Facts & Rumors # 530
October 21, 2023
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Exxon ‘Megamajor’ Exxon emerges as oil ‘megamajor’ as peak demand nears. The Energy Mix. ExxonMobil’s acquisition of shale producer Pioneer Natural Resources for US$59.5 billion signals that the oil major expects fossil fuel production to remain profitable beyond the end of the decade, despite predictions that global oil demand will peak before 2030. “They’re spending $60 billion today,” Dan Tsubouchi, Calgary-based principal and chief market strategist with SAF Group, told the Financial Post. “They wouldn’t do that if they didn’t see at least a 10-to-15-year window for oil.” The merger brings Pioneer’s 850,000 net acres in the Midland Basin, the largest oil field in the larger Permian Basin in the United States, together with Exxon’s 570,000 net acres in the Delaware and Midland basins. The combined area will make Exxon the dominant player in the Permian, giving it control over one of the largest undeveloped oil and gas inventories in the world—if the deal gets regulatory approval.
Devon Could Expand Via Shale Acquisition. Devon looks to expand in US shale via acquisitions. Offshore Technology. US-based oil and gas company Devon Energy is looking to expand its presence in US shale through acquisitions, reported Bloomberg News, citing people familiar with the matter. Devon held preliminary talks in recent months for a potential partnership with independent exploration and production (E&P) company Marathon Oil, the people said. Marathon Oil is focused on four of the resource plays in the US: Eagle Ford, Texas; Bakken, North Dakota; STACK and SCOOP in Oklahoma; and Permian in New Mexico and Texas. Bloomberg also reports.
Restocking SPR. U.S. seeks to buy 6 million barrels for oil reserve by January. Reuters. President Joe Biden’s administration hopes to buy 6 million barrels of crude oil for delivery to the Strategic Petroleum Reserve in December and January, as it continues its plan to replenish the emergency stockpile, the U.S. Department of Energy said on Thursday. The department hopes to sign purchase contracts for the oil at $79 a barrel or less. That is an increase from its earlier preferred range of around $70 a barrel, but lower than the current benchmark futures price for U.S. oil of around $90 a barrel.
Fracking Activity to Increase in 2024. Liberty Energy: U.S. fracking activity is set to increase next year. Oil Price. Fracking activity in the U.S. shale patch is set for growth early next year, according to Liberty Energy, one of the biggest oilfield service providers said at the presentation of its third-quarter financial results. The growth, however, would be modest, the company also said. “Frac activity has largely stabilized at current levels, representing a baseload of frac fleet demand needed to sustain E&P operators’ flattish production levels,” Liberty said. “Fourth quarter trends will likely see seasonal softness, winter weather, and holiday disruptions. We expect the recent strengthening of commodity prices will drive a modest increase in activity beginning in 2024.”
NatGas Prices Weaken. Natural gas futures weaken as weather looks mild. WSJ. Natural gas futures decline amid expectations of mild weather this season, even as US inventories decrease. “EIA Natural Gas storage has been narrowing the gap on the big surplus since the summer,” Mizuho’s Robert Yawger says in a report, “but there is very little confidence that winter weather is on the way anytime soon.” The front-month natural gas contract declines nearly 1%, to $3.079/mmBtu.
MVP Completion in 2024. Mountain Valley pipeline delayed: 4 questions answered. E&E News. Completion of the closely watched Mountain Valley pipeline will be delayed until next year, and its cost will exceed $7 billion, the project’s lead developer said Wednesday. The updates from Equitrans Midstream mark the latest twist in the saga of the controversial natural gas project, which received Congress’ blessing earlier this year. Mountain Valley won’t come online in 2023 as planned because of “unforeseen factors” that slowed the pace of construction and boosted costs, Equitrans said in a regulatory filing. That disclosure arrives after the Supreme Court handed developers of the Mountain Valley pipeline a critical win in July, undoing a construction freeze and allowing work on the gas project to restart.
Manchin Committed to MVP Completion. Manchin vows Mountain Valley Pipeline completion after delays announced. Bloomberg. West Virginia Senator Joe Manchin vowed the Mountain Valley Pipeline would be completed after the project’s owner Equitrans Midstream Corp. announced new delays and cost overruns for the controversial project. “It will be built,” Manchin, who inserted language approving the beleaguered project into a must-pass debt law, said in an interview. “The quicker we can get this done, that is going to help our country.”
Chesapeake – SWN Deal? Analysts: Chesapeake-Southwestern deal could create top US shale gas E&P. Hart Energy. A combination between Chesapeake Energy and Southwestern Energy would create a premier public shale gas E&P, experts say. Oklahoma City-based Chesapeake Energy Corp. is reportedly in discussions with Spring, Texas-based Southwestern Energy Co. about a potential acquisition. The deal talks are preliminary and there’s no certainty the two E&Ps will reach a deal, Reuters reported. Marcellus Drilling News also reports.
