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Oil and Gas Roundup — Sept. 9

September 09, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Fallin co-hosts shale conference in Colorado

Oklahoma Gov. Mary Fallin and her Colorado counterpart are hosting a two-day forum on the development of shale energy.

Fallin is chairwoman of the National Governors Association. Colorado Gov. John Hickenlooper is vice chairman. Together they are hosting a forum in Broomfield, Colo., focused on responsible development of natural gas resources.

The event, which started Monday, is expected to draw energy executives, policymakers and state regulators from around the country.

“We're going to be talking about many different subjects, from the promise and the pitfalls of shale energy,” Fallin said. “We're certainly going to be discussing environmental and social risks from the expanding industry and how we can be good stewards of our land and water.”

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U.S. oil production reaches highest level in 24 years

U.S. oil production last week hit its highest level in nearly a quarter century, as companies seek to capitalize on high oil prices, according to federal data.

Domestic oil production hit 7.621 million barrels per day in the week ending Aug. 30, the U.S. Energy Information Administration said in its latest weekly update.
That surpassed the 7.609 million barrels per day production mark set the week prior and was the highest production total since October 1989, when production averaged 7.644 million barrels per day.

Last week’s domestic oil production figures were up 39 percent from a year ago, although production fell in the final week of August 2012 because of shutdowns in the Gulf of Mexico because of a hurricane threat.

Still, considering 2012 U.S. oil production levels before and after the hurricane outages, last week’s figures are up about 22 percent from a year ago, according to data from the U.S. Energy Information Administration.


Gastar increasing holdings in Oklahoma’s Hunton play

Houston’s Gastar Exploration said this week that it will spend $187.5 million to buy an interest in land in the Hunton play of Oklahoma.

Under the deal, it will buy an 98.3 percent working interest in 24,000 acres of the West Edmund Hunton Line Unit in Kingfisher, Logan, Oklahoma and Canadian counties in Oklahoma. The land is located close to Hunton Limestone assests that Gastar earlier bought from Chesapeake Energy.

The property in the latest deal currently produces oil, natural gas and natural gas liquids.

“This transaction is another important step in our program to further balance Gastar’s production profile between liquids and natural gas while also expanding our presence in the Hunton play,” J. Russell Porter, president and CEO of Gastar, said in a statement. “This strategic ‘tack-on’ acquisition provides a stable producing asset base and meaningful upside potential. With this acquisition, we now have over 380 net potential drilling locations in our Mid-Continent oil play.”

Gastar’s emphasis is on unconventional domestic reserves such as shale resource plays. It is currently pursuing the development of liquids-rich natural gas in the Marcellus Shale in West Virginia and is in the early stages of exploring and developing the Hunton Limestone horizontal oil play in Oklahoma.


Demand for truckers not abating as shales continue to boom

Even as the trucking industry stages job fairs, raises driver incentives and retools benefits, booming activity in the Eagle Ford and other U.S. shale plays continues to strain the labor market for qualified tractor-trailer drivers.

The explosion in domestic oil-and-gas activity comes as many baby boom-generation truckers coast into retirement. The American Trucking Association estimates the industry is now short 30,000 drivers.

“We’re already facing a shortage, and it’s likely to grow,” says Terrance Pohlen, director of the Center for Logistics Education and Research at the University of North Texas. “All of the major carriers will tell you recruiting drivers is their No. 1 priority right now.”

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Column: HF would add Michigan jobs, can co-exist with environmental protection

Despite Detroit recently declaring bankruptcy, and at the state level, Michigan’s stagnant unemployment rate of 8.7 percent, a silver lining exists in Michigan’s economic cloud. In fact, energy development is slated to hold tremendous opportunity for economic growth in the Wolverine State.

The development of U.S. energy infrastructure was recently highlighted by the McKinsey Global Institute as one of the keys in boosting growth for the country's economy, The report, "Game Changers: Five Opportunities for U.S. Growth and Renewal," projects shale oil and natural gas development is boosting U.S. gross domestic product anywhere from $380 billion to $690 billion.

As a result, a number of states across the nation have experienced significant economic and job growth from shale oil and natural gas development occurring in their regions. For example, North Dakota’s well-known oil and gas boom has catapulted the area to one of the fastest growing economies in the nation with an increase of 13.4% gross domestic product in 2012.

What does this mean for Michigan?

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Editorial: Ease the export of U.S. natural gas

Advances in energy extraction technology and vast reserves of shale gas in the U.S. have the potential to further boost this nation's economic prospects — if there is the political will to ease restrictions on natural gas exports.

The arguments in favor of doing so are substantial.

The advent of horizontal drilling and hydraulic fracturing — also known as fracking — have led to domestic shale gas and oil production increases of 50 percent annually since 2007. This acceleration could create as many as 1.7 million jobs by 2020, according to a report by the McKinsey Global Institute, a consulting firm.

Exports of natural gas — liquefied for transport — could give the economy a $47 billion boost by 2020, according to report from the U.S. Department of Energy.

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The Oil & Gas Weekly Follies

Each week, Forbes and Energy In Depth columnist David Blackmon will “briefly chronicle the week’s silliness, foibles, fake news and real news related to the oil and natural gas industry.”

Check it out here:
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