Category: Shale Oil

LONDON (Reuters) – U.S shale oil production will flatten and slightly decline in the second quarter of 2015 as companies cut their capital spending to cope with lower oil prices, energy consultancy PIRA said on Tuesday. Crude oil prices have roughly halved since June last year due to a supply glut and weak demand. There has been a drop off in the number of drilling rigs in the U.S. in recent weeks but stocks have continued to rise to record levels. [EIA/S] "The effect of falling prices rippled throughout the production chain, both on an operational and a financial level," PIRA said in a note. "For the companies covered, capex guidance for 2015 was 35 percent lower than 2014 capex on average." Last week, a monthly report from the Organization of the Petroleum Exporting Countries (OPEC) said that U.S. oil output would decline in late 2015. U.S. oil companies […]

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Whiting Petroleum Corp. announced plans Monday to offer 35 million shares as well as $1.75 billion of convertible senior notes, raising concerns about the oil-and-gas producer’s ability to find a buyer for the whole company. Earlier this month, The Wall Street Journal had reported that Whiting was looking to sell itself amid plummeting crude prices. However, the stock sale announced Monday signaled any larger takeover was unlikely soon, an analyst said. “I think it pretty much puts that idea to bed,” said Jason Wangler, an analyst at Wunderlich Securities Inc. “It doesn’t mean there wasn’t interest, but it obviously means they didn’t get the price they wanted.” Shares of Whiting fell 12% to $33.75 in after-hours trading following news of the offerings. The stock—beaten down in late 2014 amid the drop in oil prices—had risen 47% through the close Monday from its low in December. Denver-based Whiting began suffering […]

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HOUSTON, Mar. 23 A recent US rule about hydraulic fracturing on federal and tribal lands will have limited effect on existing US oil and natural gas production, said a Barclays Research analyst in New York. The US Department of the Interior issued a long-anticipated final rule to govern fracturing of onshore oil and gas wells ( OGJ Online, Mar. 20, 2015 ). Officials with the US Bureau of Land Management said the regulations, effective in 90 days, will improve safety and help protect groundwater by updating requirements for wellbore integrity, wastewater disposal, and public disclosure of chemicals. Onshore oil production from federal and tribal lands accounted for less than 10% of US oil production according to statistics from 2013, the latest available data, said Michael Cohen, Barclay’s research analyst. Most oil and gas production from federal jurisdiction involves the offshore Gulf of Mexico, he said. “The rulemaking is significant […]

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Schlumberger says it expects the oil and gas industry’s spending internationally on exploration and production to drop by 10-15% in 2015. March 23 (Reuters) – Prudence will be the new normal for the U.S. shale oil industry, which has quickly abandoned its heavy-spending ways in the face of sliding crude prices, Schlumberger Ltd, the world’s No.1 oilfield services provider, said on Monday. Spending cuts already announced by producers – to the tune of 25 to 60 percent – have dropped the rig count by 45 percent since late 2014, and output will soon decline or flatten out so prices can recover, Schlumberger’s Chief Executive Paal Kibsgaard said. U.S. oil prices have fallen by 50 percent since June to around $46 per barrel as Saudi Arabia and OPEC try to push higher cost producers out of the market. At the time of $100 oil, some U.S. highly-leveraged U.S. players were […]

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Williston’s Population Growth Taxes Infrastructure Williston Service Population Grew 20% The Bakken-Three Forks rig count decreased by five t0 97 rigs running across our coverage area by the end of last week. In recent Bakken news, a study reveals that Williston, N.D. is experiencing population growth that is ten times the normal rate. Infrastructure maintenance and improvements are a growing concern throughout the state as growing populations and oil equipment demands have taxed the current roadways and services. Read more: Population Grows 20% in Williston The U.S. rig count fell another 56 to 1069 rigs running as of today. A total of 242 rigs were targeting natural gas (down 15 from the previous week) and 825 were targeting oil in the U.S. (41 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 99 rigs are running in the Williston Basin across […]

