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Sanchez Energy boasts of hefty production gains

Sanchez Energy takes major hit during the second quarter, but maintains optimism about future production growth. File photo by Gary C. Caskey/UPI HOUSTON, Aug. 10 (UPI) — Despite reporting a half billion loss in the second quarter, U.S. shale player Sanchez Energy said its total production was up 164 percent year-on-year. Chief Executive Officer Tony Sanchez said in a statement Monday his company plans to cut capital spending by $50 million for the year, but still increase its production target by 4 percent, or about 2,000 barrels of oil equivalent per day. "The 2016 capital budget is expected to maintain production consistent with 2015 levels and will likely lead to some moderate year-over-year growth," he said. Low crude oil prices leave energy companies with less money to spend on exploration and production. Some of those companies are boasting of production gains by crediting improved efficiencies in well operations. Sanchez […]

Posted On : Published By : Tom Whipple
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EIA: US shale oil output to drop 93,000 b/d in September

Crude oil production in September from seven major US shale plays is expected to decline 93,000 b/d to 5.27 million b/d, according to the US Energy Information Administration’s latest Drilling Productivity Report (DPR) . EIA previously projected a 91,000-b/d decline for both July and August ( OGJ Online, June 9, 2015 ; July 13, 2015 ). The DPR focuses on the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica, which altogether accounted for 95% of US oil production increases and all US natural gas production increases during 2011-13. The Eagle Ford continues to represent a bulk of the overall oil output declines, projected to fall 56,000 b/d in September to 1.48 million b/d. The Bakken is expected to fall 27,000 b/d to 1.16 million b/d, and the Niobrara is expected to fall 18,000 b/d to 399,000 b/d. In the Permian, meanwhile, EIA projects a larger increase for September […]

Posted On : Published By : Tom Whipple
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Shale Oil Output Wanes as U.S. Producers Retreat in Bear Market

The shale fields that propelled the U.S. energy boom are expected to take another step back next month as producers reduce costs in the midst of a bear market. Output from the prolific tight-rock formations, such as the Eagle Ford in southern Texas, will decline by about 92,000 barrels a day next month to 5.27 million, the Energy Information Administration said Monday. It’s the fifth straight month a slide is expected, after output more than tripled from 2007. Shale producers like EOG Resources Inc. have cut spending and reduced output after oil prices fell more than 20 percent from their 2015 peak in June, and remain down by more than half from a year ago. The number of rigs drilling for oil last week was 670, down from 1,609 in October, according to oil-field service company Baker Hughes Inc. “We’re certainly in the period where we should see the […]

Posted On : Published By : Tom Whipple
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Chevron Takes Harder Punch From Low Oil

Today Chevron has slipped hard, as the drop in oil prices combined with its own ambitious expansion have weighed heavily on its earnings. The company’s stock price has underperformed Exxon and Shell over the past year—during which oil prices fell sharply—after besting its two bigger competitors during the previous five years. Chevron’s stock price, which rose 2.5% on Monday to $85.89, is down 32% for the past year, compared with a 20% drop at Exxon. Chevron’s $571 million profit in the second quarter was just 10% of its haul a year earlier. Had Chevron not booked a gain for selling a stake in an Australian refiner, the company would have posted a quarterly loss for the first time in almost 20 years. Excluding asset sales and noncash impairments, Chevron earned $1.8 billion, or 97 cents a share. Exxon and other oil powerhouses have struggled to tame costs and deliver […]

Posted On : Published By : Tom Whipple
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Pipeline overbuild forces company executives to seek new opportunities

A doubling of pipeline capacity in one of the most prolific U.S. shale plays may have gone overboard in its rush to move oil to market, top pipeline company executives said during earnings announcements over the past week. With more than 1 million barrels per day of additional pipeline capacity moving oil from the Permian Basin of West Texas added since early 2014, companies dependent on new projects to drive revenue growth are now faced with a limit. The buildout has also caused some temporary inbalances in spot prices, traders say, as pipelines flood Houston-area refiners with surplus crude. The race for new and bigger pipelines to ease bottlenecks has led to a slew of new projects coming online through 2017, even as output wanes with oil prices down nearly 60 percent from a year ago on a global supply glut. Plains All American Pipeline, one of the biggest […]

