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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 4th November 2014

Contributor: Todd Erickson
Posted: 11/03/2014
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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

8

0

6

10

Arkansas

12

0

11

12

California onshore

44

0

41

40

Colorado

75

0

68

70

Kansas

26

+5

27

25

Mississippi

14

-2

15

10

N. Louisiana

32

0

27

23

New Mexico

100

-3

95

74

North Dakota

180

0

177

163

Ohio

42

-2

43

34

Oklahoma

208

+4

209

176

Pennsylvania

55

+3

54

56

Texas

901

-5

904

821

Utah

23

0

25

28

West Virginia

34

-2

27

31

Wyoming

61

0

50

55

Total US

1929

+2

1889

1742

Total Canada land

429

+3

389

401

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

80.70

98.09

94.58

Brent

85.91

103.47

104.85

Natural Gas-USD/mmbtu

NYMEX Henry Hub

4.03

3.84

3.38

General News

Rig count remains steady as oil rig counts fall, gas rig counts rise

As the price of crude oil continues to drop, rig counts directed at oil are experiencing a corresponding decline. The number of rigs directed at oil now stands at 1,582, the fourth weekly decline in the past six weeks, and the lowest count since August. Rigs directed at gas continued to climb however to their highest level since February, as the price of natural gas continues to hold near $4mbtu. Analysts don't expect any further significant declines in oil rigs as long as prices stabilize at or above $80 a barrel. "Our sense is we're not going to see those sorts of capital changes immediately unless we see sustained low prices," said Teri Viswanath, director of natural gas strategy at BNP Paribas. Article here

Bakken-area tribes drilling their own wells

The Fort Berthold Indian Reservation in the heart of the Bakken is home to more than 1,300 wells, but until recently, none were owned by the reservation's three tribes. Rather than just receiving a royalty, the tribe's Missouri River Resources E&P company will keep all the revenue from four planned wells. It "presents a huge opportunity for the tribe to get involved rather than be passive royalty owners," said tribal councilmember Ken Hall, who is also the board chairman of the new E&P company. "That's how you get the lion's share of the pie, and that's what we're doing." The company doesn't have too much land to work with however, since most minerals were previously leased to other companies. Article here


Read more here: http://www.star-telegram.com/2014/11/02/6251364/north-dakota-tribe-to-drill-its.html?rh=1#storylink=cpy

Anadarko sees low oil prices as opportunity for acquisitions

With oil around $80 a barrel, those with cash may start to see buying opportunities, according to Anadarko Petroleum CEO Al Walker. "We think the environment, where it is currently, may bring opportunities to acquire things in the basin that might be advantageous to us," said Walker. And Anadarko has the cash to do a deal, with profits exceeding $1 billion last quarter largely due to expanding oil production. Areas of interest for Anadarko to target include Colorado, where it is currently developing its Wattenberg field. Article here

Unconventional Oil & Gas News

Bakken landowners suffering from 'pipeline fatigue'

Surface owners in North Dakota's Bakken tight oil play, consisting largely of Ranchers and farmers, are becoming tired of the fallout that comes from granting access rights to pipelines built across their land. Subcontractors are reported by landowners to often do sloppy work and lack accountability for their results. "Somebody else negotiates the easement. Somebody else oversees the pipeline. Somebody else puts it in the ground," said McKenzie County landowner Nathan Brenna, and before it's done, 10 to 20 contractors are involved. Problems include cut fences resulting in wandering cattle, weeds, poorly compacted trenches, and incomplete reclamation. As a consequence, pipeline right of ways are getting increasingly hard to get, right when they are needed most to gather all the natural gas currently being flared. To address the problem, landowners have organized a task force, the Greater McKenzie County Stewardship Group, who meets later this week. "We've to find a balance," said organizer Vawnita Best, who also invited industry members to the meeting. Article here

$15 billion in pipelines planned for Marcellus region

The prolific Marcellus Shale play needs pipelines to transport its natural gas to markets. Four pipelines are panned, the Atlantic Coast Pipeline, Rover Pipeline, Mountain Valley Pipeline and Leach XPress, with a total capital expenditure of $15 billion. "They need to have somewhere to take all of this gas," said Tim Greene, owner of Land and Mineral Management of Appalachia and a former West Virginia Department of Environmental Protection oil and gas inspector. "They are going north, south, east and west. And more pipelines will lead to more drilling all across the state." Article here

Environment and Safety News

Blowout in the Utica results in evacuation of 400 homes

The blowout, near the Ohio town of Bloomingdale, was due to a mechanical failure. "There was no explosion, there was no fire, but it was a well that was out of control," said Bethany McCorkle, a spokeswoman for the Ohio Department of Natural Resources. Boots and Coots was brought in to bring the well under control. Article here

Mergers and Acquisitions News

American Energy Partners spends $726 million on Permian acreage

The acquisition adds 27,000 net acres, primarily in Reagan County, to American Energy's existing holdings of 63,000 acres. Article here

Conferences

Tight Oil & Shale Gas Well Site Facilities Design Western Canada 2014

December 9-10

As the economics of well site facilities become increasingly scrutinized, facilities engineers are under greater pressure to optimize costs and scheduling times. Join Chevron, Crescent Point, Talisman, Vermillion, Brion Energy, Northern Blizzard, Harvest Operations Corp., and more, at Canada's first summit dedicated specifically to well site facilities and project management professionals working within key Western Canadian tight and shale plays.

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Contributor: Todd Erickson