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Dakota Access Pipeline Concerns

Dakota Access Pipeline Route Energy Transfer Pipeline is moving forward with plans to build a massive 1.134 mile pipeline that will transport crude from the Bakken through South Dakota and into Patoka, Illinois amid public concerns. Related: Two New Bakken Crude Oil Pipelines Online by 2016 Energy Transfer Partners moved one step closer this week as officials from the McKenzie County Commission approved zoning for the first of six terminals it will need for the project. Along with permission to move ahead the company also received vigorous opposition and criticism from landowners who see the company as arrogant. According to the Tri-City Herald , “Commissioner Kathy Skarda that said she has received numerous phone calls from landowners upset about the company’s negotiating style.” Last week, more than 80 people turned out for a public hearing in Killdeer to express their concerns to the Public Service Commission. This was the […]

Posted On : Published By : Tom Whipple
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Status on the Bakken ”Red Queen” with Data as per April 2015

This post presents a study of developments of Light Tight Oil (LTO, shale oil) extraction for 8 companies in Bakken(ND) that as of April 2015 had added around 600 (or more) producing wells in the Bakken/Three Forks formations since January 2008. The 8 companies are; Continental Resources, EOG Resources, Hess Bakken Investments, Marathon Oil Company, Oasis Petroleum, Statoil Oil & Gas, Whiting Oil and Gas Corporation and XTO Energy . These 8 companies had around 63% of total LTO extraction from Bakken as of April 2015. The decline in the oil price has so far reduced the number of rigs drilling in Bakken and a decline in total Light LTO extraction in Bakken. This study shows there are differences in responses amongst the studied companies to the oil price decline. As with most other things, size matters, also in Bakken. Figure 1: The chart above (stacked areas) shows developments […]

Posted On : Published By : Tom Whipple
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The Shale Industry Could Be Swallowed By Its Own Debt

The debt that fueled the U.S. shale boom now threatens to be its undoing. Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size. The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank. “The question is, how long do they have that they can get […]

Posted On : Published By : Tom Whipple
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Oil, Gas Drilling Wastewater Blamed for Earthquakes in Oklahoma

Wastewater from oil and natural gas drilling that’s pumped underground for disposal is more likely to trigger earthquakes than extracting the fuel by fracking, according to a new study. The salty byproduct of hydraulic fracturing is often injected back underground where it penetrates fault lines and triggers seismic activity, said Mark Zoback , a geophysics professor at Stanford University and lead author of the study Thursday in the journal Science Advances. Fracking, in which fluids are forced underground to shatter rock and release oil and gas, presents a much lower risk, he said. The issue has gained attention in Oklahoma where a drilling boom has coincided with a surge in earthquakes measuring 3.0 or higher on the Richter scale. About 10 barrels of water are produced for every barrel of oil in Oklahoma where there were two dozen magnitude-4 earthquakes last year compared with one or two a decade […]

Posted On : Published By : Tom Whipple
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After Energy-Job Losses, Texas Jobs Boom in May

Employment bounced back in Texas last month following recent losses, a sign that the state is weathering the slowdown in the energy industry, the Labor Department said Friday . By contrast, in North Dakota, which is also heavily reliant on energy production, employment continues to fall as the state grapples with a slowdown in energy prices. Texas added 33,200 jobs in May, the third-largest month-over-month employment increase in the country, the department said. Just two months ago, in March, Texas saw 25,400 jobs disappear . The state’s unemployment rate stands at 4.3%, down from 5.1% in May 2014. The national unemployment rate was 5.5% in May, according to the Labor Department. Since its last oil-related boom and bust cycle three decades ago, Texas has sought to diversify its economy . Much of the state’s growth has taken place in the Dallas-Fort Worth area and around San Antonio, two regions […]

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Small U.S. frackers face extinction amid drilling drought

