The Weekly USA Oil & Gas Update: 11 February 2014

Rig Counts - select states with key plays

Oil & Gas Prices - Bloomberg/EIA

General News

Oilfield services company Weatherford to cut 7,000 employees, other firms may also pull back as market hits saturation

In addition to the job cuts, the services provider also plans to divest its pressure pumping segment, along with some other service lines, to raise $3 billion to $5 billion. Other service providers, such as Nabors Industries, are also retrenching as the industry has hit saturation and even oversupply in many segments, especially pressure pumping. Article here

Tesoro upgrading its crude oil railcar fleet to safer design

The large refiner receives much of its crude at the 120,000 b/d Anacortes, Washington facility via railcar, and will be adding the proposed Tesoro-Savage energy Distribution Terminal in Vancouver, Washington,also served by rail. to lower its risk profile shipping crude via rail, the company is replacing older railcars with new CPC 1232-compliant cars. Tesoro expects its entire fleet to be updated to the newer, safer railcars by mid 2014. Article here

Recently-announced Bakken natural gas pipeline could help ease takeaway restrictions that are contributing to flaring

WBI Energy just announced the 400 mmcf/d, 24" diameter pipeline, which will run 375 miles from the heart of the Bakken into Minnesota where it will hook up with other major pipelines. The $650 million project already has fans, including ND Governor Jack Dalrymple who has been focusing on the flaring issue. According to Dalrymple, "This pipeline is part of the solution and I commend MDU Resources and WBI Energy for their commitment to North Dakota and to the responsible development of our energy resources."

Unconventional Oil & Gas News

Utica Shale now has 300 producing wells

In total, 707 wells have been drilled, and 1,074 permits have been issued for horizontal wells for the Utica, an eastern Ohio shale gas play. The play has 38 rigs running right now so the number of drilled wells is bound to keep increasing at a good clip. Chesapeake is the dominant player in the Utica, and plans to spend 15% of its 2014 $5.5 billion capital budget in the play. Article here

Record bid for BLM leases in Bakken lease action

The BLM netted more than $17 million from just 22,260 acres in North Dakota's Montrail county at a recent auction. Diamond Resources of Williston, ND paid a record $34,000 per acre for a 53 acre parcel, and also purchased the single highest-priced parcel;152 acres for over $5 million. "There is no doubt that the oil and gas boom continues in North Dakota with record setting sales like this for federal leases," says BLM Montana/Dakotas State Director Jamie Connell. Article here

Environment and Safety News

New Colorado study links birth defects to fracking, but experts question the results

The study, prepared by the Colorado School for Public Health and Brown University, analyzed data concerning 124,842 births in rural Colorado, looking for correlations between proximity to wells and birth defects. The study found that there was a correlation, with defects increasing up to 30% in some high-density areas. The study has shortcomings however. For example, the authors found the number of premature births actually declined in closer proximity to the wells, and no correlation at all between well exposure and cleft palates. Additionally, the study shows no link to causation, and the Colorado Department of Public Health and Environment told Aljazeera America that the study, while interesting, is "not conclusive." Article here

Mergers and Acquisitions News

Baytex Energy buys Aurora Oil & Gas for $2.6 Billion CA

The acquisition provides Baytex with Aurora's 22,200 net contiguous acres in the Eagle Ford's Sugarkane field, and is currently producing almost 25,000 boe/day. Article here