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From: Dennis Roth5/7/2012 7:24:54 AM
6 Recommendations   of 198386
Yemen Attacks Disrupt Natural Gas Supplies In Massachusetts.

BOSTON — Electricity grid managers are preparing for possible spring and summer power disruptions in the Boston area after attacks in Yemen destroyed a pipeline and cut back the local supply of liquefied natural gas.

LNG from Yemen is a tiny percentage of the abundant natural gas supplies in the U.S., but certain power generators in the Boston area and northeastern Massachusetts depend on it.

If power demand spikes or another local generator unexpectedly shuts down in May or June, the regional grid’s ability to reliably produce electricity will be at risk, according to grid operator ISO New England.


That's an absurd situation to get into. A natural gas glut in the rest of the nation but New England suffers nat gas and power shortages because someone blows up a pipeline in Yemen.

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To: E_K_S who wrote (168105)5/7/2012 7:27:04 AM
From: donc
   of 198386

..crude oil (wtic) seasonal is down from now into July

but there is solid chart support at 92..


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From: CommanderCricket5/7/2012 8:02:57 AM
   of 198386
I hadn't realized TGA was mostly out of Yemen. Only 297 Bopd?

TransGlobe Energy Corporation Announces First Quarter 2012 Financial and Operating Results

Press Release: TransGlobe Energy Corporation – 9 minutes agoCompanies:TransGlobe Energy Corp.TransGlobe Energy Corp.RELATED QUOTESSymbol Price Change
TGL.TO 13.21 0.00

CALGARY, ALBERTA--(Marketwire -05/07/12)- TransGlobe Energy Corporation ("TransGlobe" or the "Company") (TGL.TO - News) (TGA - News) is pleased to announce its financial and operating results for the three months ended March 31, 2012. All dollar values are expressed in United States dollars unless otherwise stated.


-- Record first quarter average production of 16,720 Bopd, (Egypt 16,423 Bopd, Yemen 297 Bopd), a 39% increase over fourth quarter 2011;

-- First quarter funds flow of $36.1 million ($0.48/share), a 36% increase over fourth quarter 2011;

-- First quarter net earnings of $18.8 million ($0.25/share), prior to a $7.8 million $0.10/share) non-cash unrealized loss on financial instruments (convertible debentures) resulting in reported net earnings of $11.0 million ($0.15/share);

-- Drilled 9 wells in first quarter resulting in 9 oil wells at West Gharib;

-- Raised gross proceeds of Cdn$97.8 million through a convertible debenture offering in February;

-- Announced $15.0 million Share Purchase Agreement (May 1, 2012) to acquire interests in South Alamein and South Mariut;

-- Increased capital budget to $89.3 million (an increase of $13.6

A conference call to discuss TransGlobe's 2012 first quarter results presented in this news release will be held Monday, May 7, 2012 at 9:00 AM Mountain Time (00 AM Eastern Time) and is accessible to all interested parties by dialing 1-416-340-2216 or toll-free 1-866-226-1792 (see also TransGlobe's news release dated May 1, 2012). The webcast may be accessed at

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From: CommanderCricket5/7/2012 8:13:33 AM
   of 198386
Another GOM deep water miss.

Nexen, Statoil taste dust with Kakuna probe

Off the map: Kakuna probe proves unsuccessful, but Nexen says it has broad prospects in US Gulf

Bill Lehane

07 May 2012 10:49 GMT

Canada’s Nexen has said its Kakuna subsalt well in the deep-water US Gulf of Mexico turned up no commercial hydrocarbons.

The Calgary-based, New York- and Toronto-listed explorer said the well was being plugged and abandoned after the exploration reversal at Green Canyon block 504.

Kakuna was drilled to a depth of 30,300 feet by the Ensco 8502 semi-submersible at a total cost of around $120 million, or $80 million after tax, Nexen said.

The probe, which had targeted prospective resources of 400 million barrels, was one of the first wildcat wells in the US Gulf of the post-Macondo era.

Nexen operates the prospect on a 72.5% interest, with Statoil holding the remaining 27.5%.

