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Railroad Commission: Texas oil drilling continues to rise

An oil processing station on land owned by Fasken Oil and Ranch near Midland. (Vernon Bryant/The Dallas Morning News)

Evidence is mounting that the fall in oil prices in recent months has yet to put a dent in drilling activity in Texas.

The Texas Railroad Commission reported Wednesday that it issued 3,013 oil and gas drilling permits in September, compared to 2,440 in August and 1,531 a year ago.

The continued ramp up in drilling comes as West Texas Intermediate, the U.S. crude benchmark, is trading $82 a barrel. That is down 20 percent since July, and is driving predictions oil companies will slow down drilling next year.

But so far, the boom appears to be full steam ahead.

Preliminary estimates are Texas oil production in August exceeded 2.2 million barrels a day, up 24 percent from a year ago.

Herrera’s, Coal Vines, Little Katana are added to menu at city-owned Omni hotel downtown

The City of Dallas Wednesday approved leases to bring three popular Dallas restaurants and one new flavor to the former grassy strip outside of the Omni Dallas Hotel downtown.

New restaurants planned for the former grassy patch outside of the Omni Dallas Hotel would have patios and easy access from the convention center. (Matthews Southwest )

Coal Vines pizza, Little Katana Sushi, Herrera’s Tex-Mex restaurant and the new Bier Garden on Lamar are expected to open by fall of 2015, above a 350-space underground parking garage.

The $27 million project is being funded with money not spent during construction of the city-owned hotel, which opened in November of 2011.

The addition will bring to seven the number of restaurants at the Omni site, which already is home to Texas Spice, a Bob’s Steak & Chop House and the Owners Box sports bar.

After the hotel was built, “the No. 1 complaint” among conventioneers was that there were not enough food options near the convention center, said Jack Matthews of Matthews Southwest, the developer for both the hotel and the restaurant/garage project.

For large meetings, such at the annual Mary Kay convention, the three hotel restaurants could become swamped with would-be diners facing long waits for a table.

“There’s just demand there that hasn’t been met yet,” Matthews said.

The hotel brought in food trucks to help provide more choices and offer food at different price points.

“These are places that Dallas already has embraced,” Matthews said of the restaurants selected. “We want to give people a real taste of Dallas. These people understand the Dallas market.”

Like the Omni, the buildings that house the restaurants will be owned by the City of Dallas, through the Dallas Hotel Development Corp. The operators will have 10-year leases and pay rent.

The four new restaurants are expected to attract not only hotel guests and conventioneers but also area residents and workers.

The beer garden will be closest to the corner of Young and Lamar streets. Herrera’s will be closest to the Kay Bailey Hutchison Convention Center.

Joseph Palladino, who created the Coal Vines concept and co-owns the Uptown location, will operate the downtown Coal Vines and the beer garden.

The downtown Coal Vines is part of an expansion that Palladino said could see more than 15 new locations open annually. He said next year he also plans to open a Coal Vines, with an attached prepared-food market, in the mammoth CityLine development in Richardson that will house State Farm and Raytheon.

“I felt it was important for our brand to be downtown as well,” Palladino said of the Omni location. “ And I thought that being across from the Omni, with the exposure of the convention business [and], people traveling from all over the United States and all over Texas, it would help our brand.”

The Omni Coal Vines will function much like a fast casual restaurant at lunch. Diners will order and pay at the counter and will have no server to tip. Regular table service returns for the dinner crowd.

The restaurant will have a full bar, including hard liquor, and will serve 10-inch individual pizzas in addition to the regular menu, Palladino said.

Both Uptown and the Omni location will have delivery.

The beer garden will feature domestic and imported beer and comfort food served at group-sized tables.

Palladino expects to spend up to $1.5 million to furnish and equip the beer garden and up to $900,000 to open Coal Vines, a concept he launched with restaurateur Phil Romano.

Gil Bonifaz, who recently closed two locations of Herrera’s following “partnership issues,” has teamed with new investors to open the Omni location.

He envisions a restaurant with an open kitchen, serving craft cocktails and a modern twist on Tex-Mex favorites.

He said he’s still working to determine what his opening costs will be, but he said the new operation won’t be hindered by the recent closures.

“Going forward our main focus is going to be the Omni,” he said, adding that he still operates a Herrera’s location on Denton Drive near Love Field with his mom, Cindy Bonifaz.

