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Good Times Run Out for Sand Producers

ENLARGE Freshly washed sand is sifted into piles, waiting to be dried, stored and shipped at Fairmount Santrol’s Wisconsin Industrial Sand Co. in Menomonie, Wis. Stephen Maturen for The Wall Street Journal “This isn’t our first rodeo” has become a catchphrase among oil-industry executives who are laying off workers and dialing back spending in the wake of tumbling crude-oil prices. But for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business—and not all of them are ready for the wild ride, industry analysts say. Sand is an important ingredient in hydraulic fracturing, or fracking, which has pushed American oil output above 9 million barrels a day, rivaling the production of Saudi Arabia or Russia. Sand companies’ biggest customers used to be golf courses and glass manufacturers, but the oil boom brought energy clients to their door and now roughly 60% […]

Posted On : Published By : Tom Whipple
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Energy Partnerships Lose Allure as Oil Prices Fall

ENLARGE One of the hottest trends in the energy industry in recent years, oil-and-gas drilling partnerships, is looking increasingly iffy in the face of falling crude oil prices. By organizing themselves as partnerships, energy producers can avoid corporate taxes and offer hefty dividend-like payments that are popular with investors. Executives of the new firms have raised money easily. The partnerships helped bankroll the U.S. shale boom, spending billions to buy known oilfields from cash-hungry drillers that, in turn, wildcatted for new prospects. But the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. Many are saddled with heavy debt loads. Some, with less cash to pay out to investors, are now weighing whether to cut their payouts, executives say. Fearing such a move, investors have sent […]

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US shale boom is same as dotcom bubble, says Russian oil executive

A chapopero, literally the tar man, shows his oil-covered hands after cleaning a waist-deep pond of spilled crude oil in La Venta, Mexico Photo: AP He said the current oil market was similar to the rise of the technology sector more than a decade ago that saw companies’ stock prices surge before collapsing several years later. “The shale boom is on a par with the dotcom boom. The strong players will remain, the weak ones will vanish,” added Mr Fedun, who is worth around $4bn. Lukoil did not return calls from The Telegraph for further comment. The price of a barrel of Brent crude oil dropped 6.7pc to $72.58 on Thursday, while WTI fell 6.3pc to $69.05. The sharp falls came after Opec’s members agreed to keep oil production levels at 30m barrels per day (bpd), following three days of talks in Vienna. The meeting ended in anger, with […]

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Oilfield Housing Firm’s Stumble May Herald More Oil Industry Pain

URL: http://www.rigzone.com/news/oil_gas/a/136573/Oilfield_Housing_Firms_Stumble_May_Herald_More_Oil_Industry_Pain WILLISTON, N.D., Dec 31 (Reuters) – A nasty profit warning and deep job cuts. A gutted capital budget, a suspended dividend and shares tumbling by more than half on a single day. The retrenchment at Civeo Corp, which provides temporary housing for oilfield workers and miners, is the most-severe symptom of pain inflicted on the oil service industry by the slide in crude prices, and may presage similar steps by peers. It also exposes the transient nature of the "man camp" business of dormitory-style temporary housing the company helped pioneer. Drilling, a barometer of oilfield activity, has been slowing for weeks as producers slashed spending plans by 20 to 40 percent. Baker Hughes reported last week the U.S. land rig count fell by 35 to 1,770 and hundreds more rigs will be idled, hitting scores of services companies from ones renting trailers to those repairing pumps. The […]

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American Eagle Energy Halts Drilling Plans

American Eagle Energy Corp. said Wednesday that it has suspended its drilling operations and likely won’t resume until oil prices improve, the latest sign that a glut in crude oil is stifling exploration and production across the industry. Shares dropped 9.1% to 60 cents in light premarket trading. The stock is one of the hardest hit in the energy sector this year and approached $12 a share in November 2013. Oil prices have plummeted in the second half of 2014 as a flood of crude from U.S. shale disrupted the global oil market, leading a host of energy companies to cut drilling, lay off workers and slash spending. Earlier this month, Chevron Corp. told Canadian regulators that it had “indefinitely” suspended plans to drill for oil in Arctic waters. Energy giants ConocoPhillips and BP PLC, along with a number of smaller companies like Husky Energy Inc. and Penn West […]

