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Friday, October 24, 2014 10:07:37 AM
News from the Permian Basin
Targa Resources to expand natural gas gathering, processing system
Houston-based Targa Resources Partners said Oct. 6 it will expand its natural gas gathering and processing system in Winkler County west of the company’s existing Sand Hills gas processing plant. Targa will purchase and install a new 300 MMcfd cryogenic processing plant, a header pipeline from the new plant into the southern Delaware Basin, and related gathering and compression infrastructure. (Read more...)
Stabilis, Flint Hills announced joint venture for LNG plant in Odessa
Beaumont-based Stabilis Energy and Wichita, Kansas-based Flint Hills Resources said Oct. 6 that their joint venture will acquire property in Odessa for construction of another proposed LNG facility. The plant is expected to have a capacity of about 100,000 gallons per day and serve high-horsepower oilfield fuel applications in the Permian Basin. Stabilis said it will begin taking orders immediately and could begin construction in 2015 and production in 2016. (Read more...)
Oil price to determine budgets for 2015, CEOs report at PBPA meeting
The CEOs of RSP Permian, Parsley Energy, Diamondback Energy and Elevation Resources said Oct. 16 at the annual meeting of the Permian Basin Petroleum Association they are considering movement of oil prices as they plan budgets for 2015. The price of WTI has dropped more than 20 percent from its June peak, and Travis Stice of Diamondback told the Midland Reporter Telegram, “We’re in for a period of time where operators have to adjust their plans to make less money.” Steve Gray of RSP Permian added, “I worry about things I can control like costs and efficiency. (Read more...)
Linn Energy divests assets in Ector and Midland counties, Anadarko
A partnership of KKR Natural Resources and Dallas-based Fleur de Lis Energy agreed to acquire oil and gas properties in Ector and Midland counties from Houston-based Linn Energy for $350 million in a deal that is expected to close in fourth quarter. The Oil & Gas Journal said the assets are comprised of more than 7,200 acres producing from multiple zones, including Strawn, Spraberry and Wolfcamp. Fleur de Lis estimates fourth quarter production of more than 5,200 boed – the majority of which is oil – and sees an attractive inventory for near-term development. (Read more...)
Rig count: Permian Basin down one in week, up 113 in year
The oil and natural gas rig count in the Permian Basin declined by one in the past week, but it remains more than 100 ahead of the same date a year ago. Oilfield services firm Baker Hughes of Houston said as of Oct. 17 there were 561 rigs in the Permian Basin, down one from 562 a week earlier but 113 ahead of the 448 of the same day last year. Texas gained two to 898 from 896 in the past week – 81 rigs ahead of 817 at this time last year. (Read more...)
Sunoco begins binding open season for Delaware Basin extension
Philadelphia-based Sunoco Pipeline started an open season Oct. 15 for its Delaware Basin extension project. The project is being developed to deliver crude oil from the Delaware Basin in New Mexico and West Texas to Midland and will provide producers new takeaway capacity for the rapidly growing area. It will consist of about 125 miles of new pipeline with initial capacity of about 100,000 barrels per day. It is scheduled to begin operating in the first half of 2016.
School districts in New Mexico oil patch report record enrollments
School districts in the heart of New Mexico’s booming oil and natural gas region are reporting record enrollment, according to the Associated Press. Last week the Hobbs News Sun said the Lovington Municipal School District had enrolled nearly 3,800 students for the highest spike in enrollment in the district’s history. The enrollment for Hobbs was nearly 10,000 students as of Sept. 16 – more than 500 students above the same day a year ago. The Associated Press added, “The jump comes as Lea County continues to see a booming business for its oil and gas.”
City officials in Midland, Karnes City not worried yet about oil price
Officials in key cities in Texas oilfields, including Midland, aren’t worried yet about the effects of declining oil prices, according to the Texas Tribune. Don Tymrak, city manager in Karnes City in the Eagle Ford, said, “There’s no alarm or red flag going up at the moment. We’re pretty much staying the course.” Sara Bustilloz of the City of Midland added, “For us as a city, it’s not any cause that’s telling us to slow down on our planning.” But Chris Faulkner, CEO and president of Dallas-based Breitling Energy, told the Tribune, “We’re going to see production come down, and we’re going to see rigs lay down if we see prices below $80. That’s a problem. That’s a challenge.” (Read more...)
