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Technical options for processing additional light tight oil volumes within the United States

Preface U.S. oil production has grown rapidly in recent years. U.S. Energy Information Administration (EIA) data, which reflect combined production of crude oil and lease condensate, show a rise from 5.6 million barrels per day (bbl/d) in 2011 to 8.7 million bbl/d in 2014. Increasing production of light crude oil from low-porosity, or tight, resource formations in regions like the Bakken, Permian Basin, and Eagle Ford, often referred to as light tight oil (LTO), accounts for nearly all the net growth in U.S. crude oil production. EIA’s March 2015 Short-Term Energy Outlook (STEO) forecasts U.S. crude oil production averaging 9.3 million bbl/d in 2015 and 9.5 million bbl/d in 2016, well above the 2014 average level but only moderately above production during December 2014. EIA’s Annual Energy Outlook (AEO) projects further production growth, but its pace and duration remain uncertain, as shown by the significant differences in both the […]

Posted On : Published By : Tom Whipple
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Cheap Oil Is Squeezing Property Owners in Energy Hubs

More than $1 trillion in U.S. real estate debt from the last decade’s property boom is starting to come due as oil prices stagnate, squeezing property owners in cities and towns centered around the energy business. The 50 percent plunge in crude values since June is already dragging down property prices in Texas, according to Green Street Advisors LLC. Real estate investors are adjusting their underwriting across the state as they gird for contraction at energy companies, demanding higher yields on their investments, the property-research firm said. “It is going to be harder and more costly for borrowers in energy hubs to refinance loans in today’s environment, versus when oil was $100 a barrel,” Andy McCulloch, an analyst at Newport Beach, California-based Green Street, said in an e-mail. “Just how much harder or costly will depend.” Even as U.S. commercial real estate values surge past records set in 2007, […]

Posted On : Published By : Tom Whipple
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Exclusive: California used 70 million gallons of water in fracking in 2014

SAN FRANCISCO (Reuters) – California oil producers used 214 acre-feet of water, equivalent to nearly 70 million gallons, in the process of fracking for oil and gas in the state last year, less than previously projected, state officials told Reuters on Thursday. Hydraulic fracturing, or fracking, occurs when water and some chemicals are injected deep underground at high pressure to break up rock and release oil and gas into wells. The practice has been criticized in the state, which is suffering from a drought so severe that Governor Jerry Brown announced the first-ever mandatory 25 percent statewide reduction in water use on Wednesday. “Hydraulic fracturing uses a relatively small amount of water – the equivalent of 514 households annually,” said Steven Bohlen, the state oil and gas supervisor. About 100,000 gallons of water is used on average, he said. Previous industry estimates said that fracking used about 100 million […]

Posted On : Published By : Tom Whipple
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Bakken Rig Count Drops to 91

Crude by Rail Skyrockets The Bakken-Three Forks rig count dropped by six at 91 rigs running across our coverage area by midday Thursday. In recent Bakken news, the Energy Information Administration (EIA) released the latest data for crude by rail  (CBR) across the country that shows a significant increase over the last five years. Crude by rail continues to be highly controversial as people question the safety for individuals and the environment. Read more: Crude by Rail Up 1700% The U.S. rig count fell another 20 to 1028 rigs running as of today. A total of 211 rigs were targeting natural gas (down 11 from the previous week) and 812 were targeting oil in the U.S. (1 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 91 rigs are running in the Williston Basin across MT, ND, and SD. 90 are […]

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Economic risks may emerge in North Dakota

Standard & Poor’s says there may be sub-state economic issues in North Dakota because of a depressed oil market. File Photo by photostock77/Shutterstock. CHICAGO, April 3 (UPI) — The rig count in North Dakota continues to decline and the economic health of cities depending on the oil industry may start to suffer, credit analysis finds. State data show 94 rigs actively exploring for or producing oil and natural gas. That’s down 2 percent since the start of the week and a reflection of spending cuts enacted by energy companies reacting to the low price of oil. State-wide, analysis from Standards & Poor’s finds the North Dakota economy will be able to cope with a depressed energy sector. For cities and counties in the oil-rich parts of the state, the slowdown could result in decreased revenues during the second half of 2015 and early 2016. "Oil-industry activity in North Dakota […]

