OGI This Week

U.S. oil could eventually sell at a premium on the international market following the lifting of the crude export ban on Dec. 18. U.S. shale oil is lighter and sweeter than Brent, making it more desirable to refiners.In the Appalachian Basin, Magnum Hunter becomes the most recent shale producer to seek bankruptcy protection. So far in 2015, the collapse in commodity prices has thrown more than three dozen North American E&Ps into peril.At Cheniere Energy, Charif Souki, the company's co-founder, chairman, president and CEO, has been voted out. His departure comes about four months after activist investor Carl Icahn took a stake in the company that eventually rose to 13.8%.Editor's note: the weekly newsletter will next publish Jan. 5 following observance of the holidays.
Kinder Morgan has decided to cut its dividends by 75% to 50 cents, a move that will generate nearly $4 billion in discretionary cash flow, insulating the company from equity markets while its stock is down.In Pennsylvania, LOLA Energy is using local connections to open doors in its leasing program and pursuing acquisitions in the Marcellus while also keeping open options if the Utica ‘bet’ pays off.Meanwhile, the International Energy Agency said that production in the Americas and elsewhere will abate, creating a supply and demand balance that begins to stabilize prices by the end of 2016.
Dave Hager, Devon Energy’s president and CEO, touted the company's recent $1.9 billion purchase of Oklahoma acreage. However, with a fully stocked larder of oil and gas assets, investors penalized the company.Worldwide, there's no end in sight for the current oil glut following OPEC's much-anticipated Dec. 4 meeting. The cartel's decision to keep production at current levels could mean continued pressure on oil prices—at least for the first-half of the year, analysts say.In West Texas, a major explosion rocked an Anadarko Petroleum gas plant last week. Construction crews were working on expansions to the plant, but what caused the blast is still unknown. No one was seriously injured.
Dire market conditions may have caused some to consider halting investment offshore, especially given a strong shale presence onshore. However, where some companies may see a barrier, Noble Energy sees opportunity.Meanwhile, after selling a portion of its Midland Basin position, Resolute will now work on the potential sale of midstream infrastructure assets to chip away at its more than $700 million of outstanding debt.Also, President Barack Obama has rejected putting a large-scale force in Syria, but calls for troop deployment could lead to a conflict that unsteadies the Middle East's oil production.
For months now, the favored parlor game has been speculating on when the M&A logjam will break. But when Anadarko Petroleum revealed its rebuffed takeover bid of Apache, the market reacted with skepticism.With $5 billion in liquidity, Noble Energy has decided to take action to remain cash flow neutral in 2016 by cutting its workforce by 7%.Institutional investors may think the industry has finally hit bottom and has better days ahead, as shown in a recent survey where 52% of respondents said they have become more bullish in the past month.Note next week there will be an interruption of the weekly newsletter in observance of Thanksgiving. We will resume on Dec. 1.
Since its initial application nearly seven years ago, Transcanada’s Keystone XL pipeline has become a symbol for politicians and environmental groups—for different reasons. However, the $8 billion project might've hit its final snag under this administration.Back in January plans to market 85-year-old Fidelity Exploration & Production had been delayed by its parent company. Fast foward nine months and Fidelity is being treated as a discontinued operation as sales efforts go forward.The former chairman of MarkWest's management company wants to scuttle a multibillion dollar merger between the company's MLP and Marathon Petroleum. John Fox, former CEO, chairman and director of MarkWest Energy GP LLC, questioned why the company is selling itself for "pennies on the dollar."
There is at least one exception to the declining value of deals in the Eagle Ford. Mark Paull, the vice president of Goldman Sachs’ global natural resources group, said deal size and metrics in the popular basin have come down across the board since the price collapse in oil and NGLs, but he points out a notable exception: the $118-million EnerVest Ltd./Alta Mesa deal in September.Third-quarter 2015 transactions in the oil and gas sector were certainly powered by midstream megadeals. The upstream sector also saw a rebound with deals in the Permian, Eagle Ford and Utica/Marcellus, according to PwC. What lies ahead for the fourth quarter? Depending on who you ask, the opinions vary.Like its peers, BP is cutting costs because of the challenging market environment. In 2015, the company said it divested $7.8 billion and expects to sell another $3-5 billion worth of assets in 2016. On the other hand, year-end production from new wells is expected to reach about 160,000 barrels of oil equivalent per day.