Matthews said he was not concerned that Bonifaz recently closed two Herrera’s locations.

“He did tell us,” about the closures, Matthews said. “We’re good. We really like the way they do things.”

The Omni Herrera’s will be about three miles from a Herrera’s Café operated by other family members who formerly served up Tex-Mex favorites on Maple Avenue.

Bonifaz said he doesn’t see the proximity of another Herrera’s as an issue.

After the restaurants are complete, the site still will contain up to 12,000 square feet of space that could be developed in the future, Snell said. Initially it will be green space with a water feature, available for the Omni to rent out for private events.

Fiat Chrysler will spin off Ferrari to raise $1.15 billion

Fiat Chrysler Automobiles CEO Sergio Marchionne (file photo)

Fiat Chrysler Automobiles plans to spin off Ferrari as it seeks to raise $4.7 billion to counter rising debt, according to Bloomberg.

The company – formed from the merger of Fiat and Chrysler – will list 10 percent of Ferrari in the U.S.and possibly Europe and intends to complete the deal next year.

The remaining shares will be distributed to FCA investors. Piero Ferrari, son of company founder Enzo Ferrari, will retain his current 10 percent stake in the exotic, high-performance automaker.

The sale is expected to raise about $1.15 billion, Bloomberg said.

“As we move forward to secure the 2014-18 business plan and work toward maximizing the value of our businesses to shareholders, it is proper that we pursue separate paths for FCA and Ferrari,” CEO Sergio Marchionne said in a statement.

FCA’s board met Wednesday at its new headquarters in London to discuss the group’s expansion plans through 2018.

The company’s goal is to increase net income five-fold to more than $5 billion.

It plans to sell $2.5 billion in bonds as well as 100 million shares of stock — expected to raise another $1.1 billion — to help finance the expansion plans.

Growth at mid-sized companies helps the Texas and U.S. economies

Recent data shows that mid-sized companies — those with annual revenue of $10 million to $1 billion — provide an outsized economic boost to Texas from robust revenue and employment growth.

Texas’ 10,000 middle-market businesses represent less than 1 percent of all companies statewide, yet they account for 16 percent ($495 billion) of total Texas business revenue and 29 percent of the state workforce, the National Center for the Middle Market (NCMM) reported today.

Nationally, nearly 200,000 mid-sized firms represent 3 percent of all businesses, but are projected to create 61 percent of all new jobs in the coming year.

The improved performance rate of 64 percent for Texas mid-sized businesses in the last 12 months surpassed the national rate of 62 percent, according to a survey by the NCMM, a collaboration between GE Capital and Ohio State University’s Fisher College of Business.

NCMM executive director Thomas A. Stewart said middle-market companies in Texas and across the country have ” found a higher gear.” He noted that U.S. mid-sized companies have seen revenue growth accelerate for four straight quarters and employment growth average 3.5 percent in the last year, up 1 percentage point higher from the average in the previous two years.

Employment at Texas mid-sized companies was up 2.6 percent in the last 12 months, compared with 3.5 percent nationally. Nationally, the healthcare industry has seen the most middle-market job growth. Business executives expect continued job growth over the next 12 months.

Revenue at Texas mid-sized companies grew 6.5 percent in the last 12 months vs. 7.5 percent nationwide. About two-thirds of Texas and U.S. executives expect revenue to continue growing over the next 12 months.

So, is it any surprise that Texas business executives are more optimistic about the local, national, and global economies than their counterparts?

The NCMM survey found that 94 percent of Texas middle-market executives are confident in their local economy vs. the national rate of 74 percent. Regarding the U.S. economy, 73 percent of Texans are confident vs. 67 percent nationwide. Regarding the global economy, 56 percent of Texans are confident vs. 26 percent nationwide.

Still, companies in Texas and nationwide continue to see challenges ahead.

The cost of health care still ranks as the top challenge to doing business for Texas mid-size companies, followed by the uncertainty of government actions and the ability to sustain profit margins and grow revenue.

Nationally, middle-market companies continue to face difficulty attracting people for senior-level positions and many expect the retirement of Baby Boomers to negatively affect their financial performance.

NCMM surveyed 1,000 C-suite executives in mid-September across the country.

Developer buys land near D/FW Airport for warehouse projects

A Pennsylvania-based commercial real estate firm has purchased land near Dallas/Fort Worth International Airport for construction of an industrial building project.

