Explorers in U.S. oil fields stung by the quick rise and fall in the market last year are expected to move cautiously when crude prices begin to climb again. Bill Thomas, chief executive at EOG Resources Inc., the largest landholder in Texas’s Eagle Ford shale formation, told attendees at an industry conference in Houston on Wednesday that his company won’t start boosting output the first time oil hits $60 a barrel. “We’re going to make sure the market is in good shape, it’s balanced, and we’ve got a future,” Thomas said. “We don’t want to ramp it up and drive the price of oil down again.”
Source: It’ll Take More Than an Oil Rally to Restart Shale Boom – Bloomberg Business
The federal government believes daily U.S. crude production fell to 9.3 million barrels in June, down by 100,000 barrels in the prior month, as low oil prices continue to discourage drilling.
The Energy Information Administration said Monday its monthly report on domestic oil supplies, slated to be released in full soon, will use a new approach to collecting production data. Instead of relying largely on state agencies to provide data, it has begun to survey oil companies that drill in 15 states including Texas and the Gulf of Mexico. It’s an effort to improve the accuracy of its monthly estimates of the nation’s oil output.
This has led it to revise its monthly production data for January through May downward by at least 40,000 barrels a day and up to 130,000 barrels a day, with the biggest declines coming from Texas. There was also an uptick in production from the Gulf of Mexico.
Source: EIA revises US oil production estimates lower; June output sank
Houston-based Lucas Energy Inc. (NYSE MKT: LEI), which has been struggling to improve its financial footing, reported its net loss for fiscal year 2015 increased 9.4 percent over the previous fiscal year’s net loss.
Although the company has made significant progress cutting costs, Lucas’ viability depends on the development of its oil reserves, particularly in the Eagle Ford Shale, and finding the necessary funding for such development, the company noted.
For the 12 months ended March 31, Lucas had a net loss of $5.1 million, or 15 cents per diluted share, compared to a net loss of $4.7 million, or 16 cents per share, for the prior year.
Revenue dropped 42.5 percent to just over $3 million in fiscal year 2015 from $5.22 million the year before. Lucas attributed nearly half of that decline — approximately $1 million — to the drop in oil prices, while the company’s lower production volumes decreased revenues by another $1.2 million compared to the previous year.
Certain asset sales in Madison County, Texas, and lack of funding for drilling activity contributed to the company’s 28 percent decrease in production volumes, Lucas said.
“The past 12 months were particularly challenging for Lucas as we pursued a number of financial transactions and potential business combinations that were not completed,” Lucas CEO Anthony Schnur said in a statement. “The severe drop in crude oil prices that began in the summer of 2014 negatively affected our ability to raise external capital, and the business combinations that we pursued were also affected by the current oil and gas environment.”
via Lucas Energy records bigger net loss, still pursuing strategic alternatives – Houston Business Journal.
Posted in Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Uncategorized, Utica
Tagged Bakken, Eagle Ford, Haynesville, Marcellus, Niobara, Permian, Utica
Sabine Oil & Gas Corp. is seeking Chapter 11 bankruptcy protection, making it the sixth and the largest U.S. oil producer yet to file for bankruptcy because of cheap oil prices.
Court papers filed in New York on Wednesday show the Houston company had $2.48 billion in assets and total liabilities of $2.91 billion at the end of May, the second largest U.S. bankruptcy this year, according to data compiled by Bloomberg. It’s a mid-sized oil and gas company, and had $550 million more in debt than the second-biggest producer to file for bankruptcy this year, Fort Worth-based Quicksilver Resources.
Sabine drills for oil and gas in the Haynesville Shale in east Texas and Louisiana, and the Eagle Ford Shale and the Granite Wash in Texas. It had 165 employees and about thousands of drilling sites across the state.
In a statement, Sabine’s finance chief blamed its high debt and low oil and natural gas prices and volatility across energy markets for the company’s situation, saying it could have otherwise fixed its balance sheet by selling assets – if not for cheap oil and gas devaluing its properties.
via Sabine sixth U.S. producer to seek bankruptcy protection this year – Fuel Fix.
The shale oil boom that turned the U.S. into the world’s largest fuel exporter and brought $3 gasoline back to America’s pumps is grinding to a halt.
Crude output from the prolific tight-rock formations such as North Dakota’s Bakken and Texas’s Eagle Ford shale will shrink 1.3 percent to 5.58 million barrels a day this month, based on Energy Information Administration estimates. It’ll drop further in July to 5.49 million, the lowest level since January, the agency said Monday.
With the Organization of Petroleum Exporting Countries maintaining its own oil production, U.S. shale is coming under pressure to rebalance a global supply glut. EOG Resources Inc., the country’s biggest shale-oil producer, hedge fund manager Andrew J. Hall and banks including Standard Chartered Plc have forecast declines in U.S. output following last year’s plunge in crude prices. The nation was still pumping the most in four decades in March.