Posted On : Published By : Tom Whipple
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U.S. adds rigs in July, Baker Hughes said

Baker Hughes reports a net gain in rig deployments across the North American energy sector. File Photo by UPI/Gary C. Caskey HOUSTON, Aug. 7 (UPI) — While down year-on-year, oil services company Baker Hughes said Friday there were a net five more rigs deployed across the United States in July than in June. Baker Hughes reported net rig counts for July . Rig counts serve as a barometer for the health of the exploration and production side of the energy sector, which has been depressed because of the low price of crude oil. Crude oil prices are down more than 50 percent from last year because of oversupplies in a weak global economy. Much of the increase in supply comes from U.S. shale oil basins. Companies operating in U.S. shale have said they’re able to produce more with fewer rigs because of the improved efficiencies. Others have started adding […]

Posted On : Published By : Tom Whipple
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U.S. Oil-Rig Count Rises for Third Week

The number of U.S. oil-drilling rigs, which is a proxy for activity in the oil industry, had fallen sharply since oil prices headed south last year. The rig count had dropped for 29 straight weeks before rising for two weeks, falling, then rising again. Oil prices fell nearly 60% from June 2014 to a six-year low in March, as soaring production from the U.S. and other countries overwhelmed global demand. There are still about 58% fewer rigs working since a peak of 1,609 in October, though the pace of declines has slowed considerably recently. In late May, several U.S. shale-oil companies said they were ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices. According to Baker Hughes, gas rigs were up by four to 213 this week. The U.S. offshore rig count was up four […]

Posted On : Published By : Tom Whipple
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International Rig Count Still Falling

The Baker Hughes International Rig Count is out. I have decided to try something new with the charts. That is to compare the current year’s rig count with the previous two years count and to insert, within the charts, the percent change for this year as compared to last year. Also, this is the total rig count, Oil and Gas. Also the charts are not zero based. I do this in order to better emphasize the monthly change. July usually sees a big jump in rig counts. This year there was a very tiny July increase, only a fraction of the increase we usually see for July. Rig Count Total International *The Total International rig counts does not include the USA, Canada or the FSU. The Total International rig count was down 28 in July to 1118. Last July it was up3 to 1344. Rig Count Middle East The […]

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Plunging Oil Prices a Boon for Logistics Companies

The logistics of the oil market is proving to be a lucrative business, even as the price of crude plunges toward multi-year lows. Companies that transport and store oil and refined products, as well as manage shipping terminals reported soaring profits this week. The glut of crude driving down prices is also creating more work for petroleum logistics firms, also known as midstream companies. Higher volumes of oil being brought to market generally means more business for operators of pipelines, tanker trucks, storage tanks and marine terminals. Tesoro Logistics TLLP -0.42 % LP reported second-quarter income of $72 million on Wednesday, more than twice its net income as the same quarter a year ago, citing big gains in oil production and an improving climate for its terminal and transportation businesses. Spectra Energy Partners SEP -1.53 % and Arc Logistics Partners ARCX 0.00 % LP also posted earnings this week […]

Posted On : Published By : Tom Whipple
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Byproduct of fracking spilled in North Dakota

Spill of product used during hydraulic fracturing reported in North Dakota near the Canadian border. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Aug. 7 (UPI) — The North Dakota Department of Health reported more than 4,000 barrels of a product associated with hydraulic fracturing spilled near the Canadian border. The state said it was notified by Samson Resources of a spill of brine in Divide County, situated in the northwest of North Dakota at the Canadian border. Of the 4,260 barrels spilled, the Department of Health reported 225 barrels were recovered . No surface waters were impacted. The brine release is at least the sixth such incident reported this year. In May, Oasis Petroleum reported its fourth release of brine, known also as produced water, in the state. Energy companies inject brine, or salt water, to improve oil and gas production from shale deposits. The Federal Environmental Protection Agency said […]

Posted On : Published By : Tom Whipple