February 17, 2017
NAPE SUMMIT – HOUSTON TEXAS
The NAPE Summit Exhibit Floor opened on Thursday to a crowd of upstream industry leaders that lasted throughout the day. NAPE Week attendance to date has exceeded expectations, with nearly 11,300 attendees and 1,000 new registrants since yesterday.
Attendees buzzed about the exhibit floor, reflecting an optimistic atmosphere and expectation for industry recovery. There are numerous corporate parties and dinners taking place in the space of 48 hours. The restaurants and bars are packed with industry participants catching up and discussing basin activity, pricing and whether the price of oil is headed up or back down.
Retired four-star general and former Secretary of State Colin Powell, the keynote speaker for the NAPE Charities Luncheon, emphasized the exciting ongoing evolution of the global oil and gas industry.
“This is a fascinating time for the industry. It is the time to cut costs and lower risks,” said Powell. “We are experiencing a revolutionary change in the energy industry – shifting toward ways we can go off the grid and decentralize energy.”
Powell explained that while he can sense the anxiety and concerns among the audiences he addresses, he also sees confidence in the American people.
“There is a resiliency in our society,” Powell said. “We are a country that has been separated. We have to bridge the differences in our thinking and [how we] talk to each other, like our founding fathers once did.”
This year’s 700 exhibitors included an array of domestic, international and offshore companies. In addition, two individual domestic and international theaters each ran a full day of prospect previews.
Doors to the NAPE Summit Exhibit Floor open again this morning at 8 a.m.
Factiod: Since June 3, 2016, oil rigs have risen by 266 as of the week ending February 10, 2017—a rise of 87% from the bottom.
Closing Oil and Gas Prices, Thursday, February 16th.
Natural Gas Outlook
Despite a recent blast of winter weather, natural gas prices have quickly been falling. Winter is almost over for the so-called Henry Hub natural gas prices on the NYMEX, since that contract closes on Feb. 24, 2017, and the imminent onset of the refinery buying ahead of the U.S. summer driving season presents additional bullish risks to WTI crude oil prices — and bearish risks to natural gas prices.
Natural gas production volumes in December were 1.6 percent higher than December 2015 and 2016 volumes were 8.4 percent higher than 2015 levels.
Now For This Week’s Snippets:
US shale exports hit record last week
US shale producers exported a record 7 million barrels of oil last week, or 1 million barrels of oil per day, almost double the volume shipped during the previous week. Customers are “looking at other types of crude to fill the gap left by a reduction in OPEC production, and at the same time you’re seeing continuing demand in China, as world oil continues to increase,” said Lipow Oil Associates President Andrew Lipow.
Chesapeake, Ex-CEO’s Estate End Trade Secrets Disagreement
Chesapeake Energy Corp. has reached a deal with the estate of its former CEO to settle a $445-million-plus claim that he stole trade secrets to launch a rival energy company, according to court records.
Noble Energy to nearly double 2017 capital spending
Noble Energy plans to spend between $2.3 billion and $2.6 billion in 2017, up from about $1.3 billion last year, three-quarters of which will be invested in US onshore projects. Noble expects to direct almost half of the onshore budget toward the Denver-Julesburg basin in Colorado, while the Permian’s Delaware Basin should absorb about $500 million.
Drillers shift focus as Permian price bubble continues to inflate
US oil and natural gas companies and investors set their sights on other shale plays such as Oklahoma’s SCOOP and STACK regions, the Bakken formation and the Eagle Ford and Haynesville Shale as land prices in the Permian Basin skyrocket, hitting as much as $60,000 per acre. Williams Capital Group analyst Gabriele Sorbara says out-of-control valuations in the Permian make it nearly impossible for newcomers to get involved.
Diamondback planning to deploy more rigs to Permian Basin this year
Permian-focused Diamondback Energy has set a 2017 budget of up to $1 billion, more than half of which will go toward drilling and completions. Diamondback President and CEO Travis Stice said the company could deploy two more rigs to the Permian’s Delaware and Midland sub-basins by the end of 2017 if oil prices continue to rise.
Applications for new drilling permits spike in Texas
The Texas Railroad Commission issued 956 original drilling permits last month, up from 510 in January 2016, as oil and natural gas companies step up drilling activity to capitalize on higher oil prices even though production has yet to climb. Texas produced 81.5 million barrels of oil in November, a one-million-barrel decline from October.
N.D. posts record decline in oil production
North Dakota oil production fell by over 92,000 daily barrels to 942,455 barrels per day in December, the biggest single-month drop in history, as harsh weather conditions hindered activity. Natural gas output also declined to 1.54 billion cubic feet per day in December, down from 1.76 billion cubic feet per day the previous month.
US shale production in March to gain most barrels since Oct.
US shale drillers are expected to boost production by 79,000 barrels per day to 4.87 million barrels per day in March, the biggest monthly increase in five months, according to the Energy Information Administration. The Permian Basin will drive the gains, with production there predicted to jump by over 70,000 barrels per day to 2.25 million barrels per day.
Williams swaps Permian assets for stakes in Marcellus gathering systems
Williams Partners has agreed to hand over its 50% stake in a natural gas gathering system in the Permian Basin to Western Gas Partners in exchange for interests in two Marcellus Shale gathering systems as well as $155 million in cash. “They want to ‘core down’ to their competency, and their competency is moving gas from the Northeast to end users in the Mid-Atlantic, Southeast and Gulf Coast,” said Tudor Pickering Holt & Co. energy analyst Brandon Blossman.
Occidental Petroleum looks to sell South Texas assets
Occidental Petroleum is reportedly searching for a buyer for its remaining South Texas assets, which comprise 180,000 acres mainly in the Vicksburg Shale, wells and staffed offices worth up to $500 million combined. The asset divestiture follows Occidental’s exit from the Eagle Ford last year and comes as the company increases its focus on the Permian Basin.
No rebound in sight for offshore oil, gas industry
The US offshore oil and natural gas sector continues to be plagued by bankruptcies and declining demand, forcing drillers such as Transocean, Atwood Oceanics and Noble to cut jobs and idle or scrap rigs. Diamond Offshore President and CEO Marc Edwards said he doesn’t expect a rebound earlier than 2019 or 2020 because the industry has yet to “see a floor in the declining demand of deep-water assets.”
Plains All American, Noble form joint venture to buy Permian pipeline system
Plains All American Pipeline and Noble Midstream Partners have entered a 50-50 joint venture agreement to acquire Advantage Pipeline’s assets for $133 million. Advantage Pipeline owns a 70-mile oil pipeline system in the Permian’s Delaware Basin originating in Reeves County and running to Crane County, Texas.
Trump Signs Repeal Of SEC Payment Disclosure Rule
President Donald Trump on Tuesday signed off on legislation that nixed a U.S. Securities and Exchange Commission rule requiring oil and gas extraction companies to disclose their payments to foreign governments, marking the first time in 16 years that a president utilized the Congressional Review Act to overturn a predecessor’s rule.
Another story we release every other week in Friday Snippets is a look back at prominent Oklahoma oilmen who have helped create, shape and transform the oil and gas industry in Oklahoma.
The current video presentation is on J. Paul Getty, one of the most frugal, but wealthiest men to ever live. He drilled his first oil well out near Haskell, OK. We have a long list of historical characters we will be presenting but we welcome any suggestions of someone you would like to see featured.
If you have someone to nominate, reach out to me via email at firstname.lastname@example.org.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: J. Paul Getty
February 10, 2017
Welcome to this week’s Friday Snippets!
With the onslaught of an increase in U.S. oil inventories last week – oil continues to rise, which provided some evidence of stronger-than-expected demand.
With inventories close to 80-year record levels at 508 million barrels, the oil markets do not seem deterred. Wall Street is pouring the most money into oil and gas companies in the U.S. since at least 2000, according to Bloomberg.
