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Tomgram: Michael Klare, Big Oil in Retreat

On July 14, 2011, at TomDispatch , Bill McKibben wrote that he and a few other “veteran environmentalists” had issued a call for activists to descend on the White House and “risk arrest to demand something simple and concrete from President Obama: that he refuse to grant a license for Keystone XL, a new pipeline from Alberta to the Gulf of Mexico that would vastly increase the flow of tar sands oil through the U.S., ensuring that the exploitation of Alberta’s tar sands will only increase.” It must have seemed like a long shot at the time, but McKibben urged the prospective demonstrators on, pointing out that “Alberta’s tar sands are the continent’s biggest carbon bomb,” especially “dirty” to produce and burn in terms of the release of carbon dioxide and so the heating of the planet. Just over four years later, the president, whose administration recently green-lighted Shell […]

Posted On : Published By : Tom Whipple
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Bakken Production Data and STEO Predictions

The Bakken Production Statistics and the ND Production Statistics with June production numbers has been published. Bakken & ND BPD Bakken production was up by 10,887 barrels per day to 1,152,455 BPD while all North Dakota production was up by 8,565 barrels per day to 1,211,180 BPD. Bakken production is still 11,068 bpd below their December high while all North Dakota production is still 17,240 bpd below their December high. Bakken BPD Per Well Bakken barrels per day per well dropped by 2 to 116 and all North Dakota barrels per day per well dropped by 1 to 97. From the Director’s Cut , bold mine. May Producing Wells = 12,679 June Producing Wells = 12,864 (preliminary)(NEW all-time high) May Permitting: 150 drilling and 0 seismic June Permitting: 192 drilling and 0 seismic July Permitting: 233 drilling and 1 seismic (all time high was 370 in 10/2012) May Sweet […]

Posted On : Published By : Tom Whipple
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BHI: US oil rig count continues rise, but overall count unchanged

The overall US drilling rig count sat unchanged during the week ended Aug. 14, remaining at 884 rigs working, according to data from Baker Hughes Inc. Oil-directed rigs, however, continued their warm streak—albeit modestly—with a 2-unit gain. The overall count is now down 1,029 units year-over-year. In an energy update released earlier this week, Raymond James & Associates noted that 832 well permits were issued last week, representing a decline from the 857 issued during the previous week. Utilizing a 4-week average, weekly permits issued were lower by 15 permits week-over-week. “This is not surprising, given the current oil price environment,” RJA said. “With WTI below $45[/bbl] right now, operators are likely taking a step back to see what happens. If prices continue to fall—or even stay flat as we are modeling—from where they are currently, we do not expect to see any meaningful pickup in activity.” US onshore […]

Posted On : Published By : Tom Whipple
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KKR’s Samson Resources Plans Chapter 11 Filing by Mid-September

George Roberts is co-chairman and co-chief executive of KKR. The filing would represent the biggest corporate casualty yet of a slump in oil and gas prices and another black mark in energy for the private-equity pioneer. The Tulsa, Okla.-based oil and gas producer agreed to hand ownership to a group of its lenders in bankruptcy, the company said in a statement Friday, confirming an earlier Wall Street Journal report. The move would wipe out the roughly $4.1 billion in cash KKR and its partners invested in the company. The private-equity firm led a $7.2 billion leveraged buyout of Samson in 2011, the biggest-ever such deal for an oil and gas producer. Samson’s board approved the restructuring agreement Friday afternoon, according to a person familiar with the deal. The energy producer intends to skip a bond payment due Monday and use a 30-day grace period to seek broader creditor support […]

Posted On : Published By : Tom Whipple
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Oil Majors’ $60 Billion Cuts Don’t Go Far Enough as Crude Slides

The $60 billion of oil-industry spending cuts this year aren’t likely to be enough to meet sacrosanct dividend commitments as crude languishes near a six-year low. The world’s biggest producers will need to trim investments by a further $26 billion, according to Jefferies Group LLC. Capital spending will have to fall 10 percent next year, Banco Santander SA says. Oil companies are bracing for “lower for longer” prices as a global supply glut persists, dragging crude to the lowest close since March 2009 in New York on Tuesday. Royal Dutch Shell Plc, which has reduced spending 20 percent this year, has “more levers to pull” should the market weaken further, according to Chief Executive Officer Ben Van Beurden. The tightening means international producers such as Shell and Chevron Corp. can break even at a lower crude price — about $10 lower than before they started cuts last year, according […]