News from Texas and the Southwest
NuStar, Pemex affiliate form JV to move LPG, refined products to Mexico
San Antonio-based NuStar Energy and PMI, an affiliate of Petroleos Mexicanos (Pemex), formed a joint venture to develop pipeline systems for LPG and refined products from the U.S. into northern Mexico. The two companies said Oct. 15 they will jointly fund construction of the pipeline and storage assets; NuStar will manage construction and operation. LPG and refined products will move from Mont Belvieu and Corpus Christi to Nuevo Laredo and Burgos-Reynosa, Mexico. (Read More...)
Craddick: Reforms in Mexico oil, gas can slow illegal border crossings
Texas Railroad Commission chairman Christi Craddick said the state’s expertise in oil and natural gas opens the possibility of greater cross-border cooperation, investment and success as Mexico reforms its industry. The U.S. Energy Information Administration projected that the potential in Mexican oil fields will draw as much as $10 billion of foreign direct investment and create 500,000 new jobs for Mexico by 2018. “That surge in employment will not only have a massive impact on the Mexican economy,” Craddick said last week, “I believe it can slow the stream of people crossing the border illegally to find work.” (Read more...)
Kinder Morgan to expand terminals at Houston Ship Channel
Houston-based Kinder Morgan Energy Partners said Oct. 14 it will expand terminals in Pasadena and Galena Park to provide additional infrastructure to help meet growing demand for refined product storage and dock services at the Houston Ship Channel. The investment of about $240 million will include the construction of 2.1 million barrels of storage. The project is backed by long-term contracts with existing customers. (Read more...)
Mora County in New Mexico upholds ban on oil, gas drilling
Commissioners of Mora County, New Mexico, the only county in the U.S. that has adopted such a ban, voted Oct. 14 to continue its ban on oil and gas drilling. During what the Santa Fe New Mexican called “a raucous public meeting,” they voted 2-1 to uphold the ban after one commissioner reportedly reversed his position. The vote means the prohibition will stand until at least 2015, the newspaper said, when a new member will join the county commission and another vote is likely. During the meeting in a small room at the volunteer fire department, a sheriff’s deputy reportedly ejected at least one spectator.
Pioneer CEO urges Department of Commerce to issue more permits
Scott D. Sheffield, CEO of Irving-based Pioneer Natural Resources, which in June received one of the first two federal permits to export condensate, urged the U.S. Department of Commerce to begin issuing similar permits to other companies. “There are people right next door to us who are running the exact same condensate through the exact same units, and their export applications aren’t being approved,” he said. The DOC ruled June 24 that upgraded condensates of PNR and Enterprise Product Partners qualified as products and were not subject to existing U.S. crude oil export restrictions. (Read more...)
Oil, gas industry leaders watching price of WTI, discussing breakeven point
Texas newspapers say industry officials are closely watching as the price of West Texas Intermediate, the U.S. benchmark, has declined more than 20 percent since July. “As crude prices continue to fall,” the Dallas Morning News said, “talk is turning to the most dreaded word in the oil industry: downturn…. At $82 a barrel, crude is at its lowest since 2012, bringing the high-cost hydraulic fracturing revolution under increasing scrutiny.” Larry Oldham of Midland told the Morning News, “We’re not seeing a real pullback yet. But if it stays this way, you’re going to see companies ‘take their foot off the accelerator.’ ” (Read more...)
New York Times: U.S. could reach saturation point in oil production
Analysts at Turner, Mason & Co., a Dallas engineering consulting firm, told the New York Times that the U.S. could hit a saturation point when oil production hits 10 million to 10.5 million barrels a day – “at which point large exports will become necessary or drilling and production may have to slow.” Domestic oil production has increased about 70 percent over the last six years to 8.7 million barrels a day as imports from OPEC have declined by half. The Times added, “With domestic oil production growing month after month, many oil experts predict that the country’s output will rise to as much as 12 million barrels a day over the next decade, which would mean the country will be swimming in oil the way it is currently dealing with a surplus of natural gas.” (Read more...)
