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Occidental Petroleum Corp., which made a $57 billion bet last year to take over Anadarko Petroleum Corp. in part to secure its Permian Basin position, said Thursday it expects to write down the value of its oil and gas assets during the second quarter by $6-9 billion. The Houston-based independent, better known as Oxy, in March slashed its dividend and capital expenditures in response to the coronavirus and tanking oil prices. The producer also attempted to prevent corporate raider Carl Icahn from gaining some control of the board, but that effort failed.

In a U.S. Securities and Exchange Form 8-K on Thursday, Oxy made it clear that its financial fortunes are dwindling because of the pandemic and the damaging impact of low commodity prices.

“We have in the past recorded impairments of our proved and unproved oil and gas properties resulting from prolonged declines in oil prices and may record such impairments in the future,” management said in the...

Pennsylvania Attorney General (AG) Josh Shapiro on Thursday said a two-year grand jury investigation into unconventional natural gas development uncovered “systematic failure” by regulators to protect the public from the risk of industry operations.

The grand jury report recommended new state laws to better protect water supplies and manage air pollution.

“This report is about preventing the failures of our past from continuing into our future,” Shapiro said. “It’s about the big fights we must take on to protect Pennsylvanians to ensure that their voices are not drowned out by those with bigger wallets and better connections.”

The report cited failures by the chief oil and gas regulatory agency, the Department of Environmental Protection (DEP), in addition to the Department of Health. It put forward eight recommendations to strengthen oversight of the industry at a time when it’s reeling from low commodity prices and a collapse in demand...

Surging U.S. crude oil and natural gas production over the last decade or so has been accompanied by dramatic improvements in onshore drilling efficiency, the Energy Information Administration (EIA) said Thursday.

Oil and gas output each hit all-time highs in 2019, even as the average monthly rig count and number of wells drilled per month were among the lowest in the last 45 years, said EIA researchers led by April Patel and Emily Geary.

The United States produced 12.2 million b/d of crude and 111.5 Bcf/d of natural gas in 2019, EIA data show.

Citing preliminary data from Baker Hughes Co. and IHS Markit, the EIA analysts said that the average rig count per month in 2019 was 943, with an average of 1,400 wells drilled per month.

“One factor that has contributed to the increase in production has been the ability to contact more of the formation using horizontal drilling,” researchers said. “The average footage drilled per well was...

The oil price debacle, brought about in part by the demand-crushing pandemic, has wiped an estimated $1.6 trillion from the valuation of the global upstream industry, with North American losses leading the way, a new analysis by Wood Mackenzie has found.

Global upstream development spend overall this year has been knocked down by 30% from the pre-crash view.

“This figure captures the impact of Wood Mackenzie’s downgraded long-term Brent price assumption, now $50/bbl in 2020 terms, rather than the previous $60 -- and much more,” said Upstream Vice President Andrew Pearson.

North America has taken the biggest hit, with Africa and Asia also slumping, and “these regions may never recover to pre-crash levels,” said Wood Mackenzie’s team.

In the United States, capital expenditures (capex) are down by around 39% from the pre-crash view, with the Permian Basin most affected.

“The record low prices and near-full storage tanks forced some...

Oil and natural gas activity has declined further in the second quarter across Louisiana, New Mexico and Texas, according to a survey by the Federal Reserve Bank of Dallas.

The Dallas Fed, as it is known, every quarter surveys energy executives across the Eleventh District, which encompasses northern Louisiana, most of New Mexico and Texas, which are home to the Permian Basin, Eagle Ford and Haynesville shales.

The latest data was compiled from June 10-18, with 168 energy firms responding, including 115 exploration and production (E&P) firms and 53 oilfield services (OFS) companies. Covid-19 lockdowns have rocked the energy world, as oil and gas demand has plummeted and thousands of jobs have been lost. Executives offered few positives in their responses.

“This downturn will weed out a lot of shale players who were effective ‘money changers’ who took willing investors and Wall Street for a ‘churning’ experience in shale over the last five...

Covid-19 has upended oil and gas markets across the globe, but North America is expected to account for roughly half of the decline in global associated natural gas output this year, with a slow recovery not forecast until 2022.

