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British shale oil sector gaining momentum

British energy industry reviews what’s thought to be a significant deposit of oil in shale beds in the country. Photo by David Gaylor/Shutterstock LONDON, Aug. 26 (UPI) — At least 10 billion barrels of potential oil in place is thought to lie in the Horse Hill shale license area in the south of the country, a British group said. U.K. Oil and Gas Ltd. said an independent assessment from oil services company Schlumberger found a mean 10.9 billion barrels of oil in pace in a 55 square-mile area of the Horse Hill basin . U.K. Oil and Gas Chairman Stephen Sanderson said the independent analysis predicts "significant" oil volumes and gives further support for development plans. The company early this year said the reserves at Horse Hill are in shale beds that are fractured naturally, meaning extraction may be carried out using conventional techniques. The discovery at Horse Hill […]

Posted On : Published By : Tom Whipple
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For Oil Producers Cash Is King, and That’s Why They Just Can’t Stop Drilling

Investors sent a surprising message to U.S. shale producers as crude fell almost 20 percent in August: keep calm and drill on. While most oil stocks have fallen sharply this month, the least affected by the slump share one thing in common: they don’t plan to slow down, even though a glut of supply is forcing prices down. Cimarex Energy Co. jumped more than 8 percent in two days after executives said Aug. 5 that their rig count would more than double next year. Pioneer Natural Resources Co. rallied for three days when it disclosed a similar increase. Shareholders continue to favor growth over returns, helping explain why companies that form the engine of U.S. oil — the frackers behind the boom — aren’t slowing down enough to rebalance the market. U.S. production has remained high, frustrating OPEC’s strategy of maintaining market share and enlarging a glut that has […]

Posted On : Published By : Tom Whipple
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Jean Laherrere’s Bakken Update

The rest of North Dakota, less the Bakken, is just about finished. With this chart Jean puts North Dakota production right at the peak. Being a self confessed techno-optimist of sorts I’ll bite but before I do, here are some news stories that will support some of the arguments I will be putting forward The target was unveiled by ACT chief minister Andrew Barr at the ACT Labor Party conference on Saturday. The ACT already had a 90 per cent renewable energy target by 2020, but decided to go the “whole hog” by 2025 to show leadership in the climate and clean energy debate that has been lacking at the federal level. “Canberra can and should be a beacon for everyone who realises the world must act decisively now to stave off a future of catastrophic climate change,” Barr told the conference on Saturday. The ACT is able to […]

Posted On : Published By : Tom Whipple
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Bakken Oil Production Up Slightly

Bakken Production North Dakota saw increased production in July after slipping for two months. In April, the EIA predicted that production had peaked across the U.S. at 9.7 million barrels per day, the highest level since 1971. This proved to be true as production fell in May by 50,000 barrels per day and in June, Bakken shale month-over-month crude oil production dipped 1.3%. This week, Bentek Energy reported a slight increase in oil production for North Dakota in July, saying that the Bakken formation follows closely behind the Eagle Ford Basin in terms of efficiency gains and internal rates of return. Drill times in the Bakken dropped from about 15 days per well in late 2014 to about 13 days per well during the second quarter of this year. Bentek analyst, Sami Yahya, explained “Substantial cost savings protocols alongside reduced drill times have kept internal rates of return in […]

Posted On : Published By : Tom Whipple
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Oil Explorers Boost U.S. Drilling Even as Price Slumps

Drillers added rigs in U.S. oilfields for the seventh time in the past eight weeks as declining crude prices fail to hold back activity. Rigs targeting oil in the U.S. rose by 2 to 674 this week, the highest since the last week of April, Baker Hughes Inc. said on its website Friday. Drilling equipment added in the Williston Basin of North Dakota and other shale plays more than offset a declining count in areas like Texas’ Eagle Ford and Permian formations. The crude being pumped out of shale rock in the U.S. has helped create a global glut that pushed prices in New York below $40 a barrel for the first time in more than six years on Friday. At such low prices, the recent drilling increase may be short-lived, and the rig count remains almost 60 percent lower than in October. “We hit bottom, we bounced off […]

Posted On : Published By : Tom Whipple
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Nostalgic for the Financial Crisis? Only in the Oil Business