The explorer said the duster was only one of a broad inventory of prospects it holds in the Gulf, citing the sub-salt Miocene and Norphlet plays surrounding Shell’s Appomattox discovery, in which it holds a 20% stake.

The independent is planning to drill around 15 offshore wells this year at plays in the Gulf, the UK North Sea and west Africa.

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From: CommanderCricket5/7/2012 8:19:19 AM
   of 198386
Record gas use by U.S. utilities fails to drive up price

Posted on May 7, 2012 at 6:51 am by Bloomberg in Energy demand, Fracking, Natural Gas

(Photo: AEI Services)

U.S. utilities led by Southern Co. (SO) are burning a record amount of natural gas for generating electricity without triggering a forecasted boost to the fuel’s price from near 10-year lows.

The power companies used 34 percent more gas in February than a year earlier, Energy Department data show. Even Atlanta- based Southern, historically one of the largest U.S. coal-plant operators, is on pace to consume more of the cleaner-burning fuel than coal in 2012 for the first time in its 100-year history. Utilities are the nation’s biggest gas consumers.

The historic switch to gas is set to peak this year without fulfilling industry predictions that it would eat up inventory and drive up gas prices. That’s because unparalleled output from new shale fields is oversupplying the $95 billion U.S. gas market, postponing relief for hundreds of producers.

Record gas use “may not be the panacea that people think” it will be, Jason Schenker, president of Prestige Economics LLC, based in Austin, Texas, said in a telephone interview. Schenker was the fourth-best predictor of gas prices in the first quarter, according to data compiled by Bloomberg.

The difficulty of forecasting fuel prices led managers of two energy funds to close in the last four weeks, including John Arnold’s Centaurus Energy Master Fund.

While benchmark U.S. gas prices have gained about 38 cents from an intraday low of $1.902 per million British thermal units on April 19, most analysts are not calling the bottom of the price cycle for a fuel that traded above $13 in 2008.

No Bottom Yet

“I’m not expecting a lot of upside through summer” for gas prices, Tim Evans, energy analyst with Citi Futures Perspective, said in a phone interview. “We’re still sitting on a massive inventory of storage.”

Bulging gas stocks are also being sustained by a combination of unusual weather that’s depressing electricity sales, as well as decisions by power company executives to avoid becoming over-reliant on the historically volatile fuel.

Marketed gas production reached a record 66.22 billion cubic feet a day in 2011 and may rise another 4.5 percent this year, according to Energy Department estimates. Inventories rose to 2.576 trillion cubic feet the week ended April 27, 50 percent above the five-year average for the week, the agency reported May 3.

Cheap gas, rather than helping power producers like Southern and Exelon Corp. (EXC), undercuts their revenue because it drives down wholesale electricity prices, squeezing margins for plants that run on nuclear, renewable and coal power. The utilities, for many reasons, are close to their limit of shifting the mix toward gas.

Elasticity Limits

“You have stretched the rubber band in terms of coal-to- gas switching as much as you can,” Arun Jayaram, an analyst with Credit Suisse in New York, said in an interview.

Meteorologists say the fourth-warmest winter on record that just ended will be followed by a cooler summer for much of the U.S. compared with a year ago. If weather remains mild, total power consumption will be 1.8 percent lower from July through September from a year earlier, the Energy Department said.

Gas consumption averaged 5 billion cubic feet higher at power plants this year through April 10 compared to year-ago levels, Credit Suisse’s Jayaram said. He predicts increases will ultimately slow to an average of 3 billion cubic feet a day this year as generators manage abundant inventories of both coal and natural gas.

To make a dent in gas inventories, the power industry will need to burn at least 4.5 billion cubic feet more per day on average for the year above 2011 levels, according to data compiled by Bloomberg New Energy Finance.

Unprecedented Burn

That is “absolutely unprecedented, but not out of the question,” Charles Blanchard, fossil fuels analyst for Bloomberg’s New Energy Finance unit, said in an e-mail.

