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Erie rejects fracking freeze

Erie Town Hall - Image Credit - Wikepedia

Erie Town Hall – Image Credit – Wikepedia

Board was mulling moratorium or, at least, a promise.

By Mark Jaffe – The Denver Post - January 28. 2015

The Erie Board of Trustees Tuesday night voted not to impose a moratorium on new oil and gas drilling permits on a 4-3 vote.

The moratorium proposal was prompted by problems at an Encana Corp. drill site and the failure after five months of negotiations to reach a new operating agreement with Encana.

Erie has agreements, so-called memorandums of understanding with Encana and the Anadarko Petroleum Corp. — the two big drillers in the town. These agreement contain best management practices the operators agree to use and are included as part of their state drilling permits. Continue reading “Erie rejects fracking freeze” »

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WPX Energy hits pause button in Colorado natural gas field

WPX Corporate Logo – Reporter-Denver Business Journal – January 26, 2015

Low oil prices aren’t the only source of problems in Colorado’s energy industry. Dropping natural gas prices are also leading some energy companies to cut back in the state.

Tulsa, Oklahoma-based WPX Energy Inc., one of the biggest oil and gas companies working in western Colorado, last week said the company is “hitting the pause button” when it comes to completing, or hydraulically fracturing, “fracking,” new wells in the Piceance Basin, an area rich in natural gas that’s centered along Interstate 70 near Rifle.

WPX (NYSE: WPX) announced its decision in a note on its Colorado blog.

The company employs about 380 people in Colorado, split between its operations in western Colorado and the Denver office.

“This [decision] currently affects about 20 natural gas wells that we’ve already drilled, but could be more since we have rigs in the area that are working,” the company said in its post.

Continue reading story at The Denver Business Journal

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Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Oil Tank Battery in Weld County Colorado with protective liner

Oil Tank Battery in Weld County

By Mark Shenk – Jan 25, 2015 – Bloomberg News

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001.

Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.

U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says. Saudi Arabia’s King Salman, the new ruler of the world’s biggest oil exporter, said he will maintain the production policy of his predecessor despite a 58 percent drop in prices since June.

“There’s been a rush to call a bottom,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone Jan. 23. “The fundamentals are still stacked against a rebound.”

Continue reading story at Bloomberg News

 

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Oil Slides to Near 6-Year Low; Saudi Arabia Holds Firm Despite Supply Glut

OPEC LogoBy Heesu Lee – Jan 25, 2015 – Bloomberg News

Oil fell to the lowest level in almost six years as signs that Saudi Arabia’s new king will maintain its production policy and rising U.S. crude inventories bolstered speculation that a global glut will persist.

Futures dropped as much as 2.7 percent in New York, extending a 6.4 percent slide last week. King Salman Bin Abdulaziz, who took over after the death of King Abdullah on Jan. 23, pledged to maintain the policies of his predecessor in a speech on Saudi national television. U.S. stockpiles climbed to 383.5 million barrels last month, the highest level for December since 1930, theAmerican Petroleum Institute reported.

Oil slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted calls to cut output even as the U.S. pumped at the fastest pace in more than three decades. Saudi Arabia, the world’s biggest exporter, has chosen not to reduce supply and count instead on lower prices to stimulate demand, according to Mohammad Al Sabban, an adviser to the kingdom’s petroleum minister from 1988 to 2013.

“Crude production needs to slow down first to decelerate the speed of stockpiling, which is seen to be even faster than during the 2008 financial crisis,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, said by phone. “With Saudi Arabia, the market hardly reacted last week and will remain unchanged as King Salman is known to be very conservative.”

U.S. Supplies

West Texas Intermediate for March delivery declined as much as $1.24 to $44.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $45.09 at 11:46 a.m. Seoul time. The contract lost 72 cents to $45.59 on Jan. 23, the lowest close since March 2009. The volume of all futures traded was more than double the 100-day average.

Continue reading story at Bloomberg News

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Baker Hughes to lay off 7,000 as oil patch layoffs mount

200px-Baker_Hughes_LogoGary Strauss – USA TODAY - January 20, 2015

As crude oil prices continue slipping, pink slips are mounting in the oil patch.

The latest: oilfield services provider Baker Hughes(BHI), which said Tuesday it plans to lay off about 7,000 employees — or about 11% of its workforce — in the wake of a nearly 60% drop in the price of crude oil.

“While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015,” said CEO Martin Craighead. “We are taking proactive steps to manage the business through these challenges.”

