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

Oil and Gas Roundup — May 11

May 11, 2015
A roundup of oil and natural gas industry news from around the state, nation and world:

Oklahoma drilling rig count drops by six to 102

The number of drilling rigs actively exploring for oil or natural gas this week in Oklahoma decreased by six to 102, Baker Hughes Inc. reported Friday. The tally is down 90 rigs from a year ago, when it was 192.

Nationwide, the net number of active drilling units decreased by 11 this week to 894, said Houston-based Baker Hughes. The total is down 961 rigs from a year ago, when it was 1,855.

Of the other major oil-producing states, Louisiana lost three, New Mexico fell by two and Texas dropped one. Colorado added two rigs, while North Dakota gained one. Pennsylvania was unchanged.

Of the rigs operating this week across the U.S., 668 rigs were exploring for oil, the lowest number in several years, while 221 were deployed for natural gas and five were classified miscellaneous.


Natural gas rises to seven-week high as warmer weather boosts demand

Natural gas futures rose to a seven-week high as forecasts for hotter-than-normal weather signaled increased demand from power generators.

Temperatures may be above normal across most of the Northeast and mid-Atlantic Friday through May 12, according to Commodity Weather Group.

Gas deliveries to electricity producers have climbed as companies and homeowners turned on their air conditioners. Shipments Friday were up 16% from a year ago, according to LCI Energy Insight. Gas accounts for about 30% of U.S. power output, government data show.

“You have a couple days of relatively high temperatures that are definitely going to be supportive of the market,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Beginning next week again we will be back in the 80s, so you will get substantial cooling demand.”

Natural gas for June delivery gained 14.6 cents, or 5.3%, to settle at $2.88/MMbtu on the New York Mercantile Exchange, the highest closing price since March 18. Volume for all futures traded was 60% above the 100-day average. Prices climbed 3.7% this week.


Scientists dispute theory linking hydraulic fracturing to earthquakes

During a hearing this week, one of the scientists who authored a study released last month that found natural causes were not responsible for an increase in earthquakes, countered the conclusions by environmentalists that hydraulic fracturing was directly linked to the cause.

"The injection of fluids can and do indeed trigger earthquakes," said Matthew Hornbach, Southern Methodist University associate professor of geophysics, before the Texas state House Energy Resources Committee, reports the San Angelo State Times.

He added that only a tiny fraction of injection wells are causing earthquakes, which have mild shakes that don't generally cause damage.

The SMU study was published last month in the journal Nature Communications and focused on a series of earthquakes that occurred in the area around Azle, Texas, between November 2013 and January 2014. During that period, 27 magnitude 2 or greater earthquakes were detected and monitored by scientists at SMU and the U.S. Geological Survey.

"In fact, it's been driving us crazy, frankly, that people keep using it in the press," Hornbach told state lawmakers during the hearing.



Colorado health officials debunk Lung Association’s ozone ‘Report Card’

Colorado’s health department and the state’s top air quality regulator have sharply criticized claims by the American Lung Association about ozone levels in the Denver metropolitan area.

Citing its own April 29 “report card” on the region’s air quality, the ALA told the Denver Post that levels of ground-level ozone – sometimes called smog – are deteriorating rather than improving. But the ALA went much further, claiming that while the air above the Denver metro area “looks cleaner than in the 1970s,” the region actually has “higher ozone” and the gains made since the 1970s “are going away.”

In the same news story – authored by the Post’s environmental writer Bruce Finley – the Colorado Department of Public Health and Environment (CDPHE) warned the ALA’s report card was “both inaccurate and misrepresents air quality in Colorado.” But Finley’s story didn’t detail what those inaccuracies and misrepresentations actually were.

In a follow-up interview with Energy In Depth, CDPHE’s Air Pollution Control Division (APCD) Director Will Allison revealed that the ALA report card ignored a full year of air quality data from 2014, which shows ozone levels getting better, not worse. To claim there’s higher ozone now than back in the 1970s also ignores decades of air quality data that show “it’s gotten a lot better,” Allison said.

Read more at Energy In Depth.


Costs are dropping in the Eagle Ford, producer says

When Houston’s Swift Energy Co. reported first-quarter results Thursday, it offered a glimpse at the level of cost-cutting oil and gas companies are making in the Eagle Ford Shale.

“We are seeing cost concessions in some cases greater than we originally budgeted,” said Terry Swift, president and CEO, said in a call with analysts.

Swift’s average drilling cost this year is $2.6 million per well, down from $3.2 million last year. And its most recent Eagle Ford well was drilled for $2.2 million.

Its lease operating costs dropped 16 percent from the previous quarter.

Swift on Thursday reported its first-quarter results. Its Eagle Ford production increased 19 percent over the previous year.

But lower commodity prices have taken a toll on all oil and gas companies this year. Swift had a net loss for the first quarter of $36.5 million. It also had a write down of $502.6 million of its oil and gas properties.

Read more at FuelFix.


UK election results: good for shale gas, bad for onshore wind

One of the most uncertain UK general elections of recent decades is reaching a surprisingly definite conclusion: indications on the morning of May 8th suggest a majority for the Conservative party, the lead partner in the coalition government that ran the country over the last five years. The energy industry may be pleased most of all by the removal of uncertainty, while future policy measures could boost shale gas, but limit the growth of onshore wind.

Shares in major UK utility groups were up May 8 morning as it emerged that the Conservative party looked set to gain a majority in parliament, with the BBC forecasting 329 parliamentary seats for the Tories, creeping just over the 326 needed to lead the House of Commons.

Centrica, the country’s biggest domestic gas and power supplier, was one of the fastest rising companies on the London Stock Exchange Friday, up 6% on the day just before 10am UK time. The other UK-headquartered major utility, SSE, was up 4%.

The biggest issue facing the utility groups this year remains the Competition & Markets Authority’s ongoing investigation into the energy sector, due to report back by Christmas. The independent watchdog could still propose major reform of the industry, including the sort of structural changes to companies – splitting up production and retail divisions – that were proposed by the opposition Labour party.

But the fact that the election has had a clear result will help the industry to settle down and start planning investments again, without having to worry about the potential for weeks of coalition-building, or even a second election later this year, which had been an increasingly discussed possibility.

Read more at Platts.
 
<< Back to news


AD

Topic

AD