An ode to Oklahoma, where the oil and gas come gushing down the plains. Oklahoma is one of the nation’s top five producing states, and its mix of oil and natural gas in indeed impressive. More Americans than ever before think climate change is a legitimate issue. Seventy-six percent say climate change is occurring. That number is up from 68% one year ago, according to a poll.Here’s a voice of optimism during today’s volatile environment. “I’m here to tell you the oil and gas industry is still relevant and here for the long term,” said Jay R. Pryor, vice president of business development for Chevron Corp. Happy reading, and here’s to better days ahead.Mike MadereManager, Digital News Groupmmadere@hartenergy.com
There’s a ton of important news within the pages of Oil and Gas Investor This Week:Stefan Selig, U.S. undersecretary of commerce for international trade, thinks the role of natural gas in the nation’s economy will continue to grow. Furthermore, Selig said, the place of natural gas as an export will be of particular importance going forward.It looks like a years-long ordeal is winding down for BP. A $20 billion settlement with the U.S. government and five coastal states has been finalized. Attorney General Loretta Lynch said BP is “receiving the punishment it deserves” while also providing compensation for harm to the environment and the economy of the Gulf Coast region.While some companies are eager to put properties on the market, other firms are intent on gobbling them up. Earthstone Energy Inc. is one of them. The company is trained on the Eagle Ford, Bakken and Permian as it watches for the right deal to come along.
Something is swirling in the Gulf of Mexico ̶ and it’s not a hurricane. It’s a growing interest in companies vying to secure drilling rights off the coast of Mexico. Even with the oil and gas downturn, which is causing some companies to hold back on exploration, Mexico officials says they are pleased with the results of the most-recent auction.Chesapeake Energy Corp. made an announcement recently that is causing some employees to be fidgety. The company stated recently that it plans to cut 740 people, or 15% of its workforce, to reduce costs and align itself with the realities of the market environment.The city of Anchorage is in the utility business, and it’s looking to spread its wings even more. Officials are weighing a bid on ConocoPhillips Alaska’s interests in the Beluga River Unit in the Cook Inlet. The city claims that its involvement in the utility business has saved customers hundreds of millions of dollars.
Simply stated, there is a lot going on at Halliburton these days. The service giant will pay nearly $18.3 million to 1,016 employees nationwide to address unpaid overtime. On top of that, the company has had to cut its workforce in North Dakota because of business conditions. Meanwhile, the proposed Halliburton-Baker Hughes merger is struggling to cross the finish line.For some E&P companies, it’s not all about unconventionals. RAM Energy began in 1986 with a strategy of acquiring long-life, low-decline conventional assets. Although the industry has changed tremendously, Larry Lee, the CEO of Tulsa, Okla.-based RAM Energy LLC, continues to take the same unconventional approach.And finally, there is no doubt that the oil and gas downturn has put projects at risk. Consider this quote from James Webb, the upstream research manager for Wood Mackenzie: “We estimate that as much as $1.5 trillion of investment spend destined for new (pre-sanctioned) and U.S. tight oil projects is now out of the money, or in starker terms, uneconomic at a $50 oil price.”
This week’s edition of Oil and Gas Investor This Week pretty much sums up the yin-yang state of the oil and gas industry. One company has a strategy for when oil prices begin to improve, and another has filed for bankruptcy production. And, for at least the time being, lease-and-drill tendencies are trending downward. Acquire-and-exploit strategies are today’s fashion.● In just four years Sanchez Energy Corp. has gone from 92,000 Eagle Ford acres and 10 wells generating 600 barrels of oil equivalent per day and $15 million in revenue to a quarter-million acres, 53,000 barrels of oil equivalent and $600 million in revenue. The company says it has a plan to position itself for renewed growth when the business climate improves.● EnCap partner Murphy Markham says private equity sponsors are turning back to acquire-and-exploit, as opposed to lease-and-drill. “I believe the acquire-and-exploit strategies are where the opportunities are going to be, and we’re seeing a lot more opportunities on that front despite the market being rather quiet because of the low commodity price,” he stated.● Once riding high, Samson Resources Corp. now finds itself with $4.9 billion in liabilities and nearly a billion dollars in debt due in 2016. The company ultimately succumbed to separate downturns, first in natural gas prices in 2012 and then in crude oil values in the second half of 2014. After a cumulative net loss of $1.9 billion in the past 12 months, Samson filed for bankruptcy reorganization Sept. 16. It is the largest E&P to do so amid the downturn in oil prices.
