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U.S. Crude Production Advances Even as Prices Decline

Drillers that unlocked the shale oil boom in the U.S. are finding it hard to shut off the nozzle. U.S. crude production rose even as prices slumped to the lowest in more than five years and the number of rigs targeting oil decreased. In North Dakota’s prolific Bakken shale formation, output rose in November as the number of new wells coming online fell by 73 percent. The increases illustrate how improvements in horizontal drilling and hydraulic fracturing technology may prop up U.S. crude production even as companies cut spending, idle rigs and lay off thousands of workers with oil prices down more than 50 percent since June. “We have an oversupply of crude,” Michael Hiley, head of energy OTC at LPS Partners Inc. in New York , said yesterday. “Production keeps going up. There is not a great correlation between the rig count and production because drilling has gotten […]

Posted On : Published By : Tom Whipple
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North Dakota’s Oil Production Rises to New Record

North Dakota oil production rose to a record in November, even as energy companies drilled fewer wells and the rig count dropped to a near five-year low, state officials said. Energy companies in North Dakota’s prolific Bakken formation are dialing back how much they spend on exploring for new oil deposits because crude prices are languishing. But there is more oil flowing from fewer wells as companies tap only their most promising and profitable reserves. Oil output across the state hit a record 1.19 million barrels a day in November, the most recent month available, according to data released Wednesday by the state’s Department of Mineral Resources. North Dakota is the second-largest U.S. crude producer behind Texas, but the drop in oil prices over the last six months from more than $100 a barrel to less than $50 has spurred a rapid decline in the number of rigs drilling […]

Posted On : Published By : Tom Whipple
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Halliburton Cuts Jobs in Houston Amid Slumping Crude Oil

URL: http://www.rigzone.com/news/oil_gas/a/136736/Halliburton_Cuts_Jobs_in_Houston_Amid_Slumping_Crude_Oil Houston-based oilfield service major Halliburton is cutting jobs in Houston in response to the drop in crude oil prices, the company told Rigzone in an email release. The company did not say how many jobs it was cutting in Houston. “Halliburton continues to make adjustments to its workforce based on current business conditions. The company has made some workforce reductions in Houston,” Halliburton Public Relations spokesperson Chevalier Mayes said in the email release. “While these reductions are difficult, we believe they are necessary to work through this challenging market. We will continue to monitor the business environment closely and will make adjustments to the cost structure of our business as needed.” In December, Halliburton, which employees 80,000 workers in 80 countries, cut 1,000 workers in Europe, Asia, Africa, the Middle East and Australia due to falling oil prices. The company said then that the cuts were due […]

Posted On : Published By : Tom Whipple
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Halcón Resources Reduces 2015 Budget

Halcón Operations in Bakken In a press release on January 8th, Halcón Resources executives announced that they will slash their drilling and production budget almost in half for 2015. The Houston-based company affirmed it will reduc eoperations in the Bakken to two rigs in the Fort Berthold area of North Dakota. Read here for more about Halcón in the Bakken This is the second round of cuts for the Bakken producer in less than two months due to the continued decline in oil prices. Projected spending for the company is set at between $375 – 425 million, which represent a steep decline from 2014 numbers of $950 million. Even with decreased spending for 2015, production is expected to increase to an average 40,000-45,000 barrels per day this year, compared to 43,554 b/d in the third quarter of 2014. Halcon CEO Floyd Wilson says that, “Our plan is to deploy capital to […]

Posted On : Published By : Tom Whipple
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North Dakota Rig Count Drops Sharply As Oil Price Tumbles

URL: http://www.rigzone.com/news/oil_gas/a/136715/North_Dakota_Rig_Count_Drops_Sharply_As_Oil_Price_Tumbles WILLISTON, N.D., Jan 12 (Reuters) – The number of drilling rigs operating in North Dakota’s oil fields fell to 159 on Monday, the lowest level since November 2010 and the latest reaction to falling crude oil prices, according to state data. Overnight the state lost eight rigs, a steep one-day drop not seen for years in the No. 2 U.S. oil producer. Rigs are typically contracted by oil producers to bore through the earth and create horizontal wells. The rigs then move on, and the wells are hydraulically fractured, or "fracked." The number, which is tracked closely throughout North Dakota, comes after Continental Resources Inc, Oasis Petroleum Inc and other companies slashed planned spending for 2015, openly admitting they planned to use few rigs this year. The rig count is widely seen as a key barometer of an oil field’s health and longevity. More rigs means more […]

Posted On : Published By : Tom Whipple
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As Oil Plummets, How Much Pain Still Looms For US Energy Firms?

