Ever since oil prices started plunging last summer, people have been wondering whether the producers responsible for the supply added since 2010 — mostly in the US and Canada — would want to keep pumping. How many US shale wells, for example, would be economically viable in a world where the West Texas Intermediate price was about $45 per barrel instead of $100?
It’s now been long enough to get a sense of the answer. Compared to the peak almost exactly one year ago, the number of US rigs drilling has collapsed by 62 per cent, according to Baker Hughes: Read more
The US shale gas production boom took everyone by surprise — apparently that includes George Mitchell himself, who was credited for sparking the shale gas production surge on his death last month.
Yet the variety of output from different shale gas plays is also taking some by surprise. Like Shell, for example, whose Q2 results were grim with a sharp fall in profits and a $2.1bn writedown, mostly of North American shale assets. Read more
This is painfully ambiguous parsing of doctrine. Still, it is the Church of England.
We think this statement is the Church moving a bit closer to supporting fracking in Britain (as Cuadrilla scales back drilling in leafy Balcombe)… Read more
This is well beyond the borders of our expertise, but John Kemp has a column critiquing the new report from the Harvard Belfer Center on the prospects for the shale boom to go international, and we think both worth passing along.
First is a summary from the long and detailed report by Leonardo Maugeri, who argues that a combination of technological and institutional constraints will prevent other countries from reaping similar benefits from shale as those enjoyed by the US: Read more
An interesting chart from the American Enterprise Institute showing to what degree oil shipments by rail have risen in the last two years:
When the International Energy Agency’s big annual report came out last week there was a big top line story picked up nearly everywhere: that US oil production will overtake Saudi Arabia by about 2020.
This is due to projected rises in oil being wrung from the sort of shale formations that have been the source of vast new supplies of natural gas in the past few years. Read more
The US is going to be free from the tyranny of imported crude oil soon, according to just about everyone. This is thanks to the wonders of shale gas extraction technologies being applied to sizeable and mostly untapped shale oil reserves. Previously marginal resources can now be economically extracted. Even the Europeans are getting excited about it. It’s a game changer.
You can probably guess what’s coming next… Read more
Total SA has acquired a stake in Ohia’s shale region from Chesapeake Energy Corp and EnerVest Ltd, in a deal worth $2.32bn, according to Bloomberg. This will give France’s largest oil company a 25 per cent stake in the shale deposit which is rish in liquids and natural gas. The extraction of hydrocarbons from such reserves has made the US the world’s largest gas producer. Total had also bought a share in another Chesapeake shale field in Texas in 2010.
BHP Billiton has made another big bet on energy in the US with its agreement to buy Petrohawk, an independent oil and gas company, for $12.1bn in cash, the FT reports. The Anglo-Australian mining group said on Thursday it had agreed to pay $38.75 a share for Petrohawk, which operates in three leading areas of shale gas and oil production in the US. The deal values Petrohawk at $15.1bn including net debt. The offer represents a 65 per cent premium to Houston-based Petrohawk’s shares at the close on Thursday. It will be financed from BHP’s cash balances and a new credit facility. Should BHP succeed in the acquisition, it will have more than tripled its resource base to 11bn barrels of oil equivalent within a year.
Hess Corp. has announced an all-stock deal worth $445m for American Oil & Gas as part of moves to expand into the Bakken shale oil play, Reuters reports. The offer, if approved by American Oil & Gas shareholders, would take Hess’s stake in Bakken to 85,000 acres, with the company provided extra credit facilities to continue exploration in advance of the deal’s completion.