There’s no doubt about it: The rocky state of oil prices is dominating industry news these days, and we will focus on that in this edition of Oil and Gas Investor This Week.For starters, Bill Marko, the managing director of Jeffries LLC, is not mincing words when it comes to the A&D landscape of 2015. “It’s brutal,” he said.Chuck Yates, managing partner of Kayne Anderson, says energy leaders must have the trait of vulnerability and be open to potential pain. “We’re not all perfect. We don’t have to act perfect. It’s OK to show that other side,” he said.Finally, Barclays has revised its global E&P spending outlook for 2015, saying spending could fall 20% this year and as much as 8% in 2016. “We note that after almost every decline year previously, spending increased by more than 10% the following year,” Barclays said in the report. “Then again, it’s a new oil paradigm we’re facing.”
In this week’s edition of Oil and Gas Investor This Week, we will focus on property divestitures and acquisitions in the shales. For starters, W&T Offshore Inc. has agreed to sell its Yellow Rose Field in the Permian Basin. The deal will allow W&T to maintain its offshore holdings while paying down debt. Ajax Resources LLC will purchase the Permian assets for $376 million. Meanwhile, WPX Energy is bolstering its Permian position. To do so, the company has agreed to sell a North Dakota gathering system to a private equity fund managed by the Ares EIF Group, a subsidiary of Ares Management LP. The transaction is worth about $185 million. And finally, EOG Resources Corp. is looking to dump a bulk of its noncore assets in Wyoming, Utah and Colorado, despite having about $3.4 billion in available liquidity. EOG says the land for sale, about 130,000 acres, is “outside of our core producing areas.”
Effects: The impact of short-, medium- and long-term oil price recoveries on investments in ethane crackers in North America was assessed in a recent report. Other petrochemicals, including polypropylene, could also be affected in the long term.Anticipation: Hart Energy’s Stratas Advisors predicted earlier this summer that Keystone XL permitting would be rejected before the Labor Day weekend. The Canadian press recently ran similar reports. Infrastructure giant TransCanada can resubmit its application for approval in 2016 if Keystone is rejected.Trending Down: For the first time, natural gas production across all major U.S. shales could decline this September, the U.S. Energy Information Administration said in a report. Fewer rigs and a drop in legacy production will chip away at the Marcellus and other large gas shales.
Insecure: Hackers now use malware via phishing emails, compromised credentials and other tactics to wage more sophisticated cyberattacks on the oil and gas industry. Walter Energy was a recent target in the theft of hundreds of corporate earnings announcements.Rocky: With about 950 earthquakes so far this year, Oklahoma outranks California as one of the most seismically active states. Injecting wastewater into the Arbuckle Formation triggered the uptick in quakes, an expert said.Overkill? Because the oil and gas industry has successfully reduced greenhouse-gas emissions, some energy trade groups called the Environmental Protection Agency’s recent proposed emissions guidelines unnecessary.
Silver Lining: Oil prices recently fell to a six-year low. However, the International Energy Agency forecasts that global oil demand for the rest of the year will grow by 1.6 million barrels per day.Value: Energy stocks are currently cheap compared to other equities, according to a senior equity strategist at CIO Wealth Management Research Americas. Even so, energy investments—especially in MLPs—will require careful consideration because prices are so low.Geography: Three quick factors to buoy hopes for higher oil prices:—1. The U.S. currently has the largest supply of natural gas. 2. The U.S. has a variety of international energy sector clients. 3. North America as a whole produces more barrels of oil equivalent than OPEC’s top three countries.
Exit: David M. Hall, COO of Miller Energy Resources Inc., resigned after the Securities and Exchange Commission charged that the company fraudulently overstated the value of a 2009 Alaska acquisition.Resource: Alternative capital sources include hedge funds and sale of royalty interests. Understanding the risks and benefits is crucial, Jones Day partners and associates say.Ahead: Midstream deals comprised 21 of the 47 deals with values above $50 million, according to analysis of second-quarter transactions. Upstream deals were down another 20% in July.