Liberty Property Trust bought 43 acres at Valley View Lane and Frye Road south of D/FW Airport.

Liberty said it has the potential to build 750,000 square feet of industrial space on the property.

“This is a great time to enter the Southwest market and this parcel offers excellent accessibility,”  said Mike Heise, vice president and city manager for Liberty’s Dallas region. “The market is strong and the acquisition provides a new platform for development.”

Liberty owns more than 1.86 million square feet of industrial space in the Dallas area.

Based in Malvern, Penn., Liberty has 105 million square feet of office, distribution and light manufacturing properties in the U.S. and Britain.

Dallas-Fort Worth ranks among top U.S. areas for most jobs added

Houston and Dallas-Fort Worth areas ranked among the top U.S. metropolitan areas for the most number of jobs added over the last 12 months, according to data released today by the  U.S. Bureau of Labor Statistics.

The largest job gains for the 12 months ended Sept. 30 were in the New York area (+130,500), the Houston area (+119,400) and the Los Angeles area (+102,000). The Dallas-Fort Worth area was No. 4 (+100,200).

The Dallas-Plano-Irving division — a finer slice of the metropolitan pie — performed even better: It gained 78,000 jobs, or a 3.6 percent increase over the last year.

Overall, payroll employment increased in 314 of the nation’s 372 metro areas, decreased in 53  and was unchanged in five areas in the last 12 months.

By percentage, metro areas rank differently. The largest 12-month percentage gains in employment were in Muncie, Ind. (+8.9 percent), Midland (+6.4 percent) and Elkhart-Goshen, Ind. (+5.4 percent). The Dallas-Fort Worth’s employment gain was 3.2 percent.

Just for the month of September, the Los Angeles area added the most jobs (40,000). Houston was No. 2 (+23,600). The D-FW was No. 37 (+4,800).

Unemployment rates

Unemployment rates were lower in September than a year earlier in 339 metro areas, higher in 26 areas and unchanged in seven areas. Nearly one-third of all metro areas (118) had jobless rates of less than 5 percent; six metros had rates of 10 percent or higher.

The D-FW unemployment rate last month was 5 percent. Across Texas, fourteen metro areas had jobless rates of less than 5 percent in September.

Yuma, Ariz., had the highest unemployment rates in September (25.9 percent). Bismarck, N.D., had the lowest rate (2.1 percent).

The U.S. unemployment rate in September was 5.7 percent, down from 7 percent a year earlier.

None of the employment or unemployment data above has been adjusted for seasonal variations.

Lenders are taking fewer Dallas-area homes through foreclosure

Less than 1 percent of Dallas-area homes are in foreclosure. (CoreLogic)

Lenders have foreclosed on about 25 percent fewer Dallas-area homes in the last year, according to a new report by CoreLogic Inc.

During the 12-month period ending September, 5,899 Dallas-area homes were sold at foreclosure auction. That compares with more than 7,900 home foreclosures in the previous 12 months.

Home foreclosure totals in the Dallas area are less than half of what they were in 2011, according to CoreLogic.

Only 0.7 percent of Dallas-area homes were in foreclosure in September, researchers said.

That compares with 1.6 percent of homes in some stage of foreclosure nationwide.

Nationwide foreclosures were down more than 32.6 percent in September from a year earlier and were down 61 percent from the peak of completed foreclosures in 2010.

“The level of serious delinquencies has rapidly declined over the last few years, but the pace of improvement is beginning to recede,” said Sam Khater, deputy chief economist at CoreLogic. ” As of June, serious delinquencies were 26 percent lower than the prior year, but as of September serious delinquencies were 21 percent lower.”

The number of homes posted for potential foreclosure in the Dallas-Fort Worth area is at a more than decade low, according to data from Addison-based Foreclosure Listing Service.

 

Ford may invest $5 billion in Lincoln’s ongoing revival

2015 Lincoln MKC (file photo)

Ford Motor Co. will spend up to $5 billion over the next five years in an attempt to keep reviving Lincoln.

Reuters said Ford CEO Mark Fields has earmarked at least $1 billion annually for Lincoln over the next five years, compared with $2 billion spent on the division since 2012, according to an unnamed source.

The expenditures will pay for a new MKX crossover next year; a new MKS sedan in 2016; a new Navigator with an aluminum body in 2017; a refresh for the recently introduced MKC crossover in 2018; and replacements for the MKZ sedan and MKT crossover in 2019, both of which may get new platforms.

