“I think the shoe’s dropping in South Texas, no doubt about it,” Martin S. Craighead said during a July 20 second-quarter Baker Hughes earnings conference call. “I’m a little bit more concerned about the Bakken than I am (about) the Permian [basin],” he said.
Separately, Barclays Capital analyst Amrita Sen wrote in a July 10 research note that North Dakota might be experiencing a slowdown after the state has repeatedly reported record drilling. Both the Bakken and Eagle Ford have contributed to the US rig count and oil production statistics.
“The largest drillers in the Bakken are all reducing their rig counts this month, although none acknowledge a change in drilling plans,” Sen said, citing a sharp drop in oil prices during June. That oil price drop cast doubts about the viability of shale production at prices below $80/bbl.
“Horizontal drilling is expensive, as drilling levels must be maintained sufficiently to veil the effect of steep decline rates,” Sen said. “The technique is particularly intensive in the use of fracturing crews and other oil service industry inputs.”
North Dakota's Industrial Commission showed 210 rigs operated in the state during early July, down by 5 from June levels. State oil regulators have said they do not expect a constant climb in the rig count.
“What we expect is a bit of a saw-tooth pattern in our rig count as newbuilt rigs are brought in,” Lynn Helms, director of NDIC’s oil and gas division, told Reuters earlier this month. “Once they're up and operating, then older, inefficient rigs will be moved out.”
2. Natural-gas production from shale formations rose in May on increased supplies from the Marcellus deposit even after prices fell to a 10-year low, Energy Department data show.
Total output from shale formations in the continental U.S. averaged 25.58 billion cubic feet a day in May, 24 percent higher than a year earlier and up 1.7 percent from April, according to slides that accompany a presentation the department will make to Congress Aug. 1. Shale production has gained 5.7 percent this year.
May output from the Marcellus shale in the eastern U.S. averaged 6.85 bcf a day, up 6.4 percent from the previous month and gained 28 percent during the first five months of the year. May 2011 production averaged 3.37 bcf daily.
Haynesville shale output in Louisiana and Texas averaged 6.92 bcf a day, down from 6.93 billion in April. Production from the region has declined 2.4 percent this year. Output averaged 6.43 billion cubic feet a day in May 2011.
Output at the Barnett shale in Texas was 4.67 bcf daily, from 4.66 billion in April, department data show. Production dropped 1.7 percent versus May 2011.
The average for Eagle Ford shale gas output in southern Texas was 1.52 billion cubic feet a day in May, up from 1.51 billion the previous month. Production has gained 6.3 percent this year. Output averaged 820 million cubic feet a day a year ago.
3. The oil giant Chinese National Offshore Oil Company (CNOOC), has tendered a $15-billion offer for the Canadian company Nexen.
WSJ - China's other state-controlled oil and natural gas companies will likely seek their own increasingly ambitious deals amid stagnant energy supplies at home and pressure from both Beijing and investors to add to reserves, according to industry watchers. The result could be higher prices industrywide for lucrative producing properties, as sellers hold out for better offers.
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