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Is the oil price rally over?

By Jim Mackinnon Published: May 22, 2015

Yes it is, writes Martin Tillier at Oilprice.com.

For a number of reasons, it is likely prices will fall below $50 a barrel in the near future, Tillier writes.

Tillier: "The increased domestic supply of oil as fracking wells really came online, along with fears of slowing global growth and falling demand for fossil fuels, were major factors in oil’s collapse. Nothing much has changed there either. On the demand side there has been no global meltdown but China is still weaker than expected and recent U.S. GDP numbers have been disappointing. The developed world continues to become more energy efficient."

To read the full story, go here.

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American shale remains oil market's swing producer

By Jim Mackinnon Published: May 21, 2015

Shale firms are the oil market's new swing producers, writes The Economist.

Even as the Saudis and others pump oil to maintain market share, American shale-oil producers are proving to be more productive and resilient than OPEC expected, the magazine says.

The Economist: "Prices have staged only a partial recovery: West Texas Intermediate (WTI), one of the main benchmark prices for crude, was just above $100 a year ago and hit a low of around $44 in March; it had recovered to just $60 by the middle of this week.

"If the glut persists, the price is likely to slip back.

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Oil price rally may be premature celebration, new report says

By Jim Mackinnon Published: May 20, 2015

Oil prices may fall into the mid $40 range later this year, a story in Oilprice.com says

Oilprice.com: "Not so fast, says Goldman Sachs. The investment bank argues in a new report that not only is the oil rally a bit premature, but that the rally itself will be 'self-defeating.' The rally could bring drillers back, but that would merely contribute to a reversal in price gains. More drilling and more production worsen the glut that has not yet been resolved, and prices could be in for a double dip (or triple dip if you count the price declines from February to March 2015).

"The Goldman Sachs report says that the problem is not just from a surplus of crude, but also a surplus of capital. Access to cheap finance has allowed production companies to stay in the game and continue to drill new wells. Even companies that have seen their cash flows dry up or have run into liquidity problems have still been able to find investors willing to pony up fresh capital."

The full story is here.

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Big Shale is reloading under lower oil prices

By Jim Mackinnon Published: May 20, 2015

Big Shale is reloading even as much of the energy industry is reeling from dramatically lower oil prices, reports Saqib Rahim at E&E Publishing.

E&E: "If OPEC wanted to slow down U.S. shale, it's working: The top seven U.S. shales are on track to produce less oil in June than in May, according to the U.S. Energy Information Administration.

"But the predicted wave of bankruptcies and buyouts hasn't yet come to pass, raising the question of how quickly shale can bounce back.

"'I think what happens as a result of this downturn, and this is probably true for the entire industry, we get better at what we do,' Timothy Dove, Pioneer's president and chief operating officer, told analysts last week. 'We basically reduce our break-even cost, and we emerge better in terms of our cost structure as a result of it. And that's what we're going to be. We're going to be better because of the downturn.'"

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Here's why the Saudis want to crush fracking

By Jim Mackinnon Published: May 19, 2015

The Daily Caller says two charts showing the boom in U.S. energy production caused by fracking explains why oil prices have dropped so much.

The Daily Caller: "There’s an oil price war going on, and OPEC thinks it can win by not cutting production and pricing out companies producing oil from U.S. shale formations.

"And now, the Energy Information Administration (EIA) has some charts that show why Saudi Arabia and other OPEC nations are afraid of America’s energy potential."

Take a look at the charts here.

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Innovation dramatically lowering drilling costs

By Jim Mackinnon Published: May 19, 2015

A new wave of innovation that significantly reduces drilling costs is helping struggling oil companies deal with low oil prices, reports Michael McDonald at Oilprice.com.

Oilprice.com: ""A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production.

"And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once.

"The end result of these actions is that per-barrel costs of oil have fallen to around $60 today versus $75 a year ago according to Citi analysts. And executives from oil companies are now forecasting that per barrel prices could fall to $50 or less before long. America has not yet lost the price war."

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GreenHunter Resources working to streamline operations

By Bob Downing Published: May 18, 2015

From GreenHunter Resources on Friday:

GRAPEVINE, Texas, May 15, 2015 (GLOBE NEWSWIRE) -- GreenHunter Resources, Inc. (NYSE:GRH) (NYSE:GRH.PRC), a diversified water resource, waste management, environmental services, and hydrocarbon marketing company specializing in the unconventional oil and natural gas shale resource plays within the Appalachian Basin, announced today financial and operating results for the three months ended March 31, 2015.

First Quarter Financial and Operational Highlights

OPERATIONAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2015

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Two oil organizations seek injunction against new BLM rules

By Bob Downing Published: May 18, 2015

From BakerHostetler law firm last week:

DENVER, May 15, 2015 BakerHostetler today filed a request for preliminary injunction against the final rule the Bureau of Land Management (BLM) issued to regulate hydraulic fracturing on federal and Indian lands. The motion was filed in the United States District Court for the District of Wyoming on behalf of the Independent Petroleum Association of America and Western Energy Alliance. The motion details the flaws in BLM’s final rule and requests that the federal district court halt implementation until the legal challenge is resolved. BakerHostetler filed the first legal challenge to the final rule on March 20, 2015, the same day BLM announced the final rule.

While the final rule is not scheduled to take effect until June 24, 2015, independent producers are already incurring substantial compliance costs. Producers are adjusting drilling schedules, moving equipment, contracting for operational services, and training personnel. Producers anticipate that these additional costs will exceed several hundreds of millions of dollars each year. “BLM has underestimated the cost of the final rule at every phase of development,” said Mark Barron, one of the Denver-based BakerHostetler attorneys heading the litigation. “Given the magnitude of expected costs and the legal flaws of the final rule, injunctive relief is necessary to protect independent producers until the court reaches resolution.”

The motion emphasizes BLM’s failure to consider relevant evidence during the rulemaking process and to justify its action with objective and technically sound support. “BLM argues that some states with hydraulic fracturing activity lack the regulations necessary to protect federal and Indian lands, but BLM is yet to identify a single harm that the agency’s rule will prevent that state regulation isn’t preventing already,” noted Barron.

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U.S. Department of Labor adds drilling to enforcement program

By Bob Downing Published: May 18, 2015

From the Baker Hostetler law firm:

On February 11, 2015, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) announced revisions to its Severe Violator Enforcement Program (“SVEP”).

Under SVEP, employers in designated industries can be subject to unlimited return or unannounced inspections for a period of at least three years.

Employers in the upstream oil and gas drilling industry were previously exempt from this program, which is otherwise dominated by construction and manufacturing firms.

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API challenging new federal rules on crude rail shipments

By Bob Downing Published: May 18, 2015

Last week, the oil industry took the first legal step to challenge new federal rules on shipping crude oil by rail.

The American Petroleum Institute, the industry’s main trade group, petitioned the United States Court of Appeals for the District of Columbia Circuit to block key provisions of the rules, which were unveiled this month by Anthony Foxx, the transportation secretary. The petition was filed on May 11.

The trade group has long argued that forcing oil producers and shippers to use newer tank cars and replace older models would impose high costs on the industry and lead to a shortfall in tank car capacity.

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See the most recent drilling report and an injection wells map From NewsOutlet.org

Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.