OGI This Week
Lead Role: The U.S. could play a greater role in the global oil trade as prices stay low and geopolitics play out, said Tom Petrie of Petrie Partners. Go Green: The “circular economy” of renewables and consumer products minimizing waste and pollution has heft in the environmental movement, said researcher Amy Myers-Jaffe. More Gas: The country’s technically recoverable resource base of natural gas increased 5.5% since 2012, according to the Potential Gas Committee.
Money: More people in industry are concerned about prices than they are about regulations, according to a survey. Impact: A world of oil scarcity has become one of relative oil abundance thanks, in part, to the U.S. shale and natural gas boom, said the CEO of NGP Energy Capital Management. Lull: The Bakken core, with the highest recoveries and lowest breakeven costs, is resting, said a Sterne Agee research analyst.
Bills: Residential energy bills are lower by about $13 billion annually than they were in 2007, a recent paper examining the shale gas boom’s effects on consumers said. Blueprints: Mexico draws up plans for US$10.5 billion in pipeline buildout as the country shifts into privatized oil and gas. Wallets: American consumers have about $165 billion in disposable income—if the savings are annualized—because of lower gasoline prices, said the managing director and chief U.S. economist for Morgan Stanley.
Optimism: Operators at Scotia Howard Weil’s recent conference discussed plans to spur production growth through various methods. Regulation: More than 100,000 oil and natural gas wells—more than 90% using hydraulic fracturing—on public and Native American lands have new rules governing their use and production. Worldview: Jed DiPaolo, senior adviser to Duff & Phelps, views energy commodity prices through the lens of geopolitics, and urges patience and conservative spending.
Support: Lifting the export ban would be “pro-consumer, pro-economy, pro-national security,” said Doug Suttles, CEO and president of Encana Corp., at the recent Vail Global Energy Forum. Uncertain: The EPA’s revised air quality standards for ozone were challenged by industry groups as unsupported by science, redundant and costly. Outlook: A recent oil market report analyzed global demand for crude oil, domestic crude storage capacity and global refinery throughput rates. These combined factors could push U.S. production down toward zero growth by May, the report said.
Incentive: Texas, particularly, could have influence in setting global oil prices if the crude oil export ban is lifted, according to a Texas railroad commissioner. Impact: The smallest projected increase since February 2011, of less than 300 barrels per day of oil, will happen in April, according to the Energy Information Administration. Erasure: Various disruptions from weather to political unrest recently impacted oil supply, as outages wiped out 2.7 million barrels per day.
Money Matters: Few companies were prepared with financial measures, such as explicit return-on-capital targets, before the oil price downturn, a survey finds. Drilling Down: Coiled-tubing fracks are a popular completions method for some geologies, such as sandstone. Pause Button: Clayton Williams could face a drop in production of as much as 10% as it idles some domestic rigs.
Off balance: Drilling techniques used in the shale boom have altered the balance of oil and gas supply and demand. Yes or no? FTI Consulting recently polled more than 1,000 by phone on whether they support exporting crude oil. Key resource: "The ultimate key to survival" in an oil price downturn is "good rock," according to the CEO and chairman of Magnum Hunter.
How Can We Help? Seasoned private-equity providers discuss ways they can help provide capital in the current price environment. Necessary Ingredients: Time, effort and capital combine to create successful LNG value chains, according to experts at Hart Energy’s recent World LNG Fuels conference. Speculation: There could be a 50% reduction in Marcellus-Utica activity levels, according to Enlink Midstream Partners’ CEO.
Q&A: The University of Houston’s chief energy officer discusses the school’s involvement in leading the Subsea Systems Institute for deepwater disaster prevention. No. 1: The oil price decline pushes technology to be the highest-ranking investment for the first time above energy, Houston’s high-net-worth investors say. Keeping Up: E&Ps “will work through the factors standing in the way of production cutbacks,” according to a study.
Money: Several banks with $1 billion or more in assets are “among the most at-risk” for lower lending if oil prices stay low, a report said. Chatter: The commodities market and OPEC were among topics oilman T. Boone Pickens discussed on Twitter with “legions of Twitter followers.” Valuable: Patent assets remain underutilized, but executives are starting to realize they can use them to “unlock financial value.”
Stable: The Middle East will not experience the same decline in exploration and production spending as the rest of the world, a recent survey indicates. Trending: Which North American wells have peak rates greater than 1,000 barrels of oil equivalent per day? An analyst recently explored this trend. Possible Decline: “Early signs” of a spending slowdown included the drop of 118 rigs “over the past six weeks,” an analyst said.