OGI This Week
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Quantum Energy CEO S. Wil VanLoh Jr. sets OPEC’s deadline on forcing out weaker players, saying the U.S. will struggle to regain its footing among service companies when oil inventories run out.In the Midcontinent, Houston company Vanguard Natural Resources enters an agreement to sell natural gas, oil and NGL assets in Oklahoma’s Scoop and Stack plays, a growing hotbed for A&D activity, for about $280 million.Meanwhile, the Justice Department said ValueAct Capital violated antitrust rules by failing to notify antitrust authorities that it was influencing Halliburton and Baker Hughes' business decisions after investing more than $2.5 billion in the companies.
Through April, lenders will determine how much money they’re willing to loan E&Ps. For the majority, the spring revaluation will likely cut borrowing bases by 20% to 30%, an analyst said.Out of time and money, Emerald Oil filed for Chapter 11 bankruptcy. The company leases about 76,000 net acres in the Williston Basin, and has millions of barrels in potential oil in the Bakken Shale.Israel's High Court objections about the stability clause in a framework agreement concerning the Leviathan Field could further delay development. The field's developer's Noble Energy and Delek Group hoped the $6 billion project would start in 2019.
The U.S. will continue to be the only major producing country with an Atlantic coastline that is not able to explore for oil and gas off its Atlantic shores following a decision by the Obama administration.Meanwhile, EP Energy deals away its assets in Louisiana and East Texas for $420 million as another private equity company delves into natural gas.Speaking at Hart Energy's DUG Rockies conference, political strategist and on-air pundit Karl Rove said despite conventional wisdom neither Donald Trump or Hillary Clinton are guaranteed to be on the November presidential ticket.
A judge’s decision to let Sabine Oil and Gas Corp. reject gathering, processing contracts is unlikely to devastate the industry, but it raises near-term risk for many.In Houston, a former Shell executive tells industry breakfast goers that U.S. oil and gas producers can improve the situation at homes despite the hydrocarbon oversupply.Meanwhile, Denver's FourPoint Energy has paid low prices to more than double its Western Anadarko position to 880,000 net acres as the Stack and Scoop soak up the limelight.
Value has been largely destroyed through the downturn by companies encumbering assets with low-return capital, leaving M&A out of the question for even the world's largest publicly traded oil and gas company - ExxonMobil. Instead the Texas company will focus on bite-sized asset deals.Last week, the petroleum industry lost a charismatic leader, a passionate advocate and a dealmaker extraordinaire when Aubrey K. McClendon died in a tragic auto accident in Oklahoma City on March 2. Governors, billionaires, food banks remember the shale pioneer's legacy.Meanwhile, for those looking to survive the downturn, KeyBanc’s senior E&P analyst David Deckelbaum says the only true value E&Ps can offer in the downcycle is time.
Saudi Arabia's oil minister says the harsh truth for the industry is the most efficient way to rebalance markets is to find ways to lower costs or liquidate. Meanwhile, Anadarko Petroleum sold royalties, its East Chalk asset and a midstream subsidiary in a string of deals that keep the company from having to dip into the equity markets. Also, a historic moment for the U.S., Cheniere’s first LNG cargo departed Sabine Pass last week. The company is aiming for 3.8 Bcf/d in export capacity.
A report by the International Energy Agency gave oil prices a 12% boost earlier this week. Meanwhile, an OPEC general secretary says he doesn’t know how to work with U.S. shale producers because of their rapid response to changes in oil prices. Also, after insisting it didn't need any additional financial firepower, Oklahoma City's Devon Energy launched an equity offering projected to raise more than $1 billion and lessen its dependence on asset sales. According to an elected official, North America could drive the global energy market with a combination of technology, aligned transportation infrastructure and low cost business practices.
EOG Resources has concentrated on saving money, not just by relying on service company rates to fall, but mostly by refining its own processes and monitoring the cost of every bolt, said CEO Bill Thomas at a NAPE Summit lucheon.On Feb. 9 WPX Energy announced a $910 million deal to sell its Piceance assets. Analysts see the sale as a positive for other E&Ps looking to divest noncore producing assets amid low commodity prices.In the U.S., oil stocks are higher than at any time since 1930 and are expected to build even higher by April as WTI feels the pain.
President Barack Obama is proposing to pay for clean energy investments by placing a $10 per barrel oil fee as the industry grapples with low prices. Congressional leaders said the plan is dead on arrival.Meanwhile, a report that said Cheseapeake Energy had hired a restructuring attorney sent the price of the stock tumbling, but the company countered it had no intention of filing for bankruptcy.In an outlook for 2016, Craig Lande, managing director at RBC Richardson Barr, says A&D will be different: capital markets are tightening, 20% of production is hedged and demand is hopelessly outmatched by supply.
With plans of bringing their “best-in-class technologies” to West Texas, a team of veteran oilmen struck out on their own with eyes for the Delaware Basin ultimately closing an acquisition of 18,000 net acres in the basin's core.In South Texas, Australia's AWE Ltd. has unloaded its Eagle Ford assets in Karnes County in order to focus on projects closer to home.Globally, ExxonMobil is predicting a hike in energy demand. Altogether, oil, natural gas and coal are expected to meet almost 80% of the world’s energy needs, which could rise by 25% through 2040.
Analysts forecast that the industry will likely see widespread headcount reductions amid weak commodity prices. To begin January, companies have announced layoffs and written off billions in value including oilfield services giant Schlumberger.In West Texas, Concho Resources launched plans to buy 12,000 net acres in the Delaware Basin and sell 14,000 net acres in Loving County as part of a trio of transactions meant to solidify the company’s core.Around the globe, an energy consultancy says 27 billion barrels of oil equivalent of commercial reserves have gone untapped due to delays of new upstream projects.
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