In January alone, drillers and oilfield service companies raised $6.64 billion in 13 different equity offerings. “The mood is absolutely different,” Trey Stolz, an analyst at the investment banking firm Coker & Palmer Inc., told Bloomberg. “Go back to a year ago and the knife was still falling. But today, it feels much, much better.” The Permian continues to be the hottest onshore play. In 2016, there was $24 billion spent on mergers and acquisitions.
Wood Mackenzie reports that less than two months into the New Year, the industry has already spent half of that amount in the Permian. In Oklahoma, we have two of the country’s hottest plays, central Oklahoma’s SCOOP and STACK portions of the Anadarko Woodford play. In the coming months, several Oklahoma companies are scheduled to announce their 2016 earnings and 2017 CAPEX. Look for more acquisitions as well. We will be down at NAPE next week, where the sentiment is sure to be more optimistic than last year, when rig counts and the price of oil were much lower. Hope to see you there.
Closing Oil and Gas Prices, Thursday, February 9th.
BP plans to invest more in US shale industry
British oil major BP is considering slowly boosting its position in US shale plays, but it will exercise capital discipline because shale assets are expensive, BP CEO Bob Dudley told analysts. Dudley also said the company may pursue several projects in countries such as Trinidad and Tobago, Oman and India.
Shale rebound could push US oil production to 48-year highs in 2018
The Energy Information Administration predicted that US oil output could climb to an average of 9.53 million barrels per day in 2018 — the most since 1970 — up from an anticipated 8.98 million barrels this year. US shale will drive the increase as bullish shale drillers continue to add rigs.
Targa Resources expands Permian footprint
Targa Resources Corp. has executed definitive agreements for a subsidiary to acquire the membership interests of Outrigger Delaware and Outrigger Midland Operating LLC for US565M.
Senate votes to repeal SEC anti-graft rule targeting energy companies
The Senate on Friday voted 52-47 in favor of rescinding a Securities and Exchange Commission anti-corruption rule that would have required US oil, natural gas and mineral companies to divulge payments made to foreign governments. “Passing this CRA will right the ship and put U.S. companies back on a level playing field with their private and foreign competitors; it will also protect them from a dramatic increase in regulatory compliance costs,” said Sen. James Inhofe, R-Okla.
EQT boosts Marcellus Shale position
EQT has acquired 14,000 net acres in the Marcellus Shale in a $130 million deal that will allow the Pittsburgh-based company to drill lateral wells with an average length of 5,700 feet, up from 1,900 feet. The acreage is in West Virginia’s Marion and Monongalia counties.
Record volume of US crude to head for Asia in coming weeks
Oil companies and trading houses including BP, Shell and Mercuria are expected to export between 700,000 and 900,000 barrels of US crude oil per day in February, mostly to Asian countries such as China, Japan and Singapore. “It’s a good time to buy US crude because of the OPEC cut, but our spot room has limitations so we have to compare every cargo,” a Japanese refiner said
Oilfield services costs skyrocket in Permian Basin
The prices asked by oilfield service companies for drilling and hydraulic fracturing in the Permian Basin have surged by as much as 50% in recent months amid increased demand and a shortage of frack crews. Denver-based Lilis Energy says the lowest daily rate for drilling a well is now $16,000, up from $13,900 per day a couple of months ago, while well-fracking costs surged from $2.2 million two months ago to $3.2 million currently.
US oil rig count increased last week, Baker Hughes reports
The number of US oil rigs surged by 17 to 583 in the week ended Friday, the biggest total since October 2015, according to Baker Hughes. The US oil and natural gas rig count is expected to average 795 this year and 911 in 2018. The number of rigs looking for oil and natural gas in the US increased by 4.4% in January compared with January 2016.
US shale production weighs on oil prices
Signs of a continued jump in US shale production depressed oil prices on Monday, despite OPEC’s compliance, with US light sweet crude for March delivery down 1.5% to $53.01 per barrel and Brent crude for April down 1.9% to $55.72. SEB bank analyst Bjarne Schieldrop expects a “strong revival in US shale oil production” and sees US onshore exploration and production spending up by 30% to 40% this year, while the rig count could top 1,000 by 2019.
EIA reports surge in US crude inventories
US crude stockpiles climbed by 13.8 million barrels last week fueled by a 1.1 million-barrel increase at the Cushing, Okla., oil storage hub, the Energy Information Administration said on Wednesday. Gasoline inventories were down 869,000 barrels while distillates surged by 29,000 barrels.
Another story we release every other week in Friday Snippets is a look back at prominent Oklahoma oilmen who have helped create, shape and transform the oil and gas industry in Oklahoma. This weeks new video presentation is on J. Paul Getty, once named him as the world’s richest private citizen. He founded the Getty Oil Company, but despite his wealth, Getty was notably frugal. The Nancy Taylor No. 1 Oil Well Site near Haskell, Oklahoma, was crucial to his early financial success. This oil well was the first to be drilled by J. P. Getty.
We have a long list of historical characters we will be presenting but we welcome any suggestions of someone you would like to see featured.
If you have someone to nominate, reach out to me via email at email@example.com. Have a great weekend from Oklahoma Minerals!
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: J. Paul Getty
February 3, 2017
Republicans working to repeal Obama’s methane rule
House Republicans are expected to introduce a bill today to overturn former President Barack Obama’s rule targeting methane emissions from venting and flaring at oil and natural gas drilling sites. “These are abusive, last-minute regulations that are grossly inconsistent with congressional intent,” said House Natural Resources Committee Chairman Rob Bishop, R-Utah.
US oil rig count climbed by 15 last week, Baker Hughes reports
The number of US oil rigs increased by 15 to 566 — the highest level since November 2015 — in the week ended Jan. 27, according to Baker Hughes. The total oil and natural gas rig count is expected to climb to an average of 783 this year, 898 in 2018 and 1,009 in 2019.
Border tax could further reduce Mexican oil exports to US
A proposed 20% border tax on Mexican goods will likely encourage Mexico’s oil industry to abandon the American market in favor of Asia and Europe, where demand for Mexican crude is on the rise. The volume of Mexican oil exports to the US is already declining, with 48% of Mexican crude shipped to the US in 2016 compared with 69% in 2014.
US-Mexico dispute unlikely to hinder US shale gas exports
Mexico’s dependence on US shale gas will likely continue to tie the two countries together even if tensions grow. The flow of US shale gas to Mexico more than doubled in the past two years, and ING Groep Chief International Economist Rob Carnell believes Mexico will decide against putting tariffs on US imports in retaliation to President Donald Trump’s proposed 20% border tax because “they would rather have the gas at a decent price.”
Investments keep flowing to the Permian Basin
US shale companies continued their land-buying spree in the Permian Basin into 2017, with about $9 billion in land deals in January. If drillers keep up the current pace, Gesco Sales Manager Josh Clawson estimates that an additional 100 drilling rigs could be deployed to the Permian by June.
Delaware Basin becomes ExxonMobil’s primary focus this year
ExxonMobil announced plans to deploy at least 15 more rigs in the Delaware Basin over time as it seeks to boost production in the region, which has the potential to yield 350,000 barrels of oil equivalent per day at its peak after more than 10 years of sustained drilling. The company, which reported a $2.3 billion loss in the fourth quarter, said it would raise its 2017 budget by 14% to $22 billion.
EV Energy Partners divests Barnett Shale assets to buy Eagle Ford acreage
EnerVest affiliate EV Energy Partners has sold some of its natural gas assets in North Texas’ Barnett Shale for $52 million, with proceeds going toward funding its $59 million acquisition of a 5.8% working interest in 529 net Eagle Ford acres located in Karnes County. “We believe that this position in the Eagle Ford Shale affords many attractive, self-funding, near-term drilling opportunities and will increase our crude production by approximately 25 percent in 2017,” said Michael Mercer, EV Energy president and CEO.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: Robert S. Kerr
January 27, 2017
Lario Oil & Gas spends $345M on Permian acreage
Lario Oil & Gas has expanded its position in the Permian Basin with the $345 million acquisition of 10,000 net acres in the Midland sub-basin, which have a production of about 1,850 barrels of oil equivalent per day. The assets also include “hundreds” of potential drilling locations in the Spraberry and Wolfcamp shales.
