Serena Williams is back on the court at Wimbledon, but there’s a big milestone her daughter just had that caused the first-time mom to sob.“She took her first steps… I was training and missed it. I cried,” Williams tweeted Saturday, July 7 of Alexis Olympia Ohanian Jr.The post was a simple one but it drew lots of responses from fans, including other moms who were in the same boat at the 23-time Grand Slam winner.“It doesn’t count until mommy sees it. Nothing counts until mommy sees it.”“She is practicing so you can see the real ones. ❤,” fellow celebrity mom Chrissy Teigen tweeted.“You didn’t miss it, mommy. You facilitated it. Your child still lives right there. Make those happy tears & I mean it.”“Ah, Serena. I’m with you there. I’m in Russia at a World Cup. I watched mine take her first steps on a video 😓. She’ll be proud of you when she grows up (I have to keep telling myself).”“I missed a bunch of firsts while I was at work. I hear ya, mama. It’s not easy. But our girls see us out there grinding + living our dreams and that’s got to mean something. Good luck in London — my daughter and I are both rooting for you! ❤”“I took my 1st child all the way to Israel on a trade mission. During a meeting, I heard cheering out in the waiting area … Yup, staff and husband and assorted strangers saw her 1st steps. It all turns out okay. #workingmomsrock.”This isn’t the first time Williams has been candid about tearful mommy moments. When it came time to start shedding the baby weight, Williams realized she was having a difficult time despite working out and following a vegan-only diet.“I feel like everyone says, ‘You’re so thin when you breastfeed,’” she told reporters at a Sunday press conference. “What I’ve learned through the experience — everybody is different, every person is different, every physical body is different. For my body, it didn’t work, no matter how much I worked out, no matter how much I did, it didn’t work for me.”So, Williams sat down, spoke to Olympia and got emotional.“I literally sat Olympia in my arms, I talked to her, we prayed about it,” she said. “I told her, ‘Look, I’m going to stop. Mommy has to do this.’ I cried a little bit, not as much as I thought I was. She was fine.”
Struggling 35-year-olds mostly rebounded nicelyQuarterbacks who posted subpar numbers in their first five games during their age-35 season and how they fared in rest of that year, 1978-2017 Brett Favre2004GNB86.97.186.07.195.47.8 Ken Anderson1984CIN82.07.368.07.796.17.6 Matt Hasselbeck2010SEA83.36.974.86.472.37.0 Jim Hart1979STL70.66.949.05.759.06.0 Dan Fouts1986SD81.87.855.46.384.07.7 The Steelers may be 3-2, but the mood in Pittsburgh is dour. Ben Roethlisberger is coming off a five-interception fiasco against the Jacksonville Jaguars, the latest and worst in a run of lukewarm performances this season. Plenty in Steeler nation are beginning to question whether the 35-year-old Roethlisberger has hit the wall. One of those people is the actual Ben Roethlisberger.The numbers are definitely not pretty, especially when compared to his career averages. That interception festival he hosted in Week 5 torched his passer rating, which has sunk to 75.8 and is way below his 94.1 career rating entering the season. More alarming than the spate of picks is that Roethlisberger’s yards per attempt, which for his career prior to this year stood at a near all-time-best 7.9, is a career-low 6.5 so far this season.But a closer look at the numbers shows there’s good reason to believe that this bad stretch is just that: a bad stretch. Here are the key reasons Steelers fans should still have hope — regardless of what Roethlisberger himself is saying or thinking.History is on his sideWe identified several quarterbacks who struggled in the first five games of their age-35 seasons when compared to what they did through age 34.1We looked at quarterbacks going back to 1978 to make sure all of them had played in the merged NFL for a decent amount of time. To qualify for the list, each quarterback needed to have a minimum of 125 pass attempts through five games. In almost every case, these QBs bounced back to something much closer to their established levels. To be sure, there’s some selection bias at play here — most of these quarterbacks are generally excellent, because erratic and unreliable passers do not usually last in the NFL until they are 35. CAREERGAMES 1-5GAMES 6-16 Jim Kelly1995BUF85.87.567.86.387.07.1 Trent Green2005KAN87.97.780.56.994.38.3 Drew Brees2014NOR95.37.591.87.299.67.7 PLAYERYEARTMRATING*YPA*RATINGYPARATINGYPA Ben Roethlisberger2017PIT94.17.975.86.5 *Through age-34 season.Minimum 