What You Should Know About Oil and Gas Today
The Big Story
Welcome to the second half of 2020, or as we like to call it, the year that cannot end soon enough!
The country’s largest independent shale producer, ConocoPhillips, announced that it plans to start bringing its shut-in production back online during July. In a statement published yesterday, the company said:
For the second quarter of 2020, the company’s curtailments were primarily related to oil production and averaged approximately 225 thousand barrels of oil equivalent per day (MBOED) on a net basis. Of the total net curtailments, approximately 65 percent were in the Lower 48, 15 percent were in Alaska and 15 percent were in the Surmont operation in Canada. The remainder of the second-quarter curtailments were primarily in Malaysia. Including impacts from curtailments and planned seasonal turnaround activity, the company expects to report second-quarter production volumes of 960 to 980 MBOED. Excluding Libya, and adjusting for closed dispositions and curtailments, production in the second quarter of 2020 is expected to be in line with the same period a year ago and approximately 5 percent below the first quarter of 2020.
Thus, COP joins other big shale producers like Parsley Energy, Concho, Continental Resources, Devon Energy and EOG Resources in efforts to restore shut-in shale production as crude prices slowly improve.
In other news…
The price for West Texas Intermediate breached the $40/bbl mark again early this morning, though it has fallen back to just below that level as of this writing.
Meanwhile, the Enverus Daily Rig Count fell to just 272 active rigs across the country yesterday, another all-time low level. As the larger, corporate companies now begin to execute on their lower 2nd-half budgets as of today, we should expect the number of active rigs drop lower as the year goes on.
The Petroleum Economist says that no rebound is in sight for the domestic industry right now in an interesting analysis piece. Still, the author cites encouraging signs of a rebound in demand taking place due to the reopening of economies around the world.
Apparently with a straight face, the Associated press reports that a new climate bill introduced by cynical congressional Democrats this week “would end greenhouse gas emissions by 2050.” That contention is, of course, completely false. This story is the very definition of fake news written by reporters utterly lacking in any sense of curiosity or personal integrity.
One proponent of climate change, Dr. Michael Shellenberger, has a piece at Quillette today in which he offers his sincere apologies for all the rampant societal damage that has been wrought by climate alarmism of the last 30 years. Everyone truly interested in the truth about climate change hysteria should take 10 minutes and go read his piece. You will be glad you did, and better educated for having done so.
One area that continues to perform comparatively better than the rest of the industry is the natural gas-heavy Haynesville Shale, which has just seen the completion of a new gas gathering system by Align Midstream Partners II. As reported by Kallanish Energy, The pipeline is a 30-mile, 16-inch-in-diameter pipeline in the area around Carthage, Texas, near the Texas-Louisiana border in the Haynesville Shale. There are interconnects to several downstream markets.
“The TOPS Pipeline will bolster our existing East Texas footprint and enhance our ability to serve the growing Haynesville production, providing our customers with greater access to a number of attractive markets across the Carthage hub,” said Align CEO Fritz Brinkman in a statement.
In a very interesting story, Oxy extended a deadline for bidding on a huge swath of its leasehold in Southern Wyoming so that the state itself could extend an offer for it. The state of Wyoming is looking at purchasing the lands as a means of diversifying its investment portfolio. State officials believe that the lands in the gas-rich Piceance Basin could ultimately become extremely lucrative should natural gas prices ever rebound.
That’s all for today.