US oil rig count surges by 29, Baker Hughes reports
The number of US oil rigs expanded by 29 to 551 in the week ended Jan. 20, the biggest increase since April 2013, according to Baker Hughes. Thirteen rigs were deployed to the Permian Basin, while the Cana-Woodford Shale gained nine rigs.
EP Energy unveils drilling joint venture targeting Wolfcamp
EP Energy and Apollo Global Management-backed Wolfcamp Drillco Operating have formed a 50-50 joint venture with plans to drill 150 wells in two 75-well tranches in the Wolfcamp formation of the Permian Basin. EP Energy put the value of its Wolfcamp assets at about $20,000 per acre.
Midstream companies get caught in Permian Basin frenzy
The recent spike in acquisitions of gathering infrastructure and announcements of pipeline expansions in the Permian Basin suggest that midstream assets in the shale play are becoming as hot of a purchase as Permian Basin land. Most recently, Plains All American Pipeline said it was acquiring the Alpha Crude Connector System in the Permian’s Delaware Basin for $1.2 billion.
Trump administration working on first energy policy changes
President Donald Trump is reportedly preparing to roll back a number of energy regulations enacted by the previous administration as part of his “America First Energy Plan,” published on the White House’s website after his inauguration. Trump plans to repeal Obama’s Climate Action Plan, accelerate permitting for cross-border pipelines, remove the climate change factor when making government decisions and temporarily stop the use of the social cost of carbon as a metric, according to sources.
OPEC members confident US will continue to import their oil
Saudi Arabia and Venezuela are unfazed by President Donald Trump’s pledges to reduce US reliance on OPEC oil and expect their oil export volumes to the US to stay stable. Bloomberg data show the US imported roughly 3 million barrels of oil per day from OPEC in 2016, 60% of which came from Saudi Arabia and Venezuela.
Energy Dept. sells crude from petroleum reserve to Phillips 66
Phillips 66 earlier this month submitted a winning bid to acquire crude from the Strategic Petroleum Reserve, the company announced Monday without disclosing volume or price. The Energy Department has put up for sale 8 million barrels of sweet crude coming from the Big Hill, Bryan Mound and West Hackberry SPR sites as part of its plan to sell $375 million worth of crude from the strategic reserve in fiscal 2017.
Trump clears path for Keystone XL, Dakota Access pipelines
President Donald Trump signed two executive orders on Tuesday to move forward with construction of the Keystone XL and Dakota Access pipelines and invited TransCanada to resubmit an application for a permit for the Keystone project. “Today’s news is a breath of fresh air, and proof that President Trump won’t let radical special-interest groups stand in the way of doing what’s best for American workers,” said Sen. John Cornyn, R-Texas.
Halcon Resources enters Delaware Basin in $705M deal
Halcon Resources has agreed to pay $705 million to acquire a package of Delaware Basin assets that includes 20,748 net acres in Texas’ Pecos and Reeves counties with a production capacity of 2,600 barrels of oil equivalent per day. The company also said it was selling its El Halcon assets in the Eagle Ford Shale in East Texas for $500 million, which it will use to fund the Delaware Basin acquisition.
API: US crude inventories up 2.9 million barrels
US crude stockpiles rose by 2.9 million barrels in the week ended Jan. 20, surpassing analysts’ forecast of a 1.9 million-barrel build, the American Petroleum Institute reported on Tuesday. Gasoline and distillates inventories also climbed by 4.9 million barrels and 2 million barrels, respectively.
Barclays: Oil production will only increase in the Permian in 2017
The Permian Basin will be the only US shale play where oil production will surge in 2017, according to Barclays commodity analysts. They expect output in the Permian to increase by 490,000 barrels per day from the fourth quarter of 2016 to the final quarter of 2017
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: Robert S. Kerr
January 20, 2017
EIA forecasts higher US shale oil production in Feb.
The Energy Information Administration expects US shale oil production to climb in February for the first time in three months, surging by 40,750 barrels per day to reach 4.748 million barrels per day. The Permian Basin will drive the growth, with production in the region estimated to increase by 53,000 barrels per day to reach 2.180 million barrels per day.
API: US crude inventories decline more than expected
US crude stockpiles shrunk by 5 million barrels in the week ended Jan. 13, exceeding analysts’ forecast for a 900,000-barrel drop, according to the American Petroleum Institute. Gasoline and distillates inventories rose by 9.8 million barrels and 1.2 million barrels, respectively.
Oil executives sound alarm over US shale
Oil industry executives and officials at the World Economic Forum in Davos, Switzerland, are concerned that the growing US shale industry will cause oil prices to fall again. “Physical delivery of oil will force the price back down again in the second half of this year,” said Bjarne Schieldrop, chief commodities analyst at Swedish bank SEB.
Jagged Peak seeks to raise up to $791M in IPO
Denver-based Jagged Peak Energy has launched an initial public offering — this year’s first in the upstream sector — with an eye to raising up to $791 million of gross proceeds, or $421 million of net proceeds. The company operates more than 68,000 acres in the Permian’s Delaware Basin, with a daily output of 6,600 barrels of oil.
ConocoPhillips makes big oil discovery in Alaska
ConocoPhillips has announced the discovery of as much as 300 million barrels of oil in the northeast part of the National Petroleum Reserve in Alaska, which could become a multibillion-dollar project generating up to 100,000 barrels of oil per day once it’s operational. Production could begin in 2023.
US drillers show renewed interest in the Eagle Ford
A recent surge in dealmaking and drilling activity in the Eagle Ford Shale suggests the South Texas shale play may be poised for a comeback in 2017. Two of the most recent Eagle Ford acreage deals sold land at about $15,000 per acre, up from last year’s average of $3,500, while the number of active drilling rigs has climbed by 18 since reaching a low of 29 in June 2016.
ExxonMobil expands Permian Basin footprint with $5.6B acquisition
ExxonMobil has agreed to pay $5.6 billion in stock to the Bass family in Fort Worth, Texas, to purchase a number of companies that control about 275,000 acres, mostly in the Permian Basin. The purchase doubles ExxonMobil’s Permian holdings to about 6 billion barrels of oil equivalent.
Noble Energy to acquire Clayton Williams in $2.7B deal
Noble Energy has agreed to buy Clayton Williams Energy in a $2.7 billion deal that will expand its position in the Permian Basin to 120,000 acres and 4,200 drilling locations. “This makes us a leading player in the core of the core of the Delaware Basin,” said Noble Energy President and CEO David Stover.
SM Energy to divest remaining Williston Basin assets
SM Energy is searching for a buyer for its remaining acreage in Divide County, N.D., as it seeks to exit the Williston Basin to focus on the Permian Basin. “Over the next five years, we intend to focus on generating significant high margin production growth from our operated acreage positions in the Midland Basin and Eagle Ford,” said SM Energy President and CEO Jay Ottoson.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: William Skelly
January 13, 2017
US shale set to share in $51B cash injection
A capital allocation of $51 billion aimed at the US and Canadian energy sector from the 70 natural resource funds that were launched globally last year may bring particular benefits to US shale oil producers. Industry analyst Dave Forest believes the boost could even lead to what he calls a “second wave” of shale development.
Shale-rich Okla. sees financial pressure easing
Pressure on shale revenues for the state of Oklahoma remain a concern but are showing signs of easing, says State Treasurer Ken Miller. Oklahoma was adversely affected by last year’s oil price downturn, but its rally to prices in the mid-$50-per-barrel range led to a 15.6% jump in oil and natural gas tax revenues in December.
Consultants predict doubling of oil projects in 2017
Analysts at Wood Mackenzie say they are “cautiously optimistic” that oil and natural gas companies will raise their spending this year on the back of increased crude oil prices, resulting in new product developments that could be double last year’s number. This would mark an end to the past two years of relative inactivity, although the rise in spending is still likely to be 40% below the 2014 figure.
