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

Oil and Gas Roundup — Jan. 9

January 09, 2017
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

U.S. rig count jumps 7; state count flat

The number of rigs exploring for oil or natural gas in the United States climbed by seven to 665 at the end of the week ending Jan. 6, up one rig from a year ago.

Nationwide, 640 rigs were exploring on land, 24 offshore and one in inland waters; 529 were searching for oil, 135 for natural gas and one miscellaneous.

Oklahoma’s rig count was unchanged at 86, second in the country and up three from a year ago.

Of the other major oil- and gas-producing states, Texas gained three to 327, Louisiana was up two to 50, New Mexico jumped three to 37, North Dakota was flat at 33, Pennsylvania gained one to 33, Colorado climbed one to 29 and Ohio was up one to 20.


Kimray expands again as oil industry recovers

After eight months of odd jobs and looking for work, Jordan Moore didn't hesitate when his former employer called and offered his job back.

"I was quick to take it because I realized what I had lost," Moore said.

Moore in July 2014 joined the shipping department at Oklahoma City-based oil-field equipment manufacturer Kimray Inc. He soon became an apprentice electrician, where he helped keep the plant running and dealt with electrical issues on equipment throughout the facility.

"My day is different every day," he said. "Some days, anything can go wrong, but it's our job to keep Kimray's wheels turning."

Business was good until tumbling oil and natural gas prices froze the industry and dried up Kimray's orders. Kimray was one of the last oil-field manufacturing companies to turn to layoffs, as management first paid employees to volunteer at charities and eventually offered voluntary buyouts.

Oil prices hit a 12-year low near $26 a barrel in February and then gradually recovered, climbing to $55 a barrel in December after an agreement by the world's largest oil exporters to slow production in 2017.

Read Adam Wilmoth’s story at The Oklahoman.


U.S. oil and gas deals hit $69 billion in 2016, more than doubling 2015 total

Dealmaking in the U.S. oil and gas sector rebounded strongly in 2016, as buyers scooped up prime acreage that can produce at a profit while crude prices are low, according to a new report.

Mergers and acquisitions activity in the oil patch hit $69 billion last year, more than doubling the total in 2015, according to data compiled by Houston-based oil and gas research firm PLS. That marks a sharp reversal after total deal value slumped 62 percent in 2015.

The biggest contributor to the reversal was the Delaware Basin, a portion of the larger Permian Basin located in Texas and New Mexico. The Delaware generated $18 billion in M&A activity amid a land rush that saw drillers pay dearly for acreage that yields oil at relatively low costs.

Another section of the Permian, the Midland Basin, attracted $9.1 billion in dealmaking. Much of the Midland's top acreage got purchased in 2014.

The Permian's low break-even costs are prized with crude prices still stuck at $50 to $60 per barrel, half of what the commodity fetched through 2014.

Read more at CNBC.


U.S. Army Corps keeps oil pipelines in streamlined permitting rule over protests

The US Army Corps of Engineers will not remove oil pipelines from the next five-year authorization of its streamlined permitting program, despite opponents of the Dakota Access Pipeline and historic preservation groups calling for more scrutiny in order to prevent spills.

The agency released a final rule Thursday authorizing the program through March 2022.

More than 53,000 of the 54,000 comments the Corps received about the wide-ranging program dealt with Nationwide Permit 12, or NWP 12, a provision that allows oil pipelines to avoid much of the federal scrutiny that interstate natural gas pipelines undergo.

NWP 12 includes oil pipelines in its definition of utility lines that are eligible for streamlined federal permitting authorizing construction, maintenance and repair work in federally regulated waters. Some projects can begin work without prior approval from the Corps.

Other projects with certain characteristics — including those that cross a navigable river or run more than 500 feet in a single water body and those that may affect sensitive cultural resources or endangered species — must get pre-construction authorization from the Corps' regional office that oversees that area of the pipeline and comply with a number of general conditions.

The Corps decided not to make any major changes to the provision.

Read more at Platts.


Shale field costs could rise by a fifth in 2017, analysts say

Rising oil prices have eased financial pressure for scores of U.S. drillers, but higher oil field service costs could kick in soon.

As companies return to oil patches with new fleets of rigs, the costs of newly hired crews, frac sand, pressure pumps and other equipment used to blast open shale rocks could quickly rise, possibly creeping up by 20 percent before the end of the year, Houston investment bank Tudor, Pickering, Holt & Co. said this week.

In oil price terms, that could raise break-even levels for shale drillers by $10 a barrel, eating into cash that drillers need to churn out oil from new oil wells, said David Pursell, head of macro research at Tudor Pickering.

“Prices have to go up if activity is going to increase,” Pursell said. “You’re going to have to put more equipment to work, and you’re going to have to put more people on that equipment.”

Cost inflation could pose a challenge for oil companies that have already stretched their financial resources and rely mostly on cash they make from selling oil. These firms, some already saddled with debt they’re trying to pay off, may have to issue new shares to support increased capital investment plans this year, Pursell said.

Read more at FuelFix.


Report: Kremlin propaganda network attacks fracking to boost Russian energy interests

The Russian government’s state-funded propaganda apparatus runs stories critical of U.S. oil and gas production in an effort to handicap competitors to Russia’s state-run energy companies, according to the U.S. intelligence community.

The Office of the Director of National Intelligence alleged that RT America, an arm of the Kremlin’s foreign propaganda operation, is designed and funded to serve the Russian government’s financial and geopolitical interests in a report released on Friday.

“RT runs anti-fracking programming, highlighting environmental issues and the impacts on public health,” the report noted, referring to hydraulic fracturing, an innovative oil and gas extraction technique.

“This is likely reflective of the Russian Government’s concern about the impact of fracking and US natural gas production on the global energy market and the potential challenges to Gazprom’s profitability.”

That allegation dovetails with prior statements by public officials in Europe, who say that the Russian government has financed environmental advocacy efforts there with the goal of stymying European competition to Russian oil and gas exports.

Read more at the Washington Free Beacon.
 
<< Back to news


AD

Topic

AD