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Oil and Gas Roundup — June 19

June 19, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State, U.S. rig counts fall by 2

Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in Oklahoma fell by two this week to 105. The U.S. rig count declined by two to 857.

Houston-based Baker Hughes said Friday 631 rigs were seeking oil and 223 explored for natural gas. Three were listed as miscellaneous. A year ago, with oil prices nearly double the current levels, 1,858 rigs were active.

Among the other major oil- and gas-producing states, Louisiana and New Mexico each declined by two rigs, while Ohio and Wyoming were each down by one. The number of offshore rigs fell by two.

Utah gained two rigs, and Alaska, North Dakota and Pennsylvania were up one apiece.

Arkansas, California, Colorado, Kansas, Texas and West Virginia were unchanged.

The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.


Five things to know about a new Stanford Oklahoma earthquake study

On Thursday, Stanford University geophysicists F. Rall Walsh III and Mark Zoback released a new study in the journal Science Advances entitled, “Oklahoma’s Recent Earthquakes and Saltwater Disposal.”

The researchers claim the increase in seismic activity has coincided with a dramatic increase in volumes of disposal of salty wastewater into the Arbuckle formation, a 7,000 foot deep, sedimentary formation under Oklahoma. They believe formation is in hydraulic communication with the crystalline basement, where almost all of the earthquakes are occurring.

Everyone can agree that no matter what is causing the spike of seismic activity in Oklahoma over the past five years, it’s an issue that all parties want to see addressed. While this study is certainly a significant contribution to scientific knowledge – and much of the data and analysis provided will help us better understand induced seismicity in Oklahoma – the researchers’ focus on wastewater volumes and comparative lack of downhole pressure analysis (among other factors) does raise a number of questions to consider.

Fact #1: Produced water volumes much higher in the 1980s, yet there was minimal seismic activity

Walsh et al. suggest an increase in injected volumes in recent years is the determining factor for Oklahoma’s increased seismicity.  But the reserachers’ data only go as far back as 1997.

Read more at Energy In Depth.


Senate panel advances $30B bill that targets EPA rules

The Senate Appropriations Committee on Thursday advanced a $30.01 billion spending bill that takes aim at President Obama’s environmental regulations.

The bill would fund the Environmental Protection Agency (EPA) and Interior Department for fiscal 2016, which begins Oct. 1, by $400 million below the level Congress enacted for 2015 and $2.2 billion less than Obama’s request.

Lawmakers voted 16-14 to advance the bill to the Senate floor. Sen. Barbara Mikulski (D-Md.), the ranking member on the panel, signaled Democrats would oppose the bill because of its low funding allocation.

Sen. Tom Udall (D-N.M.), the top Democrat on the subcommittee that oversees the bill, offered three separate amendments that would boost funding to various programs, strip all policy riders and specifically remove a policy rider regarding climate change.

All three were narrowly rejected by the GOP-led panel.

The bill, Udall said, would take aim at the Clean Air Act, Clean Water Act and the Endangered Species Act by permanently weakening them.

Republicans included provisions in the bill that would overturn a new EPA rule that asserts power over the nation’s waterways and would prevent the agency from writing a new rule on ground-level ozone pollution.

Read more at The Hill.


Upstream M&A deal values continue to slip

Upstream mergers and acquisitions (M&A) deals in May accounted for 50 percent of all upstream transactions, down from 73 percent in April. According to analysis by GlobalData, M&A in May had a value of $11.7 billion across 13 transactions.

That’s a significant drop from the April 2015 total of $71.2 billion, but the Royal Dutch Shell plc-BG Group plc deal skewed April. Exempting the Shell deal to buy BG Group for $69.9 billion, the decrease in deal flow month-to-month from April to May is $28.5 billion to $23.5 billion, about 17 percent.

The top May deal in the Americas was the Mexican conglomerate Alfa SAB de CV and Harbour Energy Ltd.’s decision to acquire the remaining 81.05 percent state in Pacific Rubiales Energy Corp. for $5.3 billion.

“If Alfa’s offer proves successful, the company will have skillfully capitalized on low oil prices ravaging Pacific Rubiales’ share price, which has dropped by over 70 percent,” Matthew Jurecky, GlobalData's oil and gas research chief, in a statement.

Read more at Rigzone.


GOP cheers as chief formally withdraws groundwater rule

Forest Service Chief Tom Tidwell today formally withdrew a proposal to more carefully gauge how the agency's land management decisions affect groundwater.

The agency's groundwater directive, unveiled in May 2014, had sparked a torrent of criticism from Republicans and Western governors who argued it could usurp states' authority to allocate water.

The Forest Service's notice of withdrawal in today's Federal Register acknowledges those concerns but calls them unfounded. While the proposal was received favorably by tribes and conservation groups, the agency "must have further discussions" with other stakeholders before moving forward with the proposal, it said.

"The proposed directives did not, and any future actions will not, infringe on state authority, impose requirements on private landowners or change the long-standing relationship between the Forest Service, states, and tribes on water," the notice reads. "The intent of any new groundwater proposed directive or next steps would be to establish a clearer and more consistent approach to evaluating and monitoring the effects of actions on groundwater resources of the National Forest System."

The move drew praise from House Natural Resources Chairman Rob Bishop (R-Utah), whose panel discussed the rule at a hearing in April with the Forest Service's Leslie Weldon, deputy chief of the national forest system.

"Finally, after more than a year, states and private water rights holders can have some peace of mind in knowing this policy is now officially off the table," Bishop said in a statement this afternoon. "From the outset the Forest Service failed to identify any practical or legal basis for this directive."

— E&E News
 
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