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U.S. Oil Drillers Add Rigs for Second Straight Week

Drillers put rigs in U.S. oil fields back to work for a second straight week, suggesting the end of an unprecedented retreat from the country’s prolific shale formations. Rigs targeting oil in the U.S. increased by five to 645, Baker Hughes Inc. said on its website Friday. They rose by 12 last week. Natural gas rigs fell by two to 217 and miscellaneous rigs dropped by two to one, bringing the total count up one to 863. The biggest regional growth came in the Permian Basin of West Texas, where eight oil rigs were added to 239. The Eagle Ford shale in South Texas saw a drop of five rigs to 81. “There are operators in the Permian Basin who are identifying properties that are economic even at these prices,” Matt Marietta, an analyst at Stephens Inc. in Houston, said in a phone interview. “We’ll continue to get this […]

Posted On : Published By : Tom Whipple
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EIA’s estimates for state crude oil production account for incomplete, lagged data

graphs of Texas crude oil and lease condensate production, as explained in the article text Source: U.S. Energy Information Administration, Petroleum Supply Monthly , and the Texas Railroad Commission Note: June 2015 reports include estimates through April 2015. Market analysts have a keen interest in understanding how crude oil production in key states has been affected by recent changes in crude oil prices and drilling activity. EIA develops state-level production estimates for selected states that are based in part on state-level data. However, data published by state agencies are often incomplete when first published because of a combination of late reporting and processing delays, mainly due to the filing of production reports that do not contain all required information. Because EIA’s methodology for state-level production estimates aims to anticipate and account for expected revisions to data collected by the states, state-level production data published by EIA and state agencies […]

Posted On : Published By : Tom Whipple
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Hedge funds cut bullish exposure to U.S. oil by most since 2012

Rigging equipment is pictured in a field outside of Sweetwater, Texas June 4, 2015. Hedge funds and other speculators have made their sharpest cut in more than two and a half years to their bullish exposure toward U.S. crude oil, trade data showed Friday, a further sign that investor confidence in the oil market recovery may be ebbing. U.S. crude prices sunk to three-month lows on Tuesday as Greece’s debt woes and China’s stock market plunge escalated, while Iran continued with efforts to remove Western sanctions on its exports so it could more ship more oil into an already flooded market. Corresponding with the oil price tumble, data from the Commodity Futures Trading Commission (CFTC) showed money managers’ net long position in U.S. crude futures and options fell by nearly 20 percent in the week to Tuesday, the biggest weekly decline since December 2012. Benchmark U.S. West Texas Intermediate […]

Posted On : Published By : Tom Whipple
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North Dakota oil output jumps in May despite low prices

An oil pumpjack operates near Williston, North Dakota January 23, 2015. North Dakota’s daily oil production rose 3 percent in May, state regulators said on Friday, hinting that the state’s Bakken shale formation may be more resilient to sliding crude prices than expected. The state’s well count hit a record high in the month with producers deciding to hydraulically fracture more freshly drilled wells, bucking a trend to mothball them. Drilling permit applications also spiked. "I was surprised by the increase in output for May," said Lynn Helms, head of the state’s Department of Mineral Resources (DMR). "It’s pretty astounding at how good (oil producers) have gotten at what they do." The data signaled that Whiting Petroleum Corp, Continental Resources Inc and other producers in the state have been able to weather a more than 50 percent drop in U.S. crude prices since last summer. North Dakota, the No. […]

Posted On : Published By : Tom Whipple
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BHI: US rig count continues upward creep

Although the overall US drilling rig count merely edged up a unit to 863 rigs working during the week ended July 10, it represented the third consecutive week of gains and another jump in oil-directed rigs, according to data from Baker Hughes Inc. Over the past 3 weeks the overall count has risen 6 units. The warm streak follows 28 consecutive weeks of losses, which has resulted in the count currently having 1,012 fewer units year-over-year ( OGJ Online, June 26, 2015 ). BHI also reported this week that the average US rig count for June was 861, down 28 from May and down 1,000 from June 2014. In an energy update this week, Raymond James & Associates Inc. noted that permitting activity, a main indicator of rig count activity, was low a week ago as a result of the Independence Day holiday in the US. Just 680 new […]

