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Oil and Gas Roundup — August 28

August 28, 2013
TOPICS: In the news
A roundup of oil and natural gas news from around the state, nation and world:

U.S. drilling rig count drops 15 to 1,776

The U.S. drilling rig count fell 15 units from a week ago to a total of 1,776 rotary rigs working during the week ended Aug. 23, Baker Hughes Inc. reported.

Land-based drilling lost 14 units this week to 1,692 rigs working. There were 62 rigs working offshore, unchanged from a week ago. Of these, 59 were drilling in the Gulf of Mexico, also unchanged from a week ago. The number of rigs drilling in inland waters fell 1 unit to 22.

Rigs drilling for oil in the U.S. fell 15 units to reach 1,382 rigs working. Those targeting gas also declined, falling 1 unit to 387 rigs. Compared with the same week last year, gas rigs were down 99 units, while those drilling for oil were down 26. Seven rigs were considered unclassified, up 1 unit from a week ago.

The number of rigs drilling horizontally decreased by 2 units to 1,075, and the number of rigs drilling directionally decreased by 13 units to 256.

Canada’s rig count increased by 25 units from a week ago to 383 during the week ended Aug. 23. A 15-unit rise in rigs drilling for oil was accompanied by a 10-unit increase in rigs targeting gas. The total count was up 49 units from a year ago.

Of the major oil and gas producing states, California dropped 5 units to 37 rigs working; Colorado fell 4 units to 67; North Dakota, Louisiana, and Utah each declined 3 units to 169, 110, and 28, respectively; Wyoming and Ohio dropped 2 units to 50 and 34, respectively; and West Virgina fell 1 unit 36. Oklahoma, at 169, New Mexico at 76, Alaska at 13, and Arkansas at 13 were all unchanged this week.

Two states were up 1 rig: Pennsylvania at 52 and Kansas at 26. At 848 rigs, Texas experienced the largest gain, up 2 this week.

Notable changes this week in major U.S. basins included an 8-rig decrease in Permian to 466 units working. The Permian basin lost 8 rigs this week, reaching 466. The Eagle Ford, meanwhile, saw a 5-rig gain with a total of 234 rigs working.

— Oil & Gas Journal


Devon Energy optimistic about new in-state oil play

Devon Energy Corp. has no shortage of experience in shale plays, so it's no surprise the company chose to look beyond the emerging Mississippian formation in its home state.

Devon dug deeper, finding an oil-rich shale formation that officials introduced during this month's earnings call.

CEO John Richels and Dave Hager, Devon's chief operating officer, hailed central Oklahoma's Woodford oil shale as an “exciting” play for the company.

“To date, we've identified 1,000 risk locations in this light-oil resource play,” Richels said during the Aug. 7 call with analysts.

Hager said Devon has completed 29 wells in the play, with 10 of those wells providing initial production of more than 800 barrels of oil equivalent a day.

Read the full Oklahoman story: http://newsok.com/devon-energy-optimistic-about-new-oklahoma-oil-play/article/3874961.


Anadarko to sell Mozambique gas block for $2.64B

REUTERS — Anadarko Petroleum Corp said it agreed to sell a 10 percent stake in a gas field offshore Mozambique to a unit of India's Oil & Natural Gas Corp for $2.64 billion in cash, as the U.S. oil company looks to focus more on its domestic assets.
The deal for Mozambique's offshore Area 1 is expected to close around the end of this year, Anadarko said.

ONGC faces diminishing supplies from its aging oil and gas fields in India and has been buying interests in overseas assets.

Anadarko also said it will remain the operator of Area 1 with a working interest of 26.5 percent in the block, which is located in Mozambique's deepwater Rovuma Basin.

Read more: http://uk.reuters.com/article/2013/08/25/anadarko-ongc-mozambique-idUKL2N0GQ0M120130825.


Natural gas-powered vehicles: who's buying?

Motley Fool analyst Brendan Byrnes sat down for a video conversation with Ian Scott, the executive vice president of Westport Innovations' on-road systems segment, which works with OEM partners such as Ford, Volvo, Kenworth, and Peterbilt to produce natural gas-powered vehicles in the U.S. and elsewhere.

Not surprisingly, natural gas vehicles sell best in areas that offer the infrastructure required to refuel them. Scott says those areas currently include states rich in natural gas, such as Oklahoma and Texas, although infrastructure development is expanding to other regions.

