Facts & Rumors # 563
August 10, 2024
Energy Transfer and Williams Talking Pipelines to AI Hyper-Scale Data Centers. U.S. gas companies in talks with data centers to build pipelines for onsite power plants. Data Center Dynamics. US Energy Transfer and Williams Cos. are in discussions with data center operators about the possibility of building pipelines directly to their facilities. Within the context of the artificial intelligence (AI) boom, data center power demands are continuing to grow, and many are looking at onsite power generation as a solution, reports Bloomberg.
EOG Very Bullish on Ohio. Thanks, MDN. EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), owns nearly a half million acres of leases in the Ohio Utica. EOG calls its position the “Ohio Utica combo play” and now considers it one of the company’s “premium plays.” EOG concentrates on oil drilling in the Utica. As part of the company’s second quarter 2024 update, Jeff Leitzell, EOG’s Chief Operating Officer (COO) said the company added another 10,000 acres of leases to its Utica portfolio during 2Q (now at 445,000 acres). He also said the company is currently focusing on 225,000 acres that are in the “volatile oil window” of the Utica.
Take a look at Ohio’s permitting activity below and you can how aggressive EOG is.
Take My NatGas, Please! Texas energy so bountiful, they pay you to take it away. New York Times. Two years ago, natural-gas prices surged after Russia invaded Ukraine and restricted supplies of the fuel to many European countries, terrifying Western leaders. Now, the fuel is so abundant that some U.S. energy producers are often paying other businesses to take it away. Natural gas has traded below zero for much of the year in West Texas, home to the country’s largest oil field, the Permian Basin. Companies operating in the region are drilling primarily for crude oil, but natural gas typically comes out of the ground with that oil — so much of it that on some days, drillers run out of places to store the gas or the pipeline capacity to send it to the Gulf Coast or California, where there is demand for it.
More LNG to Europe. More US LNG set to flow into European energy mix in 2030s if Cheniere rubber-stamps Sabine Pass expansion. Offshore Energy. Cheniere Marketing, a subsidiary of U.S.-based Cheniere Energy has inked a long-term sale and purchase agreement (SPA) to provide liquefied natural gas (LNG) to Galp Trading, an affiliate of Portuguese oil and gas company Galp Energia. Under the 20-year deal, Galp will buy approximately 0.5 million tonnes per annum (mtpa) of LNG from Cheniere on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee. Deliveries are envisaged to start in the early 2030s.
EIA Raises 2024 Forecast for U.S. Crude Oil Demand. Oil Price. The U.S. Energy Information Administration (EIA) has raised its forecast for crude oil demand in the United States, according to the agency’s Short-Term Energy Outlook released today—although its price outlook for this year and next has been revised down. The EIA now sees U.S. petroleum and other liquid fuels consumption averaging 20.5 million barrels per day in 2024—that’s up from the agency’s forecast in July of 20.4 million bpd.
EIA Forecasts Larger Decline in U.S. Natural Gas Output for 2024. Reuters. The U.S. Energy Information Administration on Tuesday forecast a larger decline in natural gas output this year compared with earlier estimates, citing record-low prices earlier in 2024 that forced producers to curtail gas production. U.S. natural gas output will average around 103.3 billion cubic feet per day (bcfd) this year, the EIA said in its August edition of the short-term energy outlook report. That compares with 103.8 bcfd produced last year, and is a slight downgrade from a forecast of 103.5 bcfd in the July edition of the report.
PA May Not Be Able to Keep the Lights On. Thanks, MDN. The CEO of the Energy Association of PA who is also a former chairman of the Pennsylvania Public Utility Commission (PUC) asks this question: What can Pennsylvania lawmakers do about a looming regional power shortage that they didn’t cause and can’t easily fix? He says this dilemma poses the most important energy issue facing the commonwealth today. He’s certainly not against renewable energy, but he points out in an op-ed appearing in the Pittsburgh Post-Gazette that coal and natural gas-fired power plants are “retiring prematurely” for several reasons, and renewables can’t handle the load. The predictable end result will be blackouts in the PJM region.
