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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 29 January 2014

Contributor: Todd Erickson
Posted: 01/28/2014
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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

11

0

12

6

Arkansas

12

0

12

17

California onshore

31

-1

40

30

Colorado

62

+1

73

55

Kansas

31

+2

23

29

Montana

9

0

11

13

N. Louisiana

24

0

23

21

New Mexico

79

+2

75

79

North Dakota

169

+1

171

178

Ohio

36

0

34

28

Oklahoma

187

+1

175

190

Pennsylvania

55

-1

58

70

Texas

839

-2

812

819

Utah

26

0

29

28

West Virginia

33

-1

30

24

Wyoming

53

0

49

48

Total US

1777

0

1738

1753

Total Canada land

590

+26

401

620

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

96.79

94.58

95.95

Brent

107.23

104.85

113.92

Natural Gas-USD/mmbtu

NYMEX

5.28

3.38

3.25

General News

US and Canadian national transportation boards call for tougher regulation on crude oil by train transportation

After a series of accidents in both countries over the last year, both the US National Transportation Safety Board (NTSB) and Canada's Transportation Safety Board (TSB) called for tighter controls on crude transport by rail. The NTSB has called for more scrutiny on route planning and incident response planning,while the TSB is also calling for tougher standard on crude tank cars. The recommendations are bound to affect the growing crude-by-rail trend, which has grown 400% since 2005. In the Bakken, where over 70% of the crude is transported to refiners by rail, expect transporters to take immediate steps to reduce risk of catastrophic events. Article here

Halliburton CEO expects no increase in natural gas activity

According to Halliburton's CEO Dave Lesar last Tuesday, don't expect any increases in the upstream natural gas industry this year. Storage levels are back near the five-year average, but production levels remained elevated both with associated gas in the liquids plays, as well as some continued robust activity in the Marcellus basin," said Lesar. "Continued strength in natural gas prices could provide some upside potential, but we are not optimistic there will be a meaningful uptick in gas activities in the near term." Article here

Unconventional Oil & Gas News

IHS report: natural gas prices to remain $4 to $5 for next 20 years

The report, Fueling the Future with Natural Gas: Bringing It Home, says that the spot price for natural gas should remain flat through 2035, primarily due to new shale extraction technologies. Good news for air quality and industries that rely on power. Natural gas provides energy with far fewer air emissions than coal, and US natural gas prices are cheap relative to other major industrial centers such as China and Europe, providing a decided cost advantage to US industry. Article here

Colorado might see regulatory changes this year as public opposes front range oil & gas development

The Niobrara formation in Colorado's DJ Basin has experienced dramatic growth in drilling and production. Mach of the best acreage is located in Colorado's populous Front Range corridor, just north of Denver, resulting in lots of activity in populated areas. As a result, public opposition has been growing. The Governor has so far been promoting slow, incremental regulatory change, which includes a fairly dramatic strengthening of air quality requirements, but opposition groups are pushing for more extreme measures. The most controversial is a ballot measure which would allow municipalities to ban any commercial activity they deem contrary to public health. This would include not only oil and gas development, but virtually any commercial activity. Expect not only the oil & gas industry, but industry in general to oppose this far-reaching measure. Article here

Environment and Safety News

Marcellus gas wells produce less wastewater per unit of gas than conventional well

In a study recently released by Kent State and Duke, researchers found that per unit of gas produced, Marcellus shale wells produce much less wastewater than conventional wells. "We found the average shale gas well is producing 10 times the amount of waste water as an average conventional well, which really isn't that surprising," said Brian Lutz, Kent State professor and an author of the study. "What did surprise us is when we actually looked at the amount of wastewater that's being produced relative to the amount of gas that's being produced we found that shale gas wells are actually producing about three times less wastewater per unit of gas recovered than conventional wells," Lutz said. The study also found that most of the water from Marcellus wells was not the result of fracking, but rather naturally occurring in the formation producing the gas. Article here

Mergers and Acquisitions News

American Midstream Partners acquires Eagle Ford gas gathering system from Penn Virginia

The $100 milliion transaction will give American Midstream a 120-mile gas gatheirng and redelivery system in the oil window of Texas' Eagle Ford shale play. Article here

Contributor: Todd Erickson