125 passes in first five games, with a QB rating worse than career numbers prior to that season.Source: Pro-Football-Reference.com Among the passers on this list, the average QB rating improved from 71.2 in the first five games to 86.0 for the remainder of the season. Their yards per attempt also rebounded, from a pedestrian 6.7 to a solid 7.4, on average. If Roethlisberger improves at the same rate, his passer rating for the rest of the year would be 88.4 and his yards per attempt would bounce up to 7.2. But Hall of Famers Dan Fouts and Jim Kelly beat those averages, so it’s certainly possible that Roethlisberger could outperform them as well.Roethlisberger is still doing Roethlisberger thingsWhile the box scores have been ugly, many of Roethlisberger’s underlying numbers have been typical for his career. His accuracy hasn’t declined significantly: Only 17.5 percent of his throws have been off target, which is only a shade worse than the 16.9 percent rate he posted in the regular season from 2014 to 2016. And on deep passes,2More than 10 yards. Roethlisberger has actually been a hair more accurate, 28.2 percent of his throws have been off target this year compared to 28.3 percent in the past three years.You would think that as Roethlisberger ages, he would start to lose his trademark ability to move outside the pocket on broken plays and find something down the field. But in a limited sample so far this year, he has still been effective when chased from the pocket — he has posted a 101.2 passer rating on just nine dropbacks in these situations this year compared with 124.2 on 93 dropbacks in the prior three seasons.One logical explanation for Roethlisberger’s poor start would be that something was amiss with his offensive line. Perhaps he’s under more pressure than usual? But in fact, the Steelers QB is tied with Oakland’s Derek Carr for the least pressured quarterback in the league this year — both have been under threat on just 15.1 percent of dropbacks. And that’s the way it has been for a while in Pittsburgh; Roethlisberger had the second-lowest pressure rate in the league (behind Peyton Manning) from 2014-16.So if Roethlisberger hasn’t suddenly become inaccurate and he’s not suddenly facing more pressure, the Steelers’ offensive problems may extend beyond the QB and O-line.Bell and Brown are not helping mattersThe real explanation for Roethlisberger’s poor start may be the decline in efficiency of his two top targets, wideout Antonio Brown and running back Le’Veon Bell.On Roethlisberger’s 62 targets to Brown this year, his passer rating has dropped to just 71, down from 112.2 on 480 targets in the past three years. And while it’s hard to tell from a passer rating whether the quarterback or receiver is more to blame, other stats provide some evidence that the 29-year-old Brown is not quite himself this year. According to the NFL, defenses are playing Brown much more tightly at the snap — his average cushion has declined from 5.2 to 4.5 yards, one of the lowest among all receivers. But he’s not making defensive backs pay by running by them, as his average separation is unchanged (2.9 yards).Bell’s receiving ability, meanwhile, is downright ordinary this year. The prior three years, Roethlisberger had 105 passer rating when throwing to Bell. This year, it’s 85.4. Bell is averaging 3.85 yards before contact and just 1.48 after. The prior three years, those figures were 6.64 and 2.20. It’s hard to blame Roethlisberger for Bell being unable to get open and make defenders miss.Bell’s ineffective performance so far has also meant that Roethlisberger can’t use him as a safety valve, which has crushed the QB’s stats against the blitz. In the past three seasons, Roethlisberger had a 96 rating on 381 dropbacks against blitzing defenses — mostly because the underneath pass to Bell was so effective. This year, his rating on those plays is down to 54.6, the lowest in the league.Sunday, Roethlisberger travels to Kansas City to face the unbeaten Chiefs, who have been winning more with offense than defense, which may mean his receivers will be able to find a little more space. And Roethlisberger’s attitude about his ability to perform has undergone a 180-degree turn. “They can question me. I don’t question myself,” he said, three days after his “Maybe I don’t have it anymore” interview. “I think you guys are much more panicked than we are.”And unless Roethlisberger is a huge outlier and suddenly craters at age 35, or Bell and Brown have completely lost their ability to be dominant receiving threats, it seems there actually is little reason for Steelers fans to panic.
