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Oil and Gas Roundup — Sept. 25

September 25, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Bakken shale production will surprise Wall Street, Goldman Sachs says

North Dakota’s Bakken shale formation will surprise investors, analysts at Goldman Sachs wrote in a note Tuesday.

“We came away from our trip to North Dakota last week with greater confidence in our outlook that Bakken production/completion activity will likely exceed Street expectations,” the analysts said.

During the Goldman trip, producers and drillers were “uniformly confident” in resource expansion, efficiency gains, and potential for improving well performance in the coming years, the analysts said. Production “can continue to grow substantially,” easing concerns that emerged after moderate growth in the first half of the year, they said.

“We see production growth of [130,000 barrels a day to 210,000 barrels a day] through 2016,” above the average of 110,000 barrels a day for the six months to July, they said.

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Differing business models in CNG refueling could be complementary

In the effort to develop natural gas as a vehicle fuel, various companies are putting forth competing technologies.

For now, at least, most players are working together for what they see as the greater good.

Chief among the friendly competition is the option on how to refill a compressed natural gas vehicle.

Retailers such as OnCue Express and Love's Travel Stops and Country Stores have invested millions of dollars to add CNG pumps to some of their gas stations throughout Oklahoma and the region.

They have plans for many more.

At the same time, companies like Whirlpool Corp. and Italy-based MTM are developing home refueling stations that can be installed in garages and at businesses.
The success of one option could drive away precious business from the other option.

Read The Oklahoman story:

Slowly, Democrats embrace hydraulic fracturing

If any state emerged from a decade of economic recession in strong shape, it was North Dakota. A booming oil industry that’s taken shape on the western side of the state, fueled by the process known as hydraulic fracturing, has kept North Dakota’s unemployment rate at a level less than half the national average while injecting millions in tax revenue into state coffers.

Now, other states want in on the economic benefits of fracking — and blue states are rushing to grab a piece of the fracking pie just as fast as red states, despite concerns raised by environmental activists.

Last week, California Gov. Jerry Brown (D) signed into law new regulations on the fracking industry that will nonetheless allow companies to continue exploring oil-rich areas in and around the San Joaquin Valley. In June, Illinois Gov. Pat Quinn (D) signed similar legislation that imposes regulations on the industry while simultaneously inviting companies to invest in the region.

Environmental groups in both states opposed the measures. But despite the fact that environmentalists contribute millions to Democratic candidates at both the federal and state level, Democratic legislators overwhelmingly backed both bills.

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Natural gas engines make for more efficient HF

In remote and rugged areas from the Great Plains to Appalachia, drilling and hydraulic fracturing is typically powered by diesel fuel rather than electricity from the grid like more established drilling operations.

But companies are increasingly using natural gas or a mixture of natural gas and diesel, meaning significantly lower emissions and lower costs for hydraulic fracturing and enhanced oil recovery – getting the last remnants of oil out of tapped-out wells.

In Pennsylvania, the switch to powering with natural gas fracked onsite has been described as a “triple threat” reducing emissions, costs and truck traffic. And earlier this year Texas-based Apache Corp. announced plans to become the country’s first fracking operation powered entirely by natural gas, projecting a 40 percent savings on fuel costs.

Last week at the High Horsepower Summit in Chicago — a conference aimed at promoting natural gas use in mining, maritime, oil and other industries — GE Power & Water touted the recent Environmental Protection Agency certification of natural gas engines from their Waukesha, Wisconsin, plant for “mobile, non-road uses” including oil and gas extraction.

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Declining Barnett Shale could remain strong natural gas producer

Even though the Barnett Shale’s production has fallen in recent years, patches of the North Texas play could remain vigorous natural gas regions for several decades, according to a University of Texas study released this week.

There’s 45 trillion cubic feet of recoverable gas yet to be developed in the region’s drilled blocks, according to the study, higher than the Energy Information Agency’s 2011 estimate of 23.8 trillion cubic feet.

And though the Barnett’s overall natural gas production has fallen more than 20 percent since 2011, some wells will be able to sustain production for at least 40 years. Barnett wells with the biggest production potential number about 4,000, while about 12,000 of the most depleted wells dot the region, according to the study.

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