Even though oil prices have rebounded since the end of 2018 and oil output continues to break records, some shale producers and oilfield service providers are still having trouble making ends meet. Oilfield servicer Weatherford International announced plans last week to seek bankruptcy protection, while other high-cost shale drillers are struggling with debt.
While other players rush to pump more oil in the Permian Basin, Apache is betting on natural gas liquids from its Alpine High field to maximize its revenue and is building three gas processing plants. Apache operates about 300,000 acres in the play, and while gas extraction is the company's main focus, Alpine High has the potential to yield at least 3 billion barrels of oil in place from two of five formations.
Permian Basin natural gas prices edged back into positive territory this month as gas producers scaled back drilling, bringing output down to just less than 8.2 billion cubic feet per day to date in May, the lowest average in almost a year. As a result, El Paso Permian cash prices rose to an average 39 cents per million British thermal units, while Waha prices are averaging 29 cents per MMBtu.
North Dakota oil production jumped by 4% from February to 1.39 million barrels per day in March, hovering around the 1.4 million-barrel record set in January, according to the state Department of Mineral Resources. Meanwhile, natural gas production in the state rose 6.5% month-on-month to a fresh high of 2.8 billion cubic feet per day in March.
US refiners' limited ability to absorb the Permian Basin's newest type of super-light oil, known as West Texas Light, means that most of the over 500,000 barrels of daily WTL supply will have to be exported. Potential customers include South Korea, which might choose WTL to serve as a substitute for Iranian condensate affected by US sanctions.
A switch to low-sulfur marine fuel in January will disrupt oil and refined-product markets by one to five years, according to a Boston Consulting Group study. Prices for low-sulfur crude oil from shale fields and refiners that can process high-sulfur crude will benefit, the study finds.
Colorado's Oil and Gas Conservation Commission is scheduled to hold a meeting today with industry representatives and others to hear public comments and talk about the first regulatory changes under a new law that prioritizes health and safety over energy development.
The City Council of Broomfield, Colo., on Tuesday unanimously voted in favor of an ordinance that bans the processing or approval of new oil and natural gas permit applications for six months. The council scheduled a second reading on the moratorium for May 28.
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