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Entries for category:   United States

 
Mar 26, 2015

Frozen market for oil and natural gas deals may start to warm up
 

Merger and acquisition deals in the oil and natural gas industry remain largely frozen as drillers wait for crude oil prices to hit bottom, but signs of a thaw are emerging, reports Bunker Ports News Worldwide. According to the news site, oil and gas exploration and production companies have issued nearly $9 billion in stock this year, well above recent first-quarter totals. Bunker Ports says some industry watchers see that as a precursor to increased mergers and acquisitions activity, as potential takeover targets and asset holders consider previously unacceptable prices. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 25, 2015

U.S. oil futures hit six-year low as storage capacity becomes strained
 

Oil futures in the United States are at their lowest level since March 2009 because of speculation that a record supply of oil may start to strain the nation’s storage capacity, reports Bloomberg Business. Citing data from the Energy Information Administration, Bloomberg says U.S. crude oil inventories have increased to the highest level since at least 1982. “It’s highly probable that we will reach the inventory capacity,” Bill O’Grady, chief market strategist at Confluence Investment Management, told Bloomberg. “Once you run out of storage space, that oil has no place to go and prices will just fall.” For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 25, 2015

Lifting U.S. ban on oil exports remains a hard sell in Congress
 

Despite a lobbying push by oil and natural gas drilling companies and steep job losses in their industry, there has been no significant effort in Congress to lift the 40-year-old ban on exporting U.S. crude oil, reports Oil and Gas Investor. Citing a story by Bloomberg, the oil and gas news site says that even Congress’ top advocate for lifting the ban, Sen. Lisa Murkowski, R-Alaska, hasn’t proposed legislation that would allow exports to flow. The reason for the go-slow approach, according to Bloomberg, is wariness among lawmakers that they will be blamed if gasoline prices climb after the export ban is lifted. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 24, 2015

U.S. agency releases final standards for hydraulic fracturing
 

Following a process that included more than 1.5 million public comments, U.S. Secretary of the Interior Sally Jewell has released final standards for hydraulic fracturing on public and American Indian lands. The Department of the Interior says that the “common-sense standards will improve safety and help protect groundwater by updating requirements for well-bore integrity, wastewater disposal and public disclosure of chemicals” in well-drilling operations. “Current federal drilling regulations are more than 30 years old and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations,” Jewell said in a press release. For more, read the full release.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 18, 2015

U.S. oil glut could push storage tanks to their operational limits
 

The United States has so much crude oil that it is running out of places to store it, and that could drive oil and gasoline prices even lower in the coming months, reports Yahoo! News. Citing an Associated Press story, Yahoo says the country has been producing and importing an average of one million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, pushing U.S. supplies to their highest point in at least 80 years, according to the U.S. Department of Energy. Yahoo! says if that keeps up, storage tanks could approach their operational limits by mid-April and send the price of crude — and probably gasoline as well — plummeting. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 17, 2015

OPEC strategist says plan to regain oil market share is working
 

Time magazine reports that Saudi Oil Minister Ali al-Naimi, architect of the strategy by the Organization of the Petroleum Exporting Countries (OPEC) to regain market share by causing crude oil prices to plunge, says his plan is working. Time says that al-Naimi recently told reporters that the markets have cooled off and cited the price of Brent crude oil, the global benchmark, as having stabilized at about $60 per barrel. He also pointed to data that shows inexpensive oil is driving up demand, notably in China and the United States, which eventually could lead to price stability or to a price rebound. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 17, 2015

Experts say oil prices may remain low for several years
 

Bloomberg reports that a consensus is emerging among BP Plc, the International Energy Agency, shale wildcatters and even the Saudis that a near-term recovery to $100-a-barrel crude oil is not in the cards. Instead, industry insiders expect a range of $50 to $60 a barrel for at least the next few years, according to the news service. For example, Dennis Cassidy, co-leader of the oil and natural gas practice for consulting company AlixPartners, told Bloomberg that his group sees an L-shaped chart for crude in which low prices continue for three to five years. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 16, 2015

Oil companies expected to step up pressure to lift U.S. export ban
 

An energy expert with the Wood Mackenzie consulting group tells the Dallas Business Journal that oil drillers will put more pressure on President Barack Obama and federal lawmakers to lift the U.S. ban on crude oil exports. The newspaper says that pressure will stem from the price gap – possibly as much as $15 to $20 per barrel – between domestic West Texas Intermediate crude oil and international Brent crude. "(Drillers) would really like to capture that Brent price,” Wood Mackenzie’s Harold York told the Business Journal, adding the federal policy keeps them from getting the higher price than if U.S. exports were allowed to flow freely. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 11, 2015

Report: Only a small fraction of disposal wells associated with damaging seismic activity
 

A report from the Congressional Research Service (CRS) concludes that only a small fraction of the more than 30,000 wastewater disposal wells in the United States appears to be associated with damaging seismic activity, according to Mealey’s Fracking Report. Mealey’s says that the CRS report also states that the potential for seismic activity caused by hydraulic fracturing in oil and natural gas drilling operations appears to be even smaller than that posed by deep-well injection of wastewater. The CRS report says it is likely that states and possibly the federal government will continue to explore ways to understand and mitigate the possibility of seismic activity caused by a small number of disposal wells.  An overview of the report can be found here.


