Category:

Apache’s 2015 capital budget less than half of last year’s $8.5 billion

HOUSTON, Feb. 12 02/12/2015 Apache Corp. , Houston, plans a capital budget of $3.6-4 billion in 2015, with $2.1-2.3 billion directed toward onshore North America and $1.5-1.7 billion for international and offshore. The new budget is down significantly from last year’s $8.5 billion. The company lost $5.4 billion on the year, compared with earnings of $2.2 billion in 2013. In the fourth quarter, the company reported a net loss of $4.8 billion, compared with earnings of $174 million in fourth-quarter 2013. After reducing its rig count from an average of 91 in last year’s third quarter to an estimated 27 by the end of February, Apache plans to run an average of 17 rigs onshore North America in 2015. The company is also reducing its frac crews by 50% during the same time period and delaying some well completions until service costs decrease materially. “In 2015, Apache will run […]

Posted On : Published By : Tom Whipple
Category:

Oklahoma shale booming

Oklahoma shale seen as mirroring developments in Texas and North Dakota, analysis finds. Photo by photostock77/Shutterstock Analysis from Wood Mackenzie finds the South Central Oklahoma Province, or SCOOP, to be economical with a price of West Texas Intermediate crude oil, the U.S. benchmark, as low as $41 per barrel, more than 15 percent below the current price. "The region will see drawbacks, rig counts are down in the near-term but production won’t fall off by much and we expect it to bounce back quickly in 2016," Brandon Mikael, a Wood Mackenzie analyst for the Lower 48, said in a Tuesday statement. Last year, Continental Resources, which is one of the largest operators in the Bakken oil reserve area in North Dakota, said its acreage in the SCOOP basin was a "significant" part of its growth strategy. According to oil services company Baker Hughes, shale basins in Oklahoma were among […]

Posted On : Published By : Tom Whipple
Category:

North Dakota Tax Trigger Getting Closer

Countdown to ND Tax Incentive The countdown has begun on North Dakota’s small oil tax trigger. This measure, which kicked in at the beginning of the month, was introduced by lawmakers to provide tax incentives to strained producers in order to ease the sting of prolonged lower crude prices. The formula for the tax trigger states that when West Texas Intermediate (WTI) stays below $52.58 (2015) for five consecutive months, then the state waives its 6.5% oil extraction tax. Since January crude prices averaged $47.98 per barrel, the trigger took affect February 1st. As long as the price stays below $52.59 for the next four months, the incentive will take effect. Once the prices inches up, the calculations start over. Related: No Income Tax for North Dakota? North Dakota state legislators jumped this week to take measures to extend the trigger through June 30, 2019. House Bill 1437 extends a smaller trigger that […]

Posted On : Published By : Tom Whipple
Category:

As Oil Price Drops, Texas Lenders Watch for Fallout

ENLARGE Banker Hugh B. "Trip" Ruckman III hasn’t lent large sums to the drillers dotting the Texas landscape near Karnes City. But his bank has lent to small hotels that rely on oil workers for much of their business. Photo: Ben Sklar for The Wall Street Journal KARNES CITY, Texas— Hugh B. “Trip” Ruckman III ’s family ties to the Karnes County National Bank date to 1901 when it started making loans to cattle ranchers and farmers in this rural community in South Texas. The mobile-home camps and sandstone-colored motels along Highway 181, where some rooms regularly cost more than high-rise hotel rooms in Houston and San Antonio, are newer additions to the local economy. So are the 18-wheelers that race down the streets and the mud-splattered pickup trucks that fill the Dairy Queen parking lot at lunchtime, their sides dotted with energy-company logos. Mr. Ruckman’s community bank doesn’t […]

Posted On : Published By : Tom Whipple
Category:

Occidental Petroleum Reduced 2015 Capex by 33%

Occidental Bakken Acreage|Click to Enlarge Occidental Petroleum Corporation reported during its earnings call in late January that the company sustained a fourth quarter loss of $3.4 billion. In response to low oil prices, Occidental announced it will scale back its 2015 capital spending by 33 percent to $5.8 billion from $8.7 billion spent in 2014. In addition to the cuts, the company will also be reducing its activity in the Bakken. This confirms the news we reported in October that the company was in the process of restructuring, and looking to sell off its Williston Basin assets. Read more here . Stephen Chazen, President and Chief Executive Officer confirmed that the company “minimized our development activities in the Williston Basin, domestic gas properties, Bahrain, and the Joslyn oil sands project, as these have subpar returns in this current product price environment. These efforts should result in a reduction in the cost of […]

