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Oil and Gas Roundup — Dec. 2

December 02, 2015
TOPICS: In the news
U.S. oil drillers cut rigs for 12th week in last 13; Okla. up 1

The number of rigs exploring for oil and natural gas in Oklahoma was up by one last week to 82, according to information from oilfield services provider Baker-Hughes.

Nationwide, the rig count fell by 13 to 744. Canada saw an increase of 18 rigs to 184.

Of the other major oil- and natural gas-producing states, Texas lost six to 336; Louisiana and North Dakota each lost one to 64 and 62, respectively; New Mexico gained two; Pennsylvania, Colorado and Wyoming were off one; and Ohio was unchanged.


Governor tasks fact-finding group to study recycling of oil-field water

Gov. Mary Fallin on Tuesday created a fact-finding work group designed to find an answer to two water-related problems connected to the state's oil and natural gas industry.

The Water for 2060 Produced Water Working Group is tasked with finding ways water produced along with oil and natural gas can be used or recycled instead of being pumped underground through disposal wells that have been connected with the state's ongoing earthquake swarm.

Finding a way to safely and effectively use produced water could both address the earthquakes and provide the state with a new water source.

“What a win-win for all if we can turn wasted water into a useful resource, while at the same time reducing seismic activity caused by deep well injection," Fallin said in a statement.

Read The Oklahoman story.

The Tulsa World also reports.


EIA: U.S. oil and natural gas reserves both increase in 2014

U.S. crude oil and lease condensate proved reserves increased by 9% to 39.9 billion barrels, and natural gas proved reserves increased by 10% to 389 trillion cubic feet in 2014, according to EIA's U.S. Crude Oil and Natural Gas Proved Reserves report.

U.S. crude oil and lease condensate proved reserves reached the highest level since 1972, and natural gas proved reserves surpassed last year's record level.



Proved reserves are volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable under existing economic and operating conditions. Because they depend on economic factors, proved reserves shrink or grow as commodity prices and extraction costs change.

EIA's estimates of proved reserves are based on an annual survey of domestic oil and natural gas well operators.



Texas had the largest increase in proved reserves of crude oil and lease condensate, representing 60% of the nation's total net increase in 2014. This increase was driven by development of tight oil plays (e.g., Wolfcamp, Bone Spring) in the Permian Basin and the Eagle Ford Shale play.

North Dakota had the second-largest increase, 362 million barrels, which came mostly from the Bakken tight oil play in the Williston Basin.



Read more here.


U.S. natural gas price set for lowest yearly average since 1999


U.S. natural gas prices this year are set to register their lowest average price since 1999, marking one of the deepest and most prolonged slumps of any commodity, with a rebound unlikely as record production from shale formations has outstripped even healthy demand.

Although prices fell further in 2012, not since the Clinton Administration has the average price of gas remained so low for so long, a boon for consumers but an added bane for energy producers like Chesapeake Energy Corp, already suffering from a dive in oil prices.

In the year through the end of November, next-day gas prices at the Henry Hub benchmark in Louisiana GT-HH-IDX so far in 2015 have averaged $2.68 per million British thermal units on the IntercontinentalExchange.

Henry Hub prices in November were the lowest for the month in 20 years, averaging $2.08 versus $4.10 in 2014 and a five-year average (2010-14) of $3.62. In 1995, November averaged $1.92.
With only 22 trading days left in the year, prices would have to average $3.70 in December to lift the average above its recent low of $2.77 in 2012.

December futures expired at $2.206 last week. In 1999, when the gas market was about 50 percent smaller than today, prices averaged $2.27.


Read more at Reuters.
 
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