The Weekly USA Oil & Gas Update: 7th April 2015
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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 |
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Oil & Gas Prices - Bloomberg/EIA |
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General News |
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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 |
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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 |
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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 |
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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 |
