The U.S. natural gas market is waking up.
Seasonal price swings will intensify as the country begins shipping liquefied natural gas cargoes to Asia and Europe later this year, said Bank of America Corp., RBC Capital Markets LLC and Wood Mackenzie Ltd.
While that’s good news for traders yearning for volatility, it could be bad news for consumers. Average retail gas prices also will rise with LNG exports, according to Bloomberg New Energy Finance.
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Texas-based Range Resources Corp., one of the biggest players in Pennsylvania's Marcellus Shale, has cut its work force by 11 percent this year due to low commodity prices.
The company, the fourth largest driller in Pennsylvania, has about 500 employees in Pennsylvania in addition to its contractors.
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From the American Petroleum Institute on Wednesday:
WASHINGTON, July 29, 2015 ─ API applauded legislative efforts now underway to lift outdated trade restrictions on U.S. oil during a conference call today with reporters.
“At this moment, U.S. diplomats are paving the way for Iran to reassert itself as a major world energy supplier,” said API President and CEO Jack Gerard. “American voters understand that lifting the ban on Iranian oil resources, while maintaining a ban on U.S. companies, is illogical and restricts our own competitiveness. It doesn’t make sense. U.S. energy producers should not be placed at a competitive disadvantage to anyone, whether it is Russia, Iran or any oil-producing country.”
“These votes will play an important role in determining whether America remains a global energy superpower for decades to come,” added Gerard. “If we act now to harness this once-in-generation opportunity, America is poised to add billions to the domestic economy, creating jobs up and down the energy supply chain.”
“Bipartisan momentum is stronger than ever, and we urge members of the House and Senate to schedule committee and floor votes on this issue as soon as possible. Now is the time to send a message to allies around the world that America is ready to lead.”
Read the full text of Gerard’s opening remarks here.
API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 25 million Americans.
Dutch-based Royal Dutch Shell Plc. says it will be cutting 6,500 jobs and paring $7 billion from budgets in the next two years.
It said the cuts are due to what officials temed the continuing "prolonged downturn" for the energy industry.
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Colorado-based Antero Resources reported on Thursday that its natural gas equivalent production grew by 67 percent from a year earlier but was flat from the previous quarter.
That’s because the drilling company has deferred 50 well completions in the Marcellus Shale because of a needed gathering pipeline. That delay had been announced earlier this year.
The pipeline providing Gulf Coast access is scheduled to be completed late this year and those wells will be completed early next year, the company said in a second quarter 2015 earnings call with analysts and the media.
Getting those wells into production will provide the company with a $150 million boost in 2016, and Antero Resources is expecting production growth to jump by up to 30 percent in 2016, officials said.
The company, one of the biggest players in Ohio’s Utica Shale, reported a financial loss of $145 million or 52 cents a share during the second quarter. That compares to a $42 million loss or 16 cents a share in the second quarter 2014.
Antero Resources is projecting a slight drop in production in third quarter 2015.
The company produced 1,484 billion cubic feet of equivalents per day in the quarter that ended June 30. . That total includes nearly 46,000 barrels per day or about 18 percent of production. That represents a 127 percent increase from a year ago and a 15 percent jump from first quarter 2015.
Antero Resources had trimmed its capital budget by 49 percent in 2015. It cut its rigs from 21 to 10 and cut completion crews from 10 to 7 as commodity prices dropped.
The company has drilled 68 Ohio wells and has four rigs drilling in Ohio. It completed 10 Ohio wells in the second quarter. The average lateral in those wells was 10,600 feet in length.
Those 68 Ohio wells produced 244 million cubic feet of equivalents per day in second quarter 2015. That included 11,900 barrels per day of liquids.
The company plans to drill another 35 Utica wells in Ohio in 2015. That includes two seven-well pads and one 6-well pad.
It has drilled 413 horizontal wells in the Marcellus Shale in Pennsylvania and West Virginia.
Earlier this week, it drilled its first Utica Shale natural gas well in Tyler County, W. Va. It will be several months before results will be released.
The company has more than 543,000 acres in Ohio, Pennsylvania and West Virginia.
The company has also recently acquired 4,400 acres with potential in both the Utica and Marcellus shales in West Virginia’s Tyler County. The purchase price was $33.6 million.
The company has reduced Utica drilling time from 34 to 30 days. It is spending about $1.3 million per 1,000 feet of laterals.
It has recently committed to ship natural gas starting in 2018 with Columbia Pipeline’s Mountaineer Xpress and Gulf Xpress pipelines.
It has reduced drilling costs by 16 percent in the Marcellus Shale and 18 percent in the Utica Shale, said chairman and CEO Paul Rady. His company is positioned to “weather the (economic) storm,” he said.
In the Utica, about 65 percent of the savings came from cuts in well service costs and 35 percent came from operating efficiencies, he said.
Tidbits from Antero Resources' second quarter 2105 earnings call:
1. Company is looking forward to completion of Mariner East 2 pipeline to carry liquids to overseas markets. That is likely to happen in fourth quarter 2016.
2. Company has cut well costs by 15 to 20 percent in the Marcellus and Utica shales. Costs have been cut 16 percent in the Marcellus and 18 percent in the Utica, compared to 2014.
3. Company is keeping a close eye on the very lucrative Utica Shale wells being drilled by other companies in southwest Pennsylvania.To read more or comment...