Big Oil Doubles Down on LNG as Renewables Falter. Oil Price. The supermajors continue to bet on LNG while scaling back renewables projects and investments as oil and gas returns continue to trump the poor profits from renewables. The world’s top international oil and natural gas firms are sanctioning new LNG projects and buying stakes in new developments as they see demand for natural gas growing in the medium to long term.
U.S. Oil and Gas Output Curbed by Lower Prices: Kemp. Reuters. U.S. oil and gas production show further signs of flattening out or turning down, a delayed response to the decline in prices over the last two years after the initial shock caused by Russia’s invasion of Ukraine in early 2022. Total crude and condensates production from the Lower 48 states, excluding federal waters in the Gulf of Mexico, averaged 11.0 million barrels per day (b/d) in May up from 10.6 million b/d in the same month a year earlier.
Diamondback Curtails Some Oil Production to Reduce Gas Output. Bloomberg. Diamondback Energy Inc. reduced some of its oil production in the second quarter to trim natural-gas output because there isn’t enough pipeline capacity to ship gas that’s pumped alongside the crude. After years of operators flaring or venting natural gas, which is a by-product of oil production, the Texas-based explorer and other companies are seeking to profit from gas instead of sending the pollutants into the atmosphere.
Gulfport Could Be Making Acquisition in Appalachian Basin. Despite a more than $26 million net loss in the second quarter of 2024 and strong challenges from fluctuating natural gas prices, Gulfport Energy Corporation says it plans to engage in more acquisitions in the Marcellus and move ahead with strong exploration plans.
Oil and NatGas Demand Setting Records. Demand for oil and natural gas continues to set records. Oilman Magazine. The demand for crude oil and natural gas in the U.S. and around the globe continued at a record pace through the first half of 2024, and producers in Texas and throughout the nation struggled to keep pace with consumer demand. On the international scene, the Organization of Petroleum Countries (OPEC) believes that demand will rise by 2 million barrels per day to 106 million barrels per day.
July DUC’s The number of drilled, but uncompleted wells in a quartet of America’s most prolific shales plays all had one thing in common in July:
All four plays, including Appalachia (Marcellus and Utica shales), Bakken, Eagle Ford and Permian recorded substantial drops in the number of “DUCs” from a year ago, data published Tuesday by the federal government revealed.
There were 2,322 uncompleted wells in the plays last month, down 460 wells or 16.5%, from 2,782 DUCs in July 2023. The data is contained in this month’s STEO, Short-Term Energy Outlook, published by the Energy Information Administration.
Three of the four plays recorded triple-digit drops in DUCs, with the biggest year-over-year reduction recorded in the Eagle Ford, down 187 wells, or 37.2% to 316, from 503 drilled, but uncompleted wells one year ago. The latest total was down five wells from June 2024’s 321-well total.
In the Bakken play, the number of DUCs last month totaled 335, down 119 wells, or 26.2%, from the 454-well total one year ago, the latest STEO reveals. This past June, the Bakken reported 345 DUCs in place.
The Permian Basin saw its July total for DUCs drop 108 wells, or 10.8%, year-over-year, to 888 from 996. July’s total was down seven wells from the previous month’s total.
Appalachian recorded its year-over-year DUCs total fell by 46 wells, or 5.5%, to 783 last month from 829 one year ago. Last month’s total was down four wells from June 2024’s 787, STEO reported
PA Permits July 29, to August 9, 2024
County Township E&P Companies
1. Armstrong North Buffalo Snyder Bros
2. Armstrong North Buffalo Snyder Bros
3. Washington Chartiers Range
4. Washington Chartiers Range
5. Washington Chartiers Range
6. Washington Chartiers Range
OH Permits July 28, to August 3, 2024
County Township E&P Companies
1. Noble Brookfield EOG
2. Noble Brookfield EOG
3. Noble Brookfield EOG
4. Noble Brookfield EOG
5. Noble Brookfield EOG
6. Carroll Brown EOG
7. Carroll Brown EOG
8. Carroll Harrison EAP OHIO
9. Carroll Harrison EAP OHIO
10. Carroll Harrison EAP OHIO
11. Carroll Harrison EAP OHIO
WV Permits July 22, to August 2, 2024
1. Marshall SWN
2. Tyler Antero
3. Tyler Antero
4. Tyler Antero
5. Tyler Antero
