Shale Gas

Massive Natural Gas Deposit Discovered In The Gulf Coast Basin

22 Apr 2017   Shale Gas, USA

Technological advancements have just pushed the boundaries of recoverable oil and gas in the U.S. further, according to an announcement by the U.S. Geological Survey. The agency reported that two formations in the Gulf Coast Basin may contain as much as 304.4 trillion cubic feet of natural gas plus 1.9 billion barrels of natural gas liquids, making the area the largest untapped continuous gas deposit in the country. The two formations—Haynesville and Bossier—also contain some 4 billion barrels of crude, according to mean estimates, the USGS also said in a press release. (Click to enlarge) Most of the newly recoverable gas is in the Haynesville formation, which contains around 195.8 trillion cubic feet. It also holds 900 million barrels of natural gas liquids and some 1.1 billion barrels of oil. The rest is in the Bossier formation. The USGS has been reassessing a lot of oil and gas deposits […]

EIA expects natural gas to be largest source of U.S. electricity generation this summer

Short-Term Energy Outlook (STEO) expects that electricity generation fueled by natural gas this summer (June, July, and August) will be lower than last summer, but it will continue to exceed that of any other fuel, including coal-fired generation, for the third summer in a row. The projected share of total U.S. generation for natural gas is expected to average 34%, which is down from 37% last summer but still exceeds coal’s generation share of 32%. Based on data from the National Oceanic and Atmospheric Administration (NOAA), EIA estimates that average U.S. population-weighted cooling degree days in the summer of 2016 reached the highest level on record. NOAA projections for this summer indicate cooling degree days will be 11% lower than last year. These milder expected temperatures lead to forecast U.S. summer electricity generation of 1.16 billion […]

New U.S. pipelines to drive natural gas boom as exports surge

13 Apr 2017   Pipelines, Shale Gas

U.S. energy firms are scrambling to finish a slew of pipelines that will unleash rich reserves of shale gas in Pennsylvania, West Virginia and Ohio as the nation prepares to become one of the world’s top natural gas exporters. The pipelines are expected to boost output from shale fields in the three states by giving producers access to new domestic and international markets. Those states could supply about a third of all U.S. natural gas once the pipeline expansion is complete, up from about 25 percent now, according to projections from the U.S. Energy Information Administration (EIA). The network will bring cheaper fuel supplies for power generation and industry being built in the eastern half of Canada and the United States, especially along the U.S. Gulf Coast. It would also transport the huge volumes needed to feed facilities that chill the gas to liquid so it can be shipped […]

Is Natural Gas In The Midst Of A Boom-Bust Cycle?

5 Apr 2017   LNG, Shale Gas

After six decades of relying on outside sources, the United States is poised to become a consistent net exporter of natural gas . The shale boom and the rush to embrace LNG has fueled the shift, one that will have significant consequences for natural gas prices around the world. In 2016, total U.S. natural gas imports reached 3 trillion cubic feet, the bulk of which came via pipeline from Canada. Month to month, natural gas imports hovered around 250 billion cf, according to data from the EIA . Exports, however, have been shooting up from less than 60 million cf in 2006 to 269 million in January 2017. The ratio of imports to exports has been falling for years, and 2017 will be the year that exports officially exceed imports for the first time since 1957. That date is significant, as it was the year the United States imposed […]

Gas Giants Share OPEC’s Shale Pain as U.S. Supply Flows East

4 Apr 2017   Shale Gas

OPEC isn’t the only decades-old energy hegemony being turned on its head by U.S. shale. Liquefied natural gas sellers from Qatar to Malaysia that dominated gas sales to Asia for years are facing the prospect of rising American exports. While less than 30 U.S. cargoes have landed in Asia, their effect was felt even before they arrived. LNG trade in 2016 jumped the most in five years, contract lengths were sliced in half in the past decade, and spot prices slumped more than 60 percent in the past three years. That means the global LNG titans gathering in Tokyo this week for Gastech are in the midst of the biggest shakeup since the industry was founded in the 1960s. Just as American crude is increasingly making its way to Asia, the world’s biggest oil market, the burgeoning armada of gas cargoes from the U.S. and elsewhere are poking holes […]

U.S. lower 48 natgas output down for second straight month: EIA

1 Apr 2017   Shale Gas, USA

U.S. natural gas output in the lower 48 states declined for a second month in a row to 78.3 billion cubic feet per day (bcfd) in January, the U.S. Energy Information Administration (EIA) said on Friday in its monthly 914 production report. That compared with 78.7 bcfd in December. Production peaked at 82.6 bcfd in February 2016. Output declined in two of the three biggest producing states in the lower 48, Texas and Oklahoma, but held at a record high in Pennsylvania. In Texas, the country’s largest gas-producing state, output declined for a ninth month in a row, down 0.2 percent to 20.6 bcfd in January from December. That was the state’s lowest level of monthly output since February 2011. Production in Oklahoma declined for a fifth month in a row, down 0.8 percent to 6.4 bcfd in January, its lowest monthly output since June 2014. In Pennsylvania, output […]

Is Haynesville About To Make A Comeback?

