follow us Twitter Facebook
OKLAHOMA INDEPENDENT PETROLEUM ASSOCIATION ABOUT | CONTACT
OIPA News
<< Back to News



Oil and Gas Roundup — Sept. 10

September 10, 2018
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

U.S. oil drillers cut rigs for second week in three

The number of rigs exploring for oil and natural gas in Oklahoma fell by two to 137 for the week ending Sept. 7, as the national rig count stayed flat at 1,048, according to Baker-Hughes.

Nationwide, 860 rigs were exploring for oil and 186 for natural gas. U.S. energy companies have cut oil rigs for two of the past three weeks, as the rig count has stagnated over the past three months along with crude prices.

Drillers cut two oil rigs in the week to Sept. 7, bringing the total count down to 860.

More than half the total oil rigs are in the Permian basin in west Texas and eastern New Mexico, the nation’s biggest shale oil field. Active units there declined by two this week to 484, the least since the start of August.

Halliburton and Schlumberger both warned this week that pipeline bottlenecks in the Permian would slow oil production growth and investments in the region.

The U.S. rig count, an early indicator of future output, rose by one in August after gaining three rigs in July and losing one in June. But the count is higher than a year ago when 756 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.

Of the other major oil- and gas-producing states, Texas was flat at 528, New Mexico lost two to 100, Louisiana gained three to 58 and North Dakota gained one to 53.


House of Representatives OKs small-scale LNG exports

The U.S. House of Representatives passed a bill on Sept. 6 authorizing small-scale exports of LNG by 260 to 146 votes. Thirty-seven Democrats joined 223 Republicans in casting aye ballots. Three Republicans and 143 Democrats opposed the measure, which moved immediately to the U.S. Senate for consideration by the Energy and Natural Resources Committee.

“It’s critically important that we take advantage of this opportunity we’ve been blessed with. There is no doubt that LNG exports are creating new, well-paying jobs and improving the quality of life for hard working families in eastern and southeastern Ohio,” Rep. Bill Johnson (R-Ohio), the bill’s sponsor, said following the vote.

H.R. 4606’s provisions are similar to a final rule the US Department of Energy issued in late July (OGJ Online, July 31, 2018). “This legislation would ensure that the DOE rule will become law, and not subject to the whims of future presidential administrations and policies,” Johnson said.

“This bipartisan legislation codifies DOE’s recent efforts to encourage the exports of small volumes of natural gas, as countries continue to look to us to meet their needs,” said Rep. Henry Cuellar (Tex.), the bill’s primary Democratic cosponsor. “I look forward to continuing to work with members on both sides of the aisle to encourage more natural gas exports, directly increasing our energy independence and security.”

Read more at Oil & Gas Journal.


U.S. independents raise their hedges

U.S. independent producers are stepping up hedging of oil and natural gas production as a safety net for stable cash flow, despite some losing money from derivatives in the second quarter.

U.S. producers' hedging plans have increased slightly, with 52pc of their 2018 output covered compared with 49pc as of March, "even with oil futures above long-term management budgets of broadly $50-$55/bl," US bank Goldman Sachs says. Producers are hedging at an average price of $58/bl this year, below the $70/bl touched this week. "Hedging [for 2019] has remained around normal levels" of up to 23pc of oil production against 16pc in the first quarter.

Current hedged prices of $60/bl for 2019 are slightly below the forward price of $63/bl, which may add some restraint against increased drilling, the bank adds. The majority of production growth this year is coming from well-hedged firms, although this is less the case in 2019, the bank says.

The increase in 2018 hedged oil production comes despite some producers reporting losses from their hedging last quarter as a result of higher-than-expected crude prices.

Read more at Argus Media.


Natural gas to overtake oil as North America's 'single largest energy source'

Oil will be toppled as North America's primary energy source this year, according to risk management firm DNV GL, with natural gas and electrification set to reshape the region's energy future.

The Norway-headquartered firm said Monday that overall energy demand in the U.S. and Canada would continue to decline over the coming months, as improving efficiencies in the transport sector dramatically reduce North America's reliance on oil.

"Energy efficiency is going to outpace the growth in GDP (gross domestic product), that's the main reason why energy demand is peaking," DNV GL's group president and CEO Remi Eriksen told CNBC's "Squawk Box Europe" on Monday.

"(And) there will be a massive change in technology in the transport sector, not only on the roads but also at sea," he added.

In a separate report published Monday by DNV GL, the company said "natural gas is set to overtake oil as the region's largest single energy source (this year) and remain the dominant source until 2050."

Read more at CNBC.
 
<< Back to news


AD

Topic

AD