My 500th Newsletter. I owe it all to Shale Directories’ Members
Please take a minute to review our Members. These companies are truly responsible for the longevity of this newsletter. When I started the newsletter in July 3, 2013, I had no idea where it would lead me. Well, it’s been a great ride. Thankfully, the O&G industry is incredibly dynamic which allows me to provide you with the latest industry information.
-Joe Barone
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Russian to Cut Oil Production by 500,000 Barrels. Russia will cut oil production by 500,000 barrels per day, or around 5% of output, in March, Deputy Prime Minister Alexander Novak said on Friday, after the West imposed price caps on Russian oil and oil products.
The price of Brent crude rose on the news of the output cut from Russia, the world’s second-largest oil exporter after Saudi Arabia, increasing by more than 2.5% on the day to $86.6 per barrel.
“As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’,” Novak said in a statement.
“In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations.”
The Kremlin said on Friday that Russia had held talks with some members of the OPEC+ producers group regarding its decision to cut output.
February Energy Information Agency Short Term Energy Outlook. Price forecast and storage outlook.
- Natural gas prices. We forecast that the Henry Hub natural gas spot price will average $3.40 per million British thermal units (MMBtu) in 2023, down almost 50% from last year and about 30% from our January Short-Term Energy Outlook (STEO) forecast. We revised our outlook for Henry Hub prices as a result of significantly warmer-than-normal weather in January that led to less-than-normal consumption of natural gas for space heating and pushed inventories above the five-year average.
- Natural gas storage. As a result of less-than-normal natural gas consumption in January, natural gas inventories ended the month above their five-year (2018–2022) average. We now expect inventories will close the withdrawal season at the end of March at more than 1.8 trillion cubic feet, 16% more than the five-year average.
NatGas Prices Fall, New Worries. As natural gas prices tumble, new worries for U.S. shale patch. Reuters. A 46% drop in natural gas prices this year is rippling across the U.S. shale patch, threatening to slow drilling and chill deal-making in a move unthinkable six months ago as global demand soared. Analysts are chopping their outlook for gas prices this year, and for production and earnings. The drop has also put a cloud over merger and acquisition activity, analysts said. Such moves were unfathomable six months ago as Russia reduced its gas flows to Europe and U.S. gas became a hot commodity. The number of active gas-drilling rigs jumped about 48% to 157 in the first six months of 2022, according to data from oilfield services firm Baker Hughes.
New Pandemic-Era High for U.S. Oil Production. U.S. oil production reaches new pandemic-era high, contributes to natural gas gains. NGI. Domestic crude production climbed to the highest level since 2020 as demand for petroleum products pushed ahead last week, the U.S. Energy Information Administration (EIA) said Wednesday. American producers generated 12.3 million b/d for the week ended Feb. 3, up by 100,000 b/d from the prior week, data from EIA’s latest Weekly Petroleum Status Report showed. The latest print also marked a 100,000 b/d increase from January’s average and from the pandemic-era peak. Additionally, production for the latest EIA period far exceeded the year-earlier level of 11.6 million b/d, and it climbed further toward the record of 13.1 million b/d set in early 2020, prior to coronavirus outbreaks.
TX Oil and NatGas Break Records in 2022. Report: Texas oil and natural gas industry breaks records in every category in 2022. Center Square. The Texas oil and natural gas industry once again led the U.S. in oil and natural gas production and lowered emissions. It also ranked first in industry job growth, wages, payroll and Gross Regional Product (GRP) nationwide. States that ranked second weren’t even close by comparison, a new report published by The Texas Independent Producers & Royalty Owners Association (TIPRO) found. In 2022, Texas was the top oil producer in America, supplying 1.83 billion barrels of oil to energy markets last year. New Mexico produced the second-greatest amount – less than one-third of Texas’ production of 534 million barrels, followed by North Dakota’s 393 million barrels. Texas’ nearly 350,000 oil and natural gas workers represent the greatest percentage of jobs in the industry nationwide of 37%, according to the report. However, when “incorporating direct, indirect, and induced multipliers for oil and gas employment,” the Texas oil and natural gas industry supported at least 2.6 million Texas jobs last year, the report notes.
Verde Bio Holdings Increasing Drilling. Oil & Gas 360. Growing oil and gas company Verde Bio Holdings is drilling new wells on its shale properties amidst higher oil and gas prices. The company recently received notices that over eight new wells have been brought online. The main areas experiencing growth are on the company’s Permian Basin and Haynesville shale properties. Verde Bio Holdings now has over 500 producing wells in its portfolio. Scott Cox, Founder and CEO, stated, “We are seeing significant growth in our Haynesville Shale acreage, where Southwestern and Chesapeake continue development at a blistering pace. The Company recently received notices of multi-unit horizontal wells in Desoto Parish.