31 Mar 2017   Shale Gas

Back in early 2011, the Haynesville shale play in east Texas, northwest Louisiana, and southwest Arkansas surpassed the Barnett Shale in Texas as the highest-producing shale gas play in the U.S., according to reported pipeline flows. Since 2013, however, Haynesville production has been falling amid low gas prices, and the shale play has been outrun by the lower-cost Marcellus and Utica basins in the Northeast. The Haynesville may have been down, but it is not yet out. Recent production forecasts and Haynesville’s geographical proximity to the Sabine Pass LNG terminal and other planned LNG export facilities, as well as its proximity to planned additional pipeline capacity to Mexico, may help Haynesville come back to life again. The uncertainty and downside, as always, are the price of natural gas and concerns that a glut would keep prices low, at least in the short to medium term. But many producers have […]

Shale Gas Is Back With This $2 Billion Acquisition

24 Dec 2016   Shale Gas

A nearly $2 billion natural gas deal could signal a sign that companies are interested in gas drilling again after a long downturn. Gulfport Energy announced plans to issue new shares in order to finance a $1.85 billion acquisition of acreage in Oklahoma’s SCOOP basin. The SCOOP has emerged as arguably the next most exciting shale play, with acreage still largely undeveloped. The Marcellus and Utica Shales in Pennsylvania and Ohio have been home to the bulk of the shale gas revolution, although Oklahoma has seen years of shale gas drilling as well. Now with the Marcellus having been poked with tens of thousands of wells, natural gas drillers are moving on to greener pastures. The rig count outside of the handful of major shale basins is now at its highest level in almost a year. Adding fuel to the fire is the recent rise in natural gas prices, […]

Chesapeake says it’s ready for recovery after big divestments

21 Dec 2016   Shale Gas, USA

Struggling shale company Chesapeake Energy said Tuesday it was anticipating a recovery next year after releasing a good portion of its non-core gas assets. The company said it sold another portion of its holdings in the Haynesville shale basin in Louisiana to rival Covey Park energy LLC for about $465 million. Doug Lawler, the company’s CEO, said total sales of Haynesville acreage so far have totaled almost $1 billion. “We will continue to pursue opportunities to strengthen our balance sheet in 2017,” he said in a statement . The company, which has headquarters in Oklahoma, in early February retained the services of longtime counsel Kirkland & Ellis to help manage debt and strengthen its balance sheet , targeting a 57 percent reduction in spending from 2015. In August, the company left the Barnett shale basin in Texas and earlier this month sold off […]

U.S. natural gas production resilient to market changes in 2015, but has fallen in 2016

17 Dec 2016   Shale Gas

U.S. dry natural gas production continued to increase in 2015, reaching 74.1 billion cubic feet per day (Bcf/d). This record-high level was a 4.5% (3.2 Bcf/d) increase over 2014, according to EIA’s Natural Gas Annual , which provides final production data for 2015. The increase in 2015 production levels marked the tenth straight annual increase, with the most recent increase occurring despite natural gas prices at the Louisiana Henry Hub declining more than 40% from an average of $4.55 per million British thermal unit (MMBtu) in 2014 to $2.62/MMBtu in 2015. Source: U.S. Energy Information Administration Production gains were highest in Pennsylvania, Ohio, and West Virginia, due in large part to production from the Marcellus and Utica/Point Pleasant shales. These three states accounted for most of the total increase in 2015. Although annual production in 2015 grew, monthly U.S. natural gas […]

$2 Billion Gulfport Buy Shows Drillers Thirsting for Next Play

16 Dec 2016   Shale Gas, USA

America’s shale gas drillers are back to looking for the next big play. On Wednesday, Gulfport Energy Corp. struck a deal to buy acreage in an oil and natural gas field in Oklahoma known as Scoop for $1.85 billion, marking its first foray in a region that Newfield Exploration Co. has devoted most of its capital budget to and Devon Energy Corp. invested almost $2 billion in late last year. Gulfport Chief Executive Officer Michael Moore described the acreage as a “sizeable and scalable footprint in a new operating area.” The deal underscores renewed interest among drillers in exploring emerging plays outside the heart of the U.S. shale gas boom — the Marcellus formation of the Appalachian Basin. The number of rigs drilling outside major basins has rebounded to the highest levels since February […]

Chesapeake Energy Drills Deeper for Profit

16 Dec 2016   Shale Gas

Chesapeake Energy is drilling a massive well in the Haynesville shale outside Shreveport, La., Doug Lawler watched a drilling rig’s high-pressure pumps rumble as workers bored in to a massive natural-gas well, part of a new drilling campaign the Chesapeake Energy Corp. chief executive calls “Prop-a-geddon.” Named for the sand that drillers use to prop open hydraulically fractured rocks, Prop-a-geddon is an experiment to create supersize oil and gas wells that the company estimates can extract fossil fuels for roughly 75% less than typical wells, thanks to potentially greater economies of scale. This well, in the Haynesville Shale formation around Shreveport, La., went 2 miles deep and another 2 miles horizontally, and used 51 million pounds of sand, which the company believes is a world record. Typical wells in this area extend about 5,000 feet, or less than a mile. “It’s the biggest job in the […]

