The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 20th July 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 07/19/2015

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

12

8

Arkansas

4

0

8

11

California land

11

-1

12

42

Colorado

39

+1

36

69

Kansas

11

+1

11

30

Mississippi

4

0

4

15

N. Louisiana

23

-2

26

27

New Mexico

50

+1

49

90

North Dakota

68

-2

83

178

Ohio

19

0

25

44

Oklahoma

105

-1

118

200

Pennsylvania

43

-2

48

55

Texas

366

-2

412

888

Utah

7

0

7

27

West Virginia

18

0

22

26

Wyoming

21

0

23

52

Total US

857

-6

954

1871

Total Canada land

188

+23

77

379

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

50.54

55.56

101.73

Brent

56.57

62.86

104.73

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.80

2.50

3.87

General News

After four years of record supply, natural gas production to fall

According to the US Energy Information Administration, natural gas production from the seven largest US shale basins will fall by 0.6% in August from the previous month. This follows estimated production declines overall since June. Analysts believe this is largely due to the fall in output of gas associated with crude oil production, due to the collapse in oil prices. "Gas is being held captive by oil," said analyst Aaron Calder. Government data still shows overall expansion in natural gas production for the year, however, even though it will be down from recent year's record pace. Article here

BHP Billiton writes down its US shale operations by $2 billion

The $2 billion hit represents the third write-down in three years for the Australian mining giant. Most of the devaluing came from its gas-focused Hawkville field in Texas. BHP has also cut its US onshore spending, down from fiscal year 2015's $3.4 billion to the current year's spend of $1.5 billion. Article here

Unconventional Oil & Gas News

Recent study shows Utica Shale much larger than previously reported

Back in 2012, the US Geological Survey estimated the Utica's technically recoverable resources at 38 Tcf of gas and 940 million barrels of oil. A study released on July 14th by the University of West Virginia puts that number much higher, with 782 trillion Tcf of gas and 1.9 billion barrels of oil technically recoverable. Those numbers put the Utica on par with the highly-prolific Marcellus play. Appalachian Basin expert Douglas Patchen said "[t]he revised resource numbers are impressive, comparable to the numbers for the more established Marcellus shale play, and a little surprising based on our Utica estimates of just a year ago which were much lower." The researchers credited more current data available from recent wells for the revision, saying that they had more than twice the data from estimates made just a year ago. Article here

Environment and Safety News

Another Bakken crude oil train derailment

This one is in Culbertson, Montana, where more than 20 cars derailed, with at least three leaking crude oil. Article here

Mergers and Acquisitions News

WPX pays $2.35 billion for Permian company RKI E&P
The deal values RKI's acreage in the Permian's Delaware Basin at about $12,500 per undeveloped acre, a steep discount to prices seen just one year ago. WPX said it plans to increase RKI's rig count of four up to six by the end of the year. Article here

Enterprise sells offshore pipeline and hub assets for $1.5 billion
Genesis Energy was the buyer for the Gulf of Mexico assets that included 2,350 miles of pipelines and six offshore hub platforms. Enterprise plans to use the proceeds to finance its acquisition of EFS Midstream in the Eagle Ford. Article here

Milagro Oil & Gas files for Chapter 11 bankruptcy

Another company squeezed by falling crude oil prices goes under. The company owns approximately 1,200 wells in South Texas, and shows assets of $1 - 10 million in court documents and liabilities of $500 million - $1 billion. White Oak Resources is buying Milagro's assets for $120 million in cash and $97 million in White Oak equity. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 07/19/2015

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