Oil companies may boost E&P spending after 2 years of declines
Oil and natural gas companies are expected to return to spending on exploration and production, raising their investment by an estimated 7% after several years of relative frugality. The upturn comes on the back of a 21% oil price rally since November.
US announces sale of 8M barrels from oil reserves
The Energy Department has invited bids for 8 million barrels of light, sweet oil that it seeks to offload in the coming weeks. The sale is part of its plan to sell as much as $375.4 million of crude in fiscal 2017 in order to finance infrastructure revisions to its emergency reserves of around 695 million barrels.
C&J Energy ends bankruptcy with liquidity worth $220M
C&J Energy Services has emerged from Chapter 11 bankruptcy protection with $1.4 billion in debt eliminated and liquid funds of $220 million. The turnaround comes less than a year since the untimely death of then-CEO Josh Comstock and the company’s subsequent bankruptcy filing, and President and CEO Don Gawick called the achievement “an outstanding resolution.”
Drillers back to work after nearly half-million job loss
For the first time in three years, the US oil industry is set to increase spending, paving the way for thousands of oilfield workers to be rehired, as well as for equipment suppliers and contractors to increase productivity. The upturn is a result of rising oil prices following the earlier slump.
Noble to drill 7,200 new acres in Delaware Basin
Noble Energy has spent $300 million to buy drilling rights on a further 7,200 acres in the Delaware Basin, bringing its total Delaware coverage up to 47,200 net acres. The company has also brought a third oil rig to the site, and Executive Vice President of Operations Gary Willingham said Noble is “aggressively moving forward with development.”
Samson Files Amended Ch. 11 Plan After Deal With Creditors
Samson Resources Corp. and its creditors aired full details Wednesday of a proposed global settlement in the oil and gas producer’s long-running, $4 billion Chapter 11 restructuring battle, setting the stage for a Delaware court hearing.
WPX Increases Position In Delaware Basin
WPX Energy Inc., is increasing its Permian operations to more than 120,000 net acres with a bolt-on acquisition, the Tulsa, Okla.-based company said Jan. 12. The sellers are Panther Energy Co. II LLC and Carrier Energy Partners LLC. For $775 million cash, WPX agreed to acquire 18,100 net Delaware Basin acres with about 6,500 barrels of oil equivalent per day (boe/d) of production, of which 55% is oil.
The acreage is located in Reeves, Loving, Ward and Winkler counties in West Texas and includes 920 gross undeveloped locations in the geologic sweet spot of the Delaware. The company is also acquiring 23 producing wells (17 horizontals) and two drilled but uncompleted horizontal laterals.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: William Skelly
January 6, 2017
American oil companies’ stock offerings pay off
Most of the North American oil companies that were bold enough to sell shares during the past two years got rewarded for their courage and were among the top performers of 2016 as oil prices rebounded. More than 70 oil companies sold stock amounting to about $57 billion combined in the last two years, and while some companies went bankrupt, the majority survived the oil price crash and emerged stronger and less indebted thanks to the stock offerings.
US crude stockpiles decline more than expected
US crude oil stocks fell by 7.4 million barrels in the week ended Dec. 30, far outstripping analysts’ predictions of between 1.7 million and 2.2 million barrels, the American Petroleum Institute reported. Meanwhile, gasoline and distillates inventories surged by 4.25 million barrels and 5.24 million barrels, respectively.
Trans-Alaska Pipeline sees oil volume surge for first time since 2002
The volume of oil moved through the Trans-Alaska Pipeline System increased nearly 2% to 188,887,500 barrels in 2016 — the first year-on-year rise in 14 years, according to operator Alyeska Pipeline Service. The increase can be attributed to a surge in North Slope oil production.
SM Energy divesting $800M worth of assets in the Eagle Ford
SM Energy has agreed to sell a package of assets in the Eagle Ford Shale that includes about 37,500 net acres and related pipeline infrastructure to Venado Oil and Gas for $800 million. The divestment comes as SM Energy shifts its focus to the Permian Basin, where it bought 35,700 net acres for about $1.6 billion in October.
Lucas Energy gets a foothold in the Permian Basin
Houston-based Lucas Energy has acquired 3,630 net acres in the Permian Basin’s San Andres formation as part of an area of mutual interest partnership with a privately held holding company, and it will pay $1.43 million for a 90% interest in the leases. “With this initial leasehold position, we have established our entry into the prolific Permian Basin,” said Lucas Energy President and CEO Anthony Schnur.
DCP Midstream Partners acquires joint venture
DCP Midstream Partners has acquired the assets of a joint venture between Phillips 66 and Spectra Energy to form an $11 billion company, named DCP Midstream, that will be the largest natural gas liquids producer and gas processor in the country. Under the agreement, DCP Midstream is paying DCP Midstream Partners $424 million in cash in exchange for about 31.1 million shares.
2 N.M. counties lead other Permian Basin counties in oil, gas production
New Mexico’s Lea County is the top oil-producing county in the Permian Basin, while Eddy County leads in terms of natural gas production, according to Texas and New Mexico state agencies. Oil production in Lea County exceeded 70.9 million barrels in 2015, while Eddy County produced 311.9 million thousand cubic feet of natural gas.
No boom in sight in the Eagle Ford despite spike in drilling activity
An oil boom in the Eagle Ford Shale is unlikely because it would take a “tremendous and unexpected increase in global demand to get up to over $100 a barrel,” said economist Karr Ingham. However, drilling activity in the Eagle Ford is on the rise, with ConocoPhillips, Pioneer Natural Resources and BHP Billiton among the companies planning to add rigs this year.
PDC Energy boosts its Permian footprint
PDC Energy is expanding its Delaware Basin position with the $118 million acquisition of an asset package that includes 4,500 net acres in Ward County, Texas, one drilled but uncompleted horizontal well and a wastewater disposal well. “Our net acreage, drilling inventory and estimated reserve potential in the basin are expected to increase by approximately 10% with this transaction,” said PDC CEO Bart Brookman.
JPMorgan predicts increased US shale production in later 2017
JPMorgan’s head of regional oil and gas for Asia Pacific Scott Darling predicts an increase in oil production from US shale companies in the second half of 2017, which will likely offset some of the oil price gains triggered by OPEC’s production-cut deal. US shale could add 200,000 barrels per day with prices at $50, up to as much as 1 million barrels per day if prices rise above $60, Darling says.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: Everette Lee DeGolyer
December 30, 2016
API reports surge in US crude oil inventories
US crude stockpiles increased by 4.2 million barrels last week, according to the American Petroleum Institute, whereas analysts had expected a 1.5 million barrel decline. Gasoline inventories dropped by 2.8 million barrels while distillate stocks were down 1.7 million barrels.
What will Trump’s impact be for oil, gas production?
The oil and natural gas industry sees President-elect Donald Trump as a good thing for production, pointing to his promises to approve infrastructure projects and expand operations on federal lands. Some analysts say the actions of the incoming administration won’t have as much effect on the industry as market conditions.
A wave of IPOs could hit US oil industry through 2018
As many as 40 North American oil and natural gas companies could go public over the next two years, up from 13 this year, because of higher crude prices and the potential for deregulation, according to Tudor Pickering Holt & Co. CEO Maynard Holt. “The number of companies expressing interest in going into this window is really high, and the number of investors saying we’d like to see something different is really high,” Holt said.
Macquarie: US shale output could surge by 1 million barrels per day
The gains in oil prices from OPEC’s production cut plan would likely be erased by an increase in US shale production by 1 million barrels per day, Macquarie analysts say. Potential cheating by OPEC members, higher output in Libya and Nigeria and an anticipated slowdown in oil demand growth amplify the threat to the recovery in oil prices.
Baker Hughes: US oil rig count surges for 8th week in a row
The number of US rigs drilling for oil rose by 13 to 523 in the week ended Dec. 23, marking the eighth consecutive week of gains, according to Baker Hughes. The Permian Basin added four oil rigs for a total of 262 rigs
US sale of sweet crude from emergency oil reserve to kick off in Jan.