Such consumption would shatter the all-time monthly gas generation record of 121 terawatt-hours, set in August 2010. Blanchard thinks the sector could reach around 130 terawatt- hours during the summer months, but cautioned recent forecasts of cooler, El Nino-influenced weather “would be terrible for gas.”

The power sector is predicted to account for 35 percent of total U.S. demand this year, up from 31 percent last year, Energy Department data show. The trend has accelerated as gas prices fell in much of the country below coal, traditionally the second-cheapest source of power behind nuclear energy.

Coal remains the leading source of power in the U.S., but has fallen to 37 percent of U.S. electricity generated during January and February, combined, from 46 percent a year ago, Energy Department show.

Coal’s Declining Role

“For the first time since the 1970s, we’ve seen coal’s share of energy production fall below 40 percent,” David Herr, leader of Duff & Phelps (DUF)’ energy and mining practice, said during a March 28 webcast. In 2010, “coal was sitting at 50 percent, where it had been for the last decade.”

Companies such as Duke (DUK), Dominion and Southern already had been increasing their reliance on natural gas in anticipation of tougher federal pollution standards and as gas prices began falling from a three-year peak on July 2, 2008 of $13.69 per million British thermal units.

Falling wholesale electricity prices also spurred the switch by making it uneconomical for power producers to retrofit older, smaller coal-fired plants to comply with tougher federal emissions standards, Herr said.

As gas became the preferred fuel source, Southern and other power producers fired up generation capacity built after the last gas-price plunge a decade ago.

Using Spare Capacity

Southern ran its combined-cycle gas turbine fleet at a near-record 70 percent of capacity during the first quarter, doubling the plants typical use, Thomas Fanning, Southern’s chairman and chief executive officer, said in an April 25 phone interview.

Southern, whose energy production is nearly as great as the country of Australia, expects to derive 47 percent of its power from gas this year and 35 percent from coal. Five years ago, the company produced 70 percent of its power from coal and 16 percent from natural gas, Fanning said.

Southern has tried to balance its power-plant fleet with a mix of nuclear energy, coal, gas and plants that can run on either fuel “so we can respond to the changing fuel market,” Fanning said. “That’s exactly what we’re doing.”

Gas output in the lower 48 states has grown greatly because of hydraulic fracturing, or fracking, and other improved drilling techniques that make it economic to extract fossil fuels from shale rock like the Marcellus in the U.S. Northeast. Drilling in oil-rich reserves, such as in North Dakota and Texas, often also yield gas.

Some of the factors affecting prices, excluding swelling supplies, are difficult to gauge. Blanchard said examples include the lingering effects of record winter warmth and the maximum use utilities will be able to derive from combined-cycle gas plants that infrequently ran at greater than 40 percent capacity.

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From: CommanderCricket5/7/2012 8:23:00 AM
6 Recommendations   of 198386
Ehrlich, False Prophets and the ‘Futures’ Market
By Peter C Glover
Posted on May. 04, 2012

When Elijah stood on Mount Carmel he faced a formidable array of 950 prophets (I Kings 18:19). All were resolute in their populist ‘consensus’ theory about a troubling environmental matter. But Elijah didn’t mind the odds. He wasn’t interested in predictions and theory, just hard facts. The issue on Carmel was one that countless would-be prophets throughout the ages have played on: weather (no rain) and climate change (a three-year drought).

It didn’t end well for the false prophets on Carmel. And it was faith in their theoretic sacrificial solutions that proved to be their downfall. These days, of course, we don’t put false prophets to the sword. Instead we put them on the public payroll, give them status awards and grant them high-profile media prestige, no matter how pathetic their prophetic insight may have been. Take Paul Ehrlich, for example.

Ehrlich came to prominence in 1968 with the publication of his environmental blockbuster The Population Bomb. The book’s central Malthusian thesis is that a growing population is unsustainable in a world of dwindling finite resources. As Malthus’ scenario failed to materialize, so too Ehrlich’s apocalyptic vision of hungry and dead bodies on the streets in the 1970s proved a total fiction. Not that this has deterred Ehrlich. He has continued to make a healthy living from a litany of population predictions – not one of which has come to pass.

