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us-oil-producers

Will U.S. Shale Finally Reward Shareholders?

U.S. oil prices above $50 a barrel are helping the shale patch to generate more cash flow, especially after the massive capital spending cuts last year. But higher prices are also reviving the good old dilemma of U.S. shale producers—raise production or raise payouts to shareholders, who have grown increasingly frustrated in recent years with the lack of meaningful returns while drillers were sinking cash flows, and even spending beyond cash flow generation into breaking production records.

Most analysts believe that this time around, there won’t be much of a dilemma as shale producers will have to show investors they can be more profitable, return more of those profits to shareholders, and “not drill themselves into oblivion,” as Harold Hamm warned the industry back in 2017.

As oil prices are steadying above $50 per barrel, producers are vowing, once again, capital and drilling restraint, while distributing more cash to shareholders now that the shale patch is set to generate higher cash flows.’

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Source: Oil Price

Natural Gas Prices Exploded

Natural Gas Prices Exploded On Cold Weather Reports

Natural gas prices exploded on Monday, with spot prices soaring more than 10% as cold weather threatens the Northeastern part of the United States.

At 1:30 p.m. EST, the spot price for natural gas was $2.833 per MMBtu, a 10.49% increase on the day or an increase of $0.269.

That price is about 50% higher than this time last year when it was trading at around $1.80 per MMBtu.

Front-month natural gas futures (NG1) were $2.84 at that time, as traders anticipate increased demand for the commodity as a massive storm heads toward the northeastern United States.

Monday’s outlook adds 18 heating degree days compared to Friday’s outlook, according to Wood Mackenzie.

“The unseasonably cold weather is expected to arrive this weekend and stock around through next week… The polar blast could mark some of the coldest temperatures seen this winter in much of the U.S.” Wood Mac analyst Mark Spangler said in a note to clients today.

And the price of natural gas may climb higher still, with more cold weather in store toward the middle of this month.

Some areas of the United States like Kansas, Alaska, Massachusetts,  and Wisconsin, could see this week—or are already seeing–the coldest temperatures so far this winter. The increased demand could help to draw down stubborn inventories.

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Source: Oil Price

Do you have further questions related to why natural gas prices exploded? Feel free to reach out to us here. 

oil-drilling-offshore

The New Use for Abandoned Oil Rigs

The grey steel girders of Platform Holly rise 235ft (72m) above the waters of the Pacific Ocean, just a couple of miles off the Santa Barbara coast. Above the water, this decommissioned oil rig is dull and lifeless, but the view below the surface is very different. Beneath the waves, colourful fish, crabs, starfish and mussels congregate on the huge steel pylons, which stretch for more than 400ft (120m) to the ocean floor.

There are more than 12,000 offshore oil and gas platforms worldwide. As they drain their reservoirs of fossil fuels below the sea, they eventually become defunct when they produce too little fuel for extraction to be profitable to their operators.

The big question is what to do with these enormous structures when the fossil fuels stop flowing. With curbing climate change rising up the international agenda, and with some questioning whether we have already passed peak oil, hastened by the coronavirus pandemic, the number of defunct rigs in the ocean is set to get bigger. Removing them from the water is incredibly expensive and labour-intensive. Allowing them to rust and fall into disrepair is an environmental risk that could seriously damage marine ecosystems.

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Source: BBC

oil boom

An Oil Boom Hidden Within One Of America’s Biggest Cities

When you think of giant oil fields you probably conjure up an image of vast areas of land or sea suitable for digging. However, Los Angeles demonstrates that oil extraction can take place right under our feet, producing as much as 100 million barrels every year. Compared to other major oil sites across the world, L.A. disguises oil diggers, sprawled across the city, as towers and buildings, so as not to look out of place. Six-story buildings and painted towers have been constructed across the city as facades to big oil diggers, extracting the black gold out of sight of daily commuters and tourists. Let’s talk more about oil boom.

With approximately 5,000 urban oil wells and 70 functioning oil fields, L.A. is a giant producer that no one talks about. There are a few other locations where extraction projects are taking place right in the center of the city, next to schools, businesses, and hospitals. Except for long-standing residents who have learned of the digging, few know about the urban oil production happening right on their doorstep.

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Source: Oil Price

If you have further questions about oil boom, feel free to reach out to us here.

How long do mineral rights last?

U.S. Oil Output Is Set to Rise Next Year on Higher Prices, Drilling

The U.S. government is forecasting oil production to rise about 3.5% next year spurred by higher crude prices and a rebound in shale drilling.

Oil output will average 11.49 million barrels a day in 2022, according to the Energy Information Administration. The agency, which left its production estimate for this year unchanged at 11.1 million, said that recent crude price increases and rig additions will help production in the Lower 48 states begin to rise in the second quarter of this year.

U.S. crude production is hovering at about 11 million barrels a day, after climbing above 13 million early last year before the pandemic crushed demand.

