Where Will Oil And Gas Go in the 2020s

Where Will Oil And Gas Go in the 2020's
Aerial view of oil refinery during sunrise.

Where Will Oil And Gas Go in the 2020’s – SCOOP/STACK Play – Oklahoma

In December, Bison announced that it was acquiring the water infrastructure assets of Gulfport Energy Corp. in the SCOOP area of the Anadarko Basin. The $50 million deal is the latest in a series of infrastructure acquisitions by Bison. Simultaneously, Bison announced it entered into a 15-year agreement with Gulfport in which Bison will exclusively manage all of Gulfport’s water gathering, recycling, storage, reuse, disposal, transportation, logistics and sourcing needs within a dedicated area across Grady, Garvin and Stephens counties.

Houston-based Infrastructure Networks announced in early January that it had reached a deal with Nokia that will bring 5G cellular service to five major shale basins, including the SCOOP/STACK. “Operators, drillers and oilfield service companies can now embrace automation, artificial intelligence analytics and machine learning, only made accessible with next generation, high-bandwidth, low-latency connectivity,” Infrastructure Networks CEO Mark Slaughter said in a statement.

Where Will Oil And Gas Go in the 2020’s – Eagle Ford Shale – Texas

Houston-based Apache Corporation announced in early January that it would close its San Antonio office, and lay off many of the 270 employees located there. The office has served as a satellite headquarters for the management of the company’s assets in both the Eagle Ford region and the Permian Basin. Some of the San Antonio employees will be asked to relocate to either Houston or the company’s Permian Basin field offices.

The Eagle Ford region finished 2019 with 67 active drilling rigs, according to the Baker Hughes weekly rig count. That compares to 80 active rigs in the area at the end of 2018.

Where Will Oil And Gas Go in the 2020’s – Marcellus/Utica Shale – Pennsylvania/West Virginia/Ohio

In its December earnings call, Chevron CEO Michael Wirth announced his company would begin the process of divesting its Marcellus Shale assets. Wirth indicated that proceeds from the sale of the company’s Marcellus holdings – which were purchased from Atlas Energy for $3.2 billion in 2011 – would largely be applied to boost its operations in the oil-rich Permian Basin.

Natural gas production in the Appalachian region declined by almost 1 bcf per day during December in the face of chronic low natural gas prices. The Henry Hub index for U.S. natural gas prices hovered around the $2.20 per MMBtu level as the year came to a close.

Where Will Oil And Gas Go in the 2020’s – Bakken Shale – North Dakota/Montana

The rich Bakken play set new production records for both oil and natural gas during the month of Oct. 2019. Bakken Shale natural gas production in North Dakota topped 3 Bcf/d in October, while oil exceeded 1.5 million bpd, setting new records in the state.

Department of Mineral Resources (DMR) Director Lynn Helms reported a month/month oil production increase of 5% and a 4% hike over the same time for gas. Oil prices exceeded estimates by 2% in October at nearly $42.00 a barrel for Bakken sweet crude.

Outrigger Energy II announced in early January that it has entered into a long-term gas gathering and processing agreement with XTO Energy Inc. to service XTO’s production in Williams County, North Dakota. The gathering system will comprise a 70-mile, 20- and 24-inch diameter, rich gas pipeline originating in eastern Williams County and terminating at a new 250 MMcfd cryogenic gas processing plant located west of Williston, ND.

Where Will Oil And Gas Go in the 2020’s – Denver/Julesburg (DJ) Basin – Colorado

It’s déjà vu all over again: The same group that pushed Proposition 112 in the 2018 election process has filed six new ballot initiatives with the state, with five of those pushing for longer drilling setbacks. 

Proposition 112, which called for drilling setbacks from occupied structures and vulnerable areas to increase from 500 feet to 2,500 feet, failed at the ballot box 57% to 43% in Nov. 2018. Similar to Prop 112, most of the proposed ballot initiatives filed in early January involve drastically increasing setbacks for all new oil and gas development. Current drilling setbacks are 500 feet from homes and 1,000 feet from schools, hospitals and playgrounds.

Where Will Oil And Gas Go in the 2020’s – Haynesville/Bossier Play – Louisiana/East Texas

Royal Dutch Shell divested its last remaining Haynesville assets in mid-January, selling 55,000 net acres to Houston-based Castleton Resources. Castleton primarily focuses on the Haynesville in East Texas and Louisiana. It acquires existing wells that are currently producing more than 100,000 cubic feet of natural gas per day. The sales price was not disclosed by either company.

Kinder Morgan CEO Steven Kean said in mid-January that it would complete significant expansions of its North American gas pipeline system in the coming years, thanks to production growth from shale and tight natural gas regions like the Haynesville. Kinder Morgan expects the Haynesville to deliver 8 bcf per day of incremental production by 2030

KMI currently sports $2.8 billion backlog of gas projects in North America, which Kean says is driven by exports. “Really, it’s exports,” Kean said. “It’s LNG and Mexico that are driving this.”

Where Will Oil And Gas Go in the 2020’s – Permian Basin – Texas/New Mexico

A new report issued in January by the Texas Independent Producers and Royalty Owners Association (TIPRO) finds that the oil and gas industry directly employs more than 87,000 people in the Texas portion of the Permian Basin. TIPRO’s report said the upstream sector remained the top employer for oil and gas in the Permian basin last year. Support activities for oil and gas operations supported 54,507 positions, crude petroleum and natural gas extraction supported another 16,572 jobs and drilling oil and gas wells supported 6,554 jobs, according to the report.

Stage Completions (USA) Corporation announced a record-setting 221-stage Permian well completion on Jan. 14.  The 5.5″ Bowhead II Sliding Sleeve System becomes the largest interventionless hydraulic fracturing operation completed to date. Stage says the operation was accomplished in six days (41 stages per day), and it was part of a larger campaign where a total of 1,095 Bowhead II sliding sleeves across six wells were fractured.

 

Shale Oil & Gas Magazine  

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