WEATHERFORD, Texas Oil field work was coming in fast when GoFrac doubled its workforce and equipment fleet at the beginning of last year, just one of hundreds of small oil service companies thriving on the revival of U.S. drilling. Founded in November 2011 with a loan of around $35 million, the Fort Worth, Texas-based company was by 2014 making nearly that much in monthly revenues, providing the crews and machinery needed by companies including ExxonMobil ( XOM.N ) to frack oil and gas wells from North Dakota to Texas. Executives flew to meetings across the country in a Falcon 50 private jet, and entertained customers at their suite at the Texas Rangers baseball stadium in Arlington. The firm would soon move into a 22,000-square-foot office on the 12th floor of Burnett Plaza, one of Fort Worth’s most prestigious office buildings. Eighteen months on, however, without work and unable to […]

Posted On : Published By : Tom Whipple
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U.S. shale oil in slow decline

Oil production from shale formations in the United States slowing, but not as much as would be expected given low rig numbers, Bentek data show. Photo by photostock77/Shutterstock DENVER, June 18 (UPI) — While oil production from key shale formations in the United States is in decline, the drop isn’t as severe as expected given low rig counts, analysis finds. The U.S. Energy Information Administration said in a drilling productivity report oil production from some of the more lucrative shale basins in the United States is expected to drop by a combined 92,000 barrels per day by July. While the Eagle Ford shale play in Texas is expected to show the largest drop in terms of volume, the Niobrara shale in Colorado declines the most in terms of percent by July, federal data show . Bentek Energy, the forecasting unit of energy news site Platts, said production from Eagle […]

Posted On : Published By : Tom Whipple
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Turning Drilling Waste into Roads

ND Tests New Technologies to Recycle Waste The North Dakota Department of Health has approved a pilot project to test new technologies to recycle solid drilling waste. One of the companies involved in the project is promising to revolutionize the industry by recycling Bakken drilling waste into material for roads or other uses. Nuverra has invested more than three years and $30 million into this initiative. Its process called Terrafficient can recycle 100 percent of that waste, according to company spokesperson. Recycling drilling waste is a common practice in other states, but the Bakken’s high salt content has made it more challenging to develop a process that protects the environment. Related: Recycling Waste Water is Big Business Scott Radig with the North Dakota Department of Health said “Nuverra proposes to reuse the drilling waste in three ways: mix it with gravel so the gravel will compact better and not […]

Posted On : Published By : Tom Whipple
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Oilfield costs fall following decline in oil prices

U.S. Energy Information Administration, based on United States Bureau of Labor Statistics, Source: Industry Producer Price Indexes As oil prices declined—falling more than 50% from June 2014 to January 2015, before increasing slightly in spring 2015—energy production companies focused efforts on increasing operating efficiencies. While production, rig counts , and employment statistics are good indicators of the expansion or contraction of the oil and natural gas industry, the Bureau of Labor Statistics Producer Price Index (PPI) tracks the rates oil and natural gas service firms are receiving for goods and services used in producing oil and natural gas. Changes in the PPI can be used to examine how prices charged by firms throughout the oil and natural gas industry respond to fluctuations in commodity prices. The magnitude of PPI declines by industrial classification compared with the downturn in oil prices reflects the idea that firms most directly exposed to […]

Posted On : Published By : Tom Whipple
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Status on the Bakken ”Red Queen”

This post presents a study of developments of Light Tight Oil (LTO, shale oil) extraction for 8 companies in Bakken(ND) that as of April 2015 had added around 600 (or more) producing wells in the Bakken/Three Forks formations since January 2008. The 8 companies are; Continental Resources, EOG Resources, Hess Bakken Investments, Marathon Oil Company, Oasis Petroleum, Statoil Oil & Gas, Whiting Oil and Gas Corporation and XTO Energy . These 8 companies had around 63% of total LTO extraction from Bakken as of April 2015. The decline in the oil price has so far reduced the number of rigs drilling in Bakken and a decline in total Light LTO extraction in Bakken. This study shows there are differences in responses amongst the studied companies to the oil price decline. As with most other things, size matters, also in Bakken. Data from the North Dakota Industrial Commission (NDIC) shows […]

Posted On : Published By : Tom Whipple