Waiting: The price of oil will stay low until there is evidence that the oversupply of oil is shrinking, a study concluded. So far, prices in the U.S. have not fallen far enough to affect the oversupply.Falling: The supply-demand imbalance meant ExxonMobil’s second-quarter profit dropped by half, to $4.2 billion from last year’s $8.8 billion. Reducing: Chevron will lay off about 1,500 people, or about 2% of its global workforce. Of the total, 950 jobs will be in Houston, and 500 will be in San Ramon, Calif.
Any Takers? There is currently a surplus of proppant in North America, and the most in-demand type is frack sand. However, through the rest of the year, overall proppant consumption will decrease by 23%.Reduced: E&Ps were awarded fewer permits in the second quarter of this year. The decline was steepest in the Eagle Ford, Permian Basin and Bakken, with 13%, 5% and 14% decreases, respectively. Money And Rules: Oil, natural gas and coal companies are not required to pay for economic damage caused by carbon emissions, according to authors of a University of Cambridge research paper.
Portent: Schlumberger said North American E&P spending could fall by 35% during the remainder of the year. The oil markets are rebalancing, and in some basins pricing has fallen to unsustainable levels.Lackluster: Lower prices and profits dampened Mexico’s much-anticipated Round One shallow-water Gulf of Mexico oil block auction. Out of 14 up for bidding, eight received no bids and four had bids thrown out. Haven: With more than $2 billion in debt, Sabine Oil & Gas recently filed for Chapter 11 bankruptcy. Prior to its merger with Sabine last year, Forest Oil Corp. incurred heavy debt.
Analysts’ Outlook: The domestic rig count is stabilizing, mid-year spending from majors to small-caps was cut by more than one-third and energy companies fear a further price drop, according to three surveys.Winter Is Coming: There are 2,577 billion cubic feet of natural gas in storage across the U.S., 35% more for this winter than last year, the Energy Information Administration said.Intellectual Property 101: Charlotte Rutherford, intellectual property expert, discussed the murky world of patents at Hart Energy’s recent DUG Permian conference. There is more than $700 billion in industry intellectual capital, including patents, but capital for patents often sits idle.
Unprecedented: BP will pay about $18.7 billion to more than 400 local government entities, five states and the U.S. government in the largest oil spill settlement agreement of its kind. The Deepwater Horizon payout is subject to court approval.Wary: The global energy industry has become uneasy as surging oil and natural gas production occurs alongside geopolitical unrest, investment banker and author Tom Petrie told attendees at Hart Energy’s recent DUG East conference. The remainder of 2015 and the start of 2016 will be a time of dramatic industry shifts, he said.All In: The Ontario Teachers’ Pension Plan will buy CA$3.3 billion worth of royalty and mineral interests available when Cenovus sells subsidiary Heritage Royalty Ltd. Partnership’s 4.8 million acres of title lands in three Canadian provinces.
Cats And Dogs: Several operators in the Denver-Julesburg Basin in Colorado, including Bonanza Creek Energy, have been affected by road closures and even fallen behind schedule on projects due to very heavy rainfall. More, Please: Shale gas produced from North America—led by the Marcellus Shale—will be in highest demand outside the continent, according to forecasters, attendees at Hart Energy’s DUG East conference were told.Rolling On: The executive chairman of Burlington Northern Santa Fe LLC discussed the U.S. Department of Transportation’s recent ruling on legacy DOT-111 rail cars used to transport crude oil and ethanol. Electronically controlled pneumatic braking systems must be outfitted by Jan. 1, 2021.
Full Speed: A Harvard Business School/Boston Consulting Group joint project outlined specific ways the U.S. can maximize impact on economy and energy through abundant, low-cost unconventional oil and gas resources. Legal Matter: A $1 billion deal for Bakken acreage prompted a 2012 class action lawsuit by Native American plaintiffs, which was properly dismissed, the 8th U.S. Circuit Court of Appeals in North Dakota recently ruled.The Squeeze: A value gap between crude oil, NGL and natural gas prices is getting narrower, and it could negatively affect exports, Suzanne Minter, manager of energy analysis for Bentek, told an audience recently.
