Category Archives: Oil & Gas – inland
The petroleum industry includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing petroleum products.
EIA: Horizontal Drilling Boosts Gas Production in Pennsylvania, USA
The U.S. Energy Information Administration (EIA) said in a report that between 2009 and 2011, Pennsylvania’s natural gas production more than quadrupled due to expanded horizontal drilling combined with hydraulic fracturing.
This drilling activity, which is concentrated in shale formations that cover a broad swath of the state, mirrors trends seen in the Barnett shale formation in Texas.
Historically, natural gas exploration and development activity in Pennsylvania was relatively steady, with operators drilling a few thousand conventional (vertical) wells annually. Prior to 2009, these wells produced about 400 to 500 million cubic feet per day of natural gas. With the shift to and increase in horizontal wells, however, Pennsylvania’s natural gas production more than quadrupled since 2009, averaging nearly 3.5 billion cubic feet per day in 2011. Natural gas wells accounted for virtually all (99%) of the horizontal wells started over this period.
Drilling programs in Pennsylvania’s shale formations, like those in other, more established plays such as the Barnett and Eagle Ford in Texas, are migrating to more liquids-rich areas due to the price premium of crude oil and natural gas liquids. The effect of low natural gas prices is apparent in Pennsylvania’s 2012 well count for the first third of the year. From January through April, drilling began on 618 new natural gas wells; over 700 new natural gas wells were started over the same period in 2011. In contrast, 263 new oil and “combination” (oil and natural gas) wells were started in Pennsylvania from January through April 2012, well above the 164 new wells that began drilling during the corresponding period in 2011.
Related articles
- Ohio considers rules that opponents say favor frackers (fuelfix.com)
- AP: Pa. gas drilling brought $3.5 billion in 2011 (news.yahoo.com)
Desperate Argentina Now Seen Begging for Oil Investment
Thursday, May 10, 2012 – by Staff Report
Argentine Vice President Amado Boudou on Tuesday urged US companies to invest in YPF, the nationalized oil company that Argentina recently expropriated from Spain’s Repsol … “We are very optimistic in terms of what is coming for the Argentine economy in general and the hydrocarbons sector specifically” Boudou said at a Conference on the Americas at the US State Department in Washington. Far from scaring off foreign investment because of the expropriation, the government of President Cristina Fernandez has set the framework for “excellent opportunities for those who want to invest in joint ventures and possibilities of joint work in the energy sector,” he said. The Cristina Fernandez administration is gambling that the discovery in May 2011 of a giant oilfield in Argentina’s Patagonia would be too tempting for foreign oil giants to ignore. YPF needs the know-how and the capital to fully exploit the oil fields in the south-western Nequen province, known as Vaca Muerta (Dead Cow), which according to official estimates holds 150 million barrels of oil. YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said. – Merco Press
Dominant Social Theme: Don’t cry for Argentina. It’s all under control …
Free-Market Analysis: Are Argentina’s top officials having second thoughts about their expropriation of Spain’s Argentine oil-producer? It would seem that way from the above news report via Merco Press.
If the move was as wildly destructive as people think it may have been, then this posture would tend to confirm the idea that one of the world’s more powerful and influential states is simply spinning out of control.
The results may be truly catastrophic, not just for Latin America but for the larger, struggling world.
This boom may well be ending – or certainly growing long-in-the-tooth after a decade or more.
Although the Argentine expropriation of Repsol made major shock waves, the Argentine government under President Cristina Fernandez has portrayed it as a judicious and necessary gambit.
Many other observers regardless of political affiliation have branded the move as a shallow populist one that will bring disaster to Argentina and environs.
As the predictions of damage mount, there is more speculation that Fernandez’s action may bring down not only her own government but other regional governments as well.
These predictions involve inevitably a peso devaluation that will set off a dollar-withdrawal frenzy in big regional banks. Real estate prices – radically inflated after a decade of monetary expansion – may well plunge. The results could affect large swaths of South America.
Countries that could be affected include Uruguay, Brazil, Chile and Peru among others – all countries that have pursued moderate market-based policies and have benefitted from the South American industrial and monetary boom.
Meanwhile, Repsol doesn’t seem apt to surrender. Here’s more from the article.
YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said.
Last week the Argentine president signed a bill expropriating 51% of YPF stock from Repsol, its majority shareholder, sealing a measure that has roiled the country’s trade ties with Europe.
Cristina Fernandez has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.
In Madrid, a Repsol spokesman Tuesday said the company has warned its competitors that they will face legal action if they invest in YPF.
