Argentina’s Vaca Muerta: $1.15-billion In Shale Gas Investments

18/07/17 • •

Argentina’s state-run oil firm YPF, France’s Total, Wintershall Energía and BP unit Pan American Energy has announced a $1.15-billion joint investment to increase shale gas production in Vaca Muerta, one of the world’s largest shale formations. The partners had already invested $500 million in the areas between 2014 and 2016. In March, Argentina’s Tecpetrol said it would invest $2.3 billion in the Vaca Muerta shale fields through 2019, marking the biggest announcement related to the formation in years. Vaca Muerta contains 308 trillion cubic feet of shale gas and 16.2 billion barrels of shale oil.


Shale Gas: Exploration Licenses In South Africa’s Karoo Basin

05/15/17 • •

Africa’s government may award its first shale gas exploration licenses by the end of September, after environmental objections delayed the process. The five license applications under review are for exploration in the semi-arid Karoo basin. “If the decision is made this year the exploration rights will be valid for a period of three years, exploration activities should commence within three years,” indicated the South African Petroleum Agency, PASA. South Africa is seeking to replace its dwindling offshore gas reserves and reduce reliance on coal to fuel power plants.


“Shale 2.0”: Shale Drilling Turned From Art Into Science

03/21/17 • •

Exxon Mobil, Royal Dutch Shell and Chevron plan to spend a combined $10 billion this year in American shale. If successful, they’ll scramble the U.S. energy business, boost American oil production, keep prices low, and steal influence from big producers. Furthermore, they are transforming shale drilling into a more economical operation. At Bongo 76-43, Shell is drilling five wells in a single pad for the first time, each about 20 feet apart, and is now able to drill 16 wells with a single rig every year, up from six in 2013.


A Shale Boom For Alaska’s North Slope?

03/09/17 • •

A pioneer of the U.S. shale revolution, Paul Basinski, wants to take fracking to America’s final frontier – Alaska. His venture, Project Icewine, has gained rights to 700,000 acres inside the Arctic Circle and they could hold 3.6 Billion barrels of oil, rivaling the legendary Eagle Ford. “The oil is there,” he said, “Now it’s a question of how quickly we can get it to flow and whether we can get the economics to work.” One exploratory well has been drilled, he added, and a second is planned by mid-year.


Hess CEO Sees Global Oil Supply Crunch Looming

03/06/17 • •

A significant, years-long oil supply crunch may be approaching due to insufficient investment in exploration and production, Hess CEO John Hess said at the IHS CERAWeek, and this will begin showing up in declining offshore supply. He added that “The shale business is back in business and starting to grow again,” but such growth in US shale would not be enough to meet global oil demand, which the International Energy Agency has projected to grow between 1.4-1.6 million barrels a day over this year and the next.


Shale Break-Even Price Drops 55% On Average 02.28.2017

Since 2013, the average wellhead break-even price (BEP) for key shale plays has decreased from $80 a barrel to $35/bbl. This represents a drop of over 55%, on average. The wellhead BEP decreased across all key shale plays, with Permian Midland falling by over 60% from $98/bbl in 2013 to $38/bbl in 2016 (for horizontal wells only). Rystad Energy forecasts an average WTI oil price of $60/bbl, which implies a 40% improvement in the cash from operations. This improvement will result in higher investments of the shale operators.


$70 Billion Each For Shale Plays And Offshore Projects This Year 02.20.2017

For every dollar invested this year in North American shale plays another dollar will be allocated for planned projects offshore racking up spending of $70 billion in each sector, analysts at Rystad Energy said: “Offshore projects that were uncommercial at $110 per barrel in 2013 are now commercial at an oil price of $50 per barrel.” However, Rigzone Data Services said offshore investment declined 30-35% in 2016 and offshore capital expenditure is expected to decline for the current year. According to Diamond Offshore, it’s difficult for deepwater operators to compete with the unconventional space.


Permian Basin: $60,000 An Acre, But A Gold Mine For Oil Drillers 02.09.2017

Record prices for drilling rights in the Permian Basin, the most fertile U.S. shale field – where wells can generate profit with crude selling for less than $40 a barrel – are prompting oil companies and private equity investors to look elsewhere for the next big gushers. Explorers eager to tap the basin’s mile-thick stack of oil-soaked rock layers have paid as much as $60,000 an acre. That marks a 50-fold explosion in deal prices over four years. It also pushes the cost 10 times higher than in the Bakken of North Dakota.


Spectre Haunts OPEC Deal: How Fast Will U.S.Shale Come Back? 12.26.2016

After the biggest oil-market deal in a decade, OPEC faces a new balancing act in 2017: boosting prices without igniting shale. But the biggest threat to OPEC’s plan could come from within: if Nigeria and Libya were to reach their potential next year, then their additional barrels would almost wipe out OPEC’s supply cuts; and Iran could be making up for several years of sanctions. Another challenge could come from the now leaner and more efficient U.S. drillers – a bigger boost in prices could mean a million-barrel shale surge.


USGS: 20 Billion Barrels Of Oil In Wolfcamp Shale Formation 12.05.2016

The Wolfcamp shale in the Texas’ Permian Basin province contains an estimated 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids. “The fact that this is the largest assessment of continuous oil we have ever done just goes to show that, even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” said Walter Guidroz, program coordinator for the U.S.Geological Survey Energy Resources Programme.


The Permian Outstripping Rival U.S. Oil Producing Regions 11.11.2016

Very informative charts help illustrate the extent to which the Permian basin is outstripping its rivals in terms of investor interest and deal flow. Confidence is not only illustrated in merger and acquisitions activity but also in how much companies are currently willing to invest in their own future. Capital expenditure plans are lower and less bullish than a year before, but operators are still displaying a greater level of confidence in being able to fund robust capex spends.


US Frackers Keep Adding Barrels 9.20.2016

Nimble U.S. shale oil producers continue to show an uncanny ability to squeeze more and more crude from new wells, allowing them to do more with less as they try to weather another dip in oil prices to $40 a barrel, so they are still seeing output gains from improved well designs and fracking techniques. The pace of innovation is increasing. Pioneer Natural Resources said it was introducing its third generation of well completion techniques, called version 3.0, using even more sand and water than the super-sized volumes introduced as version 2.0 earlier in the price crash to pull more oil out of rock. For its part, Devon Energy Corp has cut costs to drill and complete new wells by 40 percent and plans to cut $1 billion in costs this year.