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

Oil and Gas Roundup — Nov. 22

November 22, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Devon building pipeline system to serve emerging oil field

MULHALL — Devon Energy Corp. is building an extensive system of pipelines to aid in the development of its acreage in central Oklahoma's Woodford oil shale.

“It is basically a network to connect our core area with oil, gas and water pipe,” said Kris Goforth, vice president for Devon's Mississippian-Woodford business unit.

The company has high hopes for the emerging oil play.

Goforth said putting pipelines for oil, gas and water in the same right of way allows Devon to save time and money, while limiting disruption for property owners.

She said the lines move oil and gas to common sales points Devon is building in the area, where it has drilled 280 wells.
Goforth said a typical well in the Mississippian-Woodford also produces as much as 2,000 barrels of water a day before dropping off, but Devon's system limits the number of disposal wells that are needed.

Read The Oklahoman story: http://newsok.com/article/3907275?slideout=1.


Senate plan takes aim at oil industry tax provisions

WASHINGTON — Senate Finance Committee Chairman Max Baucus on Thursday unveiled a proposal to spike a raft of oil industry tax breaks as part of a broader plan to lower the corporate tax rate.

The discussion draft released Thursday would limit companies’ use of accelerated depreciation to write off capital expenditures immediately — a change that would cut across many industries.

But some of the biggest effects would be borne by the oil and gas industry, which would be barred from immediately writing off intangible drilling costs, such as repairs, site preparation and hauling supplies. Baucus’ plan also would bar taxpayers from claiming a percentage depletion for oil and natural gas wells.

The industry also would be forced to abandon the “last in first out” accounting technique that allows inventories to be valued at the most recent price paid when calculating net profit and taxable revenue. Companies that use the LIFO accounting trick — instead of a more international accepted “first in, first out” method — can slash their taxable revenue if the prices for their reserves have gone up. The provision is popular with oil companies, who have benefited from using LIFO to value reserves of crude that have generally climbed in price over the past decade.

Read more: http://fuelfix.com/blog/2013/11/21/senate-plan-takes-aim-at-oil-industry-tax-breaks/.


House votes to restrict federal regulation of hydraulic fracturing

The US House of Representatives approved legislation largely along party lines to keep the US Bureau of Land Management from imposing its own hydraulic fracturing regulations in states that already have their own requirements.

HR 2728 passed by 235 to 187 votes, following heated debate. Democrats charged it would keep drinking water supplies from being adequately protected and not let the federal government enforce existing regulations. Republicans argued it would help unconventional oil and gas production continue to grow safely without excessive, duplicative rules.

“States have successfully, efficiently, and safely been regulating this process for the past 60 years and imposing a ‘one-size-fits-all’ federal regulatory structure, as the Obama administration is attempting to do, is both unnecessary and simply will not work,” Natural Resources Committee Chairman Doc Hastings (R-Wash.) said following the Nov. 20 vote.

But the committee’s ranking minority member, Peter A. DeFazio (D-Ore.), said the measure would strip federal agencies’ authority to enforce nearly every public health, safety, and environmental protection related to oil and gas drilling and its impacts.

Read more: http://www.ogj.com/articles/2013/11/house-votes-to-restrict-federal-regulation-of-fracing.html.


Pipelines scramble to keep up with shale production, study finds

Pipeline operators aren’t building infrastructure fast enough to keep up with the growing output of South Texas’ Eagle Ford and North Dakota’s Bakken shale plays, according to new study by consultant Deloitte LLP.

Developers of pipelines, storage and other so-called midstream facilities will need to invest $200 billion in capital to meet shale-driven industry demand by 2035, according to federal figures used in the study.

“We think this midstream growth has a way to run, given the need for capacity to get oil and gas to market,” says John England, Deloitte’s vice chairman and oil and gas leader.

Indeed, more than a third of natural gas production in the Eagle Ford and Bakken isn’t marketed because of inadequate infrastructure, according to federal Energy Information Administration data.

Read more: http://www.bizjournals.com/houston/morning_call/2013/11/pipelines-are-scrambling-to-keep-up.html.


Water recycling minimal but growing on Texas oilfields

MIDLAND — Standing on a sprawling ranch where drilling rigs, cranes and bobbing stripper wells form a makeshift skyline, Jimmy Davis is not thinking solely about sucking up oil. It is not the only precious liquid that is pumped from under the land that he manages.

“We’re trying to preserve what we have for future generations,” Davis, the operations manager for Fasken Oil and Ranch, said about collecting clean water. Though required in abundance for oil and gas production, it is increasingly hard to find in drought-scorched Texas, where water use by drillers has come under increasing scrutiny.

With that in mind, after lacing water with sand and chemicals to use during the process of hydraulic fracturing, or fracking, Fasken pipes more than 330,000 gallons of the resulting wastewater each day through an on-site recycling system. Negatively charged waste in the water reacts with positively charged ions in the metal pipes, so the undesirable materials settle out and leave clean water that can be used for another hydraulic fracture.

Fasken now recycles close to half of the water it uses for fracking, Davis said. But the process is still experimental. Recycling is a money-loser for the company for now, adding about $70,000 to the cost of handling the 1.9 million gallons of water needed for each hydraulic fracture.

Read more: http://www.texastribune.org/2013/11/22/water-recycling-minimal-growing-texas-oilfields/.


Oil sands, shale vie for dollars

With state-owned enterprises already in tactical retreat from the oil sands, the Alberta oil patch is also seeing traditionally reliable American companies shying away from buying Canadian assets as they focus on riches in their own backyards.

“One broad sea change that we are seeing is really in the emergence of tight oil plays like the Bakken, the Eagle Ford and Permian, which in our minds have really shifted the oil supply cost curve and… we are seeing plays like that are attracting the capital at the expense of plays like the oil sands,” said Mike Freeborn, managing director and head, energy investment banking, at the Canadian Imperial Bank of Commerce.

With the world’s third largest repository of oil reserves, Canada still holds allure among long-term investors, and the oil sands – which also has the distinction of being the largest reserves in a free market — will continue to attract investment, say analysts. And with more than a million barrels per day already commissioned and expected to come on stream, few people worry about the oil sands’ long-term prospects.

The short-term is another matter altogether. The first nine months of the year saw 12 Canadian M&A deals (valued at $200-million or higher) with a combined value of $7.4-billion, compared to the 24 deals that generated $38.6-billion during the same period last year, FP Infomart data shows.

Read more: http://business.financialpost.com/2013/11/22/special-report-u-s-shale-new-rules-interrupt-ma-activity/?__lsa=7f69-37da.
 
<< Back to news


AD

Topic

AD