The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 6th October 2015

Todd Erickson
Contributor: Todd Erickson
Posted: 10/05/2015

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

-2

10

9

Arkansas

4

+1

4

12

California land

12

0

11

44

Colorado

30

-3

37

76

Kansas

10

+1

12

24

Mississippi

5

0

3

13

N. Louisiana

27

-1

27

32

New Mexico

46

-4

45

99

North Dakota

65

-1

76

189

Ohio

20

+1

18

40

Oklahoma

97

-8

106

212

Pennsylvania

30

-3

47

57

Texas

357

-6

363

895

Utah

5

0

8

23

West Virginia

18

+1

19

30

Wyoming

24

0

21

60

Total US

809

-29

862

1922

Total Canada land

178

+3

135

430

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

45.85

52.19

94.53

Brent

48.60

57.63

95.70

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.43

2.88

3.89

General News

OPEC oil production up slightly in September

Saudi Arabia and most other major members of the cartel maintained production levels from the previous month, but Iraq increased its shipments of crude oil from its northern region. The Kurdish region in northern Iraq had experienced disruptions in previous months that had halted supply growth, but was able to overcome them in September and increase exports. Nigeria and Angola also slightly increased exports, while Libya's output fell due to disruptions from political unrest. Article here

US rig count drops by 29 to lowest total since May 2002

According to Baker Hughes, the US rig count has fallen 6 consecutive weeks, down to 809 total rigs. This is a drop of 1,113 from a year ago. The decrease has been primarily experienced in oil-directed rigs, which are down 977 from a year ago, while gas-directed rigs have fallen by 135 over that same time. Article here

Unconventional Oil & Gas News

Can total production from shale increase by choking back wells?

Encana thinks so. They are one of a growing number of producers that believe restricting initial flow on tight oil wells will increase their total recoverable hydrocarbons. The idea is that when newly-drilled wells are allowed to flow at very high velocity's during initial production, up to 2,000 bpd, the high flow rates also sweep out proppants meant to prop open cracks in the shale, thereby lowering production later in the process. "You're losing a barrel today to get two or three barrels tomorrow, said Allen Gilmer with Drilling Info. "It's not a zero-sum game." High initial production rates pay out drilling costs, and associated debt, much more quickly though, so incentive is strong to let wells produce at high rates initially, but it also means more wells must be drilled to maintain production levels. Encana and others believe that a long-term strategy, with lower initial production but higher returns over the ultimate life of the well, will get them off the continuous-drilling treadmill many producers are on at this time to maintain overall production. Article here

Environment and Safety News

Federal agency makes tougher rules on pipelines

The federal regulator for pipelines, the US Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) came out with a draft of new rules on October 1 to respond to calls for increased pipeline safety. Changes include enhanced leak detection, timelines for inspections following storms and natural disasters, and improvement in the quality and frequency of maintenance tests. "The proposed rule would significantly change the way operators manage risk and promote the safe operation of the almost 200,000 miles of hazardous liquid pipelines int he United States," said PHMSA Administrator Marie Therese Dominquez in a news release. Article here

Mergers and Acquisitions News

Energy Transfer to acquire Williams for $32.9 billion
After months of negotiations and offers from other bidders, Williams has taken Energy Transfer's offer. The combination of the two companies will create North America's third largest energy business, according to the press release. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 10/05/2015

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