The Weekly USA Oil & Gas Update: 3rd November 2015
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The Oil & Gas Weekly is compiled by Todd Erickson. Todd is a veteran executive manager in the North American E&P market.
He has management experience in high-growth oil & gas service organizations performing a leadership role in operations, strategy, and corporate development with a track record of identifying opportunities and best-practices, creating execution plans, then developing effective teams and leaders to execute them.
Learn more about Todd here
Rig Counts - select states with key plays |
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Oil & Gas Prices - Bloomberg/EIA |
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General News |
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Shell abandons Canadian oil sands project, taking a $2 billion charge Extracting heavy crude oil from Canada's oil sands is an expensive proposition, with consultants stating it takes a Brent price of $80 a barrel to make the economics of an oil sands investment work. Shell isn't the only company to pull out of the oil sands game; so far this year producers have made 18 announcements about delays or cancellations on other oil sands projects. The current crude oil price below $50 isn't the only challenge for oil sands. Getting the heavy crude to market can be difficult, especially without the Keystone XL pipeline or other major pipelines to key markets. Expect the majors to focus on more economic offshore opportunities instead of oil sands for their large capital projects, at least until prices recover. Article here
Chevron's earnings down, responds by cutting 7,000 jobs The integrated energy giant had profit increases in its downstream segments but both US and international upstream segments had considerable degradation in profitability. As a result, the company will continue to lower its costs by cutting an additional 7,000 jobs, and lowering its 2016 capex roughly 25% from this year. Article here |
Unconventional Oil & Gas News |
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Some good news: Antero posts gains in both production and profit The company focuses on natural gas production from the Utica and the Marcellus, and posted an increase of 39% in natural gas production from a year ago, to 1.506 Bcfe/d. The company's profits rose from last year's $204 million in Q3 up to $206 million in 2015's Q3. According to the company's CFO Glen Warren, "[b]oth the overall production growth and liquids production growth were driven by outstanding results in our Utica operations, where we placed 25 wells online during the quarter." Antero also set expectations that Q4 would be flat from the current quarter. Article here |
Environment and Safety News |
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New study shows that benefits of switching from coal to natural gas for power generation understated Professor Richard Muller, from the University of California, states in his newest research that the environmental benefits of switching to natural gas from coal have been grossly understated. It is well established that burning natural gas to generate power creates about half the air emissions that creating the same amount of power from coal. Some studies have claimed however, that fugitive emissions from methane gas released to the atmosphere can create a greenhouse effect up to 86 times that of CO2, and with a methane leakage rate of 2% or more, the benefits of producing power from relatively clean natural gas are erased. Muller's research shows that leaked methane is not 86 times as potent as CO2, but rather only 11 times. According to Muller, "[l]egacy warming from fugitive methane is minuscule compared to that of carbon dioxide. Average leakage today is far below dangerous levels." Article here |
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Mergers and Acquisitions News |
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Anadarko finds itself competing with private equity for deals |