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Texas energy sector can weather the storm, officials say

Texas regulators say policies are in place for the state to cope with the low price of crude oil. UPI/Gary C. Caskey SAN ANTONIO, April 3 (UPI) — The Texas oil and natural gas sector may be facing challenges in the low oil price environment but it’s well tooled to weather the storm, officials said. The Railroad Commission of Texas, the state energy regulator, reported total crude oil production for January, the last full month for which data are available, was 2.2 million barrels per day, up from the 1.9 million bpd reported in January 2014. Texas is the No. 1 oil producer in the nation. About half of all rigs actively exploring for or producing oil in the United States are in Texas. Railroad Commissioner Ryan Sitton told the San Antonio Petroleum Club the state is rivaling its national and international peers as a result. "The long-term fundamentals […]

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Clock keeps ticking toward North Dakota oil tax break

(Reuters) – The clock kept ticking in March on a potential $5.3 billion, two-year tax break for North Dakota’s oil industry after a state-calculated average of the month’s crude price fell below $52.59 per barrel. The state waives its 6.5 percent oil extraction tax if the monthly price of benchmark West Texas Intermediate (WTI) crude at the Cushing, Oklahoma, transport hub falls below an inflation-adjusted limit, set at $52.59 per barrel for 2015, for five consecutive months. For March, the average calculated price was $47.76 per barrel, according to data from the North Dakota tax commissioner’s office. The March average was a drop from the February average of $50.86 per barrel. The tax break kicks in if the average monthly price is below that $52.59 level for the next two months. If it is off even one month, the clock resets. The tax returns if the average price exceeds […]

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U.S. oil rig count cull eases, approaches low point

NEW YORK (Reuters) – Two weeks of thin declines in the U.S. rig count have raised expectations that drilling activity is nearing a pivotal level that could dent production, bolster prices and coax idle rigs back to the field after a precipitous cull since October. Energy producers responded quickly to a steep drop in oil prices over the last six months, idling nearly 800 rigs, or 50 percent, since a peak of 1,609 rigs in October. In the last week of January, rigs fell by 94, the biggest drop on record, according to a weekly survey by oil service firm Baker Hughes. [RIG/U] U.S. companies remain nervous about oil prices. Spending has been cut as prices fail to rebound significantly, and further price drops could quickly lead to more shrinkage in the rig count. But the decline has slowed, dropping by just 23 rigs in the last two weeks, […]

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Baker Hughes: US Oil Rig Weekly Decline Smallest Since December

The number of rigs drilling for oil in the US declined by 11 this week to 802, the smallest decline since December, Baker Hughes says. April 2 (Reuters) – The number of rigs drilling for oil in the United States declined by 11 this week to 802, the smallest decline since December, oil services firm Baker Hughes said in its closely watched survey on Thursday. The data, which was released a day earlier due to the Good Friday holiday, compares with declines of 12 and 41 rigs in the prior two weeks and is a sign the collapse in drilling over the past few months has reached its low point. After a precipitous drop since October, the U.S. oil rig count is nearing a pivotal level that experts say could begin to dent production, bolster prices and even coax oil companies back to the well pad in the coming […]

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Itochu to Post Loss on Samson U.S. Oil and Gas Investment

(Bloomberg) — Itochu Corp. said it will post a loss of about 38 billion yen ($317 million) on a U.S. shale oil and gas investment amid a downturn in energy prices. The loss resulting from Itochu’s 25 percent stake in Samson Investment Co. will be booked in the earnings for the fiscal year ended March 31, the Tokyo-based trader said. On a non-consolidated basis, the figure will rise to 43 billion yen. The full-year profit target of 300 billion yen hasn’t been affected, Itochu said. Itochu joined the 2011 KKR & Co.-led purchase of most of Tulsa, Oklahoma-based Samson as part of the biggest leveraged buyout in the oil and gas production industry at the time, according to data compiled by Bloomberg. It was Itochu’s third-largest acquisition in raw materials, data show. Itochu, Japan’s third-largest trading house, paid 78 billion yen, worth $1.04 billion at the time, for the […]

Posted On : Published By : Tom Whipple