Shale M&A activity cools off amid weak oil prices | Operators of small oil wells complain about "frack hits" | Oil price slump paves way for rally
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June 22, 2017
Shale SmartBrief
News on shale oil and natural gas
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Top News
Oil's slump into bear market reveals US shale drillers' strengths
Oil's plunge into bear market territory is helping investors differentiate between healthy shale drillers and the weak ones. Producers with solid finances will likely continue to ramp up production and turn the low oil prices into an opportunity to scoop up cheaper acreage while weak, indebted producers will be forced to scale back activity.
Reuters (6/21) 
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US Northeast region is a global NGL leader
Pennsylvania is a cost competitive producer of high value natural gas liquids (NGLs) — particularly ethane and propane. These low-cost NGLs are creating opportunities for manufacturers across the state. Learn more about how PA compares to other global hubs in the US, Canada, and the Middle East.
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News from the Field
Shale M&A activity cools off amid weak oil prices
The value of mergers and acquisitions in the US exploration and production sector declined from about $23 billion in the first quarter to less than $15 billion in the second quarter, according to Bloomberg Intelligence. "Management teams are taking a more conservative view on M&A activity and that will extend through the end of 2017," Bloomberg Intelligence analyst Vincent Piazza said, citing uncertainty over the future of oil prices as one of the reasons.
Bloomberg (6/20) 
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Operators of small oil wells complain about "frack hits"
"Frack hits," in which shale companies using hydraulic fracturing methods collide with older wells, are damaging small oil wells, their operators say. The collisions -- most common in Oklahoma and Texas -- flood the old wells with water, and in some cases, force them to shut down.
The Wall Street Journal (tiered subscription model) (6/20) 
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Oil price slump paves way for rally
Oil prices will likely continue to fall in the coming period, setting the stage for a limited rally once the US rig count stabilizes, which should happen within the next four weeks, writes John Kemp. Until stabilization occurs, oil traders will likely continue to act as a drag on oil prices in an attempt to force US shale drillers to slow down drilling activity, Kemp writes.
Reuters (6/21) 
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EQT to take over Rice Energy in $6.7B deal
EQT has agreed to purchase Rice Energy for $6.7 billion in a move that would turn the Pittsburgh-based company into the biggest natural gas producer in the US, with a total output of 3.6 billion cubic feet of natural gas per day. "This transaction brings together two of the top Marcellus and Utica producers to form a natural gas operating position that will be unmatched in the industry," said Steve Schlotterbeck, president and CEO of EQT.
CNBC (6/19) 
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US oil production boom to cool down amid low oil prices
Depressed oil prices and a shortage of labor and equipment could force US drillers to scale back production and cut rigs in less-profitable plays such as the Bakken Shale, whereas rig growth in the Permian Basin will likely flatline. However, analysts don't expect a dramatic slowdown in production unless oil prices fall into the low-$30 range.
Houston Chronicle (tiered subscription model) (6/20) 
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Spotlight on Policy
Interior secretary vows to implement portions of Obama-era methane rule
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Zinke (George Frey/Getty Images)
Interior Secretary Ryan Zinke said Tuesday that the parts of an Obama-era methane rule that have already taken effect will be enforced even though the Interior Department is working to rewrite the rule. Zinke promised to take public comments during the rewrite process to make sure the final rule curtails wasteful flaring while reducing the cost burden to the oil and natural gas industry.
The Associated Press (6/21) 
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Economic Impact
Shale gives boost to Colo. economy
Colorado's shale industry has changed from a burden on the state's economy into a boon, helping it become the top economy in the US and achieve the lowest unemployment rate on record, according to a state economic report. Colorado's oil and natural gas industry is on the upswing, but Gov. John Hickenlooper said it would be challenging to maintain the momentum.
United Press International (6/21) 
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API News
API RP 2D Offshore Crane Operator Training
The objectives of this training are to provide knowledge of the lifting principles outlined in API RP 2D 7th Edition. Delegates will gain additional knowledge of crane lifting and loading techniques and procedures, as well as hands-on application. Presented by Thunder Oilfield Services, July 18 to 21. To learn more about this course and to register, visit the API-U Calendar. For a full listing of API-U Approved Training Providers, please visit the API-U Training Provider Page.
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Fifth Annual COS Forum, Sept. 19 to 20
Please join the Center for Offshore Safety at its Fifth Annual Forum. The theme for 2017 is Transforming Learnings into Action. The COS Forum brings offshore industry operators, drilling contractors, service/supply companies, academia and regulators together to facilitate collaboration and drive continual improvement. The Forum began in 2013 as part of the COS commitment to "sharing industry knowledge." The Safety Forum has become one of the premier safety-focused events for industry, auditing and regulatory agency engagement. For more information, visit our website.
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