Posted On : Published By : Tom Whipple
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U.S. shale firms turn to private equity as market funding tails off

A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. A renewed slide in crude prices is having the effect U.S. energy sector dealmakers and private equity managers have been looking for: oil companies are now returning calls from potential buyers. Throughout much of the crude market rout that started in mid-2014 oil firms could rely on generous capital markets investors betting on a quick recovery in prices, which made any asset sales look unattractive. But since crude prices began tanking again in early July after a partial three-month recovery, oil firms have finally started to feel the squeeze. A torrent of $44 billion in high-yield debt and share sales in the first half of this year has slowed to a trickle with oil now at just above $42 a barrel, 30 percent below its June levels and 60 percent down from June 2014, […]

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Oil at $30 Is No Problem for Some Bakken Drillers Cutting Costs

The lowest crude prices in six years might not be enough to put the brakes on the U.S. energy renaissance. Some parts of North Dakota’s Bakken shale play are profitable at less than $30 a barrel as companies tap bigger wells and benefit from lower drilling costs, according to a Bloomberg Intelligence analysis. That’s less than half the level of some estimates when the oil rout began last year. The lower bar for profitability is one reason why U.S. oil production has remained near a 40-year high even as crude prices fell more than 50 percent over the past year to the lowest level since March 2009. “One of the explanations for why production hasn’t fallen off is that the cost has gone down so much,” David Hackett, president of Stillwater Associates LLC, an energy consulting firm in Irvine, California, said by phone. “The marginal cost to produce has […]

Posted On : Published By : Tom Whipple
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Abu Dhabi’s Taqa Cuts 22% of Jobs Amid Loss on Falling Oil Price

Abu Dhabi National Energy Co., the government-owned utility that produces crude from Canada to the U.K., has slashed 22 percent of its oil and gas jobs in the past year amid a loss due to tumbling global prices. The company known as Taqa plans to cut spending 2.5 billion dirhams ($681 million) this year after reducing capital expenditures by 1.05 billion dirhams in the first half, according to an e-mailed statement from the company on Thursday. Headcount at the Abu Dhabi headquarters is down 32 percent since July last year. Oil producers are cutting costs after Brent crude slumped 48 percent last year and is down another 13 percent this year. Taqa’s oil and gas production averaged 150,000 barrels of oil equivalent a day in the first six months, down 5 percent from a year earlier as revenue from the business slumped 48 percent. “While the current commodity price […]

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Fracking Pullbacks Fail to Diminish Water Management Market Value

Despite a decline in hydraulic fracturing activity, the value of the fracking water management market remains at $1.9 billion, Lux Research reports. The estimated value of the hydraulic fracturing water management market remains at $1.9 billion for 2015 – not including water transportation and disposal opportunities – despite the sharp decline in fracking activity due to weakened global oil prices. U.S. frac activity remained strong for several months following the start of oil’s decline in July 2014, but finally started to start slow in January. The number of fracs in the United States declined from around 2,300 in October 2014 to 1,350 in February 2015, as companies refocused their efforts on their core regions and most economic resources, according to a recent study by Boston-based Lux Research. Significant pullbacks occurred in the Permian, Eagle Ford and Barnett plays in Texas, while the Marcellus play in northeastern Pennsylvania, which produces […]

Posted On : Published By : Tom Whipple
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Canadian Heavy Crude Slumps To Lowest In At Least A Decade

CALGARY, Alberta, Aug 12 (Reuters) – Heavy Canadian crude slumped to its lowest level in at least a decade on Wednesday after Enbridge Inc closed two of its main pipelines in the United States because of a leak, piling fresh misery on Canadian oil companies that are close to producing at a loss. Western Canada Select heavy blend crude for September delivery last traded at $20.75 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, having settled at $19.80 per barrel below on Tuesday. Earlier in the session it hit $21.75 per barrel below WTI, the widest differential since August last year. That pushed the outright price of Canadian heavy crude to around $22.50 a barrel, a level at which some companies will struggle to cover the cost of production, blending and transportation. It was lower than the 2008 trough of $24.62, according to one […]

Posted On : Published By : Tom Whipple