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Oil and Gas Roundup — Dec. 9

December 08, 2013
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Snow, cold temps slow oil production

DICKINSON, N.D. --Even booming Bakken oil production can’t stand up to North Dakota’s crippling winters.

By hindering transportation to wells and slowing the hydraulic fracturing process, severe winter weather slows production.

The No. 1 cause of the slowdown in winter months is difficulties for fracking, North Dakota Department of Mineral Resources Director Lynn Helms said. Ice and snow make it harder to get water to a site, it takes longer to heat fluids and keep them warm, and flowback water can freeze and delay the process, he said.

That’s been an issue this week.

“They are struggling at subzero temperatures,” Helms said of fracking operators. “Things get really, really slow for them.”

Shawn Wold, Tervita’s Watford City operations manager, said the Houston-based energy company will keep bumping up the temperature of frac water heaters the colder it gets outside, which takes time.

In his monthly Director’s Cut updates, Helms often cites winter weather as the reason for decreases or smaller than normal increases in daily production.

After a rough April 2011, daily production actually dropped from March numbers.

“Growth slows but then when we have a particularly severe month like we had in the spring of 2011, production can actually fall by 10,000 barrels per day or in that neighborhood,” Helms said.

With 75 percent of oil still moved by truck, a road shutdown of three or four days due to severe weather is significant, Helms said.

And on a smaller scale, a couple inches to a foot of snow on well pad access roads causes headaches for operators.

“The biggest slowdown comes from getting equipment out to those well pads,” North Dakota Petroleum Council spokeswoman Tessa Sandstrom said.

“A lot of these wells are in remote places … it just takes a little bit more time for them to clear roads to get (trucks) out to those locations.”

And in some cases, it’s not even worth it — since operators are often responsible for plowing access roads, and it takes propane and other costs to keep wells running in winter, operators sometimes just shut marginal wells down during winter months.

Read more:

Devon Energy named one of most community-minded companies

OKLAHOMA CITY — Devon Energy Corp. remains one of the most community-minded companies in the United States.

The Oklahoma City-based oil and natural gas producer on Thursday was named to The Civic 50, a comprehensive ranking aimed at identifying companies that best use their time, talent, and resources to improve the quality of life in the communities where they do business.

Devon has been part of the list published by Bloomberg since its inception last year.

Dave Hager, the company's chief operating officer, said Devon is proud of its place on the list.

He said it is important from a business perspective for the company to be part of the community with a strong civic presence.

“As business leaders, we have an important responsibility to help identify problems and pursue opportunities to improve the quality of life in our community,” Hager said. “The values that underpin our corporate culture — doing the right thing, being a good neighbor — are every bit as good for our business as they are for our community.”

Read The Oklahoman story:

Oklahoma lawmaker promotes state, energy industry in visit to Israel

MUSKOGEE — Opportunities abound in Israel for Oklahoma oil and gas companies that have the capacity of helping the country develop its newly discovered natural resources, State Rep. Arthur Hulbert said.

The Fort Gibson Republican recently returned from Israel, where he and 13 other Oklahoma lawmakers met with dignitaries and other leaders. Hulbert said the purpose of the trip was threefold: To demonstrate Oklahoma’s continued support of a sovereign Israel, promote business and economic relationships, and align interests in the fight against terrorism.

“I definitely feel this (trip) is a good thing for Oklahoma, especially if we are able to facilitate our economic and business relationships,” Hulbert said, noting “no state or government funds were used” to finance the trip. “The larger oil companies reportedly do not want to assist Israel due to their ties with other Arab oil-producing companies in the Middle East, (but) Oklahoma has mid-size companies that can help with oil and gas extraction.”

Hulbert said the discovery of natural gas and oil in Israel runs counter to a long-standing joke in Israel about its historic origins. The Israelis, Hulbert said, joke that Moses wandered the desert 40 years in search of the only place in the Middle East without oil and gas.

Read the Muskogee Phoenix story:

Companies want to compress Bakken natural gas for oil field use

BISMARCK, N.D. — Three natural gas-related companies want to know how many operators using diesel fuel in the Bakken would convert to natural gas.

Companies have struggled with what should come to the area first, natural gas vehicles or fueling infrastructure. GoCH4 and partners MicroLNG and AmeriFlare, wants to take the first step by providing the equipment to fuel the vehicles if there are enough companies ready to make the switch.

The three companies issued a call for submissions for the purchase of compressed natural gas or liquefied natural gas to determine if the market exists to support the investment.

“We have reached the tipping point where the benefits of natural gas as a fuel far exceed the investment required to use it,” said Wes Livingston, vice president of project development for GoCH4.

Compressed natural gas or liquefied natural gas cost about half the price of diesel while burning cleaner. Prices of compressed natural gas and liquefied natural gas produced by GoCH4 are expected to cost $1.90 to $2.50 per diesel gallon equivalent.

Read more:

Report: Environmentalists opposing shale gas are making a ‘tragic mistake’

A report released Dec. 6 puts the folly of anti-fracking activism squarely in the spotlight. The report, authored primarily by University of California-Berkeley physics professor Richard Muller, comes to a sobering conclusion: “Environmentalists who oppose the development of shale gas and fracking are making a tragic mistake.”

The reason is because natural gas provides a solution for two major worldwide environmental concerns: air pollution and greenhouse gas emissions. For its ability to provide an affordable energy source that can also address these problems, the authors conclude that “shale gas is a wonderful gift that has arrived just in time.”

The report focuses heavily on the local air quality benefits of shale gas, which could be especially effective in places like China that have rapidly growing economies, and by extension a great need for affordable and abundant energy.  As the report notes, shale gas “provides a solution to the pollution,” observing it’s “amazing” that local air quality benefits are “not more widely addressed by environmentalists.”

Read more:

Read the full report:

Baker Hughes: International drilling activity increased in November

HOUSTON (UPI) — Oil service company Baker Hughes Inc. said Friday oil and gas exploration internationally was increasing though U.S. activity declined.

Baker Hughes published its monthly rig count for November. The international rig count for November was 1,311. That's four fewer rigs than counted in October but up 44 from November 2012.

The company's rig count reflects the number of drilling rigs actively exploring for or developing oil or natural gas.

For the United States, the company said the average rig count for November was 1,756, down 53 compared to the same time last year. A similar U.S. trend was observed last month.

For Canada, the number was up 7 to 385 when compared to last month and unchanged from November 2012.

New drilling technologies for shale oil and natural gas deposits helped push North America to the top of the list in terms of global producers. Canada relies almost exclusively on the United States as an energy trading partner. The United States is producing more oil than it has since the late 1980s.
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