Shale Directories Conferences
SPRING 2022 Hydrogen & Carbon Capture Conference
April 21, 2022
Stay Tuned for Registration Details in January, 2022
Hilton Garden Inn, Southpointe
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Global Oil Demand Could Reach New Heights in 2022. Oil demand suffered a severe blow last year when the initially ignored coronavirus in China spread around the world and started prompting lockdowns. Then the wave receded, and oil demand began to rebound, much faster than most expected. Despite the green transition push, demand will continue to recover into next year, too, and those after it. Many forecasters, including BP, in 2020 argued that peak oil was already past us and what we had to look forward to was a more renewable energy mix. And then Covid-19 case numbers in key markets began to decline, and oil demand began to rise. Since then, demand has rebounded so strongly that it has led forecasts to start warning of the possibility of a shortage.
Saudi Arabia recently warned that underinvestment in new oil and gas production would lead to higher prices and supply crunches.
“We’re heading toward a phase that could be dangerous if there’s not enough spending on energy,” the Kingdom’s Energy Minister, Prince Abdulaziz bin Salman said earlier this month. Insufficient investment could lead to an “energy crisis,” he added.
Banks are contributing to the discrepancy between demand forecasts and supply realities as they feel growing pressure to stop doing business with the oil and gas industry because of its carbon footprint. This may well exacerbate the energy crunch if such a crunch is indeed in the cards.
It probably is. Investment bank analysts seem to overwhelmingly expect higher prices because of strong demand and not-so-strong supply. Goldman Sachs’ Damien Courvalin said earlier this month Brent crude could hit $100 next year. Morgan Stanley analysts slashed their first-quarter 2022 outlook for oil, citing omicron concerns but raised their third-quarter forecast to $90 per barrel of Brent, from $85 per barrel.
Canada’s BMO Markets expects oil demand to hit a record next year and remain strong over the next few years as well despite a temporary dip in the first quarter, again because of the omicron variant of the coronavirus.
Speaking of omicron, OPEC has largely brushed off what others see as a new threat for global economies and oil demand. The cartel, in its latest Monthly Oil Market Report actually raised its demand forecast for the first quarter of next year, despite planned reserve releases by the United States, Japan, and South Korea, aimed at curbing the rally in oil prices that started in late 2020 and pushed benchmarks to highs of over $80 per barrel in October.
According to the cartel, the effect of omicron on oil demand will be “mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges.”
Europeans See NatGas and Nuclear As “Green.” Finally, the European Union has admitted the obvious: if decarbonization is the goal, natural gas and nuclear must be a big part of the continent’s energy mix. On Saturday, the European Commission released a statement which said “there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future.” The move means that gas and nuclear could be classified as “sustainable investments” under certain conditions.
This is good news and a tacit acknowledgment by European policymakers of the energy disaster that is now shaking the region. But it’s also far too late in coming. Indeed, my immediate response was to ask: what the heck took them so long? If decarbonization is the goal, then natural gas and nuclear are the obvious ways forward. I have been making that point for more than a decade. More on that in a moment.
To be sure, the EU’s move didn’t please the catastrophists. Robert Habeck, a co-leader of Germany’s Green party called the move “greenwashing.” Leonore Gewessler, the climate action minister in Austria, said gas and nuclear couldn’t be included because they are “harmful to the climate and the environment and destroy the future of our children.”
It’s also worth seeing how big media outlets are covering the story. The New York Times NYT +1.4% summarized the move by saying gas and nuclear would be considered “transitional” sources to be “used to bridge countries’ moves away from coal and carbon-emitting power toward clean energy technologies like wind and solar.” It continued, saying nuclear would be considered sustainable if the countries can agree on how to handle nuclear waste and that gas-fired power plants would be deemed okay if they “meet certain emissions criteria and replace more polluting fossil fuel plants.”
