Tumbling oil prices have exposed a weakness in the insurance that some U.S. shale drillers bought to protect themselves against a crash, Bloomberg reports.
At least six companies, including Pioneer Natural Resources Co. and Noble Energy Inc., used a strategy known as a three-way collar that doesn’t guarantee a minimum price if crude falls below a certain level, according to company filings. While three-ways can be cheaper than other hedges, they can leave drillers exposed to steep declines.
“Producers are inherently bullish,” said Mike Corley, the founder of Mercatus Energy Advisors, a Houston-based firm that advises companies on hedging strategies. “It’s just the nature of the business. You’re not going to go drill holes in the ground if you think prices are going down.”
Click here to read the full story.To read more or comment...
From Pennsylvania-based Deep Well Services on Thursday:
From the American Petroleum Institute on Thursday:
WASHINGTON, December 18, 2014 ─ Total U.S. petroleum deliveries (a measure of demand) rose last month by 1.9 percent from November 2013 to average 19.9 million barrels per day, the highest level for the month in seven years.
“It has been several years since we’ve seen this level of demand in November,” said API Chief Economist John Felmy. “The economy overall appeared to be in good shape last month, and production of crude, natural gas and refined products all remained quite strong.”
Gasoline demand also grew by 1.9 percent from November 2013 to average 9.1 million barrels per day. These were the highest deliveries for the month since 2007. Distillate deliveries were the highest in eight months, increasing by 1.2 percent above the prior year to 3.9 million barrels per day. Demand also rose over the same period for jet fuel (3.8 percent) and “other oils” (7.1 percent) while residual fuel deliveries fell 26.0 percent to set a new record low for the month.
Crude production jumped 14.9 percent from last year to its highest November output since 1973. The production level of 9.1 million barrels per day marked the first time above 9.0 million barrels per day since March 1986. The Bakken, the Eagle Ford, and the Permian regions posted record levels of production last month, averaging 1.2 million barrels per day, 1.6 million barrels per day, and nearly 1.8 million barrels per day, respectively.
Natural gas liquids (NGL) production, a co-product of natural gas production, reached its highest output on record at nearly 3.2 million barrels per day, an increase of 15.3 percent from last year. Production of natural gas in the Marcellus region, the largest natural gas producing region, reached a record high of nearly 15.9 billion cubic feet per day in November, up 17.9 percent from last year and was up 74.0 percent from November 2012.
According to the latest reports from Baker-Hughes, Inc., the number of oil and gas rigs in the U.S. in November was 1,925, the same from October, but was up 169 counts from November 2013. This was the second highest count since July 2012.
Total petroleum imports last month were down by 5.2 percent from November 2013 to average just below 8.9 million barrels per day. This was the second lowest level since February 1996. Crude imports rose slightly by 0.7 percent from last year to average nearly 7.5 million barrels per day – the second lowest level for the month since 1996. Imports of refined products dropped 27.3 percent over the same period to the lowest level since May 1995 at 1.4 million barrels per day.
Production of gasoline gained 0.6 percent from the prior year to average a new high for the month of November at 9.5 million barrels per day. At nearly 4.9 million barrels per day, distillate production rose by 4.9 percent from October but was down by 3.7 percent from November 2013. Year to date production of both products was the highest on record.
November records were also set in refinery gross inputs and exports of refined products. Gross inputs grew 0.9 percent from last year to average 16.3 million barrels per day while exports were up 5.5 percent to average 4.2 million barrels per day.
With several refineries back up from their scheduled turnaround, the refinery capacity utilization rate averaged 91.4 percent in November. This was up 2.6 percentage points from October, up 0.8 percentage points from the year ago levels, and the highest November rate in 10 years. API’s latest refinery operable capacity was 17.805 million barrels per day.
Crude oil stocks ended the month at 374.9 million barrels, up 0.3 percent from the last year. These were the second highest November inventories in 84 years, since 1930. Stocks of motor gasoline fell 3.9 percent from last year to their lowest inventories in six years at 208.3 million barrels. Stocks of distillate, jet fuel and “other oils” all fell from year ago levels.
API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 625 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy and are backed by a growing grassroots movement of more than 25 million Americans. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy, delivers $84 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
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From Jackson Kelly PLLC on Thursday:
Jackson Kelly PLLC attorney Elizabeth B. Elmore was appointed as the head of the Akron law firm's Oil and Gas Industry group.
Elmore is a Member of the Firm and Co‑Leader of the Land and Natural Resource Development Practice Group. With more than 20 years of legal experience, Elmore focuses her practice on energy law, including claims of underpayment of royalties, joint ventures between producers for the acquisition and development of oil and gas leases and rights of way for pipeline systems.
Jackson Kelly was recently named the 2015 U.S. News – Best Lawyers® “Law Firm of the Year” for Mining Law. Jackson Kelly was the first law firm to ever receive this honor by being named “Law Firm of the Year” for Mining Law in U.S. News – Best Lawyers® 2011-2012.To read more or comment...
From the Ohio Oil and Gas Association today:To read more or comment...
There's been very little news available on the blowout at the out-of-control Triad Hunter natural gas well in Monroe County since the problem occurred on Saturday.
According to one report, the initial steps failed and an alternative plan is now being implemented and that may take a week to complete, says Rachael Dierker of WTRF News 7.
Click here to read the account at Frack Check West Virginia.To read more or comment...
NEW FRANKLIN: City Council on Wednesday voted to oppose a new natural gas pipeline that would cross southern Summit County, much to the delight of a standing-room-only crowd of 120 residents.
The vote against was 5-0, with two councilmen absent.To read more or comment...
From amp Trillium LLC on Wednesday:
AMP TRILLIUM Opens Compressed Natural Gas (CNG) Station in Canton, Ohio
Frito-Lay North America to anchor station providing easy fueling access to CNG fleets on US 30/US 65
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A Pennsylvania lawmaker is pushing a new severance tax plan, after the industry resisted an earlier severance tax proposal.
State Sen. Jim Brewster wants to impose a 5 percent tax on Marcellus Shale production with the proceeds going to education.
He said the plan would generate between $700 million and $1 billion for schools.
Click here to read the full story from NPR's StateImpact Pennsylvania.To read more or comment...
From Food & Water Watch on Wednesday:
Annapolis, MD — Concerned by both the rapidly expanding evidence of harm and by the growing uncertainties caused by unconventional natural gas development and production, a number of health and advocacy organizations have announced support for a long-term moratorium on drilling and fracking for natural gas in Maryland.
Earlier today, New York Governor Andrew Cuomo announced that his administration will ban fracking in New York, heeding the strong recommendation from the public health officials in his administration that there is no scientific evidence showing that fracking can be done without risk to public health.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.