Website
Website
News from the Permian Basin
Targa Resources to expand natural gas gathering, processing system
Houston-based Targa Resources Partners said Oct. 6 it will expand its natural gas gathering and processing system in Winkler County west of the company’s existing Sand Hills gas processing plant. Targa will purchase and install a new 300 MMcfd cryogenic processing plant, a header pipeline from the new plant into the southern Delaware Basin, and related gathering and compression infrastructure. (Read more...)
Stabilis, Flint Hills announced joint venture for LNG plant in Odessa
Beaumont-based Stabilis Energy and Wichita, Kansas-based Flint Hills Resources said Oct. 6 that their joint venture will acquire property in Odessa for construction of another proposed LNG facility. The plant is expected to have a capacity of about 100,000 gallons per day and serve high-horsepower oilfield fuel applications in the Permian Basin. Stabilis said it will begin taking orders immediately and could begin construction in 2015 and production in 2016. (Read more...)
Oil price to determine budgets for 2015, CEOs report at PBPA meeting
The CEOs of RSP Permian, Parsley Energy, Diamondback Energy and Elevation Resources said Oct. 16 at the annual meeting of the Permian Basin Petroleum Association they are considering movement of oil prices as they plan budgets for 2015. The price of WTI has dropped more than 20 percent from its June peak, and Travis Stice of Diamondback told the Midland Reporter Telegram, “We’re in for a period of time where operators have to adjust their plans to make less money.” Steve Gray of RSP Permian added, “I worry about things I can control like costs and efficiency. (Read more...)
Linn Energy divests assets in Ector and Midland counties, Anadarko
A partnership of KKR Natural Resources and Dallas-based Fleur de Lis Energy agreed to acquire oil and gas properties in Ector and Midland counties from Houston-based Linn Energy for $350 million in a deal that is expected to close in fourth quarter. The Oil & Gas Journal said the assets are comprised of more than 7,200 acres producing from multiple zones, including Strawn, Spraberry and Wolfcamp. Fleur de Lis estimates fourth quarter production of more than 5,200 boed – the majority of which is oil – and sees an attractive inventory for near-term development. (Read more...)
Rig count: Permian Basin down one in week, up 113 in year
The oil and natural gas rig count in the Permian Basin declined by one in the past week, but it remains more than 100 ahead of the same date a year ago. Oilfield services firm Baker Hughes of Houston said as of Oct. 17 there were 561 rigs in the Permian Basin, down one from 562 a week earlier but 113 ahead of the 448 of the same day last year. Texas gained two to 898 from 896 in the past week – 81 rigs ahead of 817 at this time last year. (Read more...)
Sunoco begins binding open season for Delaware Basin extension
Philadelphia-based Sunoco Pipeline started an open season Oct. 15 for its Delaware Basin extension project. The project is being developed to deliver crude oil from the Delaware Basin in New Mexico and West Texas to Midland and will provide producers new takeaway capacity for the rapidly growing area. It will consist of about 125 miles of new pipeline with initial capacity of about 100,000 barrels per day. It is scheduled to begin operating in the first half of 2016.
School districts in New Mexico oil patch report record enrollments
School districts in the heart of New Mexico’s booming oil and natural gas region are reporting record enrollment, according to the Associated Press. Last week the Hobbs News Sun said the Lovington Municipal School District had enrolled nearly 3,800 students for the highest spike in enrollment in the district’s history. The enrollment for Hobbs was nearly 10,000 students as of Sept. 16 – more than 500 students above the same day a year ago. The Associated Press added, “The jump comes as Lea County continues to see a booming business for its oil and gas.”
City officials in Midland, Karnes City not worried yet about oil price
Officials in key cities in Texas oilfields, including Midland, aren’t worried yet about the effects of declining oil prices, according to the Texas Tribune. Don Tymrak, city manager in Karnes City in the Eagle Ford, said, “There’s no alarm or red flag going up at the moment. We’re pretty much staying the course.” Sara Bustilloz of the City of Midland added, “For us as a city, it’s not any cause that’s telling us to slow down on our planning.” But Chris Faulkner, CEO and president of Dallas-based Breitling Energy, told the Tribune, “We’re going to see production come down, and we’re going to see rigs lay down if we see prices below $80. That’s a problem. That’s a challenge.” (Read more...)