 
Posted by D. Gerken in  United States   |   Permalink

 

Mar 09, 2015

Factors could align to send oil prices plunging for a second time
 

While noting that crude oil prices have recently rebounded to as high as $60 a barrel, OilPrice.com reports that several trends could conspire to force prices down for a second time. The energy news site says drillers are deciding to delay completion of their wells in the hope that oil prices will become more favorable. But when the industry clears out that queue of wells, a rush of new supplies could come online, pushing oil prices down again, according to OilPrice.com. It also says that even with well completions being suspended, oil supplies continue to build with U.S. storage levels now at their highest in more than 80 years. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 06, 2015

Experts say oil prices may remain low for several years
 

Bloomberg reports that a consensus is emerging among BP Plc, the International Energy Agency, shale wildcatters and even the Saudis that a near-term recovery to $100-a-barrel crude oil is not in the cards. Instead, industry insiders expect a range of $50 to $60 a barrel for at least the next few years, according to the news service. For example, Dennis Cassidy, co-leader of the oil and natural gas practice for consulting company AlixPartners, told Bloomberg that his group sees an L-shaped chart for crude in which low prices continue for three to five years. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 04, 2015

Natural gas processing plant opens in Wyoming’s Niobrara shale play
 

The $100 million Bucking Horse natural gas processing plant recently began operations in Converse County, Wyoming, processing gas from the Powder River Basin Niobrara shale play, reports the Douglas Budget. The Wyoming newspaper says that the Bucking Horse plant and the Jackalope Gas Gathering System in Wyoming are owned through a joint venture partnership between Tulsa-based Williams Partners and Crestwood Midstream Partners in Houston. The gathering and processing facilities provide services under a long-term, fee-based agreement with Chesapeake Energy Corp, the top driller in Ohio’s Utica shale play to date. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Mar 02, 2015

Chesapeake Energy will reduce capital spending, drilling activity
 

Chesapeake Energy Corp., the most active driller in Ohio’s Utica shale play to date, said it will slash capital spending and drilling activity this year in the face of substantially lower oil and natural gas prices, reports the Youngstown Business Journal. According to the newspaper, Chesapeake will reduce its capital expenditure budget by 37 percent in 2015 to between $4 billion and $4.5 billion, compared to $6.7 billion in 2014. Chesapeake also reported it will reduce its rig count to between 35 and 45 this year, the lowest number since 2004. For more, read the full story. More stories related to Chesapeake can be found here.
 


 
Posted by M. Warnock in  Ohio  United States   |   Permalink

 

Feb 27, 2015

Drop in oil prices affects market for natural gas liquids
 

The fall in crude oil prices is also affecting the market for natural gas liquids, reports the Pittsburgh Post-Gazette. The newspaper says the market for ethane, which makes up the largest portion of natural gas liquids production, is oversupplied, and ethane is also facing stiffer competition from naphtha, a petroleum byproduct that is cheaper due to falling oil prices. Prices for natural gas liquids have been higher than those for dry natural gas since 2010, but the Post-Gazette says the gap has been shrinking. For more, read the full story
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Feb 27, 2015

Colorado task force recommends local input on oil and gas drilling projects
 

Colorado Governor John Hickenlooper’s oil and natural gas task force has endorsed plans for more local input on large-scale oil and gas drilling projects but stopped short of supporting proposals to give more power on drilling issues to local governments, reports the Denver Post. The newspaper says the proposals, which were approved by the task force, focus on enhancing the state permitting process and including local governments in siting decisions at an early stage. However, the task force rejected seven proposals that would have bolstered local governments' ability to make their own rules on oil and gas development. Local control of oil and gas regulation is also an issue in Ohio. (See our February 24 blog, “Supreme Court decision may not close door on local input on oil and gas drilling.”) For more, read the full Denver Post story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Feb 25, 2015

Oil companies may turn to ‘refracking’ of wells to reduce costs
 

Beset by falling prices, the oil industry is looking at about 50,000 existing wells in the United States that may be candidates for a second wave of hydraulic fracturing, using techniques that didn’t exist when the wells were first drilled, Bloomberg reports. New wells can cost as much as $8 million to develop, while "re-fracking" is about $2 million, according to oilfield services company Halliburton. Bloomberg says re-fracking offered mixed results in the past, earning it the nickname “pump and pray,” but the crash in oil prices is forcing companies to pursue new technologies to produce oil more cheaply. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Feb 10, 2015

Smaller oil producers facing tough decision due to decline in crude prices
 

Reuters reports that the decline in crude oil prices is impacting scores of smaller U.S. oil producers who face the choice of shutting older, high-cost wells or burning through cash in the hope of riding out the downturn. The news service says that operators are already closing some small, old wells, known as strippers, and tens of thousands of similar wells are on the verge of losing money. A further slide could idle an equivalent of up to 2 percent of U.S. oil supply, according to Reuters. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Feb 05, 2015

Performance tests done on oil wells drawing scrutiny
 

Tests done on new oil wells that boosted the fortunes of energy companies by billions of dollars during the U.S. shale boom are increasingly coming under scrutiny, reports Bloomberg. Citing a study by Drillinginfo, an Austin, Texas-based analytics and data firm, Bloomberg says the one-day performance tests, whose results regularly spike the price of oil company shares, don’t provide enough data to predict future potential. Additionally, few rules or standards govern the tests, industry observers say, making for inconsistent findings at best. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Feb 04, 2015

