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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 3rd February 2015

Contributor: Todd Erickson
Posted: 02/02/2015
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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

10

-1

8

12

Arkansas

12

0

12

12

California onshore

14

0

44

31

Colorado

63

-1

75

62

Kansas

22

-1

26

30

Mississippi

8

-1

14

13

N. Louisiana

31

+1

32

25

New Mexico

87

-2

100

80

North Dakota

143

-4

180

169

Ohio

41

-3

42

38

Oklahoma

183

-10

208

185

Pennsylvania

54

+1

55

55

Texas

695

-58

901

842

Utah

14

-1

23

26

West Virginia

23

-2

34

33

Wyoming

42

-4

61

53

Total US

1543

-90

1929

1785

Total Canada land

391

-38

429

608

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

48.85

77.43

96.44

Brent

54.11

82.90

106.55

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.64

4.18

5.04

General News

Shell cutting $15 billion from its 2015-2017 budget

The company says it is "not overreacting to current low oil prices," but is keeping its "best opportunities on the table." The lower spending number is also driven somewhat by the company's lower cash flow due to selling $15 billion in assets last year. Article here

Weekly oil rig decline largest since 1987

According to Baker Hughes, the total number of onshore oil rigs dropped by 94 last week, the largest single drop since the company began tracking rigs in 1987. The number of rigs drilling for natural as actually went up week over week, bit still fewer than a year ago. The drop is due to the continued decline in crude oil prices, as E&P companies cut their budgets in response to reduced revenue. "There's a lot of debate right now about the duration of the current low oil prices," Ryan Lance, ConocoPhillips' chief executive officer said following the company's announcement of a reduction in wells, "we're assuming that they'll stay low for 2015, and we're taking decisive actions." Article here

Unconventional Oil & Gas News

Economist says Texas rig count has lots of downside yet

According to Karr Ingham, the state could lose a total of 600 rigs. "I think people haven't quite gotten a grip on what's possible," said Ingham, who compiles the Texas Petro Index for the Texas Alliance of Energy Producers, a trade group. "We'll likely lose 60 to 65 percent of the rigs," Ingham said. "It will be a bloodbath in the short-term, but it's cyclical." Article here

Conferences

NGL Recovery Optimization & Cryoplant Facilities Design 2015

February 17-18, Houston, Texas

At this conference speakers will present information on standardizing designs to optimize NGL recovery, reduce facilities costs, and increase project execution speeds. Presenters come from industry leaders such as Enable Midstream, American Midstream, ConocoPhillips, Targa Resources, and Antero Resource, sharing information on how to maximize propane recovery, deal with excess ethane, and building in contingencies for market changes.

If you want to attend, use the code TE15 and readers of The Weekly Oil & Gas Update receive a 15% discount. Info and registration here

NGL Recovery Poll: Take the poll at the link below and find out what other midstream executives think about the current market: Poll Here

Environment and Safety News

Recent pipeline ruptures making headlines

The last couple months have seen a number of pipeline ruptures that resulted in significant spills, including a 3 million gallon spill of produced water in North Dakota. West Virginia had an explosion last week from an ethane pipeline, and Montana's Yellowstone River had 40,000 gallons of crude spilled into it. Critics point to an aging pipeline infrastructure and lax oversight by regulating agencies. None of this helps the ongoing fight to approve the Keystone XL, as environmental groups focus on these recent headlines. Article here

Mergers and Acquisitions News

Eclipse Resources raises $440 million in private placement

Apparently the equity markets are still interested in oil & gas. Last week, Eclipse raised its capital to develop acreage and make acquisitions in the Utica and Marcellus plays. Article here

Energy Transfer to buy Regency for $11 billion

The cash and stock deal represents a simplification of ownership move since Energy Transfer is already an owner of about 22% of Regency's publicly traded units. Article here

Contributor: Todd Erickson