News from Texas and the Southwest
NuStar, Pemex affiliate form JV to move LPG, refined products to Mexico
San Antonio-based NuStar Energy and PMI, an affiliate of Petroleos Mexicanos (Pemex), formed a joint venture to develop pipeline systems for LPG and refined products from the U.S. into northern Mexico. The two companies said Oct. 15 they will jointly fund construction of the pipeline and storage assets; NuStar will manage construction and operation. LPG and refined products will move from Mont Belvieu and Corpus Christi to Nuevo Laredo and Burgos-Reynosa, Mexico. (Read More...)
Craddick: Reforms in Mexico oil, gas can slow illegal border crossings
Texas Railroad Commission chairman Christi Craddick said the state’s expertise in oil and natural gas opens the possibility of greater cross-border cooperation, investment and success as Mexico reforms its industry. The U.S. Energy Information Administration projected that the potential in Mexican oil fields will draw as much as $10 billion of foreign direct investment and create 500,000 new jobs for Mexico by 2018. “That surge in employment will not only have a massive impact on the Mexican economy,” Craddick said last week, “I believe it can slow the stream of people crossing the border illegally to find work.” (Read more...)
Kinder Morgan to expand terminals at Houston Ship Channel
Houston-based Kinder Morgan Energy Partners said Oct. 14 it will expand terminals in Pasadena and Galena Park to provide additional infrastructure to help meet growing demand for refined product storage and dock services at the Houston Ship Channel. The investment of about $240 million will include the construction of 2.1 million barrels of storage. The project is backed by long-term contracts with existing customers. (Read more...)
Mora County in New Mexico upholds ban on oil, gas drilling
Commissioners of Mora County, New Mexico, the only county in the U.S. that has adopted such a ban, voted Oct. 14 to continue its ban on oil and gas drilling. During what the Santa Fe New Mexican called “a raucous public meeting,” they voted 2-1 to uphold the ban after one commissioner reportedly reversed his position. The vote means the prohibition will stand until at least 2015, the newspaper said, when a new member will join the county commission and another vote is likely. During the meeting in a small room at the volunteer fire department, a sheriff’s deputy reportedly ejected at least one spectator.
Pioneer CEO urges Department of Commerce to issue more permits
Scott D. Sheffield, CEO of Irving-based Pioneer Natural Resources, which in June received one of the first two federal permits to export condensate, urged the U.S. Department of Commerce to begin issuing similar permits to other companies. “There are people right next door to us who are running the exact same condensate through the exact same units, and their export applications aren’t being approved,” he said. The DOC ruled June 24 that upgraded condensates of PNR and Enterprise Product Partners qualified as products and were not subject to existing U.S. crude oil export restrictions. (Read more...)
Oil, gas industry leaders watching price of WTI, discussing breakeven point
Texas newspapers say industry officials are closely watching as the price of West Texas Intermediate, the U.S. benchmark, has declined more than 20 percent since July. “As crude prices continue to fall,” the Dallas Morning News said, “talk is turning to the most dreaded word in the oil industry: downturn…. At $82 a barrel, crude is at its lowest since 2012, bringing the high-cost hydraulic fracturing revolution under increasing scrutiny.” Larry Oldham of Midland told the Morning News, “We’re not seeing a real pullback yet. But if it stays this way, you’re going to see companies ‘take their foot off the accelerator.’ ” (Read more...)
New York Times: U.S. could reach saturation point in oil production
Analysts at Turner, Mason & Co., a Dallas engineering consulting firm, told the New York Times that the U.S. could hit a saturation point when oil production hits 10 million to 10.5 million barrels a day – “at which point large exports will become necessary or drilling and production may have to slow.” Domestic oil production has increased about 70 percent over the last six years to 8.7 million barrels a day as imports from OPEC have declined by half. The Times added, “With domestic oil production growing month after month, many oil experts predict that the country’s output will rise to as much as 12 million barrels a day over the next decade, which would mean the country will be swimming in oil the way it is currently dealing with a surplus of natural gas.” (Read more...)