Posted On : Published By : Tom Whipple
Category:

Halliburton to Cut 8% of Workforce

ENLARGE A Halliburton Co. worker walks through an Anadarko Petroleum Corp. hydraulic fracturing site north of Dacono, Colo. Photo: Bloomberg News Halliburton Co. , the world’s second-largest oil-field services company, said Tuesday it plans to shed up to 8% of its global workforce as low oil prices force energy companies to rein in spending . The job cuts could amount to 6,400 layoffs; the company says it has more than 80,000 employees around the world. “We are faced with the difficult reality that reductions are necessary to work through this challenging market environment,” the company said in an emailed statement. Halliburton said the job cuts aren’t related to its pending acquisition of oil field rival Baker Hughes Inc., which was announced late last year. In its statement Tuesday, the company didn’t specify where in the world the layoffs would take place but said they would affect its entire line […]

Posted On : Published By : Tom Whipple
Category:

Halliburton to Cut Thousands of Jobs as Oil Slumps

NEW YORK, Feb 10 (Reuters) – U.S. oil services company Halliburton said on Tuesday it expects to cut potentially more than 6,000 jobs across the globe because of a "challenging market environment" resulting from low oil prices. Halliburton, the latest in a growing list of major oil industry companies laying off workers because of a worldwide glut of crude, said it expects to let go 6.5 percent to 8 percent of its 80,000-strong workforce, amounting to between 5,200 and 6,400 jobs. The number includes the 1,000 jobs that had been cut in the eastern hemisphere in the fourth quarter of 2014, a company spokeswoman said. Halliburton said the impact of the layoffs would be across all company operations, but it did not offer specifics. Oil prices have dropped about half to $50 a barrel since June because of the global glut of oil, forcing many companies to reduce spending. […]

Posted On : Published By : Tom Whipple
Category:

Oil Drilling Slows as Crude Price Drops

The International Energy Agency describes a lasting bounce in oil prices as “inevitable.” But lower Chinese oil imports, persistent oversupply and Saudi laissez-faire may endanger the recovery. Photo: AP The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday. Companies drilled 28% fewer oil wells in January across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University’s Baker Institute for Public Policy. But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm. Energy mavens around the world are […]

Posted On : Published By : Tom Whipple
Category:

Voices in Arlington, Texas Unify to Protect Environment and Community From Fracking

Liveable Arlington, a new Texas grassroots environmental group, joins the growing number of anti-fracking groups forming around the world. The group was established at the end of January, as the battle to impose stricter ozone standards intensifies and the call for fracking bans and tighter ordinances on industry increase nationwide. Arlington, Texas, a Dallas suburb, sits atop the natural gas rich Barnett Shale. ”Once Arlington was known as a bedroom community. Now we are in the forefront of a potentially dangerous industrial experiment,” Ranjana Bhandari, one of the co-founders of Liveable Arlington, told DeSmogBlog. “We have lived with fracking all around us for many years now and have experienced its negative effects on air quality, public health, and now the earthquakes,” she says. Ranjana Bhandari, co-founder of Livable Arlington, in her backyard. ©2013 Julie Dermansky Bhandari and her family are among the few residents who turned down Chesapeake Energy […]

Posted On : Published By : Tom Whipple
Category:

Why rig cuts won’t save oil

The sharp drop in U.S. oil rig counts has helped lift crude prices off their lows, but it won’t slow production or alleviate oversupply, Goldman Sachs said. “The decline in the U.S. rig count likely remains well short of the level required to slow U.S. shale oil production to levels consistent with a balanced global market,” Goldman said in a note Tuesday. “Lower oil prices will be required over the coming quarters to see the U.S. production growth slowdown materialize.” It estimates the current rig count will bring production growth from the Big-three shale basins — Permian, Eagle Ford and Bakken — to 615,000 barrels a day in the fourth quarter of this year, while continued productivity growth may push that as high as 690,000 barrels a day. Which, not how many It’s about which rigs are getting cut. U.S. crude production was estimated at around 8.6 million barrels […]

Posted On : Published By : Tom Whipple