Category: Shale Oil

Breathtaking booms and obliterating busts have made the oil and gas business. Booms draw money, which begets more money, which allows for technologies to be invented or perfected, and it builds enthusiasm that turns into blind faith among investors, and they throw more money at it. The money gets drilled into the ground. The debt remains on the balance sheet. Production soars. Demand doesn’t keep up. Storage levels rise. The price begins to plunge. And all hell breaks loose. The fracking bust didn’t start last summer when the price of oil began to skid. It started in October and has progressed with phenomenal rapidity. In the latest week, according to Baker Hughes, which publishes the data every Friday, drillers idled an additional 33 oil rigs. Only 986 rigs were still active, down 38.7% from October, when they’d peaked at 1,609. In a period of 20 weeks, drillers have cut […]

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WILLISTON, N.D., Feb 26 (Reuters) – North Dakota’s largest oil producer, Whiting Petroleum Corp, struck a confident tone for 2015 on Thursday, saying it will hydraulically fracture all wells it drills even as peers scale back, but its bold tactic prompted a sharp drop in its share price. Executives said they were sure that the company can still make a profit with oil prices around $50 per barrel. Whiting shares dropped three percent as details of the plan were announced on a conference call Thursday morning and were down more than 8 percent in afternoon trading. Though the company has cut capex in half for 2015, some analysts said a deeper reduction is needed. The Denver-based company plans to drill and frack 265 wells this year, mostly in North Dakota but also in Colorado’s Niobrara shale formation. The number is at least 15 percent lower from 2014, though final […]

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Feb 26 (Reuters) – Oil and natural gas company SandRidge Energy Inc set a capital budget of $700 million for 2015, 56 percent lower than a year earlier, as the company responds to a slump in crude oil prices. The company said it would reduce its rig count to 7 by mid-year from 32 at the start of 2015, joining a slew of oil producers who have said they would use fewer rigs this year. Net income rose to $314.1 million, or 48 cents per share, in the fourth quarter ended Dec. 31, from $73.4 million, or 6 cents per share, a year earlier. Revenue fell more than 25 percent to $346.9 million. (Reporting by Anannya Pramanick in Bengaluru; Editing by Sriraj Kalluvila) WHAT DO YOU THINK?

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SB 2103 to Fix Critical Infrastructure Governor Dalrymple of North Dakota signed legislation that grants massive emergency funding to counties and cities statewide in order to bolster the lagging infrastructure. On Monday, the ND Senate unanimously approved SB 2103 for roads and other critical infrastructure throughout the state with the bulk of the resources allocated to its oil producing counties. The $1.1 billion is in addition to a $2.3 billion infrastructure spending package that is already in place. The bulk of the money is targeted to fix roadways and bridges that have not been able to keep up with the increased traffic of heavy oil field equipment that the shale boom has brought to the Bakken area. Many of the region’s oil-producing counties still use hundreds of miles of gravel roads as main transportation routes often seeing as many as 1,000 vehicles a day, compared to fewer than 50 before […]

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Sign up for our daily Energy Newsletter Whting Petroleum plans rig reductions in North Dakota, but notes overall production should increase during the first quarter. Photo by David Gaylor/Shutterstock DENVER, Feb. 26 (UPI) — U.S. shale player Whiting Petroleum said it expects overall production to rise, though fewer wells are planned in areas like the Bakken play in North Dakota. Whiting said its fourth quarter total production average of 131,260 barrels of oil equivalent per day was 30 percent higher year-on-year and 13 percent above third quarter 2014 levels. First quarter production levels are expected to average 163,000 boe per day. Whiting, which has headquarters in Denver, acquired rival Kodiak Oil & Gas last year in an all-stock transaction valued at $6 billion. Whiting Chairman James Volker said the acquisition made his company the largest producer in the Bakken shale region in North Dakota, a basin at the heart […]

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LONDON (Reuters) – North Dakota’s oil producers have pulled back to the core areas of the Bakken formation to cut costs and maximize output amid the slump in prices. The number of active rigs in the state has fallen to just 121, from 190 a year ago, according to an active rig list published by the state’s Department of Mineral Resources (DMR) on Wednesday. The rig count is now below the threshold of “at least 130” DMR Director Lynn Helms identified last month as needed to sustain output at the current level of just over 1.2 million barrels per day. But more important than the raw number is their distribution across the state, with drilling now increasingly concentrated in only the most promising areas. Of the 121 rigs active on Wednesday, 115 are drilling in just four counties at the heart of the Bakken – Dunn, McKenzie, Mountrail and […]

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Oneok Partners LP, Tulsa, has suspended construction on 500 MMcfd of gas processing capacity at three plants in theWilliston basin of North Dakota, Powder River basin in Wyoming, and Anadarko basin in Oklahoma. Continue Reading

In petroleum capitals such as Midland, a place long known for swaggering wildcatters who made and lost fortunes, personal jet travel becomes a bellwether when times get tight. Photographer: Thomas Black/Bloomberg (Bloomberg) — The oil boom last year was easy to see at the airport in Midland, Texas, the gateway to the biggest crude-producing region in the U.S. The 30 or so spaces for private planes were often filled. On one day in early February, a lone corporate jet sat on the tarmac, the empty spots a harbinger of the slowdown looming in a city that is 85 percent dependent on the oil and gas industry. In petroleum capitals such as Midland, a place long known for swaggering wildcatters who made and lost fortunes, corporate and personal jet travel has been a bellwether for the health of the energy business. That indicator took a turn down in January, when […]

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HOUSTON (Reuters) – Shale oil producers are throttling back so quickly on drilling that U.S. crude output could fall sooner than expected, within months, executives say as they slash costs to cope with tumbling crude prices and compete with Persian Gulf rivals. About a dozen chief executives who talked to Reuters or who spoke publicly, acknowledged they were taken aback by the scale and speed of the cutbacks, noting how this oil price downturn was different from several previous episodes in their careers. For one, companies are cutting costs deeper and faster than before as Wall Street investors increasingly place a premium on capital discipline rather than just production growth. Some also say the nature of shale makes it easier for companies to defer work and wait for prices to recover. The wells that drove the U.S. energy boom of the last decade rapidly deplete, so overall output will […]

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Oil production (all liquids in barrels per day) in the US and Canada. (From Ron Patterson’s blog ). Does this rapid growth indicate that the resources are abundant and that all the worries about peak oil are misplaced? Maybe not…. Sometimes, we use a simple metric to evaluate complex systems. For instance, a war is a complex affair where millions of people fight, struggle. suffer, and kill each other. However, in the end, the final result is seen in terms of a yes/no question: either you win or you lose. Not for nothing, General McArthur said once that “ there is no substitute for victory” . Now, think of the economy: it is an immense and complex system where millions of people work, produce, buy, sell, and make or lose money. In the end, eventually, we think that the final result can be described in terms of a simple […]

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