Before going further, let me state the obvious: Europe cannot — will not — move to “a predominantly renewable-based future.” The never-ending claims that Europe, or any other region with a large economy, can run solely on “clean energy technologies like wind and solar,” are not based on history, math, or physics. Indeed, Europe is already in the throes of an energy crisis due to its headlong rush to adopt renewables at the expense of traditional thermal power plants. Numerous news outlets have documented the causes of Europe’s predicament. Two days ago, Bloomberg ran a story with the headline: “Europe Sleepwalked into an Energy Crisis that Could Last Years,” which said that Europe is “in the midst of an energy transition, shutting down coal-fired electricity plants and increasing its reliance on renewables. Wind and solar are cleaner but sometimes fickle…”
Williams Delivers Record NatGas. Williams’ Transco pipeline delivers record amount of natural gas. Tulsa World. Tulsa-based Williams announced Thursday that it recently delivered a record amount of natural gas on its Transco interstate pipeline, which provides service to natural gas distribution companies, electric power generators, LNG (liquified natural gas) exporters and other customers along the Eastern Seaboard and Gulf Coast. The nation’s largest-volume natural gas transmission system, Transco delivered 17.15 million dekatherms (MMdt) on Jan. 3, surpassing the previous high of 16.9 (MMdt) set Feb. 20. While extreme winter weather usually coincides with peak-day deliveries, the new record was because of continued expansions on Transco to serve the growing demands for U.S. natural gas.
UGI Makes Marcellus Purchase. UGI expands Marcellus Shale gas pipeline network. In another sign of the ongoing demand for fossil fuels, UGI Corp., the Valley Forge energy company, is expanding its natural gas pipeline network in Pennsylvania’s Marcellus Shale region. UGI Energy Services LLC announced Tuesday that it will pay $190 million to acquire Stonehenge Appalachia, a 47-mile pipeline in Butler County that transports natural gas produced from local wells to interstate pipelines. The acquisition is UGI’s third deal in recent years that has expanded its footprint in the shale-gas region northeast of Pittsburgh. Note: Pittsburgh Business Times, Offshore Technology, and Natural Gas Intelligence also report.
Repsol Makes $222 Million Marcellus Investment. Repsol buys shale oil and gas assets from US firm Rockdale Marcellus for $222m. Repsol has bought shale oil and gas assets from US firm Rockdale Marcellus for $222 million. This company was born out of holdings which Shell had in the counties of Tioga, Lycoming and Bradford in Pennsylvania in 2017. Repsol already operates a shale field near there. The Spanish oil and gas giant participated in an auction to acquire Rockdale on December 16, following the latter’s adherence to Chapter 11 in September. This operation is a good one from a strategic and geographical location point of view, as it strengthens Repsol’s presence in the area.
PA Permitting Returning to Normal Levels. Pa. shale gas permitting returns to normal levels in December after big dip. After hitting a 13-year low in November 2021, the number of permits for shale gas wells in Pennsylvania returned to a more normal level. The 69 permits pulled in December 2021 marked a 103% increase month over month and a 6% increase over permitting activity for the same period a year ago, according to Jan. 5 data from the state Department of Environmental Protection. Pennsylvania shale producers continued their pattern of keeping production low, rather than upping output to chase natural gas futures prices that exceeded $6/MMBtu in October 2021. Although prices began retreating in December, they still were far above the near-record lows of 2020.
Snowstorm Drives Up NatGas Prices. U.S. Northeast power, NatGas prices jump as snowstorm batters region. U.S. Northeast power and natural gas prices for Friday jumped to their highest since January 2018 as homes and businesses crank up their heaters during the region’s first big snowstorm. Meteorologists at AccuWeather said New York City can expect about 3-6 inches (8-15 centimeters) of snow on Friday. Temperatures in the Big Apple will reach around 32 Fahrenheit (0 Celsius) on Friday and Saturday before rising to 40 F on Sunday, according to AccuWeather. The normal high in New York is 38 degrees at this time of year.
Uncertainties Around Appalachian NatGas Growth. Appalachian natural gas output growth said threatened by long-term ‘uncertainties. Higher natural gas prices were a positive for natural gas producers in the Appalachian Basin in 2021, but ongoing “uncertainties” threaten the industry’s long-term growth prospects. “These include a number of challenges at the federal level being pushed by the Biden administration and some members of Congress, such as a punitive methane tax, and statewide issues such as Gov. Tom Wolf’s continued efforts to join the Regional Greenhouse Gas Initiative and a pair of rulemaking petitions by activist groups seeking to greatly increase the cost of well bonding,” President Daniel J. Weaver of the Pennsylvania Independent Oil and Gas Association (PIOGA) told NGI.
