Category:

Explorers In Need of Cash Are Selling Oil Fields as Last Resort

Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. (Bloomberg) — Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling — often a wildcatter’s option of last resort — is surging after a six-month lull. There’s more to come — by one estimate, another $20 billion this year — as executives at Occidental Petroleum Corp., Whiting Petroleum Corp., Penn Virginia Corp., Exco Resources Inc., Chesapeake Energy Corp. and Ultra Petroleum Corp. have all […]

Posted On : Published By : Tom Whipple
Category:

Can’t outrun peak oil

On the other hand, domestic oil production has taken a jump in recent years due to fracking, tar sands, deepwater drilling, etc., but oil and other fuels obtained from those sources are actually more expensive and take more energy to get than oil obtained from conventional wells. This is what’s called the EROEI ratio, which stands for “Energy Returned On Energy Invested.” According to data compiled by professor L. David Roper, in the early 20th century, the golden age of North American oil production, the equivalent of one barrel of oil invested yielded as many as 100-200 barrels produced. By 1970, the average EROEI ratio for crude oil had fallen to 30:1 (Saudi oil fields are still producing at this rate). Today, one barrel of oil invested typically gives only 15 barrels in return. New technologies, such as tar sands, have a barely 2:1 ration of energy return on […]

Posted On : Published By : ASPO-USA
Category:

15 Things the World Is Running Out of

We live in an era of limited resources—peak oil, peak phosphorous, peak everything. With the world population at nearly 7.4 billion and people living increasingly energy-intensive lifestyles, there has never been a more pressing need to conserve natural resources and develop renewable energy sources. A recent report from James Hansen and 16 other leading climate experts found that the international target of limiting global temperatures to a 2°C rise this century will not be nearly enough to prevent catastrophic melting of ice sheets that would raise sea levels much higher and much faster than previously thought possible. To make matters even worse, as 2015 shapes up to be the hottest year on record , scientists warn the world is set to pass the 1°C point this year. The icing on the cake? We won’t even have wine, coffee, tequila or chocolate to cope with runaway climate change .

Posted On : Published By : ASPO-USA
Category:

U.S. crude stockpiles fall more than expected in week: EIA

Oil storage tanks are seen at sunrise with the Rocky Mountains and the Denver downtown skyline in the background October 14, 2014. U.S. crude stocks fell last week, while gasoline and distillate inventories rose, data from the Energy Information Administration (EIA) showed on Wednesday. Crude inventories fell 4.41 million barrels to 455.28 million in the last week, a bigger decline than the decrease of 1.5 million barrels that analysts had expected. U.S. crude imports fell last week by 370,000 barrels per day (bpd) to 6.6 million bpd, or about 2.5 million barrels over the course of the week. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 542,000 barrels, EIA said. "The report was distinctly bullish for crude, with refining up and imports down, while modest builds for the products tilts bearish," said Matt Smith, director of commodity research at Clipper Data in New York. After initially extending […]

Posted On : Published By : Tom Whipple
Category:

Pioneer bucks trend by planning more rigs in Texas

Pioneer Natural Resources moves against tide with plans to spend more on rigs in shale basins in Texas. Photo by Calin Tatu/Shutterstock AUSTIN, Texas, Aug. 5 (UPI) — Despite posting a loss for the second quarter, Pioneer Natural Resources said it would increase its capital budget for the second half and add more rigs. Pioneer said it lost $218 million in the second quarter, joining its peers struggling to generate revenue during the downturn in the crude oil market. Chairman and Chief Executive Officer Scott Sheffield said in a statement the company was seeing benefits from operations focused largely in the Spraberry/Wolfcamp shale basin in Texas. "As a result, we are putting rigs back to work and plan to return to an activity level during 2016 that can result in a similar growth trajectory that we were delivering in the second half of 2014 before the downturn," he said […]

Posted On : Published By : Tom Whipple
Category:

Explorers In Need of Cash Are Selling Oil Fields as Last Resort

Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling — often a wildcatter’s option of last resort — is surging after a six-month lull. There’s more to come — by one estimate, another $20 billion this year — as executives at Occidental Petroleum Corp., Whiting Petroleum Corp., Penn Virginia Corp., Exco Resources Inc., Chesapeake Energy Corp . and Ultra Petroleum Corp. have all said in recent weeks that they are selling assets or exploring sales. The surge shows how the industry’s two-pronged strategy […]

Posted On : Published By : Tom Whipple
Category:

Fracking-Related Earthquakes Could Ding Credit Quality

CCOs Concerned About Compliance IT Systems: Survey More authority and stronger organizational support are helping to increase the effectiveness of corporate compliance programs, yet persistent concerns remain about information technology (IT) systems’ ability to fulfill compliance program requirements, according to “In Focus: 2015 Compliance Trends Survey,” a joint effort between Deloitte and Compliance Week. In addition, third parties continue to be the single biggest worry for surveyed CCOs.

Posted On : Published By : Tom Whipple
Category:

The Link Between Oil Reserves and Oil Prices

Last December the Energy Information Administration (EIA) released its latest estimate of U.S. Crude Oil and Natural Gas Proved Reserves . Although natural gas reserves rose, the real story was crude oil reserves. The EIA reported that U.S. proved reserves of crude oil and lease condensate had increased for the fifth year in a row, and had exceeded 36 billion barrels for the first time since 1975: There are two reasons for this increase in proved reserves. The first is that despite >150 years of oil production in the U.S., new fields are still being discovered. In March 2015 the EIA released its update to the Top 100 U.S. Oil and Gas Fields as a supplement to the December report. This was the EIA’s first update on the Top 100 fields since 2009. The most significant addition to the list was the Eagleville field (in the Eagle Ford Shale), […]

Posted On : Published By : Tom Whipple
Category:

Oil Companies’ Spending Cuts Unlikely to Be Enough

LONDON—The world’s biggest oil companies have vowed to bring down the costs of big projects in the face of slumping oil prices, but the unrelenting price weakness—with crude below $50 a barrel—suggests they could have to dig deeper still. In the past year, as oil prices plunged 60% from highs of $114 in 2014, U.K. energy giant BP BP 0.16 % PLC began testing new projects for profitability around $60 a barrel, down from $80 a barrel last year. Its Anglo-Dutch rival Royal Dutch Shell RDS.A -0.17 % is testing projects at prices as low as $50 a barrel, though its overall price outlook is between $70 and $110 a barrel. Under other circumstances, those would seem like draconian cuts. Billions of dollars less is being spent on everything from exploration and project engineering to construction equipment and drill rigs. But last week, when all of the world’s biggest […]

Posted On : Published By : Tom Whipple
Category:

The Oil Crash Has Caused a $1.3 Trillion Wipeout

It’s the oil crash few saw coming, and few have been spared as it erased $1.3 trillion, the equivalent of Mexico’s annual GDP, in little more than a year. Take billionaire Carl Icahn. When crude was at its peak in June 2014, the activist investor’s stake in Chesapeake Energy Corp. was worth almost $2 billion. Today, oil has lost more than half its value, Chesapeake is the worst performer in the Standard & Poor’s 500 Index and Icahn has a paper loss of $1.3 billion. The S&P 500, by contrast, is up 6.9 percent in that time. State pension funds and insurance companies have also been hard hit. Investment advisers, who manage the mutual funds and exchange-traded products that are staples of many retirement plans, had $1.8 trillion tied to energy stocks in June 2014, according to data compiled by Bloomberg. “The hit has been huge,” said Chris Beck, […]

Posted On : Published By : Tom Whipple