Website
Website
News from the Permian Basin
Targa Resources to expand natural gas gathering, processing system
Houston-based Targa Resources Partners said Oct. 6 it will expand its natural gas gathering and processing system in Winkler County west of the company’s existing Sand Hills gas processing plant. Targa will purchase and install a new 300 MMcfd cryogenic processing plant, a header pipeline from the new plant into the southern Delaware Basin, and related gathering and compression infrastructure. (Read more...)
Stabilis, Flint Hills announced joint venture for LNG plant in Odessa
Beaumont-based Stabilis Energy and Wichita, Kansas-based Flint Hills Resources said Oct. 6 that their joint venture will acquire property in Odessa for construction of another proposed LNG facility. The plant is expected to have a capacity of about 100,000 gallons per day and serve high-horsepower oilfield fuel applications in the Permian Basin. Stabilis said it will begin taking orders immediately and could begin construction in 2015 and production in 2016. (Read more...)
Oil price to determine budgets for 2015, CEOs report at PBPA meeting
The CEOs of RSP Permian, Parsley Energy, Diamondback Energy and Elevation Resources said Oct. 16 at the annual meeting of the Permian Basin Petroleum Association they are considering movement of oil prices as they plan budgets for 2015. The price of WTI has dropped more than 20 percent from its June peak, and Travis Stice of Diamondback told the Midland Reporter Telegram, “We’re in for a period of time where operators have to adjust their plans to make less money.” Steve Gray of RSP Permian added, “I worry about things I can control like costs and efficiency. (Read more...)
Linn Energy divests assets in Ector and Midland counties, Anadarko
A partnership of KKR Natural Resources and Dallas-based Fleur de Lis Energy agreed to acquire oil and gas properties in Ector and Midland counties from Houston-based Linn Energy for $350 million in a deal that is expected to close in fourth quarter. The Oil & Gas Journal said the assets are comprised of more than 7,200 acres producing from multiple zones, including Strawn, Spraberry and Wolfcamp. Fleur de Lis estimates fourth quarter production of more than 5,200 boed – the majority of which is oil – and sees an attractive inventory for near-term development. (Read more...)
Rig count: Permian Basin down one in week, up 113 in year
The oil and natural gas rig count in the Permian Basin declined by one in the past week, but it remains more than 100 ahead of the same date a year ago. Oilfield services firm Baker Hughes of Houston said as of Oct. 17 there were 561 rigs in the Permian Basin, down one from 562 a week earlier but 113 ahead of the 448 of the same day last year. Texas gained two to 898 from 896 in the past week – 81 rigs ahead of 817 at this time last year. (Read more...)
Sunoco begins binding open season for Delaware Basin extension
Philadelphia-based Sunoco Pipeline started an open season Oct. 15 for its Delaware Basin extension project. The project is being developed to deliver crude oil from the Delaware Basin in New Mexico and West Texas to Midland and will provide producers new takeaway capacity for the rapidly growing area. It will consist of about 125 miles of new pipeline with initial capacity of about 100,000 barrels per day. It is scheduled to begin operating in the first half of 2016.
School districts in New Mexico oil patch report record enrollments
School districts in the heart of New Mexico’s booming oil and natural gas region are reporting record enrollment, according to the Associated Press. Last week the Hobbs News Sun said the Lovington Municipal School District had enrolled nearly 3,800 students for the highest spike in enrollment in the district’s history. The enrollment for Hobbs was nearly 10,000 students as of Sept. 16 – more than 500 students above the same day a year ago. The Associated Press added, “The jump comes as Lea County continues to see a booming business for its oil and gas.”
City officials in Midland, Karnes City not worried yet about oil price
Officials in key cities in Texas oilfields, including Midland, aren’t worried yet about the effects of declining oil prices, according to the Texas Tribune. Don Tymrak, city manager in Karnes City in the Eagle Ford, said, “There’s no alarm or red flag going up at the moment. We’re pretty much staying the course.” Sara Bustilloz of the City of Midland added, “For us as a city, it’s not any cause that’s telling us to slow down on our planning.” But Chris Faulkner, CEO and president of Dallas-based Breitling Energy, told the Tribune, “We’re going to see production come down, and we’re going to see rigs lay down if we see prices below $80. That’s a problem. That’s a challenge.” (Read more...)
