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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 21st April 2015

Contributor: Todd Erickson
Posted: 04/20/2015
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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

12

-1

11

9

Arkansas

8

-1

11

12

California land

12

-1

17

39

Colorado

36

0

64

62

Kansas

11

-2

24

28

Mississippi

4

0

12

14

N. Louisiana

26

+1

30

25

New Mexico

49

+2

92

89

North Dakota

83

-5

156

178

Ohio

25

-1

48

36

Oklahoma

118

-6

201

187

Pennsylvania

48

-2

51

59

Texas

412

-15

766

884

Utah

7

-1

17

27

West Virginia

22

0

26

23

Wyoming

23

-4

47

49

Total US

954

-34

1676

1831

Total Canada land

77

-20

363

196

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

55.87

44.80

104.35

Brent

63.37

46.07

109.69

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.56

2.92

4.76

General News

Drilling rig rates and counts continue to fall

According to a recent article in the Oil & Gas Journal, rig owners continue to slash their rates as demand sags for both onshore and offshore rigs. "We expect a longer, slower rig-recovery profile, based on higher global supply-driven by US shale-tepid global demand, and a perceived lack of OPEC price support leading to our U-shaped price forecast assumption," wrote Fitch analysts. Rig counts for oil-directed land rigs in the US have fallen by 50% since recent highs, while 33 offshore rigs have been retired over the last six months. More offshore rigs are expected to be scrapped, as Analysts J.B. Lower and Roland Morris noted that "[w]e expect that [approximately] 100 floaters will eventually need to be retired in order to bring the market back into balance." Article here


US Government wants to raise royalties for production on public lands

The Department of Interior will open a discussion on raising the cost to drill on public lands. Producers currently pay royalties of 12.5% on oil and gas produced onshore to the US government, and 18.75% for offshore production. The Interior Department is also looking at increasing requirements around insurance, reclamation bonding, and other fees. Comments will likely be taken through the end of the may. This may not have that much impact as the recent oil and gas renaissance has largely been on private land. In 2013, only about 5% of total US product was on federal land, according to the EIA. Article here

Schlumberger misses revenue target, lays off another 11,000

Revenue for the services giant fell by 19% in the first quarter of the year, missing forecasts. In response, CEO Paal Kibsgaard announced in a statement that the company would lay off 11,000 workers, these in addition to the 9,000 layoffs announced in January. The biggest cuts will come in North America, where the company expects to cut spending by 30%. Article here

Unconventional Oil & Gas News

Utica production of natural gas up 140% from a year ago

According to the EIA, the Utica is the fastest-growing natural gas producer in the US. In March, the play produced 1.92 billion cubic feet per day. Major producers in the play include Chesapeake, CONSOL, and Range Resources. Article here

EIA releases updated map of US tight oil and shale plays

The map shows the major US plays in terms of geological age and geographic expanse. See map here

Environment and Safety News

Department of Transportation issues emergency order on crude by rail shipping

Recent derailments and resulting fires on crude oil transport trains have prompted the US DOT to issue new rules. Changes include mandatory top speed of 40 mph through urban areas and more rigorous brake and mechanical inspections. Most railway operators have already been complying with these rules for some months now under a voluntary program reached last year with the DOT. Critics argue that the accidents occurred despite the slower speeds, and the real problem is the high volatility of Bakken crude oil. Article here

Mergers and Acquisitions News

ConocoPhillips looking to sell non-core US assets

According to insiders, ConocoPhillips is preparing to sell assets in the Rockies, East Texas, South Texas and Northern Louisiana. Industry sources said the assets could be valued between $1 billion and $2.5 billion, which would make it the largest asset sale in the US by a major company this year. Article here

Gulfport expands Utica holdings with acquisition of Paloma Partners

The $300 million transaction will provide Gulfport with 24,00 net non-producing acres in the core of the Utica's dry gas window. This deal brings Gulfport's total Utica acreage to 212,000. Article here

Contributor: Todd Erickson