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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 16th June 2015

Contributor: Todd Erickson
Posted: 06/15/2015
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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

9

-1

11

10

Arkansas

5

0

11

11

California land

11

0

12

46

Colorado

38

-1

37

65

Kansas

13

-1

14

33

Mississippi

1

-1

5

11

N. Louisiana

26

-1

27

26

New Mexico

45

-1

58

91

North Dakota

76

0

101

169

Ohio

21

-1

31

38

Oklahoma

107

+1

107

200

Pennsylvania

46

0

46

59

Texas

363

-1

501

888

Utah

6

-1

8

27

West Virginia

19

-1

18

26

Wyoming

22

0

29

51

Total US

859

-9

1125

1854

Total Canada land

123

+11

216

242

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

59.18

47.40

107.52

Brent

62.57

53.82

104.73

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.79

2.72

4.71

General News

International Energy Agency sees global demand for crude rising

The agency's most recent Oil Market Report shows global demand for crude oil up 1.6 million barrels per day on the year, 400,000 barrels over last month's estimate. The agency forecasts demand to average 94 million barrels per day for the year. "Since bottoming out at a 5-year low in second-quarter 2014, global oil demand growth has steadily increased, as additional economic growth, colder-than-year-earlier European winter weather conditions and more recently price effects have filtered through," the agency said. Global crude production fell 155,000 barrels per day last month to 96 million, still a sizable surplus over current demand. Article here

Cheniere expands LNG export project

The company announced that it plans to add two additional production units to its Corpus Christi LNG export project. The expansion increases planned production levels to 60 mmcfd. Cheniere expects to begin construction in 2017, and finish four years later. Article here

Unconventional Oil & Gas News

Crude output falls in shale plays as OPEC maintains production levels

According to analyst Standard Chartered, crude oil production in the Eagle Ford and the Bakken will shrink in June and July, with overall shale oil output falling by 86,000 barrels per day in June and 105,000 barrels per day in July. "In our view, US oil supply is still falling, and it is likely to carry on falling for the rest of this year," said Standard Chartered's Nicholas Snowdon. The EIA agrees that a decline is coming but estimates it will be slightly less than Standard Chartered's forecast. Article here

Environment and Safety News

Remember those satellite photos of the Bakken's flares? New study says they were "inaccurate" and "manipulated"

Two years ago, satellite images showing the North Dakota sky lit up by natural gas flares made their way around the internet, raising the pitch on the outcry against flaring in the Bakken. Researchers at the University of North Dakota recently took a closer look at these photos, and came to the conclusion that they were highly processed to inaccurately portray the impact flaring had on the night sky. Chris Zygarlicke, the deputy associate director of the University of North Dakota's Energy & Environmental Research Center drove through the oil patch after seeing the photos, and had questions. "There's no way that we're lighting up the land like you see people talking about everywhere," he said. Upon closer examination, the researchers found that the publicized photos were actually a representation of head sources, not light, and amplified up to 100 times. "These images are misleading in that they give the uniformed public the idea that flares are literally lighting up many square mile of prairie countryside, creating visible light similar to large metro areas," the study states.Side-by-side comparisons of the manipulated photos against unaltered photos show a stark contrast, with unaltered photos showing a largely dark representation. Article here

Mergers and Acquisitions News

Hess sells 50% of Bakken midstream assets to equity firm
PE firm Global Infrastructure Partners bought the stake in Hess's North Dakota gathering and processing assets for $2.68 billion. Hess will continue to operate the asset, which it plans to move into an energy MLP. Article here

Gulfport increases Utica acreage with asset purchase from American Energy
The deal includes 35,325 net acres producing 14.6 mmcfd, along with an 11-mile gathering system in the Utica's dry gas window.

Contributor: Todd Erickson