Category:

North Dakota unfazed by low oil prices

North Dakota Gov. Jack Dalrymple rolls out budget plans that expect a rebound in crude oil prices. BISMARCK, N.D., Dec. 4 (UPI) — North Dakota’s governor rolled out his budget plans for the next year, saying the state’s financial position was strong despite fears sparked by low oil prices. North Dakota oil production in September, the last full month for which data are available, was 1.18 million barrels per day, an all-time high. Nearly all of the production came from the Bakken shale formation in the state. Gov. Jack Dalrymple said he expects oil production to increase by as much as 15 percent through mid-2017, generating around $8 billion in production tax revenue for the state. "Here in North Dakota, we can make meaningful investments in our people, our places and the many opportunities for continued progress," he said in a statement Wednesday. The governor’s office said the budget […]

Posted On : Published By : Tom Whipple
Category:

Oil Drillers to Accept Some EPA Rules to Avoid Curbs on Methane

A lobbying group for oil producers including Exxon Mobil Corp. (XOM) and Anadarko Petroleum Corp. (APC) said it would accept proposed rules on pollution from oil wells in order to head-off a broad federal standard for methane leaks. The American Petroleum Institute , which has fought U.S. mandates on everything from smog rules to renewable fuel quotas, said it is willing to meet Environmental Protection Agency limits on the release of smog-forming compounds from hydraulically fractured wells. Such rules are in place for gas wells, and the EPA is considering expanding them to oil wells. “That’s a far better approach than any regulation towards methane,” Howard Feldman, director of regulatory affairs, told reporters in Washington today. “If it were done in the right way, it could be something acceptable.” In what environmental advocates say is the next climate test for President Barack Obama, the EPA is set to announce […]

Posted On : Published By : Tom Whipple
Category:

Sub-$50 Oil Surfaces in North Dakota Amid Regional Discounts

Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47 percent from this year’s peak in June, and 29 percent less than the $70.15 paid for Brent, the global benchmark. The cheaper price for North Dakota crude underscores how geographic and logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push U.S. oil production to the highest level in 31 years. Other booming areas such as the Niobrara in Colorado and the Permian in Texas have also seen large discounts to Brent and U.S. benchmark West Texas Intermediate. “You have gathering fees, trucking, […]

Posted On : Published By : Tom Whipple
Category:

U.S. shale player ONEOK resilient

U.S. shale player ONEOK unfazed by slumping oil prices, expects growth moving forward. Photo by Christopher Halloran/Shutterstock OKLAHOMA CITY, Dec. 3 (UPI) — U.S. shale player ONEOK said it expects substantial and ongoing growth for its operations moving forward despite a volatile commodity environment. ONEOK said it expected its adjusted earnings to increase 19 percent to move close to $2 billion next year. Terry Spencer, the company’s president and chief executive officer, said the company would draw from the $3 billion in capital growth projects in various stages of construction. "Although the commodity price environment remains volatile, we expect strong volume growth to continue in 2015 as many of our key producers plan to concentrate their drilling in more productive core areas on acreage dedicated to our systems," he said in a Tuesday statement. Last month, the company said its net income year-to-date was $219.6 million, a 25 percent […]

Posted On : Published By : Tom Whipple
Category:

OPEC Challenges Bakken Shale Drillers

Bakken Stock Declines In a decision that caused energy stocks to plunge on Friday, OPEC announced last week that it will not decrease production in order to curb the falling price of crude. Viewed by many as a sort of Thanksgiving Day game of ‘chicken’, this effort is meant to drive oil prices down further in order to force U.S. shale drillers to fold in the face of falling profits. This announcement comes as the boom in shale production has produced a growing worldwide oil surplus, thus changing the global energy landscape and status quo. Some are making dire predictions about what this may mean for U.S. interests, including one Russian oil tycoon who announced to Bloomberg that he predicts a huge crash in the industry that will necessarily weed out the weaker players. Whether this tactic by OPEC will be effective remains to be seen. In October, Continental Resources […]

Posted On : Published By : Tom Whipple
Category:

