Sustained drilling activity in the Permian Basin, coupled with plans for additional pipeline capacity, could unleash a new torrent of crude that undermines OPEC's latest effort to raise oil prices with production cuts. The Permian is on track to produce 3.8 million barrels per day this month, more than OPEC's third-largest producer, but limited US export infrastructure could temporarily allow OPEC to protect its market share.
Texas' Eagle Ford Shale saw robust activity in 2018, but momentum is expected to slow this year given the current price environment, said Federal Reserve Bank of Dallas economist Keith Phillips, who expects drilling to drop off after the first quarter of 2019. However, technological advancements should allow basin production to hold steady or increase, said Chris Ashcraft, the South Texas Energy and Economic Round Table's interim president.
State officials say that West Virginia's natural gas production is projected to increase by 5% to 8% yearly through 2024, down from 30% annual growth in the early 2010s, but Platts Analytics sees a silver lining in the state's wet gas Panhandle, where output may surge by over 50% in the next five years. Producers should benefit from ongoing pipeline capacity expansions that will open the door to Northeast and Gulf Coast markets, resulting in higher gas prices in the longer term.
Permian Basin operators are shifting away from experimentation to standardization of drilling techniques and measures such as well spacing, lateral lengths and proppant volumes, says Thad Toups, president of reserve evaluation firm Haas Engineering. Benchmarking could help producers achieve higher internal rates of return and simplify cost and reserve projections, Toups says.
The Energy Information Administration expects the US to produce a record 12.07 million barrels per day on average this year and increase output to a fresh high of 12.86 million barrels per day on average in 2020. As a result, the US should maintain its position as the world's largest crude oil producer and become a net crude exporter in late 2020.
North Dakota oil production slid by 1.2% to 1.38 million barrels per day in November, while natural gas output fell by 1.5% to 2.52 billion cubic feet per day. Winter weather and lower oil prices are to blame for the decline, but these factors have done little to dissuade drillers from deploying new rigs, said North Dakota Department of Mineral Resources Director Lynn Helms.
The Colorado Supreme Court on Monday released a unanimous decision reversing a lower court order saying that the Colorado Oil and Gas Conservation Commission must factor in the impact of oil and gas drilling on the environment and public health when making decisions that concern the industry. The COGCC argued in its appeal of the lower court's ruling that it did not have the authority to adopt the measures requested by the plaintiffs.
Town trustees in Superior, Colo., voted unanimously on Monday to place a six-month moratorium on oil and natural gas drilling. The move comes as they consider a regulatory framework to govern drilling in the area.
The operator course is intended to familiarize the participant with lifting loads with slings, rigging hardware and safety concerns, and is intended to give the individual the knowledge and skills required to competently act as a Qualified Crane Operator and effectively conduct safe lifting operation. Presented by: Thunder Oilfield Services (Thailand) Ltd., Feb. 6-8, Feb. 19-22; Sparrows Offshore, LLC (Houma, LA), Feb. 14-15. To learn more and to register, visit the API-U Calendar.
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