Broomfield, a hotbed of energy activity and environmental activism in Colorado, is increasing the setbacks for future oil and gas facilities to 2,000 feet from 500 feet as the city council looks to pursue more oversight.

The Broomfield City Council approved Ordinance No. 2123, handing the city more control over where wells may be drilled.

With the approval of state Senate Bill (SB) 181 in April 2019, local governments were given the ability to regulate surface and community impacts of oil and gas operations. Community workshops were assembled in Broomfield from last August through February to gather input on changes to the regulations. One workshop centered on zoning and setback changes, which led to approval to set into motion the setback ordinance in late February.

The new ordinance is to take effect on Sunday (May 24). No wells would be permitted closer than 2,000 feet from the nearest lot line for athletic fields, amphitheaters,...

Oklahoma City-based SandRidge Energy Inc. is slashing costs, including in its executive ranks, and dramatically lowering capital expenditures (capex) to ensure it can operate as a going concern in what its new CEO called an “historically challenged” environment.

The company has reduced planned capex to $4-9 million from previous guidance of $25-30 million. In 2019, SandRidge invested $162 million.

"With the sharp downturn in commodity prices, we took swift measures to maximize the cash flow and liquidity of our business,” CEO Carl Giesler, who was appointed in April, said in announcing earnings Monday. “We implemented steep decreases in personnel and other savings measures, and we sharply curtailed planned capex for the year.

“We will only spend capital required for safety or mechanical integrity or for low spend, quick payback cash flow enhancing ‘small ball’ workovers and other projects,” he continued. “We believe our cost savings...

Equitrans Midstream Corp. said in a regulatory filing on Monday that its largest customer, EQT Corp., has started temporarily curtailing 1.4 Bcf/d of production in Ohio and Pennsylvania.

Equitrans said in the filing it expects the curtailments to last up to 45 days. It revised the forecast for second quarter net income, but full-year guidance remains unchanged.

Management of Appalacahian pure-play EQT, the nation’s largest natural gas producer, said earlier this month it could join peers in the Marcellus and Utica shales to defer some production in anticipation of better prices later this year. EQT produced 4.2 Bcfe/d in 1Q2020.

Natural gas futures appeared to spike on news of the curtailments as the June New York Mercantile Exchange contract settled up 13.7 cents and July jumped 12.6 cents.

The Energy Information Administration also said Monday it expects oil and natural gas production from seven of the most prolific U.S. onshore...

With the most severe impacts of Covid-19 on oil demand now “in the rearview mirror,” Raymond James & Associates Inc. analysts said Monday West Texas Intermediate (WTI) oil should average $50/bbl in 2021, and to reach a long-term average of $65/bbl.

The analyst team led by John Freeman and Pavel Molchanov said in a note to clients the price recovery would be driven by a partial return of oil demand, combined with disciplined adherence by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, aka OPEC-plus, to pledged production cuts, as well as organic supply cuts from countries outside the alliance.

These factors mean that “the stunning inventory builds of 2020 will make way to massive draws in the following two years,” the analysts wrote, forecasting a 2020 global inventory build of 4.4 million b/d in 2020, followed by draws of 3.1 million b/d in 2021 and 5.9 million b/d in 2022.

Although current compliance to the...

With rig counts headed to single digits and demand moribund, North Dakota is considering intervening in Bakken Shale operations by setting prorationing on oil production.

The price for Bakken crude was in single digits at $6.75/bbl last Friday with the rig count at 12, the lowest since 2006. Completion crews had plummeted to one from 25.

The need by exploration and production companies to conserve capital and preserve cash flow “indicate there could be four or five more rigs released before we hit bottom, putting us below 10 and we’re likely to get to that spot,” Department of Mineral Resources director Lynn Helms said Friday during the monthly webinar.

Oil production in March declined month/month to 44.2 million bbl (1.42 million b/d) from 42.09 million bbl (1.45 million b/d). Natural gas production in March fell to 96.9 Bcf (3.12 Bcf/d) from 90.1 Bcf (3.10 Bcf/d). Gas capture was 87% at 84 Bcf, unchanged from February.

Low oil prices...

Oil and natural gas production from seven of the nation’s most prolific onshore unconventional plays will be down in June compared with May, a second consecutive decline, as the impacts of the coronavirus pandemic continue to echo through the economy, according to the Energy Information Administration (EIA).

