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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 14th July 2015

Contributor: Todd Erickson
Posted: 07/13/2015
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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

10

0

13

12

Arkansas

4

-1

9

11

California land

12

+1

13

44

Colorado

38

+1

36

68

Kansas

10

-2

13

31

Mississippi

4

+1

4

15

N. Louisiana

25

-2

25

25

New Mexico

49

+4

47

92

North Dakota

70

-6

88

172

Ohio

19

+1

26

42

Oklahoma

106

0

124

198

Pennsylvania

45

-2

50

56

Texas

368

+5

427

898

Utah

7

-1

8

27

West Virginia

18

-1

22

26

Wyoming

21

0

27

52

Total US

863

+1

988

1875

Total Canada land

165

+30

97

313

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

52.35

56.37

104.19

Brent

58.15

61.20

108.70

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.81

2.57

4.13

General News

International Energy Agency expects further crude price declines

According to the IEA, the world remains "massively oversupplied," and price stagnation will result in non-OPEC production growth grinding to a halt in 2016. World oil production grew by 1 million barrels per day this year, and an astounding 2.4 million barrels per day in 2014. Last November though, OPEC opened up the spigots in an effort to reduce prices and slow production growth outside its organization. The tactic worked, as OPEC's increased supplies resulted in a 50% price drop. "The bottom of the market may still be ahead," said the agency, expecting growth to remain flat in the US, while declining in Russia as the growth in global demand slows its pace. Article here

North Dakota's oil output jumps three percent in May

With the plunge in rig counts and recent production declines, no one expected North Dakota to post an increase, yet the state produced 1,201,159 barrels of oil per day in May, up from 1,169,045 bpd in April. Natural gas production was up 6% as well. The increase in crude output likely came from completing previously-drilled wells. Article here

Unconventional Oil & Gas News

Refracking - a way to squeeze more out of existing shale wells?

It's common in conventional wells to go back and restimulate the well, but in shale wells, refracking is still a new horizon, with only a little data to show its value. So far, the data looks promising. Mike Vincent teaches well refracking to completions engineers, and his class in refracking has been swamped. "I'm booked every week teaching refrack classes out to November," he recently said. Some early results reported by Bloomberg look promising. A Bloomberg study in the Bakken shows that in 80 wells originally drilled in 2008 and 2009 then refracked, the wells produced more than 30% more oil in the month after the refrack than they did after the original completion. Advances in completions technologies over the last 7 years likely played a large part in the eye-popping results, but refracking still holds tremendous promise in high-decline shale wells. With an estimated 100,000 horizontal wells eligible for restimulation, the upside is tremendous. Article here

Environment and Safety News

Colorado may see fracking rules on the 2016 ballot

A showdown in 2014 between the pro-industry and anti-fracking groups ended up in a compromise with the governor's formation of an advisory panel made up of experts from both sides of the argument. The anti-fracking side has not been happy with the panel's recommendations however, and want to take up the fight again. "I think the fossil fuels industry won," said Karen Dike, a member of Coloradans Against Fracking. The biggest issue is local control. Industry interests, as well as the advisory panel, say that regulation of the industry is best done by the state agency, which has the technical competence to understand the risks and create workable solutions to implement state-wide. The anti-fracking crowd prefers regulation at the local level, which industry says would result in a patchwork of unworkable rules and bans. It's still not clear yet, but chances are increasing that this may be settled at the polls next year via ballot initiatives. Article here

Mergers and Acquisitions News

Legacy Reserves pays $440 million for East Texas gas assets
The deal includes assets from Anadarko and Western Gas Partners, which consists of low-decline wells and more than 500 miles of pipelines. According to David Kistler, coo-head of E&P research at Simmons & Co., "[t]he transaction improves Legacy's production composition and allows for the allocation of capital to more economic portion of the portfolios" such as the DJ Basin and the Eagle Ford, he said. Article here

Contributor: Todd Erickson