The Energy Department plans to start selling off about 8 million barrels of sweet crude from the Strategic Petroleum Reserve in early to mid-January, with delivery anticipated in March, a department notice to potential bidders revealed. The $375 million sale is the first of several slated to be held over the next few years, with total value estimated at $2 billion.
3 US oil companies to file for bankruptcy
Memorial Production Partners, Forbes Energy Services and Bonanza Creek Energy plan to file for Chapter 11 bankruptcy protection over the next few weeks, joining the more than 200 North American oil and natural gas companies that filed for bankruptcy. However, bankruptcies in the oil and gas industry are expected to decline in 2017 as crude prices rise.
Golden Pass LNG project gets the green light
The Federal Energy Regulatory Commission granted a permit to Golden Pass Products to build a $10 billion liquefied natural gas facility in Sabine Pass, Texas, with a total capacity of 17.2 million tons of LNG per year. The project is expected to create about 3,800 jobs in 25 years of operations.
Iraq commits to OPEC cuts, sends oil prices higher
Iraqi Oil Minister Jabar al-Luaibi told the official Kuwait News Agency his country was committed to cutting as much as 210,000 barrels per day from production starting next month. Iraq, he said, is keen on maintaining balance in the global market and has an eye on oil priced at $60 per barrel.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: Everette Lee DeGolyer
December 23, 2016
Chesapeake Energy hopes supersize wells will help it make a comeback
Chesapeake Energy has drilled a supersize oil and natural gas well to a depth and horizontal length of two miles in the Haynesville Shale as part of an experiment which, if successful, could help the company produce more fossil fuels for a cost 75% lower than average and stage a financial recovery. “What we’re learning in the Haynesville, we’re testing in the Eagle Ford, we’re going to apply to the Utica,” said Frank Patterson, the company’s executive vice president of exploration and production.
Operators extend Glass Mountain Pipeline to enter Okla.’s STACK play
SemGroup and NGL Energy Partners have announced plans to build a 44-mile extension of the Glass Mountain Pipeline so it can transport crude oil from the STACK play to Cushing, Okla. The project is expected to be completed in the fourth quarter of 2017.
US energy companies need oil prices at $55 per barrel for turnaround
US independent oil and natural gas companies that survived the oil price crash will be the first oil industry players to make a comeback in 2017 if oil prices stabilize above $55 per barrel, according to energy research firm Wood Mackenzie. Average oil prices above $50 per barrel will allow US independents to boost investments by 25% and in some cases, increase production by an average of 2% in 2017.
Drilling in the Permian is becoming too expensive for some oil companies
Increased competition could make it unsustainable for some oil companies to continue to drill in the Permian Basin at the current rate because it could prompt workers to ask for higher wages and lift oilfield service costs, which in turn would hurt drillers’ already weak profits, analysts say. “We think it’s going to become a big-company game,” said Instinet analyst Lloyd Byrne.
Phillips 66’s liquefied petroleum gas export facility is now operational
Phillips 66’s liquefied petroleum gas export terminal in Freeport, Texas, exported its first contracted cargo Friday aboard the Commander LNG ship. The facility has an export capacity of 4.4 million barrels per month and mostly ships propane and butane.
Forbes Energy Services could file for bankruptcy this month, sources say
US oilfield services firm Forbes Energy Services is reportedly planning to file for bankruptcy protection as soon as this month in an effort to reduce its $300 million debt load. The company posted third-quarter losses of $23.2 million and warned last month in its quarterly financial statement that it could have to file for bankruptcy.
Anadarko Petroleum to divest $1.2B in Marcellus Shale assets
Anadarko Petroleum has agreed to sell 195,000 acres along with associated equipment in Pennsylvania’s Marcellus Shale to a subsidiary of Alta Resources Development for $1.2 billion. The deal, expected to close in early 2017, marks Anadarko’s exit from the Marcellus as the company is shifting its focus to Colorado’s Denver-Julesburg Basin and Texas’ Delaware Basin.
December 16, 2016
Gulfport to buy acreage in Oklahoma’s SCOOP for $1.85 billion
Gulfport Energy Corp (GPOR.O) said it would buy acreage in Oklahoma’s SCOOP region from a privately held company for $1.85 billion. The deal is expected to close in February 2017.
The purchase price consists of $1.35 billion in cash and about 18.8 million of Gulfport’s shares. Oil companies have resumed buying oil and gas acreage in low-cost shale fields in the United States, restocking their inventories on a bet that a two-year slump in the price of oil has abated. Gulfport said it would buy 46,400 acres from Vitruvian II Woodford LLC, a portfolio company of Quantum Energy Partners, a Texas-based private equity and venture capital firm.
The leases include access to the Woodford and Springer rock formations under parts of Grady, Stephens and Garvin counties. The deal also includes 48 producing horizontal wells and an interest in more than 150 non-operated horizontal wells. Existing production was about 183 million cubic feet of natural gas equivalent per day in October. The properties are 80 percent held by production.
Four rigs are currently operating on the acreage and Gulfport plans to add two more rigs in 2017. Gulfport has identified about 1,750 drilling locations in the area, the company said.
BP moves headquarters of Lower 48 onshore business to Denver
BP on Wednesday announced it would move the headquarters of its Lower 48 onshore division from Houston to Denver in the first quarter of 2018 and have at least 200 employees there as a result. “With two-thirds of our operated oil and natural gas production and proved reserves in the Rockies … Denver is a logical — and strategic — place for us to be and a natural fit for our business,” said David Lawler, CEO of BP’s Lower 48 business.
Diamondback boosts its Permian Basin footprint with $2.43B acquisition
Diamondback Energy has agreed to acquire 76,319 net acres in Texas’ Pecos and Reeves counties from Brigham Resources Operating and Brigham Resources Midstream in a cash-and-stock deal worth $2.43 billion. The acreage produced an average of about 9,500 barrels of oil equivalent per day in November.
Panhandle Oil and Gas reports FQ4 results
Michael C. Coffman, President and CEO, said, “As have all companies in the oil and gas industry, Panhandle experienced a very difficult year in 2016, brought on by extremely low product prices. Our average per Mcfe sales price of $2.73 in 2016 compared to $3.97 in 2015 and $5.88 in 2014.
For fiscal 2016, the Company recorded a net loss of $10,286,884. This compared to a net income of $9,321,341 for fiscal 2015. Total revenues for 2016 were $39,063,183, a decrease from $70,882,093 for 2015. Oil, NGL and natural gas sales revenues decreased $23,122,561 or 42% in 2016, as compared to 2015.
Swift Energy completes sale of remaining 25% interest in La. fields
Swift Energy has sold its remaining 25% interest in Louisiana’s Burr Ferry and South Bearhead Creek fields for $8 million, with proceeds going toward reducing debt. “These transactions to date have simplified our business model, as our cost structure is now more representative of our Eagle Ford development program,” Swift Energy CEO Bob Banks said.
Kinder Morgan reportedly plans to divest Permian Basin assets
Kinder Morgan is looking to sell its oil and natural gas assets in the Permian Basin, which produce about 56,000 barrels of oil per day, sources say. Proceeds from the sale could amount to more than $10 billion and will likely be used to clear some of the company’s debt, according to analysts.
Congress authorizes sale of $375M worth of emergency reserve US crude
The US government will sell $375 million worth of crude oil from the Strategic Petroleum Reserve this winter as part of an up to $2 billion overhaul designed to “increase the integrity and extend the life” of the 695 million-barrel oil reserve. Additional annual sales will have to be approved over the next three fiscal years to hit the overhaul target.
US shale recovery to offset oil price gains, Goldman Sachs says
Goldman Sachs analysts predicted that crude prices above $60 a barrel will trigger a rebound in US shale production next year, which in turn will cause prices to fall back to $55 a barrel. The bank’s analysts also said they disagree with Saudi Arabia Energy Minister Khalid al-Falih’s recent comments that the American shale industry will not increase output significantly in response to higher prices.