The truth is that Ehrlich is the greatest failed prophet of our age. Yet amazingly, not only does he continue to collect his university stipend and pick up lucrative public appearance and book deals, for all his blatant failures, is still feted by the media. Take the journalistic drivel with which John Vidal’s Guardian article began at the end of April. Vidal’s interview announces Ehrlich as “the world’s most renowned population analyst”. So what track record of predictive success to date warrants such approbation? Ehrlich’s prophecies include:

  • That the battle to feed humanity was over. In the 1970s hundreds of millions of people, including Americans, were going to starve to death. (Of course, if eco-warriors butted out, GM foods could easily eradicate global hunger within a decade. But, in any event, food production is running well in excess of global population growth. To top it all, the obesity epidemic currently kills hundreds of thousands every year.)
  • England would not exist in the year 2000 (I just looked out of the window. It’s still here.)
  • “Smog disasters” would kill 200,000 people in New York and Los Angeles in 1973. (Not only did it not happen, both cities continue to have the best air quality they have had in decades.)
  • In 1976, “before 1985 mankind will enter a genuine age of which the accessible supplies of many key minerals will be facing depletion.” (Heard of the shale gas and oil revolutions that are set to last for hundreds of years and, beyond that, centuries of methane hydrates?)
  • In an Atlantic article in the late 1990s Ehrlich maintained that anyone who believed technology would provide the answers to the problem of scarcity was either a liar or a fool. (Heard of the technique of ‘hydraulic fracturing’ that has set in motion the energy game-changing shale revolution – not to mention deepwater reserves – facilitating century’s more of both gas and oil and cutting US gas prices by a quarter?)
  • In 1972 Ehrlich suggested adding a forced sterilization agent to “staple food” and to the water supply. (Shades of the SF movie Soylent Green? Would you trust any government who effectively ‘poisoned’ the food and water supply as part of a program of ‘forced sterilization’?)
All of Ehrlich’s solutions to his predictions are, of course, rooted in the need to overthrow democracy with a world government controlling and enforcing a global program of distribution of food and energy consumption. Ah yes, world domination – and a final solution. And if the very thought of this 1984-style one world government turns your liberty-loving stomach, consider what Ehrlich-esque policies have already achieved. In the 1950s the UN imposed a global ban on the use of DDT after environmentalists complained a few birds were accidently killed by DDT (actually through slight over-use of the chemical). DDT was singularly responsible for eradicating the world’s single greatest killer: malaria. As a direct result of the ban by the EPA in 1972, it is estimated that around a million people a year in sub-Saharan Africa alone die from the disease. The “solutions” of environmentalist visionaries should come with a global health warning attached.

No wonder Ehrlich has variously been referred to as “worse than Hitler” and “the Bernie Madoff of science”. To be fair, Ehrlich’s renewed concerns articulated in Vidal’s Guardian interview, about how the earth’s resources can sustain the 9 billion people predicted for 2050, was actually triggered by a new report from the Johnny-come-lately prophets-of-gloom at the Royal Society. Remember when the RS was the doyen of Newtonian empiricist real science? Not anymore. In a desperate bid to become appear “relevant” and justify its increasingly publicly-funded soaring price tag, the RS leadership is increasingly eschewing real science for speculative science.

Published in April 2012, the key recommendations of the Royal Society’s People and the Planet are thoroughly Malthusian. Like Ehrlich, the RS report is concerned about the Earth’s finite resources failing to keep up with population growth. It demands that developed and emerging economies (that’s everyone) “stabilise” and “reduce material consumption”. And, chiefly, that “reproductive health and voluntary family planning programmes urgently require political leadership” to cut “fertility rates”. Pretty much your standard environmental doom and gloom – and based on an erroneous understanding of “finite resources”. As I have written elsewhere, the RS is developing a culture of anti-science by exchanging its empiricist soul for a mess of prophetic theory.

