The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 11th November 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 11/09/2015

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

13

0

9

7

Arkansas

4

0

4

12

California land

12

-1

12

44

Colorado

33

+3

36

75

Kansas

10

+1

10

28

Mississippi

7

+1

3

14

N. Louisiana

28

-2

28

31

New Mexico

37

-5

54

96

North Dakota

63

+1

71

181

Ohio

20

0

20

41

Oklahoma

83

-1

107

208

Pennsylvania

28

0

39

56

Texas

340

+1

383

906

Utah

5

0

4

22

West Virginia

16

0

19

31

Wyoming

24

-2

22

61

Total US

771

-4

884

1925

Total Canada land

184

-6

204

410

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

44.11

41.93

78.77

Brent

47.42

47.77

84.90

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.30

2.79

3.82

General News

Majors backing away from large capital projects in low price environment

Exxon, Shell, Chevron, ConocoPhillips and Hess have all either delayed or abandoned large-scale capital projects in the deepwater Gulf, Canada's oil sands or the Arctic, while focusing a larger portion of capital to onshore shale operations. "What makes more sense in this environment: drill a $100 million well in the deepwater Gulf that might come up empty, or poke lots of holes in west Texas where you already know there's oil for a few million apiece?" said UT Energy Institute's Michael Webber. Redeploying capital from large, long-term projects is a systematic way of reducing risk at a time when practically everyone is losing money on upstream operations, however the cancelling of mega projects worldwide will likely have a long-term affect on the sources for crude oil supply for years to come. Article here

Unconventional Oil & Gas News

Shale producers cutting budgets for 2016

As the price of crude oil dropped by over 50% in late 2014, shale oil producers cut their capex budgets by an average of about 30% going into 2015. As companies announce their 2016 budgets, more cuts appear to be coming. Moody's expects an average capex reduction for upstream operators of 10% to 15% for 2016. Devon, Continental and Marathon all released statements that capital spending may fall by double digits for 2016, while Oasis said it expects to spend only about $350 million in 2016, down $200 million from the the current year. Despite big cutbacks, many producers hope to make it up, at least partially, with additional increases in efficiency. Article here

Environment and Safety News

It's official: Obama rejects Keystone XL construction application

US President Barack Obama rejected Keystone's application to build a crude oil pipeline from Canada's oil sands to the US. "The State Department has decided that the Keystone XL pipeline will not serve the national interests of the United States. I agree with that decision," Obama said. Oil industry reaction was critical. "It's ironic that the administration would strike a deal to allow Iranian crude onto the global market while refusing to give our closest ally, Canada, access to US refineries. This decision will cost thousands of jobs and is an assault to American workers. It's politics at its worst," said API CEO Jack Gerard. Article here

Mergers and Acquisitions News

Marathon sells Gulf of Mexico assets
After losing $749 million in the last quarter, Marathon's CEO Lee Tillman said the company was planning "meaningful cost reductions." In line with that appears to be Marathon's announced sale of their GOM assets in the greater Ewing Bank, along with assets in the Petronius and Neptune fields for a total of $205 million to an undisclosed buyer. Article here

Range Resources sells Virginia assets for $876 million
The sale included 460,000 net acres and 3,500 wells producing 109 million cubic feet per day in the Nora Basin in southwestern Virginia. Article here

SandRidge buys Niobrara assets in Colorado's North Park Basin
Boulder, CO based EE3 LLC sold the assets, which included 136,000 acres and 16 existing horizontal wells producing 1,000 barrels equivalent per day. The assets contain proved reserves of about 27 million barrels of oil equivalent and is 82% oil. SandRidge expects to drill its first well into the asset in the first quarter of 2016. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 11/09/2015

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