Source Energy reduces IPO target range amid lower oil prices | IPO activity across US shale industry to spike in 2017 | Canada's oil sands may be a better investment than shale
March 21, 2017
Shale SmartBrief
News on shale oil and natural gas
Top News
Frac sand suppliers still have room to run
Frac sand miners and suppliers such as US Silica Holdings and Fairmount Santrol Holdings are expected to continue to thrive even though the positive effects of the OPEC deal have already begun to wane, writes Liam Denning. Demand for frac sand will likely keep growing even in the worst-case scenario, he writes.
Bloomberg (3/20) 
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News from the Field
Source Energy reduces IPO target range amid lower oil prices
Canadian frac sand supplier Source Energy reduced the size of its initial public offering. The company now looks to raise about $188 million, down from $225 million, with proceeds to be used to fund its acquisition of a facility near Blair, Wis., and cut its debt.
Bloomberg (3/20) 
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IPO activity across US shale industry to spike in 2017
The number of drillers, oilfield service companies and pipeline operators expected to go public this year could surge to 30, with a combined value estimated at $8.5 billion, which is close to four times more than in 2016, according to Credit Suisse. Oilfield service companies are expected to account for half of the initial public offerings. (3/17) 
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Canada's oil sands may be a better investment than shale
Despite the high upfront costs and the recent exits, Canada's oil sands may turn out to be more lucrative than US shale fields if oil prices rise because oil sands producers enjoy more stable costs and years of steady output without massive investments. Canadian Natural Resources and Suncor, Canada's biggest oil producers, are expected to report a combined free cash flow of $7.9 billion, or 9% combined free cash flow yield, in 2018, while shale giant EOG Resources' free cash flow is seen at just $1 billion next year, or just 2% free cash flow yield.
The Wall Street Journal (tiered subscription model) (3/20) 
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US oil rig count advances for 9th consecutive week
(Andrew Burton/Getty Images)
The number of US oil rigs surged by 14 to 631, the highest level since September 2015, in the week ended March 17, the ninth straight week of increases, while the US natural gas rig count increased by seven to 157, according to Baker Hughes. Oklahoma, North Dakota and Texas led the gains with 10, five and four additions, respectively.
Reuters (3/17),  The Associated Press (3/17) 
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US shale gas commands record prices overseas
Importers of US shale gas paid a record of $7.52 per million British thermal units of liquefied natural gas shipped from Cheniere's Sabine Pass export terminal in January, up from a high of $6.21 last year. The volume of LNG exported in January and February also climbed to a record of 15 tankers, headed mainly to Mexico, China, Japan and Jordan.
Bloomberg (3/18) 
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Kalnin Ventures boosts Marcellus Shale foothold in $16M deal
Denver-based investment firm Kalnin Ventures has agreed to pay $16 million to acquire its third Marcellus Shale asset package, which consists of interests in 177 wells in Pennsylvania's Bradford, Sullivan, Susquehanna, Lycoming, Tioga and Wyoming counties. "As we expand our foothold in the region, more operators are recognizing us as a potentially strong non-op partner, with ability to add value through our Big Data technology which helps to analyze and drive performance," said Christopher Kalnin, the firm's managing director and co-founder.
The Business Journals (tiered subscription model)/Pittsburgh (3/21) 
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EIA: US crude production decreased in 2016
The US produced an average of 8.9 million barrels of crude oil per day in 2016, down from 9.4 million barrels of oil per day in 2015, despite production growth in the Permian Basin and record high average daily output in the Gulf of Mexico, according to the Energy Information Administration. US crude exports surged 12% to 520 thousand barrels of oil per day, while inventories rose by 35 million barrels to 484 million barrels by the end of the year.
Oil & Gas 360 (3/20) 
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Spotlight on Policy
Md. governor says he backs fracking ban
Maryland Gov. Larry Hogan on Friday called for a ban on hydraulic fracturing in the state, saying, "Our administration has concluded that the possible environmental risks of fracking simply outweigh any potential benefits." Maryland already has a fracking moratorium in place, set to expire in October, while two anti-fracking bills are pending in the state Legislature.
WBFF-TV (Baltimore) (3/17) 
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API News
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