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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 7th April 2015

Contributor: Todd Erickson
Posted: 04/06/2015

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

+1

9

11

Arkansas

8

-1

11

12

California land

13

+1

21

37

Colorado

37

0

66

62

Kansas

12

-1

29

27

Mississippi

3

0

14

14

N. Louisiana

24

-1

28

25

New Mexico

51

0

101

90

North Dakota

90

-6

169

178

Ohio

27

-1

46

38

Oklahoma

129

-4

209

193

Pennsylvania

50

-1

53

54

Texas

456

-6

840

877

Utah

8

0

23

27

West Virginia

22

+1

28

26

Wyoming

28

0

56

49

Total US

1028

-20

1811

1818

Total Canada land

98

-20

205

233

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

50.15

46.06

100.43

Brent

56.16

46.90

104.89

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.64

2.90

4.58

General News

Analyst predicts tough year for service providers

Moody's Investor Services gave the services sector a negative outlook in a report this week, predicting a "deep, protracted cyclical downturn." It stated that even if oil prices rebound, services providers will continue to be squeezed by operators for additional price concessions. According to Moody's, prices for service providers tend to be more fixed than for operators, leaving primarily lay-offs and wage reductions as a means to reduce costs. Moody's expects things to get worse, as rigs get stacked and operators continue to look for ways to cut costs in the face of stagnant prices. Article here

Bakken rents still sky high, even after drop in oil prices

According to the recent article by Emily Guerin, rents in Williston still average $2,200 a month, and in Watford City average $2,800 a month. Evidently, the population growth has been so extreme that even despite the recent slowdown, space is still at a premium. Developers have been slow to invest in housing for the region because of their difficulties attracting capital to a boom/bust driven economy. Developer Darrin Badger described his experiences looking for capital by stating "I mean, even today when you say I'm developing in North Dakota, people look at you and go, 'why?'" Article here

Unconventional Oil & Gas News

Permian Basin the only major shale play still growing

According to figures just released form the Energy Information Agency, the Permian Basin added 21,000 barrels of oil to its production totals for the month of March to bring its total production to 1.982 million barrels a day. In that same time period, the Bakken fell by 8,000 barrels a day for a total of 1.32 million a day, while the Eagle Ford fell by 10,000 barrels a day down to 1.732 million a day. In the Niobrara, which stretches through Colorado and Wyoming, production dropped 5,000 barrels a day to total 413,000 barrels a day for the month. Article here

Marcellus natural gas production up on January

According to the Pennsylvania Department of Environmental Protection, natural gas production was up in January to 12.6 Bcf/d, increasing from the 11.5 Bcf/d averaged in the second half of 2015. Production was led by operator Cabot Oil & Gas, followed by Chesapeake, Southwester Energy, Range Resources and EQT Corp. The story here is that even with production flat across the US, the low-cost Marcellus continues to grow as traditional sources for gas production decline. Article here

Environment and Safety News

Methane emissions from natural gas distribution down significantly in last two decades

According to a field study recently published in the peer-reviewed journal Environmental Science and Technology, methane emissions are currently 36% to 70% lower than current EPA estimates, which it derived from a 1992 national study. The reduction was despite a 44% increase in in distribution pipeline mileage since the 1990s. The study suggests that the reductions are a result of a combination of advancements in equipment, better maintenance and government regulation. Article here

Mergers and Acquisitions News

Anadarko sells Wyoming's largest oilfield

Fleur de Lis Energy, along with financial partner Kohlberg Kravis Roberts & Co. are the buyers for Anadarko's Salt Creek field, located 40 miles north of Casper. The field produced 4.7 million barrels last year, utilizing C02 injection to boost the legacy field's productivity. "These fields have over 2 billion barrels of original oil in place, with only a portion of that recovered to-date," Fleur de Lis CEO Porter Trimble said in a news release announcing the deal. "These are exactly the type of long-lived oil assets we look to own and operate." Terms for the deal were not disclosed. Article here

Samson Resources looking at restructuring, bankruptcy

According to a company spokesperson, Samson has not yet defined its plans to deal with its cash shortage from falling prices. Bankruptcy has been rumored to be one of the options on the table, as the company seeks to restructure debt and sell assets to maintain solvency. The E&P company reduced its headcount by 30% in March and may make more cuts going forward after completing an evaluation of its field operations personnel. Article here

Contributor: Todd Erickson