Rambling Response To A Reader Regarding The Bakken Blog -- March 24, 2022

A reader commented on my Bakken blog. 

I replied but the reply was too long as a comment. 

So, I have moved that comment here:

The blog started simply because I grew up in Williston, saw several "boom and bust" cycles but was never involved in oil. The closest I ever came to energy was working as a "gopher" one summer with MDU, helping to build and maintain utility lines (think: Glenn Campbell's "Lineman for the County." LOL).

In 2007, I would retire from the USAF; I was aware of the Bakken in Montana and maybe (I forget) some activity in North Dakota). I sensed that somehow this "boom and bust" cycle would be different. I have no idea why I thought that.

But I was really, really curious. I really, really wanted to learn about "oil" was all about. I was going to follow the Bakken but it was going to be with a word document and hyperlinks when I realized doing it in HTML was made for this.

The USAF taught me how "to do" HTML and how to establish a website -- well, actually, a middle-aged civil servant in one of the IT departments gave me a book to read and told me to figure it out myself -- she said it was insanely easy.

And, so with nothing more than a lot of time, the internet, and a website, I started following the Bakken. I knew nothing, absolutely nothing, about oil, conventional or otherwise, although I had read "The Prize" by Daniel Yergin some years earlier.

Two things happened, which confirmed that I made the correct decision.

One, a few readers started sending me comments anonymously and through direct e-mail which steered me in the right direction. I learned a lot from my readers and still do.

Two, I realized that a lot of mom-and-pop mineral owners probably had no clue what was going on and I wanted to help explain the Bakken at that level. I've said many times on the blog that my level of "reporting" has not improved much since I began. I don't have the resources to do better, but, in fact, that's good: I've tried to keep the writing at a level average mom-and-pop mineral owners can understand.

Since I've began blogging, I've become a much better investor but almost entirely outside of companies drilling in the Bakken. I made some huge investing mistakes early on but was quick enough to get out or move in another direction.

Sometimes one thinks they know too much about their subject which can lead to bad investment decisions. That's the same reason, I have almost no investments in the health care arena even though I spent 30+ years in medicine.

My energy holdings were almost all acquired between 1984 and 1990, well before the Bakken. And if any did well, it was purely serendipity.

So, any "monetary" (investing) interest I might have in the Bakken has absolutely nothing to do with blogging but does have something to do with the altruistic (?) joy I have sharing what I think I know about the Bakken.

Two things:

I am truly humbled when many folks who know this subject much better than I do, actually write me and don't call me an idiot.

Second, I am often embarrassed with regard to what I write that does not pertain to the Bakken and my political views which should not be on the blog. But it's impossible for me not to write some of these things. Having said that, I feel I am much more fair and balanced in my comments; I hope I have grown a bit over the years.

Before I started blogging, I was part of a "Bakken discussion group." I had no minerals, no experience, nothing, and I was pretty much told to leave the discussion group since I was clearly an outsider. I learned a lot from that discussion group but was eventually banned ("kicked off the island" as they said at that time).

Much, much more could be said. My biggest worry now is (not) stepping on the toes of my readers so I'm sure I disappoint others with my wishy-washy comments; or my flip-flopping, but it is what it is.

That's why I have no subscription fee. I don't want to feel I have any conflicts of interests. It's bad enough as it is trying not to step on toes of regular readers.

Much more could be said.

Laundromats -- January 8, 2022

Laundromats were recently in the news.

A reader did some internet searching on laundromats in Mt Vernon, NY, yesterday, and sent me what was found.

My reply:

My dad was going to open a laundromat years ago. Had he done it, it would have been a super-duper laundromat. He never went halfway on his projects. He was the "Harold Hamm" of little projects. LOL.

Except "Hooterville" in Williston. Dad ought an entire block of houses that should have been condemned, but rented them out as is, and did very, very well (based on how long he held that property). The rent was in the range of $50 - $150 / month (in today's money -- LOL --probably a bit of hyperbole but not much).

