The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 12th December 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 12/14/2015

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

11

-1

13

10

Arkansas

3

-1

4

0

California land

9

0

13

43

Colorado

25

-2

32

68

Kansas

10

0

10

28

Mississippi

4

-3

3

15

N. Louisiana

30

+1

30

28

New Mexico

36

-4

48

101

North Dakota

58

-2

70

179

Ohio

15

-4

18

47

Oklahoma

85

+1

106

211

Pennsylvania

30

+1

35

54

Texas

324

-9

366

872

Utah

3

-1

4

23

West Virginia

13

-1

17

33

Wyoming

21

-1

24

58

Total US

708

-28

848

1893

Total Canada land

174

-3

184

429

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

36.21

46.67

63.13

Brent

37.71

47.64

65.64

Natural Gas-USD/mmbtu

NYMEX Henry Hub

1.90

2.61

3.42

General News

Global E&P spending to decline again next year, but rebound in 2017

Evercore ISI's report "Global 2016 E&P Spending Outlook: An Industry Mired in Recession" predicts that E&P spending in 2016 will fall 11%, in addition to 2015's 20% decline. North America will see the largest decline in spending, with a predicted fall of nearly 20% from the previous year. The report goes on to forecast resumed capital spending growth in late 2016, with robust growth of 12% in 2017 and 18% in 2018. ISI expects the North American market to rebound first and strongest. "We continue to believe current spending levels as well as oil prices are unsustainable and the longer spending remains subdued, the stronger and longer the coming upcycle will be," said ISI's James C. West. Article here

Unconventional Oil & Gas News

ConocoPhillips announces budget cuts and asset sales

With oil prices looking to stay lower for longer, ConocoPhillips announced that it plans to cut its capex spending by 25% for next year, while also looking for operating cost reductions. With its reduced expenditures, the company plans to focus its development on its North Dakota and Texas shale plays. The company also plans to sell $1.7 billion in assets in 2016, and between $1 billion and $2 billion of assets in 2017. "The company is defending the balance sheet and dividend with more aggressive opex reductions than its peers," wrote Wells Fargo analyst Roger Read in a recent note. Article here

Environment and Safety News

Fracking saving the environment?

Often overlooked when considering the environmental concerns around hydraulic fracturing is the profound positive effect that natural gas, mostly produced from fracking operations, has on the reduction of carbon into the atmosphere. According to the US Energy Information Administration, since 2005, switching from coal to natural gas has resulted in the prevention of 1 billion metric tons of carbon dioxide from entering the atmosphere. By comparison, renewable energy has prevented only 600 million metric tons of carbon dioxide. Between reductions from the two, the US is the only industrialized country in the world to reduce its carbon footprint since the signing of the Kyoto Treaty. Others are noticing too. The International Energy Agency noted in its latest World Energy Outlook that the "decline in energy related CO2 emission in the US" as "one of the bright spots in the global picture" and "One of the key reasons has been the increased availability of natural gas, linked to the shale gas revolution." Interesting facts for the next time you consider industry impacts on climate change. Article here

Mergers and Acquisitions News

Lime Rock Resources identified as buyer for Oxy's North Dakota assets
Oxy announced the $600 million deal for all its assets in North Dakota's Bakken formation back in October, but it wasn't until last week that the buyer was confirmed. Lime Rock Resources will become the operator of Oxy's 300,000 acres in North Dakota, according to North Dakota's oil regulator, which will make them the 16th largest producer in the state. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 12/14/2015

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