Spectra Energy (SE +1.5%), American Electric Power (AEP +2.3%) and Chesapeake Energy (CHK +1%) announce their proposed expansion of the Ohio Pipeline Energy Network, connecting Ohio's Utica and Marcellus shale gas supplies with the fast-growing natural gas-fired power generator markets attached to the system. [View news story]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
The point I wanted to make was that the technology wasn't lacking; human error caused the blowout. It used to be common knowledge that a cement job was never started until the mud column contained not a single bubble of gas. Dual wells might work, but given the predilections of human nature, the sense of security afforded by the backup well might produce less diligence than might otherwise be the case.
LNG's Secondary Offering Is A Golden Gift To Investors [View article]
Didn't read everything closely, but didn't see anything about LNG tankers. A price tag of one billion dollars per tanker and netbacks buried in some global contracts suggests that a closer look at those details is warranted before reaching for your billfold.
Good picks for good reasons, although my 50+ years of watching stock market behavior leads me to believe that perception rules the market rather than reality. Denbury has acquired some of the best reservoirs for tertiery recovery that exist in the U.S. Lots of oil left to recover there. And probably at a much lower cost than oil obtained by fracturing shale. Natural gas is in the toilet, where it has always been except for a few scattered years, but you have to admire Southwestern's guts (and honesty) in publishing their decline curves. Haven't seen that in the reports of the darlings of Wall Street. Little hard to B.S. people when they are looking at production rates in free fall.
Virtually No One Can Predict Natural Gas Prices [View article]
Just to be accurate, a big upward move in the price off diesel came after the U.S. set the maximum sulfur content at 10 parts per million. Our old standard for sulfur content in diesel fuel was 300 parts per million. Europe adopted 50 parts per million, so we felt compelled to go them one better. This ran up the cost to refine ultra low sulfur diesel close to that of gasoline. Since our government never tests a program for effectiveness, nor does a cost/benefit analysis, the only thing we know for certain is that the floor for diesel prices is now $3.00/gallon; whereas, before the new standard it was about 50 Cents/gallon.
Virtually No One Can Predict Natural Gas Prices [View article]
The game has certainly changed. In 1955, I went to work for the domestic affiliate of what is now Exxon. Wells that hit natural gas were either plugged or shut in; gas associated with oil production was flared. If you could find a market for natural gas, the going price was 5 cents per Mcf (crude was around $2.50 per barrel). If you messed up, you were transferred to the natural gas division and your career was over.
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
Once had an onshore well that blewout that we couldn't get under control, so I called Red Adair, the renowned wild well fighter (now deceased). In filling him in on what was happening, he asked what I was thinking about doing. I told him I thought I would pump cement down the drill pipe and seal off the formation that had blown out. He said " Harry, that is the worst thing you could possibly do. It is conventional wisdom and it is the first thing most operators are prone to do." Naturally, I asked why this wasn't a good idea (trying not to sound offended). He said that as the cement reached the bottom of the hole, the gas being blown out of the formation would cut the cement and blow the gas cut slurry up the annulus (space between the drill pipe and the wall of the hole). He said "this will bridge off (block the annulus) at some point and you will think that you have it under control. Then, when you start to break off your cementing connections, the bridge will fail and the well will blow out again. Now, he went on, you have the worst of all worlds - cement scattered up the hole with no idea of exactly where it is or how much it has been weakened by gas cutting.
The only person at fault in the gulf spill was the company man who gave the order to start cementing before the mud weight had been brought to a level sufficient to stop gas flow from the pay zone. The intermittent gas flow cut the cement slurry, weakening it and displacing it from the place it was intended (and required to be).
Our problems are only going to continue to grow larger until industry and government alike can get back to admitting mistakes and putting the training in place to avoid repeating them, as opposed to our collective malignancy of always trying to find someone or something else to blame. Congressional hearings and more bureaucrats won't ever produce a solution.
Virtually No One Can Predict Natural Gas Prices [View article]
Devon Shire is right - no one can predict natural gas prices. And no one can explain how a government that wants to control every other aspect of our lives can continue with an "energy policy" (that is a joke) that fosters payment of five times as much for energy in the form of foreign oil as natural gas producers get for the same energy equivalent of domestic gas.
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
There seems to be a thread running through the foregoing comments by some that private industry never does anything right and more Government oversight is needed. Does anyone have an example of anything that the federal government has done right in the last 20 or 30 years ? Just what is it that gives some folks such confidence that more government is the solution ? Perhaps it is the exemplary handling of federal financial regulations during the past decade, or the prosecution of the handful of crooks that brought down the economy. (Any of them in jail yet or are they still advising the government ?)
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
I would do it as long as it doesn't contain anything other than the stuff used in fracing fluids. However, I would want assurances that dry cleaners in the area haven't been dumping PCPs in the local landfill for the past 50 years. Several years ago, in a move to be politically correct, Oklahoma adopted federal standards for the maximum levels of arsenic and salt that could exit in drinking water. Turned out that all of the State's rural water wells have higher levels than the federal standard, as has been the case for as long as water tests have been made.
