Category: Shale Oil

BISMARCK, N.D., May 26 (UPI) — The number of rigs actively exploring or producing oil and natural gas in North Dakota was 82 as of Tuesday, relatively stable from a week ago, state data show. The state government reported 82 rigs in active service as of Tuesday, down one from May 18. The rig count, a reflection of the health of the exploration and production side of the sector, is at its lowest level since January 2010, but holding steady for North Dakota. Rig counts in the state fell from 93 at the middle of April to 84 by the end of that month. Low oil prices means less cash for energy companies to spend on exploration and production. Oil field services company Baker Hughes reported 885 rigs in active service in the United States in its weekly count last week, down three from the previous week. North Dakota […]

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SINGAPORE Shale oil producers, benefiting from lower costs, are expected to ramp up drilling activity if the price of U.S. oil stays near $60 a barrel, Goldman Sachs said. "We believe that should West Texas Intermediate prices remain near $60 a barrel, U.S. producers will ramp up activity, given improved returns, with costs down by at least 20 percent," analysts at Goldman Sachs said in a report. U.S. drillers cut the number of rigs by just one last week, data from oil services firm Baker Hughes Inc showed, signaling that higher crude prices may be starting to steady the sector after 24 straight weeks of drill rig declines. "Last week’s rig count is a first sign of this response and suggests that producers are increasingly comfortable," the Goldman Sachs analysts said. (Reporting by Jacob Gronholt-Pedersen; Editing by Clarence Fernandez)

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(Photo: Thinkstock) Low oil prices are endangering an increasing number of exploration and production companies. According to a new report from Moody’s Investors Service, the oil and gas industry could see the rate of defaults rise over the next year. The companies in danger of going belly up, not surprisingly, are the ones that already have low credit ratings. Moody’s finds that the default rate for oil drillers with a credit rating of B2 or lower could jump from 2.7% to 7.4% by March 2016. Moreover, distressed oil companies make up a rising share of overall firms with a poor credit rating – roughly 14.8% of the companies with a B3 credit rating or worse covered by Moody’s are in oil and gas. That is up sharply from the 8% share that oil firms accounted for in 2014. The credit ratings agency also said that even if oil prices […]

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Millions of barrels of untapped oil that U.S. shale drillers discovered during the boom years are about to disappear from their inventories. Six years ago, the industry pushed the Securities and Exchange Commission to make it easier for companies to claim proved reserves for wells that wouldn’t be drilled for years. Some prospects considered sure-things when crude was $95 a barrel are money losers at today’s $60. When crude crashed in 2008, 44 U.S. companies wiped 630 million barrels from their books. Now the stakes are higher. Of all the proved reserves of oil and natural gas liquids found by the 44 companies since 2008, more than half — 5.4 billion barrels out of the 9.7 billion — is attributed to wells that don’t exist yet, according to data compiled by Bloomberg. “We’re going to see a lot of proved undeveloped reserves get vaporized,” said Ed Hirs, a managing […]

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The deal gives Vanguard a bigger presence in Oklahoma, where the company already pumps oil and gas, Vanguard chief executive Scott Smith said. “The assets being acquired are attractive bolt-ons to our Mid-Continent, Permian, and Gulf Coast Basin operations,” Mr. Smith said, referring to Vanguard’s existing drilling operations in Texas, New Mexico, Colorado, Wyoming and several other states. Terms of the deal calls for a subsidiary of Vanguard to merge into Eagle Rock for $474 million in stock and assume Eagle Rock’s net debt of $140 million. Following that combination, Eagle Rock will be a subsidiary of Vanguard. Joseph A. Mills, chief executive of Eagle Rock, said the agreement gives Eagle Rock shareholders a 24% premium over Thursday’s closing price of $2.45 a share. “We have been very impressed with the Vanguard team and look forward to working together to successfully combine our two companies,” he said.

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Bakken production will keep growing, albeit at a slower pace, and the Eagle Ford still has running room within high-return portions of the play, according to a recent analysis by Wood Mackenzie. The Bakken and Eagle Ford together produce just over 2.5 million barrels per day of oil, or nearly two-thirds of U.S. tight oil production. Higher oil prices in the 2013 to 2014 timeframe spurred operators to drill not only in the core of the Williston Basin, but in the fringe and speculative areas. This included areas along the Montana-North Dakota border, the northern most part of the play near the Canadian border, and the southern portion of the Williston Basin. Operators have responded to the decline in global oil prices from over $100/bbl last year to around $60/bbl today by reducing rig counts and retrenching drilling activity to the core Bakken area, Jonathan Garrett, principal analyst for […]

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WASHINGTON Two oil and gas groups have asked a federal court to block the implementation new U.S. rules for hydraulic fracturing on public lands until their lawsuit challenging the regulations is resolved. The Independent Petroleum Association Of America (IPAA) and the Western Energy Alliance filed a motion on Friday for a preliminary injunction to prevent the Interior Department’s Bureau of Land Management from enforcing the regulations, arguing the standards will cause their members irreparable harm. The regulations, finalized in March, would require companies to provide data on the chemicals used in hydraulic fracturing, or fracking, and to take steps to prevent leakage from oil and gas wells on federally owned land. They do not cover wells on private land. Fracking, involves the injection of large amounts of water, sand and chemicals underground at high pressure to extract fuel. In their filing with the U.S. District Court for the District […]

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Rig Count Falls by One The Bakken-Three Forks rig count fell this week to 79 rigs running across our coverage area by midday Friday. In recent Bakken news, the SEC froze the assets of North Dakota Developments, LLC (“NDD”) and its principles, claiming they defrauded over 980 investors from 66 different countries of $62 million dollars intended to go towards Bakken man camps. Read more: Bakken Man Camps Center of Ponzi-Type Scheme The U.S. rig count fell by six, ending with 888 rigs running by midday Friday.  A total of 223 rigs were targeting natural gas (an increase of two from the previous week) and 660 were targeting oil in the U.S. (eight less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)    79 rigs are running in the Williston Basin across MT, ND, and SD. 79 are in ND alone. […]

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A natural gas-fueled drilling rig is shown earlier this year in Mentone, Texas. Texas, which has benefited from fracking, has tripled its production of oil in the past five years. Photo: Spencer Platt/Getty Images AUSTIN, Texas—Last year, a city in North Texas banned fracking. State lawmakers want to make sure that never happens again. On Monday, Republican Gov. Greg Abbott signed a law that prohibits bans of hydraulic fracturing altogether and makes it much harder for municipal and county governments to control where oil and gas wells can be drilled. Similar efforts are cropping up in states including New Mexico, Ohio, Colorado and Oklahoma, where both chambers of the legislature have passed a bill that limits local governments to “reasonable” restrictions on oil and gas activities. This is all part of a broader legislative and judicial effort, backed by the oil industry, to limit local governments’ ability to regulate […]

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