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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 5th January 2016

Contributor: Todd Erickson
Posted: 01/04/2016
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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

11

9

Arkansas

1

0

4

11

California land

7

-2

12

21

Colorado

24

0

30

66

Kansas

12

0

10

29

Mississippi

5

0

5

14

N. Louisiana

27

0

27

28

New Mexico

38

0

46

101

North Dakota

53

-2

65

169

Ohio

14

-2

20

46

Oklahoma

87

-1

97

209

Pennsylvania

27

+1

30

54

Texas

321

+2

357

840

Utah

3

0

5

23

West Virginia

15

-1

18

28

Wyoming

17

0

24

56

Total US

698

-2

809

1811

Total Canada land

83

-43

178

205

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

37.82

47.09

53.46

Brent

38.40

50.95

57.86

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.34

2.48

3.07

General News

Oil traders say price not likely to recover much in 2016

A year ago, analysts were predicting price recoveries in 2015, while oil traders were shorting crude with expectations of further price erosion. The traders were right, and the price of crude oil kept dropping throughout 2015. Now, a similar disparity exists between analysts' and traders' expectations for 2016: the analysts expect a recovery, while traders expect prices to remain flat throughout the year, and maybe even longer. "The party (of past high oil prices) is over, at least for the next two to three years," said trader Oystein Berentsen. Crude oil supply appears to support the traders' argument for sustained lower prices. A significant global surplus in production still exists as OPEC keeps pumping, and shale producers have proven to be more resilient with their production than expected, as they adjust costs and returns downwards to accommodate lower prices. Article here

Unconventional Oil & Gas News

US LNG terminal gets ready to make first shipment in January

Cheniere Energy's Sabine Pass terminal in Louisiana has begun liquefying natural gas and storing it into tanks, anticipating its first shipment to go to Europe this month. The plant expects to have six trains completed by 2018, enabling it to export up to 3.5 billion cubic feet per day when finished. Article here

Environment and Safety News

Environmental groups question Pennsylvania study of radioactive waste

Pennsylvania's Department of Environmental Protection undertook the study after questions were raised about the risk from naturally occurring radioactive materials (NORM), a common by product of oil & gas exploration and production. The study found that NORM from Pennsylvania industry activities showed little potential for harmful radiation exposure. The Delaware Riverkeeper Network claims the study was flawed, using inaccurate radon measurements and sampling methods. The state has received the group's review, but has declined to comment. Article here

Mergers and Acquisitions News

Freeport-McMoRan looking to get out of the oil & gas business
The mining giant got into the space in 2013 with the purchase of Plains Exploration and McMoRan Exploration for $19 billion. Since the collapse of oil and gas prices, the company's acquisition debt and lack of profitability in this segment is compelling it to consider a sale of these assets. Freeport hired investment banker Lazard to advise it in the divestiture, which could be worth more than $3 billion. Article here

Swift Energy files for chapter 11 bankruptcy

The Houston-based E&P company is the 40th North American driller to file for bankruptcy in the downturn. The company, with $1 billion listed in assets and $1.35 billion in debt, plans to restructure by converting senior debt to equity. Article here

Contributor: Todd Erickson