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Oil and Gas Roundup — Dec. 11

December 11, 2017
TOPICS: In the news, OIPA
A roundup of oil and natural gas industry news from around the state, nation and world:

Drilling rig count rises to kick off December

The nationwide rig count climbed by two to 931 at the end of last week, as Oklahoma’s rig count fell by one to 121.

Texas’ Permian Basin and Eagle Ford shale both added rigs this week.

Those gains offset losses in other states, contributing to a net gain of two oil drilling rigs nationwide. The number of rigs drilling for natural gas stayed flat, according to weekly data collected by Baker Hughes.

The Permian and Eagle Ford added three new rigs apiece, contributing to a net gain of five rigs for Texas. New Mexico, which has a portion of the Permian, tacked on three rigs.

In addition to the one-rig decline in Oklahoma, Colorado, North Dakota, Kansas and Ohio all counted losses in their rig counts, potentially because of seasonably colder weather farther north.

The total U.S. rig count is now up to 931 rigs, down from a July peak of 958. The rig count has dipped for much of the fall, but rebounded somewhat in recent weeks. Still, the total U.S. rig count is well up from an all-time low of 404 rigs in May 2016.

Oil drilling currently accounts for 751 rigs of the total.

U.S. oil was selling above $57 a barrel in early afternoon trading in New York.

West Texas' Permian Basin now accounts for 400 rigs, which is more than half of all the nation's oil rigs. The next most active area is Oklahoma's Cana-Woodford shale with 73 rigs, recently surpassing Texas' Eagle Ford shale with 70 rigs. Texas is home to 459 rigs overall, while Oklahoma is second with 121 rigs. New Mexico is next with 73 rigs, having passed Louisiana for third.


U.S. delays methane rule implementation until 2019

The Bureau of Land Management has decided to temporarily suspend the federal law-regulating methane emissions from oil and gas operations in the U.S.

The waste prevention rule, or the venting and flaring rule, which was finalised in November last year under the previous federal administration, will now not be implemented until January 2019.

BLM Policy and Programmes deputy director Brian Steed said: “As we strengthen America’s energy independence, we need to make sure that regulations do not unnecessarily encumber energy production, constrain economic growth, or prevent job creation.

“By holding off on certain requirements, the BLM now has sufficient time to review the 2016 final rule while avoiding any compliance costs on industry that may not be needed after the review.”

The latest decision follows the BLM seeking responses from various stakeholders and is part of the government’s aim to conduct a review of the President Obama-era regulation.

It is in line with the current administration’s resolve to lower the costs of regulatory compliance.

Read more at Hydrocarbons-Technology.


Oil to open '18 stuck between thirst to grow, wary investors

Investor exhaustion with poor returns from the oil and gas industry may mean less financing to expand the U.S. shale boom next year, and less of a drive for consolidation.

After nearing a record in 2016, equity issues from U.S. oil and gas companies are on pace for an eight-year low this year, amid doubts about the stability of the rally in global crude prices. Mergers and acquisitions and initial public offerings got off to a strong start but petered out as the year wore on.

While explorers including Anadarko Petroleum Corp. and ConocoPhillips have preached the need for fiscal discipline, investors remain skeptical, said Bobby Tudor, chairman of Houston-based investment bank Tudor Pickering Holt & Co. That’s tightened the flow of new money into the industry, and it’s likely to chill deal-making as buyers and sellers alike wait for stock prices to rebound.

“You’ve had a decoupling, where the companies have not followed oil prices higher, and the investor apathy has been stunning," Tudor said in a telephone interview. “What investors are saying is that as soon as oil peaks its nose above the parapet of $60 a barrel, the switch will go on and all those drilling rigs will go back to work."

Read more at Bloomberg.


Brazil opens areas for exploration and production of oil and gas

Brazil's National Agency for Oil, Natural Gas, and Biofuels (ANP) announced the areas for the exploration and production of oil and natural gas to be made available as part of a new, permanent-offer system. The move covers 846 blocks of 13 sedimentary basins, adding up to some 285,400 square kilometers.

Also offered are 15 areas with marginal accumulations in three land basins. The areas with marginal accumulations are located in the states of Espírito Santo, Rio Grande do Sul, and Bahia, ANP explained.

The decision entails the continuous offer of oil fields that have been returned or are in the process of being returned, blocks not offered in previous bids, as well as blocks not acquired in previous rounds.

Further details regarding participation rules and technical and economic parameters, as well as when the offer is to be made, are expected to be unveiled by ANP by April next year.

ANP believes the move represents an important step towards the resumption of oil and gas exploration and production in Brazil.

Read more at Oil & Gas Links.

 
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