Category: Shale Oil

WILLISTON, N.D., Nov 23 (Reuters) – Providers of temporary housing for North Dakota’s oilfield workers are fighting a plan by the state’s energy capital to evict their "man camps," fearing it could set an example for others and add to the sector’s woes caused by a global commodity slump. Earlier this month, the Williston City Commission voted 3-2 in favor of an ordinance that would deny "man camps" occupancy permit extensions beyond July 2016. Should the ordinance pass in a final vote on Nov. 24, which appears likely, it would mark the first time since the U.S. shale boom began in 2008 that a community has evicted a "man camp," though other communities in Texas and North Dakota have blocked their arrival or expansion. Williston leaders say it is time for oilfield workers to plant permanent roots or use existing hotels for extended stays and point out to abundant […]

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The ingenuity and easy money that allowed American oil companies to keep pumping through a year-long price crash appear to be petering out as U.S. crude slides toward $40 a barrel. U.S. companies have stunned global rivals by continuing to produce oil —particularly from shale deposits—ever more cheaply as American crude prices plunged from over $100 a barrel in 2014. But the recent drop toward $40 a barrel and below puts even the most efficient operators in a bind. The worst-case scenario most major producers have discussed in the past six weeks with investors involved a price of $50 a barrel. That is beginning to look optimistic as Saudi Arabia continues to produce near-record volumes and major exporters such as Iraq have increased output. Many oil executives, including BP BP -2.33 % PLC CEO Bob Dudley, expect prices to be “lower for longer.” The U.S. Energy Department is forecasting […]

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The collapse in oil prices has sent three-dozen companies into bankruptcy court this year—and that might not be nearly enough to balance the glutted market. Thirty-seven North American oil and gas producers have​filed chapter 11 cases in 2015, according to law firm Haynes and Boone LLP. The cases involve $13.1 billion in debt, and “industry and economic indicators suggest more producer bankruptcy filings will occur before the year is out,” the law firm said a report. ​More may well be needed to bring production back into balance with demand, some investors say. “There’s been more efficiency in the space than we all expected, and that’s helped current owners hold on a little longer,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $126 billion. “We’re not seeing as much turnover in the oil patch as we’d expect, in terms of weak hands to strong hands. […]

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Debt of Chesapeake Energy Corp. tumbled to a record low on Thursday as the price of oil plunged. Nine of the energy producer’s unsecured notes plummeted, some losing more than 12 cents on the dollar, as it was the most actively traded company in the junk-debt market. Credit-default swaps, which are used by investors to protect against defaults, rose to the highest ever. The company’s $1.1 billion of unsecured notes due 2017 dropped 12.2 cents to 70.75 cents on the dollar at 11:48 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. One of its biggest bonds, the $1.5 billion of floating-rate notes due 2019, fell 7.4 cents to 43.6 cents at 11:48 a.m. in New York, the data show. Five-year CDS contracts rose 5.5 percentage points to 53.5 percent upfront, according to S&P Capital IQ. Swaps are used to protect […]

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Debt of Chesapeake Energy Corp. tumbled to a record low on Thursday as the price of oil plunged. Nine of the energy producer’s unsecured notes plummeted, some losing more than 12 cents on the dollar, as it was the most actively traded company in the junk-debt market. Credit-default swaps, which are used by investors to protect against defaults, rose to the highest ever. The company’s $1.1 billion of unsecured notes due 2017 dropped 12.2 cents to 70.75 cents on the dollar at 11:48 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. One of its biggest bonds, the $1.5 billion of floating-rate notes due 2019, fell 7.4 cents to 43.6 cents at 11:48 a.m. in New York, the data show. Five-year CDS contracts rose 5.5 percentage points to 53.5 percent upfront, according to S&P Capital IQ. Swaps are used to protect […]

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bakken EIA For the first time in more than a decade, Bakken’s oil production is showing a year-over-year decline. Related: OPEC’s Plan to Squeeze out U.S. Shale: Is it Working? Thanks to the shale oil boom, the Bakken region has experienced years of unprecedented growth with each year dwarfing the year before. But things have changed since oil prices crashed one year ago. The U.S. Energy Information Administration (EIA) released their latest drilling productivity report showing production across all the shale basins are in decline. The report estimates that in October 2015, the Bakken Shale produced 1.16 MMbpd (million barrels per day) of crude oil—1.8% less than the production levels in September 2015 and 4.6% lower than production was one year previously. This is the first time in over a decade that the production trends have gone backward. have reversed. Related: Marathon Oil Shifts Focus to U.S. Shale Total […]

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The moon was a waning crescent sliver Sept. 9 when a man emerged from an oil tanker, sidled up to a well outside Cotulla, Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a town where he sold his load on the black market for $10 a barrel, about a quarter of what West Texas Intermediate currently fetches. “This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based Lewis Energy Group, who recounted the heist at a Texas legislative hearing. “You’ve got your mules that go out to steal the oil in trucks, you’ve got the next level of organization that’s actually taking the oil in, and you’ve got a gathering site — it’s always a criminal organization that’s involved with this.” From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas […]

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An oil refinery is seen in Carson, California March 4, 2015. An autumn credit crunch was expected to hit many independent U.S. oil producers, starving the industry of billions of dollars and further denting company budgets and drilling plans. But banks that adjust their loans to energy companies every six months based on the oil price and volumes of reserves were more lenient than many expected this time, leaving producers with more cash for drilling and allowing them to supply more oil to a market already flush with excess crude. The biannual process, known in the industry as redetermination, shaved only 4 percent off bank loans to oil and gas companies, according to a Reuters analysis of loan data, surprising experts who had expected deeper cuts because of a protracted oil price rout. It offers cash-starved energy firms a lifeline right when oil prices are back near six-year lows […]

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The shale boom in North Dakota has softened to a whisper. The state’s Bakken oil region produced less oil in September than it did the previous year, the first time that’s happened in more than a decade. Output fell as low oil prices, exacerbated by the region’s remoteness, caused companies to scale back drilling operations and delay completing new wells. North Dakota’s portion of the Bakken produced 1.11 million barrels a day in September, down 1.1 percent from the same month a year ago, according to state data. Half the oil left the state by costly truck and rail routes, forcing producers to offer steep discounts. Along with an overall decline in crude prices, that’s prompted drillers to idle 67 percent of the rigs that were in the region last year. “The production drop was inevitable with the rig decline and the low-price environment,” Carl Larry, head of oil […]

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