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Oil and Gas Roundup — April 6April 06, 2017
|A roundup of oil and natural gas industry news from around the state, nation and world:|
Lawsuit dismissed over Oklahoma earthquakes
A federal district court judge in Oklahoma City on Tuesday dismissed a lawsuit against three oil and natural gas producers over the state's ongoing earthquake swarm.
Judge Stephen P. Friot said the Oklahoma Corporation Commission is the best venue to determine the "highly complex and technical issue" of how much disposed wastewater is acceptable to avoid seismic activity.
"The short of the matter is that the OCC, aided, if necessary, by other agencies (including the United States Geological Survey and Oklahoma Geological Survey) and researchers, is better equipped than the court to resolve the seismicity issues relating to disposal well activities, by specialization, by insight gained through experience, and by more flexible procedure,'" the judge wrote in his decision.
Public Justice filed the lawsuit in February 2016 on behalf of Sierra Club Oklahoma against Devon Energy Corp., Chesapeake Energy Corp., and New Dominion LLC. SandRidge Energy Inc. later was added to the lawsuit, but its involvement was stayed after the company filed for bankruptcy reorganization.
Read Adam Wilmoth’s story at NewsOK.
Bosque Systems profiled in The Oklahoman
A recent issue of The Oklahoman featured a profile of Bosque Systems’ Clane LaCrosse and Peter Pappas.
‘A friendship and rivalry that began in the ninth grade over basketball and Ping-Pong has grown into a partnership that has helped grow an oil-field services company operating throughout much of the country.
‘Clane LaCrosse and Peter Pappas became friends shortly after Pappas moved to Norman.
‘“Clane was one of the first guys I met in Oklahoma," Pappas said. …
‘After college, LaCrosse and Pappas moved into different areas, with LaCrosse focusing on oil and natural gas investing and Pappas concentrating on corporate insurance and risk management. But they stayed in touch, often discussing various business ideas.
‘When LaCrosse started Bosque Systems, he immediately turned to Pappas.
‘Bosque grew quickly, but business slowed dramatically during the oil and natural gas industry downturn over the past two years. The company shed about one-third of its 600 employees in an effort to stay in business. LaCrosse and Pappas' relationship only strengthened during the downturn, they said.
‘”When prices dropped, we had to make tough decisions," LaCrosse said. "There's nothing better than having a brother next to you saying 'Let's go turn a wrench' if we have to. We trust each other. That makes tough decisions better.”’
Read Adam Wilmoth’s feature at NewsOK.
State treasurer reports gross production taxes more than double year-over-year
Gains in exploration and production activity in shale-rich Oklahoma are pulling the economy out of a slump, though recovery is slow, the state treasury said.
Oklahoma is one of the top contributors to total U.S. oil production, accounting for about 5 percent of the nation's total output. Lower crude oil prices curbed exploration and production activity last year and the state's economy faltered as a result.
State Treasurer Ken Miller said that, as exploration and production activity gains traction, the economy as a whole is showing signs of life. Data for March show tax collections from oil and natural gas production more than doubled year-on-year to $47.9 million. For the economy as a whole, however, total collections of $915 million were down 2.7 percent from March 2016.
"March gross receipts notwithstanding, leading indicators continue to show Oklahoma's economy is slowly on the mend," he told reporters. "The average decline in gross receipts has slowed and the unemployment rate is shrinking as rig counts rise along with business conditions and consumer confidence."
Rig counts provide an indication of exploration and production activity and offer loose gauge of confidence in a particular region. Oilfield services company Baker Hughes reported 118 rigs in service in Oklahoma for the last week in March, unchanged from the previous week, but up by 90 percent from the same time last year.
Read more at UPI.
Dems ask regulators to rewrite disclosure rule for drillers, miners
Several Senate Democrats are asking federal regulators to rewrite a financial disclosure rule for miners and drillers after Congress formally killed a similar regulation earlier this year.
The Democrats, led by Sen. Ben Cardin (Md.), sent a letter to the Securities and Exchange Commission (SEC) on Tuesday asking it to reissue a rule requiring oil and gas drillers and mineral miners to publish information about payments from foreign governments associated with their extraction work.
“This anti-corruption transparency rule is necessary, particularly in times of conflict and market volatility,” the senators wrote.
“Transparency is a critical tool to ensure that citizens in resource-rich countries can monitor the economic performance of oil, gas and mining projects and ensure that such revenues are used responsibly.”
The request comes weeks after lawmakers passed a Congressional Review Act (CRA) resolution to undo a similar rule issued late in the Obama administration. Opponents of the rule said it would be burdensome for drilling and mining firms, and that it would improperly expose internal financial information on the open market.
President Trump signed the resolution in February, one of several CRA challenges he and Congressional Republicans have used to undo Obama administration rules.
Read more at The Hill.
U.S. oil companies hiked capital spending late last year
U.S. oil companies hiked capital spending the most in half a decade after OPEC’s oil deal late last year, the Energy Department said Monday.
These producers raised oil field investments and other outlays by a combined $4.9 billion in the fourth quarter, an increase of 72 percent compared to the same period the year before, according to the agency’s review of 44 companies.
The increased spending by oil producers marked a turning point for an industry that had cut investments sharply for two years after the collapse of oil prices in the summer of 2014. The financial drought had prompted companies that make oil field equipment and provide drilling services to cut thousands of jobs across Texas.
And the pullback in drilling reduced domestic oil production. By the time oil companies began increasing spending late last year, the operational cash coming in from oil fields had fallen by $475 million for the 44 oil companies, in part because they were putting out less oil. The agency did not name the 44 firms.
The Energy Department also said oil company hedging, a trading technique used to lock in prices for future production, for these companies nearly reached the highest point in a decade in February after oil prices climbed above $50 a barrel. It’s a technique oil companies use to protect their revenue stream if crude prices tumble.
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