The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 22nd September 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 09/21/2015

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

13

0

10

10

Arkansas

4

0

5

12

California land

13

0

11

44

Colorado

33

+1

38

76

Kansas

9

-1

13

25

Mississippi

5

+2

1

14

N. Louisiana

30

0

26

29

New Mexico

49

+1

43

99

North Dakota

67

-3

77

189

Ohio

19

+1

20

42

Oklahoma

106

0

105

215

Pennsylvania

33

-2

47

58

Texas

365

-1

363

900

Utah

5

+1

8

23

West Virginia

17

0

19

26

Wyoming

24

0

21

57

Total US

842

-6

857

1931

Total Canada land

180

-4

132

375

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

45.82

58.34

92.86

Brent

48.21

59.03

96.43

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.56

2.88

3.92

General News

Shale oil production flat in August

Although production of crude oil from US plays is up dramatically from a year ago, growth has flattened out in the last month, according to Bentek in a recent report. The most prolific shale oil formation, Texas' Eagle Ford, rose 17% from a year ago to 1.7 million bpd, but was up only 23,000 bpd over last month's production. In the Bakken, production dropped 6,000 bpd from last month, although it is up 66,000 bpd from a year ago. Sami Yahya pointed to deferment of completions as a material factor in the lack of growth, stating "[w]hile the US is able to drill more wells now with fewer rigs, some producers are opting to defer completing their wells until better economic conditions are present. In other words, production could begin to decline even if rig activity and number of drilled wells remain steady. This is a crucial risk to current production numbers." If prices do recover, all these uncompleted wells provide a deep backlog for quickly turning on production. Article here

Unconventional Oil & Gas News

Refracking in shale could provide substantial recovery increases

Halliburton has been conducting a number of re-fracturing pilot projects across the country recently, with positive results. The process involves going into an existing well and re-completing to reconnect existing fractures and create new ones. "If a horizontal lateral is landed in good reservoir quality, it most probably has potential for a second life," said Halliburton's senior manager Priyesh Ranjan. Halliburton has reported impressive results so far, claiming EUR increases as high as 80% per well compared to new drills. In the new low-crude price environment, expect more innovation like this going forward. Article here

Environment and Safety News

Oil and gas workplace fatalities rise in 2014

According to the Bureau of Labor Statistics, 142 workers died last year in work-related accidents in the oil and gas industry, up from 112 workers in 2013. The 27% annual increase in fatalities is a troubling trend, which some experts correlate with lower crude oil prices. Although major oil producing states Texas, Colorado and Wyoming all saw increases in work-related fatalities, North Dakota saw a 32% decline in their rate. Article here

Mergers and Acquisitions News

Samson Resources files for bankruptcy
The Tulsa-based operator, a private company backed by equity firm KKR, filed for reorganization under chapter 11 on September 16. Under chapter 11, the company will continue to operate and pay employees, but must submit a reorganization plan to the bankruptcy court. "We fully expect to operate our business as usual throughout this process and emerge as a financially stronger company," said CEO Randy Limbacher. The filing will wipe out KKR's $4.1 billion investment in the company. Article here

ExxonMobil looking for bargains in the Permian

XTO Energy, which operates ExxonMobil's US shale operations, has been meeting with several smaller operators in West Texas' Permian Basin offering a partnering deal: XTO pays for drilling and appraisal costs in exchange for two thirds of future production. Cash-strapped operators might be ready to take this deal; Endeavor Energy Resources already accepted the offer, and in total, XTO has bought drilling rights or funded partnerships in five Permian transactions over the last 20 months, and the company now has drilling rights in 1.5 million Permian acres. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 09/21/2015

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