Statistician William Briggs was recently commended by one commentator for having written the “best sentence, ever”. Briggs had observed that “Love of theory is the root of all evil”. Like all mathematicians he lives in a world of facts that add up, so I can see where Briggs is coming from; but he’s quite wrong. The fact is – and continuing the religious theme in this article – Jesus’ line about “the love of money being the root of all evil” beats it hands down. And here’s why. No one would spend time publicly expounding preposterous prophetic theories that keep failing if there wasn’t a public appetite for them – and if there weren’t mega-bucks to be made in the speculative ‘futures’ market. Public speaking engagements, book tours, disaster movies, headline-grabbing articles majoring on apocalyptic and sensationalism and warnings are all money-spinning themes. Then there are the rewards of academia. In 1990 alone, even as the failed prophecies racked up, Ehrlich pocketed a cool $345,000 through winning the MacArthur Foundations’ “genius award” and another $60,000 being one half of an award from the Swedish Royal Academy of Science. “Genius” then, we must concede. Any butterfly specialist – which is what Ehrlich is – that can screw $400,000+ out of two international science academies must have some chutzpah.

But we can’t blame junk journalism and pseudo-science only for the lucrative nature of the apocalyptic ‘futures’ market. Before facing down his antagonists, Elijah asked “the people” a very pertinent question: “How long will you falter between two opinions?” He wanted to know how long “the people” would continue to be – like Vidal and The Guardian – so gullible as to keep giving credence to the false prophets of apocalyptic environmentalism? Good question.

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To: Jim P. who wrote (168100)5/7/2012 8:27:58 AM
From: Ed Ajootian
1 Recommendation   of 198386
JimP, Osage Exploration (OEDV.OB) -- thanks, I also think that RRC's wells are the most analogous since they are all east of the Nemaha Ridge, notwithstanding that they are farther away from Logan County than many of SD's wells. The magic here, at least insofar as getting a higher mix of oil vs. gas, seems to be to drill east of the Nemaha.

Regarding waiting for a pullback, I agree that the chances of one occurring at this point are great given how much and how quickly the stock has skyrocketed. The production figures that will be in the 1Q will be a big improvement over the prior quarter but will not come close to supporting the current stock price so there is a chance that some would take profits at that point. Countering that is the likelihood (at least IMO) that Osage will use the 1Q earnings PR as an opportunity to update us on their acreage situation, the total current quantity of which may surprise a few folks. Also, at some point here (and I believe sooner than later) we should be getting the news of what the next well (the Krittenbrink) IP'd at. That well is even closer to the Nemaha than Osage's first well (the Wolf), and that is the well that Devon is now drilling one of their wells only 3 miles to the east. I believe Osage's thinking is that the closer you get to the Nemaha, the more naturally fractured the Miss. formation is, which I believe should translate to greater permeability.

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From: CommanderCricket5/7/2012 9:21:47 AM
   of 198386
Very nice recovery in the pre-market. The European markets aren't acting like it's the end of world. FTSE is closed though.

Wonder if it holds after open?

Would be nice to have Friday establish a low, especially for my CLF puts.

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To: t4texas who wrote (168103)5/7/2012 11:02:42 AM
From: Dennis Roth
2 Recommendations   of 198386
>>germany ain't got none as far as i know<<

Germany does have oil and gas fields and prospective formations.


However, as this BBC columnist points out, the use of modern oil and gas production techniques to
get at tight gas and oil in Europe may fall to the same fate that modern biotech agriculture did, become
a victim of fact-free fear campaigns.

Is shale gas the GM of energy?

All shale formations are different, and companies will employ a variety of regimes when they frack. The US experience indicates a lot of variability, and some learning through experience.

Presumably European practitioners would learn by doing as well.

But in the biotech agriculture field, campaigners have argued there should be no planting until crops are proven to be "safe" while at the same time wrecking trials that could demonstrate safety, thereby ensuring no take-off.

Shale gas protests around Europe are beginning to see the same kind of dual messaging

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To: Dennis Roth who wrote (168122)5/7/2012 11:30:18 AM
From: t4texas
   of 198386
some might feel schadenfreude, but the massachusetts situation for a pipeline is absurd as you wrote. can people in mass think anyone but they are responsible?

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