US oil and natural gas operators have rushed in the past few months to shield their businesses from market volatility with production hedges and various contractual arrangements. The producers tracked by Goldman Sachs have boosted their share of hedged 2020 output from 48% before the downturn to 66% currently, marking the highest level of hedging activity in at least five years.
US drillers pumped 12.71 barrels of oil per day in March, down 28,000 bpd from February and the lowest level since October, with most oil-producing states reporting declines, according to the Energy Information Administration. Meanwhile, gross natural gas output in the contiguous US rose for the first time in four months to 105.41 billion cubic feet per day.
The Railroad Commission of Texas received only 45 drilling permit applications from 23 companies from May 20 through May 26, with Shell, Blackbeard Operating and Ring Energy leading the pack. Only one of the 45 filings targeted the Eagle Ford Shale, down from an average of 48 filings per week last year.
US producers idled 17 oil and natural gas rigs last week, bringing the total combined rig count to a record low of 301, down from 683 a year ago, according to Baker Hughes. The rig count will slide below 300 despite higher oil prices and gas drilling will be the first to recover, predicted James Williams of WTRG Economics.
The Environmental Protection Agency has finalized a rule to ease methane emissions standards for the oil and natural gas industry and asked the White House Office of Management and Budget to expedite its internal review. If the request is granted, the rollback could take effect by the end of July.
The Environmental Protection Agency has issued an internal memo on a policy that could, reportedly, temporarily give companies more time to pay civil penalties if they can show they have experienced a 25% decline in profit due to the pandemic. "This internal EPA memorandum provides regions with the ability to offer respondents in administrative cases additional flexibility to pay civil penalties where they have been financially impacted by the coronavirus public health emergency," states the memo.
Energy companies in Texas, including Enterprise Products Partners and Air Liquide, received more than 100 exemptions from environmental rules such as chemical leak inspections from the Texas Commission on Environmental Quality.
Royal Dutch Shell's commitment to its Beaver County, Pa., cracker, the important role of shale gas in the US economy and Pennsylvania's "world-class ethane supply" all indicate the region's shale production will rebound quickly and drive new projects, says Marcellus Shale Coalition President David Spigelmyer. The American Chemistry Council says demand for plastic is also expected to increase as the world's middle class grows.
New Mexico could run a deficit of up to $2.8 billion this year, compared with a $2 billion budget surplus in 2019, due to the coronavirus-induced oil and natural gas downturn. Revenue from mineral production taxes plunged to around $4 million in February from $43.7 million a year earlier, while revenue from rents and royalties paid by the oil and gas sector also declined year-on-year from $90 million to about $82 million in February.
API Training Course - Virtual Dates Now Available | API Fundamentals of Auditing and Lead Auditing
The Fundamentals of Auditing two-day course covers auditing fundamentals and auditing processes that are unique to the API program. The third day, the Lead Auditor course, offers additional information on leading an audit team. Participants of this course will learn how to conduct effective audits by applying the principles, procedures and techniques of effective audits as well as how to manage the audit process. To learn more about this course and to register, visit the API-U Calendar. To learn more about the new Auditor Certification Program, visit API Auditor Certifications.
Presented by: Qualified Specialists, June 9-11; AxiomLogics, June 15-17; Global Management Sol., June 22-24; Bureau of Quality Surveillance, July 6-9; Mireaux Management Sol., July 15-17; Aston Technical Consulting, Aug. 10-12.
EVENT | 15th Annual API Cybersecurity Conference, Nov. 10-11, Houston, Texas (Also available with virtual conference registration.)
This API-organized conference provides a networking opportunity for cybersecurity professionals to candidly discuss challenges and share solutions. These sessions, essential to cybersecurity, are chosen and presented by recognized experts in the field. Conference topics now include pandemic and oil markets lessons learned. The conference will be held both in-person and virtually. See website for details on the call for presentations.