U.S. House passes bill aimed at speeding up LNG approval process
 

The U.S. House of Representatives recently passed a bill that would expedite the approval process for export permits for liquefied natural gas (LNG), reports the Columbus Dispatch. The bill’s sponsor, Rep. Bill Johnson, R-Marietta, told the newspaper that House Resolution 351 is aimed at advancing an approval process that has been mired in bureaucratic red tape and is frustrating LNG exporters. The bill is scheduled for hearings in the Senate. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 30, 2015

Oil and gas drillers face credit pinch by lenders
 

With the assets of energy companies in decline along with oil prices, banks are preparing to cut the amount they’re willing to lend to them, thereby hurting the ability of U.S. oil and natural gas drillers to keep production growing, Bloomberg reports. The news service says that in April, lenders will recalculate the value of properties that energy companies staked as loan collateral. “This could start a downward spiral for some of these companies because liquidity will dry up,” Standard & Poor’s Thomas Watters told Bloomberg. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 30, 2015

Baker Hughes to lay off 7,000; Halliburton hints of job cuts, too
 

Oilfield services company Baker Hughes plans to lay off about 7,000 employees, which is 11 percent of its workforce, in the wake of the plunge in the price of crude oil, reports the Advertiser in Lafayette, Louisiana. The newspaper says the layoffs will be companywide and take place mostly during the first quarter of 2015. Executives at oilfield services giant Halliburton have also hinted of layoffs in the coming year, the Advertiser reports. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 28, 2015

West Texas ‘hunkers down’ as shale oil boom goes bust
 

With oil prices falling by more than 50 percent since June 2014, the gleeful mood of recent years has turned glum in the West Texas oil patch as the frenzy of shale drilling has come to a halt, reports the New York Times. The newspaper says oil companies are decommissioning drilling rigs and announcing layoffs, and small companies that lease equipment have fallen behind on their payments. But the Times notes that West Texas is accustomed to the boom-and-bust nature of the oil business, with a jewelry store owner telling the paper, “We are always prepared for slowdowns. We just hunker down.” For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 28, 2015

Oilfield-services company Schlumberger to cut 9,000 jobs
 

The Columbus Dispatch reports that Schlumberger Ltd., the world’s largest oilfield-services provider, plans to cut 9,000 jobs, or about 7 percent of its work force, as it focuses on controlling costs in response to the fall in oil prices. The newspaper says that Schlumberger’s customers have slashed capital budgets and reduced the number of rigs amid a nearly 60 percent decline in oil prices in the past six months. Schlumberger has operations in Ohio, where it is involved in drilling in the Utica shale play. For more, read the full story.
 


 
Posted by M. Warnock in  Ohio  United States   |   Permalink

 

Jan 23, 2015

Falling prices to hurt industries tied to oil and natural gas producers
 

U.S. manufacturers and other industries are bracing for the impact of plunging crude oil prices that are forcing energy producers to cancel or postpone new drilling projects, reports the International Business Times. The news site says the slowdown in activity by drillers may deliver a hit to steelmakers, local banks and construction firms. The Business Times notes that the largest industrial victim of crashing oil prices so far is United States Steel Corp., which recently said it will lay off more than 750 workers at its plants in Lorain, Ohio and Houston that make pipes and tubes for oil and gas exploration and drilling. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 21, 2015

Obama administration pushes for lower methane emissions from oil and gas wells
 

The Obama administration has set a goal of cutting methane emissions from the oil and natural gas sector by nearly half in the next 10 years as part of an effort to reduce the release of greenhouse gases, reports the Pittsburgh Post-Gazette. The newspaper says the U.S. Environmental Protection Agency will propose rules this summer to limit methane emissions from new oil and gas wells, compressor stations and other sources. It also will issue guidelines for cutting emissions of smog-forming compounds from existing oil and gas facilities in areas of the country that need to improve their ozone air quality levels. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 15, 2015

Expert thinks crude oil prices could go as low as $30 a barrel
 

Tom Kloza, the global head of energy analysis for the Oil Price Information Service, is predicting that crude oil prices could bottom out at $30 a barrel in 2015 in a market he called “unprecedented and volatile,” reports the Dallas Business Journal. Kloza told the newspaper that overall, the price of crude will average between $60 and $70 a barrel over the course of the year. He also said that gasoline prices will average $2.45 a gallon nationwide. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 14, 2015

Latest drop in crude oil prices the steepest since 2009 recession
 

Oil prices took another sharp turn downward on January 12th to levels not seen since the depths of the 2009 recession, reports the New York Times. The newspaper says several international banks predicted even lower prices later this year because of an oversupply of crude oil in the global market. According to the Times, the latest price drop of more than 5 percent has brought several crude oil benchmarks down by more than 55 percent since June 2014 in one of the fastest declines ever for the commodity. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 13, 2015