News from Texas and the Southwest
NuStar, Pemex affiliate form JV to move LPG, refined products to Mexico
San Antonio-based NuStar Energy and PMI, an affiliate of Petroleos Mexicanos (Pemex), formed a joint venture to develop pipeline systems for LPG and refined products from the U.S. into northern Mexico. The two companies said Oct. 15 they will jointly fund construction of the pipeline and storage assets; NuStar will manage construction and operation. LPG and refined products will move from Mont Belvieu and Corpus Christi to Nuevo Laredo and Burgos-Reynosa, Mexico. (Read More...)
Craddick: Reforms in Mexico oil, gas can slow illegal border crossings
Texas Railroad Commission chairman Christi Craddick said the state’s expertise in oil and natural gas opens the possibility of greater cross-border cooperation, investment and success as Mexico reforms its industry. The U.S. Energy Information Administration projected that the potential in Mexican oil fields will draw as much as $10 billion of foreign direct investment and create 500,000 new jobs for Mexico by 2018. “That surge in employment will not only have a massive impact on the Mexican economy,” Craddick said last week, “I believe it can slow the stream of people crossing the border illegally to find work.” (Read more...)
Kinder Morgan to expand terminals at Houston Ship Channel
Houston-based Kinder Morgan Energy Partners said Oct. 14 it will expand terminals in Pasadena and Galena Park to provide additional infrastructure to help meet growing demand for refined product storage and dock services at the Houston Ship Channel. The investment of about $240 million will include the construction of 2.1 million barrels of storage. The project is backed by long-term contracts with existing customers. (Read more...)
Mora County in New Mexico upholds ban on oil, gas drilling
Commissioners of Mora County, New Mexico, the only county in the U.S. that has adopted such a ban, voted Oct. 14 to continue its ban on oil and gas drilling. During what the Santa Fe New Mexican called “a raucous public meeting,” they voted 2-1 to uphold the ban after one commissioner reportedly reversed his position. The vote means the prohibition will stand until at least 2015, the newspaper said, when a new member will join the county commission and another vote is likely. During the meeting in a small room at the volunteer fire department, a sheriff’s deputy reportedly ejected at least one spectator.
Pioneer CEO urges Department of Commerce to issue more permits
Scott D. Sheffield, CEO of Irving-based Pioneer Natural Resources, which in June received one of the first two federal permits to export condensate, urged the U.S. Department of Commerce to begin issuing similar permits to other companies. “There are people right next door to us who are running the exact same condensate through the exact same units, and their export applications aren’t being approved,” he said. The DOC ruled June 24 that upgraded condensates of PNR and Enterprise Product Partners qualified as products and were not subject to existing U.S. crude oil export restrictions. (Read more...)
Oil, gas industry leaders watching price of WTI, discussing breakeven point
Texas newspapers say industry officials are closely watching as the price of West Texas Intermediate, the U.S. benchmark, has declined more than 20 percent since July. “As crude prices continue to fall,” the Dallas Morning News said, “talk is turning to the most dreaded word in the oil industry: downturn…. At $82 a barrel, crude is at its lowest since 2012, bringing the high-cost hydraulic fracturing revolution under increasing scrutiny.” Larry Oldham of Midland told the Morning News, “We’re not seeing a real pullback yet. But if it stays this way, you’re going to see companies ‘take their foot off the accelerator.’ ” (Read more...)
New York Times: U.S. could reach saturation point in oil production
Analysts at Turner, Mason & Co., a Dallas engineering consulting firm, told the New York Times that the U.S. could hit a saturation point when oil production hits 10 million to 10.5 million barrels a day – “at which point large exports will become necessary or drilling and production may have to slow.” Domestic oil production has increased about 70 percent over the last six years to 8.7 million barrels a day as imports from OPEC have declined by half. The Times added, “With domestic oil production growing month after month, many oil experts predict that the country’s output will rise to as much as 12 million barrels a day over the next decade, which would mean the country will be swimming in oil the way it is currently dealing with a surplus of natural gas.” (Read more...)