Pennsylvania levels $3.5 million fine against gas driller

8 Dec 2016   Shale Gas

 Pennsylvania environmental regulators have fined a natural-gas driller more than $3.5 million for violations at 10 well sites and six pipeline locations. The Department of Environmental Protection said Wednesday that subsidiaries of Rice Energy Inc. operated an unpermitted wastewater impoundment that leaked, improperly constructed wells, violated rules for erosion and sediment control, failed to obtain permits and committed other infractions. Regulators say the violations took place over several years at sites in Washington and Greene counties, in western Pennsylvania. Canonsburg-based Rice has already paid the fines. DEP has entered into several agreements with Rice and says the company has either fixed or is scheduled to fix the problems at its wells and pipelines. A Rice Energy spokeswoman did not immediately return a call for comment.

NREL sees natural gas, renewables gaining US market share

18 Nov 2016   Renewables, Shale Gas

Natural gas-fired and renewable resources are expected to enjoy growing generation mix shares over the next three decades, driven by low-cost gas and renewable energy cost declines and performance improvements, according to analysis by the US Department of Energy’s National Renewable Energy Laboratory. The report released Wednesday — the 2016 Standard Scenarios: A US Electricity Sector Outlook — aims to identify a range of possible futures for the US electricity sector. The emergence of low-cost gas has driven major changes in the power sector, with the annual average capacity factor for combined-cycle generators jumping from 35% in 2005 to over 56% in 2015 at the expense of coal-fired generation, the report said. NREL expects gas prices to remain generally low. “Despite increases in commodity prices, including natural gas prices, in mid-2016, the outlook for continued low-priced natural gas looks firm, given the currently high levels of underground storage and […]

Judge issues temporary stay of some Pennsylvania drilling rules

11 Nov 2016   Shale Gas

In a ruling in a lawsuit brought by the Marcellus Shale Coalition, a Pennsylvania judge on Tuesday ordered the temporary stay of several key provisions of a set of natural gas drilling regulations recently promulgated by the state’s Department of Environmental Protection. In an order handed down in the Commonwealth Court of Pennsylvania, Judge Kevin Brobson issued a preliminary injunction blocking the state from enforcing provisions of the rules pertaining to public resources, well permit reviews, wastewater impoundment and site restoration. However, the ruling denied the MSC’s request for an injunction to block other provisions of the regulations pertaining to onsite processing, the remediation of spills and waste reporting. The MSC filed the suit in October to block the implementation of seven provisions of Chapter 78a of the Pennsylvania Code. The rules, which regulate many aspects of unconventional gas drilling, took effect October 8. Article Continues below… Your source […]

President Trump: This Is How To Bring Back 1 Million Energy Jobs

11 Nov 2016   Shale Gas, USA

Dear President-Elect Trump, There’s work to be done. And I know you’re up for a challenge. In fact, I’m now sure of it. So let me lay out a policy position that I am truly hoping you will adopt as your own. I’m talking about natural gas as a transportation fuel: cheap, clean, abundant natural gas. And I’m talking about U.S. energy independence, balanced budgets, jobs, trade and the environment. We use natural gas for power generation and as a heating fuel but that’s an old story for a new reality. Fracking has unlocked a phenomenal amount of gas in the last decade. Our onshore wells are rivaling the reserves of the deep offshore giants. And we’re getting much more for much less these days. North America also has over 2 ½ million miles of pipeline with more coming on line plus distribution capabilities in every […]

U.S. gas production shows tentative signs of upturn: Kemp

2 Nov 2016   Shale Gas

U.S. natural gas production may be stabilising or even starting to rise as the boost to oil and gas prices in recent months stimulates an increase in new drilling. Marketed dry gas production amounted to 2,239 billion cubic feet in August, down from 2,302 bcf in August 2015, according to the U.S. Energy Information Administration ( tmsnrt.rs/2e9e05u ). Gas production has been down year on year by an increasingly large percentage since March as the effect of low prices and a reduction in drilling filters through. Output in July was down by more than 4 percent compared with the same month a year earlier, according to EIA survey data. But production bucked the trend in August and was down by just 2.7 percent from a year earlier ( tmsnrt.rs/2e9k1z2 ). Extrapolating a trend from a single month’s data is risky especially when the series has a high level of […]

Gas industry challenges new drilling rules in Pennsylvania

15 Oct 2016   Shale Gas

The natural gas industry in Pennsylvania is challenging new state regulations that govern surface development of shale gas wells, saying they threaten jobs and investment by adding up to $2 million to the cost of drilling a well. Energy companies in the Marcellus Shale, the nation’s largest natural gas field, filed suit against the Pennsylvania Department of Environmental Protection and the state’s Environmental Quality Board over rules that took effect last week, calling them financially burdensome, vague and unlawful. “The provisions we are challenging impose immediate harm to our industry because they affect our ability to operate and remain competitive,” David Spigelmyer, president of the Marcellus Shale Coalition, said Friday in a conference call with reporters. The suit, filed Thursday, marks the first time the powerful trade group has taken the state to court over drilling rules. It seeks to block enforcement pending a ruling on their legality. Neil […]

