The Weekly Oil and Gas Update

The Weekly US Oil & Gas Update: 17 December 2013

Todd Erickson
Contributor: Todd Erickson
Posted: 12/16/2013

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

9

0

12

8

Arkansas

11

0

13

16

California onshore

34

-1

34

31

Colorado

70

+4

67

58

Kansas

31

+1

27

31

Montana

13

+1

13

21

N. Louisiana

25

-1

25

22

New Mexico

78

0

70

81

North Dakota

174

+7

168

174

Ohio

35

0

34

26

Oklahoma

175

-6

164

185

Pennsylvania

54

+1

54

71

Texas

848

+6

850

848

Utah

23

-5

30

31

West Virginia

34

-1

36

26

Wyoming

56

-1

50

49

Total US

1782

+7

1768

1799

Total Canada land

424

+24

375

416

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

96.72

103.62

86.71

Brent

109.43

108.56

109.35

Natural Gas-USD/mmbtu

NYMEX

4.25

3.46

3.20

General News

Barclay's Bank expects 2014 US E&P spending to rise 7%

Although domestic spending shows the greatest increase, the bank's analysts said global spending will go up 6%, for a total of $723 billion total capital spending in the coming year. Independent oil & gas companies are leading the way on this, as the major integrated companies stay conservative and focus on increasing returns to investors. BP cut back capital spending plans and ramped up its target for asset sales to $10 billion over the next two years. Article here

McClendon's new company files for $2 billion public offering

Former Chesapeake CEO Aubrey McClendon's new company, American Energy Capital partners, recently raised $1.7 billion in private equity and debt to purchase Utica Shale acreage. He's now following this with a $2 billion public offering, conceivably to raise capital for developing the acreage. McClendon remains one of the most bullish on the production possibilities of the Utica acreage, which several others such as Devon Energy have abandoned, having other, higher-return assets in which to invest. Article here

Unconventional Oil & Gas News

Shale development driving pipeline spending to $22 billion by 2020

The latest edition of the Douglas-Westwood North American Pipeline Database identifies $22 billion in expenditure for the construction of over 23,000 miles of pipeline between 2014 and 2020, with most of that consisting of projects to transport hydrocarbons from growing shale plays. Article here

Colorado's Wattenberg to see more than $4 billion in 2014 capital investment

Noble Energy and Anadarko will each spend up to $2 billion on their Wattenberg development projects next year, and PDC will spend another $647 million. Encana and Whiting are also active in the play, with multi-rig drilling programs. The reason for all the interest: 3.8 billion barrels of oil technically recoverable estimated by the EIA, with relatively low well costs. The challenge lies with the area's proximity to the heavily-populated Colorado Front Range, and the existance of 20,000 old vertical wells drilled over the last three decades from legacy operations. The state has a policy that operators check these old wells for well integrity before drilling nearby horizontal wells, and many of these get plugged as a consequence. "We are drilling horizontal wells in some sections in the midst of 32 vertical wells. And so the technology, the precision and accuracy we have to have in steering our wells is critical," according to Andarko's Brad Holly. Article here

Environment and Safety News

Oilfield injuries and fatalities on the increase

According to the US Bureau of Labor and Statistics, an oil & gas worker is killed on average every three days. Non-fatal injuries are also up, from 1,400 in 2011 to 2,600 last year. These numbers have grown as the industry has seen an influx of inexperienced workers. "Job gains in oil and gas and construction have come with more fatalities, and that is unacceptable," said U.S. Secretary of Labor Thomas Perez in August. Despite these numbers, the deadliest occupations still remain in agriculture, fishing and forestry. Article here

Mergers and Acquisitions News

QEP buys EnerVest's Permian Basin assets for $950 million

The company "has been focused on expanding our footprint in the world-class crude oil provinces of North America," said CEO Chuck Stanley in a written statement. The properties, near Midland, TX, include 26,500 net acres producing 6,700 barrels of oil equivalent, 68% of which is oil. Article here

Devon selling its Canadian natural gas assets

The leading US independant oil and gas producer is getting out of the natural gas business in Canada and the persistent low price for natural gas is the culprit. "Rather than waiting three or five years until maybe LNG takes off in North America, and we see a change in the gas and liquids market, we think the time is right to move forward with what we do best today." This was from Christopher Seasons, president of Devon Canada in a recent interview. The assets should sell for about $3 billion. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 12/16/2013

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