Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Biden Creating the Methane Police. Biden wants citizens to police oil wells for methane. Rigzone. A Biden administration plan to empower private citizens to police oil wells and pipelines for methane leaks is being blasted by industry leaders who say it sets a dangerous precedent. Under the Super-Emitter Response Program proposed by the Environmental Protection Agency, individuals who have agency-approved expertise and equipment would be authorized to monitor oil industry operations for emissions of the potent greenhouse gas and notify companies of any high-volume leaks. Operators would have five days to analyze any credible third-party methane reports and 10 days to fix most leaks. Industry officials say the initiative could encourage activists to trespass on private land, including on farms and near homes with active wells. And they warn that third-party data can be riddled with errors. Better requirements on the “validity and veracity of the data” are needed to ensure companies don’t have to shut operations over nothing, the Independent Petroleum Association of America and more than a dozen state oil industry groups told the EPA in written comments.
Global Oil Demand All Time High in 2023. Global oil demand to hit all-time high in 2023, IEA predicts. The Washington Examiner. Worldwide oil demand is predicted to rise by 2 million barrels per day in 2023, the International Energy Agency said Wednesday, reaching an all-time high due largely to higher demand from China as it lifts its harsh zero-COVID policies. Global oil demand is anticipated to reach a record high of 101.9 million bpd in 2023, the Paris-based agency said Wednesday in its closely watched Oil Market Report, up from a slowdown toward the end of 2022 and a 1.4 million-bpd rise from the previous record seen in 2019. The report is the third month in a row that the IEA has increased its oil demand forecast, and it is up by 100,000 bpd compared to last month’s predicted growth. But the high demand could drive a supply shortfall in the second half of 2023 due to restrained OPEC+ production, the IEA said. “World oil supply looks set to exceed demand through the first half of 2023, but the balance could quickly shift to deficit as demand recovers and some Russian output is shut in,” the Paris-based agency said.
U.S. Becoming Global Oil Price Maker. Booming oil exports boost U.S. role as global price maker. Wall Street Journal. The world’s oil traders are increasingly adopting an old slogan as they track crude prices and try to shield themselves from volatility: Don’t mess with Texas. Traders swapped contracts for oil sold in Houston and Midland, key hubs of the Texas export boom, at a record clip on Feb. 8, according to exchange giant CME Group CME 0.64%increase; green up pointing triangle. By Monday, the number of outstanding agreements for such crude deliveries sat at a record high. The surge in activity reflects how U.S. crude exports increasingly shape global oil prices, as well as the financial instruments bought and sold by producers, refiners and traders to avoid or capitalize on price swings. In June, a Texas-produced crude will be formally added to the Brent complex, the global benchmark.
As the Result of East Palestine, Pipeline Approvals Needed. Speedier pipeline approvals needed for oil and gas transportation. Forbes. Fifty Northern Southern Railroad train cars derailed in East Palestine, Ohio, ten of them carrying toxic chemicals. With smoke billowing, residents on both sides of the Ohio-Pennsylvania border were ordered to evacuate. This frightening incident should lead us to reexamine our pipeline priorities. Although the chemicals on the train could not move by pipeline, pipelines are used for natural gas and petroleum—and we need more of them. Pipelines are the safest way to transport oil and natural gas because the pipeline stays still and the gas moves, away from people, with little risk of accident. New technology shows pipeline operators if there is a pinhole leak in a pipe, and sophisticated pressure gauges can signal if oil pressure is declining.
OH Governor Approves Fracking on State Land. Ohio Governor Mike DeWine greenlights fracking on state lands. Cleveland Scene. Environmentalists in Ohio say they’re concerned oil and gas operations planned on state lands could harm the health and property of citizens living nearby. Last month Gov. Mike DeWine signed House Bill 507 into law, which approves licenses for companies seeking to extract natural resources from state lands. Former U.S. Department of Energy scientist Yuri Gorby explained that oil and gas wells drilled into the Marcellus and Utica shale dredge-up radium, uranium, and potassium deposits, along with all of the chemicals used in the fracking process. “That the whole process is releasing this material,” said Gorby, “and the potential, not just the potential but the reality, is those chemicals and radioactive elements are getting into surface and ground waters and being spread around.”
NatGas Bottoming Out, Heading Higher. Thanks, MDN. A financial analyst writing on the Seeking Alpha investors’ website wrote a detailed post outlining his thesis on why the price of natural gas is likely at the bottom now and will only go higher. He says that since natural gas prices are at or below breakeven levels for drillers, they are reducing their drilling rate. A negative shift in weather, falling rig counts, and the potential boost from Freeport exports may push natural gas back into a shortage over the coming months.