Trump names ExxonMobil CEO Tillerson secretary of state
President-elect Donald Trump brought an end to his wide-ranging search for a secretary of state by appointing ExxonMobil CEO Rex Tillerson. Trump brushed aside concerns expressed by leaders of both parties that the energy executive’s relationship to Russian President Vladimir Putin was too close to permit him to represent the global interests of the US.
Darren Woods to succeed Rex Tillerson as ExxonMobil CEO
Darren Woods, the former head of ExxonMobil’s refining and supply arm, is set to replace Rex Tillerson as CEO of the company following the latter’s retirement and nomination for secretary of state. Woods has been with the company since 1992 and has served as president and member of the board since January of this year.
Extraction Oil & Gas pays $177M for D-J Basin acreage
Denver-based Extraction Oil & Gas is in the process of acquiring about 16,800 net acres in the Denver-Julesburg Basin for $177 million and will sell about 25 million shares for net proceeds of $442 million to fund the deal. The majority of the acreage is expected to achieve breakeven prices below $45 a barrel.
Patterson-UTI to merge with Seventy Seven Energy in $1.76B deal
US drilling companies Patterson-UTI and Seventy Seven Energy will merge in a $1.76 billion all-stock deal, creating a combined company that would have 201 high-specification rigs and 1.5 million hydraulic fracturing horsepower. The transaction is expected to close in the first quarter of 2017.
Callon Petroleum to acquire Southern Delaware Basin acreage in $615M deal
Callon Petroleum plans to pay $615 million to purchase assets in the Southern Delaware Basin from American Resource Development, American Resource Development Upstream and American Resource Development Midstream. The acreage had a net production of 1,945 barrels of oil equivalent per day in October.
EIA: US shale production to rise for the first time in 5 months in Jan.
The Energy Information Administration expects US shale production to surge by 1,400 barrels per day to 4.542 million barrels per day in January, marking the first month-on-month increase since July. The Permian Basin will lead the gains, with production expected to jump by 37,000 barrels per day to 2.13 million barrels per day.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: FRANK BUTTRAM
December 9, 2016
EIA: US crude inventories fall
US crude stockpiles plunged by 2.4 million barrels in the week ending Dec. 2, compared with analysts’ expectations for a draw of 1.7 million barrels, according to the Energy Information Administration. Gasoline inventories rose by 3.4 million barrels, while distillate supplies increased by 2.5 million barrels.
Bankruptcies in oilfield services sector growing
Troubled US oilfield services companies are increasingly filing for Chapter 11 bankruptcy protection as they seek to clear debt and raise funds for investments in preparation for the upturn expected during President-elect Donald Trump’s presidency. About 70 oilfield services companies filed for bankruptcy this year through October, compared with 39 in all of last year.
SM Energy to sell shares to fund Midland acreage acquisition
SM Energy seeks to raise $363.4 million from the sale of 9.5 million common shares, with plans to use part of the proceeds to acquire 4,100 acres in the Midland Basin of the Permian for $120 million. “The bolt-on nature of the acreage acquired will stretch laterals and improve well economics,” Capital One Southcoast analysts said.
Noble Energy expands Delaware Basin position
Noble Energy has paid $216 million for 7,200 acres in the Delaware Basin portion of the Permian and has also increased working interests in certain assets it already operates there. As a result of the deal, the company will boost its Delaware position with 150 new locations.
Dakota Access denial casts shadow over new projects
The US Army Corps of Engineers’ decision to deny an easement needed for the Dakota Access Pipeline could spell uncertainty for future pipeline projects, considering that Energy Transfer Partners had received all necessary permitting approvals. “I think it sends a horrible signal to anyone wanting to invest in a project, and I strongly suspect those policies will be discontinued on Jan. 20th,” said former Pipeline and Hazardous Materials Safety Administration head Brigham McCown.
Asia receives nearly 3 million barrels of US crude from BP
BP has exported almost 3 million barrels of US crude oil to Asia over the past few months as part of a $150 million operation that involved seven tankers and several transfers. More long-haul shipments of US crude such as BP’s are expected in 2017 in the wake of Russia and OPEC’s oil production cuts.
Fraser Institute names Okla. best place for oil and gas investment
Oklahoma, Texas, Kansas, Saskatchewan and Wyoming are the top five most attractive jurisdictions for oil and natural gas investment worldwide thanks to their friendly policies, according to the Fraser Institute’s annual Global Petroleum Survey. “Most US states are bucking the global trend of decreasing confidence for investment, and Oklahoma’s top spot in this year’s ranking demonstrates how coherent environmental policy and sound regulation can improve investor perception,” said Fraser Institute Senior Director of Natural Resource Studies Kenneth Green.
Chesapeake Sells First Of Two Haynesville Packages For $450 Million
Chesapeake Energy Corp. (NYSE: CHK) is delivering on its divestment plans, saying Dec. 5 it agreed to sell a package of producing Haynesville Shale acreage in northern Louisiana for about $450 million. The deal covers 78,000 net acres, with slightly more than half—40,000 net acres—considered core to Oklahoma City-based Chesapeake. Assets include 250 wells producing 30 million cubic feet of gas per day (MMcf/d).
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: HARRY SINCLAIR
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December 2, 2016
Mary Fallin a Candidate as Secretary of Interior
Oklahoma Gov. Mary Fallin as secretary of the interior would be great news — at least for the state’s oil and gas industry. The Department of Interior, along with the Environmental Protection Agency and, to a lesser extent, the Department of Energy, are important federal agencies for oil and gas producers. Interior oversees the Bureau of Land Management, which is responsible for 245 million surface and 700 million subsurface acres owned by the federal government. Also in the secretary of the interior’s portfolio are the Bureau of Indian Affairs and the Office of the Special Trustee for American Indians, both of which have connections to energy production and the State of Oklahoma.
OPEC Deal Sends Energy Stocks Through The Roof
US energy stocks surged on Wednesday on news of the OPEC production cut agreement, with 16 out of the 36 energy stocks in the S&P 500 posting gains of at least 10%. The top three gainers were Marathon Oil, Transocean and Newfield Exploration, up 21%, 17% and 16%, respectively.
US Becomes A Net Exporter Of Natural Gas
The US has exported 7.4 billion cubic feet a day of natural gas on average this month, compared with an average of 7 billion cubic feet a day in imports, figures from S&P Global Platts show. It’s the first time in almost 60 years that the US has shipped more gas than it has bought.
Low Oil Production Costs In US Shale Plays Threaten OPEC
The ability of US shale drillers to produce oil at costs as low as $15 a barrel threatens to offset any rise in crude prices that an OPEC production cut deal could bring because it would stimulate US shale producers to boost output. Break-even price points in the Bakken Shale have dropped to $29.44 in 2016 from $59.03 in 2014, and the downward trend is expected to persist.
Concho Resources Strengthens Permian Basin Position with $430M Deal
Concho Resources is expanding its Permian Basin acreage with the acquisition of land in the Delaware Basin, part of a $430 million deal that would provide opportunities for denser development for multi-well pads. Concho aims to increase its rig count in the Delaware Basin, a section of the Permian, in 2017 and is targeting 20% production growth.
Baker Hughes Divests Cementing, Fracking Operations to Form Joint Venture
Baker Hughes has divested its cementing and hydraulic fracturing business, which will become part of a new joint venture in partnership with CSL Capital Management and a Goldman Sachs merchant banking division. Baker Hughes will own a 46.7% stake in the venture, called BJ Services, and will receive $150 million in compensation as part of the deal.
Texas Crude Oil Production Stable
Crude oil production in Texas averaged 2.38 million barrels per day in September, 1.6% lower than in September 2015, the Texas Railroad Commission reported. Texas, the top oil producer in the US, produced 995 million barrels of crude over the past 12 months.
