US independent shale producers spent $2.5 billion less than budgeted in the first quarter of 2017 as they struggled to find fracking workers, prompting delays and potentially undermining drillers' growth ambitions, according to Infill Thinking. This shortage suggests that US oil production will likely continue to grow into early 2018, creating a big supply bubble that could hinder OPEC's efforts to raise oil prices, said Joseph Triepke, Infill founder and principal research analyst.
The Haynesville Shale in Louisiana and East Texas is seeing a period of resurgence, with natural gas production in the region expected to increase for the seventh straight month to reach the highest level since October 2014. Haynesville's revival can be attributed to new well designs as well as its advanced energy infrastructure.
Dealmaking activity in Texas and New Mexico has maintained momentum at the beginning of May as the Permian Basin continues to lure new entrants as well as explorers that exited the play during the downturn. Among this month's major deals are CP Exploration's sale of 2,200 acres in the Delaware Basin to Resolute Energy for $160 million and Peregrine Petroleum's re-entry into the basin after its retreat in November 2016.
US shale drillers are expected to boost production by 122,000 barrels per day to reach 5.4 million barrels per day in June, according to the Energy Information Administration. The Permian Basin and the Eagle Ford Shale will drive the growth, adding 71,000 barrels and 36,000 barrels respectively to daily shale production next month.
BHP Billiton said it was willing to discuss divesting its US shale assets in Texas and Arkansas in response to pressure from activist hedge fund Elliott Management. BHP paid approximately $20 billion to acquire the assets earlier this decade but has since erased more than half the value of the acreage, bringing its worth to about $9 billion.
The Bureau of Land Management is facing a backlog of almost 3,000 drilling applications and said it is looking for solutions to help reduce the pile. "Every day that goes by while independent producers -- companies with an average of 12 employees -- wait for their permits to be approved means more money out of their own pockets," Independent Petroleum Association of America spokesman Neal Kirby said.
Uncertainty continues to overshadow the oil market even though a majority of industry players surveyed by Wood Mackenzie see oil prices ranging from $50 per barrel to $60 per barrel this year, potentially hitting $80 per barrel by 2020. Despite the stronger oil prices, companies are cautious and risk-averse, and many will likely put investments on hold to focus on protecting dividends and improving balance sheets this year, Wood Mackenzie Head of Corporate Analysis Martin Kelly said.
The American Petroleum Institute is urging the Trump administration to delay the January 2018 deadline for compliance with the methane flaring rule by two years. "Swift action from your department is needed to provide certainty for operators of federal oil and gas leases subject to its terms," API President and CEO Jack Gerard wrote in a letter to Interior Secretary Ryan Zinke.
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, June 20 to 22. 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.
2017 API Offshore Safe Lifting Conference & Expo, July 11 to 12, Houston
Don't miss this opportunity to learn about the latest in offshore developments while sharing experiences, practices and even information on real-life incidents. The major theme of this year's event will be "Safe Lifting in a Changing Global Industry," covering how lifting operations fit into the overall philosophy of an operator's Safety and Environmental Management System, now required by the BSEE. Read more.