America’s suffering shale patch is about the only place in the U.S. where there’s nostalgia for the dark days of the financial crisis. While the global economy started to unravel in 2008, it was also the beginning of the biggest oil boom in U.S. history. Domestic production, which had been steadily declining since the bust of 1986, began to climb in 2009. OPEC cut output to an average of 28.5 million barrels a day that year, putting a floor under prices. And at the heart of the shale revolution, states like North Dakota, Texas and Oklahoma enjoyed lower rates of unemployment than the rest of the U.S. Sure, crude plummeted to $32 a barrel in December 2008, but it didn’t stay there for there for long. Analysts described it as a V-shaped bust, and by May the following year oil was back above $65. Plenty of people counted on […]

Posted On : Published By : Tom Whipple
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BHI: US oil-directed rig count rises for fifth straight week

The overall US drilling rig count edged up 1 unit to 885 rigs working during the week ended Aug. 21, according to data from Baker Hughes Inc. The oil-directed count increased for the fifth straight week, rising 2 more units ( OGJ Online, Aug. 14, 2015 ). The overall count is now down 1,011 units year-over-year. Last week 894 new well permits were issued, up from 832 permits issued during the previous week, according to an energy update by Raymond James & Associates. Utilizing a 4-week average, weekly permits issued were up 22 week-over-week. “Just like the rig count, permits are currently trending above the [year-to-date] lows, but still well below levels seen this past spring,” RJA said. “With WTI closer to $40[/bbl] than $45[/bbl], operators are likely to be reassessing any plans to ramp up activity. If prices continue to fall—or even stay flat as we are modeling—from […]

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Canada’s Largest Refinery Shifts from Bakken Shale Oil to Brent Crudes

The operator of Canada’s largest crude oil refinery, Irving Oil Ltd., said it has stopped importing Bakken Shale oil from the U.S. in favor of cheaper crudes from such producers as Saudi Arabia, reflecting a shift in crude costs affecting East Coast refiners during a global slump in oil prices. The closely held company’s 320,000-barrel-a-day refinery in Saint John, New Brunswick, one of the biggest by volume in North America, has reduced purchases of Bakken crude shipped by rail to zero from a high of nearly 100,000 barrels a day two years ago, Irving President Ian Whitcomb said in an interview on Thursday. “We’re not importing any Bakken crude right now,” he said. The move reflects shifting economics in the energy industry even as the price of oil—including Bakken crude—has slumped to six-year lows . A once-yawning gap, between the cost of oil produced in North America and overseas […]

Posted On : Published By : Tom Whipple
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In downturn, frackers turn to toilet water in drought-prone Texas

Rigging equipment is pictured in a field outside of Sweetwater, Texas June 4, 2015. Top shale oil producer Pioneer Natural Resources Co ( PXD.N ) has found an unusual way to both save water and cut costs for its wells: tapping the treated runoff from toilets, sinks and showers in west Texas. Pioneer has signed an 11-year, $117 million deal with the city of Odessa, Texas that will guarantee it access to millions of gallons of treated municipal wastewater each day, for use in nearby oilfields. Deliveries of the so-called effluent, are expected to start at the end of the year. As crude oil has slid to its lowest level in six years – currently about $40 a barrel – oil and gas companies pumping from shale rock have tried to cut every unnecessary penny from their operations. Water acquisition and transportation can be up to 10 percent of […]

Posted On : Published By : Tom Whipple
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Texas RRC June Production Data

The Texas RRC Oil & Gas Production Estimates are in. By now everyone should know that the Texas oil and gas data is incomplete and the drooping data lines will eventually look more like the EIA lines as the more and more data comes. The EIA data is only through May but all Texas Railroad Commission data is through June. Texas C+C It appears that Texas C+C was flat to slightly up in June. Dean C+C Dr. Dean Fantazzini has a program that attempts to correct for the incomplete data and give a pretty good estimate of what the final data will look like. He has April C+C down, May down also but only slightly so and has June Texas Crude+Condensate up slightly. Texas crude only appears to have increased slightly. Dean Oil Dean has crude only pretty much the same as C+C for April, May and June except […]

Posted On : Published By : Tom Whipple