“The idea is to protect the assets that were confiscated in Argentina until the situation is resolved in a satisfactory way for the parties that are involved,” the spokesman said.
Conclusion: A cascading crisis in South America may still seem likely …
Related articles
- Argentina: Vaca Muerta – Argentina’s oil and gas seizure poses new dilemma (mb50.wordpress.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
- Leftist economist masterminds Argentina’s YPF grab (mb50.wordpress.com)
- This Is Why President Cristina Kirchner Is Not Good For Argentina (businessinsider.com)
- Argentine Congress easily approves YPF takeover (fuelfix.com)
- BOOM: Argentine Parliament Votes To Nationalize YPF (YPF) (businessinsider.com)
- Leftist economist behind Argentina’s YPF takeover (sacbee.com)
- Argentina Backs Nationalization of YPF Oil Firm (theepochtimes.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
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Marathon Oil in $750m Eagle Ford splash
Marathon Oil has splashed out $750 million to acquire Houston-based private Paloma Partners II and its Eagle Ford assets.
The US independent will pay in cash for the acquisition, which is expected to close subject to approvals in the third quarter.
Paloma II owns roughly 17,000 net acres in the Eagle Ford shale play, primarily in Karnes and Live Oak counties.
Net production at the properties as of 1 April was around 7000 barrels of oil equivalent per day.
Paloma II’s principal shareholders are Paloma Resources, Encap Energy Capital Fund VII and Macquarie Americas Corporation.
Marathon Oil has previously flagged its intentions to hone in the Eagle Ford, telling the Howard Weil conference earlier this year it would ramp up activity in the oil window of the South Texas shale play.
The Eagle Ford is a key plank of the New York-listed outfit’s $4.82 billion capital expenditure budget for this year.
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- Energy: Texas Tops Finds From Brazil to Bakken as Best Prospect (mb50.wordpress.com)
- New drilling, production in Eagle Ford surges (mb50.wordpress.com)
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USA: NOV Posts Solid 1Q Results
National Oilwell Varco, Inc. today reported that for its first quarter ended March 31, 2012 it earned net income of $606 million, or $1.42 per fully diluted share, compared to fourth quarter ended December 31, 2011 net income of $574 million, or $1.35 per fully diluted share.
The first quarter 2012 results included transaction costs totaling $7 million pre-tax, and, excluding these, earnings were $612 million, or $1.44 per fully diluted share. Earnings per share improved 44 percent from the first quarter of 2011 and five percent from the fourth quarter of 2011, excluding transaction and devaluation charges from all periods.
Revenues for the first quarter of 2012 were $4.3 billion, an increase of one percent from the fourth quarter of 2011 and an increase of 37 percent from the first quarter of 2011. Operating profit for the quarter, excluding the transaction and devaluation charges, was $881 million, or 20.5 percent of sales. Sequentially, first quarter operating profit increased two percent, resulting in operating profit flow-through (change in operating profit divided by the change in revenue) of 48 percent, excluding transaction and devaluation charges. Year-over-year first quarter operating profit increased 40 percent, resulting in operating profit flow-through of 22 percent, excluding transaction and devaluation charges.
Capital equipment orders for the Company’s Rig Technology segment increased 15 percent sequentially to $1.91 billion during the first quarter, reflecting higher demand for drilling equipment for new build offshore rigs. At March 31, 2012 the segment’s backlog was $10.36 billion, up two percent from the end of the fourth quarter.
Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, “Our Company got off to a good start in the first quarter of 2012, with strong results in all three segments. Our Petroleum Services & Supplies group performed exceptionally well, helped by high levels of oilfield activity which is spurring demand for all our products and services. National Oilwell Varco continues to provide critical, enabling technologies to improve the efficiency and safety of oil and gas operations around the globe. Our outlook for demand for our capital equipment is very strong and our expectations high for the remainder of the year. Overall, efficient execution of orders in our backlog, innovation in our leading technologies, commitment to great service, and, most importantly, the hard work of the best team in the industry, led to solid earnings again this quarter.”
National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.