During a conference call with analysts, Craighead was more frank about the layoffs, which will be companywide and occur mostly in the first quarter.

“This is really the crappy part of the job, and this is what I hate about this industry frankly,” Craighead said. “This is the industry, and it’s throwing us another one of these downturns, and we’re going to be good stewards of our business and do the right thing. But these are never decisions that are done mechanically.”

Continue reading story at USA Today

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Oil and gas chief: Local government needs more say in siting oil, gas wells

Colorado Oil and Gas Commission

Colorado Oil and Gas Commission

By Mark Jaffe – The Denver Post – January 15, 2015

GREELEY — The movement of large-scale oil and gas operations into Front Range suburbs is creating pressures not being addressed by state rules, Colorado’s top oil and gas regulator said Thursday.

In testimony to the governor’s oil and gas task force, Matt Lepore, executive director of the Colorado Oil and Gas Conservation Commission, said development of shale oil has transformed the industry in the state.

Multiple wells are being drilled from large sites, and collection facilities are also bigger and moving closer to developed areas.

“This is the crux for me,” Lepore said. “Scale, proximity, intensity.”

One solution, Lepore said, is “some kind of comprehensive planning process that brings in industry, COGCC, local government and the community.”

The oil and gas task force was created by Gov. John Hickenlooper in August as part of a compromise with U.S. Rep. Jared Polis, D-Boulder, that kept initiatives aimed at limiting drilling off the November ballot.

The 21-member task force has been meeting around the state. It will meet again Friday in Greeley then Feb. 2-3 and Feb. 23-24 at the Colorado Convention Center in Denver. Its recommendations are due no later than Feb. 27.

Continue reading story at The Denver Post

 

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Schlumberger Cuts Jobs, Records Charge After Oil Collapse

logo_slb_headerBy David Wethe – Jan 15, 2015 – Bloomberg News

Schlumberger Ltd. (SLB), the world’s biggest oilfield-services company, tackled the “uncertain environment” of slumping crude prices head-on by cutting 9,000 jobs and lowering costs at one of its biggest businesses.

The 7.1 percent workforce cutback, along with the reduction and reassessment of its WesternGeco fleet, were among steps leading to a $1.77 billion fourth-quarter charge in anticipation of lower spending by customers in 2015, the Houston- and Paris-based company said in an earnings report Thursday.

Energy companies, coping with a 42 percent decline in oil prices during the last three months of 2014, are expected to cut spending in the U.S. by as much as 35 percent this year, according to Cowen & Co. The number of onshore U.S. rigs could fall by as much as 750 this year, Wells Fargo & Co. said in a note Wednesday. That would be a 44 percent decline from the 1,744 in operation at the start of the year, according to Baker Hughes Inc.

The coming year “is looking like it’s gonna be pretty rough,” Rob Desai, an analyst at Edward Jones in St. Louis, who rates the shares a buy and owns none, said in a phone interview. “With the potential for this to last some time, it’s in the best interest of the company to attack it aggressively.”

Schlumberger, which had doubled its workforce in the past 10 years, said the one-time charges for the quarter also resulted from the devaluation of Venezuela’s currency and a lower value for production assets it owns in Texas. Net income dropped to $302 million, or 23 cents a share, from $1.66 billion, or $1.26, a year earlier.

Continue reading story at Bloomberg News

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Wall Street Now Sees Oil Around $40

oil-drop-dollarsignBy Grant Smith – January 14, 2015 – Bloomberg News

Brace for $40-a-barrel oil.

The U.S. benchmark crude price, down more than $60 since June to below $45 yesterday, is on the way to this next threshold, said Societe Generale SA and Bank of America Corp. And Goldman Sachs Group Inc. says that West TexasIntermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut.

“The markets are continuing to price in huge oversupply in the first half of 2015,” Mike Wittner, head of research at Societe Generale SA in New York, said by phone on Jan. 12. “We’re going to go below $40.”

Oil is seeking a “new equilibrium” as the Organization of Petroleum Exporting Countries abandons its role of keeping supply and demand aligned, according to Goldman. Prices are poised to drop further, testing the ability of U.S. shale drillers to keep pumping.

WTI fell as low as $44.20 a barrel on the New York Mercantile Exchange yesterday and closed today at $48.48. The U.S. benchmark has dropped 10 percent this month, extending a 46 percent plunge last year that was the worst since the 2008 financial crisis.

Continue reading story at Bloomberg News

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