According to projections by Rystad Energy, led by researcher Carols Torrez-Diaz, head of Gas & Power Markets, associated gas may decline in North America this year to 246 billion cubic meters (Bcm) from 259 Bcm in 2019. Output then is seen remaining flat in 2021. Associated gas should begin to recover in 2022 to 256 Bcm and to 269 Bcm in 2023.

Globally, associated gas output initially is forecast to stay largely flat from the 2019 level of 547 Bcm, but Rystad now expects production to decrease to 517 Bcm this year. Worldwide production is projected to rise to 530 Bcm in 2021 and to 542 Bcm in 2022, though researchers said it would not likely exceed 2019 levels before 2023.

“Part of the recovery will be driven by...

Mexico’s upstream oil and gas regulator, Comisión Nacional de Hidrocarburos (CNH), has approved the appraisal plan by exploration and production firm Pantera Exploración y Producción to drill two wells in the Burgos Basin south of the Texas border.

One well is the Patriota-106DEL in Tamaulipas state, part of a modification to the evaluation program approved in early March. Investment is expected to hit $6.37 million, with $3.9 million for drilling and $2.47 million to complete the well.

The second approval was for the Teenek-1 well, targeting natural gas. Drilling is to begin in mid-September with costs projected at $4.93 million.

Last month, Mexico’s Jaguar Exploración y Producción CEO Warren Levy said natural gas in the Burgos is a promising investment opportunity in Mexico, even given current demand and regulatory uncertainty. Jaguar has acreage in the basin. Last week, Levy said the new Burgos approvals by CNH “will allow Jaguar to...

Wyoming and Montana on Tuesday filed briefs with the U.S. Supreme Court challenging as unconstitutional the state of Washington’s rejection of an export terminal to process the states’ coal supplies for export to Asian markets.

The two states in January asked the U.S. Supreme Court to rule on Washington’s denial of a water permit for the proposed Millennium Bulk Terminals project, a port facility by Lighthouse Resources slated for Longview, WA.

This latest filing completes the submittals needed for the nation’s highest court to decide if it will hear the case. Wyoming Gov. Mark Gordon expressed confidence the court would ultimately hear the case “and put a stop to Washington’s unlawful discrimination” against the two states.

Gordon contends the legal action is not just about coal, but “about a precedent that would allow coastal states to arbitrarily deny access to interior states.”

Washington officials have argued that Wyoming and...

After surviving protests and the Covid-19 pandemic, Coastal GasLink (CGL) plans to start  laying pipe for the only liquefied natural gas (LNG) export project underway on the northern Pacific coast of British Columbia (BC).

CGL said construction employment would roughly triple to peak at more than 2,500 in September as work accelerates along the 416-mile route from northern BC gas fields to LNG Canada, which is being built at Kitimat.

With a second wave of Covid-19 seen as a potential threat in BC, CGL and its contractors are “implementing enhanced project-wide health and safety standards at all worksites and workforce accommodations.” Precautions include fielding about 80 medics from International SOS, a global health and safety contractor.

The onset of the pandemic coincided with a seasonal industrial activity lull in northern BC, where spring thaw renders the region’s rugged forests, mountains and muskeg swamps impassable to...

Natural gas flowing from the Western Canada Sedimentary Basin to the western United States languished in April and May as higher prices north of the border kept supplies in the country, according to the U.S. Energy Information Administration (EIA).

The EIA said that Canadian imports through western pipelines fell to an estimated average of 6.2 Bcf/d in April and increased only marginally to an average of 6.3 Bcf/d in May. The projections were based on pipeline flow data from Genscape Inc. EIA noted that Canadian imports by pipeline into the western United States make up the bulk of imports and tend to be less seasonal than imports by pipeline in the eastern part of the country.

Though tepid demand resulting from Covid-19 is likely behind some of the reduced flows heading south, higher spot gas prices in Alberta, Canada, also led to the reduced exports.

NGI data show that NOVA/AECO C spot gas prices consistently ranged between $1-2/MMBtu below...