Website
Website
News from the Permian Basin
Targa Resources to expand natural gas gathering, processing system
Houston-based Targa Resources Partners said Oct. 6 it will expand its natural gas gathering and processing system in Winkler County west of the company’s existing Sand Hills gas processing plant. Targa will purchase and install a new 300 MMcfd cryogenic processing plant, a header pipeline from the new plant into the southern Delaware Basin, and related gathering and compression infrastructure. (Read more...)
Stabilis, Flint Hills announced joint venture for LNG plant in Odessa
Beaumont-based Stabilis Energy and Wichita, Kansas-based Flint Hills Resources said Oct. 6 that their joint venture will acquire property in Odessa for construction of another proposed LNG facility. The plant is expected to have a capacity of about 100,000 gallons per day and serve high-horsepower oilfield fuel applications in the Permian Basin. Stabilis said it will begin taking orders immediately and could begin construction in 2015 and production in 2016. (Read more...)
Oil price to determine budgets for 2015, CEOs report at PBPA meeting
The CEOs of RSP Permian, Parsley Energy, Diamondback Energy and Elevation Resources said Oct. 16 at the annual meeting of the Permian Basin Petroleum Association they are considering movement of oil prices as they plan budgets for 2015. The price of WTI has dropped more than 20 percent from its June peak, and Travis Stice of Diamondback told the Midland Reporter Telegram, “We’re in for a period of time where operators have to adjust their plans to make less money.” Steve Gray of RSP Permian added, “I worry about things I can control like costs and efficiency. (Read more...)
Linn Energy divests assets in Ector and Midland counties, Anadarko
A partnership of KKR Natural Resources and Dallas-based Fleur de Lis Energy agreed to acquire oil and gas properties in Ector and Midland counties from Houston-based Linn Energy for $350 million in a deal that is expected to close in fourth quarter. The Oil & Gas Journal said the assets are comprised of more than 7,200 acres producing from multiple zones, including Strawn, Spraberry and Wolfcamp. Fleur de Lis estimates fourth quarter production of more than 5,200 boed – the majority of which is oil – and sees an attractive inventory for near-term development. (Read more...)
Rig count: Permian Basin down one in week, up 113 in year
The oil and natural gas rig count in the Permian Basin declined by one in the past week, but it remains more than 100 ahead of the same date a year ago. Oilfield services firm Baker Hughes of Houston said as of Oct. 17 there were 561 rigs in the Permian Basin, down one from 562 a week earlier but 113 ahead of the 448 of the same day last year. Texas gained two to 898 from 896 in the past week – 81 rigs ahead of 817 at this time last year. (Read more...)
Sunoco begins binding open season for Delaware Basin extension
Philadelphia-based Sunoco Pipeline started an open season Oct. 15 for its Delaware Basin extension project. The project is being developed to deliver crude oil from the Delaware Basin in New Mexico and West Texas to Midland and will provide producers new takeaway capacity for the rapidly growing area. It will consist of about 125 miles of new pipeline with initial capacity of about 100,000 barrels per day. It is scheduled to begin operating in the first half of 2016.
School districts in New Mexico oil patch report record enrollments
School districts in the heart of New Mexico’s booming oil and natural gas region are reporting record enrollment, according to the Associated Press. Last week the Hobbs News Sun said the Lovington Municipal School District had enrolled nearly 3,800 students for the highest spike in enrollment in the district’s history. The enrollment for Hobbs was nearly 10,000 students as of Sept. 16 – more than 500 students above the same day a year ago. The Associated Press added, “The jump comes as Lea County continues to see a booming business for its oil and gas.”
City officials in Midland, Karnes City not worried yet about oil price
Officials in key cities in Texas oilfields, including Midland, aren’t worried yet about the effects of declining oil prices, according to the Texas Tribune. Don Tymrak, city manager in Karnes City in the Eagle Ford, said, “There’s no alarm or red flag going up at the moment. We’re pretty much staying the course.” Sara Bustilloz of the City of Midland added, “For us as a city, it’s not any cause that’s telling us to slow down on our planning.” But Chris Faulkner, CEO and president of Dallas-based Breitling Energy, told the Tribune, “We’re going to see production come down, and we’re going to see rigs lay down if we see prices below $80. That’s a problem. That’s a challenge.” (Read more...)
