• Featured Oilfield News

    Few Bargains Left In Permian Basin

    A few months ago, a small Fort Worth driller sold off tens of thousands of acres it had cobbled together in West Texas, earning a $2.8 billion fortune for drilling prolific wells during the worst oil bust in a generation.

    Oil rigs drill into the Permian Basin outside of Midland Saturday Sept. 17 2016.  Michael Ciaglo Houston Chronicle .jpgArmed with a $400 million private equity investment, Double Eagle Energy Permian wants to build another foothold in the world's hottest oil field, aiming to drill its first wells on new property early next year. But this time, buying and flipping gushing oil land in the Permian Basin is going to be much more difficult and expensive.

    "The availability of land is diminishing every day," said Garrett Martin, Double Eagle's senior vice president of engineering in Fort Worth. "Everyone wants to be there. Nothing out there is cheap anymore."

    Over the past few months, the pace of transactions in the Permian Basin has slowed dramatically amid a combination of turbulent oil prices and the oil industry's buying spree in West Texas earlier this year, which consolidated large swaths of land and left behind a much smaller amount of contiguous acreage suitable for drilling sideways for thousands of feet underground, a technique used to plumb once-inaccessible rock formations.

    The rush of geologists and...

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    EEOC Files Complaint Against Horizontal Well Drillers LLC

    The federal Equal Employment Opportunity Commission filed a complaint Wednesday against a Purcell-based drilling contractor, alleging it discriminated against job applicants older than 40 and those who had filed workers' compensation claims.

    The commission said Horizontal Well Drillers LLC violated federal age and disability discrimination laws in its hiring process, including putting notations on job applications about family medical history, age and previous disability or workers' compensation claims.The commission said Horizontal Well Drillers LLC violated federal age and disability discrimination laws in its hiring process, including putting notations on job applications about family medical history, age and previous disability or workers' compensation claims. The infractions date to at least 2012, the complaint said.

    Through a representative, company officials said they were reviewing the complaint Wednesday afternoon with their attorneys and had no immediate comment.

    The EEOC complaint said a former CEO at the company, Steve Akerman, reviewed all applications for rig positions, including derrickhand, motorhand and floorhand. Staff highlighted portions of the applications dealing with age, medical and family medical history, and the CEO separated the applications into two piles. Applications that didn't...

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    Virginia Wants Out Of New Offshore Oil, Gas Leasing Plan

    Virginia Letter.pdf Gov. McAuliffe Letter
    Virginia Letter.pdf, 99KB
    Gov. Terry McAuliffe, reversing field on a controversial issue, has asked federal officials to take the ocean waters off Virginia out of contention for oil and gas leases.

    Gov. Terry McAuliffe has asked federal officials to take the ocean waters off Virginia out of contention for oil and gas leasesThe governor’s office disclosed McAuliffe’s position Thursday, making public a letter that he wrote last week to Kelly Hammerle, national program manager for the U.S. Bureau of Ocean Energy Management. McAuliffe asked that Virginia not be included in the 2019-24 Outer Continental Shelf...

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    Sanchez Energy Makes $105M Eagle Ford Land Sale

    Houston-based oil and gas exploration company Sanchez Energy is selling 39,500 acres in the Eagle Ford Shale oil field for $105 million, the company said.

    Sanchez Energy Selling 39,500 Acres In Eagle Ford PlayThe sale involves Sanchez’s Javelina region, which stretches across La Salle and Webb counties, an area full of mostly dry natural gas.

    “Over the last eighteen months we leased approximately 70,000, largely contiguous, net acres in the dry gas window of the Eagle Ford,” said Tony Sanchez, III, Sanchez Energy’s CEO. “This transaction accelerates the value of the asset, while building our liquidity and providing value to our shareholders.”

    Sanchez has more than 350,000 acres in the Eagle Ford Shale.

    In January, Sanchez along with Blackstone Group LP bought 318,000 acres from Houston-based oil and gas explorer Anadarko Petroleum in a $2.3 billion deal. The land — which is nicknamed “Comanche” — is located in Dimmit, Webb, La Salle, and Maverick counties.

    Earlier in August, Oklahoma-based Devon Energy sold 20,000 acres and midstream assets to Houston-based Penn Virginia Corp. for $205 million. In January, Denver-based SM Energy sold at least 37,500 acres and some midstream assets in the Eagle Ford to a subsidiary of the privately-held Venado Oil and Gas LLC of Austin for $800 million.