U.S. oil companies may see tightening of credit because of fall in crude prices
 

U.S. oil companies could see the amount of money they can borrow shrink significantly in April when banks reassess credit conditions amid falling oil prices, according to FuelFix.com. The energy news site says that tighter credit would reduce the cash that companies need to drill pricey wells in shale basins, a painful prospect for firms that rely on high spending levels to maintain oil production and their income levels. Unless crude prices climb back by spring, financial institutions will reset their credit assumptions about the value of oil reserves, says FuelFix. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 13, 2015

Economist: $60-a-barrel oil is ‘sweet spot’ for U.S. economy
 

Economist Bud Weinstein says oil priced at $60 a barrel is the “sweet spot” where the U.S. economy gets a boost without putting the brakes on oil-producing states, reports the Dallas Morning News. “A strong case can be made that with oil in the $60 range, the pluses for the U.S. economy outweigh the negatives, even in the state of Texas,” Weinstein, associate director of Southern Methodist University’s Maguire Energy Institute, told the newspaper. He said that when oil is selling for $55 to $60 a barrel, drivers save about $100 per month per household, and American manufacturers can make products cheaper, increasing their competitiveness abroad. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 12, 2015

Helmerich & Payne’s idling of drilling rigs is sign of oil industry downturn
 

With oil prices plunging at an ever-quickening rate, producers are beginning to slash the number of drilling rigs around the country, reports the New York Times. The newspaper says that Helmerich & Payne, the Tulsa, Okla.-based contract rig company, has announced it plans to idle up to 50 rigs over the next month, sending shudders through the oil and natural gas industry. The Times says Helmerich & Payne’s announcement was an early indication that the oil industry, with its history of booms and busts, was in the early stages of its latest downturn. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 07, 2015

Murder charges tied to oil industry cast cloud over North Dakota reservation
 

The New York Times reports that charges of murder for hire and other crimes connected to the oil industry have upended business as usual on the Fort Berthold Reservation in North Dakota. Two murder cases, one in Spokane, Washington and the other in North Dakota, have been tied to oil business on the reservation, according to the newspaper. The Times also says that anxiety about the environmental and social costs of the oil boom, as well as about tribal mismanagement and oil-related corruption, have risen to the surface after six years of rapid oil development on the reservation. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 07, 2015

Oil and gas companies expected to look for acquisition opportunities
 

An analysis by energy consulting firm Wood Mackenzie says upstream oil and natural gas companies are waiting out volatility in the commodities markets, reports FuelFix.com, but many are expected to be on the hunt for acquisitions after the dust settles in the crude oil market. Wood McKenzie says that attractive deals will come as companies struggling with lower crude prices meet with others looking to take advantage of lower-valued assets. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 06, 2015

Declining costs should help balance lower prices for U.S. oil producers
 

Bloomberg reports that a new analysis by Goldman Sachs Group Inc. says U.S. oil producers battling the Organization of the Petroleum Exporting Countries (OPEC) for market share may still increase output as costs decline almost as fast as oil prices. According to Bloomberg, Goldman Sachs says that the slump in benchmark U.S. crude futures, which are down more than 40 percent this year, is driving producers to move drill rigs to lower-cost fields. “Costs are falling nearly as fast as the price, which means oil producers can spend less to get the same or potentially even more in terms of production,” the bank said in the report. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 05, 2015

Reports say outlook is stable for natural gas pipeline and midstream industries
 

Two recent reports by Fitch Ratings show the credit ratings and sector outlooks for the North American natural gas pipeline and midstream industries are generally stable, according to Platts. The news service says that is the case despite the dramatic drop in crude oil prices and the continued weakness of prices for natural gas liquids. "We expect continued stability as we've seen in the past in regard to natural gas pipelines," Peter Molica, a Fitch senior director, told Platts, adding that natural gas has not been under the same price pressure as crude oil. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 05, 2015

Oil and gas states preparing for cuts as falling prices hurt their economies
 

States dependent on oil and natural gas revenue are bracing for layoffs, slashing agency budgets and growing increasingly anxious about the ripple effect that falling oil prices may have on their local economies, reports the New York Times. The newspaper says the concerns are cutting across traditional oil states such as Texas, Louisiana, Oklahoma, and Alaska as well as those like North Dakota that are benefiting from the nation’s latest energy boom. But experts and elected officials told the Times that an extended downturn in oil prices seems unlikely to create the economic disasters that accompanied the 1980s oil bust, because energy-producing states have diversified their economies. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Jan 02, 2015

Oil-service companies expected to lower prices to help struggling customers
 

Oilfield contractors hired to drill wells and fracture rock to bring crude oil and natural gas to the surface will have to lower their prices by as much as 20 percent to help keep their cash-strapped oil and gas customers working, according to Bloomberg. The news service says the price cuts could carve out more than $3 billion from the 2015 earnings outlined by analysts for the world’s four biggest oil-service companies: Schlumberger Ltd., Halliburton Co., Baker Hughes Inc., and Weatherford International Plc. The potential losses loom just as the service providers were looking ahead to higher rates, Bloomberg says. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 29, 2014

Drillers shutting down rigs as oil prices fall below $60 a barrel
 

Facing oil prices that have fallen below $60 a barrel amid escalating competition from suppliers abroad, U.S. oil drillers have idled the largest number of rigs in almost two years, reports the News-Journal in Longview, Texas. Citing a report from Baker Hughes Inc., the newspaper says the number of rigs targeting oil fell by 29 in mid-December for the biggest weekly decline since December 2012. The drop in rig count comes at a time when plunging global oil prices are threatening to slow the U.S. shale-drilling boom. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 23, 2014