A Customs and Border Protection agent watching surveillance footage. James Martin/CNET If you’re taking a trip in to or out of the US, border agents currently have free rein to search through your digital devices. Unlike police, agents don’t need a warrant to look through your phones, laptops and other electronics. Two US senators are hoping to change that with a bipartisan bill. Sen. Ron Wyden, a Democrat from Oregon, and Sen. Rand Paul, a Republican from Kentucky, on Wednesday introduced the Protecting Data at the Border Act, which would require agents to obtain a warrant before they can search Americans’ devices at the border. The number of electronic searches at the border has spiked in the last four years. In 2018, the Department of Homeland Security conducted more than 33,000 searches on devices, compared with 4,764 searches in 2015. Customs and Border Protection declined to comment.”The border is quickly becoming a rights-free zone for Americans who travel. The government shouldn’t be able to review your whole digital life simply because you went on vacation, or had to travel for work,” Wyden said in a statement. The bill is also being introduced in the House of Representatives by a group of Democrats. Wyden and Paul introduced the same bill in 2017. Since then, warrantless device searches at the border increased by 10 percent.Law enforcement agencies have been taking advantage of the warrantless searches at the border, using the information discovered in unrelated court cases, the American Civil Liberties Union discovered through its related lawsuit against the DHS. Until a court makes a decision, the agency is still allowed to conduct these searches without a warrant. “Respecting civil liberties and our Constitution actually strengthens our national security, and Americans should not be forced to surrender their rights or privacy at the border,” Paul said. “Our bill will put an end to these intrusive government searches and uphold the fundamental protections of the Fourth Amendment.” Border wall dividing homes and habitat Politics Security 1 Now playing: Watch this: 2:09 Share your voice Comment Tags
The ongoing textile exhibition titled Amoolya at India Habitat Centre brings together a collection of intricately hand-crafted works of textile art by Neha Puri Dhir. The pieces displayed at the show are a part of Dhir’s design practice called Mool. Inspired by the beauty of geometry, Mool brings together fabrics with ancient craft technique. Each piece in Amoolya represents a harmony of structure and fluidity, intention and chance, perfection and imperfection, craft and art, freedom and control. Also Read – ‘Playing Jojo was emotionally exhausting’It embodies Dhir’s personal interest in the concept of the fundamental – her search for the most basic form of an object or a process. The works presented here are an expression of that search and the culmination of philosophy joining with practice.Each piece bears the mark of the hands it has passed through – from the spinners and weavers of the silk, to the craftsmen who collaborate with Dhir. To her, geometry represents the bridge between art and mathematics. She begins by working with basic shapes and grids, developing them to represent complex ideas using an essential language of dots and lines. Once these sketches are created, she transposes them to the medium of textiles – working with the technique of resist dying as her brush. She has extensive experience working in the field of crafts, education and industry in India. Her specific areas of interest include working with dying techniques in Kutch (Gujarat), exploring shawl weaving in Kullu and Kinnauri (Himachal Pradesh), Tussar silk making in Jharkhand and Tholu Bommalata or leather puppet craft (Andhra Pradesh).When: On till 31 August Where: Art Gallery, India International Centre Time: 11am – 7 pm
French pay TV operator Canal Plus is planning to launch a new channel focusing on drama series in September, according to local reports.The channel, Canal+ Séries, is expected to air American shows 24 hours after they air in the US, along with a range of French and European shows. The channel will be included in Canal Plus’s premium bouquet alongside Canal+, Canal+ Décalé, Canal+ Sport, Canal+ Cinéma and Canal+ Family.
