The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 14th November 2014

Todd Erickson
Contributor: Todd Erickson
Posted: 11/18/2014

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

8

+1

9

9

Arkansas

12

0

11

12

California onshore

45

+1

45

40

Colorado

75

0

75

69

Kansas

27

-1

26

27

Mississippi

12

-2

14

9

N. Louisiana

32

+1

31

23

New Mexico

99

+3

94

81

North Dakota

181

0

185

165

Ohio

46

+5

42

34

Oklahoma

207

-1

209

176

Pennsylvania

53

-3

51

57

Texas

902

-4

901

825

Utah

23

+1

23

28

West Virginia

32

+1

29

32

Wyoming

62

+1

55

55

Total US

1928

+3

1913

1762

Total Canada land

402

-8

397

399

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

75.01

95.39

93.03

Brent

78.40

100.49

108.80

Natural Gas-USD/mmbtu

NYMEX Henry Hub

4.13

4.00

3.71

General News

EIA slashes its forecast for 2015 oil prices

The US Energy Information Administration (EIA) lowered its price expectations for a barrel of crude by $18 over earlier estimates, to $83 a barrel for next year. Several brokerages also lowered their estimates, including JP Morgan who dropped their 2015 forecast by $33 to $82 a barrel and by $33 to $88 a barrel in 2016. Most analysts point to supply gains led by growth in US tight oil production for the recent fall in prices. In response, the EIA expects Saudi Arabia to cut production to "avoid further downward pressure on oil prices amid high non-OPEC supply growth" but will maintain output above 9 million bpd through 2015. Article here

Energent Group interactive rig-count map

Todd Bush with the Energent Group sent me a link to a map which enables the user to examine domestic rig counts by a number of variables, including geography, target (oil or gas), profile (vertical or horizontal) and depth. The interactive webpage displays the output in comparative graphs and a map which breaks down all the way to the county level. Great tool! See the interactive map HERE

Unconventional Oil & Gas News

Eagle Ford to produce 1.65 million barrels daily in December

The country's second largest oilfield has grown dramatically over the last few years, up from 1.2 million barrels daily in 2013 and just 848,000 in 2012 to its current 1.65 million. The field is also the nation's second largest gas field behind the Marcellus, with production of an expected 7.29 billion cubic feet per day this December. Article here

Magnum Hunter Resources sells oil assets, focuses on natural gas

Contrary to recent prevailing thought in the domestic oil & gas industry, Magnum Hunter is exiting the crude oil production business in favor of the natural gas business. CEO Gary Evans recently told CNBC that "We're really a gas company and that's where I think the future is for the oil and gas industry in the United States." Back in the 2009/2010 time period when natural gas prices began to collapse, EOG led the industry in the "pivot" from focusing on natural gas to focusing on liquids and crude. Since then, many E&P companies have sold their dry gas holdings to focus on liquids, with only a few exceptions. Now, with oil taking a recent $20 a barrel drop, and natural gas prices still holding above $4/mbtu, perhaps Magnum Hunter's strategy may pay off. Article here

Environment and Safety News

One dead, two seriously injured in Colorado accident

The accident happened while workers were attempting to unthaw a frozen high-pressure water line for a completions operation. The workers were employed by Halliburton and working on an Anadarko site. Anadarko has suspended operations in the area. Article here

Mergers and Acquisitions News

Halliburton to acquire Baker Hughes

A merger announcement this morning confirmed that Halliburton, the second-largest oilfield services provider, will be acquiring Baker Hughes, the third-largest. The combination of the two will create the world's largest provider with $52 billion in revenue, compared to the current largest Schlumberger's $46 billion. Cost savings by eliminating redundant operations appears to be a major benefit of consolidating the two giants. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 11/18/2014

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