Posted On : Published By : Tom Whipple
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The EIA’s Short-Term Guessing Game

The EIA’s Short-Term Energy Outlook came out a few days ago. That is where they try to guess the future production and price for oil, for the USA as well as the world. As of late they seem to be getting a little timid with their predictions. They are saying not much growth is happening until the fourth quarter of 2016, and only a slight bump then. STEO N-O Liquids This chart is Non-OPEC Total Liquids in million barrels per day. Production of N.O Liquids surged upwards from September of 2012 until December 2014, gaining 6.38 million barrels per day in those 27 months. That’s an average increase of 236,000 barrels per day per month. But then in January 2015 there was a drop of 800,000 bpd. Non-OPEC total liquids still have not reached that December high again but the EIA thinks they will by August. I have my […]

Posted On : Published By : Tom Whipple
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As oil teeters at $50, a few shale producers still drilling more

A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. A handful of optimistic U.S. shale drillers are sticking with plans to deploy more rigs in the coming months even as oil prices take a sharp dive well below many producers’ $60-a-barrel breakeven point. On Wednesday, Pioneer Natural Resources Co. became the first big company to publicly confirm it was drilling more wells, saying it had already added two rigs in the Permian Basin of Texas this month and would keep on adding two a month as long as the oil price "remains constructive." Smaller shale oil producer WPX Energy Inc, whose operations are focused on North Dakota’s Bakken shale, said this week that its decision to add two rigs later this year was unaffected by a nearly $8 drop in crude prices since June to toward $50 a barrel. While half a dozen […]

Posted On : Published By : Tom Whipple
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North Dakota Fights Fracking Rule

North Dakota Fights Ruling Two days after North Dakota filed an injunction to delay new federal fracking rules, a district court grants a temporary reprieve. Related: New Fracking Rules for Public Lands U.S. District Court Judge Scott W. Skavdahl delayed the new ruling, which was to go into effect this week, saying that permitting of oil and gas wells on federal land will proceed under current regulations until July 22nd. The case before Judge Skavdahl combined a challenge from North Dakoa, Wyoming and Colorado with one from industry groups who believed the Bureau of Land Management (BLM) did not follow federal rule-making law and exceeded their authority. Jessica Kershaw, a BLM spokeswoman said “While the matter is being resolved, the BLM will follow the court’s order and will continue to process applications for permit to drill and inspect well sites under its pre-existing regulations.” In March, the BLM passed […]

Posted On : Published By : Tom Whipple
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Survey: OPEC keeps plugging away

Platts survey finds oil production from OPEC increased in June, the fourth straight month of gains in an already oversupplied market. Photo by sakhorn/Shutterstock HOUSTON, July 7 (UPI) — Output from Saudi Arabia and Iraq helped lead to the fourth straight monthly increase from the Organization of Petroleum Exporting Countries, a survey found. A survey by energy reporting service Platts finds OPEC production in June reached 31.3 million barrels per day, a 5.5 percent increase from May and the fourth straight month of gains from the 12-member group. Saudi Arabia, the de facto leader of OPEC , produced an average 10.3 million bpd in June, about 1 million barrels more than the United States. The increase in production from U.S. shale basins is keeping markets weighted on the supply side. Saudi Arabia has said it would keep its output higher despite the glut in an effort to stay competitive […]

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Houston-based LINN leaves Texas shale

Houston-based LINN Energy dumps remaining shares in Texas shale basin while securing capital support for future developments. Photo by Christopher Halloran/Shutterstock HOUSTON, July 7 (UPI) — Struggling LINN Energy said it was selling its stake in a Texas shale basin while simultaneously brokering capital investment deals to fund future developments. LINN said it signed a deal to sell its remaining 6,400 net acres in the Permian shale basin in Texas to an undisclosed buyer for $281 million. The company said the acreage yields an average 2,000 barrels of oil equivalent per day from around 133 wells. Permian production increased 58 percent from 2007 to reach 1.35 million barrels per day last year, which represents 18 percent of total U.S. crude oil production. The low price of crude oil, still struggling to break through $60 per barrel, has forced many companies to cut staff levels and spending on production from […]

Posted On : Published By : Tom Whipple