“Production has to come down because rigs drilling for oil are down 57 percent this year,” James Williams, president of energy consultancy WTRG Economics, said by phone Monday from London, Arkansas. “Countering that is the fact that the rigs we’re still using are more efficient and drilling in areas where you get higher production. So that has delayed the decline.”
via U.S. Shale Oil Boom Grinds to a Halt as OPEC Keeps Pumping – Bloomberg Business.
The cadence and timing of well completions have been the primary drivers of Halcón’s production volumes in El Halcón. Even though the company has reduced its drilling activity in the play to just one rig, the completion calendar in April was quite busy, with five new wells turned to sales. This compares to an average of three wells per month during the preceding twelve months when Halcón was running 2-3 rigs in the play.
With five new wells brought online in April, Halcón’s May production in El Halcón will likely remain stable, even if no new wells are completed in May.
As a reminder, East Texas Eagle Ford accounts for approximately one-quarter of the company’s overall production volumes, with the Bakken being a much more significant producing area for the company. However, El Halcón is important to the stock’s valuation due to the asset’s sheer size and significant value potential.
via Halcón Resources: Taking Stock In The Eagle Ford – Halcon Resources Corporation (NYSE:HK) | Seeking Alpha.
Proceeds from the sale of the Eagle Ford Shale Midstream business by Pioneer Natural Resources and Reliance Holding USA Inc. will find their way to the Permian Basin.
Pioneer and Reliance, a subsidiary of India’s Reliance Industries, are selling the business to Enterprise Products Partners for $2.15 billion.
The two companies will receive $1.15 billion at closing, expected early in the third quarter, and $1 billion a year later. Pioneer’s share of the net proceeds is expected to be $500 million at closing and $500 million a year later. An additional $100 million will be realized from reduced transportation and processing fees associated with new downstream agreements resulting from the sale.
“We’re at the point where we had built out the facilities to the great effect that the project was done. We felt it was an asset we could sell at high value in the master limited partnership space,” said Tim Dove, Pioneer’s president and chief operating officer.
Company officials then felt the proceeds could be redeployed to activity in the Permian Basin, he said.
In announcing the sale, Scott Sheffield, Pioneer chairman and chief executive officer, said in a statement that the company currently operates 10 horizontal rigs in the Spraberry/Wolfcamp of the Permian Basin. He said the company will ramp up drilling activity on high-return Wolfcamp B and Wolfcamp A horizontal wells during the second half of the year and resume horizontal drilling in the Lower Spraberry Shale.
“Starting in July, we will add an average of two horizontal rigs per month in the northern Spraberry/Wolfcamp through the remainder of 2015 as long as the oil price outlook remains positive,” Sheffield said. “This additional drilling activity is expected to increase the company’s 2015 capital budget by approximately $350 million. The addition of these 12 rigs will have minimal impact on forecasted 2015 production growth of more than 10 percent due to multi-well pad drilling.
via Pioneer to ramp up drilling in Permian Basin – MRT.com: Oil & Gas.
Noble Energy Inc. agreed to acquire Rosetta Resources Inc. for $2.1 billion in stock, giving the natural gas and oil producer a position in two of the largest areas of shale production in Texas.Noble will also assume Rosetta’s net debt of $1.8 billion, the companies said in a statement on Monday. The per-share offer is valued at $26.62, a 38 percent premium to the target’s closing price on Friday. The Eagle Ford basin was the most productive U.S. oil field at the end of 2013, according to the latest Energy Department data.The premium for Rosetta is below average for the sector over the past five years, suggesting there are more mergers to come, said Fadel Gheit, a New York-based analyst for Oppenheimer & Co. It’s the largest takeover of a U.S. oil and gas producer announced this year, according to data compiled by Bloomberg.
via Noble Buys Rosetta for $2.1 Billion to Gain Texas Shale – Bloomberg Business.
U.S. crude oil production surged last year by the largest volume in more than 100 years.
American producers pumped an additional 1.2 million barrels per day of crude oil and condensate in 2014 compared with the year before, reaching 8.7 million daily barrels, according to the U.S. Energy Information Administration.
It was the largest increase in production since record keeping started in 1900, according to the agency.
“Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations,” the agency said in a report.
The Bakken formation in North Dakota, the Permian Basin in West Texas and eastern New Mexico, and the Eagle Ford Shale in South Texas have been driving crude oil production increases for each of the last six years.
Though oil and condensate production is expected to rise this year again, the growth isn’t expected to be as robust. Crude oil prices have been slashed in half since last summer.
That’s pushing drilling into the best areas of established oil fields and eliminating drilling in the more economically marginal regions.
EIA’s latest Short-Term Energy Outlook anticipates crude oil production to grow at 8.1 percent this year and 1.5 percent next year.
via Crude production surges by highest volume in 100 years – Eagle Ford Fix.