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- Schlumberger Announces Agreement to Sell Wilson International Inc. (mb50.wordpress.com)
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EPA Official: EPAs "philosophy" is to "crucify" and "make examples" of US energy producers
In a Senate speech, Senator Inhofe will draw attention to a little known video from 2010, which shows a top EPA official, Region VI Administrator Al Armendariz, using the vivid metaphor of crucifixion to explain EPA’s enforcement tactics for oil and gas producers. In this video Administrator Armendariz says:
Quote from video:
“But as I said, oil and gas is an enforcement priority, it’s one of seven, so we are going to spend a fair amount of time looking at oil and gas production. And I gave, I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting but I’ll go ahead and tell you what I said. It was kind of like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years. And so you make examples out of people who are in this case not compliant with the law. Find people who are not compliant with the law, and you hit them as hard as you can and you make examples out of them, and there is a deterrent affect there. And, companies that are smart see that, they don’t want to play that game, and they decide at that point that it’s time to clean up. And, that won’t happen unless you have somebody out there making examples of people. So you go out, you look at an industry, you find people violating the law, you go aggressively after them. And we do have some pretty effective enforcement tools. Compliance can get very high, very, very quickly. That’s what these companies respond to is both their public image but also financial pressure. So you put some financial pressure on a company, you get other people in that industry to clean up very quickly. So, that’s our general philosophy.”
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- Coming Soon: A Controversial “Ruling” That Threatens Your Job AND the Economy (articles.mercola.com)
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- EPA: A Rogue Agency under a Rogue President (conservativesonfire.wordpress.com)
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USA: Higher Oil, Gas Taxes Would Hurt Jobs and Revenue, API Says
API’s Chief Economist John Felmy told reporters yesterday that when America’s oil and natural gas industry reports solid earnings it means jobs are being created and more revenue is being delivered to government.
He said raising taxes on the industry would hurt both jobs and revenue: “If first quarter earnings are solid, it will be a positive sign for American workers, for American retirees, and, in particular, for Uncle Sam, which is desperately in need of the massive revenue our industry has been providing.
“In 2011, the three companies paying the largest share of incomes taxes in the United States were oil and natural gas companies. They paid almost $55 billion – and paid at higher effective rates than all other companies. They also paid at substantially higher rates than the U.S. federal statutory rate.
“Unfortunately, calls for higher taxes on the industry often accompany the release of earnings reports. Higher taxes are a bad idea, not only because they would be discriminatory and punitive – but also because they would hurt investment, hurt jobs, hurt future financial performance and, after a few years, decrease the revenue our industry delivers to the government.
“Instead of raising taxes, if we committed to a strong program of domestic development, we could in 2030 create as many as 1.4 million jobs, generate $800 billion in additional revenue, and substantially boost U.S. oil and natural gas production, according to a study last year by Wood Mackenzie. In just seven years, as many as one million jobs could be created.
“Our industry is successful, and our nation shares in and benefits from that success. We need to remember that when earnings are released.”
API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
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- Removing the disconnect between talk and action on energy policy (mb50.wordpress.com)
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- Energy secretary backs natural gas exports (mb50.wordpress.com)
- API: Taxing onshore oil, gas wrong policy (upi.com)
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New drilling, production in Eagle Ford surges
New well starts in the Eagle Ford shale jumped 110 percent from January through March 2012 compared to the same period a year ago, according an analysis by Bentek Energy. (Source: U.S. Energy Information Administration, Bentek Energy)
Drilling in the Eagle Ford shale has dramatically increased in 2012, as producers have frantically turned away from cheap natural gas to production from regions that yield higher priced oils and other liquids.
The number of new wells drilled in Texas’ Eagle Ford shale more than doubled during the first three months of 2012, compared with the same period a year ago, according to Bentek Energy.
Operators started 856 new wells in the first quarter of 2012, compared with 407 in the same period a year ago, the energy market analysis firm reported.
There was also a record high number of 217 rigs active in the Eagle Ford during this month.
The increase in activity ratcheted up production of oil and other liquids, from 182,000-barrels-a-day in April 2011 to more than 500,000-barrels-a-day this month, according to Bentek’s analysis, which the U.S. Energy Information Administration highlighted on its website.
The Eagle Ford currently produces about 2 billion cubic feet of natural gas per day.
According to Bentek, Eagle Ford crude oil and liquids production was approaching the levels of the booming Bakken shale formation in North Dakota and eastern Montana during March 2012.
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- Energy: Texas Tops Finds From Brazil to Bakken as Best Prospect (mb50.wordpress.com)
- Bexar facility is ‘big deal for us’ (mb50.wordpress.com)
- Pioneer Bets On West Texas Shale Oil To Rival Bakken (mb50.wordpress.com)
- Tuscaloosa shale promising (mb50.wordpress.com)
- Does the U.S. Really Have More Oil than Saudi Arabia? (theoildrum.com)
Continents of the World
