O&G Members Banner

The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 24 June 2014

Contributor: Todd Erickson
Posted: 06/22/2014
Rate this Column: 
Be the first!

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

7

Arkansas

11

0

12

14

California onshore

46

-1

41

36

Colorado

68

+3

61

62

Kansas

33

0

29

28

Mississippi

11

0

11

11

N. Louisiana

26

0

29

23

New Mexico

90

-1

86

75

North Dakota

170

+1

179

178

Ohio

40

+2

39

30

Oklahoma

200

0

183

178

Pennsylvania

57

-2

56

54

Texas

889

+1

858

843

Utah

27

0

28

34

West Virginia

25

-1

23

22

Wyoming

51

0

53

46

Total US

1858

+4

1803

1759

Total Canada land

263

+21

389

196

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

107.05

101.57

95.07

Brent

114.88

105.95

99.80

Natural Gas-USD/mmbtu

NYMEX Henry Hub

4.51

4.48

3.81

General News

Barclay's: US E&P companies could boost spending by 9.6% over last year's spending based on rising crude prices

The increase would put US spending at $165 billion in 2014. The adjustment in Barclay's estimate was made upwards after crude prices rose, largely based on political instability in many major oil-producing countries. Barclay's opinion is based on its survey of US E&P companies, where executives reported that they would increase spending if WTI pricing exceeded $100 a barrel. None of the companies Barclay's surveyed said they would drop spending at current prices, "which we think provides strong evidence that actual E&P spend will outpace current expectations." Most of the increase in spending appears to be directed at the Permian Basin, where rig counts are 33% higher than a year ago. Article here

Two new refineries under construction in North Dakota, three more in the planning stages

A major refinery has not been built in the lower 48 states since 1976, but now North Dakota has two under construction, with three others under consideration. The Dakota Prairie Refinery, a 50/50 JV between MDU Resource and Calumet, should be done by the end of this year. The Thunder Butte refinery, the second under construction, will take a bit longer to complete. The other three, including the Trenton, Devils Lake, and Fairview refineries, are all in various stages of approval, or waiting on financing and/or permits. All of these are fairly small, at around 20,000 bpd. Those currently under construction plan to refine local crude into diesel fuel to sell back into the local market. Article here

Colorado Energy Expo this Friday to promote the energy industry to the public

The Expo, which will be held in downtown Denver at the Colorado Convention Center on Friday, June 27, attempts to connect the public to how energy positively impacts their lives on a daily basis. Co-sponsored by the Colorado Energy Commission and Enserca, the Expo is promoting energy production in all its forms, including renewable sources such as solar and wind, along with oil & gas. The key note speaker is former Secretary of the Interior Ken Salazar, with other speakers from RES Americas, the National Renewable Energy Lab, and Noble Energy. Find out more here:Colorado Energy Expo

Unconventional Oil & Gas News

Recent study predicts Cline Shale could have $20 billion impact

A recent University of Texas at San Antonio study estimates that activity from the Cline Shale, located in West Texas' Permian Basin, could add up to $20 billion to that local economy by 2022, supporting up to 30,000 jobs. Early analysts' estimates for recoverable reserve in the Cline Shale were at 30 billion barrels, but analysts have backed off that number as exploration has provided more complete information on the formation's production possibilities. Currently, most horizontal drilling rigs in the Permian focus on the Spraberry. Article here

Environment and Safety News

BLM proposing 151,000 acres for new leasing in Utah's Uinta Basin

The proposed lease area would cover portions of the West Tavaputs Plateau, Nine Mile Canyon, and Utah's Canyon Country District. These proposed leases are based on industry nominations. Article here

Mergers and Acquisitions News

Shell to spin off its US pipeline assets in part of a larger divestiture

The new entity that will be spun off by Shell will be a public MLP, with an initial public offering expected to bring in $750 million. This is just part of Shell's strategy to sell $15 billon in assets by the end of the year, including most of its stake in Australia's Woodside Petroleum. MLP's are the rage right now in the midstream industry. "As all of the majors have significant midstream assets, and as they have a tendency to mimic one another's strategy at times, it will be interesting to see if the other majors begin to follow Shell's lead on this front," wrote a Simmons & Co analyst. Article here

Contributor: Todd Erickson