The U.S. Is Set To Dominate Global Natural Gas Markets

13 Oct 2016   Shale Gas, USA

The shale revolution has changed the U.S. natural gas production and trade dynamics forever. Domestic output and exports have been rising, to the point where the U.S. is poised to become a natural gas net exporter in the second quarter of next year, the EIA said last month. In this scenario of abundant resources, U.S. companies have been planning on building pipelines and LNG export terminals to ship domestically-produced natural gas to Mexico, Canada and to future LNG export hubs along the coast. These exports hubs will be used for further LNG shipments to markets in South America, Asia, Europe, and the Middle East. Since Cheniere Energy ( NYSEMKT:LNG ) shipped the first U.S. LNG commissioning cargo out of its Sabine Pass LNG terminal en route to Brazil in February of this year, the terminal has exported an estimated 113 Bcf of LNG to 12 countries […]

Is The Era Of Cheap Natural Gas Over?

11 Oct 2016   Shale Gas

Natural gas prices have been low for years, as shale gas drillers continued to break records with higher and higher production. But just as the oil markets have gone through a very painful bust that is leading to a drop off in supplies, the market for natural gas is going through a similar period of adjustment. Not only that, but demand is on the rise, with a wave of new gas-fired power plants coming online. The result is a much tighter market for gas than we have seen in years. Before there was a boom in oil production in the United States, the shale gas revolution led to massive flood of new supply, which sent prices careening downwards. Natural gas spot prices are always volatile, but have largely traded below $3 per MMBtu since 2014. With prices so low, companies pared back drilling plans and focused […]

Pennsylvania adopts new fracking regulations

8 Oct 2016   Shale Gas

Pennsylvania Governor Tom Wolf speaks on the final night of the Democratic National Convention in Philadelphia, Pennsylvania, U.S. July 28, 2016. New regulations governing the extraction of natural gas through fracking will go into effect on Saturday in Pennsylvania, the first overhaul since the industry took off in the state more than 10 years ago. The new rules allow the state’s department of environmental protection to require additional measures if fracking is taking place near public resources, and requires drillers to restore water supply that is degraded or damaged through fracking, according to the statement. Environmental groups hailed the new rules. An oil and gas industry group blasted the regulations, with a spokesman saying he expected legal challenges. The rules have been in development since 2011, and faced opposition from the oil and gas industry and their allies in the state legislature, where the regulations were rejected earlier this […]

New wave of power plants is fueling U.S. gas demand: Kemp

5 Oct 2016   Shale Gas, USA

(John Kemp is a Reuters market analyst. The views expressed are his own) The United States is experiencing a structural increase in gas demand with more gas-fired power stations operating more hours per year and consuming a record volumes of gas. But domestic gas production is turning down, with output nearly 4 percent lower in July 2016 compared with July 2015 (“Falling U.S. gas output meets stronger demand”, Reuters, Oct 3). Growing demand for gas and shrinking supplies are not sustainable, so gas prices will have to rise to encourage more drilling and limit the use of some gas-fired power plants. U.S. power producers had 448 gigawatts of gas-fired generation capacity in July 2016, an increase of 25 gigawatts since the end of 2012, according to the Energy Information Administration ( tmsnrt.rs/2dOroBg ). Installed gas-fired capacity is scheduled to grow by another 11.5 gigawatts to 459 gigawatts by the […]

Statoil completes sale of Marcellus acreage

17 Sep 2016   Shale Gas

Norwegian energy company Statoil said it retained some of its shale acreage in the United States, but completed a sale Friday of assets in West Virginia. Statoil said it closed Friday on the $96 million sale of 11,500 acres in the Marcellus shale natural gas basin in West Virginia to Antero Resources Corp. The Norwegian company retains about 350,000 net acres of the Marcellus shale natural gas basin in Ohio. The sale from the Marcellus shale, initialized in August, is the third for Statoil in the past two years. In December 2014, the company sold some of its interest in Marcellus for $394 million after suspending some rig work to save capital. […]

Is This A Sign That Oil Majors Are Becoming More Bullish

14 Sep 2016   Shale Gas

Drilling Rig French oil company, Total SA announced in a press release Friday that it would be exercising the rights to obtain 75 percent of the lease agreements in the Barnett shale gas and oil fields. The company already possesses the other 25 percent of the field, meaning they would have total production control. This comes at a time when Chesapeake Energy Corporation makes a move to exit the fields. Total will acquire the rights to produce after paying Williams Partners $420 million next quarter. In 2011, the Barnett field was home to over 80 oil rigs ; today that number has fallen to 3. Production can see substantial reductions when oil and gas prices are low. Natural gas production from the Barnett shale peaked in 2012 with 5,743 mb/day and oil in 2013 with 5,641 b/day. Total SA investing and acquiring the 215,000 acres could be signs of […]