US Crude Inventories Fall by 900,000 Barrels, EIA Reports
The U.S. Energy Information Administration reported Wednesday that crude inventories decreased by 900,000 barrels for the week ended Nov. 25, putting inventories at 488.1 million barrels. “At 488.1 million barrels, U.S. crude oil inventories are near the upper limit of the average range for this time of year,” the EIA said in a statement. However, Cushing, Okla., posted a record increase of 2.3 million barrels, the biggest since March 2015. Cushing is still near maximum operating capacity.
STORIES & LEGENDS SERIES ABOUT OKLAHOMA OILMEN: HARRY SINCLAIR
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November 25, 2016
Results of The Short Rig Count Week
The overall US drilling rig count increased by 5 to 593 during a week ended Nov. 23 that was shortened by the Thanksgiving Day holiday. The latest jump comes after last week’s increase of 20 rigs, the largest since April 2014. Oil-directed rigs gained 3 units this week to 474, an increase of 158 since May 27. Gas-directed rigs rose 2 units to 118, up 35 since Aug. 26. The horizontal count is now up 161 since May 27.
Pawnee Nation Sues US Government in Bid to Cancel Okla. Drilling Permits
The Pawnee Nation of Oklahoma has sued the federal government claiming that the Interior Department, the Bureau of Indian Affairs and the Bureau of Land Management approved drilling permits and leases on tribal lands despite a tribal moratorium on new oil and natural gas wells. The Pawnee Nation, with its tribal headquarters located in Pawnee, has approximately 3,200 members.
Trump Vows to Lift Fossil Fuel Restrictions on First Day in Office
President-elect Donald Trump pledged to eliminate regulations that limit fossil fuel production on his first day in the White House. “On energy, I will cancel job-killing restrictions on the production of American energy — including shale energy and clean coal — creating many millions of high-paying jobs,” Trump said in a video message.
US Rig Use Down This Year, But More Activity Expected in 2017
The use of rigs dropped around the world this year following two years of decline in drilling activity, according to an annual rig census by National Oilwell Varco. The US fleet saw a decrease of 188 rigs, and the number of active global offshore mobile units declined by 29%, but an increase in new wells and rigs is expected next year.
Swift Energy Divests Southeast La. Assets
Swift Energy has sold its 14,000-acre assets in the Lake Washington field in Southeast Louisiana for about $40 million as the company shifts its focus to the Eagle Ford Shale in South Texas. “We’ve had a tremendous amount of success with the development of our assets in South Texas, and this transaction allows us to focus exclusively on our very best rate of return projects,” said Swift Chief Operating Officer, Executive Vice President and interim CEO Bob Banks.
Some US Oil & Gas Companies That Survived Bankruptcy Face Risk of Relapse
US oil and natural gas companies that emerged from Chapter 11 bankruptcy protection with still too much debt or too little cash on hand are vulnerable to “Chapter 22,” a term for firms that failed to solve their problems with a Chapter 11 restructuring. Such is the case of oil and gas industry data provider Global Geophysical Services and offshore driller Hercules Offshore, while other companies such as Vantage Drilling International, ETX Energy and Titan Energy are at risk of a subsequent bankruptcy.
Stories & Legends Series About Oklahoma Oilmen: Frank Phillips
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November 18, 2016
Oklahoma’s earthquake problem, Is There a Solution?
Earthquakes in Oklahoma, such as the magnitude 5.0 temblor that damaged buildings Sunday in Cushing, are related to the underground disposal of wastewater in oil and gas production, and they likely will continue for several years, experts say. Even once injections into the Arbuckle formation under Oklahoma stop, earthquakes will continue because of the time it takes for pressure to spread out from concentrated areas, said Jeremy Boak, director of the Oklahoma Geological Survey.
Entrepreneurs are working on ways to deal with Oklahoma’s earthquake problem, which is believed to be caused by the pumping of salty wastewater back into the ground during the hydraulic fracturing process. Among the ideas are to extract salt from the water and release the water into rivers, turn the salt slurry into disposable brine, and use the water for other parts of the drilling operation.
Wolfcamp Shale Could Contain 20 Billion Untapped Oil Barrels
USGS says the Wolfcamp Shale in West Texas is believed to hold 20 billion undiscovered, recoverable barrels of oil, more than any other oil deposit in the US, the US Geological Survey said in a study released Tuesday. The Wolfcamp could also contain 16 trillion cubic feet of associated natural gas and 1.6 billion barrels of natural gas liquids.
Although the Permian has been gushing crude since the 1920s, its multiple layers of oil-soaked shale remained largely untapped until the last several years, when intensive drilling and fracturing techniques perfected in other U.S. regions were adopted. The Wolfcamp, which is as much as a mile thick in some places, has been one of the primary targets.
API Reports Larger-Than-Expected Inventory Buildup Against Decreasing Shale Oil Output.
US crude oil stockpiles grew by 3.6 million barrels in the week ended Nov. 11, more than twice as much as analysts had predicted, according to the American Petroleum Institute. On the flip side, US shale oil production in December is expected to decline by 20,000 barrels a day, less than in November, for a total of 4.498 million barrels a day, according to a report by the Energy Information Administration.
Output in the Permian Basin is forecast to climb by 27,000 barrels a day, while production at Texas’ Eagle Ford and North Dakota’s Bakken Shale plays will likely fall by 33,000 barrels a day and 14,000 barrels a day, respectively. It will be interesting to see if Donald Trump’s threat to ‘become independent of any need to import energy from the OPEC cartel‘ materializes and whether the President-elect will follow through on his threats to ban Saudi crude imports to the U.S.
Oil Drillers Increasingly Focus on The Permian Basin
With a count of about 220 active oil rigs, the Permian Basin has almost the same number as the rest of the US combined, the Energy Department said in a report. The Permian is also the only US region expected to have an increase in production for a third month in a row.
Double Eagle Receives Up To $450 Million For Midland Deals
Double Eagle Energy Permian LLC formed a strategic relationship to grow and develop its position in the Midland Basin, the company said Nov. 14. As part of a definitive agreement, Magnetar Capital agreed to invest up to $450 million of equity and delayed draw unsecured debt capital to support Double Eagle’s Midland development and A&D activities.
Double Eagle has rapidly grown to become one of the largest pure-play Midland Basin E&Ps following the recent merger of two private equity-backed companies, the release said. In October, Double Eagle Lone Star LLC and Veritas Energy Partners Holdings LLC, both based in Fort Worth, Texas, agreed to combine forming Double Eagle Energy Permian. Combined, the companies control more than 60,000 core Midland net acres (over 70% operated) located predominantly in Midland, Martin, Howard and Glasscock counties in West Texas.
Double Eagle is backed by funds managed by affiliates of Apollo Global Management LLC and Post Oak Energy Capital LP.
Beckham County Well Completion
In far Western portion of the Anadarko Basin, Atalaya Resources LLC completed a Des Moines Granite Wash D well in Section 32-11n-21w of Beckham County, Okla. The #1H Barnett 29/28-11-21 was tested in an acidized and fracture-stimulated horizontal interval at 13,335-17,995 ft. It initially flowed 2.48 MMcf of gas, 566 bbl of 53-degree-gravity condensate and 158 bbl of water per day. The discovery was drilled northward to 18,080 ft and it bottomed in Section 29-11n-21w with at true vertical depth of 13,010 ft. Tested on an 8/64-in. choke, the shut-in tubing pressure was 6,375 psi and the flowing tubing pressure was 6,200 psi. According to the Tulsa-based operator, the estimated ultimate recovery is 5.0 Bcf of gas and 350 Mbbl of condensate
Franco-Nevada Corp. has entered into an agreement to acquire royalty interest in STACK assets in Oklahoma for $100 million. The transaction includes ~1.61% royalty interest over 74,880 gross acres in Blaine Co., and Kingfisher Co., OK. The seller is rumored to be Felix Energy II LLC. Franco-Nevada owns rights to precious metals across the world. Felix is now active in the Delaware Basin, where it is permitting wells.
