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This $2.1 Billion Shale Deal Will Be the First of Many

Where the Opportunities Are in Energy Stocks The first major shale deal after the worst oil price collapse in five years is a model for future transactions that promises to quickly change the industry as companies expand in new areas or soak up struggling rivals. Noble Energy Inc.’s $2.1 billion all-stock purchase of Rosetta Resources Inc. is poised to be an opening salvo in a long-predicted wave of industry consolidation that’s been slow to materialize since crude fell by more than half since June. As a stock-for-stock deal, Rosetta shareholders would see the benefit from a rebound in oil prices, a key sticking point after the value of North American energy companies fell by more than $200 billion since June, according to data compiled by Bloomberg. “Both shareholders then get to participate in the upside going forward,” Noble Chairman and Chief Executive Officer Dave Stover said Monday in an […]

Posted On : Published By : Tom Whipple
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Bakken Formation Still Has 6 Billion Barrels of Oil

How much recoverable oil does the Bakken Formation have? The most recent estimate of proved reserves is just under 6 billion barrels for the entire Williston Basin, which includes the Bakken, and another 3.5 billion to 4.1 billion barrels of “undiscovered and technically recoverable” oil. Harold Hamm, founder and CEO of Continental Resources, once said he believed there were 24 billion barrels of oil in place in the basin. That size of this resource has been lost during the discussion of whether the price of oil will shut down fracking in the region. Eventually, as global demand for crude continues at or near historical highs, the oil from the region will be produced and shipped to refineries. And with the price of oil moving back up, that could happen sooner and not later. One sign of the possible contribution of the formation is the amount of oil that comes out of North Dakota […]

Posted On : Published By : Tom Whipple
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Germany builds wind energy reputation

One of the largest offshore wind farms of its kind, Nordsee Ost, inaugurated off the German coast. Photo courtesy of RWE. HAMBURG, Germany, May 11 (UPI) — Wind energy is a vital part of a German move to a low-carbon economy, the German economic minister said during the inauguration of RWE’s Nordsee Ost wind farm. German Economics Minister Sigmar Gabriel hosted ministers from the Group of seven industrialized economies, along with representatives from RWE, for the inauguration of the 48-turbine wind farm off the northern German coast. "Offshore wind energy is a strategically important element of Germany’s energy and climate policy and is key to the success of the energy transition," Gabriel said in a statement. In April, German company E.ON started producing electricity from its Amrumbank West wind power project in the German waters of the North Sea . Germany is one of the world leaders in renewable […]

Posted On : Published By : Tom Whipple
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Nuclear, Fracking Decisions on Tap for New U.K. Energy Secretary

LONDON—The U.K.’s new energy secretary, Amber Rudd, drew praise from both the oil-and-gas industry and green lobby groups ahead of decisions on the nuclear industry and hydraulic fracturing that other nations will be watching. The appointment of Ms. Rudd, a former parliamentary undersecretary at the Department of Energy and Climate Change, was announced Monday by U.K. Prime Minister David Cameron , who was elected last week with an outright majority. Ms. Rudd is likely to be presiding over the startup of the U.K.’s first fracking operations since 2011 when the government called a moratorium on the controversial technique after tiny earth tremors were detected near a site in northwest England. Protests and local opposition have slowed fracking in the U.K. where only a handful of exploration wells have been drilled and just one well has been fracked. While much of the department’s work is done on creating regulations for […]

Posted On : Published By : Tom Whipple
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How Much Longer Can The Oil Age Last?

History has been so fascinated with oil and its price movements that it is indeed hard to imagine our future without oil. Over the last few months, we have witnessed how oil prices have fluctuated from a 6 year low level of $42.98 per barrel in March 2015 to the current levels of $60 per barrel. It is interesting to note that, in spite of the biggest oil cartel in the world deciding to stick to its high production levels, the oil prices have increased mainly due to falling US crude inventories and strong demand. However, the current upward rally might be short lived and there may yet be another drop in the international oil price when Iran eventually starts pumping its oil into the market at full capacity, potentially creating another supply glut. In these endless price rallies, it is important to take a holistic view of the […]

