Category: Shale Oil

LONDON (Reuters) – The United States will remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth. The agency also said in its Medium Term Oil Market report that oil prices LCOc1, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years. Oil prices deepened their decline after the Organization of the Petroleum Exporting Countries in November shifted strategy and declined to cut its own output, choosing to retain market share that has been eroded by rival supply sources such as U.S. shale oil. But IEA Executive Director Maria van der Hoeven, launching the report in London, said while OPEC may win back […]

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The Bakken-Three Forks rig count decreased by seven t0 180 rigs running across our coverage area by the end of last week. The NDIC notes 178 rigs are active in North Dakota, but around Continue Reading

(Bloomberg) — Talisman Energy Inc., the Canadian producer being acquired by Spain’s Repsol SA, reported about $1.37 billion in one-time charges for the fourth quarter as it reduced the value of certain assets because of slumping crude-oil prices. “The company partially impaired its investment in the Eagle Ford by $614 million due entirely to price declines, and fully impaired its investment in Block K44 in the Kurdistan region of Iraq by $234 million after determining that future investment in a capital constrained environment was unlikely,” Calgary-based Talisman said in a statement on Marketwired Tuesday. It also wrote down North Sea assets and a joint venture with Colombia’s Ecopetrol SA. Talisman joins other oil companies, including BP Plc, in lowering the value of assets after oil prices fell by more than half from a June high. The industry has cut more than $40 billion in spending and fired thousands of […]

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Tumbling oil prices have increased borrowing costs among energy companies, with spreads on high-yield bonds issued by energy firms soaring to 800 basis points, or 8 percentage points, as of January, from 330 points in June, according to the BIS. Photographer: Susana Gonzalez/Bloomberg (Bloomberg) — Energy companies may be slow to cut oil production after a 50 percent price drop because they need to service debt that has risen fourfold since 2003, according to the Bank for International Settlements. “Debt-service requirements may induce continued physical production of oil to maintain cash flows, delaying the reduction in supply in the market,” the Basel, Switzerland-based institution said in a report Saturday. Energy companies’ outstanding debt rose to more than $800 billion this year from less than $200 billion in 2003, said BIS, which is owned by central banks. Sinking oil prices weakened the value of assets used as collateral by producers […]

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Small business owners in North Dakota, the United States’ second-largest oil-producing state, remain confident despite plunging crude oil prices. WILLISTON, N.D., Feb 6 (Reuters) – Even as plunging crude oil prices fuel anxiety in North Dakota, small business owners in the No. 2 U.S. oil producing state say they are confident that demand for their products and services will remain strong enough to keep things humming. North Dakota’s oil patch has been one of the faster-growing U.S. regions. Small businesses employ three-fifths of the state’s private workforce, about 195,000 people, with food service and construction among the larger employers, according to data from the U.S. Small Business Administration (SBA). While big oil companies grab the most headlines out of the state, much of the local economy still relies on hotel owners, plumbers, contractors and other small businesses, said Mike Gallagher, manager of the SBA’s North Dakota district. "There’s a […]

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Tumbling crude oil prices have started the clock ticking on a potential $5.3 billion, two-year tax break for North Dakota’s oil producers. WILLISTON, N.D., Feb 5 (Reuters) – Tumbling crude oil prices have started the clock ticking on a potential $5.3 billion, two-year tax break for North Dakota’s oil producers. The countdown, which started this week, holds the promise of a silver lining of sorts for oil producers and their contractors in the No. 2 oil-producing U.S. state, many of whom have struggled with a roughly 50 percent drop in oil prices since last June. North Dakota officials designed the tax waiver in 1987 to encourage drilling. Here’s how it works: North Dakota 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 $52.59 per barrel for five consecutive months. For January 2015, […]

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The West Texas city of Midland has yet to be affected by the downturn in crude oil prices, but a prolonged energy slump would eventually be felt. Midland, Texas’ downtown. Source: City of Midland Chamber of Commerce With crude oil prices at their lowest levels in years, municipalities that depend primarily on the oil and gas industry for their economic vitality are suddenly at risk of seeing drastic slowdowns in the local economy, and possibly some red ink. One such city is Midland, Texas, an oil and gas town like few others. Oil is its lifeblood, and throughout its history, the Tall City has experienced many up-and-down cycles in the energy industry. So, how is it weathering the current one? The short answer is that months after oil prices first began to slump, the city itself is doing fine – so far. In fact, a relatively short-term slowdown would […]

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A floor hand signals to the driller to pull the pipe from the mouse hole on a drilling rig near Encinal, Texas. Shale wells, like those in the Eagle Ford, deplete as much as 50 percent in their first year, faster than conventional ones, putting pressure on companies to find new wells. Photographer: Eddie Seal/Bloomberg (Bloomberg) — Back in October, Jill Potts waved off concerns about falling crude prices, pointing to the long lines of trucks forming outside her oil field supply store in South Texas as evidence that the shale boom was still going strong. But then oil kept plunging — from $82.70 a barrel back on that sunny mid-October day to $70, then $60, and ultimately touching as low as $43.58 before settling at about $50 Thursday. Potts’s mood has changed. Standing inside her shop in Cuero, Texas, surrounded by industry wrenches the size of T-Rex femurs, […]

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WILLISTON, N.D., Feb 4 (Reuters) – Halliburton, Statoil ASA, Hess Corp and other North Dakota energy companies have decided, for now, not to lay off staff in the No. 2 U.S. oil producing state, hoping to be prepared for any prolonged rebound in crude prices. Many oil producers and their contractors are trying to strike a balance between cutting costs and maintaining workforce reserves after a more-than 50 percent drop in oil prices since last June. The drop has made some oil patch investors anxious that North Dakota could experience a third oil bust after slumps in the 1950s and 1980s. Local business leaders, though, say they’re confident the state’s economy can abide the slowdown. Indeed, oil prices are nothing if not volatile, up about 19 percent in the past four trading days after plunging for months. Whiting Petroleum Corp, the largest North Dakota oil producer, has no plans […]

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