NatGas Production Growth in the Permian. EIA: US natural gas production to grow on high Permian well productivity, crude oil prices. Oil & Gas Journal. In its latest Short-Term Energy Outlook, the US Energy Information Administration (EIA) projects that natural gas production in the Lower 48 states of the US will grow by 5% (5 bcfd) in 2023 and 2% (1.8 bcfd) in 2024. The primary driver of this forecasted growth is the Permian basin region, where EIA expects that improved well-level productivity and higher crude oil prices will spur drilling activity that will increase natural gas production. The Permian basin region currently accounts for a quarter of all marketed natural gas production in the Lower 48. EIA forecasts that natural gas production in the region will increase by 11% (2.2 bcfd) in 2023 and 6% (1.4 bcfd) in 2024. Most of the natural gas production in the Permian basin is associated natural gas production from oil wells. Oilfield Technology also reports.
TX Oil and NatGas Records. Texas sees host of oil and gas records. Rigzone. Texas has seen a host of oil and gas related records recently, the Texas Oil & Gas Association’s (TXOGA) latest monthly energy economic analysis, which is prepared by the organization’s Chief Economist Dean Foreman, pointed out. In the analysis, TXOGA estimated that, for the month of September, Texas saw its highest crude oil production rate ever, at 5.9 million barrels per day, and its highest natural gas production gross withdrawal figure ever, at 34.6 billion cubic feet per day. TXOGA also highlighted a flurry of records in the analysis “based on official data for the month of July (latest), compared with monthly data since 1981 as reported by the U.S. Energy Information Administration”.
Permian Well Productivity Driving NatGas Production Growth. High Permian well productivity, crude oil prices drive U.S. natural gas production growth. EIA. We estimate that U.S. marketed natural gas production in the Lower 48 states (L48) will grow by 5% (5.0 billion cubic feet per day [Bcf/d]) in 2023 and 2% (1.8 Bcf/d) in 2024 in our latest Short-Term Energy Outlook. Most of the forecast growth comes from the Permian region, where we expect that improved well-level productivity and higher crude oil prices will spur drilling activity that will increase natural gas production. The Permian region, which spans western Texas and eastern New Mexico, currently accounts for a quarter of all marketed natural gas production in the L48. We forecast Permian region natural gas production will increase by 11% (2.2 Bcf/d) in 2023 and 6% (1.4 Bcf/d) in 2024.
U.S. Oil Output to Drop in November. US oil output from top shale regions set to fall in November -EIA. Reuters. U.S. oil output from top shale-producing regions is set to fall for a third month in a row in November to its lowest since May, the U.S. Energy Information Administration (EIA) said in its monthly Drilling Productivity Report on Monday. U.S. oil output is expected to fall to 9.553 million barrels per day (bpd) in November from 9.604 million bpd in October, EIA data showed. Crude output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil basin, is expected to fall by about 30,000 bpd to 5.9 million bpd, the lowest since February. World Oil also reports.
OH’s Noble & Guernsey Counties Leasing Pick up. Thanks, MDN. Leasing activity picks up in Noble & Guernsey counties in Ohio. Marcellus Drilling News. According to an article in Ohio Country Journal, interest and activity in eastern Ohio’s oil and gas leasing has been growing in some new areas. Those areas include, says Clif Little, Ohio State University Extension educator in Guernsey County, portions of Guernsey and Noble counties where there hadn’t been interest in the past. Little specializes in, among other things, oil and gas leases. He’s the author of “Important aspects of an oil and gas lease” (copy below), chock full of good tips for landowners either leasing for the first time or looking to re-lease.
PA October 9, to October 19, 2023
County Township E&P Companies
1. Green Wayne EQT
2. Green Wayne EQT
3. Green Wayne EQT
4. Green Wayne EQT
5. Green Wayne EQT
6. Green Wayne EQT
7. Lycoming Plunketts Creek PA GEN Energy
8. Lycoming Plunketts Creek PA GEN Energy
9. Lycoming Plunketts Creek PA GEN Energy
10. Lycoming Plunketts Creek PA GEN Energy
11. Tioga Delmar Clean Energy Exp.
12. Tioga Lawrence JKLM Energy
OH October 9, to October 21, 2023
County Township E&P Companies
1. No New Permits
WV Permits October 2 to October 6, 2023
1. Doddridge Antero
2. Doddridge Antero
3. Doddridge Antero
4. Doddridge Antero
5. Doddridge Antero
6. Lewis HG Energy
7. Lewis HG Energy
8. Lewis HG Energy
9. Lewis HG Energy
10. Lewis HG Energy
11. Lewis HG Energy
12. Lewis HG Energy
13. Marshall SWN
14. Marshall SWN
15. Marshall EQT
16. Marshall EQT
17. Marshall EQT
18. Marshall EQT
19. Marshall EQT
20. Marshall EQT
21. Marshall EQT
22. Wetzel Antero
23. Wetzel Antero
24. Wetzel Antero
25. Wetzel Antero
26. Wetzel Antero
27. Wetzel Antero
28. Wetzel Antero
29. Wetzel Antero
30. Wetzel Antero
31. Wetzel EQT
32. Wetzel EQT
33. Wetzel EQT
34. Wetzel EQT
35. Wetzel EQT
36. Wetzel EQT
37. Wetzel EQT
38. Wetzel EQT
