Shale Directories Conferences
SPRING 2022 Hydrogen & Carbon Capture Conference
April 21, 2022
Stay Tuned for Registration Details in January, 2022
Hilton Garden Inn, Southpointe
Canonsburg, PA
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Oil & NatGas Will Be Here for a Long Tim. Demand for oil, gas to remain robust for years, energy leaders say. The leaders of the world’s largest oil companies said Monday that demand for the products they make will remain robust for years to come even as the world attempts to transition to lower-carbon energy sources. The chief executives of Exxon Mobil Corp., Chevron Corp. and Saudi Arabian Oil Co., speaking at the World Petroleum Congress in Houston, said that while the world needs to address the risks posed by climate change, global economies cannot function without fossil fuels. “Oil and gas continue to play a central role in meeting the world’s energy needs, and we play an essential role in delivering them in a lower carbon way,” Chevron CEO Mike Wirth said Monday. “Our products make the world run.” The conference, one of the industry’s largest, is convening this week as the oil and gas business remains mired in uncertainty because of the pandemic.
JP Morgan $125 in 2022. JP Morgan predicts the end of covid, a strong economy, and $125 Oil. Next year could lay the foundation for “a far more vibrant economic environment” and COVID transitioning from a pandemic to an endemic disease, JP Morgan said in its Outlook 2022, titled ‘Preparing for a vibrant cycle.’ According to the investment bank, household net worth is at all-time highs in many developed countries, and excess savings are elevated. Consumption will likely be strong for years amid strong labor market conditions and the capacity to take on more debt, JP Morgan’s strategists said in the report for 2022.
Oil Prices “Too Hot” Top U.S. shale producer worries oil prices could run too hot. Scott Sheffield, the chief executive of top U.S. shale producer Pioneer Natural Resources Co, on Tuesday said he worries oil prices could get too high and further roil markets after years underinvestment in the sector. “I’m worried that it may get too high, above $100 (per barrel),” Sheffield said in an interview on the sidelines of the World Petroleum Congress in Houston.
Toby Rice Responds to Sen. Warren. The United States should produce and export more natural gas to tackle climate change, the country’s top producer EQT Corp said in response to U.S. Senator Elizabeth Warren’s recent criticism of the energy sector for spiraling gas prices.
“LNG exports have the potential to be the biggest green initiative on the planet,” Chief Executive Toby Rice said on Tuesday as it could replace dirtier fuels like coal.
Last month, Senator Warren had written to 11 of the nation’s big gas producers asking them to explain their decision to export record amount of heating fuel, while imposing massive prices increases on consumers who are struggling to pay their bills. read more
Natural gas futures have this year shot up to levels not seen since 2014 as a return to pre-pandemic activities and stockpiling in Asia and Europe ahead of winter drove up energy demand faster than supply.
Warren’s letter to companies including EQT, Exxon Mobil (XOM.N), ConocoPhillips (COP.N) and Occidental Petroleum (OXY.N) had expressed concern over the extent of price increases and accused them of “corporate greed and profiteering”.
However, EQT CEO Rice called her concerns as “misguided” and said it is because of the shale gas boom and companies like EQT that the U.S. consumer continues to benefit from some of the lower natural gas prices in the world.
“The average price of natural gas for 2021 is significantly below the 20-year average of approximately $5.70 per mcf (thousand cubic feet),” he said.
“Yes, the price of natural gas has increased rapidly relative to 2020, but natural gas prices in 2020 were the lowest in over two decades.”
Warren had said the gas producers are putting their massive profits, share prices and dividends for investors, and millions of dollars in CEO pay and bonuses ahead of the needs of American consumers.
Shale producers have been putting their profits into dividends and shares buybacks, rather than investing in production, under increased investor pressure as years of supply additions had hurt prices.