Total oil production from the Anadarko, Appalachian and Permian basins, and the Bakken, Eagle Ford, Haynesville and Niobrara formations, is expected to be 7.82 million b/d next month, compared with 8.02 million b/d in May, according to EIA’s latest Drilling Productivity Report (DPR), which was released Monday.

Decreases in oil production in June month/month are expected in the Anadarko (434,000 b/d from 462,000 b/d); Bakken (1.11 million b/d from 1.14 million b/d); Eagle Ford (1.17 million b/d from 1.21 million b/d); Haynesville (36,000 b/d from with 37,000 b/d); Niobrara (636,000 b/d from 660,000 b/d); and Permian (4.29 million b/d from 4.38 million...

To ensure its financial viability in uncertain times, WPX Energy Inc. is dropping rigs and crews in the Permian and Williston basins, as well as building a backlog of uncompleted wells to hold the line on costs until energy demand is higher.

The Tulsa-based independent was producing more than 150,000 b/d net in oil at the end of March, boosted by the 60,000 it acquired in the recent takeover of Permian operator Felix Energy Inc. Since then, however, output has been curtailed, with plans to shut-in 30,000 b/d net in May, or about 45,000 b/d less in the market on a gross basis.

Similar curtailments are possible in June.

“In these unprecedented times, we’re acutely focused on keeping our employees healthy, protecting our cash flow and preserving our assets for future value creation,” said CEO Rick Muncrief. “Our financial position is solid as evidenced by banks and lenders who recently reaffirmed our credit facility, along with the ratings...

A pair of Denver-based oil and gas producers said plummeting commodity prices weighed on first quarter earnings and muddied their 2020 outlooks, necessitating investment cuts.

Extraction Oil & Gas Inc. said it had engaged strategic advisers after disclosing that it may not meet covenants on its credit facility for the current quarter, while Highpoint Resources Corp. posted a steep quarterly loss driven by an impairment charge of more than $1 billion linked to weak demand and depressed prices.

Extraction, which operates in the Denver-Julesburg (DJ) Basin, is actively cutting costs and delaying investments. However, near-term revenue opportunities are dwindling with production slowing substantially and prices stubbornly low.

Production averaged about 94,000 boe/d in the first quarter, up from 80,400 a year earlier.

“Due to the continued uncertainty in the commodity markets, we made the decision during the middle of April to release...

Ring Energy Inc., whose drilling expertise is focused in the Permian Basin’s Northwest Shelf and Central Basin Platform, has joined its peers and suspended all operations pending an improved outlook for the energy industry.

CEO Kelly Hoffman during the first quarter conference call to discuss results shared what is on everyone’s mind who works in the energy industry.

“Every operator right now is experiencing an unstable, unpredictable pricing and storage dilemma,” he said. “And because of the lack of storage capacity, there is a large differential” between West Texas Intermediate oil spot pricing and the “actual price a buyer is willing to pay for the wellhead price.

“Until the markets improve and we begin to see the world economics at work again, we have to be prepared for this continued uncertainty.”

The first quarter was “a challenging time for all oil companies,” he said. It had started strong for the Midland, TX-based independent...

Plummeting demand in the wake of coronavirus fallout is punishing oil and gas prices, forcing drillers to shut in wells and curtail capital expenditures (capex). Midstream operators are feeling the squeeze as well, cutting spending and delaying projects, and private equity (PE) is stepping into the void.

Energy Spectrum Capital is forging ahead with plans to invest in North America’s midstream sector. The Dallas-based firm this month closed its eighth fund, Energy Spectrum Partners VIII, with $969 million committed to four portfolio companies and a fifth in documentation.

Founding partner James Benson said the new capital provides “a renewed mandate to support best-in-class management teams to build successful midstream companies.” Despite the extraordinary environment, the firm intends to “profitably navigate the market volatility and build another strong portfolio.”

Three of the four companies in which the new fund has invested are led by...

The Energy Information Administration (EIA) said Thursday it expects U.S. crude oil production to decline in both 2020 and 2021, driven by the Lower 48 onshore segment, in response to price and demand destruction caused by Covid-19.

