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BHI: US rig count jumps 19 units to 876

The US drilling rig count jumped 19 units to reach 876 during the week ended July 24, according to data from Baker Hughes Inc. The gains came primarily from rigs drilling on land. Land rigs were up 17 units to 841. Those drilling in inland waters also increased, up 2 units to reach 4 rigs working. During the week, rigs targeting oil jumped 21 units to 659. Gas-directed rigs, meanwhile, were down 2 units to 216. Rigs considered unclassified were unchanged at 1 rig working. Rigs engaged in horizontal drilling increased 12 units to 662. Directional drilling rigs lost 1 unit to 83. Rigs drilling offshore and in the Gulf of Mexico were both unchanged this week, both maintaining counts of 31. Canada’s rig count continued its upward climb, increasing 8 units to an even 200. Its count has now risen in 9 of the last 11 weeks. This […]

Posted On : Published By : Tom Whipple
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Weatherford: Future looks grim

Rig services company Weatherford says the future does not look good for the North American market. Photo by Calin Tatu/Shutterstock BAAR, Switzerland, July 24 (UPI) — With few prospects for a recovery in the crude oil market, rig services company Weatherford said it was making deeper cuts in its North American portfolio. "Market conditions will not improve significantly in the balance of the year," Weatherford President and Chief Executive Officer Bernard Duroc-Danner, said in a statement. "There will be modest activity increases in North America and selected international geographies but these will not be material." Weatherford, which has headquarters in Switzerland, joins peer companies Baker Hughes and Halliburton in announcing downbeat expectations for the trajectory in crude oil markets. West Texas Intermediate, the U.S. benchmark for crude oil, traded Friday at around $48.60 per barrel, down about 18 percent from July 1 and more than 50 percent below June […]

Posted On : Published By : Tom Whipple
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Dim crude price outlook may force more spending cuts for oil majors

A pedestrian stands near a sign displaying the cost of gasoline at a filling station in San Francisco, California July 22, 2015. The world’s top oil companies are set to report yet another sharp drop in quarterly profits that could force more spending cuts due to a dim outlook for oil prices. Oil companies rarely scale back capital expenditure (capex) in the middle of the fiscal year. But with oil prices failing to recover and even lurching lower in recent weeks after a nuclear accord between Iran and world powers, boards could take more action beyond cuts already announced, analysts say. "Oil companies are hunkering down for a downturn that will take longer than some initially thought," Martijn Rats, head of European oil and gas equity research at Morgan Stanley, told Reuters. International oil companies including Exxon Mobil, Chevron, Royal Dutch Shell, BP and Total all reduced 2015 spending […]

Posted On : Published By : Tom Whipple
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How a Chinese Company Slipped on Canada’s Oil Sands

Weeks after the state-controlled oil company bought Nexen for $15 billion, its executives were in Calgary with a blunt message for the Canadian company, which had struggled for years to extract crude from the oil sands in the Alberta wilderness. Cnooc Chief Executive Li Fanrong told staffers Nexen provided just 2% of Cnooc’s profits, say attendees, warning that “2% is not enough.” Two years later, Cnooc is still trying to fix Nexen, its troubles compounded by low crude prices. And now Cnooc must explain an oil spill: This month, a pipeline Nexen installed last year ruptured, spilling nearly 31,500 barrels of a mixture of crude oil, wastewater and sand in northern Alberta. Nexen’s chief executive, Fang Zhi, on Wednesday stood by the oil-spill site near the hamlet of Anzac. “It is very disappointing that this has happened,” he said, the scent of petroleum wafting. “I therefore personally apologize.” Buying […]

Posted On : Published By : Tom Whipple
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Rig company Hercules posts heavy quarterly loss

U.S. rig company Hercules Offshore expects weak market for crude oil to endure at least into 2016. Photo by num_skyman/Shutterstock HOUSTON, July 23 (UPI) — Low crude oil prices suggest activity in the exploration and production side of the energy sector will stay depressed, U.S. rig company Hercules Offshore said. From U.S. operations alone, Hercules said revenue generated during the second quarter of the year dropped 71 percent year-on-year to $40.6 million. Crude oil markets are struggling to recover from the long decline that began in June 2014, when prices were above the $100 per barrel mark. West Texas Intermediate, the U.S. benchmark, dropped below $50 per barrel in interday trading this week. "The latest pullback in the price of oil is likely to delay any improvement in worldwide activity levels well into 2016," Chief Executive Officer John Rynd said in a statement. In the U.S. sector, the company […]