France’s Total Takes Control of Barnett Shale in Texas

10 Sep 2016   France, Shale Gas

A rare Barnett Shale drilling rig, pictured last year. French oil major is now the… Total said on Friday it is exercising its preemption right to acquire the 75% share in the Barnett Shale which it doesn’t already own to become the sole owner and operator of the field. Total said its Total E&P USA unit will top up Chesapeake’s payment with $420 million to Williams for “a fully restructured, competitive gas-gathering agreement” in addition to paying $138 million to be released from three other contracts. “With the new conditions created by the exit of Chesapeake and the associated restructuring of the midstream contracts, we believe that we can extract significant value from the substantial, well-located resource base of the play,” Total E&P USA President José Ignacio Sanz said in a statement. The Barnett Shale was once a big-producing gas field near Fort Worth in North Texas, but in […]

Analyst: Northeast NGL Supply/Demand at ‘Crossroads’

10 Sep 2016   Shale Gas

Proposed Appalachian Storage Hub might incentivize region’s ethane recovery, petrochemicals investment, says S&P Global Platts analyst. Earlier this week, Rigzone presented an article featuring the perspectives of two prominent supporters of developing a $10 billion natural gas liquids (NGL) storage and distribution system in West Virginia, Ohio, Pennsylvania or Kentucky. The proposed Appalachian Storage Hub project would provide a regional home for ethane and possibly other NGL produced in the Marcellus, Utica and Rogersville shale plays and support growth in petrochemicals manufacturing – and job creation – in the four-state area, the hub advocates said. The project would also pose “an interesting question for NGL markets,” says one informed observer. “While there is little demand for the storage hub currently, it could incentivize petrochemicals firms to site projects in the region, depending further on continued supply from wet gas production in the area,” said Andrew Neal, NGL analyst with […]

Only Higher Prices Can Prevent The Imminent Natural Gas Bust

9 Sep 2016   Shale Gas

One hundred years of natural gas? Not at these prices. U.S. gas production is declining and shale gas output is down almost 2.5 Bcf per day. Production is decreasing while consumption and exports are both increasing. EIA data indicates a supply deficit by the end of 2016. Henry Hub spot prices have doubled since early March. Will companies show discipline to preserve higher prices? Not a chance. They will drill more wells if investors continue to provide capital. This, however, will probably be too little too late to stop the decline in gas production that is already underway. Real Gas Prices Have Never Been Lower In February 2016, I wrote that an increase in natural gas prices was inevitable and in April, I wrote that prices would double . Now, spot prices have doubled from $1.49 on March 4 to $2.97 per mmBtu on August 29 (Figure 1). Still, […]

Australian State To Permanently Ban Onshore Gas Fracking

30 Aug 2016   Australia, Shale Gas

The state of Victoria plans to ban shale and coal seam gas fracking in what would be Australia’s first permanent ban on unconventional gas drilling, citing the concerns of farmers and potential health and environment risks. However the government left the door open to allowing onshore conventional gas drilling after 2020. The decision was made despite the fact that most of eastern Australia’s gas supply is produced from coal seam gas and comes as a blow to manufacturers who have been clamouring for more gas supply to help keep prices down. “Our farmers produce some of the world’s cleanest and freshest food. We won’t put that at risk […]

Fracking Really Isn’t So Bad

30 Aug 2016   Shale Gas, USA

When Governor Andrew Cuomo announced last year that hydraulic fracturing would be banned in the State of New York, he cited the lack of scientific data on public health effects. He also said more study needed to be done to determine where emissions were coming from in the fracking and extraction cycle. That study has now been done. Chemists at the University of Texas at Arlington published a study that indicates contamination from fracking wells are highly variable but result more from operational inefficiencies than from the extraction process itself. In other words, it’s sloppy drilling methods that are the worst part of fracking. The study, “ Point source attribution of ambient contamination events near unconventional oil and gas development ”, was published on Friday in the Science of the Total Environment . The researchers found highly variable levels of benzene, toluene, ethyl benzene, and xylene compounds (BTEX) in […]

Texas shale basin left behind

12 Aug 2016   Shale Gas, USA

Leaving part of a Texas oil and natural gas shale basin will free up potentially more than a billion dollars in financial commitments, Chesapeake Energy said. Chesapeake, which has headquarters in Oklahoma, said it was exiting the Barnett shale basin in Texas, which could result in an increase in operating income by up to $300 million per year through 2019. It could also free up as much as $1.9 billion in commitments in the transit and refinery side of the energy sector for the company. Second-quarter revenue for Chesapeake declined 54 percent year-on-year and the loss was around $1.8 billion. The company said the primary driver of the loss was weak energy prices, which […]

Chesapeake Energy cut debt by $1 billion

5 Aug 2016   Shale Gas

Struggling U.S. shale player Chesapeake Energy said it reported a loss for the second quarter, but reduced debt by more than $1 billion. The company said second quarter revenue declined 54 percent year-on-year and the loss was around $1.8 billion. Chesapeake said the primary driver of the loss was weak energy prices, which for crude oil are down more than 12 percent from last year and more than 50 percent below peak levels in 2014. Chesapeake, meanwhile, was able to cut its debt load by more than $1 billion as it worked to keep costs under control. “Financial discipline remains our top priority,” CEO Doug Lawler said in a statement. Chesapeake in early February retained the services of longtime counsel […]