Plunge in oil prices could drive mergers and acquisitions
 

The plunge in the price of oil to a five-year low may trigger a new wave of mergers and acquisitions in the United States energy sector, reports Smart Investor. The magazine says highly leveraged and smaller producers struggling to cope with oil prices below $70 a barrel could be forced to sell assets to remain financially viable. “I think you will see a bunch of companies with fairly strong balance sheets start looking to be acquirers,” John Howell, chief executive of Houston-based Portfolio Decisions, told Smart Investor. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 16, 2014

Drop in oil prices may signal slowdown in global economy
 

The New York Times reports that oil prices have continued to drop with mounting evidence that the frenzy of American oil production would continue well into 2015 even while growth in global demand is declining. The newspaper says the swoon in oil prices led to a steep decline in equities on December 12, as investors feared that declining energy demand meant the global economy was slowing. “People are scared that the drop in oil demand is the first leg down for the global economy that had been led by the growth in the emerging markets,” Nancy T. Schmitt, president of Taum Sauk Investments, told the Times. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 12, 2014

Report: U.S. shale oil to remain profitable despite oil price plunge
 

Shale Gas International reports that analysts at Colorado-based IHS Inc. are saying that the vast majority of U.S. shale oil deposits will continue to be profitable despite the drop in oil prices in the world market. According to the shale industry news site, a new IHS report says about 80 percent of potential gross U.S. tight-oil capacity additions in 2015 have a break-even price ranging from $50 to $69 a barrel, and would remain resilient at West Texas Intermediate prices of $70 a barrel. IHS also estimates tight-oil production growth at about 700,000 barrels per day in 2015 at an average price of $77 a barrel. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 09, 2014

OPEC’s decision on oil output to hurt weakest players in energy business
 

The Dallas Morning News reports that the refusal by the Organization of Petroleum Exporting Countries to curb crude oil output in the face of plummeting prices has set the energy world on a painful course that will leave the weakest behind, from governments to U.S. wildcatters. But the newspaper says that U.S. oil patch executives have vowed to drill on, asserting they can still profit at oil prices well below $70 a barrel. U.S. supply is expected either to remain flat or rise by almost 1 million barrels a day in 2015, according to the International Energy Agency and ITG Investment Research, because only about 4 percent of shale production needs oil prices of $80 or more a barrel to be profitable. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 08, 2014

Federal agency considers new standards on hydraulic fracturing
 

The U.S. Bureau of Land Management (BLM) is close to imposing a suite of new standards governing hydraulic fracturing on public lands, reports FuelFix.com. Citing a fall 2014 outline of rules drafted by federal agencies, the online energy news service says the proposed BLM standards are aimed at boosting the integrity of wells to ensure oil, gas and other fluids are contained within them, recovered water and other fluids are safely stored, and chemicals used in the fracturing process on public lands are disclosed. FuelFix says those rules, as well as ones on offshore drilling and methane emissions at oil and gas drilling sites, are among a number of changes under consideration by the Obama administration. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 03, 2014

Report: New oil and gas technologies attract $7 billion in funding
 

The Akron Beacon Journal reports that a new study by Boston-based Lux Research finds that new technologies to enhance exploration and production of oil and natural gas have attracted $7 billion in funding since 2003. The research firm said waves of innovation have opened up new kinds of energy plays in shale gas, tight oil and heavy oil areas. Lux also noted that there was a surge in megadeals involving oil and gas technologies from 2010 to 2013, with investments in North America’s booming oil and gas market the runaway leader. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Dec 02, 2014

Cheap energy fueled by shale boom reshaping geopolitical landscape
 

A new age of abundant and cheap energy supplies is redrawing the world’s geopolitical landscape, reports Bloomberg News, and it is weakening the legitimacy of some governments while enhancing the power of others, including the United States. The news service says that surging U.S. oil production (driven by the shale boom) has enabled America and its allies to impose tough sanctions on Iran without having to worry much about the loss of oil imports from the Middle Eastern nation. In addition, Bloomberg says that Russia faces what President Vladimir Putin called a potentially “catastrophic” slump in prices for its oil as Russia's economy is battered by U.S. and European sanctions over its role in the Ukraine. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 26, 2014

Private equity firms see opportunities in natural gas
 

CNBC reports that natural gas appears to be private equity's biggest play when it comes to what investors are doing now that will shape the future of energy. Blackstone Energy Partners CEO, David Foley, told the network that the low cost of natural gas compared to crude oil represents a major arbitrage opportunity for private equity firms. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 25, 2014

Halliburton and Baker Hughes deal may be start of energy takeovers
 

Bloomberg News reports that Halliburton Co.’s proposed acquisition of Baker Hughes Inc. (See our Nov. 18, 2014 blog “Report: Halliburton and Baker Hughes deal will face antitrust scrutiny”) may be just the start of takeovers of big energy companies as oil prices slump amid a U.S. supply glut. The news service says that buyers with cash to spend aren’t going to let the cheapest energy company valuations in years pass them by. In addition, acquisition targets threatened by lower oil prices may become more willing sellers, according to Bloomberg. For more, read the full story.