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    Oklahoma Oilfields Gain Recognition

    Oklahoma's growing oil fields gained national recognition this week when the U.S. Energy Information Administration added the Anadarko Basin to its weekly Drilling Productivity Report.

    Continental Resources Inc. is among the most active drillers in Oklahoma's STACK play, a part of the Anadarko Basin.The weekly snapshot of industry activity highlights the country's most active drilling areas. The Anadarko Basin — which includes the STACK and SCOOP fields — is the third most active in the country.

    "The Anadarko Basin has a long history of hydrocarbon production and, in recent years, has seen an increase in activity mainly from two areas commonly known as the STACK and SCOOP plays," EIA said in a statement this week.

    The productivity report also includes information on the Permian Basin in west Texas and southeast New Mexico, the Eagle Ford in south Texas, the Haynesville in east Texas and northwest Louisiana, the Niobrara in Colorado and Wyoming and the North Dakota Bakken.

    Also this week, the EIA combined its reports on the Marcellus in Pennsylvania area and the Ohio-area Utica into one group the agency now lists as Appalachia.

    EIA recognizes the Anadarko as 24 counties in western Oklahoma and five counties in the Texas Panhandle. The region accounts for about 450,000 barrels of oil per day, 5.7 billion cubic feet of...

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    Pullback In U.S. Fracking Sand Use Pressures Producers

    U.S. shale oil companies are pulling back on the amount of sand they use to hydraulically fracture new wells, responding to rising prices of the material that are driving up costs.

    Halliburton SandCastle PS-2500 trailers, which store sand for hydraulic fracturing, also known as fracking, stand at a Hess well site near Williston, North Dakota November 12, 2014.Investors worry a slowdown in sand use, combined with new mining capacity coming online, could lead to a glut of the material and bring down prices. The worries have pressured shares of sand companies.

    Sand prices soared in the last year as oil companies ramped up shale drilling and production.

    But with crude LCoC1CLC1 prices below where they started the year, oil producers are employing new well designs and chemical agents that lessen the use of sand that represents around 12 percent of the cost of drilling and fracturing.

    The price of frack sand is expected to rise 62 percent this year to average $47 a ton, according to researcher IHS Markit. That is expected to drive oilfield service price inflation to 15 percent over 2016, according to researchers at Wood Mackenzie.

    Oilfield services provider Halliburton Co (HAL.N), which buys sand for its drilling customers, last month reported its first decline in average sand used per well, saying customers wanted designs that...

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    Fugitive Sought For Dumping Radioactive Oilfield Waste

    A fugitive who escaped custody in Wyoming four years ago has been added to a list of U.S. environmental crimes fugitives and is being sought by investigators for illegally dumping radioactive oilfield waste in North Dakota in incidents dating back to 2011, authorities said Tuesday.

    -In this file photo taken April 23, 2014, white-suited workers wearing respirators clean up the illegal filter sock dump in an abandoned gas station in Noonan, N.D.James Kenneth Ward, 55, is considered violent and dangerous and should not be approached, the U.S. Environmental Protection Agency's Criminal Investigation Division said in a statement.

    Prosecutors said Ward beginning in 2011 illegally disposed of hundreds of pieces of radioactive oil field waste known as filter socks, which are used to strain the sometimes-radioactive fluids produced during oil and gas exploration. Filter socks are tubular nets used to strain polluted water that is a byproduct of oil production. The wastewater contains low amounts of radioactive material such as radium.

    Instead of bringing the filter socks to a licensed landfill, prosecutors allege Ward dumped them inside an abandoned gas station just south of the Canada border in Noonan, North Dakota, where they were discovered in March 2014a. The site was later cleaned up and the filters were transferred out of state for...

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    Transocean To Acquire Drilling Contractor Songa Offshore In $3.4 Billion Deal

    Switzerland-based Transocean Ltd., which has its main U.S. office in Houston, has agreed to buy Songa Offshore SE in a deal valued at $3.38 billion, including the assumption of debt and bonds.

    Songa is a midwater drilling contractor with a strong presence in the North Atlantic basinThe deal is expected to close in the fourth quarter of 2017, according to a press release. The deal won’t affect Transocean’s executive management, but the combined company’s board of directors will include Frederik Wilhelm Mohn, Songa’s chairman of the board and owner of Perestroika AS, Songa’s largest shareholder.

    The deal includes Transocean assuming $1.7 billion of Songa’s debt, and the acquisition will be conducted through a voluntary exchange offer. Transocean expects the deal to consist of $480 million in cash, $540 million in equity and $660 million in convertible bonds.

