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Texas oil output up, but pessimism endures

Texas state data show oil production on a steady rise, though economic concerns remain in No. 1 oil producer in the nation. File photo by Ian Halperin/UPI AUSTIN, Texas, April 28 (UPI) — Nearly half of all land rigs in service in the United States are in Texas, where a state regulator said oil production increased 5 percent from January. The Railroad Commission of Texas, the state’s energy regulator, said preliminary data from February show crude oil production averaged 2.34 million barrels per day. That’s an increase of 5.2 percent , or 117,550 barrels, from January and 17 percent higher than February 2014. Texas is the No. 1 oil producer in the nation. The so-called Beige Book published by the Dallas Federal Reserve said the low price for crude oil is hurting the state’s oil sector. While most firms surveyed by the bank said they’d be able to weather […]

Posted On : Published By : Tom Whipple
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U.S. frontier energy plans under fire

Frontier developments planned in U.S. territorial waters criticized for lack of transparency and over complaints of state authority. Photo by num_skyman/UPI WASHINGTON, April 28 (UPI) — A South Carolina congressman’s question over state authority over maritime territory and concerns about transparency may curb frontier U.S. oil developments. U.S. Rep. Mark Sanford , R-S.C., was joined by state and local officials in expressing opposition to permits to conduct seismic testing to get a better understanding of potential oil and gas reserves off the coast of South Carolina. The U.S. Interior Department in February released a draft proposal for 2017-22 for access to federal waters. Ten leases are planned for the Gulf of Mexico, three for offshore Alaska and one, a debut, for waters in the Atlantic. Sanford said state authorities are sidelined from the federal decision-making process for operations off their coasts. "It makes little sense to even conduct tests […]

Posted On : Published By : Tom Whipple
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North Dakota land grants support oil boom

North Dakota awards land grants to support development in the west of the state as its government reviews lowering the tax for oil extraction. File photo by Gary C. Caskey/UPI BISMARCK, N.D., April 28 (UPI) — As an oil tax bill heads to his desk, North Dakota Gov. Jack Dalrymple said more than $12 million in grants are supporting development in the oil-rich state. "These grants are an important part of our ongoing commitment to help the oil and gas region meet the challenges created by rapid growth," the governor said in a statement. The state’s Land Board awarded more than 130 grants totaling $12.3 million to fund developments in the west of the state where the boom in oil and natural gas is resulting in unprecedented growth. North Dakota catapulted to the No. 2 spot in the nation, after Texas, as output from the Bakken shale reserve area […]

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Lower Oil Tax for North Dakota

North Dakota Oil Tax Reductions North Dakota is one step closer to cutting the price-triggered exemption that will lower the extraction tax on oil. Related: North Dakota Tax Trigger Getting Closer On Friday, North Dakota lawmakers cleared the way to change a 30 year old tax structure that gave some tax breaks for the oil industry have been linked to a price “trigger.”  Debate in North Dakota’s House was fierce and ended in a 66-26 vote in favor of cutting the state’s oil tax rate from 11.5 percent to 10 percent. Republicans believe that this will provide a more stable table policy that will boost the state’s economy, but Democrats have said that it will cost the state billions over the next 10 years. The legislature’s research group estimates that the new tax structure will add $120 million to the state’s coffers between 2015-2017. Now that the bill has […]

Posted On : Published By : Tom Whipple
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Offshore Drillers’ Problem: Few Oil Firms Need Their Rigs

ENLARGE Analysts are likely to be pressing offshore specialists on the state of their contracts as they report first-quarter earnings, beginning with Hercules Offshore on Wednesday. Photo: Bloomberg News Offshore drillers are bracing for a wave of contract cancellations as energy companies try to cut their costs to cope with low oil prices. Big oil and gas companies lease drilling rigs and crews from oil-field-services companies, often for years at a time and at a cost of up to $400,000 a day. The industry has long considered these leases basically unbreakable. But now several drilling companies have reported that clients including BP PLC and some government-owned energy companies are trying to get out of leasing deals—and analysts say a flood may follow. “We expect additional contract cancellations,” said Angie Sedita, an analyst at the investment bank UBS. “Offshore rigs could be offered for free and most oil companies would […]

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Projections show U.S. becoming a net exporter of natural gas

Source: U.S. Energy Information Administration, Annual Energy Outlook 2015 (interactive table viewer) In its recently released Annual Energy Outlook 2015 (AEO2015), EIA expects the United States to be a net natural gas exporter by 2017. After 2017, natural gas trade is driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of U.S. natural gas and world prices that encourages exports of liquefied natural gas (LNG), and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed U.S. oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. […]

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Freeport LNG unit closes on financing, starts building third train

FLNG Liquefaction 3 LLC, a unit of Freeport LNG Expansion LP , has closed on the $4.56 billion in financing needed to start construction of the third train of FLNG’s gas liquefaction and LNG loading facility on Quintana Island near Freeport, Tex. The construction cost for the combined three-train project is expected to be $12.5 billion, including owner’s costs and interest during construction. An additional $3 billion in funds were raised for refinancing and acquisition costs associated with the existing LNG import facility, letters of credit facilities, and a special contingency fund. With closing on this financing, Freeport LNG has completed all milestones and issued a full notice to proceed to CB&I Inc., Zachry Industrial Inc., and Chiyoda International Corp. to construct the project’s third train. Full three-train operation is expected by third-quarter 2019. LNG production from the first liquefaction train is expected in early 2018, with commercial operation […]

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EIA projections indicate US becoming a net exporter of natural gas

EIA projections indicate US becoming a net exporter of natural gas thumbnail In its recently released annual energy outlook (AEO2015), EIA expects the US to be a net natural gas exporter by 2017. After 2017, natural gas trade is expected to be driven largely by the availability of natural gas resources and by world energy prices. Increased availability of domestic gas or higher world energy prices each increase the gap between the cost of US natural gas and world prices that encourages exports of LNG and, to a lesser extent, greater exports by pipeline to Mexico. The AEO2015 examines alternate cases with higher and lower world oil price assumptions, which serve as a proxy for broader world energy prices given oil-indexed contracts, as well as with higher assumed US oil and natural gas resources. These assumptions significantly affect projected growth in annual net LNG exports after 2017. Net LNG exports […]

Posted On : Published By : Tom Whipple
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Gazprom Profits Plunge on Ruble Weakness and Ukraine Crisis –Update

By Thomas Grove and Andrey Ostroukh MOSCOW–Russia’s gas giant OAO Gazprom said Wednesday its 2014 net profit plunged 980.26 billion ruble ($19 billion) on year to 159 billion ruble due to weakness in the Russian currency and instability in Ukraine. Gazprom, facing tougher conditions in its biggest market Europe, saw its sales to the continent fall to 159.4 billion cubic meters from 174.0 bcm a year ago. Russia’s ruble plummeted last year, losing around half of its value against the dollar, due to lower oil prices and a crisis of confidence in the currency following Western sanctions on Russia over the crisis in Ukraine. The weaker ruble also pushed Gazprom’s net debt higher by 48% to 1.65 trillion rubles. The company said it suffered a 34 billion ruble loss on its balance sheet due to a dispute with Ukraine’s state energy company Naftogaz. Gazprom has been in arguing with […]

Posted On : Published By : Tom Whipple