A formal demand to shut off oil flows immediately has been added to the Michigan lawsuit seeking to cancel the state’s 1953 right-of-way easement for Enbridge Inc.’s 540,000 b/d Line 5 across the Straits of Mackinac.

Michigan Attorney General Dana Nessel injected urgency into the case by filing motions requesting an injunction and restraining order against restarting deliveries that Enbridge temporarily suspended last week.

The motions claim the Canadian pipeline poses "grave risk of irreparable damage to the Great Lakes." Enbridge said the added courtroom maneuver “is legally unsupportable, unnecessary and will be vigorously opposed.”

The new duel erupted after Enbridge restarted oil flows over the weekend through one of two Line 5 pipes that were both shut down last week as a precaution. An inspection found damage to an anchor support for one of the pipes.

The operation has proceeded “working very closely” with the U.S. watchdog for...

Tumbleweed Midstream LLC, which serves natural gas producers in Colorado and Kansas, has executed three long-term gathering and processing agreements that have quadrupled production at its Ladder Creek Helium Plant.

Two of the new agreements for the plant in eastern Colorado would more than double the inlet volume to 12 MMcf/d, while the third contract is expected to boost output in the next three months by another 3-5 MMcf/d.

“We have a first-class team that has worked hard with the area’s natural gas producers and with our helium tolling customers,” CEO Durrell Johnson said. “These results support our original position that the helium resource of this area is far from depleted.

“Helium is a highly valuable part of the natural gas stream in eastern Colorado and western Kansas,” providing “premium netbacks to the gas producers in the region. Despite the recent downturns in oil and natural gas pricing, helium demand remains strong and...

Mexico’s Comisión Federal de Competencia Económica (COFECE), the federal economic competition commission, has asked the country’s Supreme Court to intervene on constitutional grounds against new power sector rules imposed by energy ministry Sener.

The rules, published through an order in the official gazette on May 15, seek to limit the entry of renewable energy projects into operation by suspending their preoperative tests, under the pretext of ensuring stable power grid operations and continuity of supply amid the coronavirus pandemic.

The unilateral order caused an immediate uproar among energy sector stakeholders, which argue that the policy unfairly benefits state power utility Comisión Federal de Electricidad (CFE), and violates the contracts awarded to renewable project developers under Mexico’s 2013-2014 constitutional energy reform.

In addition to preventing the operation of renewable energy plants, the policy allows for the...

An early rally Monday on expectations for increasing heat across much of the Lower 48, including temperatures in excess of 100 over swaths of the West Coast, fizzled in afternoon trading after a new mid-range weather outlook disappointed. The latest American model still showed near-term heat but cooler-than-previously-expected forecasts for early July that could reduce cooling degree days (CDD).

The July Nymex contract settled at $1.664 /MMBtu, down a half-cent day/day. August fell 1.0 cent to $1.738. 

Bolstered by current heat waves, NGI’s Spot Gas National Avg. advanced 16.0 cents to $1.620.

Triple-digit temperatures are expected to cook much of California this week, with 90s permeating Oregon and Washington, according to the National Weather Service (NWS). Intense summer heat already settled in across much of the Southwest, Texas and the southern Plains. The NWS noted that high pressure is mounting in the western half of the country,...

After finishing flat a day earlier, Natural gas futures mustered new momentum on Friday, ending the week in positive territory as mid-range forecasts for more heat outshined persistently weak demand for liquefied natural gas (LNG) amid fallout from the coronavirus pandemic.

The July Nymex contract settled at $1.669/MMBtu, up 3.1 cents day/day. August advanced 2.0 cents to $1.748.

NGI’s Spot Gas National Avg. rose 1.0 cent to $1.460.

Weather models showed “a slightly faster return of heat from the Midwest to Northeast next weekend into the following week,” Bespoke Weather Services said. “This progression generally fits with what we see in analog years when transitioning into a La Niña base state, with the most favored areas for anomalous heat in July being in the Midwest and Northeast.  

“We still are not seeing the South involved in terms of above-normal temperatures,” the firm added. But national gas-weighted degree days...