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
TxPete has it exactly right. Thoughtful analysis based on scientific fact is a rarity inside the Beltway. We don't take all of the cars off the road because some people violate the law and drive drunk. If some oil and gas operators violate state regulations that were set up years ago to protect fresh water we can't punish the entire industry. Believe it or not, back in the 1920's some operators pulled the surface casing (the primary string that protects fresh water) after the state inspector left in order to use it in the next well. And we still have fresh water a century later. The point is, we need some sense of proportion. As the bible says "Where no oxen are, the crib is clean, but much increase is by the strength of the ox."
SandRidge Energy: Worries Regarding Future Capital Expenditures Overblown [View article]
Royalty trusts such as SD's Mississippian Trust I (MTI) introduce some uncertainties that are seldom covered by analysts (and perhaps not well understood). Contrary to popular belief, such trusts impose some indeterminate financial risks on the issuer as well as on the purchasers of trust units. For example, SD conveyed to the Trust 90% of its interest in 37 completed wells and 50% of its interest in 123 wells yet to be drilled (the 123 YTBDW) SD has to pay 100% of the cost to operate the 37 wells and that cost will significantly exceed the 10% interest it retained. The Mississippian horizontal play is relatively new and drilling and completion costs have varied considerably. Although it is likely that SD priced the Trust Units to cover such contingencies, the amount received from the sale thereof is fixed and finite; whereas, the expenditures SD is obliged to make to drill, complete and operate the 123 YTBDW is open ended. Although SD retained a 50% interest in the in the 123 YTBDW, Mississippian horizontal wells produce large volumes of salt water; consequently, operating costs are relatively high. Obviously, properties with high operating costs are more sensitive to oil prices and reach their economic limit much earlier than those with lower operating costs. It is a mathematical certainty that SD will reach its economic limit twice as fast paying 100% of the operating costs while receiving only 50% of the revenue than would be the case were it receiving 100% of the revenue. When this economic limit is reached, SD will be faced with the decision to either operate the wells at a loss to the Company, or plug the wells at a time when they are still producing attractive revenue for the trust beneficiaries. The first option isn't prudent and the second spells litigation with a capital L.
In a scorching critique, Argus analyst Phil Weiss nails Chesapeake Energy (CHK) with a Sell rating, citing skepticism about the company’s "ability to lower debt and slow spending," "off-balance-sheet debt" and ownership structure that’s "becoming more and more convoluted." Oil and gas explorer, financial firm, oilfield services - Weiss sees CHK becoming "a jack-of-all-trades and master of none." [View news story]
Monetizing their assets. So that is the definition of selling assets that have been quantified and putting the proceeds into assets that haven't been quantified. I always wondered what that meant.
When Will Natural Gas Producers See An Improvement In Prices? [View article]
Kind of reminds me of the 15 years following the collapse of oil and gas prices in 1981. We had a group of investors in our drilling programs that we met with annually at the Hartford Golf Club. Around the mid 1990's, one of our regulars said "Harry, every year you tell us that natural gas prices are going to rise. One of these years you are going to be right."
Spectra Energy (SE +1.5%), American Electric Power (AEP +2.3%) and Chesapeake Energy (CHK +1%) announce their proposed expansion of the Ohio Pipeline Energy Network, connecting Ohio's Utica and Marcellus shale gas supplies with the fast-growing natural gas-fired power generator markets attached to the system. [View news story]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
LNG's Secondary Offering Is A Golden Gift To Investors [View article]
5 Must-Own Energy Stocks For 2012 [View article]
MLPs Offer Steady Income And Exposure to Shale Gas Development [View article]
Virtually No One Can Predict Natural Gas Prices [View article]
Virtually No One Can Predict Natural Gas Prices [View article]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
The only person at fault in the gulf spill was the company man who gave the order to start cementing before the mud weight had been brought to a level sufficient to stop gas flow from the pay zone. The intermittent gas flow cut the cement slurry, weakening it and displacing it from the place it was intended (and required to be).
Our problems are only going to continue to grow larger until industry and government alike can get back to admitting mistakes and putting the training in place to avoid repeating them, as opposed to our collective malignancy of always trying to find someone or something else to blame. Congressional hearings and more bureaucrats won't ever produce a solution.
Virtually No One Can Predict Natural Gas Prices [View article]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
Why Is It So Hard To Apply Common Sense In The Fracking Debate? [View article]
SandRidge Energy: Worries Regarding Future Capital Expenditures Overblown [View article]
In a scorching critique, Argus analyst Phil Weiss nails Chesapeake Energy (CHK) with a Sell rating, citing skepticism about the company’s "ability to lower debt and slow spending," "off-balance-sheet debt" and ownership structure that’s "becoming more and more convoluted." Oil and gas explorer, financial firm, oilfield services - Weiss sees CHK becoming "a jack-of-all-trades and master of none." [View news story]
When Will Natural Gas Producers See An Improvement In Prices? [View article]