The Weekly USA Oil & Gas Update: 04 February 2014

Contributor: Todd Erickson
Posted:  02/04/2014  12:00:00 AM EST
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Tags: america | todd erickson | bakken | shale | marcellus | usa | eia | bloomberg | rig count | news | hess | liberty resources | aubrey mcclendon | american energy partners | prairie chicken | keystone xl | texas | permian basin | eagle ford | koch | shell | alaska | oil prices | gas prices

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

Rig Counts - select states with key plays

  

 

Select states

This Week

Change from last week

3 months ago

One year ago

Alaska

   12

 +1

   10

    9

Arkansas

  12

   0

   12

   16

California onshore

  31

   0

   40

   33

Colorado

  62

   0

   70

   55

Kansas

  30

  -1

   25

   29

Montana

    9

   0

   14

   11

N. Louisiana

  25

  +1

   23

   21

New Mexico

  80

  +1

   74

   79

North Dakota

 169

    0

 163

 180

Ohio

   38

 +2

   34

   28

Oklahoma

 185

  -2

 176

 196

Pennsylvania

   55

   0

   56

   69

Texas

 842

 +3

 821

 826

Utah

   26

   0

   28

   28

West Virginia

   33

   0

   31

   24

Wyoming

   53

    0 

   55

   47

Total US

1785

   0

1742

1764

Total Canada land

  608

+18

  393

  624

 

Oil & Gas Prices - Bloomberg/EIA

 

 

This Morning

 

12 weeks ago

 

1 year ago

Crude Oil - USD/bbl

     

WTI

    97.49

       95.13 

     96.21     

Brent

  106.18

      105.76

    116.06

Natural Gas-USD/mmbtu

     

NYMEX

    4.77

        3.62

       3.27

 

General News

Shell to delay its offshore arctic drilling program a least another year

In a recent court case, the Federal ninth circuit ruled that a portion of the environmental impact statement, created prior to leasing in Alaska's Arctic waters, was improperly prepared.  This has created regulatory uncertainly around these leases.  Based on that, Shell will delay its offshore drilling program in the region.  Shell's drilling program has been wrought with problems, including the grounding of its drilling vessel. "The lack of a clear path forward and an associated timeline makes it impossible to commit the resources needed to explore safely in 2014," a Shell spokesman in Alaska told Oil and Gas Journal on Jan. 30. "It's frustrating to be put in this position as we felt we were making solid progress toward a 2014 program." Article here

 

Koch abandon Bakken oil pipeline project for lack of interest

This is the second time a major oil pipeline with takeaway from the Bakken has been cancelled for lack of interest.  ONEOK cancelled their Bakken-to-Cushing pipeline plan in November of 2012 when they failed to sign up enough committed shippers.  The reason - turns out that producers favor rail, which is more expensive, but enables them to seek the highest price for their oil anywhere in the country.  This has enabled coastal refiners to utilze lower-priced unconventional oil from the central US, in place of more expensive brent-priced crude from overseas.  Expect even more crude to ship by rail as the industry continues to add capacity in the way of crude tanker cars and onload/offload facilities to acommodate this transportation method. Article here

 

Unconventional Oil & Gas News

Texas oil boom to slow down this year according to economist

Over the least three years, Texas has seen an unprecedented growth in its oil production, coming largely from unconventional development in the Eagle Ford and Permian Basin areas. The Eagle Ford went from producing almost nothing three year ago to providing one fourth of Texas' 857 million barrels of oil produced in 2013.  The Permian has also expanded, now  providing 45% of the state's oil, up from 31% in 2011.  But the rate of growth has slowed, and may start to flatten, according to Karr Ingham.  "I think we will see a solid year for exploration and production activity, and that the oil and gas economy will continue to be a great benefit to the state as a whole," Ingham said. "But I don't think we are going to see rates of growth like this." Rig counts and drilling permits have dropped slightly, indicating a pullback for anticipated price declines in the coming year. Article here

 

Environment and Safety News

Keystone XL study complete, raises no environmental objections

The study, commissioned by the US State Department, looked at the environmental and economic impacts from the proposed project.  The study is not an endorsement, but its conclusion that the project does not present a major environmental impact makes this determination easier.  Additionally, the study concluded oil sands in Canada will likely be developed regardless of whether or not the pipeline is built, which essentially says canceling the project would not provide substantial environmental benefit. Article here

 

Five oil & gas companies pledge 1.5 million acres to protect prairie chicken habitat

The lesser prairie chicken thrives in habitat that has seen a boom in drilling activity.  Population counts have recently been dropping for the bird, and the US Fish an Wildlife Department is considering listing the bird as endangered, which could have a dramatic impact on the industry's ability to develop the area. The pledged acreage, as part of the "range wide plan", lies in Texas, Colorado, Kansas, New Mexico and Oklahoma. Companies participating include Oxy, Samson Resources, Devon, Continental and Apache. Article here

 

Mergers and Acquisitions News

Hess selling off its dry gas Utica acreage

The assets consist of 74,000 acres, for a price of $924 million. The buyer is Aubrey McClendon's American Energy Partners LP. Hess will utilize the proceeds in its share repurchase program. Article here

 

Liberty Resources II acquires Bakken assets for $455 million

The acquisition consists of 53,000 net acres located in Williams, Divide, Burke, and McKenzie counties with current production of 4,000 barrels of oil equivalent per day.  This is the second go-around in the Bakken for Liberty's management team,who previously built and sold a Bakken asset to Kodiak in July of last year. Article here




Contributor:   Todd Erickson


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