Nuverra to build 150-mile water pipeline for Bakken operator XTO

Nuverra Environmental Solutions trucking and transport branch, Power Fuels, started in the Bakken. PHOTO: NUVERRA ENVIRONMENTAL SOLUTIONS Nuverra Environmental Solutions trucking and transport branch, Power Fuels, started in the Bakken. PHOTO: NUVERRA ENVIRONMENTAL SOLUTIONS Nuverra Environmental Solutions Inc., a water and environmental solutions provider with a large presence in the Bakken shale play, will make water transport for a major Bakken operator more efficient. Nuverra has signed with XTO Energy Inc., a subsidiary of Exxon Mobil Corp., to build a 150-mile pipeline network in McKenzie County, North Dakota. The pipeline infrastructure will include produced water gathering and disposal services along with fresh water delivery. The pipeline will service XTO’s dedicated acreage in the area along with other operators looking for supply or disposal options. Construction for the pipeline could begin in May, with project completion expected to occur in the fourth quarter of next year. Total costs to build […]

Posted On : Published By : Tom Whipple
Category:

Bakken Shale Rig Count Increases by Three to 191

IHS: Shale Growth Still Strong, Despite Dip in Oil Prices ND Pump Jack | Click to Enlarge The  Bakken-Three Forks rig count  increased by three t0 191 rigs running across our coverage area by the end of last week. The NDIC notes 185 rigs are active in North Dakota, but around 14 of those are in the process of moving in and rigging up. In recent Bakken news, research consultancy IHS Energy  reports most shale plays are economic and ~80% of potential drilling in 2015 would remain strong at WTI crude oil prices as low as $70 per barrel. WTI traded at ~$67 today, a nearly 40% drop from June of 2014. As a result, Bakken operators, including Emerald Oil, Inc., have already announced plans to potentially scale back their drilling programs in 2015. North Dakota’s Department of Mineral Resources (DMR) Director Lynn Helms updated lawmakers in October on the status of oil & gas development in the […]

Posted On : Published By : Tom Whipple
Category:

Billionaire Shale Pioneer Sees Drilling Slowdown on Oil Price Drop

Billionaire wildcatter Harold Hamm , a founding father of the U.S. shale boom whose personal fortune has fallen by more than half in the past three months, said U.S. drilling will slow as producers cut back amid falling oil prices. Declining activity from Texas to North Dakota won’t be as harmful to the industry as some have feared, the chairman and chief executive officer of Continental Resources Inc. said. OPEC’s refusal to curb output last week bodes well for U.S. producers that can outlast countries in the cartel, which depend on higher oil prices. “Will this industry slow down? Certainly,” Hamm said today in a telephone interview. “Nobody’s going to go out there and drill areas, exploration areas and other areas, at a loss. They’ll pull back and won’t drill it until the price recovers. That’s the way it ought to be.” Investors have been spooked as oil has […]

Posted On : Published By : Tom Whipple
Category:

WTI moves near price where it could hurt

West Texas Intermediate crude, the U.S. benchmark, falls below level some see as profitable one day after OPEC Secretary-General Abdalla Salem El-Badri, pictured, leads ministers in the decision to keep output steady. File Photo by Maryam Rahmanian/UPI West Texas Intermediate shed more than $4 per barrel for the January contract in early Friday trading, adding to dramatic losses for the U.S. benchmark that greeted a Thursday decision from members of the Organization of Petroleum Exporting Countries to keep production levels static . Oil prices are at a four-year low and down more than 25 percent from their mid-summer levels. The decline in price is in part related to slow economic recovery and an increase in oil production from U.S. shale. "It is important to recognize that if the recent price trend continues, the long-term sustainability of capacity expansion plans and investment projects may be put at risk," Libyan Deputy […]

Posted On : Published By : Tom Whipple
Category:

Here Comes $60 Oil as OPEC Tests U.S. Shale: Chart of the Day

OPEC’s decision not to try and eliminate an oil-supply glut means the biggest crash in six years won’t stop until prices reach $60 a barrel, according to firms including Nomura Holdings Inc. and Deutsche Bank AG. The CHART OF THE DAY shows how the group supplying 40 percent of the world’s oil has kept pumping at or above its own production limit of 30 million barrels a day even as output in the U.S. climbs to the highest in decades. Crude collapsed into a bear market this year as the U.S. boom contributed to a global surplus that Venezuela estimates at 2 million barrels a day, more than the production of five OPEC members. The Organization of Petroleum Exporting Countries, which said Nov. 27 it is taking no action to reduce supply, has exceeded its target in all but four of the 34 months since it took effect at […]

Posted On : Published By : Tom Whipple