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 18, 2014

Report: Halliburton and Baker Hughes deal will face antitrust scrutiny
 

Halliburton has agreed to buy its rival Baker Hughes for about $34.6 billion, uniting two big oilfield services providers in a friendly deal only days after a hostile takeover battle appeared to be brewing, reports the New York Times. But the newspaper says there are questions about whether the takeover will survive antitrust scrutiny, given the level of consolidation that it promises within the oil production services business. The Times also says a merger would help the two companies, both based in Houston, compete better against oilfield services leader Schlumberger. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 14, 2014

Federal agency says U.S. oil production at its highest since July 1986
 

A federal agency says that U.S. crude oil production averaged an estimated 8.7 million barrels per day (bbl/d) in September, the highest monthly production since July 1986. The report from the U.S. Energy Information Administration (EIA) also says that total crude oil production is expected to average 9.5 million bbl/d in 2015, which would be the highest annual production since 1970. The EIA reports that natural gas liquids production is expected to increase from an average of 2.6 million bbl/d in 2013 to 3.2 million bbl/d in 2015. For more, read the full report.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 13, 2014

With oil prices dropping, top U.S. producers look to tighten spending
 

Reuters reports that top U.S. oil producers, which already were reining in spending before crude prices started to slip in June 2014, are now looking to trim more fat from their budgets while reminding investors they must spend to grow. The news service says that Exxon Mobil Corp. recently announced it would keep its current spending plan intact, although it is about 15 percent less than in 2013. In addition, Reuters says that ConocoPhillips will spend less money next year, and that Chevron Corp. said it is looking for budget "flexibility." For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 11, 2014

Shale drillers employ ‘down-spacing’ to boost oil production
 

U.S. shale producers are cramming more wells into the best spots in their production fields in a move that may help keep the drilling boom going as oil prices plunge, Bloomberg reports. The news service says the technique, known as “down-spacing,” aims to pull more oil at less cost from each field, allowing companies to boost profits, attract more investment dollars and arrange loans needed to continue drilling. Energy companies see closely-packed wells as their best chance to add billions of barrels of oil to domestic production that’s already the highest in a quarter century, according to Bloomberg. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 10, 2014

Election Day was mixed bag for votes on fracking bans, including in Ohio
 

Opponents to oil and gas drilling experienced mixed results on Election Day in regards to local proposals to ban or limit hydraulic fracturing, including four ballot measures in Ohio, three in California, and a closely watched one in Texas, reports the New York Times. Voters in Denton, Texas approved a ballot proposal to ban hydraulic fracturing, marking the first time a municipality in that oil-rich state has approved such a prohibition. The Times reports that proposed fracking bans were defeated in Youngstown, Gates Mills, and Kent, Ohio, but approved in Athens, the home of Ohio University. In addition, California voters in San Benito and Mendocino counties passed fracking bans, but a similar initiative was defeated in Santa Barbara County. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 06, 2014

Saudi Arabia's strategy drives down price of U.S. crude oil
 

The New York Times reports that the recent drop in the price of U.S. crude oil below the symbolic $80-a-barrel threshold came as Saudi Arabia tries to shore up its dwindling exports to the United States by cutting its prices. The newspaper says the move by the Saudis, and deepening fall in oil prices, are both the result of the oil-drilling boom in the United States. The hike in drilling has lifted production by more than 70 percent over the last six years and reduced the nation’s oil imports to roughly half of what they once were. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Nov 05, 2014

Report: Mining fine-particle sand used in hydraulic fracturing poses threat to health, environment, economy
 

A new report from a Massachusetts-based think tank says mining of fine-particle sand needed for hydraulic fracturing of oil and natural gas wells poses a little-understood threat to human health, the environment, and local economies. The report by the Civil Society Institute's Boston Action Research project looked at the mining of so-called “frac sand” in Wisconsin and Minnesota where such operations are concentrated. The report cited a number of concerns about the effect of fine-particle sand mining, including health issues related to silica dust, impacts on water quality, potential declines in local property values, and decreased life spans of roads and other infrastructure. For more, read the full report.
 


 
Posted by D. Gerken in  United States   |   Permalink

 

Oct 30, 2014

OPEC pumps up oil production to see how U.S. shale drillers respond
 

The Organization of Petroleum Exporting Countries (OPEC) is resisting pressure to cut oil production as it tests how low prices must go to make U.S. shale oil unprofitable, according to Bloomberg. The news service says OPEC boosted crude oil output by the most in 13 months in September 2014, even as crude plunged into a bear market and demand growth weakens to a five-year low. While OPEC has acted as a “swing producer” of oil over the past decade, it is now letting oil slide to see if North American production can withstand lower prices. Bloomberg says that so far, U.S. shale drillers are showing no signs of cracking. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 30, 2014

Improved drilling techniques drive production gains in U.S. shale plays
 

The U.S. shale boom is getting even bigger with advances in drilling techniques that are making oil and natural gas wells more productive, reports the Youngstown Vindicator. The newspaper says more efficient drilling techniques have helped Texas more than double its oil production in the past three years. Citing data from the U.S. Energy Information Administration, the Vindicator also says five of the country’s six major shale areas have seen increased production per rig in the last few years, with the Marcellus shale play in Pennsylvania leading the way for natural gas. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 28, 2014