Permian NatGas Constraints. Permian shale producers warn of natural gas takeaway constraints. U.S. oil and gas producers Diamondback Energy Inc (FANG.O) and ConocoPhillips (COP.N) said on Tuesday the top U.S. shale field will face natural gas pipeline constraints as production grows and companies strive to reduce flaring. While other U.S. oilfields are seeing production plateau, the nation’s largest in the Permian Basin in west Texas and New Mexico is anticipated to continue to grow because of its low cost of output. The Permian’s cost of production “is the lowest in the world right now,” Tim Leach, a Conoco executive vice president, told the World Petroleum Congress in Houston.
US #1 in LNG Export Capacity. U.S. liquefied natural gas export capacity will be world’s largest by end of 2022. U.S. liquefied natural gas (LNG) export capacity has grown rapidly since the Lower 48 states first began exporting LNG in February 2016. In 2020, the United States became the world’s third-largest LNG exporter, behind Australia and Qatar. Once the new LNG liquefaction units, called trains, at Sabine Pass and Calcasieu Pass in Louisiana are placed in service by the end of 2022, the United States will have the world’s largest LNG export capacity.
ET Completes Enable Deal. Energy Transfer boosts natural gas, oil capacity with Enable acquisition completed. Dallas-based Energy Transfer LP owns and operates another 14,000 miles of natural gas and oil pipeline in Arkansas, Louisiana, Oklahoma and Texas after completing its merger earlier this month with Enable Midstream Partners LP. The $7.2 billion tie-up, first announced in February, strengthens the midstream and gas transportation systems in the Anadarko Basin in Oklahoma, along with intrastate and interstate pipelines in Oklahoma and surrounding states.
Southeast Needs NatGas. Can U.S. phase out natural gas? Lessons from the Southeast. Even with the Biden administration’s call for the power sector to decarbonize, many Southeastern utilities plan to add large amounts of natural gas to their grids, a move they say is necessary to support renewable projects in the queue. The plans illustrate the challenge facing some U.S. regions as they aim to decarbonize: How can utilities move away from fossil fuels when they say natural gas is needed to back up renewables? Can gas lower emissions in the long run? Is it true that policies such as cancellation of the Keystone XL pipeline have raised gas prices? Will a reduction in gas lead to less grid reliability?
EXXON to Cut Emissions in TX. Exxon Mobil plans to cut emissions in Texas oilfield. Exxon Mobil says it has a plan for cutting greenhouse gas emissions from its operations in one of the most prolific oilfields in the United States, saying it hopes to achieve its net-zero goal for operations in the Permian Basin by 2030. The company made the announcement Monday, saying the effort will target both its own operations as well as indirect emissions associated with the electricity it buys to power well sites and other infrastructure in the basin, which spans parts of southeastern New Mexico and West Texas. Although limited, Exxon’s announcement is significant because it’s the first tangible commitment the company has made to reducing greenhouse gas emissions. Note: Carlsbad Current Argus and Energy News Network also report.
VA Exiting Cap-and-Trade. Va. governor-elect vows to exit cap-and-trade program. E&E News. Virginia Gov.-elect Glenn Youngkin said he intends to remove the state from a regional carbon emissions trading program, a significant blow to climate policy advocates in the South. Calling the Regional Greenhouse Gas Initiative, a “carbon tax,” the Republican reportedly announced his aim to take Virginia out of the multistate program at an event this week in the Hampton Roads region of southern Virginia.
More Permian Deals Are Coming. Oil execs expect more deals in Permian Basin amid volatile energy prices. Oil executives expect mergers and acquisitions in the Permian Basin to continue as increasingly volatile energy prices and growing uncertainty over the future of fossil fuels drive the industry to consolidate. How fast companies will consolidate holdings in the prolific West Texas oil basin remains up for debate, but executives and analysts agree that the trend will continue. Energy companies have been consolidating since crude prices tumbled from more than $100 a barrel in 2014.
Critical Need for More Investment in Upstream Oil & NatGas. More investment is needed in the upstream oil and gas sector not only to sustain production as global demand grows, but to drive the transition to cleaner energies, conference panelists said Dec. 7.
Oil and gas investment declined in 2020 and 2021 because of the pandemic, which is a “recipe for more volatility,” Joseph McMonigle, secretary-general for the International Energy Forum, said on a panel at the World Petroleum Congress.