Stories & Legends Series About Oklahoma Oilmen: Frank Phillips
November 11, 2016
Donald Trump Is President-Elect: What Now?
After an ugly, hard fought campaign, voters chose Republican Donald J. Trump as the next president of the United States. The win completely caught the pollsters and mainstream media by surprise. Many oil and gas industry executives were prepared for a Hillary Clinton administration, they now find themselves asking: What does a Trump administration mean for the industry? Will his economic policies help or hinder economic growth and favor oil and gas exploration? One sure winner is the coal industry which was punished by the Obama administration.
Trump counts among his advisers champions of fracking such as Harold Hamm, chairman and CEO of Continental Resources Inc. (NYSE: CLR). Hamm is considered a contender for U.S. energy secretary.
Anadarko plans to seek more oil, heavy liquids
Anadarko Petroleum intends to move away from natural gas and focus on drilling for oil in West Texas’ Delaware Basin, Colorado’s Denver-Julesburg Basin and the Gulf of Mexico, company executives said in it’s recent third-quarter conference call. Anadarko reported third-quarter losses of $830 million, down from $2.24 billion in the same period of last year. Anadarko announced Oct. 31 that it has a deal to sell its Carthage assets on the eastern border of Texas for more than $1 billion.
Since the end of the second quarter, the company also closed more than $500 million in asset sales through divesting assets in Elm Grove, Hearne, Hugoton and Ozona, Texas, and in Adams County, Colo. With the divestitures, the company exceeded its March goal of selling up to $3 billion worth of assets. This year, Anadarko closed $3.08 billion in sales and, with the Carthage sale, will eclipse $4 billion.
Royal Dutch Shell to sell Permian Basin acreage
Royal Dutch Shell has put up for sale two small properties in the Permian Basin, but it remains open to acquisition opportunities in West Texas, Shell Chief Financial Officer Simon Henry said on an analysts call Tuesday. “The Permian is the crown jewel. Not just in terms of value and quality of the asset but also the capability that is being developed there,” he said.
Värde Partners and Titanium Exploration Partners, LLC Announce Closing of STACK Acquisition
Värde Partners and Titanium Exploration Partners, LLC today announced they have acquired oil and gas assets in the STACK play in Oklahoma. Titanium will manage the STACK Acquisition assets on behalf of Värde, who provided the financing. The STACK Acquisition, which closed on September 9, 2016, consists of non-operated working interests covering approximately 3,600 net acres and 1,100 barrels of oil equivalent of daily production as of the effective date of the acquisition.
The assets consist of non-operated working interests in Blaine and surrounding counties, primarily alongside Continental Resources, Inc., one of the leading operators in the play.
Substantial damage after earthquake rattles Cushing
Dozens of buildings sustained “substantial damage” after a 5.0 magnitude earthquake struck an Oklahoma town that’s home to one of the world’s key oil hubs with almost 600 million barrels of stored crude, but officials said Monday that no damage has been reported at the oil terminal. It was only the sixth 5.0 magnitude or higher to strike Oklahoma since 1882, said George Choy, a geophysicist with the U.S. Geological Survey in Boulder, Colo. Three of those larger quakes occurred this year. The strongest ever recorded in Oklahoma was a 5.8 magnitude that hit Pawnee in September.
The quake struck at 7:44 p.m. Sunday and was felt as far away as Iowa, Illinois and Texas. The U.S. Geological Survey initially said Sunday’s quake was of magnitude 5.3 but later lowered the reading to 5.0. In response to Sunday’s earthquake near Cushing, Oklahoma’s oil and gas regulator says it plans to shut some disposal wells and reduce the volume of others. The Oklahoma Corporation Commission says its plan covers 700 sq. miles but does not say how many wells were affected; when a quake of similar magnitude hit the state in September, the agency ordered 37 wells shut over a 500 sq. mile area
Oil majors’ cash flow improved for 3 straight quarters
The world’s biggest oil companies — ExxonMobil, Royal Dutch Shell, Chevron, Total and BP — saw their combined cash flow surge 67% to almost $26 billion in the July-September period, marking the third consecutive quarter of growth. “Cash deficits should start to shrink in 2017 as oil prices gradually recover and cost-cutting initiatives continue,” Fitch Ratings Senior Director Maxim Edelson said.
US drillers attracted record amount of cash this year
US drilling companies, including Anadarko Petroleum and RSP Permian, have raised an unprecedented $28 billion so far this year from over 60 secondary stock offerings, beating out all but one other industry group. The capital helped companies build up their war chests for mergers and acquisitions.
OKLA Tax Collections on the Rise
State tax collections from oil and natural gas production are up for the first time in almost two years, Oklahoma Treasurer Ken Miller said Tuesday. October gross production collections of $35.1 million were above October 2015 collections by $2.9 million, or 8.9 percent. The last such increase was in December 2014, when receipts totaled $72.1 million.
Last Week’s Stories & Legends Series About Oklahoma Oilmen
November 4, 2016
Devon Reports Earnings
Devon Energy (DVN+3.1%) posted better than expected Q3 earnings and revenues, as it cut expenses and shifted to higher margin production. It expects cost savings to reach $1B this year. David A. Hager of Devon, noted that development programs delivered the best quarterly drillbit results in Devon’s 45-year history, with new wells reaching peak 30-day rates of nearly 2,000 BOE per day. These prolific drilling results were centered in our world-class STACK play, where oil production increased by nearly 40% year over year. DVN says it plans to increase its rig activity in the U.S. from five operated rigs running in Q3 to as many as 10 operated rigs by year end.
Earthquake Shakes Oklahoma
A magnitude 4.5 earthquake rocked north-central Oklahoma Tuesday night at 11:27 p.m. – the strongest and latest in a series of tremors that have been rattling the state for months. The US Geological Survey reports that the epicenter was near Pawnee, some 70 miles northeast of Oklahoma City. Pawnee Police say that preliminary reports show no significant damage. This was the fifth earthquake of the day in the state that registered at least a 2.0 magnitude, according to The Tulsa World.
GE Oil & Gas, Baker Hughes Plan Mega-Merger
Baker Hughes Inc. (NYSE: BHI), left at the altar in the failed merger with Halliburton Co. (NYSE: HAL), will combine with GE Oil & Gas, the companies said Oct. 31. GE (NYSE: GE) and Baker Hughes said they will merge into a new oilfield technology company with a value of $32 billion. As part of the deal, GE will give Baker Hughes shareholders’ a $7.4 billion sweetener, with shareholders receiving a special one-time cash dividend of $17.50 per share. The merger will create a “new Baker Hughes,” with GE owning a 62.5% majority interest in the company. Baker Hughes would hold the remaining 37.5% of the company.
Oxy’s $2 Billion Deal Doubles Permian Basin Holdings
Occidental Petroleum Corp. (NYSE: OXY) will take control of 35,000 net Delaware Basin acres and other Permian Basin interests in a $2 billion deal, the company said Oct. 31. Oxy said the company purchased producing and non-producing leasehold acreage in the Permian as well as interests in enhanced oil recovery (EOR) and CO2 properties and related infrastructure. The seller was undisclosed. In the Southern Delaware, Oxy added acreage in Reeves and Pecos counties, Texas, in areas where the company already holds working interests.
- Includes production of about 7,000 net barrels of oil equivalent per day (boe/d) (72% oil) from 68 horizontal wells;
- Adds an inventory of about 700 gross horizontal drilling locations targeting the Wolfcamp A and B and Bone Spring as well as potential for additional zones; and Boosts the company’s leasehold Delaware position to nearly 59,000 acres
Wall Street Steps Up Investments in Permian Basin
West Texas is attracting new money from investors such as Blackstone Group, Apollo Global Management and WL Ross, which increasingly recognize the long-term potential of the region, particularly the Permian Basin. Contributing to the Permian’s allure for investors are advances in horizontal drilling and fracking, as well as the widespread presence of oilfield services companies, which help keep costs down.