Brendan Byrnes: What kind of customers are you and Ford seeing as buying these F-250s, 350s, and soon to be 450s and 550s? What kind of customer would need these and use these?

Ian Scott: They're typically work vehicles, so they're larger vehicles. Having said that, we are seeing some retail consumer buying -- farmers, et cetera -- that see the advantage of using natural gas, mainly due to the cost, obviously, as it's a much cheaper fuel.

Target customers initially are oil and gas companies. With respect to natural gas, at the retail pump you can get an advantage of maybe $1.50 — even more in some jurisdictions — per gallon over gasoline, over diesel.

What happens is you get the fleets that have to pay retail, but then you have the oil and gas producers that get a much lower-cost fuel. For them, they may be saving $2.00-2.50 a gallon. These are what we're seeing initially, are the fleet buyers, the commercial buyers, that get these cost advantages.

Watch the interview at https://www.youtube.com/watch?v=HeLNUFg7N7M.


Cornell Univ. professor: N.Y. should be natural gas leader

Now that President Barack Obama and Gov. Andrew Cuomo have toured New York, it is worth considering the goals we should have for the 21st century, the role natural gas could play and what is broadly at stake. The world is watching New York.

As the Earth's population grows from 7 billion to 10.5 billion, meeting future energy goals requires that the global energy supply expand from 15 terawatts to 75 terawatts. Because energy is prosperity, the expansion of supply must also be steady. Prosperity delayed, like justice delayed, has a high social cost.

It is the fuel choices made by India, China and the developing world that will count. The advantage of our encouraging the substitution of natural gas for coal in the U.S. is that it will increase our prosperity, improve our environment, and reduce our CO2 emissions immediately and automatically. Most importantly, it will encourage the developing world to follow our lead.

U.S. experience already demonstrates the immediate benefits of substitution. China has become the No. 1 coal importer in the world, and Europe's use of coal has increased every year since 2009. The opposite has happened in the United States.

Read more: http://www.timesunion.com/opinion/article/New-York-s-choice-is-a-natural-one-4760496.php.


National independents group sees problems in BLM’s latest proposed HF rule

U.S. independent oil and gas producers identified three main problems as two of their trade associations submitted comments on the U.S. Bureau of Land Management’s proposed revised hydraulic fracturing regulations. Officials from the Independent Petroleum Association of America and the Western Energy Alliance also reiterated that federal fracing rules aren’t even necessary.

“Our federal system has vested the states with the authority to ensure that development of energy sources is safe and responsible,” IPAA Pres. Barry Russell maintained.

“Together with state regulators and local environmental groups, the US oil and gas industry has secured the great benefits of the shale revolution, while protecting the environment and strengthening local communities,” he said, adding, “The U.S. Department of the Interior should not be in the business of undermining this progress.”

Meanwhile, Kathleen Sgamma, vice-president of government and public affairs at the Denver-based WEA. “The Interior Department cannot demonstrate that states are not adequately regulating or that federal regulation is more effective.”

Read more: http://www.ogj.com/articles/2013/08/independents-see-problems-in-blm-s-latest-proposed-frac-rule.html.


Founding father of the shale boom says the best is yet to come

Hans Helmerich, who announced this week that he is retiring as CEO of Helmerich & Payne Inc. next year, is widely credited with developing a new generation of drilling rigs that have helped make the U.S. energy boom possible.

The oilfield services company his family helped to found in Tulsa became the most active on-shore drilling company in the country on his watch, using new rigs that were suited to drilling the long horizontal bores that helped unlock oil and natural gas trapped in shale formations.

Though the frantic pace of drilling in many shale formations has slowed and the number of rigs at work in the U.S. has fallen, Mr. Helmerich said in an interview that the company still stands to gain from demand for more efficient work.

“One of the things I was sensitive to is this being perceived as me calling a top which I really am not doing,” he said. “We’re not even at half time yet in terms of what we have ahead of us.”

Mr. Helmerich, who will remain chairman, said he will have served for about 25 years as CEO and is ready to turn the reins over for the first time to someone outside the family. Chief operating officer and president John Lindsay will take over as chief executive after next year’s shareholder meeting.

— Alison Sider, Wall Street Journal
 
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