Banker says big drop in oil prices is not cause for panic by drillers
 

An investment banker told the Dallas Business Journal that well-managed oil and gas drilling companies should not panic despite the recent decline of crude oil prices by more than $25 a barrel. "Absolutely not," said David Mahmood chairman for Allegiance Capital Corp., a Dallas-based investment bank that specializes in mergers and acquisitions. While noting that drillers in expensive, tight shale formations will feel the price drop first, Mahmood says management teams that are experienced and planned ahead for drops in commodity prices will weather the storm. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 27, 2014

Oil and gas producers lobby White House to halt fracking rule
 

Bloomberg says representatives of Exxon Mobil Corp., Halliburton, Chesapeake Energy Corp. and other oil and natural gas producers have urged White House officials to not proceed with a final rule to regulate hydraulic fracturing on federal and Indian lands. The proposed rule (RIN 1004-AE26), which has been in the works since 2012, focuses on well integrity, chemical disclosure, and flow-back water. Bloomberg says the American Petroleum Institute (API) indicates that the rule will have a significant impact on the oil and gas industry, and that its impact has not been adequately analyzed. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 23, 2014

Shale boom brings $3-a-gallon gasoline in sight for holiday drivers
 

Bloomberg reports that U.S. drivers are closer to seeing $3-a-gallon gasoline in the coming holiday season than they’ve been in four years as New York-traded futures are selling for $1 a gallon below retail prices. The news service says gasoline prices are sliding as oil trades at the lowest price levels since 2012. Bloomberg notes that U.S. output of crude oil, which makes up about two-thirds of the cost of gasoline, has surged to a 28-year high as drillers pull record volumes out of shale formations from North Dakota to Texas. That is contributing to a glut of oil as global demand growth slows. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 20, 2014

Record oil production, reduced demand pose threat to drilling activity
 

The U.S. shale boom is producing record amounts of oil as demand weakens, pushing prices down toward levels that threaten to reduce future drilling, Bloomberg reports. Citing data from the U.S. Energy Information Administration, the news service says domestic oil fields will add 1.1 million barrels a day of output this year and another 963,000 in 2015, raising production to the highest level since 1970. However, the agency also forecasts oil consumption will shrink 0.2 percent to 18.9 million barrels a day this year, the lowest since 2012.  "If oil prices go to $80 a barrel or lower, which I think is possible, then we are going to see a reduction in drilling activity,” Jeffries LLC Vice Chairman Ralph Eads told Bloomberg. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 16, 2014

Anti-fracking vote will test Texans’ love for oil and gas business
 

The New York Times reports that Texas’ long-held love of the oil and gas industry will be tested Nov. 4th in a election that would ban hydraulic fracturing in Denton, Texas. The Times says the grass-roots campaign in Denton, a college town near Dallas, has pushed the industry into a corner in a state that has never come close to passing such a measure. Oil and gas company executives have expressed uneasiness that the Denton vote threatens to encourage anti-fracking forces nationwide. For more, read the full story.

 


 
Posted by M. Warnock in  United States   |   Permalink

 

Oct 15, 2014

Kansas task force unable to link injection wells with seismic activity
 

A task force in Kansas didn’t find conclusive evidence linking practices used by injection-well drillers to specific seismic events in that state, but it called for more study on the issue, reports the Topeka Capitol Journal. The newspaper says the Induced Seismicity Task Force had been assigned to determine whether the use of injection wells for disposal of waste products from oil and gas drilling was causing seismic activity, which has been higher in 2014 than in prior years in Kansas. The task force determined the scientific community hasn’t reached a consensus on whether injection wells can cause ground tremors and called for more research. For more, read the full story. More articles related to seismic activity can be found here.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Oct 14, 2014

Pickens may be open to investing in McClendon’s latest venture
 

Oil and gas magnate T. Boone Pickens appears to be open to investing in shale ventures being developed by wildcatter Aubrey McClendon, reports Columbus Business First. Citing comments Pickens made to BusinessWeek, the newspaper says Pickens has talked with McClendon several times and said he “kind of knows what (McClendon) is doing.” McClendon recently said he may take public his American Energy Partners LP subsidiaries, including the one operating in the Utica shale play. For more, read the full story. More articles related to Aubrey McClendon can be found here.
 


 
Posted by R. Smith in  Ohio  United States   |   Permalink

 

Oct 14, 2014

Major pipeline construction needed to keep pace with shale development
 

While North America’s natural gas pipeline network has made possible rapid development of oil and gas shale plays, major changes and additions to the system will be needed as shale regions continue to grow, according to the Unconventional Oil & Gas Center. The industry group reports that an expert with the Interstate Natural Gas Association of America (INGAA) recently said at an energy forum that there will be a tremendous amount of pipeline construction in the next 20 years, pointing to a recent INGAA Foundation study that forecasted the gas pipeline business will need to invest $313 billion through 2035 to keep up with demand. For more, read the full story
 


 
Posted by R. Smith in  United States   |   Permalink

 

