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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 10th August 2015

Contributor: Todd Erickson
Posted: 08/09/2015

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

10

8

Arkansas

4

0

7

11

California land

12

+1

12

46

Colorado

36

-2

39

71

Kansas

10

+3

10

26

Mississippi

3

0

4

15

N. Louisiana

28

+2

27

31

New Mexico

54

0

44

94

North Dakota

71

+1

80

182

Ohio

20

-1

24

43

Oklahoma

107

0

102

211

Pennsylvania

39

-3

47

51

Texas

383

+8

379

908

Utah

4

0

6

25

West Virginia

19

+2

20

26

Wyoming

22

0

24

48

Total US

884

+10

894

1908

Total Canada land

204

-7

73

385

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

44.21

59.44

98.26

Brent

49.26

65.15

103.63

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.85

3.01

4.00

General News

Moody's revises its 2015 crude oil price estimates down $5 per barrel

With the recent slump in crude oil prices, Moody's now expects an average price for crude in 2015 of $55 per barrel for Brent and $50 per barrel for WTI crude. To make that average, Moody's believes the remainder of the year will run around $47 for WTI and $52 for Brent. Looking to 2016, Moody's expects Brent to average $57 and WTI to average $52. Past 2016, what Moody's calls the medium-term, the ratings agency expects $75 per barrel for Brent and $70 for WTI. Moody's price expectations for natural gas remain unchanged. Article here

Pioneer ramps up drilling program in Permian

Despite a second quarter loss of $218 million, the Texas company announced that its aggressive cost reductions have put it into a position enabling it to expand activities. The company will expand its drilling budget to $2.2 billion and add an average of two rigs per month in the Permian's Spraberry and Wolfcamp formations the second half of this year. A pretty aggressive strategy with current trends. Article here

Unconventional Oil & Gas News

Fitch Ratings forecasts 7% decline in shale production for second half of 2015

The ratings agency believes that production will drop 7% from June's numbers, making 2015 overall 3% lower than 2014. The drop comes from the nearly 55% fall in rig counts from last year. Going forward, Fitch believes the pricing environment will create a "new-normal" total US rig count of between 1,200 and 1,300 rigs, down significantly from last year's high of nearly 1,900. Article here

Environment and Safety News

Oklahoma regulators limit waste water disposal in effort to curb seismic activity

Since 2010, parts of Oklahoma have seen a tremendous increase in tremors, which coincides with a relative increase of oil production-related waste water injection. So far, regulators have just focused on specific wells in areas of high seismic activity, but continued tremors have prompted regulators to take a bolder step; as of Monday of last week, regulators have issued instructions to reduce waste water disposal volumes by 38% in 23 wells northeast of Oklahoma City. Dana Murphy, member of the commission that issued the instructions, said "[t]here was a time when the scientific, legal, policy and other concerns related to this issue had to first be carefully researched and debated in order to provide a valid framework for such action. That time is over. We must continue to take progressive steps, and do so as quickly as possible." Article here

Mergers and Acquisitions News

Exxonmobil purchase in the Permian may signal deal market ready to pick up
The global giant announced that it signed two drilling agreements in the Permian for 48,000 acres. ExxonMobil is notoriously conservative, so many analysts feel that this deal marks the bottom of the crude oil slump. The deal may also spur further deal making in the sector as over-leveraged E&P companies finally close the spread between sellers and buyers. Article here

Contributor: Todd Erickson