News from Texas and the Southwest
NuStar, Pemex affiliate form JV to move LPG, refined products to Mexico
San Antonio-based NuStar Energy and PMI, an affiliate of Petroleos Mexicanos (Pemex), formed a joint venture to develop pipeline systems for LPG and refined products from the U.S. into northern Mexico. The two companies said Oct. 15 they will jointly fund construction of the pipeline and storage assets; NuStar will manage construction and operation. LPG and refined products will move from Mont Belvieu and Corpus Christi to Nuevo Laredo and Burgos-Reynosa, Mexico. (Read More...)
Craddick: Reforms in Mexico oil, gas can slow illegal border crossings
Texas Railroad Commission chairman Christi Craddick said the state’s expertise in oil and natural gas opens the possibility of greater cross-border cooperation, investment and success as Mexico reforms its industry. The U.S. Energy Information Administration projected that the potential in Mexican oil fields will draw as much as $10 billion of foreign direct investment and create 500,000 new jobs for Mexico by 2018. “That surge in employment will not only have a massive impact on the Mexican economy,” Craddick said last week, “I believe it can slow the stream of people crossing the border illegally to find work.” (Read more...)
Kinder Morgan to expand terminals at Houston Ship Channel
Houston-based Kinder Morgan Energy Partners said Oct. 14 it will expand terminals in Pasadena and Galena Park to provide additional infrastructure to help meet growing demand for refined product storage and dock services at the Houston Ship Channel. The investment of about $240 million will include the construction of 2.1 million barrels of storage. The project is backed by long-term contracts with existing customers. (Read more...)
Mora County in New Mexico upholds ban on oil, gas drilling
Commissioners of Mora County, New Mexico, the only county in the U.S. that has adopted such a ban, voted Oct. 14 to continue its ban on oil and gas drilling. During what the Santa Fe New Mexican called “a raucous public meeting,” they voted 2-1 to uphold the ban after one commissioner reportedly reversed his position. The vote means the prohibition will stand until at least 2015, the newspaper said, when a new member will join the county commission and another vote is likely. During the meeting in a small room at the volunteer fire department, a sheriff’s deputy reportedly ejected at least one spectator.
Pioneer CEO urges Department of Commerce to issue more permits
Scott D. Sheffield, CEO of Irving-based Pioneer Natural Resources, which in June received one of the first two federal permits to export condensate, urged the U.S. Department of Commerce to begin issuing similar permits to other companies. “There are people right next door to us who are running the exact same condensate through the exact same units, and their export applications aren’t being approved,” he said. The DOC ruled June 24 that upgraded condensates of PNR and Enterprise Product Partners qualified as products and were not subject to existing U.S. crude oil export restrictions. (Read more...)
Oil, gas industry leaders watching price of WTI, discussing breakeven point
Texas newspapers say industry officials are closely watching as the price of West Texas Intermediate, the U.S. benchmark, has declined more than 20 percent since July. “As crude prices continue to fall,” the Dallas Morning News said, “talk is turning to the most dreaded word in the oil industry: downturn…. At $82 a barrel, crude is at its lowest since 2012, bringing the high-cost hydraulic fracturing revolution under increasing scrutiny.” Larry Oldham of Midland told the Morning News, “We’re not seeing a real pullback yet. But if it stays this way, you’re going to see companies ‘take their foot off the accelerator.’ ” (Read more...)
New York Times: U.S. could reach saturation point in oil production
Analysts at Turner, Mason & Co., a Dallas engineering consulting firm, told the New York Times that the U.S. could hit a saturation point when oil production hits 10 million to 10.5 million barrels a day – “at which point large exports will become necessary or drilling and production may have to slow.” Domestic oil production has increased about 70 percent over the last six years to 8.7 million barrels a day as imports from OPEC have declined by half. The Times added, “With domestic oil production growing month after month, many oil experts predict that the country’s output will rise to as much as 12 million barrels a day over the next decade, which would mean the country will be swimming in oil the way it is currently dealing with a surplus of natural gas.” (Read more...)
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