The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 1st June 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 05/31/2015

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

10

+1

12

11

Arkansas

6

-2

11

11

California land

10

-2

13

48

Colorado

41

+2

44

66

Kansas

13

0

17

31

Mississippi

2

-2

7

10

N. Louisiana

27

0

32

29

New Mexico

48

+1

68

86

North Dakota

77

-1

108

169

Ohio

23

0

36

38

Oklahoma

106

+2

146

199

Pennsylvania

47

-2

54

60

Texas

369

-4

570

894

Utah

7

0

11

27

West Virginia

18

0

16

25

Wyoming

22

0

33

47

Total US

875

-10

1267

1866

Total Canada land

95

+26

327

196

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

59.79

49.95

103.07

Brent

64.91

58.67

109.34

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.65

2.75

4.49

General News

Analyst says glut over, prices to rebound later this year

Sanford C. Bernstein Ltd. expects demand to exceed supply by 1.5 million barrels a day by the fourth quarter this year, according to their report released last week. This represents a large swing from recent estimates of a 2 million barrel per day surplus, but as rig counts drop, US production has begun to level out and inventories have fallen for the fourth week in a row. Bernstein also expects global demand to rise over the next few quarters. "The start of sustained US inventory declines is a a significant milestone for the oil market," said Bernstein's analyst Paul Horsnell. "Virtually all the global build in commercial inventories so far in 2015 has occurred in the US. The end of this build is likely to be an early warning of a shift into deficit for the global market as a whole." Article here

Unconventional Oil & Gas News

Eagle Ford rig count rises this week, despite overall US reduction

Although the overall US rig count fell by 10 this week, the Eagle Ford in south Texas gained three rigs to rise to a total of 110 rigs. Economics in the Eagle Ford remain competitive relative to other shale plays, accounting for the slight increase in activity. Article here

Marcellus Shale natural gas output could remain flat through end of the decade

According to the US Energy Information Administration, output from the nation's most prolific natural gas producing basin, the Marcellus Shale, could remain flat for several years, and even decline, largely due to low regional prices and limited transportation options out of the region. Many private analysts don't agree with this assessment however. New pipelines out of the area, along with anticipated LNG export, could provide growth opportunities. "We see slow growth in the Marcellus each year out to 2020," said analyst Keith Barnett with Asset Risk Management LLC in Houston. Article here

Environment and Safety News

Oil and gas worker fatality rate declines over last decade

As the oil and gas industry has boomed in the last 10 years, total fatalities have risen, but the overall fatality rate, measured by number of deaths per 100,000 workers, has actually declined due to the large influx of new workers. The rate peaked in 2006, with 32 deaths per 100,000 workers, and has declined to 19 deaths per 100,000 workers in 2013, the last year of the study. Although improving, the rate is still up to seven times that of the US overall worker fatality rate. Article here

Mergers and Acquisitions News

Canada's Crescent Point acquires Legacy Oil and Gas
The $1.23 billion deal will add 22,000 barrels of oil equivalent per day to to Crescent Point's production. "Legacy's combination of high-growth resource play assets and high-quality, low-decline conventional assets area a tremendous fit with Crescent Point and are expected to enhance our long-term dividend plus growth strategy," said Crescent Point's CEO Scott Saxberg. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 05/31/2015

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