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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 17th March 2015

Contributor: Todd Erickson
Posted: 03/16/2015

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

10

11

Arkansas

11

0

9

12

California land

12

0

43

38

Colorado

37

-2

68

61

Kansas

14

-1

28

29

Mississippi

5

+1

15

12

N. Louisiana

37

-3

28

27

New Mexico

58

-3

101

85

North Dakota

101

-4

179

177

Ohio

31

-4

47

41

Oklahoma

123

-5

211

186

Pennsylvania

47

0

54

54

Texas

501

-37

872

868

Utah

8

-1

23

27

West Virginia

18

+1

33

25

Wyoming

29

-1

58

53

Total US

1125

-67

1893

1809

Total Canada land

216

-80

429

522

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

44.15

55.25

98.43

Brent

53.98

58.31

106.99

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.72

3.05

4.57

General News

Price stability only temporary according to IEA and ready to fall

Last Friday the International Energy Agency issued a report that the increasing glut in US oil production may be setting us up for another price drop. "Behind the faèade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly," the agency said in its monthly report. Global production rose by 1.3 million bpd last year, led by non-OPEC suppliers, contributing to the oversupply. The IEA went on to say the problem will likely continue until the second half of 2015 when supply and demand begin to rebalance. Article here

Unconventional Oil & Gas News

Bakken production falls 3.3% last month

Rebalancing has begun in the Bakken, the second most prolific shale oil play in the US. The Bakken has seen especially large declines in capex, many producers cutting spending by as much as 50%, due to the region's price differential. The region's remoteness and lack of takeaway capacity mean lower prices at the wellhead compared to other regions, with last month's average bringing just $31.41 per barrel. Expect the Bakken's production to continue its decline as the large decline rates of these wells kick in with limited replacement wells. Article here

Environment and Safety News

Three killed in west Texas rig explosion

The three workers were working on a Parsley Energy site 50 miles south of Midland. OSHA is investigating the incident, which involves workers for contractor Mason Well Service. No additional details were available. Article here

Mergers and Acquisitions News

Drop in shale asset value will lead to a wave of deals

According to a recent article in Bloomberg, the value of shale acreage has fallen by 25% from 2013 to the fourth quarter of 2014. This will lead to plenty of deals in 2015, according to experts. "In this market, there are whales and there are fishes, and the whales are well armed," said energy banker William Arnold. "There are some very vulnerable little fishes out there trying to survive any way they can." According to one unconfirmed rumor on the street, the Bakken's largest producer, Whiting Petroleum has put itself up for sale, unable to handle the debt from its recent acquisition of Kodiak. Article here

Contributor: Todd Erickson