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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 27th May 2015

Contributor: Todd Erickson
Posted: 05/26/2015
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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

0

12

10

Arkansas

8

+2

11

11

California land

12

0

13

47

Colorado

39

0

44

66

Kansas

13

-1

17

32

Mississippi

4

-1

7

10

N. Louisiana

27

0

32

29

New Mexico

47

+3

68

87

North Dakota

78

-1

108

174

Ohio

23

-1

36

39

Oklahoma

104

+1

146

191

Pennsylvania

49

+3

54

60

Texas

373

0

570

889

Utah

7

0

11

27

West Virginia

18

-3

16

25

Wyoming

22

0

33

45

Total US

885

-3

1267

1857

Total Canada land

69

-5

327

152

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

59.08

49.59

104.78

Brent

64.90

60.75

110.01

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.82

2.79

4.40

General News

Moody's believes 7.4% of US oil producers will go bust this year

A continuing low-price environment will be too much for 7.4% of current E&P companies, says credit analyst Moody's. "With a gradual recovery in energy prices, the weaker oil and gas issuers are at a much greater risk of default," said David Keisman at Moody's. Their forecast shows defaults accelerating between September this year and March, based on a continued low oil price scenario. Article here

Pipeline ruptures, spills up to 105,000 gallons of crude into California ocean

The pipeline, operated by Plains All American, ruptured last Tuesday along the Gaviota Coast in Santa Barbara County. The 24" oil line, installed in 1987, was pumping at a rate of more than 50,000 gallons per hour. Governor Jerry Brown declared a state of emergency for Santa Barbara County to make resources available for clean up. Article here

Unconventional Oil & Gas News

More shale oil plays confirmed in Canada

According to Canada's National Energy Board, two fields in the Northwest Territories can together hold has many as 200 billion barrels of shale oil. Although this may not all be recoverable, experts believe that the Canol and Bluefish shales, located 145 kilometers south of the Arctic Circle, might hold up to 7 billion barrels of oil that are economically recoverable. "This study confirms what we have known all along - that there is significant petroleum potential in the Sahtu," said Minister of Industry David Ramsay. Article here

Core of the Bakken profitable at $60 oil

According to a study by GlobalData, the Bakken's core, located in Montrail and McKenzie counties, remains profitable at current crude prices. "Both counties possess break-even prices that still generate profit in the current market, " said Jonathan Lacouture, GlobalData's analyst for US onshore. Drilling has almost completely stopped in counties outside of this core, considered "frontier". This is largely due to the high cost of drilling and completions in North Dakota, along with the almost $11 discount per barrel differential to WTI due to the area's high transportation costs. Article here

Environment and Safety News

Offshore oil platform on fire in Gulf of Mexico

The platform, owned by privately-held Texas Petroleum Investment Co, is small by Gulf standards, producing only about 2,200 barrels of oil per day. According to the Coast Guard, only 130 barrels were aboard at the time of the fire, but a rainbow sheen could be seen on the surface of the ocean running 1.4 miles southwest of the platform, which lies 20 miles off the coast of Louisiana. The platform's 28 workers were evacuated and no injuries reported. Article here

Mergers and Acquisitions News

Vanguard Natural Resources to acquire Eagle Rock Energy Partners
The $474 million transaction follows an earlier deal where Vanguard purchased LRR Energy for $250 million. "We believe that all Three companies' unit holders will benefit from a larger, more diversified entity with lower financial leverage and strong positions in several key US basins," said Vanguard CEO Scott Smith. Article here

Contributor: Todd Erickson