The Weekly Oil and Gas Update

The Weekly US Oil & Gas Update: 14 January 2014

Todd Erickson
Contributor: Todd Erickson
Posted: 01/13/2014

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

11

11

Arkansas

11

0

12

15

California onshore

32

0

38

30

Colorado

59

-6

70

52

Kansas

30

+1

24

30

Montana

10

0

11

20

N. Louisiana

25

0

24

21

New Mexico

81

+2

75

81

North Dakota

168

-6

170

174

Ohio

35

0

35

30

Oklahoma

183

+14

178

185

Pennsylvania

55

-1

58

67

Texas

835

-7

822

824

Utah

25

+2

29

28

West Virginia

34

+2

30

27

Wyoming

54

+1

49

46

Total US

1754

+3

1743

1761

Total Canada land

476

+195

353

530

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

91.82

99.28

94.27

Brent

106.67

109.47

111.32

Natural Gas-USD/mmbtu

NYMEX

4.15

3.77

3.39

General News

Oil prices hit lowest point in the past year

The US Energy Department said that supplies of gasoline rose by 6.2 million barrels last week. This oversupply, along with increasing crude oil stocks, led to the lowest price for the US benchmark oil price in the past year, just under $92. US production of crude oil is at its highest level for the last 25 years, and supplies "are near the upper limit of the average range for this time of year," according to the Energy Department. Natural gas prices also fell as forecasts called for warm weather in the coming weeks. Article here

US Energy Information Administration expects rate of crude oil production growth to slow in 2015

The boom in production from US shale plays has consistently exceeded the EIA's forecasts the last couple of year, with growth of over 1 million bpd just last year. The EIA expects growth of another 1 million bpd in 2015, which will make US production its highest in 43 years, but the EIA expects production growth to slow to 750,000 bpd in 2015. This, along with increased OPEC production, means falling crude prices globally, at least according to the EIA's forecast, with Brent prices averaging $101.58 in 2015, down from $105.42 this year, despite rising global demand for oil. Article here

Another train carrying crude derails, catches fire

This one was in rural New Brunswick, CA. On January 8th, 15 cars derailed, four carrying crude oil, and caught fire. As a result, 60 people were evacuated while the fire was being contained. This string of train accidents involving crude oil is bound to result in a significant impact on public perception around crude transportation--expect lots of noise from Washington, followed by increased scrutiny and possibly new regulations affecting crude transportation. Article here

Unconventional Oil & Gas News

Ohio releases Utica production numbers; looks like a gas play

In the third quarter report from Ohio's Department of Natural Resources, 245 Utica wells produced on average 14,500 barrels of oil per day and 370 million cubic feet of gas per day, making gas the predominant hydrocarbon from the play. This is a tremendous increase from the Department's May 2012 report, that showed average daily output of oil at just 1,742 bpd and gas at 35 million cubic feet per day. The highest-producing wells, for both oil and gas, belong to Gulfport, who has made a substantial commitment to the Utica. Article here

Marcellus Shale facts

The article on the link below reports ten facts about the Marcellus Shale gas play in the Northeast US that put the size of this fast-growing shale play into perspective, such as:

-If the Marcellus Shale were a country, it would rank 8th worldwide in total production, ahead of Saudi Arabia

-Production is up from 2 Bcf/d in 2010 to its current rate of 13 Bcf/d, making it the most prolific play in the US

-Production increases continue to exceed forecasts, and analysts believe production could hit 10 Bcf/d by 2020

Article here

Environment and Safety News

Environmental activists target science education program in effort to limit Ohio oil and gas development

Recently, the environmental activist organization Climate Parents succeeded in killing a childrens science program in Ohio due to its content on pipelines, geology and energy use. The reportedly science-driven cirruculum was developed by science teachers across Ohio, but apparently the activist group found that providing children industry-specific knowledge threatening to the group's anti-industry message. This truly disturbing trend of hiding scientific knowledge in the interests of furthering political agendas represents a disappointing turn of events in the national oil & gas debate. Article here

Mergers and Acquisitions News

Emerald Oil acquires 19,500 net acres in the Bakken

The acquisition brings the company's total o 85,000 net acres in the play, focused on Mckenzie County, North Dakota. Emerald paid $74.6 million for the assets. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 01/13/2014

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