Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
MVP Makes It Through the Senate Vote. Senate clears debt deal with pipeline, permitting mandates. E&E News. The Senate voted 63-36 late Thursday night to extend the nation’s borrowing authority ahead of a June 5 deadline after disposing of several contentious amendments — including on the Mountain Valley pipeline. The “Fiscal Responsibility Act,” H.R. 3746, will suspend the nation’s debt limit until after the 2024 election. It will cut spending, institute new work requirements for federal food assistance programs and make a suite of changes to the National Environmental Policy Act as part of “permitting reform.” The legislation passed the House late Wednesday night with the support of 165 Democrats and 149 Republicans in a 314-117 vote. It now heads to President Joe Biden for his signature.
WTI Joins Brent Crude. U.S. crude joins biggest oil benchmark. Oil Price. Starting today, U.S. oil will be part of the Brent crude basket that underlies the world’s most traded benchmark contract. It will be the first non-European grade included in the basket, highlighting the change that the U.S. shale revolution brought about for the global oil market. “Since the restart of U.S. crude exports in 2015, WTI Midland has become a baseload grade for European refiners and a core part of the North Sea oil market,” Vera Blei, who is in charge of oil market price reporting at S&P Global Platts, said in 2020. At the time, she added that the inclusion of WTI to the Brent basket “would provide additional volume and ensure the continued robustness of Dated Brent for the next decade and beyond.”
Chevron Betting on Oil and NatGas. Chevron doubles down on shale with $6.3 billion deal. WSJ. Chevron deepened its commitment to oil-and-gas drilling in the U.S., spending more than $6 billion to acquire a rival with sizable operations in Texas and Colorado. In buying PDC Energy in a $6.3 billion all-stock deal, the U.S. oil major is aiming to build a bigger foothold in two prolific oil patches, particularly the Denver-Julesburg Basin that straddles Colorado and Wyoming, a region where Chevron already has a large stake. The transaction also boosts Chevron’s position in its major U.S. onshore play, the Permian Basin of West Texas and New Mexico, the most prolific American oil patch but one where Chevron and many other companies have seen well-productivity issues over the past year.
Exxon CEO Bullish on Shale Output. Exxon CEO says technology advances could double its shale output. Reuters. Exxon Mobil (XOM.N) Chief Executive Darren Woods said on Thursday he aims to double the amount of oil produced from the company’s U.S. shale holdings over a five-year period using new technologies. In December, the top U.S. oil producer postponed for two years, to 2027, a goal of pumping up to 1 million barrels per day in the Permian Basin, the top U.S. shale field, citing COVID-19 pandemic delays. It also introduced the five-year technology development program at the same time, Exxon said.
Williams Files with FERC to Expand Transco Pipeline to NYC. NESE Project. Thanks, MDN. It’s time to catch up on a project we haven’t written about in some time. In March 2017, Williams filed a full, official application for the Northeast Supply Enhancement (NESE) Project. NESE is meant to increase pipeline capacity and flows heading into northeastern markets. Both New York and New Jersey, where portions of the project would be built, have pushed back against the project, causing Williams to seek time extensions with FERC. The most recent time extension expired in May. Williams has asked FERC for another three years, until May 3, 2025, to get the NESE project built.
May’s Rig Count Lowest in Three Years. US oil & gas rigs fall in May by most in a month since 2020, Baker Hughes says. Reuters. The U.S. oil and gas rig count fell by 44 this month, the biggest drop in three years, after energy firms this week cut rigs for a fourth week in a row, energy services firm Baker Hughes Co (BKR.O) said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell by nine to 711 in the week to May 26, the lowest since May 2022. Baker Hughes said that puts the total rig count down by 16, or 2%, below this time last year.
Manchin, Granholm Talking up Hydrogen. Granholm, Manchin talk up hydrogen hubs, permitting reform. Pittsburgh Business Journal. U.S. Energy Secretary Jennifer Granholm and U.S. Sen. Joe Manchin praised the opportunities that will arise from the federal funding to support the creation of hydrogen hubs, a fierce competition that has drawn at least three applicants from Appalachia to share in the $7 billion in funding. There are 33 applicants for between 7 and 10 projects that would receive significant federal funding to create so-called regional hydrogen hubs, including production and transportation of hydrogen as a fuel source to decarbonize heavy industry and power generation.
