b/d, most of which went to Asia, particularly China (550,000 b/d), India (320,000 b/d), Japan (315,000 b/d), and South Korea (250,000 b/d). --- EIA

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For Those Who Need More Proof That Minnesota Is Anti-Business

The Park Rapids Enterprise is reporting:

Offutt says the episode has changed his attitude about investing in any new farming projects in Minnesota.

"I would say that the least amount of expansion in the state of Minnesota is the best for our company," he says. "There are other areas in the United States that are a lot friendlier to agriculture and agriculture production than the state of Minnesota is under its present situation."

So, who is Offutt? Perhaps one of those most familiar with good water stewardship.

The patriarch of the biggest potato producer in the world says his company is not the poor environmental steward critics have accused it of being in a snafu over Minnesota water permits.

Ron Offutt, emeritus chairman of the board of R.D. Offutt Co. in Fargo, N.D., says his company got ahead of itself in applying for more preliminary water well permits than it needed or wanted. But that was, in part, a reaction to a changing permit application process and a rare offer to explore buying land from Potlatch Corp., which has sold thousands of acres it had used as timberlands.

In April, Offutt's company appealed a Minnesota Department of Natural Resources decision to require an Environmental Assessment Worksheet for its 56 water permit applications. A court recently agreed to drop the appeal, after Offutt withdrew all but 18 of those applications. The withdrawal prompted some to question why the company was against the environmental assessments.

See also:

• Tax climate for businesses: North Dakota, #2; Minnesota, #47.
• Business climate: North Dakota vs Minnesota.
• Marvin Windows experience.

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I Can't Make This Stuff Up

California's Governor Brown wants the EPA to "tighten US smog standards." His state would be exempt from the standards the governor wants to see imposed on the rest of the US. His rationale is that the state already has stricter goals in play. In addition, and I can't make this up, California, he says, is at the mercy of ozone from China:

Regulators say that ozone travelling from Asia makes it harder for the state to comply with the current standard. Indeed, the head of the San Joaquin Valley Air Pollution Control District warned that “it’s no longer an exaggeration that getting to even 75 ppb is total economic devastation in the timeline that’s proposed."

CO2, fortunately, stays within national borders. That's why no one here in the US is concerned about the 1,000's of new coal plants China is building.

I can't make this stuff up.

Fracking Rule On Hold -- June 24, 2015

A day late and a dollar short, my earlier post. To clarify: my earlier note was a day late, and a dollar short; the judge's ruling was right on time and worth a gazillion dollars to a lot of folks.

Don sent me the update. The Dickinson Press is reporting -- federal fracking rule on hold.

A federal judge issued a stay Tuesday of a U.S. Bureau of Land Management fracking rule, temporarily halting an Obama administration effort to regulate oil and gas operations on public land nationwide.

The BLM rule had been scheduled to go into effect today before U.S. District Court Judge Scott W. Skavdahl’s decision. The ruling amounted to a legal cease-fire and means permitting of oil and gas wells on federal land will proceed under current regulations for at least another month.

Skavdahl stopped short of issuing the injunction sought by industry groups and oil- and gas-producing states. But he left open the possibility of halting the Obama administration’s effort to police fracking until the matter can be decided in court, a process which could take years.

Wow, when you read the story, the judge played this just right. 

GDP Forecast, 2Q15, Ticks Up -- Now At 2.0 -- June 24, 2015; Greek Deal Collapses

GDP New:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 2.0 percent on June 23, up from 1.9 percent on June 16. Following yesterday morning's existing-home sales report from the National Association of Realtors and this morning's reports on sales and prices of new single-family homes from the U.S. Census Bureau, the nowcast for second-quarter real residential investment growth increased from 7.0 percent to 10.0 percent.

By the way, the government is still massaging figures for 1Q15 GDP; this should be the last and final number. Reuters is reporting:  U.S. first-quarter GDP revised to show slight contraction.

The Commerce Department said on Wednesday gross domestic product fell at a 0.2 percent annual rate in the January-March quarter instead of the 0.7 percent pace of contraction it reported last month.

It should be noted that the contraction was blamed on ... drum roll .. cold weather.  ObamaCare was not mentioned. Cold weather in the first quarter is not new; we see that every winter. ObamaCare, on the other hand ... priceless.

Market freaks out, futures slump: Greek deal collapses. Creditors refuse terms. The new terms:

• Greece gets more bailout money
• Creditors get more promises 

"The Greek deal collapses" was a [London] Telegraph headline. In fact, the AP story simply suggests more of the same, that "divisions exist." Remember, this is only June 24th; the IMF payment is due June 30th, and Greece has already telegraphed it "doesn't need no stinking IMF." Not in those exact words.

Disclaimer: this is not an investment site. Yada, yada, yada.*

By the way, remember all those stories about all the money being withdrawn from Greek banks by their citizens? And yet, the Greek government isn't putting an end to those withdrawals. The Greek government is getting the best of both worlds: a) they aren't putting an end withdrawals from their banks; to do so would be a political disaster; and, b) the deposits being taken from the banks are being replaced by non-Greek European funds. The net effect: a continuing bailout. Bloomberg is reporting:

That’s what it’s now doing. While Greece didn’t ask for an increase in assistance on Wednesday, according to a person familiar with the matter, it has needed fresh approval for a higher ELA limit four times in the past week. An ECB spokesman declined to comment on Greece’s ELA requests.