“Capex cuts by international oil companies and national oil companies in 2020 was about 35%,” he said. “We’re now showing another 23% reduction in capex levels” from pre-pandemic levels this year.
In 2019, E&P companies spent $525 billion, an amount which plummeted to $341 billion in 2021, he added.
“We have to get back to $525 billion over several years until 2030 to restore market balance,” McMonigle said. “I’m afraid what we’re seeing with the energy crisis is on our doorstep.”
According to a report released Dec. 7 by the IEF and IHS Markit, the “next two years will be critical for sanctioning and allocating capital toward new projects to ensure adequate oil and gas supply comes online within the next 5-6 years.”
Prices at the pump have affected US consumers, and winter heating oil prices have jumped to the point where the Biden administration said it will release about 50 million barrels of crude from the Strategic Petroleum Reserve early in 2022, aiming to offer price relief.
Oil, gas ‘part of the solution’
Investment in energy supply represents the “greatest challenge the oil and gas industry faces today,” Hess Corp. CEO John Hess told the panel. “We’re way short of where we need to be.”
The CEO noted, as did many other speakers at the conference, that even though research and development is soaring in alternative energies and technologies aimed at diversifying and at some point, largely eliminating fossil fuels, oil and gas will remain at the center of energy use for the next few decades.
“At the end of the day, to have an orderly transition, oil and gas are part of the solution, not the problem,” he said. “Our carbon footprint is 10% less now than 10 years ago. The real takeaway is that the energy transition will take a long time, cost a lot of money, and need technologies that don’t exist. We need climate literacy, energy literacy and economic literacy.”
The US produced shale oil quickly starting around 10 years ago, helping US oil production to more than double. The rapid growth in part caused oil prices to crash in late 2014, with volatility plaguing the sector in the intervening years.
“We grew it at a rate too fast … but shale has gone from a growth to a harvest industry,” John Hess said. “Investors are [demanding] more financial discipline.”
Like many companies, Hess has taken that advice and believes about 70% reinvestment of cash flows into company operations, with the rest returned to shareholders, is a prudent recipe for E&P company operations.
Moreover, many even in the industry don’t realize that some large shale oil reservoirs have peaked. The Bakken Shale of North Dakota/Montana and the Eagle Ford Shale of South Texas are largely stagnant production-wise, he noted.
“So, it leaves the Permian Basin that, obviously, has a bigger resource, to be the growth engine for the country,” Hess said.
Gulf of Mexico investment lagged while oil prices were low because the region is long-cycle, meaning payback may take years, as opposed the shale where the first barrel of oil may start producing revenue within six to 12 months.
The US Gulf is also one of the world’s lowest-cost, lowest carbon-footprint basins and delivers higher returns than many others, Hess said, while Mexico, Angola and the North Sea are all in decline.
“We have to make sure we have the ability for [delivering] production at a time when clean energy is being urged” to ramp up, he said.
Investors Coming Back to Shale Oil. Shale oil wins back investors despite policymakers’ focus on climate change. Opinion. U.S. oil companies are raking in cash hand over fist, showing that the long-battered sector continues to be an attractive bet for investors. The S&P Oil and Gas Exploration and Production ETF (XOP) has surged recently by more than 75 percent compared to investment levels a year ago, making it the best performing subsector of the stock market. Generalist investors wary of the U.S. exploration and production (E&P) sector before the pandemic due to its reputation for capital destruction and mounting environmental, social and governance (ESG) concerns have found a bona fide cash machine on the other side. According to analysts at Wells Fargo, the robust oil and gas prices, capital discipline, and embrace of the ESG challenge by oil and gas producers mean the sector could enter a new “super cycle” in 2022, according to analysts at Wells Fargo.
Scary Outlook for Farmers. Farmers worldwide seeking to secure fertilizer for the next two years will have to outbid rivals or otherwise miss having enough to support crops, executives of a leading U.S. fertilizer supplier said in November.