From a press release received today:
Republic Expands Natural Gas-Powered Fleet Serving Denver
More than half of Republic's Colorado fleet now powered by the domestic fuel source
DENVER, July 29, 2015 /PRNewswire/ -- Republic Services announced today the addition of 17 Compressed Natural Gas (CNG) solid waste collection trucks to its fleet serving customers throughout the greater Denver area. The CNG trucks replace older diesel-powered trucks, and bring the total number of natural gas vehicles operated by Republic throughout Colorado to 82.To read more or comment...
A press release today:
NEXUS on Collision Course with Community
July 29, 2015 Medina, OH. - NEXUS Gas Transmission’s claim that its current proposed pipeline route is necessary to serve the market area identified by NEXUS and identified customers located along the current route is disputed by the Coalition to Reroute Nexus (CORN or Coalition). In a letter filed July 28, 2015 with the Federal Energy Regulatory Commission (Commission) the grassroots organization stated,
“….… Northeastern Ohio is a well-established industrial region that is abundantly supplied with local natural gas distribution as well as high volume natural gas transmission lines. Any assertion that the NEXUS Project is required in the market area of Northeastern Ohio or by identified customers located along the current route shown in Figure 10.4-1 of Resource Report 10 Alternatives is groundless, if not outright false, in an attempt to mislead the Commission.”
The full text of the Coalition’s most recent filing is attached to this Release and can also be found at http://elibrary.ferc.gov/idmws/file_list.asp?accession_num=20150728-5051
“There has been no disclosure to date that the Nexus proposed route is necessary to provide a direct interconnect with any committed large volume industrial consumer,” wrote CORN Board Director David Eigel. Mr. Eigel is a veteran of 33 years in the energy and utility industry as a petroleum engineer and senior executive.
The Mission of the Coalition to Reroute Nexus is to inform, educate, and persuade NEXUS to choose a more southerly route largely avoiding higher density counties in the northeastern part of Ohio and the ecologically unique and environmentally sensitive Oak Openings Region in western Ohio. The Coalition’s Goal is the creation of a carefully engineered, thoughtfully located Pipeline Safety Corridor that protects the public, the pipeline itself, preserves property values and demonstrates respect for individual property rights.
The 250 mile Nexus pipeline will cover 11 Ohio counties and is a transmission line for natural gas extracted from southern Ohio and intended for resale to international clients at the Dawn Energy Hub in Ontario, Canada. The proposed pipeline route will traverse densely populated counties in northeastern Ohio and could compromise environmentally unique and fragile areas in western Ohio, according to CORN leaders.
On March 23, 2015 the City of Green, Summit County, in conjunction with the Coalition officially submitted to the Commission an engineered alternate route (City of Green Alternative) that would conflict with 40 percent fewer businesses, 50 percent fewer churches, 70 percent fewer homes and 100 percent fewer schools.
In a head-to-head comparison performed by NEXUS the company confirms that, “…the City of Green Alternative would affect 12.4 acres less wetlands and cross 0.22 fewer miles of state parks and 0.26 miles of public or conservation lands than the corresponding segment of proposed route. It would also cross 24.6 fewer miles of steep slope areas and require 9.3 miles less side hill construction.”
In a June 12, 2015 filing with the Commission, NEXUS dismissed the City of Green Alternate route proposal as, “… not located in the market area identified by NEXUS and identified customers located along the current route…”
The Coalition’s Board of Directors wrote, “More likely the justification of the current route by NEXUS and the attempt to discredit the City of Green Alternative is that if the City of Green Alternative were implemented NEXUS would not be able to meet contractual agreements with customers to be in-service by November 2017. A self-imposed contractual date of November 2017 is an insufficient reason to preclude a well thought out route revision such as the City of Green’s.
Any delays associated with the NEXUS Project and its inability to meet contractual commitments is being caused solely by Nexus and Spectra Energy's inability to listen to and work with stakeholders, who have a far greater understanding of the needs and concerns of the community. Repeatedly, suggestions have been made to NEXUS and Spectra Energy to avoid a collision course with the community and residents of Ohio, only to have NEXUS and Spectra Energy ignore, rebuff and bully the stakeholders in the affected communities as if no consequence will result and if the outcome has been predetermined by the Commission. If NEXUS and Spectra Energy continue this arrogant, stubborn, and overly confident approach in its assertions and ruses designed to mislead the Commission in order to achieve its myopic goal of building the shortest route from Kensington, Ohio to the Dawn Hub in Ontario without any regard for the best interests of the stakeholders, the State of Ohio, and the physical safety of the residents living in the proposed route, there will be consequences.”
Donate to CORN: http://bit.ly/1D49BY1
Gas and oil production increased in the second quarter 2015, but low commodity prices resulted in a financial loss of $147 million, Hess Corp. reported today.
Click here to access its 19-page report.To read more or comment...
From a press release:
Swift Energy Retains Lazard to Advise As to Strategic Alternatives Related to Its Capital Structure
HOUSTON, July 28, 2015 – Swift Energy Company (NYSE: SFY) announced today that it has retained Lazard Freres & Co. LLC to advise the Company’s management and Board of Directors with respect to capital structure, financing alternatives and related strategic opportunities.To read more or comment...
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.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
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.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.