10 Things You Should Know About Oil and Gas Today – 4.2.2020

PennEast Pipeline

Here are 10 things you need to know about oil and gas for April 2, 2020:

Oil And Gas M&A Deals Crash Along With Prices – A new report from Enverus (formerly DrillingInfo) shows that mergers and acquisitions activity within the oil and gas industry crashed during the first quarter along with the price for crude oil. The report details just $770 million in domestic M&A activity, less than 1/10th of the average quarterly activity seen in the industry over the previous ten years.

Railroad Commissioner explains “greatest oversupply in the history of the oil and gas industry”Excerpt:

Sitton said production worldwide needs to drop by about 18 million barrels per day. He added that if the current oversupply rate continues, global oil storage will be full in 72 days.

“The producers need to shut-in now,” University of Houston Energy Fellow Ed Hirs said. “If I can shut-in a well today and not sell it for $6, but produce it a year from now at $40. That’s a huge profit over what I’d be making now.”

Trump to host oil meeting: Who’s going and why it mattersExcerpt: The White House is inviting the country’s top oil executives to a meeting tomorrow about the oil crisis as a wave of layoffs, spending cuts and bankruptcies send shock waves through the industry. The meeting is intended to discuss the Trump administration’s response to the novel coronavirus epidemic that has sapped demand for energy and comes amid an international oil price war, a double punch that has caused chaos in the drilling industry, sources said. Trump told reporters yesterday that he may meet with independent oil producers over the weekend as well. “We have a great oil industry, and the oil industry is being ravaged,” Trump said. Expected to attend the White House tomorrow are Exxon Mobil Corp. CEO Darren Woods, Chevron Corp. CEO Mike Wirth, Occidental Petroleum Corp. CEO Vicki Hollub and Energy Transfer Partners CEO Kelcy Warren, according to sources familiar with the discussions.

Shale-well frackers grind to a halt as oil prices collapse – Reuters piece with a typically-biased and stupid headline does contain some decent information.

Oil Price Crash Pushes Whiting Petroleum To Bankruptcy As Stock Slumps 91%Excerpt:

Whiting Petroleum Corporation WLL has become the first oil and gas sector casualty of the current slump in crude demand in the wake of the coronavirus or Covid-19 global pandemic, and the price war between producers triggered by Saudi Arabia and Russia.

Early on Wednesday (April 1), Denver, Colorado, U.S.–headquartered Whiting announced it had filed for Chapter 11 bankruptcy protection in the Bankruptcy Court for the Southern District of Texas, prompting a suspension of its shares (NYSE:WLL) on the New York Stock Exchange.

In a statement, Whiting said its board had concluded that given a severe downturn in oil and gas prices resulting from the Saudi Arabia-Russia oil price war and coronavirus-related impact on demand, a financial restructuring was the “best path forward” for the company.

Utah’s GOP members of Congress want to give oil, gas and mining companies a break – First, Wyoming and now Utah’s members of congress set a good example on things that can be done to help the embattled industry. When will Texas’s state and federal politicians follow suit? It’s a question that needs to start being answered soon.

Producers explore creation of North American oil cartel to manage output amid worsening crisisExcerpt:

As the Canadian oil sector weathers one of its lowest points ever, a new movement is gaining momentum with producers and the Alberta government to create a North American cartel that could manage production across the continent and stabilize the industry.

The idea is gaining currency among many smaller, independent producers who are feeling the pain from a dramatic drop in oil prices, including in Alberta and also throughout the U.S., particularly in Texas, where a legal framework for cartels already exists.

Such an organization could, in theory, function like the Organization for Petroleum Exporting Countries or OPEC, which until recently had played the role of swing producer to stabilize prices. In recent weeks, OPEC kingpin Saudi Arabia decided to raise production to drive down prices in a move that is likely to squeeze out high-cost producers across North America and elsewhere.

Fracking Banned in New York State Budget – Meanwhile, in New York, the stupidity towards oil and natural gas just chugs right along even in the midst of a national crisis. You seriously could never make these people up.

Marathon Petroleum Corporation earns 2020 ENERGY STAR® Partner of the Year – Sustained Excellence AwardExcerpt: Marathon Petroleum Corporation (NYSE: MPC) has earned the U.S. Environmental Protection Agency’s (EPA’s) 2020 ENERGY STAR Partner of the Year – Sustained Excellence Award, the highest honor among ENERGY STAR awards. MPC is the only fuels manufacturing company to earn the award, which recognizes the company for sustained, top-tier energy efficiency and excellent environmental compliance.

Oilfield spending to tumble 21% in 2020 – reportExcerpt:

Global spending on oilfield equipment and services (NYSEARCA:OIH) will fall 21% this year to $211B, the lowest level since 2005 and below industry outlays at the low point of the 2016 oil price crash, according to a report from the Spears & Associates consultancy.

Oilfield segments with the greatest share of North American revenue will see the biggest hits, with hydraulic fracturing spending down 44% Y/Y and land contract drilling down 29%, Spears says.

That’s all for today.


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