In the latest edition of its Short-Term Energy Outlook, EIA is forecasting average output of 11.7 million b/d in 2020 and 10.9 million b/d in 2021, down 0.5 million b/d and 1.3 million b/d, respectively, from the 2019 figure of 12.2 million b/d.

The expected year/year decline of 800,000 b/d in 2021 would be the largest on record in the United States, researchers said.

They highlighted that West Texas intermediate spot crude prices averaged $17/bbl in April, down from $58 in January, and that the Lower 48 rig count -- excluding the Federal Offshore Gulf of Mexico (GOM) -- stood at 355 as of May 8, down almost half from the February total of 753, according to Baker Hughes Co.

Researchers said they expect GOM...

Eagle Ford Shale pure-play SilverBow Resources Inc. is looking to begin expanding its dry natural gas production late this year to take advantage of what it expects will be higher prices, but it is joining South Texas producer Magnolia Oil & Gas Corp on the path of least resistance for now by suspending well completions and shutting in output until prices are more accommodating.

Houston-based SilverBow, which has around 200,000 net acres in South Texas, produced on average 228 MMcfe/d in the first quarter. By mid-March, however, it began curtailing production as Covid-19 grew into a pandemic.

About 50 MMcf/d of gas and 2,000 b/d of oil has since been shut-in, and more curtailments may be implemented “as a result of deteriorating commodity markets and the supporting production economics,” management said.

Capital spending for the year also has been cut by 55% to $80-95 million, with around $10 million of operating expense reductions...

Driven by further losses in the Permian Basin, the U.S. rig count fell another 35 units to end at 339 for the week ended Friday (May 15), extending a vertiginous two-month falloff in upstream activity, the latest data from Baker Hughes Co. (BKR) show.

U.S. operators packed up 34 oil-directed rigs for the week, along with one natural gas-directed, putting the combined domestic tally a pronounced 648 units behind year-ago levels. Since March 13, the U.S. count has fallen 453 units, according to BKR data.

The most recent week’s declines included 32 land rigs, with three exiting the Gulf of Mexico. Thirty-one horizontal rigs and five directional rigs exited the patch, partially offset by the addition of one vertical unit.

The Canadian rig count fell three units -- all gas-directed -- to end at 23 for the week, down from 63 a year ago.

The combined North American rig count finished the week at 362, down from 1,050 at this time last...

Plummeting demand in the wake of coronavirus fallout is punishing oil and gas prices, forcing drillers to shut in wells and curtail capital expenditures (capex). Midstream operators are feeling the squeeze as well, cutting spending and delaying projects, and private equity (PE) is stepping into the void.

Energy Spectrum Capital is forging ahead with plans to invest in North America’s midstream sector. The Dallas-based firm this month closed its eighth fund, Energy Spectrum Partners VIII, with $969 million committed to four portfolio companies and a fifth in documentation.

Founding partner James Benson said the new capital provides “a renewed mandate to support best-in-class management teams to build successful midstream companies.” Despite the extraordinary environment, the firm intends to “profitably navigate the market volatility and build another strong portfolio.”

Three of the four companies in which the new fund has invested are led by...

Oklahoma pure-play Chaparral Energy Inc. has released rigs contracted to drill new wells, halted completion activities and increased storage in hopes of better oil prices following the historic plunge in demand in the wake of the coronavirus pandemic.

The Oklahoma City-based producer also warned that price pain could persist for the foreseeable future.

“We are shutting in substantially all nonessential oil production, which excludes only wells associated with water floods and those with well-specific mechanical or other risks,” CEO Charles Duginski said during the first quarter earnings call.

“These actions minimize our exposure to low wellhead pricing for crude oil and preserve value for a more favorable pricing environment.” The actions will “significantly decrease our operated production in the second quarter and potentially longer.”

Chaparral reported stronger-than-expected production and lower costs in the first quarter, with...

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) on Monday withdrew a proposal to limit vapor pressures when crude oil is transported by rail, which could be a positive for Bakken Shale oil to be moved west by rail in an ongoing dispute with Washington state.

In withdrawing the proposed rulemaking, PHMSA relied on a recent study by the Sandia National Laboratories, which found that vapor pressure for oil “is not a significant factor in the severity of pool fire or fireball scenarios.” PHMSA said establishing vapor pressure limits “would not improve the safety of crude oil rail transportation.”