The city was constantly on his back to bulldoze the entire block and do something else --- anything else --- with that lot, even a big parking lot.

Our family was very, very embarrassed every time they drove by but I don't think anyone in Williston -- except the tax department, city council, and a few real estate agents -- knew who owned it.

Interestingly, he was a very good landlord. A lot of folks had difficulty making even those very small rental payments, and he never evicted anyone and never went after missed rent payments, as far as I know. If so, he wasn't very aggressive.

My hunch: he took a huge tax loss to lower his income tax. I don't know. But he was certainly appreciated by any folks over the years who really had no place to go.

With the boom, the area has been re-built.

Back to the laundromat: had he built that laundromat (that was before the boom) he would have become the Harold Hamm of laundromats in Williston. I don't know if folks recall but during the early days of the boom, "everyone" needed a laundromat.

Dickinson folks recalled Williston as one "big ball of dust."

Ten Best Performing Commodites Of 2021

Link to Alex Kimani. Commodity, 52-week change (2021), in order starting with best performing:

• lithium, 477%
• ethanol, 125%
• coal, 111%
• oat, 90%
• coffee, 78%
• gasoline, 62%
• naphtha, 62%
• propane, 61%
• heating oil, 60%
• crude oil, 58%
  

"Halved By A Horizon" -- January 4, 2022

Our oldest granddaughter has just completed her first semester at Vanderbilt University, Nashville, TN. She brought home one of her books which she thought I might enjoy. After spending some time with the book, I wrote her the following note:

Your book Identity and Violence, Amartya Sen, ends with an interesting phrase:

"We have to make sure, above all, that our mind is not halved by a horizon."

 

Whenever  you see an interesting phrase such as "halved by a horizon" -- if you have not seen it before, or are not sure if you understand it -- google it. You may be surprised.

From Cultural Tensions and Hybrid Identities in Derek Walcott's Poetry: 

While trading the beginning of the Caribbean race, [Derek] Walcott is searching for a particular moment in history when "the mind was balved by a hovizon" ("Names," 1.11).

By this phrase, Walcott means the introduction and the internalization of the binary opposition between the black and the white.

Your book by Sen was c. 2006. Derek Walcott wrote in the 40's through the 70's.

Many links on the internet to Derek Walcott, including this one:

http://www.inquiriesjournal.com/articles/1141/cultural-tensions-and-hybrid-identities-in-derek-walcotts-poetry

This might be a better site, considering your classes in poetry:

https://poemanalysis.com/derek-walcott/names/ 

From that site:

The black people may try to find their origins once again, but the poet ruefully admits that “the wind bends our natural inflections”. Walcott often repeats words and entire phrases to emphasize a search that seems to yield no results. When he repeats that “the mind was halved by horizon”, he, as an intellectual, perceives that his world has indeed been divided into white and black by colonial history, language, education, and racial prejudice.

Thus, his search for a past previous to colonial history is futile. The exotic cities of Benares, Canton, or Benin that once held sway over the world are lost in the recesses of time. Again the poet asks the soul-searching questions, “Have we melted into a mirror, / leaving our souls behind.”

Sen attributes such ideas from Derek Walcott in the bibliography / writers he cites at the end of the book, and references Walcott in three places in this book.

So, there you go.

There was an interesting connection between your political science book by Sen and poetry which you also enjoy.

On a separate note, there seems to be a whole "school" of writers and thinkers writing about this issue, and Amartya Sen, part of the school, was moving the discussion forward. Among that school, there are probably a handful that were instrumental; it looks like Derek Walcott was one of them.

This book made my day. I learned something completely new and now it gives me something to explore.

Lutheran Social Services -- Bankruptcy -- December 31, 2021

From a reader:

Lutheran Social Services filed a petition for a Chapter 11 bankruptcy on Thursday, May 13, four months after the organization’s board of directors determined it wasn’t able to continue operating.