Permian Oil Production Could Surge by 500,000 bpd This Year. Yahoo. Houston, Texas-based pipeline company Plains All American Pipeline, L.P. (NASDAQ: PAA) has predicted that Permian crude output will surge by 500,000 barrels per day in the current year. The company revealed this during its latest earnings call whereby it reported that it’s been recording higher utilization for long-haul systems for its Cactus pipelines in Texas. PAA reported Q4 2022 revenue of $12.95 billion versus $12.98 billion a year earlier; unfortunately, fourth-quarter net income shrunk 42% to $263 million while net cash also contracted 47% to $335 million. Although U.S. production in the oil-and-gas-rich Permian Basin grew in 2022, it remained below 2019 levels for most of the year.
Latest NatGas Storage Report Bullish for Prices. Natural gas futures edge up slightly amid bullish EIA storage data. NGI. Natural gas futures rose on Thursday despite little change in the supply/demand backdrop of the market. Although the latest storage data were bullish, prices were higher before the report was published, and the print didn’t detract from what likely will be growing surpluses later this month. The March Nymex gas contract reached a $2.529 intraday high before settling at $2.430/MMBtu, up 3.4 cents from Wednesday’s close. April futures climbed 1.5 cents to $2.492. Spot gas prices were mostly steady across the Lower 48. However, large price increases on the West Coast sent NGI’s Spot Gas National Avg. up 1.5 cents to $2.770.
Freeport LNG Starts and Stops. Thank you, MDN. Tuesday of last week, Freeport LNG, which has been out of operation since an explosion and fire in June 2022, asked the Federal Energy Regulatory Commission (FERC) for permission to begin re-introducing feedgas back into one of three liquefaction “trains” (units) at the facility. A day later, FERC agreed, and small amounts of gas began to flow. Last Wednesday (a day later), Freeport said it was ready to begin loading ships with the LNG it’s producing and asked FERC for permission to do so. So far (now a week later), FERC has not responded and has not granted permission to load the ships. As of yesterday, Reuters is reporting gas flows to Freeport have stopped.
IEA NatGas Global Summit. IEA convenes Special Ministerial on natural gas markets and actions to reinforce supply security. IEA. Some 40 countries will convene for a Special IEA Ministerial on 15 February to review the state of natural gas markets and discuss actions to strengthen security of supply amid the global energy crisis. The virtual meeting will be chaired by Canada’s Minister for Natural Resources Jonathan Wilkinson, and co-chaired by US Secretary of Energy Jennifer M. Granholm and Ireland’s Minister for Environment and Climate Eamon Ryan. Russia’s invasion of Ukraine in February 2022 triggered an energy crisis whose ripple effects for the global economy are still being felt by consumers and businesses worldwide. The most severe price spikes and disruptions have taken place in gas markets. Countries in Europe and beyond are working to navigate the risks posed by the ongoing crisis and how best to ensure energy security going forward.
Tight LNG Market to Continue. Tight LNG market to continue as EIA sees lowest natural gas export capacity additions in decade. NGI. The Energy Information Administration (EIA) estimated this year will bring the lowest amount of LNG export capacity additions in a decade, exacerbating expectations for a tight global natural gas market through 2025. In a recent report, EIA researchers projected four liquefied natural gas export projects would come online across the world this year, adding a combined capacity of 1 Bcf/d. Its expectations were based on data from the International Group of Liquefied Natural Gas Importers and information from project developers. If completed, the projects would amount to the fewest additions to global supply since 2013, when around 0.7 Bcf/d of capacity was brought online. EIA researchers wrote that 2023 would likely be the beginning of a three-year streak of “fewer global LNG export capacity additions than in previous years.”
U.S. Exports to China 5-month High. U.S. exports of light sweet crude to China jumped to a five-month high, as the world’s biggest crude importer boosted refining and as Europe’s demand eased, market participants said.
Cargoes of U.S. light sweet crude bound for China rose last month to about 187,000 barrels per day, the highest since August, said Matt Smith, lead oil analyst for the Americas at data and analytics firm Kpler. Those exports are expected to tighten global supply of light sweet crude, while prices for WTI Midland, a key U.S. light sweet grade, have strengthened.
“China is continuing to pull more light sweet crude,” said Vikas Dwivedi, global oil and gas strategist at financial services firm Macquarie Group. “WTI Midland is moving into Asia in bigger size.”