Federal law governs the transport of hazardous materials, PHMSA noted, and it would preempt state-imposed vapor pressure limits for crude loaded or unloaded from rail cars within a state’s borders.

Allowing states to set individual vapor pressure limits would create a “patchwork state regulation,” PHMSA said, which Congress sought...

Global natural gas demand is on track to drop by a record 5% in 2020 due to the economic impacts of Covid-19, the International Energy Agency (IEA) said Wednesday.

The year/year (y/y) decline, which follows 10 years of uninterrupted growth, would be the largest on record since natural gas demand developed at scale during the second half of the 20th century, the global energy watchdog said upon releasing the latest edition of its flagship Global Energy Review report.

Nonetheless, researchers expect the drop to be less pronounced than the decline in oil consumption, due to oil’s exposure to the collapse in transportation fuel demand.

The power generation and industrial sectors are expected to account for 60% and 25% of the total decrease in gas demand, respectively, while the energy sector itself -- including upstream operations, refining and pipeline gas compression -- is seen accounting for 10% of the drop.

Gas demand from the power...

Following Boulder County, CO, receiving an “F” in 2019 from the American Lung Association over harmful levels of ozone pollution, local government agencies plan to consider greenhouse gas (GHG) emissions rules for the region’s oil and natural gas producers.

The hearing on Regulation No. 22 by the Colorado Air Quality Control Commission (AQCC) is scheduled for Wednesday and Thursday (May 21-22) regarding stricter monitoring and reporting measures for exploration and production (E&P) companies.

The hearing may lead to the phasing out hydrofluorocarbons (HFC), a GHG emitted typically from refrigeration and cooling. Phasing out HFCs would include a prohibition on manufacturing and using the GHG in specific end-uses statewide.

Boulder’s Board of County Commissioners extended an existing moratorium on accepting and processing new oil and gas development applications and on seismic testing to July 31. The hearing next week would deal with...

Hess Corp. said it will further scale back capital spending in response to an oil-price collapse worsened by the coronavirus pandemic.

The exploration and production company in its first quarter results said it plans to reduce 2020 capital expenditures (capex) to $1.9 billion, with lower rig counts in North Dakota and slowed drilling elsewhere.

“The pandemic has had a severe impact on near-term oil demand,” necessitating the cuts, CEO John Hess told analysts on an earnings call.

The New York City-based independent said in March that it would trim capex by $800 million to $2.2 billion. The latest cuts to capex, by $300 million, have reduced spend by nearly 40% from its original $3 billion plan heading into 2020.

The reduction plans involve dropping five of six rigs in the Bakken Shale. Most discretionary exploration and offshore drilling activities were already to be deferred. Though discretionary work will continue in Guyana -- a...

Energy Transfer LP (ET) has found new ways to store products and has reduced spending for the year as it navigates the historic oil price collapse, but management for the Dallas-based midstreamer said the market has reached a bottom with improvement and growth for the remainder of the year.

Speaking Monday during the first quarter earnings call, Chief Commercial Officer Marshall McCrea said because of the oil downturn and nationwide shutdowns because of the coronavirus pandemic, “things really got difficult” in late April and at the beginning of May. About 8% of the volumes on the gathering and processing assets in the Permian Basin’s Midland sub-basin were shut-in. However, ET has seen about 25% of the volumes already turned back online.

“As we look through all of our assets and all of our segments, we see that things have bottomed out...that things are improving, and they're going to grow,” said McCrea. 

The path forward depends on the...

The collapse in drilling activity deepened in April, with permitting for oil and natural gas wells at a record low, but there are glimmers of gains so far this month, according to an analysis by Evercore ISI.

The analysis led by James West compiles data from state and federal officials for a deep dive of where permitting is underway and where it has fallen. April permitting was less a bump in the road and more like a train wreck.

However, April showers may be bringing May flowers, the data indicated. Using week/week (w/w) data, Evercore said oil permits climbed 19% from the final week of April to 166 in the first week of May. The Permian Basin accounted for the most permits early this month, rebounding to 100, up by 35 from the week before. The gain was partly offset by the Eagle Ford Shale, with six fewer permits, and the Mississippian Lime, down by seven.

Still, natural gas permits “strengthened to 39,” a 64% gain w/w, “as a result of...