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The Weekly Oil and Gas Update

The Weekly USA Oil & Gas Update: 8th July 2014

Contributor: Todd Erickson
Posted: 07/07/2014
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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

Select states

This Week

Change from last week

3 months ago

One year ago

Alaska

10

0

11

8

Arkansas

11

0

12

14

California onshore

45

-2

37

39

Colorado

68

+1

62

66

Kansas

29

-3

27

28

Mississippi

15

+3

14

11

N. Louisiana

25

-1

25

23

New Mexico

92

+2

90

78

North Dakota

171

0

178

177

Ohio

41

0

38

33

Oklahoma

209

+1

193

174

Pennsylvania

54

-5

54

53

Texas

896

+7

877

835

Utah

27

0

27

32

West Virginia

27

+2

26

25

Wyoming

51

0

49

49

Total US

1874

+1

1818

1757

Total Canada land

307

+73

233

212

Oil & Gas Prices - Bloomberg/EIA

This Morning

12 weeks ago

1 year ago

Crude Oil - USD/bbl

WTI

104.01

104.05

103.03

Brent

110.85

107.68

107.75

Natural Gas-USD/mmbtu

NYMEX Henry Hub

4.27

4.64

3.65

General News

US now worlds biggest crude oil producer

According to Bank of America, the US produces more crude oil than Saudi Arabia or Russia, with daily output exceeding 11 million barrels in the first quarter of this year. Credit the dramatic rise in extraction of crude from unconventional tight oil from shale formations. Capital investment into the sector has been massive to support this growth, at a record $200 billion annually, reaching 20% of the country's total private fixed-structure spending for the first time. According to Francisco Blanch, the bank's head of commodities research, "The shale boom is playing a key role in the U.S. recovery. If the U.S. didn't have this energy supply, prices at the pump would be completely unaffordable." Despite this number, the US still imports 7.5 million barrels of oil per day, as it remains the world's largest consumer of oil. Article here

Unconventional Oil & Gas News

Ballot initiatives to halt oil production in Colorado move forward

On Monday, the Colorado supreme court approved five ballot initiatives, ruling that the wording met the standards for clarity required by statute. This clears the next hurdle to put the initiatives on this fall election's ballot. Of the five, two would give local governments the power to limit or prohibit oil and gas development, and three others would increase setbacks, up to half a mile, which would virtually eliminate any drilling on the entire front range of Colorado. Sponsors for the ballot initiatives must still collect the minimum number of signatures to put them on the ballot, but they are well organized an funded by out of state environmental interests. Article here

Environment and Safety News

North Dakota get serious on flaring reduction

For some time, over 30% of natural gas produced in the Bakken associated with the oil production has been flared to the atmosphere. Seen as not only an environmental degradation, but also a waste of resources, state regulators are now getting serious about compelling operators to do something about the problem. In March, state regulators told each operator that they must provide a flaring reduction plan. At this time, regulators have only approved 27 of the 136 plans received. The state has set aggressive reduction targets for the industry, and will restrict oil production on wells that continue to flare all or most of their associated natural gas production. One big problem is that two thirds of the flaring is due to wells that are hooked up to gathering, but the system lacks the capacity to flow additional gas. This means that the midstream sector will need to make significant capital investments in compression, processing, and transportation to keep the gas, and crude oil, flowing in the Bakken. Article here

Mergers and Acquisitions News

Midstream company Regency Energy Partners purchases Eagle Rock

The deal is a combination of cash, assumption of $500 million in debt, and 8.2 million Regency common unit. Eagle Rock's assets include 8,100 miles of gathering pipeline and 800 MMcf/d f processing plants. Article here

Contributor: Todd Erickson