Posted On : Published By : Tom Whipple
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Oil rises towards $66 after China cuts rates

LONDON Oil rose towards $66 a barrel on Monday after China moved to bolster its flagging economy, raising hopes that the world’s top energy consumer would help absorb a global supply glut. China cut interest rates for the third time in six months on Sunday to stoke its sputtering economy, which is headed for its worst year in a quarter of century. Data on Friday showed China ahead of the United States as the world’s top oil importer in April, as the Asian economy seized on lower crude prices to stock up. Brent crude LCOc1 for June was up 20 cents at $65.59 a barrel by 0800 GMT (4 a.m. EDT) after dropping 1.6 percent last week. June U.S. light crude CLc1 was up 20 cents to $59.59 a barrel after rising for eight straight weeks, the longest winning stretch since late 2012 to early 2013. Analysts talk of […]

Posted On : Published By : Tom Whipple
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International Oil Rig Counts

All rig count data is provided by Baker Hughes . All monthly charts are oil rigs only . Gas rigs are not included in the count. The last data point for all monthly charts is April 2015. When I talk about “peaks” in this post I am only speaking of the peak since 2011 and am not suggesting that there were not higher peaks in previous years. International Oil Rig Count The International Rig Count has fallen by 150 rigs, from 1,080 in July 2014 to 930 in April 2015. This count does not include the USA, Canada or any of the FSU countries. The European Oil Rig Count dropped from 96 in October and November to 65 in April. The African Rig count peaked at 123 in February and dropped to 88 in April. The Asia Pacific rig count stood at 211 in January 2011 and now stood […]

Posted On : Published By : Tom Whipple
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Iraq Begins Training of Sunni Tribal Fighters

ENLARGE Sunni recruits take part in their first training session to join an Iraqi government force that will fight Islamic State extremists, on Friday at a base in the town of Amriyat Fallujah. Photo: ahmad al-rubaye/Agence France-Presse/Getty Images AMRIYAT FALLUJAH, Iraq—Iraq’s Shiite-led government has begun training Sunni tribal fighters here in the western province of Anbar, in an urgent U.S.-backed initiative to stem recent advances by Islamic State. The setbacks in Anbar have exposed the need for trusted and equipped Sunni fighters to help turn momentum against Islamic State and dry up the extremists’ pool of potential recruits. “When the government fails, people turn to Islamic State,” said Mohammad Abu Risha, a young tribal sheik from Anbar who commands 150 fighters. “The tribes don’t trust the government, and the government doesn’t trust the tribes.” Mr. Abu Risha, speaking at an inaugural ceremony for the Anbar training program in Amriyat […]

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Saudi King Salman Won’t Attend Gulf Summit Hosted by Obama

RIYADH—Saudi Arabia said Sunday that King Salman won’t attend a summit of Gulf leaders to be hosted this week by U.S. President Barack Obama at Camp David. Foreign minister Adel al-Jubeir said the king decided to skip the meeting to focus on the Yemen cease-fire and humanitarian aid effort, according to a statement by the state news agency. The king has delegated Crown Prince Mohammed bin Nayef to lead Saudi delegation which would include Deputy Crown Prince Mohammed bin Salman and other senior officials. Write to Ahmed Al Omran at [email protected]

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Saudi Arabia Says King Won’t Attend Meetings in U.S.

Photo President Obama speaking about the Iran nuclear agreement at the White House last month. Credit Gabriella Demczuk for The New York Times WASHINGTON — Saudi Arabia announced on Sunday that its new monarch, King Salman, would not be attending meetings at the White House with President Obama or a summit gathering at Camp David this week, in an apparent signal of its continued displeasure with the administration over United States relations with Iran , its rising regional adversary. As recently as Friday, the White House said that King Salman would be coming to “resume consultations on a wide range of regional and bilateral issues,” according to Eric Schultz, a White House spokesman. But on Sunday, the state-run Saudi Press Agency said that the king would instead send Crown Prince Mohammed bin Nayef, the Saudi interior minister, and Deputy Crown Prince Mohammed bin Salman, the defense minister. The agency […]

Posted On : Published By : Tom Whipple