    Songa is a midwater drilling contractor with a strong presence in the North Atlantic basin. It has seven midwater semisubmersibles and is Statoil’s largest drilling service provider, according to the press release.

    Transocean provides offshore contract drilling services for oil and gas wells with a fleet of 44 mobile offshore drilling units. It also has four ultra-deepwater drillships under construction or under contract to be constructed.

    The combined company is...

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    Red Dirt Black Gold Festival Celebrates Oil And Gas Industry

    The Artesia Arts & Cultural District presents the Red Dirt Black Gold Festival on Aug. 26. The all-day festival features free concerts and entertainment celebrating the oil and gas industry.

    Singer and songwriter Bri Bagwell will perform at Artesias Red Dirt Black Gold FestivalThe event kicks off at 9 a.m. at the Eagle Draw with Oilfield Olympics. The competition is not only for professionals out in the oilfield, it is also a fun way to see who can handle the hustle and bustle working on the gas- and oilfields. Best teams get awarded for first, second and third place with gold, silver and bronze trophies.

    At the RDBG Kid Zone children can enjoy carnival games, rubber duck races down the fountain, crafts, sidewalk chalk and a photo booth in the Heritage Walkway.

    The New MexiCAN BrewFest is located at the parking lot of Western Bank, 320 W. Texas Ave., close to the main stage. Only those 21 years and up can purchase a ticket to attend. There will be regional, local beer and cider on tap.

    At 1 p.m., the Oilfield Cook-off takes place at the Heritage Plaza. The cook-off features some of the best cooks in the oil patch and onlookers can purchase meals to sample and vote for the people’s choice award.

    Live music starts at 2 p.m. at the main stage at the Heritage Plaza parking lot with country singer Shari Rowe.

    At...

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    Shale Industry Suffering From Unexpected Operational Problems

    Despite rosy forecasts for U.S. crude output this year and next—the EIA sees production hitting almost 10 mbd in 2018—there are some warning signs beginning to emerge in the shale patch, even from what is the hottest and most prized shale basin of all—the Permian Basin. The industry may struggle to ratchet up production as rapidly as many analysts forecast due to a number of unforeseen problems, including sharper-than-expected decline rates.

    Decline rates in Permian Basin sharper than expectedFirst, there are bottlenecks for oilfield services, which could lead to a hike in production costs. Second, some signs suggest that the ever-increasing productivity gains for the Permian are starting to stagnate. But perhaps most worrying of all is the potential acceleration of decline rates at some shale wells, an ominous sign that the drilling bonanza in West Texas should not be taken for granted.

    Production problems and decline rates

    Shale wells typically see their production levels decline rapidly after an initial burst of output. Unlike a conventional oil field, which usually enjoys relatively stable production for years, output from a single shale well can fall off drastically within months. More shale wells need to be drilled just to keep production flat.

    In the Permian, the rate of decline has accelerated recently....

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    Nabors Acquiring Tesco For $215 Million

    Nabors Industries said Monday it will buy Houston-based Tesco Corp. for more than $215 million in a bid to enhance its strengths in drilling and well construction.

    Nabors Acquiring Tesco In $215 Million DealThe all-stock deal buys Tesco at a 19 percent premium from its closing share price Friday, which was less than half of its value at the beginning of 2017.

    The deal combines two oilfield services companies that operate out of Houston, although Nabors is formally domiciled in Bermuda for tax purposes. Tesco was founded in Calgary, but moved its headquarters to Houston a decade ago, although much of its manufacturing remains in Canada.

    "The addition of Tesco to our company represents another step forward for both our rig equipment and Nabors Drilling Solutions business. Tesco is respected for the quality of their product offerings and aftermarket service levels," said Nabors Chairman and CEO Anthony Petrello in the announcement.

    Source: Houston Chronicle

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    Argentina Eases Used Rig Imports To Spur Drilling, Boost Output

    Argentina’s government said Thursday it is making it easier to import used rigs, a widely awaited measure aimed at spurring drilling activity to boost oil and natural gas production as rising investment creates bottlenecks in the oilfield services industry.

    Pentagon at Puerto Madryn ArgentinaCompanies will be able to import used rigs and other equipment, as long as the supplies are no more than 10 years old and are not available locally “in the times and qualities required by the sector,” according to a presidential decree published in the Official Bulletin, the government’s newspaper of record.

