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Rig company Hercules Offshore takes big 2Q hit

Rig company Hercules Offshore said Wednesday its second quarter results were hurt by declining activity in the U.S. waters of the Gulf of Mexico. Hercules reported income from continuing operations of $6.6 million for the second quarter of 2014, compared to $16.6 million for second quarter 2014. President and Chief Executive Officer John Rynd said second quarter results reflected lower drilling activity and the transfer of properties in the U.S. Gulf of Mexico. "Our latest discussions with various domestic customers suggest activity levels will rebound late this year," he said . Rynd added his company was taking proactive measures to cut down on costs. The lease rate for its fleet of rigs remains solid for its assets deployed in the Gulf of Mexico, he said, and relatively stable crude oil prices are supporting the company’s bottom line. "While our third quarter results will likely be impacted by the current […]

Posted On : Published By : Tom Whipple
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Air quality a concern near North Dakota fire

North Dakota’s Health Department said it’s surveying air quality near the site of a fire at an industrial park in Williston, the heart of the state’s oil patch. Chemicals used in hydraulic fracturing caught fire at an industrial warehouse in Williston. Officials said they’re going to let the fire burn out on its own because pouring water on the blaze would create a secondary problem for nearby waterways. The North Dakota Department of Health said it’s monitoring air quality around the industrial park for any threats to public health. "The fire in the industrial park has resulted in a plume of smoke that may adversely affect air quality in the surrounding area, and may cause health concerns," it said in a statement Tuesday. North Dakota oil production is growing as a result of the advances in drilling technology for shale reserves. The state government said oil production for May, […]

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Albany Nears Oil-Hub Status as 100-Car Trains Jam Port

Albany, New York’s capital city, may join the ranks of U.S. energy hubs such as Houston and Cushing, Oklahoma , as oil-terminal operator Global Partners LP (GLP) pushes an expansion plan after already quadrupling its capacity. For the last two years, more oil from the Bakken shale formation has rolled 1,800 miles (2,900 kilometers) by rail across North Dakota and around the Great Lakes to Albany. There, companies including Global Partners and Buckeye Partners LP (BPL) load barges bound for New Jersey and New Brunswick refineries. Albany’s importance as a link in the energy-production chain is poised to grow under Global Partners’ effort to win state permission to handle oil-sands crude and biofuels for shipping over objections of neighbors and environmental groups. The convergence of Bakken crude cargoes in upstate New York adds Albany to the roster of North American cities grappling with a surge in rail-borne oil. The […]

Posted On : Published By : Tom Whipple
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BHP Billiton lifted by U.S. shale oil

Australian natural resources company BHP Billiton said Wednesday onshore operations in the United States helped boost its oil production by 4 percent. BHP said total petroleum production for the fiscal year ending June 30 was up 4 percent year-on-year to 246 million barrels of oil equivalent per day. The Australian company said in a financial report operations in U.S. shale helped boost the output. "Onshore U.S. liquids production increased by 23 percent in the June 2014 quarter and we expect to carry strong momentum into the 2015 financial year as shale liquids volumes are forecast to increase by over 17 million boe in the period," the report said. The company said the bulk of its onshore investments targeted the Eagle Ford shale play in the southern part of the United States. Roughly 75 percent of the $4.2 billion in drilling expenses targeted that play. Eagle Ford output during the […]

Posted On : Published By : Tom Whipple
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Alberta frets over steam-injection for oil

| License Photo While potentially safe, the provincial energy regulator in Alberta said it’s not ready to lift a ban on a controversial steam-injection method for bitumen. The Alberta Energy Regulator released results from an independent review of an assessment made by Canadian Natural Resources Ltd. of last year’s seeps at its Primrose project, near the Cold Lake Air Weapons Range in Alberta. The regulators said four so-called flow-to-surface events were reported last year, spoiling about 50 acres of land. The company’s own report said a process called cyclical steam stimulation, or CSS, may have cracked open other subsurface layers, allowing oil to leak out of control from the site. Jim Ellis , president of the Alberta regulator, said flow-to-surface events could be prevented if the right mitigation efforts are in place. "That said, the AER is not prepared to approve a return to full operations at these sites […]

Posted On : Published By : Tom Whipple
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U.S. Seeks New Rules for Rail Transport of Fuel