Warner Bros. has acquired DramaFever, the US-based SVO service that specialises in South Korean TV and movie content.It is the second ownership change for DramaFever in recent times, after SoftBank bought it in late 2014 for US$100 million. The Japanese telco has now offloaded the SVOD service to Warner Bros. for an undisclosed.DramaFever started out in 2009 with a package of content from Korean free-TV broadcaster MBC. It has since added content from other Korean channels, and has also started moving into original programming.Warner Bros.’ parent company Time Warner now has a stable of SVOD services that includes HBO Now and iStreamPlanet.The US media giant said that Buying DramaFever gives it access to “critical expertise, which will be vital to Warner Bros. as it explores various OTT scenarios and establishes more direct connections with its audiences”.DramaFever’s experience in creating and running SVOD services targeted at niche audiences, including for third-parties, brings critical expertise, which will be vital to Warner Bros. as it explores various OTT scenarios and establishes more direct connections with its audiences.DramaFever’s co-founders Seung Bak and Suk Park will stay with the company and report to Craig Hunegs, president, business and strategy, Warner Bros. Television Group.“With Warner Bros.’ resources, we will rapidly enhance and grow the DramaFever channel,” Hunegs said. “As importantly, we are bringing to Warner Bros. a great and talented team, led by Seung Bak and Suk Park, that will move quickly with our own distribution and creative teams to create and build more OTT services.”Seung Bak added:. “Combining our deep media sensibilities and experience in developing online video destinations with Warner’s vast library and production expertise will provide an unlimited number of opportunities to create the next generation of OTT services and Internet TV brands.”
ContentWise’s recently-updated personalisation platform, ContentWise 5.4, will make its European debut at TV Connect this week.Contentwise 5.4 is designed to help content providers offer easy and accurate “advanced personalisation” for linear TV, catch-up, VOD and OTT services.The updated platform includes its first ‘UX Personalisation API’ aimed at multiscreen app developers, as well as advanced tools for marketing and editorial teams.It also supports content curation and provides personalised search and discovery, targeted promotions and context-based adaptation to user’s habits through the new UX API.“Operators are taking great efforts to establish an online multiscreen presence but are faced with poor conversions of the trial phase and high churn due to users missing the value of the content offering,” said ContentWise CTO, Pancrazio Auteri.“We can help them to welcome new users by surfacing the right catalogue perspectives, to lower the ‘time-to-play’ and increase the number of successful user sessions based on metrics that will have the greatest impact for the business.”The TV Connect demonstration follows the launch of ContentWise 5.4 at NAB Show in Las Vegas last week.
More Gold Buying Tips: Don’t get hung up on price fluctuations. Gold prices are volatile in the short term. Thus, you should not get too hung up on these wide fluctuations. However, if you can stomach the short-term movements, or if your ability to purchase is limited, monitoring a couple technical indicators can help identify appropriate entry points for a position in gold. Understand why you are buying. Buying physical gold in an attempt to make a gain on short-term price fluctuations is not recommended as costs can make this an unprofitable venture. Rather, the acquisition of this traditional store of value is a substitute for the fiat currencies around the world – it is better viewed as an ultra-secure savings account that cannot be debased or stolen through fiat money printing. As we don’t believe gold is anywhere near it’s top, it’s a long-term investment and only to be sold if you need the cash. Set aside a fixed number of dollars for gold purchases each month. A very easy way to take advantage of the temporary dips in price is to set aside a fixed amount of dollars each month for gold buying. This habit, when paired with the basic indicators discussed above, give you the best opportunity to purchase gold at a favorable price. [One of the most convenient ways to purchase and store precious metals is through a SmartMetals account – a breakthrough new program developed by the Hard Assets Alliance that allows investors to buy gold, silver, platinum and palladium through a secure online portal and store domestically or, in the case of gold, internationally in London, Zurich or Melbourne. Download the free SmartMetals Action Kit for all the details.] One may ask why gold hasn’t made new highs in the past year. Looking