    The scheme will take effect Friday and run until June 30, 2019, the government said.

    Importers will pay 7% import duties on the used equipment, with some equipment allowed to come in at 0% and others at 14%, according to the decree.

    Argentinian President Mauricio Macri announced plans for the reduced duties on used rigs in April during a meeting with oil executives in Houston.

    His right-of-center government is taking steps to snare investment to turn around more than a decade of dwindling oil and gas production, which has brought shortages and a surge in imports.

    The initial focus is on developing huge unconventional resources in plays like Vaca Muerta, one of the biggest shale formations.

    YPF, the country’s...

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    Oil Production Vessel In Position For Decommissioning In Shetland

    An offshore vessel said to have produced almost 150 million barrels of oil over 36 years has arrived in Shetland for decommissioning.

    Buchan Alphas arrival in Lerwick had been delayed by poor weatherThe Buchan Alpha's arrival in Lerwick had been delayed by poor weather.

    The production vessel is being brought in to anchor for the removal of some of the deeper parts of the structure.

    The Scottish government said the decommissioning was "a clear sign of the opportunities available in this emerging market".

    The Buchan Apha will be brought alongside the newly-extended Dales Voe deepwater quay to be dismantled for recycling.

    Work will begin on Monday and it is expected to take about 17 months to take Buchan Alpha apart.

    The work will be done by the French company Veolia, and 35 jobs will be created by the project.

    Originally a drilling rig, Buchan Alpha started production from the Buchan field in 1981.

    It was taken out of service in May by operators Repsol Sinopec Resources UK.

    Scottish government Minister for Business, Innovation and Energy, Paul Wheelhouse, said: "I am delighted that we have now seen the safe arrival of the Buchan Alpha in Lerwick.

    "This is great news for Shetland and a clear sign of the opportunities available in this emerging market.

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    Gulf Rig Count Up By 1 Following Toughest Week In 2 Years

    The previous week saw the count plunge by seven, or 30 percent.

    BP’s Thunder Horse platform in the Gulf of Mexico.The number of rigs exploring for oil and gas in the Gulf of Mexico rose by one last week after taking its biggest plunge in more than two years the previous week.

    The Gulf rig count, a key barometer for Houma-Thibodaux’s oil-based economy, stood at 17, according to figures released Friday by Houston-based oilfield services company Baker-Hughes.

    The previous week saw the count plunge by seven, or 30 percent. It was the worst week since mid-March 2015, when it dropped by 11 to total 36.

    The count is now the same as a year ago but down 70 percent from the 56 rigs working in August 2014, when a three-year bust that has stripped an estimated 14,000 jobs from Houma-Thibodaux’s offshore-oil-based economy began.

    Across the country, the rig count dropped by five to 949 for the week ending Friday, according to Baker-Hughes. That’s nearly double the 481 drilling a year ago. Of last week’s total, 768 rigs sought oil and 181 natural gas. Texas lost seven rigs and Louisiana one.

    The U.S. rig count peaked at 4,530 in 1981 and reached a low of 404 in May 2016.

    West Texas Intermediate crude, the U.S. benchmark, closed Friday at $48.82 per barrel, down about 1.5 percent for the week. Brent crude, the international...

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    GOP Senators Ask Trump To Hold Off On Venezuelan Oil Sanctions

    A group of Republican senators are asking President Trump to hold off on hitting Venezuelan oil companies with sanctions, claiming the restrictions could hurt U.S. oil refiners and drive Venezuela closer to U.S. adversaries.

    Lufkin Pump Jacks ( Getty Images)Republican Sens. John Cornyn (Texas), Bill Cassidy (La.), Thad Cochran (Miss.) and Roger Wicker (Miss.) warned Trump that refiners in their states that depend on Venezuelan oil could face major losses from sanctions against that country’s oil industry.

    The senators also expressed concerns that sanctions on Venezuelan oil could drive the South American country to forge closer ties with China and Russia.

    “We are concerned that unilateral sanctions could harm the U.S. economy, impair the global competitiveness of our businesses, and raise costs for our consumers,” the senators wrote. “It is critical to consider the role that the U.S. energy industry and refining sector play in our economic and national security interest.”

    The Trump administration has sanctioned dozens of Venezuelan government officials as President Nicolás Maduro attempts to consolidate power and crackdown on the opposition. Hundreds of anti-Maduro protesters have been killed as he fights with the opposition-controlled legislature. The political violence has exacerbated the Venezuelan economic crisis.

    ...

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