The Weekly Oil and Gas Update

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

Todd Erickson
Contributor: Todd Erickson
Posted: 07/06/2015

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

10

0

13

10

Arkansas

4

-1

8

11

California land

11

0

13

45

Colorado

37

-1

37

68

Kansas

12

-1

12

29

Mississippi

3

0

3

15

N. Louisiana

27

0

24

25

New Mexico

45

+1

51

92

North Dakota

76

+2

90

171

Ohio

18

+1

27

41

Oklahoma

106

+1

129

209

Pennsylvania

47

0

50

54

Texas

363

+2

456

896

Utah

8

0

8

27

West Virginia

19

-1

22

27

Wyoming

21

0

28

51

Total US

862

+3

1028

1874

Total Canada land

135

+4

98

307

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

54.56

51.95

106.07

Brent

59.07

57.14

111.03

Natural Gas-USD/mmbtu

NYMEX Henry Hub

2.76

2.58

4.31

General News

Shale drillers with price hedges soon to lose revenue source

Savvy E&P companies dependent on crude oil revenues from shale hedged a large share of their 2015 production, much at above $90 a barrel. Now, those hedges are beginning to expire after the first quarter of 2015, resulting in big revenue losses for some in the sector. According to Bloomberg, hedging contributed at least 15% of first-quarter revenue at 30 of the 62 oil & gas companies in their index. That advantage is no longer available. "A year ago, you could hedge at $85 to $90, and now it's in the low $60s," said Chris Lang, SVP with Asset Risk Management. Most producers with heavy hedging strategies hope that the hedges provided a runway for them to cut costs enough to survive in a sub-$60 a barrel world; the next two quarters will show who made it. Article here

Oil slumps to two-month low on news of crude inventory increases

The US Energy information Administration released its weekly status report showing that crude oil inventories had increased by 2.4 million barrels from the previous week. Markets reacted by cutting prices more than $2 a barrel on July 1st. "We've been expecting prices to remain in this sub-$60 a barrel range," said Barclays analyst Michael Cohen. He expects US crude to average $55 a barrel during the third quarter. Article here

Unconventional Oil & Gas News

Statoil to use CO2 for stimulation in Bakken test well

The test well lies 15 miles outside of Williston, North Dakota, where Statoil will use liquid CO2 to replace water in the initial stimulation process. Head of Statoil's Shale Oil and Gas Research Doctor Bruce Tocher said "[w}e will use liquid CO2 as the initial fracturing medium because we believe that it will crate a more complex fracture network, giving increased surface area, which should increase the ultimate oil recovery." It also has the benefit of decreasing the amount of water utilized in hydraulic fracturing by 20 to 40 percent. Article here

Environment and Safety News

USGS releases hydraulic fracturing water use maps

The amount of water needed to frack a well varies greatly, according to the USGS in an analysis recently published. "One of the most important things we found was that the amount of water used per well varies quite a bit, even within a single oil and gas basin," said USGS scientist Tanya Gallegos, the study's lead author. "A better understanding of the volumes of water injected for hydraulic fracturing could be a key to understanding the potential for some environmental impacts." IN 2014, the annual median amount for the oil wells exceeded 4 million gallons per well, and gas wells used about 5.1 million gallons per well. Article here

Mergers and Acquisitions News

Hess sells half its Bakken midstream assets for $2.68 billion
Global Infrastructure Partners was the buyer of the half interest in the all-cash deal. Hess plans to use the proceeds to continue funding their Bakken drilling program. Article here

Todd Erickson
Contributor: Todd Erickson
Posted: 07/06/2015

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