back at the chart, we see that after the end of QE2, gold has traded sideways. However, dips below the 50-day average still represented opportunities to acquire more of the yellow metal. Now that we’ve got another round of quantitative easing, we expect gold to resume the pattern of temporarily dropping below the 50-day average and then breaking out to new highs afterward. Buying Indicator #2: USD Index Another indicator that gold is “on sale” is the USD Index. Gold and the USD Index have a strong inverse relationship, meaning that tops in the index represent a good time to buy gold. In this next chart, we’ve circled the tops in the USD Index and marked the subsequent rises in gold prices shortly thereafter. By the Hard Assets Alliance Team With the Fed’s announcement of QE3 and the world’s central banks jumping onto Uncle Ben’s helicopter, prospects for a rising gold price are rosy. But, what if you’re new to buying gold, have seen the price rise ever higher over the past few years, and are worried you’ve missed the best entry point? If you share our belief that money printing and subsequent currency devaluation will continue, then you need not worry. The long-term prospects for gold are very positive – making any entry point at current levels a good one. However, temporary dips in price can offer a golden opportunity to buy the metal at a “discount”. How can one identify these buy points? We’ll explore the answer to this question below. Buying Indicator #1: The 50-day Moving Average One of the most useful technical buying indicators is the 50-day moving average. Once gold’s price drops below the line, it often experiences a surge soon after, and, other than in a temporary sideways market, rarely returns to that original price point again. Some such opportunities are highlighted in the chart below.
WTI <$55.09 5 months 24 months, 4% extraction tax thereafter 5.0% 0.0% All Wells How Do You Make Money from the Evolving Shale Revolution? The current energy markets are volatile, but a speculator must use volatility to his own advantage to build positions in companies that have suffered as a result of the current market correction. I follow a very disciplined approach and use very advanced mathematics and technical knowledge to position myself in the best energy companies. If you’re looking for in-depth research, experience, and exposure to my vast network in the resource sector, then you may want to pay attention to what I’m doing. If you believe that in order to be successful in the resource sector, one must be a contrarian—as I do—now is the time to become engaged. Come see what I’m doing with my own money. You’ll get access to every Casey Energy Report newsletter I’ve written in the last decade. I reveal which companies will be best situated to make their shareholders money in the current depressed energy market. It’s all available right here. I can’t make the trade for you, but I can help you help yourself. I’m making big bets—are you ready to step up and join me? I plan on writing a weekly missive on whatever I find interesting in the resource world. I will also attempt to make this the one stop. K-Man’s Resource Financial Tip of the Week: Price per Flowing Barrel If you’re wondering why this portion is K-Man, it was my nickname back when I was a teacher. Though I left teaching years ago, some people still call me K-Man, including Casey Research’s Louis James. In the spirit of learning, and as a flashback to my old teaching days, this section will be called “K-Man’s Financial Tips.” Over decades of practice, valuation experts have derived industry specific multiples to determine the intrinsic value of companies. Investing is not easy and requires hard work and a lot of time. Thus, any tools to make things simpler is definitely welcome, and multiples are just that: tools to help in the process of buying and selling stocks. For example, social media stocks have been on everyone’s radar: companies with absolutely no earnings are raising billions upon billions of dollars from a more-than-eager investment community. However, traditional valuation methods, especially the price-to-earnings ratio, are thrown out the window, and investors must somehow quantify what is merely an idea. This is where the industry specific multiple comes in. The only thing that can be quantified in the case of Twitter, WhatsApp, Snapchat, etc., are the users of the application. And as it turns out, you and I are worth roughly $100 each. So, if a new social media company is launched and 1,000 users sign-up, the company is worth $100,000 to the market. Let’s look at a real life example. According to their last financials, Twitter, who had a loss of $578 million in 2014, has 288 million users and market capitalization of approximately $34 billion. So, each user is currently being valued at $118. Your tweets about the weather and how long your coffee is taking at Starbucks are worth roughly the cost of Netflix for a year. Feeling used? The price per flowing barrel is just another multiple, but used in the valuation of oil and gas. It is calculated as: Russian Urals 54.51 The WTI price in January, February, and the first half of March 2015 have remained below $55.09, which means that if oil prices remain below $55.09 for the next 2½ months, we could see this tax incentive kick in as early as June 2015. $57.50> WTI >$55.09 1 month First 75,000 Barrels, $4.5 million revenue per well, for 18 months 5.0% 2.0% New Wells Western Canadian Select 38.17 Global Crude Prices $USD US oil production has increased even under a crumbling oil price. How? For one thing, lower production costs. As drilling and service companies are forced to undercut each other to compete for business, the cost of production per barrel decreases. Another and now very crucial element is the support from state governments. State Governments backing the US oil patch For every $1 spent on Texas’s oil and gas industry, $2 of additional business is generated in other industries, and for every $1 spent on North Dakota’s oil and gas industry, $1.60 of additional business is generated, according to both Texas’s and North Dakota’s own government websites. Texas and North Dakota are the largest oil producing states, and they are more than aware that their economies depend on oil production. Texas and North Dakota produce 3.5 and 1.2 million barrels per day of oil, respectively, which is over 50% of total US oil production. (To put things in perspective, one in every four drilling rigs on the planet is in Texas.) Thus, for their states to do well, it is essential for the oil and gas industry to continue to thrive. The way Texas and North Dakota have dealt with the issue of low oil prices is by providing oil and gas companies with tax incentives. The most effective tax incentive will come from North Dakota’s tax program on new and old oil wells. If oil drops below $55.09 for five consecutive months, all wells will be exempt for 24 months from paying a 6.5% extraction tax on oil produced. After the 24 months, if oil prices have not increased above $55.09 for a five-month period, the extraction tax will increase to 4%. However, if oil prices rise above $55.09 per barrel for five consecutive months, the extraction tax exemption will become inactive. Oman 55.90 Brent 55.55 What’s Next in the Energy Sector? In the past four months, I have personally invested more cash in speculations than I have in the last four years. Could I be wrong? You bet I could, but this is not my first downturn. I’ve seen this rodeo before. I also do not have many positions personally, nor does the Casey Energy Report portfolio. I follow a very disciplined approach, and my style isn’t for everyone. I’ll be the first to acknowledge that fact. If you’re looking for a newsletter that recommends a stock every month, I’m not your guy. I only recommend stocks that I’m willing to put my own money in. If you’re looking for in-depth research every month, experience, and exposure to my vast network in the resource sector, then you may want to pay attention. There’s blood in the streets in the energy sector right now—and I love it! If you believe that, as I do, to be successful in the resource sector, one must be a contrarian, now is the time to become engaged. So how can we profit from the blood in these markets? Take me up on my “Katusa Challenge.” You’ll get access to every Casey Energy Report newsletter I’ve written in the last decade, along with my current recommendations, with specific price and timing guidance. There’s no risk to you. If you don’t like the Casey Energy Report or don’t make any money over your first three months, just cancel within that time for a full, prompt refund, no questions asked. Even if you miss the three-month cutoff, cancel anytime for a prorated refund on the unused part of your subscription. As a subscriber, you’ll receive instant access to our current issue, which details how to protect yourself from falling oil prices, plus our current top recommendations in the oil patch. Do your portfolio a favor and have me on your side to increase your chances of success. I can’t make the trade for you, but I can help you help yourself. I’m making big bets—are you ready to step up and join me? Below are the US natural gas storage levels. Interesting metaphor (unconventional, as it’s unconventional technologies that will save the US E&P sector) I’m jabbing with here, but it’s an appropriate one, as the Russians have increased their oil production, as have the US and Saudi Arabia. And just like in boxing, it is important to not be caught standing still. Iran? Yes, Iran also might become an issue because of the potential