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The Weekly Oil and Gas Update

The Weekly Oil & Gas Update: 18th June 2012

Contributor: Todd Erickson
Posted: 06/20/2012
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Catch up with his week's industry news, oil and gas prices and the North American rig count.

GENERAL NEWS

Saudi Arabia nears peak capacity as it ramps up production to minimize impact from Iran sanctions

The OPEC member is increasing its production to provide price and supply stability in preparation for the anticipated sanctions to Iran for its rogue nuclear program. The increase marks a doubling from last years output. Other OPEC members, such as Kuwait and UAE are already at or near their capacity. Article here

Governor of Colorado Creates task force to deal with local O&G regs

Development in the Niobrara has prompted a number of local governments to develop their own drilling rules. Governor Hickenlooper's task force was created to "clarify" the roles of state and local governments in regulating drilling activities. Industry officials say that a patchwork of local rules, in a state with robust and sophisticated drilling regs already developed, would make drilling activities unduly complicated. Article here

Regulatory approval of two Uinta gas fields could double basin well count

BLM and Utah state officials are meeting to finalize the decision to develop these fields in eastern Utah, with over 5,000 wells proposed. Gasco and Anadarko are the operators. Article here

OIL & GAS PRICES

This Week

12 weeks ago

1 year ago

Oil

Nymex Crude Future

82.67

Brent Spot

95.78

WTI Cushing Spot

84.03

108.09

93.23

Natural Gas

Henry Hub Future

2.51

Henry Hub Spot

2.45

2.25

4.20

NYC Gate Spot

2.54

SHALE NEWS

Bakken crude recently traded at a $27.50 discount to WTI due to takeaway constraints

On February 9th, Bakken crude traded at its greatest discount yet to West Texas Intermediate crude as growing output and limited takeaway capacity continue to increase price differentials. Some analysts believe this is a pattern that could continue through the decade. Article here

Proposed $1billion pipeline to carry Marcellus gas to Mid Atlantic

The 200-mile, 30-inch pipeline would carry gas from northeast Pennsylvania to a distribution center near Rockville, MD with a completion date in 2015. Article here

Baker Hughes to hire 700 for regional facility in Ohio

The services giant chose Massillon, OH, near Canton, as its regional headquarters, serving Ohio, Pennsylvania, and the surrounding states. The company will invest $64 million into the facility, located in the heart of the Utica Shale play. Article here

ENVIRONMENT & SAFETY NEWS

Water use in the Eagle Ford for fracing will have a limited impact

The use of water in well completions only represents 6% of the total water use from the South Texas aquifer, but the Texas Rail Road Commission is still considering new water recycling rules for the state, and a public comment period will start once a draft of the proposed rules becomes available. Article here

Water treatment unit to be deployed with drilling rigs in the Bakken

Sionix Corporation has entered into a fee-per-barrel arrangment to filter and desalinate water for drilling and expects to treat 4,800 to 9,600 barrels per day. Article here

ACQUISITIONS & MERGERS NEWS

Apollo-led group buys El Paso's E&P assets

The $7.15 billion acquisition is a divestiture of the E&P assets from Kinder Morgan's earlier acquisition of El Paso for its midstream assets. Apollo highly values El Paso's Niobrara, Eagle Ford and Woldcamp assets. Article here

Linn Energy to buy BP's Hugoton (Kansas) property for $1.2 billion

The deal provides Linn with 2,400 wells in the largest US conventional gas field, consisting of proved reserves of 730 bcfe at 110 mmcfe/d, of which 37% is NGL's. Article here

RIG COUNT

This Week

Change from last week

12 weeks ago

One year ago

Arkansas

20

-1

27

35

California

52

-1

44

43

Colorado

69

-5

67

68

Kansas

28

+3

34

30

Montana

20

-2

18

10

N. Louisiana

31

0

47

99

New Mexico

90

+2

81

78

North Dakota

200

-3

197

163

Ohio

21

+2

10

11

Oklahoma

189

-5

207

165

Pennsylvania

84

-1

101

109

Texas

926

-8

926

838

Utah

39

0

37

28

West Virginia

25

+2

28

21

Wyoming

41

+2

44

46

Total US

1971

-13

1984

1860

Total Canada land

245

+18

516

276


ABOUT THE AUTHOR

The Oil & Gas Weekly is compiled by Todd Erickson. Todd is a veteran executive manager in the North American E&P market. He has management experience in high-growth oil & gas service organizations performing a leadership role in operations, strategy, and corporate development with a track record of identifying opportunities and best-practices, creating execution plans, then developing effective teams and leaders to execute them.

Learn more about Todd here

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Contributor: Todd Erickson