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The Weekly Oil and Gas Update

The Weekly US Oil & Gas Update: 6 January 2014

Contributor: Todd Erickson
Posted: 01/06/2014

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

11

+2

9

9

Arkansas

11

0

11

15

California onshore

32

-1

40

29

Colorado

65

+1

70

55

Kansas

29

-2

28

31

Montana

10

+1

12

22

N. Louisiana

25

0

25

21

New Mexico

79

+1

73

81

North Dakota

174

+1

171

173

Ohio

35

0

34

30

Oklahoma

169

-3

171

181

Pennsylvania

56

0

54

73

Texas

832

-3

830

826

Utah

23

0

29

29

West Virginia

32

0

34

26

Wyoming

53

0

49

48

Total US

1751

-6

1756

1762

Total Canada land

281

+19

357

257

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

94.39

102.46

93.20

Brent

107.76

110.13

112.49

Natural Gas-USD/mmbtu

NYMEX

4.35

3.82

3.30

General News

Bakken crude oil train collision results in fire, evacuation

For the third time in the last year, a train transporting crude oil sourced from North Dakota's Bakken formation wrecked and caught on fire, setting off a series of explosions. The latest was near the North Dakota town of Casselton, when a westbound training carrying soybeans derailed and an eastbound train carrying 106 cars of crude oil ran into it, leaving 21 cars on fire. There were no injuries reported. Article here

One of the results of this series of event has been an alert to the public, emergency responders, shippers and carriers by the Pipeline and Hazardous Materials Safety Administration that Bakken crude my be more flammable than other crudes. Article here

Proposed Colorado constitutional amendment would allow municipal bans on fracking

The Colorado Community Rights Network plans to submit the language for a ballot measure that would change the argument on how to restrict oil & gas development in Colorado's Front Range. Currently, four communities have passed local hydraulic fracturing bans, but the measures have little hope of surviving a legal challenge since the state has primacy on regulating oil & gas activities. The newest ballot measure would attempt to circumvent that legal restriction. Article here

Newfield files EIS for 5,750 wells in the Uinta Basin

The proposed development would be an infill into its existing Monument Butte field, target oil, natural gas, and NGLs. Newfield expects the 15 year project to ultimately produce up to 335 million barrels of oil, 6.9 Tcf natural gas and 100 million barrels of NGLs. If approved, Newfield will drill at a rate of 360 wells per year and begin a water flood three years after initial production. Article here

Unconventional Oil & Gas News

University of Texas study shows that power generated from unconventional natural gas uses less water than coal

Those opposed to extracting natural gas utilizing unconventional methods,with multi-stage hydraulic fracturing (fracking), have long contended that the practice wastes valuable water. A new study from the University of Texas' Bureau of Geology says that in fact it uses far less compared to coal. It turns out that when looking at the total life cycle of power generation, coal uses many times the amount of water of natural gas genertion, especially when considering new combined cycle energy plants utilizing natural gas. The researchers estimated that if Texas' natural gas plants had instead burned coal last year, the state would have used 32 billion gallons of extra water, enough to meet the needs of 870,000 residents. Article here

Environment and Safety News

ExxonMobil faces criminal charges in Marcellus spill

The company's subsidiary, XTO Energy, was storing flowback water for treatment when a removed plug resulted in 57,000 gallons of water leaking out. Last week, the trial judge ruled that ExxonMobil will face up to eight counts for criminal charges in the incident. Article here

Mergers and Acquisitions News

Merger and acquisition activity down in 2013

According to IHS, 2013 saw the lowest total transaction value since 2008, with just $136 billion in deals. The industry saw a flurry of acquisition activity in the period from 2010 to 2012, with deal value of $600 million. Recently though, companies have chosen to focus on their current acreage. As a result, transaction activity has gone down but capital investment has increase 10% over last year. Article here

Contributor: Todd Erickson