URL: http://www.rigzone.com/news/oil_gas/a/136705/As_Oil_Plummets_How_Much_Pain_Still_Looms_For_US_Energy_Firms With nearly a quarter of US energy shares’ value wiped out by oil’s 6-month slide, investors are wondering if the sector has taken enough punishment. NEW YORK, Jan 12 (Reuters) – With nearly a quarter of U.S. energy shares’ value wiped out by oil’s six-month slide, investors are wondering if the sector has taken enough punishment and whether it is time to pile back in ahead of earnings reports later this month. The broad energy S&P 1500 index gained more than 4 percent over the past month, suggesting many believe markets have already factored in the pain caused by oil prices tumbling by more than half since June below $50 a barrel. Yet since the start of this year, most energy stocks have given up some of those gains, revealing anxiety that some nasty surprises might still be lurking somewhere and that last month’s bounce may not […]

Posted On : Published By : Tom Whipple
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Tight oil boom can explain only part of drop in US oil product imports

We continue to look at what impact US tight oil has on global oil markets, in this post the reduction of US petroleum product imports. This analysis shows that only around one quarter of a drop of 1.7 mb/d since 2005/06 can be explained by the tight oil boom. Fig 1: US product imports The graph shows that US product imports peaked already in 2005/06, long before the tight oil boom started. The drop between that peak and 2010 was around 1 mb/d. Remember that the US went into recession end 2007.  A further drop of 700 kb/d happened during the tight oil boom. (1)    US product imports from Venezuela The biggest drop came from Venezuela and Virgin Islands. Fig 2: US product imports from Venezuela Product imports from Venezuela are in long-term decline since 1997.  In 1999 el Comandante  Chavez came to power, re-instating quotas and trying to […]

Posted On : Published By : Tom Whipple
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Oil price crash bankrupting ‘small oil’

Sherri McDaniel is already feeling the sting of the drop in crude oil prices from more than $115 per barrel in June to less than $50 in early January. She is president of ATEK Access Technologies, a small Minneapolis firm that owns TankScan, a wireless monitoring system that keeps track of fluid levels in oil tanks. Oil companies that use the system are starting to postpone orders, as they take a cautious approach to spending. “In the oil fields, they are starting to pull back pretty heavily,” McDaniel said. “They are literally taking tanks and laying them down on their sides.” As a result, she explained, “we have a number of big orders that are temporarily on hold.” A derrick hand works on an oil rig drilling into the Bakken shale formation outside Watford City, North Dakota. Getty Images ATEK Access Technologies is one of many small and midsize […]

Posted On : Published By : Tom Whipple
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North Dakota oil output forecast tabulated using internal model

WILLISTON, N.D. Jan 12 (Reuters) – A stark breakdown from North Dakota projecting how falling oil prices could affect production was formulated using proprietary corporate data and a state official’s personal model. Late last Thursday, the Department of Mineral Resources caused a stir in world oil markets by releasing slides from a presentation to the state legislature that included a range of output forecasts based on different oil price scenarios, including one showing production would begin to decline by the middle of this year if crude prices remained at current levels. The projections presented by Lynn Helms, head of the state’s energy regulatory agency, cut to the quick of a pivotal question for global oil traders and executives: How quickly will U.S. shale producers, particularly those in the booming Bakken of North Dakota, respond to the collapse in oil prices? While consultants and analysts have been frantically reviewing and […]

Posted On : Published By : Tom Whipple
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North Dakota county feels Bakken boom ebb away as oil falls

CROSBY, N.D. (Reuters) – Just over a decade ago, this sleepy farming community on the fringe of North Dakota’s Bakken shale formation hosted the state’s first horizontal oil well to be hydraulically fractured, or fracked, helping set in motion an economic revolution that shook the world. Today, Divide County may be another vanguard for the state, this time ominous, as the first to feel the full effect of a collapse in prices that has lopped more than 50 percent off the price of oil since the summer. Only five oil rigs were drilling in Divide County this week, down from 12 last August, according to state data. While those only account for a handful of the more than 162 rigs still drilling in North Dakota, the drop has been much steeper than elsewhere in the state and could signal trouble across the No. 2 U.S. oil producer behind Texas […]

Posted On : Published By : Tom Whipple