increase of Iranian oil exports. The P5+1 countries have come to a framework agreement with Iran regarding the nuclear issue. Part of this agreement would lead to the sanctions against Iran being removed, including oil sanctions. Iran has the ability to increase production and the existing infrastructure to bring this oil to the international markets. All of this would increase the global supply of oil. Bearish for oil. This means as an investor, you have to be on your toes at all times, stick and move, as Ali would say. If you’re caught flatfooted or get hit on the chin, it could be lights out for your portfolio. Oil Prices around the World One of my favorite scenes in Rocky is where Rocky asks his manager, Mickey, who is in his corner, to cut open his right eye just before the 15th round. Apollo Creed had cut and bruised Rocky’s eye so badly that Rocky couldn’t see out of his right eye. Time will tell how the US oil patch will look by the time this battle with OPEC is over. Rocky is one of my favorite films of all time. Chuck Wepner is regarded as the “real life” Rocky, as it’s Chuck’s career that people most believe Stallone used to create Rocky. But I believe it was based on a hybrid of both Chuck Wepner’s and my favorite boxer “Mr.Canada,” George Chuvalo’s, careers. Chuvalo, like Rocky had very little time, exactly 17 days to prepare for the world title bout against Ali, and like Rocky, Chuvalo went the distance with Ali. Also, like Rocky, Chuvalo came from an ethnic background. Muhammad Ali, stated of Chuvalo, “He’s the toughest guy I ever fought,” and Chuvalo, whom many believe had one of hardest punches in boxing history, happens to be of Croatian descent. Even Stallone made a remark about Chuvalo, calling him, “My hero.” Chuvalo’s post-ring life has been a nightmare, with his first wife and a son both committing suicide, and two sons who died from drug overdoses. Trying to make the best of a horrible experience, Chuvalo has dedicated his life to trying to teach kids the dangers of drug abuse. Chuvalo, you’re a world champ in my books! West Texas Int. 50.42 Midland 50.09 Price per Barrel Period Sustained Period Enacted Production Tax Extraction Tax Well Types Bakken 46.39 Back in November I wrote why OPEC would not cut oil production. At the same time, I also stated that we would see US government tax breaks for certain US producers. It’s now official. Tax breaks are about to start. If the shale revolution is in a 12-round boxing match, then we are barely through the first few rounds. In the first round, OPEC came out swinging with haymakers as they declared war on US shale and said they would not cut production. Many US exploration and production (E&P) companies’ share prices took a beating as the price of WTI tumbled over 50%. Supported by the ropes and holding on for dear life, round one ended with the US E&Ps looking to their corner for help. And help has come. The oil patch has always tried to distance itself from all forms of government, but it is the government that is coming to their rescue. And because of the US government’s assistance, the US E&Ps are able to throw a couple of uppercuts back at OPEC. Why? Tax breaks, which have helped increase US oil production. OPEC took round one, but round two goes to the US E&P sector. Back to the oil patch. Should the government create tax incentives for the US E&Ps? Answer: They have no choice. But the governments will actually add to the problem and here is why. The state governments of Texas and North Dakota have additional legislative measures that will promote oil production through force. Under Texas and North Dakota oil well abandonment laws, any well that remains inactive and unproductive for more than a year must be plugged. North Dakota, in addition to plugging, the well site must be reclaimed to its original landscape. The reason this is particularly important to the current US shale oil industry is due to the increased amount of oil wells that have been drilled and left uncompleted in North Dakota and Texas. The costs of reclaiming certain wells is actually higher than the NPV of the well, thus the companies will continue to produce because it’s cheaper than reclaiming the well. The reason oil and gas companies are leaving wells uncompleted is to prolong their production until a higher oil price is realized. These companies are essentially storing oil in the ground in hopes that within a year, oil prices will appreciate. Large producers such as EOG Resources, Apache, Anadarko Petroleum, and Chesapeake have added over 3,000 US shale wells that remain uncompleted and unable to produce. I wrote about this in 2011, calling them “phantom wells” in the gas sector. The phrase being used today is “fracklog.” If oil prices remain low for the rest of 2015, it is likely that many of these wells will be