Category: Shale Oil

Summary Many objections to the science and economics of shale production have been raised for years. These objections have serious implications for investors in securities that are related in any way to the energy industry. This series attempts to summarize what I see as important risks as well as potential rewards. Instead of fighting against the critics of shale production, investors can simply attempt to profit instead. Part 2 of this article will highlight several ways for investors to potentially profit with or without any bursting of a "shale bubble". As most investors are aware, David Einhorn recently presented his concerns about the poor economics of U.S. shale production at the Sohn conference. Specifically, he went after shale producers Pioneer Natural Resources (NYSE: PXD ), Concho Resources (NYSE: CXO ), Whiting Petroleum (NYSE: WLL ), Continental Resources (NYSE: CLR ), and EOG Resources (NYSE: EOG ). While I think […]

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LONDON Underground disposal of waste water produced from oil and natural gas wells has been blamed for triggering thousands of small earthquakes in Oklahoma and a number of other U.S. states since 2009. Heightened seismic activity corresponds closely with the timeframe and location of increased drilling and hydraulic fracturing across the southwest United States, according to the U.S. Geological Survey (“Incorporating induced seismicity in the 2014 United States national seismic hazard model”, 2015). Most tremors have been barely perceptible to humans, but one at Prague in Oklahoma was recorded at magnitude 5.6, enough to cause severe shaking and damage to buildings. The quake swarms have sparked a debate about safety and economic opportunity in states and communities that depend heavily on oil and natural gas production for jobs and income. WASTE WATER INJECTION Most tremors seem to have been caused by re-injection of waste water brought to the surface […]

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After weeks of idling rigs on slumping crude prices, U.S. oil drillers added rigs to the Permian Basin for the first time this year, industry data showed on Friday. Energy companies increased by one each the number of oil rigs in the Permian basin of West Texas and eastern New Mexico – the biggest and fastest growing U.S. shale oil field – and in the Barnett in Texas. That was the first increase in the Permian since December and the first in the Barnett since March, oil services company Baker Hughes Inc said on Friday. Overall, the number of active oil rigs declined for the 22nd week in a row, but the rate of that decline has slowed in recent weeks, suggesting the collapse in drilling may be coming to an end as prices recover after falling 60 percent from June to March. The number of rigs drilling for […]

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The oil boom isn’t dead after all. For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday. Shale explorers including EOG Resources Inc. and Pioneer Natural Resources Co. say they’re preparing to bounce back from the deepest and most prolonged slowdown in U.S. oil drilling on record. The country has lost more than half its rigs since October, casualties of a 49 percent slide in crude prices during the last half of 2014. Futures rallied above $60 a barrel earlier this week, and a sudden return to oil fields would threaten to end this fragile recovery. “You’re inviting a lot of pent-up supply to come back into […]

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WILLISTON, N.D. (Reuters) – At least five senior Statoil executives and engineers have left the Norwegian oil giant’s North Dakota unit to form their own U.S. exploration and production company backed by $500 million in private equity. The move is one of the first to show that billions of dollars waiting to finance energy deals in the wake of the last year’s crude price drop have started flowing to industry veterans eager to strike out on their own. It also highlights that the wildcatter, the nostalgic American term for investors who prospected, well by well, for oil and built their own companies, is still very much alive despite doubts the entrepreneurial practice could survive after so much land was gobbled up by the U.S. shale boom. Lance Langford, until recently the head of Statoil’s North Dakota unit, has formed Luxe Energy LLC in Austin, Texas, with equity financing from […]

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North Dakota’s governor sees latest oil train incident as an example of why the state needs to build pipeline capacity. Photo by Heather Snow/Shutterstock BISMARCK, N.D., May 7 (UPI) — As emergency crews respond to the latest oil train derailment in North Dakota, the state’s governor called for the quick development of more pipeline capacity. Six tank cars carrying Bakken crude oil through Heimdal, N.D., derailed Wednesday morning. The flames forced the evacuation of the town of less than 50 people. No injuries were reported and cars not involved in the derailment were moved to a secure location. North Dakota’s crude oil production has increased to the point that there’s not enough pipeline capacity to handle the boom. That means energy companies are relying more on rail to take up the slack. North Dakota Gov. Jack Dalrymple said that, while the latest incident shows an urgent need for improved […]

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Continental is the latest energy company to show operating costs decline in key shale basins in the United States. File Photo by Calin Tatu/Shutterstock. OKLAHOMA CITY, May 7 (UPI) — Shale production from Oklahoma basins increased 23 percent from the fourth quarter, rivaling North Dakota by nearly a quarter, Continental Resources said. In terms of production, Continental’s output from the Bakken shale in North Dakota was up 4 percent from the fourth quarter and 39 percent year-on-year to an average 135,538 barrels of oil equivalent per day. From the so-called SCOOP basin in Oklahoma, production increased 23 percent from fourth quarter and 70 percent year-on-year for an average 49,882 boe per day. Continental said last year its acreage in the SCOOP basin was a "significant" part of its growth strategy. Data from oil field services company Baker Hughes show 108 active rigs in Oklahoma and all of them are […]

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Occidental Petroleum boosts production forecast after showing an increase in the first quarter, largely from Texas shale deposits UPI/Gary C. Caskey HOUSTON, May 6 (UPI) — Occidental Petroleum said Wednesday first quarter production was up 13 percent year-on-year in part because of output from the Permian shale in Texas. Occidental, known by its ticker symbol Oxy, said first quarter production rose year-on-year by 72,000 barrels of oil equivalent. "The increase was led by Permian resources which delivered a 46-percent increase to 98,000 boe per day, of which oil production grew by 25,000 barrels a day," President and Chief Executive Officer Stephen Chazen said in a statement Texas is the No. 1 oil producer in the nation. The Railroad Commission of Texas, the state’s energy regulator, said preliminary data from February show crude oil production averaged 2.34 million barrels per day. That’s an increase of 5.2 percent , or 117,550 […]

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