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Oil and Gas Roundup — August 16

August 16, 2016
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State rig count flat as national count up 18

The number of rigs exploring for oil or natural gas in the United States grew by 17 to 481 for the week ending Aug. 12, as the rig count in Oklahoma stayed flat at 61.

Texas accounted for most of the increase, adding 13 rigs to 230.

Of the other major oil- and gas-producing states, Louisiana was unchanged, New Mexico was up one to 31, North Dakota added one to 29, Colorado gained one rig to 21, Pennsylvania was flat at 15 and Ohio gained one rig to 14.

A year ago, there were 103 rigs operating in Oklahoma and 843 nationwide.

Domestic benchmark West Texas Intermediate crude climbed $1, or 2.3 percent, to close at $44.49 a barrel on Aug. 12.

U.S. shale output drop seen for 10th straight month in September, EIA says

U.S. shale oil production is expected to fall for a tenth consecutive month in September, according to a U.S. government forecast released on Monday, as low oil prices continue to weigh on production.

Total output is expected to drop 85,000 bpd to 4.47 million bpd, according to the U.S. Energy Information Administration's drilling productivity report. That is the lowest output number since April 2014.

The EIA's previous forecast calling for an output decline in August of 99,000 bpd was revised up to nearly 112,000 bpd, data shows.

Bakken production from North Dakota is expected to fall 26,000 bpd, while production from the Eagle Ford formation is expected to drop 53,000 bpd. Production from the Permian Basin in West Texas is expected to rise 3,000 bpd, according to the data.

Total natural gas production, meanwhile, is forecast to decline for a seventh consecutive month in September to 45.4 billion cubic feet per day (bcfd), the lowest level since May 2015, the EIA said.

Read more at Reuters.

Western Energy Alliance: Feds illegally canceling lease sales

A trade group for the energy industry is accusing federal officials of illegally canceling or postponing the sale of more than two dozen oil and gas leases over the past two years.

The Western Energy Alliance sued the Obama administration in U.S. District Court on Thursday to force it to hold lease sales four times a year.

The group says sales have been called off in Montana, Colorado, New Mexico, North Dakota, Oklahoma, Texas, Utah and Wyoming.

U.S. officials say at least some cancellations stem from companies' limited interest. Of more than 2.2 million federal acres offered for sale last year, just over a half-million acres received bids.

The government expects low oil and gas prices will reduce drilling on public lands by 40 percent versus historical levels in coming years.

Mexico’s new energy policy could be boon for Texas port

Driven by industrial and power sector demand, the Mexican government is moving to deregulate its energy industry, providing new openings for U.S. gasoline, natural gas and other fuels.

Walker Smith, director of the Port of Harlingen, said the move to deregulate its energy sector could make the Port of Harlingen a much bigger player when it comes to unloading oil, diesel, propane and similar products from barges and putting them into rail or truck tankers for transport across the border.

Mexico’s state petroleum industry, Pemex, can’t keep up with the increasing demand, Smith said.

“I’m getting calls constantly about companies wanting to come into the Port of Harlingen because of where we’re situated and to take advantage of the Los Indios bridge crossing,” he said. Delays there are far shorter than at other border bridge crossings like Reynosa’s.

Smith, speaking before the Harlingen Economic Development Corp. earlier this month, said U.S. companies are prepared to move aggressively to capture a portion of the opening energy market in Mexico.

— The Brownsville Herald.
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