Lincoln badly trails the leading luxury brands in the U.S., including cross-town rival Cadillac.

Nonetheless, Ford wants Lincoln to triple its sales to 300,000 vehicles by 2020 and apparently is willing to invest in at least one distinct vehicle platform that won’t be shared with mainstream Ford models.

That may be a premium two-wheel and all-wheel drive platform that will underpin the next generation of Lincolns beginning in 2019, Reuters said.

The brand’s most recent success has been the new MKC compact crossover, which offers styling and driving dynamics that are distinct from the Ford Escape on which the MKC is based.

Through September, Lincoln’s sales were up 13.2 percent, according to Automotive News.

Senior adviser in General Motors bailout coming to the aid of RadioShack

(Mona ((Mona Reeder/The Dallas Morning News))

RadioShack said Wednesday it has hired a former U.S. Treasury senior adviser to help it fix its business.

The Maeva Group will provide advisory services to RadioShack’s board of Directors and management as the retailer tries to turnaround its operations and finances.

Harry J. Wilson, founder and CEO of the Maeva Group, was named chief revitalization officer of RadioShack, reporting to RadioShack CEO Joe Magnacca and the RadioShack Board.

Wilson was a senior advisor in the U.S, Department of the Treasury and was a senior member of the Auto Task Force, which was responsible for the Treasury’s role in the restructuring of General Motors and Chrysler.

Wilson led a team responsible for the business and financial work of the task force and also led the team that completed the General Motors bailout.

“Harry Wilson’s experience in guiding companies through successful turnarounds speaks for itself and will be extremely valuable as we continue our efforts to revitalize the company. We welcome his insight and involvement,” Magnacca said in a statement.

Wilson said he believes RadioShack is worth saving.

“RadioShack remains an important retailer serving many key markets. While challenging secular trends have undermined its performance in recent years, we believe that there is a great deal of opportunity ahead of it.

“We look forward to working with the management team, the board, customers and vendors to help address these issues as quickly as possible and to revitalize the company,” Wilson said in a press release this morning.

RadioShack said earlier this year that it may have to restructuring in bankruptcy.

Judge orders Trinity Industries, plaintiff who won at trial to mediation

WASHINGTON—U.S. District Judge Rodney Gilstrap ordered Trinity Industries and the plaintiff who won his case in federal court earlier this month to try one last time to settle their differences.

Gilstrap ordered both the company and plaintiff Josh Harman to mediation led by Duke University professor Francis McGovern, He set a Dec. 31 deadline for an agreement.

If no agreement is reached, the judge will have to decide how much Trinity will be ordered to pay — and likely a host of other questions expected to be raised by competing motions from the parties.

A jury found Oct. 13 that Trinity had violated the False Claims Act because it failed to tell the Federal Highway Administration of money-saving changes it had made to guardrails in 2005. Those guardrail systems are in use on highways across the country, including in Texas. State highway departments have paid $175 million in federal dollars for them since 2005.

The company believes the jury was wrong and has vowed to appeal.

Jeff Eller, a spokesman for Trinity, said the company will comply with the judge’s order, but continues to feel the verdict was wrong as a matter of law.

“Trinity continues to believe that the jury decision cannot and will not withstand legal scrutiny. We intend to follow the court instructions and attend mediation,” Eller said.

An attorney for Josh Harman, the competitor to Trinity who brought the suit on behalf of the federal government, said the mediation could touch on any part of the case. Both sides are likely to file a storm of post-trial motions, and the mediation likely is the judge trying to give a settlement one more chance.

Beyond the question of whether the jury was right in nits verdict, other complicated issues remain in dispute as well. For instance: If no settlement is reached, how much will the judge order the company to pay?

The jury determined that the fraud cost the government $175 million. But that figure, thanks to language in the False Claims Act, would ordinarily be tripled when damages are calculated. In addition, as much as $200 million in additional fines, and attorneys’ fees, could be added as well. That latter total could come down to how many technical violations of the False Claim Act were contained in each of the many invoices the company sent over the years.

Trinity Industries had 2013 revenues of $4.4 billion and is best known for making rail cars. Its highway product subsidiary makes guardrails that are in use across the country. Several states have suspended use of the guardrails, due to Harman’s suit. Following a demand for more testing, the company suspended sales of the units pending test results.