Norway’s Statoil sheds Marcellus shale acreage

1 Aug 2016   Shale Gas

For $96 million, and following a weak earnings report, Norwegian energy company Statoil said it was getting rid of some of its gas assets in the United States. The Norwegian company holds about 350,000 net acres of the Marcellus shale natural gas basin, but decided to sell off about 11,500 acres of that to Antero Resources Corp. “The U.S. business is one of the focus areas in Statoil’s international strategy,” Torgrim Reitan, a vice president in charge of U.S. production for Statoil, said in a written statement. “We will continue actively to manage the portfolio, optimize field developments, and step up efficiency improvements and cost reduction measures.” The Marcellus basin is one of the more lucrative reserve areas […]

EIA Expects Uptick In U.S. NatGas Production As Prices Soar

14 Jul 2016   Shale Gas

Natural Gas Storage Embattled U.S. natural gas producers have a reason to perk up: the Energy Information Administration has forecast that natural gas production in the country over the second half of the year will increase, stimulated by a continuing rally in gas prices. The average spot price of natural gas at Henry Hub in June was US$2.52/mmBtu, up over 30 percent from May. The increase came on the back of greater demand from the power generation sector and lower production. The June price was also the highest monthly average since September last year. Though the news is good in that it could encourage producers to lift output, higher prices could eventually have a negative effect on demand, with power plants switching to coal to save money. Still, overall consumption is growing persistently, the EIA said, estimating the 2016 average to be 76.5 bcf a day, compared with 75.3 […]

Chesapeake hit with another Barnett Shale suit

8 Jul 2016   Shale Gas

Chesapeake Energy has once again become the target of a lawsuit by property owners in the North Texas Barnett Shale region alleging the producer underpaid millions of dollars of royalties to them. In a suit filed in District Court of Dallas County, more than 30 North Texas businesses and individuals are suing Chesapeake and Total USA, alleging that Oklahoma City-based Chesapeake’s $588 million sale of assets to New York hedge fund Global Infrastructure Partners in 2009 resulted in the charging of unreasonable fees on royalties. The lawsuit, which involves oil and gas leases covering more than 5,400 mineral acres and more than 750 producing gas wells in Tarrant, Johnson and Ellis counties in Texas, alleges that the sale was structured to benefit Chesapeake at the expense of royalty owners. “Chesapeake structured its midstream asset sale and transportation agreements in such a way that the lessors and royalty owners bore […]

Move Over Canada, U.S. Shale Gas is Here to Stay

6 Jul 2016   Canada, Shale Gas

A Canadian Energy Research Institute survey has found that the country’s natural gas exports will continue to slide over the coming years, with their market share eaten up increasingly by the U.S. Canada’s southern neighbor is fast on track of becoming a net exporter of the commodity, with a saturated domestic market, which has been the main traditional destination of Canadian gas. CERI says that exports from Western Canada, the country’s most gas-rich region, which accounts for the bulk of exports, will gradually drop to a billion cubic ft per day in four years, pressured by low international and domestic gas prices resulting from oversupply. It won’t be until 2037 that daily export volumes will recover to three billion cubic ft. However, there is light at the end of the tunnel and it’s not from an oncoming as-powered train: Canada will continue to be a net […]

Coal use plunges as China cuts back and US turns to gas

17 Jun 2016   China, Coal, Shale Gas

The world’s use of coal fell by the largest amount on record last year as the fossil fuel that powered the industrial revolution was struck by tumbling US gas prices and another year of dwindling consumption in China.  BP’s latest world energy review showed 2015 had been “an annus horribilis for coal”, said the oil and gas group’s chief economist, Spencer Dale.  Global consumption and production levels for coal plunged by the biggest amount since at least 1980, while prices fell about 20 per cent.

Oil Investor Still Bets on McClendon

As creditors line up for the assets of recently deceased oil titan Aubrey McClendon , an energy-investment firm already has claimed some of his most valuable holdings. EIG Global Energy Partners owns small stakes once held by Mr. McClendon in some 8,500 wells across the U.S. drilled by Chesapeake Energy CHK 6.42 % Corp., the oil and gas producer that Mr. McClendon co-founded and ran until 2013. EIG lent Mr. McClendon more than $1.2 billion over several years to pay for his personal stake in the wells. It gained control of those stakes by foreclosing on the loans last year, after collecting cash and data from the properties since 2009. That trove of data about U.S. drilling helped EIG weather the oil downturn by prompting its executives to sell out of some oil-production investments […]

U.S. shale gas production grows through 2040

9 Jun 2016   Shale Gas

Natural gas from shale basins in the United States accounts for more than half of the total production through 2040 to support more exports, a report finds. A review from the Energy Information Administration finds about half of all of the natural gas produced in the United States now comes from shale gas reserves or is associated with so-called tight oil basins, a category that includes shale formations. Much of that comes from lucrative shale beds like the Eagle Ford basin in Texas and the Bakken play in North Dakota. Natural gas production in North Dakota reached an all-time high in March, the last full month for which data are available, at […]