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Continental’s 2015 Bakken plans: $1.5 billion

Continental Resources production by geography for Q3 2014. IMAGE: CONTINENTAL RESOURCES Although Continental Resources, one of the Bakken’s most prolific producers, has reduced its 2015 operating and budgeting plans for all of its U.S.-based plays, the Oklahoma-based exploration and production firm still intends to spend roughly $1.5 billion in its Williston Basin operations. Continental had previously announced it’d be operating 19 rigs and investing $2.6 billion in western North Dakota, but, due to lower than expected crude oil prices, the firm now intends to run 11 rigs in the Bakken. The company plans to decrease its total operated rig count from roughly 50 to approximately 31 by the end of the first quarter 2015 and has decreased its previous estimated budget of $4.6 billion to $2.7 billion. “This revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015. This budget also […]

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ND population reaches all-time high

Ron Ness, president of the North Dakota Petroleum Council addresses a large crowd during a 1 million barrel celebration held in mid-2014. The celebration was highly attended by long-time and new residents of the Tioga and surrounding area communities North Dakota’s population has reached an all-time high of 739,482 residents, an increase of roughly 15,600 from last year’s count, largely due to the increased activity in western North Dakota, according to the U.S. Census Bureau. “Our economic growth over the last decade continues to keep North Dakotans home, and we are attracting new residents who come for good jobs, a stable community and a quality of life that is second to none,” said North Dakota Governor Jack Dalrymple. According to the U.S. Census Bureau, the state’s population has increased 2.2 percent since last year, the largest percent increase in the nation. North Dakota is also in the midst of […]

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Until oil prices recover, American Eagle suspends 2015 plans

Two American Eagle Energy wells shown producing in Divide County, North Dakota. PHOTO: AMERICAN EAGLE ENERGY American Eagle Energy may be situated in a Divide County, North Dakota, sweetspot, but the Denver-based exploration and production company has chosen to suspend its 2015 drilling schedule due to low crude prices. The company recently released its operations and guidance update, explaining that after drilling a well in November, the company has released the drilling rig and will complete two unstimulated wells before it halts drilling and completion activity for 2015 until oil prices recover. During the fourth quarter of 2014, American Eagle added three gross new operated wells and two gross operated wells that were recompleted to production. The Rick 13-31 well was stimulated earlier in mid-October and began producing oil in late October. During the first 30 days of production, the Rick well produced an average of approximately 267 barrels […]

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More Budget Cuts for Continental Resources

Continental Resources CEO, Harold Hamm For the second time in as many months, Continental Resources announces huge adjustments to its 2015 budget in response to plummeting oil prices. More about Bakken operators slashing budgets for 2015 In a press release before Christmas, the energy giant announced the details including plans to slash their 2015 capital expenditures to $2.7 billion. Additional cuts will come as they decrease the number of operated rigs, which they predict to drop from 50 to approximately 31 operated rigs by the end of 2015. In an interview with Forbes, CEO Harold Hamm explained that the company is taking the necessary precautions to weather this storm and protect bondholders. Seemingly unfazed in his comments, Hamm credits his confidence to his past experience with these types of scenarios. Harold Hamm tells Forbes that “It’s all part of our plan. If prices go down, we are going to cut […]

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Oil Firms Pull Back on Rigs as Prices Fall

ENLARGE According to data from Baker Hughes, there were 1,499 drilling rigs in the U.S., down 37 from the latest count. Analysts expect drilling capacity to continue falling, but not output. Here, an oil pump near Williston, N.D., on a recent day. Associated Press U.S. oil producers appear to be scaling back amid low crude prices, with the onshore drilling-rig count falling by 37 last week, according to oil-field services company Baker Hughes Inc. It was the third consecutive week the drilling rig count fell and one of the biggest since crude-oil prices started to tumble in June. Analysts say energy companies operating in the U.S. will need slow their oil production to help bolster international crude prices. Rigs drilling for oil in the U.S. last week dropped by 37 to 1,499, Baker Hughes said Monday. This follows a 10-rig drop the previous week and a 29-rig decline the […]

Posted On : Published By : Tom Whipple