American Energy Purchases Apex. American Energy acquires Apex Energy Solutions, LLC. Allentown-based American Energy Partners, Inc. announced Monday that it had completed its acquisition of Apex Energy Service, LLC. Effective Jan. 1, 2022, the acquisition was funded through a combination of cash, conventional debt, and common stock. A final transaction cost was not released. Apex, a regional provider of services in Ohio, West Virginia, and Pennsylvania, provides oil and gas services, facilities maintenance, and logistics services.
EOG Ready to Pump More. Shale titan EOG is ready to boost oil output if market wants it. Bloomberg. EOG Resources Inc., one of the biggest U.S. shale oil producers, is ready to raise production this year if the market demands it. The company has yet to resume pre-pandemic levels of production, but that could change this year under certain macroeconomic conditions, EOG Chief Executive Officer Ezra Yacob said in a virtual energy conference hosted by Goldman Sachs Group Inc. The driller is monitoring global oil demand, inventory levels and unused production capacity within OPEC+, Yacob said.
Cold Drops NatGas Production in TX. Texas natural gas production dropped during recent cold front, reviving concerns about electric grid. Texas Tribune. During Texas’ first strong cold front of the winter this past weekend, natural gas production in the state’s top energy-producing region dropped by about 25%, according to a report from S&P Global. And while the lights largely stayed on across the state, the gas system’s performance during a brief cold snap raised more questions about the grid’s ability to handle extreme winter weather. “Keeping the power on is the best winterization tool we have,” Todd Staples, president of the Texas Oil and Gas Association, said in December. Note: San Antonio Current and The Facts also reports.
Oil and Gas Discoveries at All Time Lows. Oil and gas discoveries at the lowest level since 1946. Oil and gas firms are having their worst year for new fossil fuel discoveries in decades and reserves are dwindling. The oil and gas industry is on track to discover just 4.7 billion barrels of oil equivalent (boe) by the end of 2021, its worst performance in 75 years, according to the research firm Rystad Energy. Globally, 40% of all petroleum ever discovered has been found in 900 oil and gas fields. But the industry has made few such discoveries this year.
NatGas Drilling Flat in 2021. Natural gas drilling unchanged in U.S. as 2021 draws to uneventful close. The final days of 2021 proved largely uneventful for U.S. producers as the domestic natural gas rig count went unchanged at 106 for the week ended Friday (Dec. 31), according to the latest numbers from Baker Hughes Co. (BKR). Total oil-directed rigs in the United States similarly held steady at 480. Rig totals on land and in the Gulf of Mexico were both flat week/week in the latest BKR tally, which is based partly on data provided by Enverus.
More Legal Battles for MVP. Another legal battle looms over Mountain Valley Pipeline. Opponents of the Mountain Valley Pipeline are gearing up for another legal fight to try to stop the natural gas project. The Roanoke Times reports that environmental and community groups filed a petition with a federal appeals court.
The groups want the court to review a decision made earlier this month by the State Water Control Board that allowed the infrastructure to cross streams and wetlands. Pipeline opponents say Mountain Valley should not be allowed to continue given its past track record of violating erosion and sediment regulations.
Manchin Getting Support. Manchin hearing from both coal, natural gas. Leaders of the coal and natural gas industries have different messages for U.S. Senator Joe Manchin and the future of any further negotiations on the Build Back Better plan. Meanwhile, GOWV, that natural gas industry’s trade organization in West Virginia, joined several similar organizations from surrounding states on a letter to Manchin Monday thanking him for his leadership against Build Back Better.
Mariner East 2’s Latest Update. Pennsylvania pipeline on track for completion in 2022 | Today in Pa. The Mariner East pipeline is at long last on track to be completed in 2022.
Pioneer Exits Delaware Basin. Pioneer Natural Resources completes $3 billion exit from Delaware Basin. A $3 billion sale of Pioneer Natural Resources’ assets in the Delaware Basin was completed last week and the company plans to focus its oil and gas operations to the east. Pioneer announced the sale to Continental Resources in November, seeking to divest from the Delaware – a sub-basin that spans southeast New Mexico and West Texas on the western side of the larger Permian Basin – in favor of developing operations in the Permian’s eastern Midland sub-Basin.
Higher Costs for O&G Industry. Reports predicts oil and gas companies will have higher capital costs in 2022. Natural gas companies will likely face higher capital costs in 2022 after a year that led to lower spends on drilling and higher prices for gas, according to a new report. The Institute for Energy Economics and Financial Analysis, an independent analysis organization that has authored a number of Appalachian reports in the past, indicated in a report released Wednesday that the higher-than-normal free cash flow for the oil and gas industry could come to a halt in 2022.
