Category: Shale Oil

URL: http://www.rigzone.com/news/oil_gas/a/136651/Another_Cold_Blast_On_Track_For_Permian_Oil_Patch_In_Texas More icy weather is expected this week in the Permian Basin of Texas, on the heels of freezes that disrupted oil and gas work last week. HOUSTON, Jan 7 (Reuters) – More icy weather is expected this week in the Permian Basin of Texas, on the heels of freezes that snarled truck traffic, caused power outages and disrupted oil and gas work last week, the National Weather Service said on Wednesday. Parts of North Dakota, the top U.S. oil producing state after Texas, were also forecast to have snow or blizzards on Thursday, the NWS said, as blasts of arctic air moved across much of the country. Apache Corp, a leading producer in the Permian, said on Wednesday it suffered a modest impact from the freezes last week, while Pioneer Natural Resources Co said on Tuesday severe winter weather had disrupted its production and drilling operations in […]

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There’s no doubt that US-based fracking – the process through which oil and gas deposits are blasted from shale deposits deep underground – has caused a revolution in worldwide energy supplies. Yet now the alarm bells are ringing about the financial health of the fracking industry, with talk of a mighty monetary bubble bursting − leading to turmoil on the international markets similar to that in 2008. In many ways, it’s a straightforward case of supply and demand. Due to the US fracking boom, world oil supply has increased. But with global economic growth now slowing – the drop in growth in China is particularly significant – there’s a lack of demand and a glut in supplies, leading to a fall in price of nearly 50% over the last six months. Fracking has become a victim of its own success. The industry in the US has grown very fast. […]

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American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June. But signs of strain are building in the oil patch, where revenue growth hasn’t kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment. Energy analysts warn defaults could be coming. “The group is not positioned for this downturn,” said Daniel Katzenberg, an analyst at Robert W. Baird & Co. […]

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North Dakota’s Governor, Jack Dalrymple In a few short days, the North Dakota legislature heads back into session. Expected to take center stage are several key funding issues recently made more crucial by the continued decline in oil prices First is an initiative by GOP members that would effectively wipe out the state income tax. A new bill that is expected to be introduced early in the session will reduce the income tax rate to zero. This is a counter to Gov Dalrymple’s proposal for a 10% decrease in personal and corporate income tax that was made in an effort to draw more people to the region. This issue is highly contested since there is great concern over the potential lost revenue due to plummeting oil prices. North Dakota’s state funding is tightly tied to taxes on oil and gas production and was responsible for more than half the state’s […]

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There has been considerable dispute over how many new wells required to keep production flat in the Bakken and Eagle Ford. One college professor posted, over on Seeking Alpha , figures that it would take 114 rigs in the Bakken and 175 in Eagle Ford to keep production flat. He bases his analysis on David Hughes’ estimate that the legacy decline rate fir Bakken wells is 45% and 35% for Eagle Ford wells. And he says a rig can drill 18 wells a year, or about one well every 20.3 days. The EIA has comes up with different numbers. The data for the chart below was taken from the EIA’s Drilling Productivity Report . Legacy Decline The EIA has current legacy decline at about 6.3% per month for Bakken wells and about 7.7% per month for Eagle Ford wells. That works out to be about 54% per year for […]

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OGA, N.D. – Ben Chorn had a good vacation in Minnesota last month, making it to a Vikings game, a hockey game in Duluth and getting engaged. But while he was gone, the price of oil hit him personally. “While on vacation, I got a call from someone who’s covering for me and said, ‘Hey your rig’s being laid down,’” said Chorn, who does geology work on rigs for Sunburst Consulting. He’s had a slow six weeks since then. The oil price drop will impact fringe regions in the Bakken the most, experts said, because the oil there costs more to extract. “I think those areas will slow down, but we’ll come back and we’ll get them again,” said Kathy Neset, a geologist with Neset Consulting in Tioga. Chorn said the rig he was meant to work on was pulled by a smaller operator and was on the fringe […]

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2014 Was a Record Year for Bakken 2014 was one for the record books as exploding production elevated the Bakken region to major-player status amongst the world’s energy leaders. January began as North Dakota set several all-time highs including having over 10,000 producing wells averaging 973,045 b/d and natural gas at 1,086,571 MCF/day. By June, the NDIC announced it had hit the 1 million b/d in production. This long anticipated goal was slowed a bit by difficult weather in the winter but by the time it happened, the U/S. was positioned as the  worlds largest oil producer . Even as oil prices began to decline throughout the fall, production continued to break records and by September, production averaged 1.2 million b/d . The latest numbers from the NDIC show that at the end of the year, the Bakken and Three Forks regions alone averaged 1,118,010 barrels per day and boasted two more all time high […]

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US Expected To Increase Oil Production In 2015 Despite Declining Oil Prices thumbnail Oil prices continue to fall, but don’t expect the U.S. to curtail its production in 2015. In fact, a recent report from the U.S. Energy Information Administration suggests that U.S. oil production will grow in 2015. Through an analysis of oil permits, rig movement and the groundbreaking of new drilling projects, known as spudding, in North Dakota, a state that is home to some of the most active production fields in the country, the EIA’s “Drilling Productivity Report” found that U.S. oil production should continue to increase in 2015. The agency is expecting U.S. crude oil production to average 9.3 million barrels per day (bbl/d) in 2015, which would be an increase of 0.7 million bbl/d from 2014, but down from expected growth of 0.9 million bbl/d in last month’s Short-Term Energy Outlook . The survey […]

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