Oct 10, 2014

More shots fired on connotation of ‘fracking’ as a term
 

The venerable Wall Street Journal’s language blog has jumped into the debate over the use of the word “fracking,” wondering if the term can be rescued from its sometimes negative connotations, reports Columbus Business First. The Journal asks whether fracking as a term is salvageable, citing a public relations study from 2011 that said it isn’t. But Business First also reports that a Pennsylvania oil and gas group has started airing ads to take the word back, with a girl saying that “fracking rocks” in the ads. For more, read the full story.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Oct 09, 2014

Baker Hughes to disclose all fracking chemicals to boost transparency
 

Oil and gas drilling services company Baker Hughes has decided to disclose all of the chemicals used in its hydraulic fracking operations, reports ABC News. The network says the oil and gas industry has an online database that lists many of the chemicals used in fracking but has held back information on certain chemicals and the amount used on the grounds it would provide competitors with trade secrets. But Houston-based Baker Hughes announced it will not withhold any of that information, with a company official saying “greater transparency about the chemicals used in the hydraulic fracturing process and protecting the ability to innovate are not conflicting goals." For more, read the full story. More articles related to fracking chemicals can be found here.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Oct 08, 2014

Report: State agencies up their game on oil and gas oversight
 

A new national report says state regulatory agencies have significantly increased their oversight and rules for oil and gas exploration and production over the last five years. The Akron Beacon Journal reports that the analysis by the Ground Water Protection Council looks at the 27 states that produce 98 percent of U.S. gas and oil. An official with the association of groundwater regulatory agencies says states are “on the forefront of oil and gas regulation and are diligently working to address the safety and environmental issues surrounding modern energy development.” For more, read the full story. The council’s analysis can be found here.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Sep 26, 2014

Federal agency says new rules needed for oil and gas pipelines
 

Columbus Business First reports a federal agency says that oil and natural gas production is outpacing pipeline construction and regulation, and the U.S. Department of Transportation (DOT) needs to consider making new rules to address the issue. The newspaper says that was one of the conclusions in a report by the U.S. Government Accountability Office (GAO) on oil and gas infrastructure, including pipelines, railroads and trucks. The GAO report says the DOT began looking at safety regulations for pipelines in 2011, but didn’t propose new standards. Since then pipeline construction has increased significantly, including in Ohio where oil and natural gas production is soaring. For more, read the full story.
 


 
Posted by R. Smith in  Ohio  United States   |   Permalink

 

Sep 23, 2014

Federal forecast is bullish on U.S. crude oil production
 

Bloomberg BusinessWeek reports that government forecasters estimate that U.S. crude oil production will surge to a 45-year high in 2015, lowering prices and reducing the need for imports. The magazine said the U.S. Energy Information Administration has raised its estimate of 2015 output by 250,000 barrels a day to 9.53 million, the most since 1970.  The agency has also forecast output of 8.53 million barrels a day this year, up from 7.45 million in 2013. For more, read the full story.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Sep 15, 2014

Bloomberg: U.S. oil and gas drillers sitting on a mountain of debt
 

A decade into the U.S. shale boom, oil and gas drillers are propping up the dream of American energy independence with a mountain of debt, Bloomberg reports. It says these companies are paying a steep price for big gains in domestic oil production, with most spending money -- an average of $1.17 for every dollar earned in the 12 months ended on June 30 – faster than they make it. Bloomberg’s research found only seven of the U.S.-listed firms in the Bloomberg Intelligence’s E&P index made more money in that time than it cost them to keep drilling, and they are plugging their cash shortfalls with junk-rated debt. For more, read the full story.
 


 
Posted by R. Smith in  United States   |   Permalink

 

Sep 10, 2014

New York Times: Oil and gas surge changes economic picture for the heartland
 

The New York Times reports that an industrial turnaround in the nation’s heartland is being driven by a surge in domestic oil and gas production that is “changing the economic calculus for old industries and downtrodden cities.” The newspaper says that in Ohio, entire sectors such as manufacturing, lodging, real estate and law are being reshaped in an arc stretching south from Youngstown, past Canton and into the rural parts of eastern Ohio. A manufacturing consultant at McKinsey & Company told the Times that energy production is a game-changer for the U.S. economy and an opportunity for regions of the country to renew themselves. For more, read the full story.
 


 
Posted by M. Warnock in  Ohio  United States   |   Permalink

 

Sep 08, 2014

Colorado researchers look for cause of seismic activity
 

Seismic activity in Greeley, Colorado has prompted researchers from the University of Colorado to examine whether there is link to a high-volume injection well for drilling wastes, reports the FuelFix news site. FuelFix says the study in Colorado comes on the heels of seismic research out of Oklahoma, which is also undergoing intensive oil and gas extraction and wastewater injection activities. For more, read the full story.
 


 
Posted by M. Warnock in  United States   |   Permalink

 

Sep 08, 2014

Cleveland’s Friedman cashing in on housing shortage in Bakken shale play
 

Cleveland area businessman Michael Friedman is leaving his mark as a real estate deal maker in North Dakota’s housing-hungry Bakken shale play, reports Crain’s Cleveland Business. The newspaper says Friedman got his start in North Dakota three years ago by building and renting housing for oilfield workers. Now he said he raises millions of dollars for other housing and commercial developments in the region, usually tapping hedge funds and family investment groups from New York, Philadelphia and California. For