Posted On : Published By : Tom Whipple
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Weatherford Raises Layoffs Target to 11,000

Responding to continued weakness in the North American oilfield services market, Weatherford International said Thursday it would revise the number of planned layoffs to 11,000. The company completed 97 percent of its planned workforce reduction of 10,000, Weatherford said in its second quarter 2015 earnings report Wednesday. The additional cuts in Weatherford’s workforce will occur in the company’s U.S. operations, with a focus on support positions. Based on its 2015 reduction in force actions, Weatherford now expects annualized savings of $754 million from the release of 9,936 employees, said Weatherford Chairman, President and Chief Executive Officer Bernard J. Duroc-Danner during the company’s second quarter 2015 earnings call Thursday morning. The company is taking advantage of the downturn to develop a leaner structure and a tighter organization, Weatherford said. In addition to layoffs, the company has closed more than 60 operating facilities across North America through the first half of […]

Posted On : Published By : Tom Whipple
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North Dakota oil well completions slow sharply: Kemp

A service truck drives past an oil well on the Fort Berthold Indian Reservation in North Dakota, November 1, 2014. No new well completion reports have been filed in North Dakota since July 10, the longest gap this year, according to daily activity records published by the state’s Department of Mineral Resources (DMR). Completions, rather than wells drilled, provide the best guide to short-term changes in output, since operators can always delay completing a well and putting it into production, either because they are waiting for completion crews to be available or to wait for better prices. Completion is usually defined as a single operation including the stimulation and testing of a well as well as the installation of surface production equipment (“Dictionary of petroleum exploration, drilling and production” 2014). North Dakota’s regulators consider a well completed when the first oil is produced through wellhead equipment into tanks from […]

Posted On : Published By : Tom Whipple
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Oil Rigs Left Idling Turn Caribbean Into Expensive Parking Lot

Imagine parking your $300 million boat for months out in the open sea, with well-paid mechanics hovering around it and the engine running. The Gulf of Mexico and the Caribbean Sea have become a garage for deepwater drillships — at a cost of about $70,000 a day each. It’s either that or send your precious rig to a scrapyard. The dilemma underscores how an offshore industry that geared up for an oil boom is grappling with a bust. Rig owners are putting equipment aside at unprecedented numbers as customers including ConocoPhillips pull back from higher-cost deepwater exploration. That’s helped make Transocean Ltd. and Ensco Plc two of the three worst performers in the Standard & Poor’s 500 Index over the past year. “Most contractors have never seen an environment like this, where demand is falling as quickly as it is,” David Smith, an analyst at Heikkinen Energy Advisors in […]

Posted On : Published By : Tom Whipple
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Jobs Machine From Canada Oil Slows as Robots Add to Price Slump

Truck driver Craig Huzulak is unemployed after losing his job four times since December — the new normal in a Canadian oil patch still reeling from a downturn. Huzulak, 49, was working at a mine last year near Fort McMurray, Alberta, when crude prices plunged and work dried up. He lost two more positions in the following months and then had a job offer yanked at the end of June before he could even start. In addition to the market rout, the father of two now worries about the self-driving trucks Suncor Energy Inc. is rolling out in its oil-sands mining operations that will replace workers like him to save companies money. “It’s really, really hard for heavy-equipment operators,” said Huzulak, who has driven trucks and worked on drilling rigs in Western Canada for 15 years. “There’s a lot more fear now that this might last longer.” The burgeoning […]

Posted On : Published By : Tom Whipple
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How a Chinese Company Slipped on Canada’s Oil Sands

Weeks after the state-controlled oil company bought Nexen for $15 billion, its executives were in Calgary with a blunt message for the Canadian company, which had struggled for years to extract crude from the oil sands in the Alberta wilderness. Cnooc Chief Executive Li Fanrong told staffers Nexen provided just 2% of Cnooc’s profits, say attendees, warning that “2% is not enough.” Two years later, Cnooc is still trying to fix Nexen, its troubles compounded by low crude prices. And now Cnooc must explain an oil spill: This month, a pipeline Nexen installed last year ruptured, spilling nearly 31,500 barrels of a mixture of crude oil, wastewater and sand in northern Alberta. Nexen’s chief executive, Fang Zhi, on Wednesday stood by the oil-spill site near the hamlet of Anzac. “It is very disappointing that this has happened,” he said, the scent of petroleum wafting. “I therefore personally apologize.” Buying […]

Posted On : Published By : Tom Whipple