Meanwhile, U.S.-linked grades are seeing a wider discount to the international benchmark Brent, encouraging foreign buyers to snap up U.S. crude. U.S. crude futures’ discount to Brent widened to over $7.00 a barrel this week, the most since Nov. 28.
Latest Updates
- Oil prices down 1.5% for the week on recession jitters
- Dutch government lifts filling target for Bergermeer gas storage facility to 90%
- Factbox: Germany’s efforts to tackle energy crisis
- Yellen wants bolder World Bank steps on climate change, global issues
- Greenpeace to sue EU over ‘green’ label for gas and nuclear
A tight light sweet crude market is an indication that oil prices could go higher in the coming weeks, said Macquarie’s Dwivedi.
U.S. exports to Asia are expected to continue expanding. Macquarie has forecast U.S. production to grow by roughly 900,000 bpd to December 2023 from December 2022, with as much as half of that production growth going toward exports to Asia.
U.S. oil production is expected to hit 12.4 million bpd in 2023, according to the Energy Information Administration. Weekly U.S. crude exports rose to 4.7 million bpd in the week to Jan. 20, highest since November, EIA data showed.
PA Gov. to Fully Fund PA DEP. Gov. Shapiro must lead on environmental funding. A new governor offers hope that the chronic underfunding of the Pennsylvania Department of Environmental Protection will finally end. This underfunding has compromised the department’s ability to regulate the oil and gas industry, monitor and reduce air and water pollution, protect the Chesapeake Bay and clean up hazardous waste sites. Gov. Josh Shapiro’s upcoming budget proposal should fully fund DEP. The best measure of the DEP’s strength over time is its number of filled positions, i.e., the number of people paid to come to work each day. In 2002, DEP’s authorized complement was 3,211 positions. That was before the shale gas boom placed significantly more responsibilities on DEP. In September, the department was down to 2,337 filled positions.
RNG News from Coalition for RNG
Renewable Natural Gas Solution to Climate Change
There are no downsides
Imagine if burning natural gas actually reduced carbon emissions and can be transported via the nations existing natural gas pipelines to factories, commercial buildings, power generators, and our homes. So what is the downside?
As organic matter decomposes, it gives off primarily natural gas – methane and carbon dioxide. Large sources of decomposing matter include landfills, livestock (cattle, dairy, pig and chicken) farms, wastewater treatment plants and variety of farming and forestry sectors.
The methane generated by decomposition is traditionally is allowed to leak into the atmosphere. Methane is a potent greenhouse gas with warming potential 25–34 times greater than carbon dioxide, according to University of Utah data. Avoidance of methane emissions gives RNG a negative carbon intensity. A fuel with no downsides.
There are no downsides, Renewable Natural Gas (RNG) also named biogas and sustainable natural gas is undergoing rapid growth. An Industry Research report, released earlier this year forecasts RNG growth at a CAGR of 44%. Major oil and gas companies such as BP are jumping in; BP recently acquired landfill RNG leader Archaea Energy.
Volvo Launches Powerful Biogas Truck for Lowering CO2 on Longer Transports
Volvo Trucks is now launching a new, stronger gas-powered truck that can run on liquified biogas. The new truck can carry out demanding, long distance transport tasks, while reducing overall CO2 emissions.
Five years ago, Volvo Trucks launched its trucks that can run on liquified biogas, often called bio-LNG, which is a renewable fuel that can be produced from many types of organic waste, including food scraps. The fuel can reduce CO2 emissions by up to 100%.
PA January 30, to February 9, 2023
County Township E&P Companies
1. Bradford Troy Repsol
2. Westmoreland Rostraver Olympus
3. Westmoreland Rostraver Olympus
4. Westmoreland Rostraver Olympus
5. Westmoreland Rostraver Olympus
OH Permits January 29, to February 4, 2023
County Township E&P Companies
1. Belmont Union Ascent
2. Belmont Union Ascent
3. Belmont Union Ascent
4. Belmont York Gulfport
5. Belmont York Gulfport
WV Permits January 30, to February 3, 2023
1. Barbour Tug Hill
2. Doddridge Antero
3. Doddridge Antero
4. Doddridge Antero
5. Doddridge Antero
6. Doddridge Antero
7. Doddridge Antero
8. Doddridge Antero
9. Doddridge Antero
10. Marshall Tug Hill
11. Marshall Tug Hill
12. Marshall Tug Hill
13. Marshall Tug Hill
14. Marshall Tug Hill
15. Marshall Tug Hill
16. Marshall Tug Hill
17. Tyler Antero
18. Tyler Antero
