The Weekly USA Oil & Gas Update: 7th July 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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Shale drillers with price hedges soon to lose revenue source Savvy E&P companies dependent on crude oil revenues from shale hedged a large share of their 2015 production, much at above $90 a barrel. Now, those hedges are beginning to expire after the first quarter of 2015, resulting in big revenue losses for some in the sector. According to Bloomberg, hedging contributed at least 15% of first-quarter revenue at 30 of the 62 oil & gas companies in their index. That advantage is no longer available. "A year ago, you could hedge at $85 to $90, and now it's in the low $60s," said Chris Lang, SVP with Asset Risk Management. Most producers with heavy hedging strategies hope that the hedges provided a runway for them to cut costs enough to survive in a sub-$60 a barrel world; the next two quarters will show who made it. Article here
Oil slumps to two-month low on news of crude inventory increases The US Energy information Administration released its weekly status report showing that crude oil inventories had increased by 2.4 million barrels from the previous week. Markets reacted by cutting prices more than $2 a barrel on July 1st. "We've been expecting prices to remain in this sub-$60 a barrel range," said Barclays analyst Michael Cohen. He expects US crude to average $55 a barrel during the third quarter. Article here |
Unconventional Oil & Gas News |
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Statoil to use CO2 for stimulation in Bakken test well The test well lies 15 miles outside of Williston, North Dakota, where Statoil will use liquid CO2 to replace water in the initial stimulation process. Head of Statoil's Shale Oil and Gas Research Doctor Bruce Tocher said "[w}e will use liquid CO2 as the initial fracturing medium because we believe that it will crate a more complex fracture network, giving increased surface area, which should increase the ultimate oil recovery." It also has the benefit of decreasing the amount of water utilized in hydraulic fracturing by 20 to 40 percent. Article here |
Environment and Safety News |
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USGS releases hydraulic fracturing water use maps The amount of water needed to frack a well varies greatly, according to the USGS in an analysis recently published. "One of the most important things we found was that the amount of water used per well varies quite a bit, even within a single oil and gas basin," said USGS scientist Tanya Gallegos, the study's lead author. "A better understanding of the volumes of water injected for hydraulic fracturing could be a key to understanding the potential for some environmental impacts." IN 2014, the annual median amount for the oil wells exceeded 4 million gallons per well, and gas wells used about 5.1 million gallons per well. Article here |
Mergers and Acquisitions News |
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Hess sells half its Bakken midstream assets for $2.68 billion |
