Category: Shale Oil

State data from North Dakota show a steep drop in the number of rigs actively exploring for or producing oil or natural gas. Energy companies are spending less on exploration in the market downturn. File photo by Calin Tatu/Shutterstock BISMARCK, N.D., Nov. 9 (UPI) — Catching up with a national trend showing declines in the exploration and production sector, North Dakota reported an 8.5 percent drop in rig activity. The state reported 64 rigs actively exploring for or producing oil or natural gas in the state as of Monday. That’s down from the 70 reported last week and a sharp reversal in recent trends showing moderate stability in the No. 2 oil-producing state in the nation. Crude oil prices have moved consistently lower as weak economic growth balances against an increase in production, largely from U.S. shale oil basins. That’s left energy companies with less capital to invest in […]

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U.S. shale production is expected to fall for an eighth consecutive month in December, according to a forecast on Monday from the U.S. Energy Information Administration (EIA). Total output is set to decline 118,000 barrels per day (bpd) in December, the biggest monthly decline on record, to 4.95 million bpd, the least since Sept. 2014, according to EIA data going back to 2007. Oil production from the Eagle Ford play in South Texas was expected to fall 78,000 bpd to 1.28 million bpd. Bakken oil output in North Dakota was expected to slide 27,000 bpd to 1.11 million bpd. Oil production from the Permian Basin of West Texas, which continues to buck the trend, was projected to rise 11,000 bpd to 2.02 million bpd. U.S. natural gas production, meanwhile, was expected to fall for a sixth month in a row. Total output was set to decline almost 0.4 billion […]

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Oil companies of all hues loaded up on massive amounts of debt to fund rigs and fancy new drilling equipment. The problem is the companies were banking on oil prices closer to $100 oil when they took on the debt. Now oil is around $45 and no one is expecting prices to hit $100 any time soon. What that means is the likelihood of unpaid debt has gone up for many companies. “Energy has been really treacherous. There are going to be a lot of defaults,” R. Matthew Freund, chief investment officer of USAA Investments, told CNNMoney. It’s a dramatic change from just a few years ago. The roaring junk bond market and low interest rates broadly helped fuel the U.S. energy boom. Cheap credit allowed companies to invest in new technologies like hydraulic fracking that makes it easier to drill oil in difficult to reach places. Back then […]

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Only 1 percent of the Bakken Play area is commercial at current oil prices based on my analysis that follows. Only 4 percent of horizontal wells drilled since 2000 meet the EUR (estimated ultimate recovery) threshold needed to break even at current oil prices, drilling and completion, and operating costs. The leading producing companies evaluated in this study are losing $11 to $38 on each barrel of oil that they produce, the very definition of waste. Although NYMEX prices are about $46 per barrel, realized wellhead prices in the Bakken are only $30 per barrel according to the North Dakota Department of Mineral Resources . At that price, approximately 125,000 acres of the drilled play area of 10,500,000 acres is commercial (green areas in Figure 1). Figure 1 . Bakken Shale Play commercial area map at $30 per barrel wellhead price. Contours are in barrels of oil estimated ultimate […]

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A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. U.S. shale oil producers, having slashed fat from 2015 budgets after a 50-percent drop in crude prices, risk cutting to the bone next year as they pare spending further and get ready for a prolonged downturn. Top shale companies including Devon Energy Corp, Continental Resources Inc and Marathon Oil Corp this week released preliminary 2016 plans for capital spending that may fall by double digits. The cuts, following reductions of 30 percent to 40 percent by many in the industry this year, would leave budgets at a fraction of levels seen during the height of the shale boom that lasted to mid-2014. Lower costs and improved productivity would allow them to hold shale oil production largely flat. While he did not provide a specific figure, Doug Lawler, the Chief […]

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Oversupplied market no deterrent to shale-player Continental Resources, which said it expects to produce even more during the market downturn. Photo by David Gaylor/Shutterstock OKLAHOMA CITY, Nov. 5 (UPI) — Continental Resources, one of the largest oil and gas producers in U.S. shale basins, said it expects output to increase despite market downturn pressures. Continental, one of the premier leaseholders in the oil-rich Bakken shale in North Dakota, reported total crude oil production for the three months ending Sept. 30 increased 15 percent from the same period last year to an average 147,472 barrels per day. Gas production increased 48 percent year-on-year to 484,834 million cubic feet per day on average. Based on what the company said was strong operational performance during the third quarter, Continental said it was increasing its production forecast for full-year 2015 to between 24 to 26 percent, compared with a previous range of 19-23 […]

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More Bakken Bankruptcies More energy companies are exiting the Bakken Shale Play as they struggle to adapt to the prolonged low oil prices. Related: Occidental to Leave the Bakken Samson Resources and American Eagle Energy plan to sell off their Bakken assets in order to pay back what they owe as part of a restructuring under Chapter 11. These companies are among almost two dozen oil and gas companies who have succumbed to the stress of low crude prices by filing for bankruptcy in the past year. Samson Resources Corporation filed in mid September after selling off 400,000 acres in the Bakken to Continental Resources for $650 million. Potential debtors have until November 20th to make a claim against the company. “The steps we are taking will allow our company to maximize future opportunities and compete more effectively with significantly less debt on our balance sheet,” Samson CEO Randy […]

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Nov 5 (Reuters) – Apache Corp reported a much smaller-than-expected quarterly loss and joined a growing list of U.S. oil producers in raising full-year production forecast even as many of them cut spending. Increased efficiencies, a drop in service costs and low break-even levels in core U.S. shale fields are all helping U.S. oil companies increase production on reduced budgets. U.S. producers ranging from Oasis Petroleum Inc to Devon Energy Corp have forecast higher production in their latest quarterly reports. Apache on Thursday raised its full-year North American onshore production forecast to 307,000-309,000 barrels of oil equivalent per day (boepd), from 305,000-308,000 boepd. The company also increased its international and offshore production forecast to 172,000-174,000 boepd, from 164,000- 168,000 boepd. "As we turn to 2016, prudent capital allocation will continue to be our primary focus…," Chief Executive John Christmann said in a statement. Oil producers are keeping a tight […]

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Souring energy loans quadrupled to $34.2 billion since 2014 as oil prices tumbled, according to a report released today by regulators led by the Federal Reserve. Loans deemed substandard, doubtful or a loss account for 12 percent of the banking industry’s $276.5 billion oil and gas portfolio, according to the report from the Fed, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency. The review is designed to assess the risk of $3.9 trillion in loans shared by multiple financial institutions. "Companies incurred significant debt to fund drilling programs, and their capital structures became unsustainable in the face of lower oil prices," the regulators wrote in the report. The Oseberg A offshore gas platform operated by Statoil ASA stands in the Oseberg North Sea oil field 140kms from Bergen, Norway.

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North Dakota Spuds hit 5 year low . Not since January of 2010 have spuds been below 77, the point they hit in September. Indonesia: Missing pieces needed to revive oil and gas sector The future of Indonesia’s oil and gas industry is in peril. Since the early 2000s, the resource-rich country has been experiencing a persistent annual oil production decline of 4 percent , significantly under performing relative to most producing countries. The continued oil-production decline is mainly down to fields maturing and a downtrend in discoveries of new reserves. Indonesian oil production only is around 800,000 barrels per day (bpd), barely half the 1.4 million bpd production in 2000. The reserves-replacement ratio is even more worrisome, averaging merely 75 percent over the same period, which means a quarter of oil produced is not replaced. Projecting the future from these numbers alone, oil production will tumble to around […]

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