Colorado Has 40 Times More Natural Gas Than Previously Estimated

9 Jun 2016   Shale Gas

Western Colorado has 40 times more natural gas than previously thought, potentially making it the second-largest formation in the country, the U.S. Geological Survey said Wednesday. Mancos Shale formation in Colorado’s Piceance Basin holds about 66.3 trillion cubic feet of gas, up from 1.6 trillion estimated in 2003, the USGS said, citing new research. A trillion cubic feet of natural gas is enough to heat 15 million homes for a year, the U.S. Energy Department said. The U.S. already has 2.9 trillion cubic feet of the fuel that has been extracted and put into storage, which has weighed on natural-gas futures prices . The contract for July delivery fell 0.6 cent, or 0.2%, to $2.468 a million British thermal units on the New York Mercantile Exchange on Wednesday. David Ludlam, executive director of the […]

Many natural gas-fired power plants under construction are near major shale plays

20 May 2016   Shale Gas

Natural gas-fired capacity additions include plants completed and under construction. Natural gas-fired power generation increased 19% in 2015, because of low natural gas prices , increased gas-fired generation capacity , and coal power plant retirements . EIA’s May 2016 Short-Term Energy Outlook forecasts that this year, natural gas-fired generation will exceed coal generation in the United States on an annual basis. Growth in natural gas-fired generation capacity is expected to continue over the next several years, as 18.7 gigawatts (GW) of new capacity comes online between 2016 and 2018. Many of the new natural gas-fired capacity additions in development are near major shale gas plays. The Mid-Atlantic states and Texas have the most natural gas-fired capacity additions under construction with planned online dates within the next three years (2016–18). Mid-Atlantic states. Many of the natural gas […]

Faced With a Fracking Giant, This Small Town Just Legalized Civil Disobedience

19 May 2016   Shale Gas, USA

Pennsylvania township first to legalize civil disobedience. Photo from A tiny community sitting on a 27-square-mile piece of Western Pennsylvania wanted to send a big message to the energy company planning to deposit toxic fracking wastewater under its neighborhoods. And its 700 residents wanted it to be perfectly legal for them to loudly object. Grant Township had seen what happens when people nationwide take to the streets to protest bullying corporations: Arrests. Lots of them. So Grant Township planned ahead. Two weeks ago, it passed a law that protects its residents from arrest if they protest Pennsylvania General Energy Company’s (PGE) creation of an injection well. Residents believe this law is the first in the United States to legalize nonviolent civil disobedience against toxic wastewater injection wells. “We’re doing it to safeguard the residents and protect as many people as possible,” Township Supervisor Stacy Long said. Long said legalizing […]

Chesapeake Energy Swaps Debt for Stock

13 May 2016   Shale Gas, USA

Chesapeake Energy Corp. CHK -4.13 % on Thursday said it would swap 4.1% of its shares outstanding for debt, the latest move by the beleaguered energy company to ease its debt load as it struggles with low natural gas prices. The Oklahoma City company, one of the biggest U.S. producers of natural gas, disclosed in a regulatory filing that it will issue 28.1 million shares, worth $122.5 million based on Wednesday’s closing price, to redeem $153 million in debt. The agreement by bondholders to make the swap suggests they may not see the company as headed toward bankruptcy. In the event of a bankruptcy, bondholders are paid first whereas stockholders are lower on the chain. Chesapeake has a significant amount of debt due starting in 2017, and “they’re starting to find creative ways to […]

Gas Firms Rally on Signs Glut Is Easing

Indications that supply was easing helped natural-gas prices rebound 31% in the past two months. Shares of natural-gas producers, among the market’s worst performers in recent years, are now among the top performers on signs that a glut could shrink soon. Natural-gas prices, which had slumped since 2008, plunged more than 60% from 2014 to early this year. Stock prices for gas companies began to plummet in 2014, too, as investors worried that the shale boom had oversupplied the market. Overall, four of the nine top-performing S&P 500 stocks this year are natural-gas producers, making them among the best-returning commodity stocks and outshining their peers in oil. The question now is whether the rally marks the start of a powerful turnaround in gas prices, supported by deep cuts from producers, or a short-lived surge based on optimistic forecasts. Dan Pickering, co-president of Tudor, Pickering, Holt & Co. in Houston, […]

EPA Ready to Issue Methane Limits for New Oil and Gas Wells

The Environmental Protection Agency is set to issue on Thursday the first federal standards aimed at curbing methane emissions from the oil and natural gas industry, according to multiple people familiar with the plan. The final regulations, which EPA proposed last year, are the latest in a series of rules the Obama administration is pursuing in a broad agenda clamping down on greenhouse gas emissions from fossil fuels. The rules are one piece of an administration goal to cut methane emissions from the oil and gas industry by as much as 45% from their 2012 levels over the next decade. The rules, which will only affect new oil and natural gas wells, will require companies to install technologies to monitor and limit inadvertent emitting of methane during the production and transmission process of natural […]