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(Bloomberg) — The biggest retreat from U.S. oil fields on record is showing signs of subsiding. Oil explorers sidelined 41 drilling rigs this week, the smallest drop in three weeks and down from the average 59-rig decline in February. The count has fallen for 15 straight weeks to 825, reaching the lowest level in more than five years, Baker Hughes Inc. said on its website Friday. The country has lost an unprecedented 750 oil rigs in the past 15 weeks as collapsing prices force drillers to let go of thousands of workers and retreat from shale formations. The slide in the rig count threatens to bring to a halt the oil production boom that turned the U.S. into the world’s largest fuel exporter. “While we’re still going to see declines on a weekly basis, the retreat is definitely losing steam,” James Williams, president of energy consulting company WTRG Economics, […]

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In this March 29, 2013 photo, a worker switches well heads during a short pause in the water pumping phase, at the site of a natural gas hydraulic fracturing and extraction operation run by Encana Oil & Gas (USA) Inc., outside Rifle, in western Colorado. Proponents of hydraulic fracturing point to the economic benefits from vast amounts of formerly inaccessible hydrocarbons the process can extract. Opponents point to potential environmental impacts, with some critics acknowledging that some fracking operations are far cleaner than others. (AP Photo/Brennan Linsley) The Obama administration has taken its biggest step yet to regulate fracking on federal land by imposing new environmental safeguards on the technique that has turned America into a shale energy superpower and upturned global energy markets. In a move that will be closely watched by other countries debating shale development, the administration said on Friday that it would introduce new rules […]

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The rules will require disclosure of chemicals used at well sites. ENLARGE Photo: Getty Images WASHINGTON—The Obama administration on Friday issued comprehensive rules for hydraulic fracturing, seeking to set a national standard for controversial drilling practices that have helped fuel a domestic oil and natural-gas boom. The regulations, in the works since 2012, triggered criticism from oil and natural-gas companies that they were too onerous and from environmental groups that they didn’t go far enough. Two influential groups representing oil and natural-gas companies filed a lawsuit to block the rules just minutes after they were announced. The rules directly apply to a small percentage of oil and gas drilling on federal lands, which account for 11% of the natural gas and 5% of the oil the U.S. consumes, according to Interior Department data. Most hydraulic fracturing, known as fracking, occurs on private or state land. But states and companies […]

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(Bloomberg) — The Obama administration’s new fracking regulations were attacked in an oil industry lawsuit as lacking scientific and engineering evidence to support them. The Independent Petroleum Association of America contends regulations issued Friday are based on “unsubstantiated concerns” and asked a federal judge in Cheyenne, Wyoming, to rule them invalid. The new rules don’t take effect for at least 90 days. The rules require those drilling on federal lands to reveal the chemicals they use, meet well construction standards and safely dispose of contaminated water. Hydraulic fracturing, or fracking, injects the high-pressure water and chemicals to free oil and natural gas from underground deposits. Mark Barron, a Denver-based lawyer for the Independent Petroleum Association, said the group may ask for an order blocking the rules from taking effect after it has reviewed them in detail. The Washington-based association named the U.S. Bureau of Land Management and Interior Secretary […]

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An oil worker outside of Midland, Texas, in December. Even with sliding oil prices, Midland boasts the lowest metro jobless rate in the country. Bloomberg Midland, Texas, a symbol of the American oil boom that has recent run into shaky ground, still has the  lowest unemployment rate in the nation at just 2.6% in January, according to figures from the Labor Department published Friday. The Texan oil town was followed by Lincoln, Neb., a consistently stable employer, at 2.8%. That’s the same jobless rate as that of the state of North Dakota, also at the center of the energy sector’s expansion and still the lowest rate of any state in the nation , a separate report recently showed. Oil prices have plunged by more than 50% in the last eight months, raising concerns about the financial condition of some energy producers and refiners. In contrast, El Centro, Calif., has […]

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