The Weekly USA Oil & Gas Update: 29th July 2014

Rig Counts - select states with key plays

Oil & Gas Prices - Bloomberg/EIA

General News

The "Big Three" oil fields now each produce more than 1 million bpd

These consist of the Permian Basin, the Eagle Ford, and the Bakken, together producing more than one third of all crude oil in the US. The 1 million bpd number is significant, according to Mark Perry, an economist at the University of Michigan. "In all of human history, there have only been ten oil fields in the world that have ever reached the one million barrel per day milestone . . . three of those ten are now active in the US-thanks to the advanced drilling techniques that started accessing oceans of shale oil in Texas and North Dakota about five years ago." Article here

Unconventional Oil & Gas News

ONEOK investing up to $470 million into gas processing for the South Central Oklahoma Oil Province (SCOOP)

The investment, which ONEOK will make between now and the 2016 fourth quarter, will go into constructing a 200 mmcf/d gas processing facility (the Knox plant), along with related infrastructure, in Grady and Stephens counties. "The Knox plant in Oklahoma will increase our presence in the growing SCOOP play and increase our Oklahoma natural gas processing capacity to approximately 900 MMcf/d," said Terry K. Spencer, president and CEO, ONEOK Partners. Company-wide, ONEOK plans to invest up to $6.8 billion through 2016 into capital spending, about half that in the Bakken. Article here

Corpus Christi goes from net crude importer to exporter based on Eagle Ford shipments

In June, daily shipments of Eagle Ford crude out of the port averaged 551,934 barrels per day. This will soon be boosted by the modification on the ban to exporting crude oil, which will allow exportation of condensate. This is a historic reversal starting last summer; the port traditionally was a net importer of crude oil. Additionally, new destinations for exported crude have been added. Traditionally, oil exported from Corpus Christi went to Houston, Port Arthur, and New Orleans. Now a growing amount is bound for east coast refineries and Canada, according to analyst organization Platts. Article here

Environment and Safety News

Pennsylvania's Department of Environmental Protection to release a report showing damage to water supplies from oil & gas activity

The Pittsburgh Post-Gazette reports that it was able to inspect an early version of the spreadsheet the DEP plans to release later this month which will outline specific cases in Pennsylvania. According to the Post-Gazette, the spreadsheet shows 209 cases of diminished flow or contamination to water supplies as a result of oil & gas activities, however the document does not disclose cause or nature of the contaminations. By law, the regulators in Pennsylvania are required to determine within 45 days of receiving a complaint if oil and gas operators were accountable or presumed to be the cause, and report in a letter to property owners. The spreadsheet shows issues in most every region of development in Pennsylvania. A spokesperson for industry group the Marcellus Shale Coalition pointed out that context is important to consider when reviewing numbers like these, including the fact that the state does not have private well construction standards and that many water supplies are in poor condition or contain methane gas independent and unrelated to any oil & gas activities. Article here

Mergers and Acquisitions News

Breitburn's $3 billion acquisition of QR Energy will create the largest oil-weighted MLP

The resulting entity will have a pro forma enterprise value of $7.8 billion and daily production of 57,300 barrels of oil equivalent per day. Article here