Tanker rail cars, bearing hazardous materials placards, on an elevated railway in Aurora, Ill., last month. Daniel Acker/Bloomberg The U.S. government wants to phase out thousands of railroad tank cars that carry crude oil within two years once it adopts proposed rules to upgrade safety for trains carrying flammable liquids . Tens of thousands of these older tank cars, known as DOT-111s , will have to be replaced or retrofitted under the proposed rules, announced Wednesday. This puts the U.S. on roughly the same timetable as Canada, which announced a phase out earlier this year. The federal government’s sweeping proposals come after a string of explosive derailments involving trains filled with oil from the Bakken Shale and will change how flammable liquids are transported in North America. But they aren’t as stringent as some in the rail and energy industry feared. Crude-carrying tank cars would need to upgraded by […]

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Oil and natural gas sales accounted for 68% of Russia’s total export revenues in 2013

Source: U.S. Energy Information Administration, Russia Federal Customs Service Note: Natural gas includes liquefied natural gas (LNG) sales. Russia is a major exporter of crude oil, petroleum products, and natural gas. Sales of these fuels accounted for 68% of Russia’s total export revenues in 2013, based on data from Russia’s Federal Customs Service. Russia received almost four times as much revenue from exports of crude oil and petroleum products as from natural gas. Crude oil exports alone were greater in value than the value of all non-oil and natural gas exports. Europe, including Turkey, receives most of Russia’s exports of crude oil and products, as well as virtually all exports of natural gas. Asia (especially China) receives substantial volumes of crude oil and some liquefied natural gas (LNG) from Russia. Recently, Russia finalized a 30-year, $400 billion deal to supply China with natural gas from fields in Eastern Siberia, […]

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Chinese company considering Texas site for $4.5 bil methanol facility: release

China-based Fund Connell USA Energy and Chemical Investment Corporation is considering Texas City, Texas, as the site for a $4.5 billion methanol facility, the Galveston County Economic Alliance said. If constructed, the facility could produce up to 7.2 million mt/year of methanol and would be one of the largest methanol facilities in the world. As part of the company’s evaluation, it has secured a site at Shoal Point in Texas City. If the company decides to invest in the Shoal Point site, it would also construct a deepsea marine export terminal, the Galveston County Economic Alliance said in a statement late Tuesday. In addition, the project would include a fleet of tankers to run a continual route from the Gulf of Mexico to China. The company will make a final investment decision during the second quarter of 2015. –Colleen Barry-Goodman, [email protected] –Edited by Jason Lindquist, [email protected]

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Texas RRC July Oil and Gas Report with May Production Numbers

The Texas Rail Road Commission has just released their Oil & Gas Production Data  through May. There are four categories of data, Crude, Condensate, Gas Well Gas and Casinghead Gas. Casinghead gas is what most folks call Associated Gas. That is gas that comes up with the oil in oil wells. On all oil charts the July Report has data through May 2014 and is in barrels per day. Also the last month, May in this case, is always exaggerated on the low side. That is the data is incomplete back to about two years. But the last month is always far more incomplete than the previous months. Texas Crude Only This data is of course incomplete but even from the incomplete data we can get an idea of the average monthly increase. I calculate that Texas Crude only is increasing at about 40,000 barrels per day per month. […]

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CERI: Costs up for oil sands production

The costs of producing bitumen and synthetic crude in the Albertan oil sands have increased over the past year, says the Canadian Energy Research Institute in an annual report that projects steady growth in output. Compared with last year’s report, estimated costs of production before blending and transportation are up 4.4% for steam-assisted gravity drainage , 1.6% for mining without upgrading, and 5.9% for integrated mining and upgrading ( OGJ Online, May 29, 2013 ). The new estimates of plant-gate supply costs: $50.89/bbl (Can.) for SAGD, $71.81/bbl for stand-alone mining, and $107.57/bbl for integrated mining. CERI estimates the cost of stand-alone upgrading at $40.82/bbl. When the price of West Texas Intermediate crude is $100/bbl, the only economic production technology when blending and transportation are included in the estimate is SAGD, CERI points out. After those adjustments, the WTI-equivalent supply costs at the Cushing, Okla., pricing […]

Posted On : Published By : Tom Whipple