Sharper: Major U.S. shale plays have seen swift efficiency gains, doubling IP rates and reducing well drilling time and creating a tipping point for production growth as demand lags behind production, according to an expert at a recent symposium. Steeper: On average, E&Ps spent 16% more during 2014 to achieve aggregate revenue growth of 10% and oil and gas reserves growth of 8% and 7%.Varied: Governments of countries dependent on oil-related revenue are coping differently in the downturn. The U.K. rolled out tax cuts to foster North Sea competition; budgets in Russia and the U.S. fell; and Nigeria considers fiscal amendments with a new president.
E&P Know-how: There is room to improve efficiencies, drive down costs and improve type curves in the Permian Basin. Improving wells in a low-cost environment was discussed by Dan Themig of Packers Plus at Hart Energy’s DUG Permian conference. Past and Future: The impact on revenue, reserves and production for 2015 is still unknown, but a study found that capex and costs rose during 2014, and techniques like multiwell pad drilling boosted production.M&A’s Potential Impact: Petrie Partners has advised on three all-stock transactions, including Noble Energy’s $3.9 billion deal to acquire Rosetta Resources in May. All-stock deals are popular now, Tom Petrie said at Hart Energy’s DUG Permian conference.
Knowledge: E&Ps can use data to their advantage for microseismic, geochemical, geomechanical and production issues and information, attendees at Hart Energy’s recent DUG Permian Conference were told. Results: Laredo Petroleum is reaping the rewards of steady work after years in the Permian Basin, Randy Foutch, chairman and CEO, said at DUG Permian.Resolution: Mud King Products Inc. manufactured knockoff mud pumps in China that were designed from stolen National Oilwell Varco blueprints. NOV won almost $400,000 in a legal case.
The New Normal: The industry is adapting to the low oil prices—acquisitions and mergers will continue, non-acquisition spending will fall and capital spending for the largest plays has been reduced. Ask Your Questions: MLPs are proving trickier to govern and define. Lawyers gave a webinar covering MLP classification and qualifications under guidance by the IRS.Old Is New: Older oil fields in North America could be infused with activity through new fracturing techniques.
Game On: Maersk Group created an online game, “Quest For Oil: A Subsurface Gaming Experience.” Lessons that online gaming can give the offshore oil and gas industry were discussed at the close of this year’s Offshore Technology Conference. Finish Line: E&Ps pulled through first-quarter 2015. Pioneer Natural Resources plans to sell its Eagle Ford midstream business, Apache lost $4.7 billion and Rex increased its production guidance.World View: Lifting sanctions against Iran would bring 1 million more barrels per day of oil onto the market by year-end 2016, but geopolitics are unpredictable.
Debate: Opinions differ on whether refracturing is a cost-effective way to revive old or incomplete wells, or if it potentially weakens offset wells’ value.Economics: E&Ps recently closed a record number of debt and equity offerings, a show of confidence in the industry even as E&P values have eroded.Important: The state of Tamaulipas is Mexico’s most violent—with cartels, kidnappings and theft—but it will also play a pivotal role in development and transit of hydrocarbons.
Prudence: Guarding the balance sheet by cutting costs and shortening drilling times is one strategy some E&Ps are using to combat the downturn.Stable: The oil market remained steady after a brief price spike on news April 28 that Iranians boarded the MV Maersk Tigris cargo ship headed to the Marshall Islands.Discussion: Recapitalization as a strategy for companies was assessed at Hart Energy’s recent Energy Capital Conference.
Beneficial: Recent equity financings have helped E&Ps hold onto their midstream assets, Tudor Pickering, Holt said.Detrimental: Alaska Sen. Lisa Murkowski said the ban on domestic oil exports hurts American producers and consumers.Ideal: Exporting LNG is “in the national interest,” the Department of Energy said according to a white paper from America’s Natural Gas Alliance.
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.
Secure: Industry knowledge that is considered valuable exists in ‘the marketplace and the commercial sector,’ a senior consultant said at a recent cybersecurity conference.In Favor: Jack Gerard, head of the American Petroleum Institute, recently spoke in favor of approving the Keystone XL pipeline.Timing: Mergers and takeovers could be well-positioned in a down market for acquisitions and divestitures.
Cutting Back: ‘Billions of dollars’ are off the budgets of many small- and large-cap E&Ps for the new year.Follow The Rules: New regulations for tank cars and wellhead requirements will impact profitability of North Dakota crude oil, analysts say.Legislation: ‘Lack of federal regulation’ of hydraulic fracturing in a Republican Congress ‘is a plus for E&P companies’ according to a report.