forced into production or required by state regulations to be plugged and, for North Dakota wells, reclaimed. According to the North Dakota Industrial Commission, Department of Mineral Resources, there are 825 North Dakota wells that were drilled and uncompleted as of January 2015, compared to October when 650 were left uncompleted and 150 were left uncompleted in June 2014. If we just focus in on North Dakota production, by June 2015, oil producers will be forced to either plug and restore their well sites or bring on at least 37,500 barrels per day of additional production over the next two months. As October 2015 approaches, an additional 500 wells will be forced to either plug the wells and restore the land, or produce a minimum of 150,000 barrels of new oil production per day. Ding, Ding, Ding; Round Three. Who Will Take Round Three? Unfortunately for this fight, there will be no scantily clad models walking the ring between rounds. No ring girls in this fight. Just investors, speculators, traders, E&P’s, NOCs, and now governments. Round three is likely going to be a long and bloody round as both sides (OPEC and US E&Ps) begin to suffer from the previous rounds of the fight. The Saudis have publicly stated they have produced 350,000 more barrels per day than reported to OPEC, while also suggesting they could increase production further if there was demand. This is not a knockout punch but a definite body blow to the North American shale industry. The US tax incentives are not going away and will drive production higher into 2015 and early 2016. Furthermore, the backlog of thousands of wells (fracklog) that can be completed in a matter of days will force down any short-term increase in the price of WTI. Round three will extend throughout the majority of 2015 as OPEC and the United States circle each other, leaving everything in the ring. What about Russia? For all the Rocky fans, don’t worry, I didn’t forget about the greatest Russian boxer, Ivan Drago. In Rocky IV, Ivan Drago easily took down Apollo Creed. Rocky turned to unconventional training methods to take down Ivan Drago. WTI > $57.50 5 months N/A 5.0% 6.5% All Wells The incentive trigger for a price under $55.09, plus the existing tax incentive trigger for a price between $55.09 and $57.50, will reduce North Dakota oil-driven tax revenue by $100 million per month, provided oil stays below $55.09 per barrel for the entire 24-month period. Tax incentives in both Texas and North Dakota provide oil and gas companies with a saving grace of last resort. But just as oil companies can benefit from incentivized regulation from state governments, there are certain regulations that may hinder the profitability of oil and gas companies, while simultaneously leading to another unwarranted flood of US oil production. Mick, Cut me Syncrude 53.62 Condensate 51.83 North Dakota Tax Incentive Program Edmonton Par 47.36 If this multiple is higher than its peers, the company is trading at a premium, and if it’s lower, the company is trading at a discount. Now let’s use it in a real life example like we did with Twitter. In one of the most recent transactions in the oil patch, Whitecap Resources (WCP.TO) acquired Beaumont Energy, a private E&P, for $587.5 million. At time of acquisition, Beaumont had production of 5,100 barrels of oil equivalent per day, so Whitecap paid $115,196 per flowing barrel. Historically, companies operating in the same light-oil play sold for $100,000 per flowing barrel, so initially we can conclude Whitecap overpaid for Beaumont. This metric is easy to use, but we emphasize that it is just one tool to use in the valuation of an oil company. And it comes with several shortcomings. One is that the metric does not take into account the reserves of a company or the future growth from undeveloped fields. So, while it may look like Whitecap overpaid for Beaumont, we are not taking into account the 27.2 million barrels of 1P reserves Beaumont also comes with. Which is why the price per flowing barrel metric is often used in combination with the enterprise value to 1P Reserve ratio. It helps investors understand how well a company’s current production is supported by what is in the ground. Remember, these metrics will differ due to location and oil/gas mix, but it’s a great starting point if you have a group of similar companies. Interesting Resource Data Below is the data showing the current oil storage, capacity, and daily production. This past week was the first week of the year that had a production decrease. US crude oil production is at 9.386 million bopd, down 37,000 bopd from the week before. Hard Rock Data Here are the five-year storage and price decks for some of the more popular metals. I have put this info together for you so you can quickly see the price and LME inventory levels all in one place.