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Source: Bloomberg

how to find oil on your land

Why Natural Gas Prices Are Set To Go Higher

Winter temperatures below seasonal norms in the northern hemisphere have created a rally in natural gas prices from Asia to Europe. The spot liquefied natural gas (LNG) prices in north Asia jumped to record highs last week, while the key price marker in Europe, the Dutch Title Transfer Facility (TTF), rallied to the highest in more than two years.

The natural gas markets at the start of 2021 look completely different from the beginning of last year, when milder weather and the pandemic hit to demand had dragged natural gas prices down to historic lows.

This winter season, a rebound in Asian natural gas demand, supply issues at major LNG exporters, logistics issues at the Panama Channel, soaring tanker rates, and last but not least, the cold snap from Madrid to Tokyo, are pushing gas prices higher.

Even when temperatures return to seasonal norms in coming weeks and the Polar Vortex-induced cold spells in Europe end, natural gas prices will continue to be supported through the spring and summer, as buyers would look to restock, analysts say.

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Source: Oil Price

Why Oil Will Keep Rising In 2021

We have seen strong moves higher in the key crude oil benchmarks-WTI, and Brent, in the last several months. This was initiated by the advent of positive news on the Covid front that the vaccines in development were extremely efficacious, promising an endpoint to the spread of the virus. This upward trend in crude was boosted by the gradual decline in U.S. shale production and inventories over the same period.

Finally, the move in early January, by OPEC+ to restrain output into mid-2021, and an extra “gift” from Saudi Arabia to remove another 1-million BOPD from the market, provided the impetus for WTI to rise firmly into the $50s. In this article, we will discuss key reasons that we think the upward trend for crude will continue this year. Why

Demand will return

In spite of the current lockdowns which inhibit demand, the trend is higher. As implementation of the vaccines increases the pool of the virus-immune population, business activity will resume creating demand for refined petroleum products. The graph below shows the EIA’s, Energy Information Agency, forecast of the trend for refined products over the next couple of years.

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Source: Oil Price

Best 3 Stocks to Buy Now

Best 3 Stocks to Buy Now As Oil Prices Rise Above $50

As oil prices continue to maintain the latest trajectory above the psychologically significant $50/barrel level, investors are increasingly recalibrating their investment prisms for beaten-down oil and gas companies. So what are the Best 3 Stocks to Buy Now?

WTI has rallied 12.8% over the past 30 days to trade at $53.02 per barrel while Brent is up 12.3% to $56.49, levels they last touched nearly a year ago thanks to a revamped OPEC-plus deal as well as an unexpected bonanza after Saudi Arabia announced plans to unilaterally cut its oil production by another 1M barrels.

Enter Shale 3.0.

For a sector that was supposed to be on its deathbed, U.S. shale might be the biggest beneficiary yet of the oil rally as higher crude prices offer a much-needed reprieve to strained balance sheets. The U.S. shale patch bears some of the highest production costs in the world, with most companies in the sector needing oil prices between $50 and $55 per barrel to break even.

That’s highly significant because it implies that another 5-10% climb in oil prices from here could mean the difference between bleeding cash and gushing profits for the shale sector.

But not all oil and gas companies need such high oil prices to break even, with a handful solidly in the green even at current prices.

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Source: Oil Price

If you have further questions aside from the Best 3 Stocks to Buy Now above, feel free to reach out to us here.

oil-and-gas

What Were the Top Oil and Gas Trends in 2020?

2020 has been an extraordinary year for the oil and gas industry. When Rigzone asked several informed industry-watchers what they considered the biggest oil and gas trends during such a momentous year, their responses focused largely on two areas: digitalization and consolidation. Read on for their insights.

Bob Benstead, Vice President, Strategic Planning with business cloud software firm Infor: One of the biggest trends I’ve seen in oil and gas in 2020 has been a reduction in operating costs through fewer full-time equivalents (FTEs) and the deferral of capital projects. Another is the growing desire for companies to take on digital initiatives hat require them to look outside of their traditional industry.

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Source: Rigzone

what are mineral rights

These U.S. Oil States Are Holding Lease Sales In January

Several U.S. states will hold oil and gas lease sales via EnergyNet in January, with most of the bids due before January 20 when President-elect Joe Biden is scheduled to take office.

Biden’s energy plan favors renewables development and promises a ban on new oil and gas leases on federal lands.

Alaska, New Mexico, Texas, and North Dakota plan oil and gas lease sales this month, according to the EnergyNet schedule.

The Alaska Department of Natural Resources will be offering 284 tracts covering an estimated 867,841 acres in the Beaufort Sea area, in an online sealed bidding that ends on January 7. Alaska DNR is also offering oil and gas lease sales in the North Slope area, with bidding ending on January 7.

BLM is holding on January 14 an online sale of 37 parcels covering 6,850.72 acres in New Mexico, Texas, Oklahoma, and Kansas.

The Texas General Land Office will hold on January 19 an oil and gas lease sale, offering 66 Tracts covering 22,500.607 net mineral acres available for lease.

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Source: Oil Price