PA Water Withdrawal Restrictions. The lack of rain in the Susquehanna River Basin has triggered water withdrawal restrictions for 42 oil and gas drillers and four other large water users (46 in all) by the Susquehanna River Basin Commission (SRBC). In many cases, the SRBCV order is to “cease withdrawal.”
Exxon and Chevron Shareholders Demonstrate Rationale Thinking on Climate Resolutions. Exxon and Chevron shareholders cut support for climate resolutions. Financial Times. ExxonMobil and Chevron shareholders solidly rejected climate change proposals at the US oil majors’ annual meetings on Wednesday, scaling back support from last year and splitting with results at peers in Europe where resolutions related to global warming have won stronger support. Only 11 per cent of Exxon shareholders supported a petition calling for the company to set emissions reduction targets that would be consistent with the goals of the 2015 Paris climate agreement. A similar proposal at Chevron received less than 10 per cent support. The vote tallies highlight differences between shareholder support for climate change action at US and European oil companies. WSJ also reports.
NatGas Heading to Below Zero in Europe. Natural gas prices could fall below zero in parts of Europe. Oil Price. s tepid demand for gas from power generation and industry has sent European natural gas prices into a freefall in recent weeks, traders and industry officials are not ruling out the possibility that Europe may see a brief dip to below zero for day-ahead prices in some markets this summer. The combination of ample inventories at the end of a mild winter, steady imports of LNG, and weak demand has led to eight consecutive weeks of weekly losses in European benchmark natural gas prices, the longest weekly losing streak in more than six years. While the benchmark price is unlikely to drop below zero, some regional day-ahead natural gas prices in Europe could see sub-zero prices briefly this summer, if demand remains weak and renewable power generation holds high, traders and industry officials at the E-World energy fair in Essen, Germany, told Bloomberg.
OH Begins Parcel Leasing on Public Lands. Fracking debate continues as Ohio begins parcel leasing. FOX8. Oil and gas companies can now request parcels of Ohio public land so it can be leased for oil and gas extractions. The new law defines Ohio public land as including parks, forests, and wildlife areas. Others said this could be a good thing for Ohio’s economy and could give money back to the state. Plus, Ohio Oil and Gas Association President Rob Brundrett said the process of drilling on public land is nothing new in Ohio and it won’t be disruptive because it happens underground. “The drilling will all take place on private land off public property and then they’ll drill down very, very deep under the property so you don’t see any surface disruption,” Brundrett said.
Massive New Refinery Could Be Coming. A big U.S. oil refinery could go up after a 50-year wait. Barron’s. An Oklahoma oil hub could soon be home to the first large-scale oil refinery constructed in the U.S. in nearly 50 years. If the project actually does get built, it could potentially help reduce U.S. gasoline and diesel prices. But building a U.S. refinery is so complicated that at least one analyst is skeptical it will actually happen. Privately held Southern Rock Energy Partners says it will build a refinery capable of producing 250,000 barrels per day of oil products in Cushing, Okla., a city that’s already a major oil hub. It’s where the U.S. benchmark for oil prices, West Texas Intermediate, is measured. The company says its refinery will cost $5.6 billion and open in 2027, with construction starting up next year.
Oil Exports Up; Imports Down. U.S. oil imports down, exports up last week. Hellenic Shipping News. U.S. crude oil imports decreased while exports increased during the week ending May 19, the U.S. Energy Information Administration (EIA) said in a report released on Wednesday. U.S. crude oil imports averaged 5.85 million barrels per day (b/d) last week, down by 1.01 million b/d from the previous week, while crude oil exports averaged 4.549 million b/d, up by 239,000 b/d from the previous week, according to the Weekly Petroleum Status Report. Over the past four weeks, crude oil imports averaged about 6.165 million b/d, down by 3.9 percent from the same four-week period last year.
NatGas Drilling Slows in TX. Odessa American. New natural gas drilling hasn’t totally cratered in spite of stubbornly low prices, but it has been seriously dented as many producers pull back and wait for conditions to improve. Permian Basin Petroleum Association Executive Vice President Stephen Robertson, Texas Oil & Gas Association President Todd Staples, Texas Independent Producers & Royalty Owners President Ed Longanecker and Panhandle Producers & Royalty Owners President Judy Stark cite a high volume of gas being put in storage and other factors. Staples said gas drilling “has held up well despite recent low prices and it has consistently shown an ability to respond quickly to changes in market conditions. Permian Basin Petroleum Association Executive Vice President Stephen Robertson, Texas Oil & Gas Association President Todd Staples, Texas Independent Producers & Royalty Owners President Ed Longanecker and Panhandle Producers & Royalty Owners President Judy Stark cite a high volume of gas being put in storage and other factors.
