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BHP says will take $2bln charge on U.S. onshore energy business

A promotional sign adorns a stage at a BHP Billiton function in central Sydney August 20, 2013. BHP Billiton on Wednesday said it will take a $2 billion impairment on its U.S. shale operations – the third writedown in three years. The charge on fiscal 2015 financial results, pushed BHP’s Australian shares to their biggest fall in a week — down 1.7 percent to $26.64. The gas-focused Hawkville field in Texas accounts for the substantial majority of the charge to be included in results for the fiscal year that ended on June 30, which BHP estimates will be around $2.8 billion on a pre-tax basis. BHP announced a $328 million write-down on the Permian field in February and a $2.84 billion impairment on the gas component of the shale division in 2012. The latest charge comes as BHP, the world’s biggest diversified mining company, faces a sharp fall in […]

Posted On : Published By : Tom Whipple
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Shale Gas Supply Held Hostage by Oil to Drop by Most in a Year

(Bloomberg) — After four years of record supply, America’s natural gas output is showing signs of weakness as producers retreat amid tumbling oil prices. Gas production from the seven largest U.S. shale basins will fall 0.6 percent to 45.1 billion cubic feet a day in August from a month earlier, the biggest drop since March 2014, the U.S. Energy Information Administration said Monday in its monthly Drilling Productivity report. EIA estimates have shown supply declines since June. The government’s forecasts signal the collapse in crude oil prices, which have plunged by about half over the past year, is reverberating in the natural gas market. As drillers shut wells in liquids-rich deposits from North Dakota to Texas, they’re also curtailing gas output from those reservoirs. That may prevent further price declines for gas, which has slid almost a third over the same period. “Gas is being held captive by oil,” […]

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EIA report forecasts further US shale oil output drops in August

US crude oil production from shales is projected to fall for the fourth month in a row in August to 5.357 million b/d, a drop of 91,000 b/d from July estimates, the US Energy Information Administration said Monday in its latest Drilling Productivity Report. It is the second consecutive month the agency has predicted a month-on-month decline of 91,000 b/d. The data, which EIA began publishing in October 2013, showed estimated oil production in the Bakken, Eagle Ford and Niobrara shale plays dropping in August, although Permian Basin production will continue to rise. EIA data predicted oil output in the Permian, located in West Texas and New Mexico and widely considered the US’ hottest unconventional play, to increase 5,000 b/d in August to 2.046 million b/d. That is up from the 3,000 b/d increase that the agency estimated for July. Article continues below… Crude Oil Marketwire delivers vital intelligence […]

Posted On : Published By : Tom Whipple
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Oil output from U.S. shale plays seen down for fourth month -EIA

Oil production from U.S. shale in August is expected to fall by the most since at least 2007, according to the U.S. agency tasked with tracking oil output, the latest sign a price rout will shrink the nation’s crude output. Oil production from the largest U.S. shale plays will plunge in August for a fourth consecutive month, forecasts from the U.S. Energy Information Administration showed on Monday. Output was expected to decline by 91,000 barrels per day, 12 percent over July’s forecast production decline, to 5.4 million bpd, the lowest level since November for the seven shale plays tracked in EIA’s productivity report. Energy firms fired thousands of workers and cut back on new drilling after U.S. crude futures collapsed 60 percent from over $107 a barrel in June 2014 to near $42 in March on oversupply concerns and lackluster world demand. Despite the cuts, however, overall U.S. production […]

Posted On : Published By : Tom Whipple
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Shale Oil Output Heads for Record Drop After Drilling Swoon

U.S. Oil Boom Stymied Shale fields that powered the U.S. energy renaissance will suffer the biggest drop in output since the boom began after companies idled more than half their drilling rigs. Production from the prolific tight-rock formations such as the Eagle Ford in southern Texas will decline 91,000 barrels a day in August to 5.36 million, the Energy Information Administration said Monday. It’s the fourth month in a row production is expected to slide, after more than tripling from 2007. Output is slipping after producers from ConocoPhillips to EOG Resources Inc. reduced the number of drilling rigs in order to cut costs following a 50 percent drop in the price of oil. About 645 rigs were drilling for oil last week, down from 1,609 in October, according to oil-field service company Baker Hughes Inc. “The market is largely anticipating oil production to keep declining this year and snap […]

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North Dakota oil production up despite fewer rigs

North Dakota rig numbers decline, though state data show operators on shale basins are doing more with less. UPI/Gary C. Caskey BISMARCK, N.D., July 13 (UPI) — The number of rigs actively exploring for or producing oil and gas in North Dakota declined nearly 4 percent from last week, state data show. North Dakota reported 73 rigs in active service as of Monday, down from the 76 reported one week ago. The exploration and production side of the North Dakota, measured by rig counts, is slower by more than half from this date in 2014, when 190 rigs were deployed across the state. Rig deployments were near historic highs in 2012, with 215 reported. North Dakota is the second largest oil producer in the nation and, while diversified, its economy depends in part on the surge of oil taken from shale basins in the state . State government data […]

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North Dakota’s oil output stabilizes but does not fall: Kemp

Pumpjacks taken out of production temporarily stand idle at a Hess site while new wells are fracked near Williston, North Dakota November 12, 2014. Crude oil production data published by the state of North Dakota on Friday contained something for both bulls and bears. Bears can point to the unexpected resilience of shale production in the face of lower oil prices while bulls can point to the fact that production is no longer growing after five years of tremendous gains. The state pumped an average of 1.2 million barrels per day (bpd) in May, an increase of 32,000 bpd compared with April, according to the Department of Mineral Resources ( link.reuters.com/kan25w ). Production remained steady with an average of just 80-90 rigs drilling in May, far fewer than the 120-130 rigs the department forecast at the start of the year would be necessary to maintain 1.2 million bpd. By […]

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EIA Confirms: U.S. Oil Production Peaked

U.S. oil production has peaked…at least for now. That is the conclusion from a new government report that concludes that U.S. oil production is on the decline. After questions surrounding the resilience of U.S. shale and when low oil prices would finally cut into production, the EIA says the month of April was the turning point. In its Short-Term Energy Outlook released on July 7, the EIA acknowledged that U.S. oil production peaked in April, hitting 9.7 million barrels per day (mb/d), the highest level since 1971. In May, production fell by 50,000 barrels per day, and EIA says that it will continue to decline through the early part of next year. Still, the declines won’t be huge, according to the agency’s forecast – production will average 9.5 mb/d in 2015 and 9.3 mb/d in 2016. The EIA figures move a little closer to what some critics have been […]

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Texas Oil Production Increases 16%

While crude oil production in the U.S. seems to have leveled off, oil production in Texas continues to move forward at a brisk pace. The Energy Information Administration (EIA) said that US oil production declined slightly by 0.5 percent or 50,000 barrels per day (bpd) in May from the prior month to an average of 9.7 million bpd. In Texas, however, crude oil production increased 16 percent in May to 107 million barrels (3.6 million bpd) from 92 million barrels (3.1 million bpd) in May 2014, according the Texas Petro Index. The surplus of oil in Texas and worldwide has created a softening of price. Prices declined on the New York Mercantile Exchange (NYMEX) on July 7 to $51.98 the lowest price since April 13 and a 17 percent drop since its 2015 high of $62.58 in May. The six-year low was set on March 18 at $42.03. The […]

Posted On : Published By : Tom Whipple