Facts & Rumors # 567
September 14, 2024
New World Reality in Oil Production. Peak oil: A looming threat to economic stability. Oil Price. Recently, lower prices seem to be associated with lower production because extraction has become less profitable for producers. A temporary spike in oil prices does little to raise production. The view of economists that crude oil extraction can continue to rise indefinitely because lower production leads to higher prices, which in turn leads to greater production, is not true.
OH 2nd Qtr. Production. Oil Up 23% and NatGas down 4%. Thanks, MDN. The Ohio Department of Natural Resources (ODNR) released production numbers for the second quarter of 2024 yesterday. The story the numbers tell continues to be about Utica oil, which continues to rise each quarter. Ohio’s total oil production during 2Q24 was 8.01 million barrels, up 23% from 2Q23’s 6.5 million barrels and up 11% from 1Q24’s 7.2 million barrels. The story of oil in the Buckeye State can’t be told apart from Encino Energy (EAP), which produced nearly half of all the state’s oil during 2Q24. As for natural gas production, it’s no surprise it went down slightly in 2Q24, given the current low price for gas. The state produced 526.6 Bcf in 2Q24, down 3.7% from 2Q23’s 547.0 Bcf, and down 1.4% from this year’s first quarter number of 534.0 Bcf. MDN pulled the numbers from the ODNR quarterly report and produced top 25 lists for both gas and oil wells.
STEO Flat NatGas Prices. We forecast natural gas prices will remain relatively flat in the upcoming shoulder season during September and October before generally rising in 2025. Price increases in 2025 reflect U.S. natural gas production that does not keep pace with growth in U.S. liquefied natural gas (LNG) exports. We expect the Henry Hub spot price will rise from less than $2.00 per million British thermal units (MMBtu) in August to around $3.10/MMBtu next year.
Oil Price $80?? U.S. EIA lifts oil demand forecast, says prices will recover to above $80/bbl. Reuters. Global oil demand is set to grow to a bigger record this year while output growth will be smaller than prior forecasts, the U.S. Energy Information Administration (EIA) said on Tuesday. The widening supply deficit will increase withdrawals of oil from global stockpiles, pushing Brent crude prices back above $80 a barrel in the physical spot market this month, the EIA said in its short-term energy outlook. We do not think oil will get back to $80. Demand in China has weaken significantly which will make $80 tough.
Big Changes Could Be Coming to FERC. FERC staffing at risk in Supreme Court fight over agency power. E&E News. The upcoming Supreme Court term is poised to feature a new round of attacks on federal agency powers. Among those fights is a battle launched by a right-leaning nonprofit that says it should be easier for the president to fire top brass at the Consumer Product Safety Commission. The dispute, should the justices choose to hear it, could similarly affect other independent agencies, including the Federal Energy Regulatory Commission.
Coterra Pulling Rigs out of the Marcellus. Thanks, MDN. We never thought we’d see the day when we would write the headline that Coterra (nee Cabot Oil & Gas) was pulling all of its active rigs in the Marcellus in Susquehanna County, PA. But today is that day. It makes us profoundly sad. Coterra CEO Tom Jorden was interviewed during a session last week at the Barclays 38th Annual CEO Energy-Power Conference. As part of the Q&A, Jorden confirmed (dropped the bombshell) that his company has just “released our last rig in the Marcellus.”
APA Sells to Mystery Buyer. APA sells Permian basin oil and gas properties to mystery buyer for $950 million. World Oil. APA Corporation has entered into an agreement for the sale of non-core producing properties in the Permian basin to an undisclosed buyer for $950 million. The properties are located in the Central Basin Platform, Texas and New Mexico Shelf, and Northwest Shelf, and currently represent estimated net production of 21,000 boed, of which approximately 57% is oil. “Our remaining Permian position has scale and balance in the unconventional Midland and Delaware Basins,” said John J. Christmann IV, CEO of APA Corporation.
Texas LGN Project FID-Ready. New offtake deal takes Texas LNG project to FID-ready stage. Offshore Energy. Texas LNG, a subsidiary of Glenfarne Energy Transition has signed another heads of agreement (HOA) for a long-term supply of LNG from its proposed facility in Texas’ Port of Brownsville. Thanks to the latest agreement, the developer says it has the customer offtake commitments needed to reach a final investment decision for its Texas LNG facility. While the name of the new client and the capacity booked remain unknown, the US firm alleges that this is “a highly experienced, investment-grade, global LNG player.”
3 New Electric Power Plants Progress in Permian Basin. Odessa American. State Rep. Brooks Landgraf and the Texas Independent Producers & Royalty Owners Association say the newly established Texas Energy Fund is paying off with three natural gas-fired electrical generation plants in the Permian Basin. TIPRO President Ed Longanecker said the Public Utilities Commission of Texas has boiled down 72 loan applications to the TEF to 17 gas-fired dispatchable electrical generation projects including those in the Basin. “Altogether the 17 projects would require $5.38 billion in loans and generate 9,781 megawatts of electricity,” Longanecker said from Austin.
PA Permits September 2, to September 12, 2024
County Township E&P Companies
1. Bradford Overton Chesapeake
2. Bradford Overton Chesapeake
3. Lycoming Jackson Range
4. Lycoming Jackson Range
5. Lycoming Jackson Range
6. Lycoming Jackson Range
7. Lycoming Wolf Inflection
8. Tioga Delmar Seneca
9. Tioga Delmar Seneca
10. Tioga Delmar Seneca
11. Tioga Delmar Seneca
12. Tioga Delmar Seneca
13. Tioga Delmar Seneca
OH September 1, 2024 to September 7, 2024
County Township E&P Companies
1. No New Permits
WV Permits September 2, to September 6, 2024
1. Marshall SWN
2. Marshall SWN
3. Marshall SWN
4. Marshall SWN
5. Ohio SWN
6. Ohio SWN
7. Ohio SWN
8. Ohio SWN
9. Ohio SWN
10. Ohio SWN
11. Ohio SWN
12. Ohio SWN
13. Ohio SWN
14. Ohio SWN
15. Ohio SWN
16. Ohio SWN
17. Ohio SWN
18. Ohio SWN
19. Ohio SWN
20. Ohio SWN
21. Tyler Antero
22. Tyler Antero