Earthquake Hits Permian Basin. Magnitude 4.5 earthquake strikes Permian Basin – USGS. An earthquake of magnitude 4.5 struck near Stanton in West Texas on Monday, the US Geological Survey reported. The quake struck at a depth of 7.8 km (4.8 miles), USGS said. The earthquake happened in the Permian Basin, home of the largest shale oil and gas field. This is the second strongest earthquake in West Texas in the last 10 years, MRT news reported. After a series of smaller earthquakes in recent months, the state’s energy regulator, Texas Railroad Commission in September set limits on the volume of waste water that oil and gas producers could inject underground. Note: The Sun also reports.
TX Producers Hit by Well Disposal Closures. Top Texas shale producers hit by quake-driven well disposal closures. Some Texas shale oil and gas producers could lose as much as half of their wastewater disposal capacity in key operating areas of the top U.S. oilfield under a growing state crackdown to stem a surge in earthquakes, energy consultancy Rystad said on Thursday. The Texas Railroad Commission, which regulates the state’s oil industry, in December suspended deep disposal wells in four oil-rich counties in West Texas amid a spike in tremors. Saltwater typically produced with oil and gas production often is shunted into wells drilled specifically to handle the wastewater.
Drilling Update in Eagle Ford. Forney-based Paluxy Oil & Gas plans five new oil wells. The company, incorporated in 2017, applied Dec. 22 for permits to drill five new vertical oil wells 34 miles southeast of the nearest town of Ozona.
US #1 in LNG Export. US becomes world’s top exporter of liquified natural gas. CNN Business. The United States is now the world’s leading exporter of liquified natural gas as Europe’s energy crisis and shortages in China send demand for American shipments soaring. LNG exports from the United States topped 7 million tonnes (7.7 million tons) in December, according to ship-tracking data from ICIS LNG Edge, narrowly edging out rival producers Qatar and Australia for the first time. The United States only shipped its first LNG cargo from the lower 48 states in 2016 and has risen to become the world’s top exporter in just six years as a shale gas revolution boosted domestic production and turned the country into a powerful force in global energy markets.
Deep Freeze Causing Problems. Deep freeze disrupts crude flows in oil sands and Bakken. A deep-freeze in Canada and Northern U.S. is disrupting oil flows, causing a surge in crude prices just as American stockpiles are declining. With temperatures from North Dakota to Northern Alberta below zero Fahrenheit (-18 Celsius), TC Energy Corp.’s Keystone pipeline was shut on Tuesday before resuming later the next day. In North Dakota’s Bakken shale, production has started to succumb to the freeze, sending local crude prices to their highest since November. Canadian oil has also jumped.
VA Governor Taps Trump EPA Chief. Will It Be Easier to Get Pipelines Through Virginia? Va. governor-elect taps Trump EPA chief for key post. Hyperlink. E&E News. Andrew Wheeler, who served as head of EPA during the Trump administration, is returning to government service. Virginia Gov.-elect Glenn Youngkin (R) announced today he chose Wheeler as his secretary of natural resources. Wheeler will be the state’s top environmental official and oversee five agencies focusing on the environment, natural resources and recreation. Youngkin also selected Michael Rolband as Virginia’s next director of environmental quality. Rolband founded Wetland Studies and Solutions Inc., a consulting firm, and the Resource Protection Group Inc., a nonprofit group for wetlands and streams restoration.
Triumph Energy Has New CEO. Triumph Energy names new president and CEO. Hawkstone Associates Inc.—doing business as Triumph Energy Corp.—has promoted Jason Wittekind to president and CEO. Current president Ronald Wittekind will become the executive chairman. He is a member of the Ohio Petroleum Marketers and Convenience Association board of directors and the Indiana Food and Fuel Association board and member of the Sunoco National Brand Council.
NexTier Moving to NatGas. NexTier swapping more diesel for natural gas-powered fleets, but covid variants still threatening. U.S. land-based NexTier Oilfield Solutions Inc. said pressure pumping work picked up in the final three months of 2021, with more fleets deployed than in the third quarter. The gains came despite the surge of Covid-related infections during December caused by the Omicron variant, management noted. The Houston-based oilfield services firm said it averaged 30 deployed hydraulic fracture fleets during 4Q2021, with 29 fully utilized.