Lower NatGas Prices May Cause Switch from Coal. Low U.S. natural gas prices to spur gas-fired power generation. Oil & Gas 360. U.S. electricity generators are expected to use more natural gas at the expense of coal in the coming months due to the falling prices of domestic natural gas futures. The benchmark U.S. natural gas prices have slumped to the lowest in years in recent weeks due to a mild start to January, consistently high supply, and an outage at the Freeport LNG export facility, which has raised the volume of gas available for domestic use since the fire at the plant in June last year. This year, Freeport LNG exports are set to return at some point this quarter, although it will likely take weeks or months to see the second-largest U.S. LNG export facility by capacity fully operational. The Henry Hub gas prices have slumped to around $2.50 per million British thermal units (MMBtu), down from $6/MMBtu in the middle of December and more than $9/MMBtu in August 2022.
Freeport and Cold Could Boost NatGas Prices. Freeport activity, cold snap give boost to natural gas futures; cash markets mixed. NGI. Natural gas futures strengthened on Tuesday, driven in part by signs of life at the long-dormant Freeport LNG export terminal. The potential for another cold snap to arrive in the Lower 48 later this month also proved supportive, with the March Nymex gas futures contract settling 16.2 cents higher on the day at $2.567/MMBtu. April climbed 15.3 cents to $2.652. Spot gas prices were mixed amid a mostly mild weather pattern. NGI’s Spot Gas National Avg. slid 17.0 cents to $2.690. Though the near-term gas outlook is decidedly bearish, the long-awaited return of the Freeport liquefied natural gas export terminal on the upper Texas coast stoked price gains on Tuesday. The first cargo partially loaded and exited the facility over the weekend, and another partial cargo departed Tuesday, according to Kpler vessel-tracking data.
EU NatGas Will Be Selling at a Loss. Europe’s now dealing with an oversupply of natural gas after hoarding it for months before winter. Business Insider. Opinion: Today, we’re diving into the energy scene in Europe that not long ago many governments had thought would be in a state of catastrophe by now. As a key energy supplier to Europe, many feared that Russia would cut off natural gas flows in retaliation to Western sanctions. Those concerns pushed European buyers to import as much natural gas from other countries as possible to backfill their storage facilities in preparation for cold weather. Luckily, warmer temperatures won the season. Europe enjoyed its third hottest January ever last month, meaning people used less heating and thus less natural gas. But according to a Bloomberg analysis of data from Gas Infrastructure Europe, regional natural-gas inventories are at their highest level in years. That means that any sales from the stockpile on the spot market will come at a loss — and any losses at the government level could be shouldered by taxpayers.
Appalachian Basin NatGas Production to Increase. Region’s Shale Gas, Oil Production Expected to Increase. Business Journal Daily. Oil and natural gas produced from the Utica/Point Pleasant and Marcellus shale formations in eastern Ohio, Pennsylvania and West Virginia are projected to increase next month, according to the latest data provided by the U.S. Energy Information Administration. The EIA’s most recent drilling productivity report shows that gas produced from the Utica/Point Pleasant and Marcellus – collectively termed Appalachia – is expected to increase by 80 million cubic feet per data shown.
Devon Focusing on the Permian. Devon focusing capex on Permian Delaware, says natural gas takeaway sufficient. NGI. Devon Energy Corp. is planning to focus a majority of its capital on the Permian Basin’s Delaware sub-basin this year, management said Wednesday. Oklahoma City-based Devon, a leading Lower 48 independent, operates primarily in the Permian Delaware, Anadarko, Williston and Powder River basins, along with the Eagle Ford Shale. Devon has set a 2023 capital expenditures (capex) budget of $3.6-3.8 billion. The midpoint of the budget would be a 46% increase from 2022’s capex spending of $2.54 billion. The company expects to self-fund the entire budget even if West Texas Intermediate oil prices drop as low as $40/bbl, CEO Rick Muncrief said during the fourth quarter earnings call. The Delaware “will be the top funded asset in our portfolio, representing roughly 60% of our total capital budget for this year,” said COO Clay Gaspar, who joined Muncrief on the call. Gaspar said Devon’s Delaware wells have shown “world-class productivity.”
Biden Selling Strategic Reserves Probably to China. Biden admin to sell more oil from strategic reserve. Bloomberg. The Biden administration plans to sell more crude oil from the Strategic Petroleum Reserve, fulfilling budget directives mandated years ago that it had sought to stop as oil prices have stabilized. The congressionally mandated sale will amount to 26 million barrels of crude, according to people familiar with the matter. The sale is in accordance with a budget mandate enacted in 2015 for the current fiscal year, said a spokesperson for the Department of Energy. The Energy Department has sought to stop some of the sales required by 2015 legislation so that it can refill the emergency reserve, which currently has about 371 million barrels. After this latest release, the reserve will dip to about 345 million.
