The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 1st July 2014

Todd Erickson
Contributor: Todd Erickson
Posted: 06/30/2014

The 1st July 2014 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

14

8

Arkansas

11

0

12

14

California onshore

47

+1

38

38

Colorado

67

-1

63

63

Kansas

32

-1

29

30

Mississippi

12

+1

13

10

N. Louisiana

26

0

27

23

New Mexico

90

0

88

76

North Dakota

171

+1

178

175

Ohio

41

+1

38

32

Oklahoma

208

+8

188

173

Pennsylvania

59

+2

51

54

Texas

889

0

866

832

Utah

27

0

27

33

West Virginia

25

0

26

25

Wyoming

51

0

50

49

Total US

1873

+15

1809

1748

Total Canada land

234

-29

296

204

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

105.34

100.43

97.94

Brent

112.61

104.89

103.19

Natural Gas-USD/mmbtu

NYMEX Henry Hub

4.41

4.58

3.52

General News

EIA expects demand for diesel to soar over next couple decades

Even with increased fuel economy, projections for growth in travel by heavy vehicles is expected to push the need for diesel fuel up 41.5% by 2040, according to an analysis released by the US Energy Information Administration (EIA) this week. This outpaces the transportation sector as a whole. "In contrast to the projected decline in gasoline use, a strong increase in heavy-duty vehicle miles traveled leads to an increase in consumption of diesel fuel." reported the analysis.Article here

Texas reaches 3 million barrels per day of oil production

This is up from just under 1.2 million in 2010. The biggest contributing areas in the state include the Eagle Ford in south Texas and the Permian Basin in west Texas, each producing over 1 million barrels per day. If Texas were a separate nation, this production level would rank it 8th largest among the worlds' oil producing countries. Article here

Unconventional Oil & Gas News

Three pipelines planned to take Bakken crude out of North Dakota

Energy Transfer Partners' "Bakken Pipeline" has obtained shipping commitments, enabling the commercial go-ahead for this 1,100 mile, 320,000 bpd pipeline, which will run from North Dakota to Patoka, Illinois. Enbridge's Sandpiper pipeline was also approved last week by regulators, which will move 225,000 bpd to Minnesota and Wisconsin. Finally, Enterprise Products Partners is also planning a 700,000 bpd pipeline which would take crude from North Dakota, Colorado and Wyoming to Cushing, OK. This project is still looking for shippers' commitments. Article here

ICF International: More investment into ethane export capacity needed to support sustained growth in shale gas

A significant portion of the value in natural gas comes from the associated liquids, or Natural Gas Liquids (NGL's). The two dominant NGL's include propane and ethane. Exporting of propane has doubled in the last two years, but there is a lack of ethane export capacity and the current supply of ethane exceeds the demand. Because of this lack of market, in the Marcellus 87% of the ethane produced is 'rejected', or put back into the gas stream and sold at lower natural gas prices. This not only negatively affects economics, pipelines are also reaching the limit of ethane they can take in rejection mode. "The question is what to do with the ethane, said Greg Hopper of ICF International. Article here

Environment and Safety News

Game camera catches late-night produced water dumper in Eagle Ford

An occasional practice by water haulers in some shale plays is to open a valve on disposal water trucks while hauling, allowing the waste water to drain onto the road during transport. The driver of the empty truck, having been paid to haul and dispose of the water, pockets the wastewater disposal fee since the truck is now empty. This practice usually happens late at night when few witnesses can discover the transgression, which provides its name, "midnight dumping". The Texas Commission on Environmental Quality sent a notice of enforcement to Point Services LLC after it identified its truck as the dumper of 128 barrels of flowback water on 9 miles of road in Karnes County after identification from a roadside game camera. The driver claimed a faulty valve was to blame, but did not report the spill to authorities. Article here

Mergers and Acquisitions News

Encana sells Bighorn, WY assets to Jupiter Resources for $1.8 billion

The transaction includes 360,000 net acres along with Encana's working interests in all pipelines, facilities and service arrangements. The sale is part of Encana's broader effort to divest its large dry-gas holdings to focus on liquids. Article here

QEP Resources plans to spin off its midstream business

According to a recently-filed SEC Form 10, QEP Resources will re-name the wholly-owned subsidiary Entrada Midstream before the spin off. The company operates assets in the Rockies, the Bakken, and Louisiana, with some minor assets in Oklahoma and Texas. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 06/30/2014

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