The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 15 April 2014

Todd Erickson
Contributor: Todd Erickson
Posted: 04/13/2014

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

10

-1

10

10

Arkansas

11

-1

11

15

California onshore

40

+3

32

37

Colorado

62

0

59

59

Kansas

27

0

30

24

Montana

7

0

10

10

N. Louisiana

24

-1

25

22

New Mexico

91

+1

81

80

North Dakota

178

0

168

178

Ohio

34

-4

35

32

Oklahoma

192

-1

183

185

Pennsylvania

54

0

55

59

Texas

884

+7

825

848

Utah

27

0

25

28

West Virginia

26

0

34

24

Wyoming

49

0

54

42

Total US

1831

+13

1754

1771

Total Canada land

210

-23

476

154

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

103.65

94.51

88.75

Brent

107.36

108.01

99.32

Natural Gas-USD/mmbtu

NYMEX

4.63

5.66

4.23

General News

EIA boosts US oil reserve estimates by 15.4% year-over-year

Technological advances in extracting oil from shale have dramatically boosted domestic proven oil reserves, those possible to access under current commercial conditions using current technology. This estimate puts total reserves at their highest since 1976, poking another hole in the 'peak oil' theory that oil discovery has topped out and on the decline. The big winner was Texas' Eagle Ford play, increasing to 3.4 billion barrels from the previous years' 1.6 billion, putting it ahead of North Dakota's Bakken formation, which had increased to 3.2 billion barrels, up from 2 billion the previous year. Article here

Unconventional Oil & Gas News

Colorado sets oil production record for 2013

Operators in the state produced 64.1 million barrels in 2013, an increase of 30% over the previous year, and more than double the amount produced in 2008. Credit the Niobrara shale oil boom on Colorado's Front Range, which has seen massive investment over the last few years from Noble Energy and Anadarko Petroleum, among others. Both these industry leaders plan for additional growth, with each investing around $2 billion every year for additional wells. Article here

Study: Bakken production to peak at 1.2 million to 1.5 million barrels per day over next five years

KLJ Engineering came up with the estimate as it looked at projected activity through 2019. Others findings concluded that the play faced stiff competition for investment dollars from the Eagle Ford and Permian Basin in Texas, primarily due to the Bakken's disadvantages of harsh winters and lack of takeaway infrastructure to multiple markets. The study also cautioned North Dakotans to expect cyclical population levels due to seasonality, and continued heavy truck traffic, as the total well count rises from its current level just under 6,000 to more than 20,000. Article here

Environment and Safety News

Federal regulator considering Process Safety Management (PSM) standards for upstream industry

The present boom in domestic upstream oil & gas activity has brought with it increased scrutiny over safety performance. According to the Bureau of Labor Statistics, 138 workers in upstream were killed in 2012, more than double the 2009 rate of 65. As a result, the Chemical Safety Board and others are urging OSHA to un-exempt upstream operations from PSM standards. The move would require operators to have written operating procedures, assess workplace risks, evaluate the integrity of critical equipment and take other steps to prevent uncontrolled releases of hazardous substances. Industry believes this goes too far; PSM was designed for stable facilities, and does not apply well in the fast-changing field environment of upstream oil & gas. The National Institute for Occupational Safety and Health thinks PSM doesn't go far enough, and endorses the European model of "safety cases", a robust performance-based method that puts the onus on employers to assess risks and find ways to mitigate. Article here

Earthquakes and fracking linked in Ohio

Seismic activity has long been linked with underground injection of produced water, and other industrial waste water, for some time. In Ohio, regulators have now linked seismic activity directly to hydraulic fracturing during well stimulation, otherwise known as fracking. The seismic activity in question is a series of five small earthquakes near Youngstown, Ohio, that the USGS reportedly traced back to a Hilcorp well location. Ohio investigators concluded that fracking had a "probable" link to the quakes measured from 1.2 to 3.0 magnitude, and found that Hilcorp had followed all regulations. As a result, Ohio's regulatory body now requires seismic monitoring on sites within 3 miles of a known fault. Article here

Mergers and Acquisitions News

Exterran Partners buys Chesapeake compression in Eagle Ford

The purchase includes 337 compressors with combined horsepower of 440,000 hp, for a total purchase price of $360 million. As part of the deal, Exterran will provide contract compression services to Access for the next seven years in the Eagle Ford, Permian, Barnett, Anadarko, Mississippi Lime, Granite Wash, Woodford, Haynesville and Niobrara formations, company officials say. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 04/13/2014

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