The Weekly Oil and Gas Update

The Weekly Update: 9th July 2012

Todd Erickson
Contributor: Todd Erickson
Posted: 07/09/2012

Catch up with his week's industry news, oil and gas prices and the North American rig count.
GENERAL NEWS

Analyst expects US E&P capital expenditures to grow 9.6% in 2012

Dahlman Rose & Company's mid-year survey reports that the weakening oil prices have somewhat blunted the expected rise in spending from earlier estimates of 11% domestically. Globally, the survey predicts 12% capex increase over last year, with a 6% increase in Canada. Article here

Growth in shale oil production large enough to impact world oil prices

Leonardo Maugeri, a research fellow at Harvard, says that production in shale oil is growing so fast that it may outpace the global growth in consumption. Through 2020, the United States and Iraq are forecast to lead production increases, with Saudi Arabia, Russia and China also contributing. Expect production levels to decline in Iran, Mexico and the United Kingdom. Article here
OIL & GAS PRICES


This Week

12 weeks ago

1 year ago

Oil

Nymex Crude Future

84.51

Brent Spot

98.21

WTI Cushing Spot

84.82

102.45

95.16

Natural Gas

Henry Hub Future

2.85

Henry Hub Spot

2.94

1.89

4.27

NYC Gate Spot

3.12




SHALE
NEWS

Hydraulic fracturing in 2012 to exceed $7 billion in the Bakken

Analysts Warlick Energy predict that the play that covers large parts of western North Dakota and eastern Montana will continue its frenetic pace of development through the rest of the year. Article here

Overseas companies fund a large share of US oil & gas development

Unconventional oil & gas development projects have been booming in the US as well as Canada. Domestic independent E&P companies with assets in the Bakken, Eagle Ford, Marcellus, Utica and Mississippian have seen billions invested into them from companies based in France, China, Japan, Spain, South Korea, Norway and Australia. These overseas entities, many of them national oil companies, are not only looking for sound financial investments, they are also looking to acquire some of the technology that has enabled this growth, with the intention of applying it in other assets outside the US. The following article provides details around some of the largest of these transactions. Article here

ENVIRONMENT & SAFETY NEWS

Ohio water treatment provider shut down by the state

The Ohio Department of Natural Resources allows three forms of oil & gas wastewater disposal; (1) deep injection, (2) using as road salt, or (3) through seeking a new technology permit from ODNR and disposing in other ways. Patriot Water, a private enterprise in the business of treating oil & gas wastewater, had been treating and then sending to a municipal disposal facility at Warren, OH. The state EPA put a stop to this saying that the Warren facility does not have the authority to accept brine, such as what Patriot has been sending to them. Patriot does not have a new technology permit from the ODNR, but had gotten around that by sending the water to the Warren facility. To complicate the issue, Patriot recently won a ruling from the Ohio Environmental Review Appeals Commission upholding its right to treat wastewater. Based on the controversy, Warren has stopped accepting water from Patriot. Article here

Traffic related deaths in the Eagle Ford area up 400%

In the counties directly affected by development in the Eagle Ford resource play, traffic-related deaths in the last four years have jumped from 6 to 24, most involving commercial vehicles. Article here

ACQUISITIONS & MERGERS NEWS

Breitburn closes two acquisitions in the Permian for $220 million

The transaction for acreage from Element Petroleum, LP and CrownRock, LP will provide Breitburn with additional drilling locations for wet gas in the prolific Permian. Article here

Remote communications provider RigNet buys Nessco

The acquisition will expand RigNet's managed remote communications solutions market position in the global arena. Article here

RIG COUNT

This Week

Change from last week

12 weeks ago

One year ago

Arkansas

17

-1

26

33

California

53

0

45

45

Colorado

69

+1

64

70

Kansas

29

-1

33

31

Montana

19

-1

19

10

N. Louisiana

25

-3

45

95

New Mexico

84

-1

85

81

North Dakota

196

+4

197

153

Ohio

18

-1

12

12

Oklahoma

201

+1

202

176

Pennsylvania

78

+3

102

115

Texas

927

-2

923

850

Utah

40

+1

38

30

West Virginia

27

+1

22

20

Wyoming

42

0

41

50

Total US

1965

+6

1979

1887

Total Canada land

261

+2

187

329



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

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Todd Erickson
Contributor: Todd Erickson
Posted: 07/09/2012

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