“High crop prices and increased economic activity continue to drive demand. Meanwhile, lower global production and government actions have created a supply constrained global market,” said on Nov. 4, 2021 Bert Frost, vice president for sales and supply chain at CF Industries.
“We expect strong global fertilizer demand to last into at least 2023,” he said.
Relief is “unlikely to appear anytime soon,” he added, in comments during the Deerfield, Illinois-based company’s third quarter 2021 earnings call, according to a Motley Fool’s transcript.
India and Brazil
Frost said global fertilizer production has been constrained in 2021 in part by weather events in North America as well as lower supplies due to increased maintenance.
On the other hand, internationally, global demand has been steadily on the rise, with Brazil and India taking tonnes away from other regions.
“The demand is definitely there,” Frost said.
“You are seeing India desperately trying to pull in tons and will continue to do so through, I expect, into their next fertilizer year, which begins in April. Brazil is ahead 10T year-on-year and probably will continue at that pace through importing urea at least through February,” he added.
China and Russia
China and Russia have contributed in 2021 to the tightening of the world’s fertilizers markets by limiting exports and this could have consequences for many countries in coming years, Frost said.
The “Russian and Chinese governments are discouraging nitrogen fertilizer exports through the spring. These factors suggest the potential for strong fertilizer demand to last beyond 2023,” he said.
An inability to secure enough product may result in lower crop yields, he said.
“If this were to happen, demand would be deferred into future years as it would take more than two growing seasons to replenish global grain and oilseed stocks,” he said.
Fertilizer prices
“We started the year at $350 per ton of urea, moved to $400 by April, moved to $500 by July, $600 in September and $700 in October. And you can see in the publications, we started our fill program in July at $285 NOLA equivalent and then moved to $435 in September and then in October, $535,” he said.
“The Chinese announcement is much more significant, because of what has come out traditionally from China, the four million to five million tons of urea exports and also phosphates,” Frost said.
“In a world of 50 million tons of world traded urea, to take out up to 10% is going to be felt, on top of the demand, as I mentioned earlier, from Europe that needs to move. So you are going to see North African tons moving into Europe. And there’s going to be a hole,” he added.
As for the Russia announcement, it was “a little bit of a surprise,” he said.
“Russian demand for nitrogen fertilizer has been fairly consistent in that 5.5 million to 6.5 million tons demand per year,” he said.
“And they’ve exported the remainder. And so when you look at from year-on-year what Russia has consumed and what Russia has exported, on the margin, there’s probably going to be a shortage of up to 0.5 million tons,” he added.
Fertilizer bidding competition
CF Industries CEO Anthony Will shared during the same call the company’s expectation “that there’s going to be availability of product here in North America,” according to a transcript of the call by Motley Fool.
“The U.S., based on crop prices and efficiency of growers and requirements on the industrial side, is able to bid away tons from other parts of the world that are less able to do so, particularly those economies that require government subsidies in which to bring tons in,” he said.
The fertilizer shortage and the possibility of lower crop yields may also contribute to inflationary pressures.
“I see a situation where you end up with inflation in terms of the industrial goods as opposed to some reduction in economic output,” Will said.
In August, the U.S. International Trade Commission probed fertilizer imports.
According to figures published in a Dec. 2 press release by the Food and Agriculture Organization, as of Sept. 2021 161 million people in the world were experiencing “high acute food insecurity”, an increase from 155 million in the previous year, after the pandemic intensified an existing problem.
PA Permit December 2, to December 9, 2021
County Township E&P Companies
- Susquehanna Rush Repsol
- Tioga Delmar Seneca
- Tioga Delmar Seneca
OH Permits November 28, to December 4, 2021
County Township E&P Companies
- Belmont Wayne Gulfport
- Jefferson Smithfield Ascent
- Jefferson Smithfield Ascent
- Jefferson Wells Ascent
- Jefferson Wells Ascent
WV Permits November 29, to December 3, 2021
- Dodd HG Energy
- Dodd HG Energy
- Marion EQT
- Marshall SWN
- Monongalia Northeast Nat. Res
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Monongalia Northeast Nat. Res.
- Taylor Arsenal