Via the Greek central bank, the ECB is replacing money withdrawn by depositors fearful that the government can’t agree a deal with its creditors, allowing lenders to rack up an overdraft of almost 90 billion euros ($101 billion) since February.

Quite a racket to say the least. The longer this drags out, the more money the Europeans are giving the Greeks.

*Do not make any investment or financial decisions based on what you read here or what you think you may have read here.  

Wednesday -- June 24, 2015; New Federal Fracking Rules That Were To Take Effect TODAY -- US District Judge Scott Skavdahl, Casper, WY, Put Them On Ice

UPDATE on federal fracking rules: see this note. 

North Dakota rig count appears to have hit bottom -- Reuters is reporting:

The drilling rig count in North Dakota's oil patch, a closely watched metric through which many attempt to divine future crude production, appears to have hit a bottom.

For the past three weeks the count has hovered between 76 and 79, after sliding only slightly from 80 at the end of May. On June 12, the count hit 76, the lowest level since 2009. The count bobbed slightly in the ensuing days, hitting 77 on Tuesday.

It has, in short, been the longest period since oil prices started to slide last fall that the rig count has stayed in the same range, offering many in and near the No. 2 U.S. crude-producing state's energy industry a bit of solace that a nadir has been reached. In early March, for example, the count was at 113.

The apparent stabilization has produced a palpable sigh of relief around North Dakota's western oilfields, where newspapers [and the MillionDollarway blog] print the number daily.

Now, on to President Obama's "war on fracking." Bloomberg is reporting: 

The U.S. government says it can set standards for more than 100,000 wells that make up 11 percent of the nation’s natural gas output and 5 percent of its oil. The states argue they’re doing plenty to make sure fracking is done safely, so oversight should be left to them.

With the new rules set to take effect Wednesday, U.S. District Judge Scott Skavdahl in Casper, Wyoming, may decide in court who is right. Producers say they can’t afford the increased costs and lengthy delays they fear will accompany the new federal rules. Drillers are already struggling because of falling oil prices, which has led to a spate of bankruptcies and missed bond payments. Oil dropped from more than $100 a barrel to as low as $44 in March, undercutting the “shale gale” that drove U.S. production to near record levels.

 Active rigs:

	6/24/2015	06/24/2014	06/24/2013	06/24/2012	06/24/2011
Active Rigs	77	194	185	210	170

RBN Energy: Why Are WTI Prices Stuck at $60/Bbl? (Archived)

Prices for prompt delivery of West Texas Intermediate (WTI) crude as quoted on the CME/NYMEX futures exchange fell by 60% from their high over $107/Bbl in June 2014 to a low under $44/Bbl on March 17, 2015. After recovering about 37% in April and May WTI prices have remained stuck close to $60/Bbl ever since - closing yesterday (June 23, 2015) at $61.01/Bbl.

With market contango narrowing, inventory levels falling, and refinery throughputs rising – why aren’t prices moving higher faster?

Today we review the fundamental data.

For the past year oil market analysts have been busier than shrinks after Thanksgiving – trying to explain what happened and what comes next - since crude prices started falling in June 2014. As we explained last fall the root cause for the price meltdown was a worldwide increase in crude supplies coupled with a downturn in demand.

Crude from U.S. shale based production has been increasing at the rate of 1 MMb/d a year for the past three years - pushing out imports into the world market and creating increased competition between producers to retain their market share and placing downward pressure on prices. When producer group OPEC failed to signal any intent to try and prop up prices at their Thanksgiving meeting the rout gathered pace.

With too much crude and too few buyers the market condition known as contango developed where future prices are expected to be higher than spot prices today – encouraging the use of storage to “save” cheap crude today for use when prices recover.

Without new sources of demand or supply interruptions, a contango market keeps downward pressure on today’s market prices as storage fills up and becomes more difficult and expensive to find – increasing the contango spread required to cover storage costs.

In March of 2015 we described how sky-high inventory levels were still keeping up the downward pressure on crude prices. More recently we posted a blog at the beginning of June (2015) suggesting that low crude prices were here to stay in a new era of abundance.

Other analysts contend that the narrowing contango, falling inventory levels and increased refinery demand seen recently – coupled with a slow down in crude production – are signs that prices should recover further this year. In this two part blog series we look at the impact of evolving fundamental signals on prices.

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This Is How Wal-Mart Will Pay Higher Wages

Reuters is reporting: Wal-Mart to impose charges on suppliers as its costs mount --

"It is not the way Walmart has done business in the past," Jetta said. "This approach suggests that they are seeking areas to offset their increased investment in wages, as well as offset their lack of organic revenue growth."

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Netflix To Split 7 -1 

CNBC is reporting:

In soaring almost 100 percent this year, Netflix shares have reached nearly $700. As of last week, Netflix was the third-most expensive stock in the S&P 500.

I've talked about Netflix for quite some time. 

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Disclaimer

This is not an investment site. Do not make any investment or financial decisions based on what our read here or what you think you may have read here.

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Collapse

The Greek deal has collapsed. Creditors refuse new terms. The new terms:

a) more bailout money for Greece
b) more promises from Greece