Methane Emissions Down. Intensity of U.S. oil, gas methane emissions down: report. Rigzone. The intensity of methane emissions from oil and gas production fell 28% between 2019 and 2021 among the industry’s 100 biggest emitters. Greenhouse gas emissions intensity — which includes carbon dioxide, nitrous oxide and methane — dropped 30%, according to an analysis of public data published today by the nonprofits Clean Air Task Force and Ceres, and ERM Group Inc. The organizations’ goal in pursuing the study, the third annual version, is to make it easier to compare greenhouse gas emission data that regulated companies submit annually to the US Environmental Protection Agency. The oil and gas industry’s CO2 emissions mostly come from burning fossil fuels during the production process or flaring methane, which converts methane to carbon dioxide. Methane is 81 times more powerful than CO2 in the medium term (20 years).
NatGas Can Meet Demand. Natural gas industry can meet demand, study says. Pennsylvania Business Report. The natural gas market in the United States is robust and can satisfy growing domestic consumption and export demands at relatively low prices, according to a recent American Council for Capital Formation Center for Policy Research (ACCF-CPR) study. The study, Analysis of U.S. Natural Gas Market Price Impacts from Increasing Natural Gas Supply Accessibility for Different Natural Gas Demand Outlooks, evaluated the potential price impacts of increasing natural gas supply accessibility. There are sufficient natural gas supply resources, according to U.S. Energy Information Administration estimates, to support both domestic and export demand within a price range of $3 to $4 per 1 Million British Thermal Units (MMBtu).
TX Slower Growth and Rig Count Decline. Texas E&P sector sees slower job growth as rig count, natural gas prices slump. NGI. Employment in the Texas upstream oil and gas industry continued to rise in April but at a slower clip than the previous month, according to the latest tally from the Texas Independent Producers and Royalty Owners Association (TIPRO). Direct employment in the exploration and production sector totaled 199,400 for the month, up 700 jobs form March, TIPRO said, citing figures from the U.S. Bureau of Labor Statistics.
Permian Flaring Could Rise in 2024. U.S. Permian NatGas flaring could rise in 2024, report shows. Reuters. Natural gas flaring in the top U.S. shale basin is poised to increase next year, a report released on Tuesday projected, as the region’s output exceeds available pipeline capacity. Increased flaring, or the burning of unwanted gas, could reduce shale oil production in the region as major oil producing companies seek to limit climate-warming carbon dioxide emissions. The Permian is the biggest U.S. shale oil basin, pumping 5.7 million barrels of oil per day and 22.5 billion cubic feet per day (bcfd) of natural gas, productivity estimates by the U.S. Energy Information Administration (EIA) show.
More Companies Moving into Permian Basin. $141M Permian Basin oil and gas deal finalized as more companies move into region. Carlsbad Current Argus. A $141 million acquisition in the Permian Basin became the latest sale to close in the region as it was expected to continued growing in production of both oil and natural gas. Kimbell Royalty Partners said May 17 it completed a deal announced in April to buy assets on the eastern Midland sub-basin of the Permian in Howard and Borden counties in Texas. The acquired assets included about 60,000 acres in the region, expected produce about 1,901 barrels of oil equivalent per in the next year – 77 percent oil and 12 percent natural gas.
PA Permits May 22, to June 1, 2023
County Township E&P Companies
1. Cameron Shippen Seneca
2. Cameron Shippen Seneca
3. Washington Smith Range
4. Washington Smith Range
5. Washington Smith Range
6. Westmoreland Murrysville Olympus Energy
OH Permits May 14, to May 27, 2023
County Township E&P Companies
1. Guernsey Oxford SWN
2. Harrison Freeport EOB
WV Permits May 15, to May 26, 2023
1. Brooke SWN
2. Brooke SWN
3. Monongalia Northeast
4. Tyler Antero
5. Tyler Antero
6. Tyler Antero
7. Tyler Antero
8. Tyler Antero
9. Tyler Antero
10. Tyler Antero
11. Tyler Antero
12. Tyler Antero
13. Tyler Antero
14. Tyler Antero
15. Tyler Antero
16. Tyler Antero
17. Wetzel Tug Hill