Going Black, Not Green. Curbing U.S. oil, gas production would hurt the environment, report finds. Fox News. Environmentalists seeking to halt U.S. oil and gas production in the name of combating climate change are undermining their own agenda and risking greater damage to the planet, according to a new report. The Institute for Energy Research (IER) released a paper showing that the U.S. is the most environmentally friendly major energy producer and arguing that, like it or not, because petroleum products are here to stay, limiting U.S. production would have a devastating effect on the environment. The report comes as Alaska Republicans and Native leaders are urging the Biden administration, which has committed to a complete transition away from fossil fuels, not to kill a major oil project in the state.
3 LNG Projects Could Be Coming. U.S. LNG producers poised to leapfrog rivals with three new projects. Reuters. At least three proposed U.S. liquefied natural gas (LNG) export plants have likely found enough customers to receive financial approvals this year, according to Reuters calculations, developments that would make the country the world’s largest LNG exporter for years to come. After a dearth of plant approvals last decade, developers have secured dozens of long-term contracts to finance new multibillion-dollar LNG plants. The pace of approvals has accelerated as Europe has shifted away from Russian gas since Moscow’s invasion of Ukraine. About a dozen developers hope to make final investment decisions (FID) this year. Many of these projects have been delayed several times, but analysts said at least three have secured enough customers to move ahead soon.
$640 Billion Needed for Upstream by 2030: report. Zawya. Annual upstream oil and gas investment needs to rise by 28% to reach $640 billion by 2030 to ensure adequate global supplies, according to a new report published by the International Energy Forum (IEF) and S&P Global Commodity Insights, the leading independent provider of information, analysis and benchmark prices for the commodities and energy markets. Capital expenditure in 2022 rose by 39% from the previous year to $499 billion, the highest level since 2014, but drilling remained below pre-pandemic levels as inflation ate away at the spending, stated the report. The number of drilling rigs rose by 22% in 2022, but this was still 10% below 2019 levels, it added.
Shell Bullish on U.S. LNG. Shell sees U.S. LNG playing outsized role in global natural gas markets. NGI. The U.S. natural gas market is expected to have a greater impact on the global LNG trade in the future as more projects are built and the world’s supply contracts are increasingly tied to Henry Hub, Shell plc reported Thursday in its annual liquefied natural gas outlook. Qatar and the United States are expected to drive the bulk of supply additions this decade, with most new offtake agreements likely to be tied to Henry Hub and crude oil prices. While Qatar continues to advance contract negotiations for its massive North Field East and North Field South projects, U.S. project developers led the pack last year, accounting for more than 70% of all global sales and purchase agreements, according to NGI calculations.
PA February 6, to February 16, 2023
County Township E&P Companies
1. Armstrong Sugarcreek Snyder
2. Armstrong Sugarcreek Snyder
3. Armstrong Sugarcreek Snyder
4. Armstrong Sugarcreek Snyder
5. Bradford Herrick SWN
6. Bradford Herrick SWN
7. Bradford Wilmot Chesapeake
8. Greene Wayne EQT
9. Greene Wayne EQT
10. Susquehanna Bridgewater Coterra
11. Susquehanna Bridgewater Coterra
12. Susquehanna Bridgewater Coterra
13. Susquehanna Bridgewater Coterra
14. Susquehanna Bridgewater Coterra
15. Tioga Middlebury Seneca
16. Tioga Middlebury Seneca
17. Tioga Middlebury Seneca
18. Tioga Middlebury Seneca
19. Tioga Middlebury Seneca
20. Tioga Middlebury Seneca
21. Washington East Finley EQT
22. Washington West Finley CNX
23. Westmoreland Derry Campbell O&O
24. Westmoreland Penn Olympus
25. Westmoreland Penn Olympus
OH Permits February 5, to February 11, 2023
County Township E&P Companies
1. Carroll Monroe EAP OHIO
2. Carroll Monroe EAP OHIO
3. Carroll Monroe EAP OHIO
4. Carroll Monroe EAP OHIO
5. Harrison Cadiz Ascent
6. Harrison Cadiz Ascent
7. Monroe Center Gulfport
8. Monroe Center Gulfport
9. Monroe Center Gulfport
WV Permits January 30, to February 3, 2023
1. Clay Mountain Valley
2. Marshall Tug Hill
3. Marshall Tug Hill
4. Marshall Tug Hill
5. Ohio SWN
6. Ohio SWN
7. Ohio SWN
8. Ohio SWN
9. Tyler Antero
10. Tyler Antero
11. Tyler Antero
12. Tyler Antero
13. Tyler Antero
14. Tyler Antero