US EIA says gas output growth seen slowing after near-record levels

11 May 2016   Shale Gas

Declines in rig activity triggered by sustained low natural gas prices are starting to take their toll on US gas production forecasts, the Energy Information Administration said Tuesday in its monthly outlook. EIA lowered by 210 MMcf/d to 79.29 Bcf/d its marketed gas production estimate for the US in second-quarter 2016. The Q3 production forecast also took a hit, falling 10 MMcf/d from last month’s estimate to 79.50 Bcf/d, EIA said in its May Short-Term Energy Outlook. The report noted that while production saw a month-on-month uptick in February to 80.10 Bcf/d — the second-highest production level on record — “more recent preliminary data indicate production may be leveling in the next few months,” with output remaining relatively unchanged through the rest of this year. EIA added that it expects full-year 2016 production to average 79.62 Bcf/d, a 20 MMcf/d downward revision from its prior estimate, reflecting a 0.9% […]

Groundwater Contamination from Fracking Changes over Time: Study

11 May 2016   Shale Gas, Shale Oil

A new Texas study has found that horizontal oil wells fractured by the injection of high volumes of chemicals, sand, and water contaminate nearby water wells with a variety of heavy metals and toxic chemicals that fluctuate over time. In the last decade, North America’s $40-billion fracking industry has punctured uneconomic or ”unconventional” rock formations from British Columbia to Texas with long lateral wells that extend for miles underground. Then they blast open the surrounding formation with injections of water, chemicals, sand, fluids, or hydrocarbons. But industry can’t always control the direction of the fractures. ”In our most recent study, we found that as more unconventional wells were drilled and stimulated, more drilling-related contaminants were found […]

France Discusses Ban Of Imported U.S. Shale Gas

11 May 2016   France, Shale Gas

LNG Imports After French media accuses government of hypocrisy, French Energy Minister Segolene Royal is discussing with French parliament a potential ban on the import of U.S. shale gas. The issue arose out of concerns expressed by some members of French parliament that American LNG exports to Europe have contained natural gas that is 40 percent shale gas—which environmentalists and some lawmakers argue contradicts France’s own ban on shale gas exploitation using hydraulic fracturing. Two French companies, Electricite de France (EDF) and gas utility Engie, have previously signed contracts to buy U.S. LNG from, while the French state has a large interest in both, and a 75-percent ownership stake in EDF. Related: Petrobras Offloads $1.4B In Assets Amidst Political Turmoil France’s Socialist government has been under pressure from environmentalists not only to ensure that fracking never takes place on French territory, but also to ensure that no fracked gas […]

Hydraulically fractured wells provide two-thirds of U.S. natural gas production

7 May 2016   Shale Gas, USA

For decades, hydraulic fracturing had been referred to as an unconventional completion technique, but over the past 10 years it has become the technique by which most natural gas is produced in the United States. Based on the most recent data from states, EIA estimates that natural gas production from hydraulically fractured wells now makes up about two-thirds of total U.S. marketed gas production. This share of production is even greater than the share of crude oil produced using that method, where hydraulic fracturing accounts for about half of current U.S. crude oil production . Hydraulic fracturing , often in combination with horizontal drilling, involves forcing a liquid (primarily water) under high pressure from a wellbore against a rock formation until it fractures. The fracture lengthens as the high-pressure liquid in the wellbore flows into the […]

Beleaguered Chesapeake to Sell Off More Assets to Reduce $9B Debt

7 May 2016   Shale Gas

The second-largest producer of natural gas in the United States, Chesapeake Energy Corp., has announced plans to sell part of its Oklahoma shale acreage in order to prop up finances and reduce a massive debt load of around $9.4 billion. Chesapeake announced yesterday that it would sell around 42,000 acres in the Stack field in Oklahoma, which currently produces around 3,800 barrels of oil equivalent per day. The assets will go to Newfield Exploration Co. for an estimated price of $470 million. Furthermore, due to low oil and gas prices, the company will seek to sell additional assets that will bring between $500 million and $1 billion in its coffers by the end of the year. “We anticipate subsequent divestitures during the second and third quarters,” Chief Executive Doug Lawler said in a statement. Despite these difficulties, the company’s shares were up 12 percent at $6.31 […]

Statoil Sells Marcellus Assets to EQT for $407 Million

3 May 2016   Norway, Shale Gas

The Norwegian oil and gas producer said Monday the divestment includes 62,500 acres of operated properties in West Virginia with a production of about 9,300 barrels of oil equivalent a day in the first quarter. Statoil said it would retain its operated properties in the state of Ohio and its non-operated Marcellus positions. The company entered Marcellus and the U.S. shale industry through a 2008 joint venture with Chesapeake Energy Corp. CHK -4.08 % and in 2012 became an operator in the area through the acquisition of additional acreage in a liquids-rich part of the formation. EQT said the acquired assets, primarily located in West Virginia’s Wetzel, Tyler and Harrison counties, would add a sizable amount of acreage within the company’s core development area and complement its adjacent operations in Wetzel County. The acquisition would boost EQT’s core undeveloped Marcellus acreage […]