Administrators have blamed heavy debts from Lutheran Social Services Housing, which provided affordable housing in rural areas, for the 102-year-old organization’s financial failure.

Lutheran Social Services invested $16 million and borrowed another $45 million for its housing program, which grew significantly during the 2010s in response to an urgent need for affordable housing in the Oil Patch during the Bakken boom.

The organization owned 20 housing projects and managed another 14 facilities in 22 communities in North Dakota, which provided housing for about 1,400 residents

The documents did not provide a total for secured debts held by banks, but include a foreclosure lawsuit seeking $8.3 million filed by First International Bank & Trust owed for the 124-unit Prairie Heights apartment complex in Watford City.

Several other banks have filed lawsuits seeking loan repayments.

Alerus Financial Corp. said Lutheran Social Services Housing still owes more than $4.7 million on a 2017 loan for a housing project in Stutsman County, and Cornerstone Bank said it owes more than $7.5 million on a 2016 loan for a project in Watford City, according to court documents.

Other secured debts, according to the bankruptcy filing, include a $5.6 million loan owed to the city of Maddock and a federal Payroll Protection Program loan of more than $2.5 million, for which Lutheran Social Services has applied for forgiveness.

Lutheran Social Services also owes Gate City Bank $591,975 and American State Bank & Trust $149,991, according to bankruptcy filings.

In the bankruptcy petition, Lutheran Social Services seeks approval from a judge in U.S. Bankruptcy Court in Fargo to use cash collateral to pay expenses as the organization continues what Otterson has described as an “orderly wind down,” which includes liquidating assets, paying creditors and transferring key programs to other organizations.

One important program is Luther Hall in Fargo, which provides residential treatment for children aged 10 to 17. Luther Hall has been sold to Nexus Family Healing, a nonprofit group that specializes in outpatient therapy, residential treatment and foster care for children with emotional and behavioral health problems.

Most employees were told their jobs were being eliminated when Otterson announced on Jan. 15, the day the board decided that Lutheran Social Services couldn’t continue to operate, that the organization was being dissolved. The organization had 283 employees as of mid-January.Several major real estate holdings are being sold off. Lutheran Social Services has an agreement to sell its Fargo headquarters, near the interchange of Interstates 29 and 94, for $4.9 million to Great Hall Partners, a real estate holding company based in Fargo.

In a May 14 letter to former employees, Otterson notified them that they were receiving payments, minus deductions, for unused vacation days. The payments were made possible by the sale of Lutheran Social Services’ Bismarck program center, which enabled the organization to make payments to its primary lender, Bremer Bank, he said.

“Many people invested their careers here,” Otterson wrote in the letter. “Many people turned to LSS in times of need. Unfortunately, decisions made two, four, even 10 years ago brought down this agency and forced hundreds of people to seek healing, help and hope from other sources.”

Otterson took the helm of the agency on Dec. 1, 2020 — six weeks before the board decided to cease operations — and has spent most of his tenure “winding down” the organization.

In a separate legal proceeding, the assets of Lutheran Social Services Housing, a subsidiary nonprofit, are going through receivership. The receiver, Lighthouse Management, is running the properties and will decide whether to sell housing assets, he said.

.......................

That did answer [the reader's] question.  They did own that Fargo building, it wasn't just a leaseback.

First International Bank is owned by the Stenejhem family - originally from Arnegard.  That's $8 million - and there's another $14 million owed to ND entities.  That's still just half of the $45 million debt listed.  Of course, I'd like to see the creditor list.  I pitched it to XXXXX XXXX as being of interest to western ND since there was ND property and lenders involved.  We'll see. 

Sailboat -- December 26, 2021

Link here. I have this set, recently bought it locally.

Cocktails

Wall Street Journal book review, December 17, 2021.

Sources

Make Me A Cocktail