Argentina’s government announced on Friday it is freezing natural gas prices for users until the end of the year and will forbid canceling utility services even if users haven’t paid their bills.

The move is part of the country’s response to the coronavirus outbreak that has stalled the economy and has kept much of the citizens under lockdown since the middle of March. Electricity prices also are to be frozen until year-end.

Meanwhile, domestic natural gas production continues to declne, according to the latest report from the IAE Argentine Energy Institute in Buenos Aires. In April, when Argentina announced no rigs were running, gas production decreased 11.3% year/year to 116.7 million cubic meters/day (MMm3/d), or 4.12 Bcf/d.

Conventional gas comprised 57% of the total and fell 6.3% in April while unconventional production, including from the Vaca Muerta shale deposit, decreased 8.4% year/year in April.

Analysts attributed the...

The U.S. onshore oil and gas industry is against the wall with the unconventional boom in its 15th year, now facing accelerated insolvencies and a wave of consolidation, according to new research.

Second quarter earnings may bring a “surge of asset impairments” as U.S. operators that work in shale and other tight resources enter a period of “great compression,” Deloitte researchers said Monday.

“Prior to the pandemic, the U.S. shale industry in aggregate was losing money,” but now exploration and production (E&P) companies are facing simultaneous threats of lower oil prices, reduced demand, capital constraints, heavy debt loads and Covid-led economic uncertainty.

“The history of oil and gas is filled with periods of extensive consolidation,” said Deloitte LLP’s Duane Dickson, vice chairman. “Following a 15-year boom, the U.S. shale segment appears to be next. As Covid-19 impacts amplify pressures on shale companies through 2020, a wave of...

Oilfield service and supply contractors continue to suffer the biggest job losses in the Canadian oil and gas activity slump driven by the Covid-19 pandemic, according to an industry monitoring agency.

Cuts of 6,100 field positions accounted for 89% of 6,870 Canadian industry layoffs during May, based on records compiled by Petroleum Labor Market Information (PetroLMI) from Statistics Canada surveys.

Annual employment comparisons indicate the May job drop extended erosion since the winter onset of the pandemic.

Total Canadian oil and gas industry employment as of May was 162,750, down by 25,600 or 14% from 188,350 in May 2019.

The field job losses are the human toll of a collapse by Canadian drilling as a result of unreliable fossil fuel prices as well as the economic contraction due to public health emergency actions in response to the pandemic.

An updated forecast by the Petroleum Services Association of Canada (PSAC)...

The oilfield services (OFS) sector has been looking for a break, brought low for several quarters by reduced exploration and development spending and further upended by Covid-19, but it’s expected to be a long, hard slog before activity moves into high gear.

Meanwhile, the jobs picture for the energy industry, and in particular the OFS sector, is grim. Rystad Energy estimated earlier this month that more than 100,000 oil and gas jobs across the United States had been lost, most within OFS.

The Petroleum Equipment and Services Association (PESA) put a finer point on those numbers in a new report about lost jobs related to the pandemic, noting employment in the domestic OFS sector fell by nearly 15,000 jobs in May, bringing total job losses in only a few months to more than 84,000.

Employment across the OFS sector in the United States fell in May by an estimated 105,000 jobs from May 2019 to “its lowest point since 2017,” PESA researchers...

After curtailing output by 70% in May in response to a pandemic-driven market downturn, Continental Resources Inc. said Thursday it would bring some production back in July, although about 50% of output is to remain offline.

June production is expected to average 150,000-160,000 boe/d, the Oklahoma City-based independent said, while July output is projected to range from 225,000 to 250,000 boe/d.

Production in the second quarter is expected to average 200,000-205,000 boe/d, down from 360,841 boe/d in the first quarter.

“Continental elected to defer production in order to preserve shareholder value over volumes, and maximize the economics of the barrels we produce,” said CEO Bill Berry.

“As oil prices have stabilized and begun to recover, we have partially resumed production. As improved supply and demand fundamentals benefit oil prices, we expect to continue restoring production in subsequent months.”

Continental, the largest...

Even after a major court victory upheld the Atlantic Coast Pipeline’s (ACP) plans to cross the Appalachian National Scenic Trail, the latest FERC filings point to the hurdles that remain for the 600-mile, 1.5 Bcf/d project to reach the finish line.

In a major victory for the embattled ACP, this past Monday the U.S. Supreme Court reversed a lower court ruling that had jeopardized the pipeline’s federal permit to cross beneath the Appalachian Trail near the Virginia/West Virginia border.

The ACP’s developers in a recent filing asked the Federal Energy Regulatory Commission for a two-year extension to build and place the project online, citing legal and regulatory delays. ACP, designed to run from West Virginia into Virginia and North Carolina, is being developed by Dominion Energy as part of a joint venture with Duke Energy.

Dominion Energy Transmission Inc. also asked the FERC for an extension to build the related Supply Header Project. Both...

Ohio’s unconventional oil and natural gas production declined sharply in the first quarter as operators grappled with a challenging period in which energy demand crumbled due to the coronavirus pandemic and commodity prices followed with a historic decline.

Unconventional natural gas production, driven almost entirely by volumes from the Utica Shale, was 581.6 Bcf during the period, down 15% from the 684.8 Bcf reported in 4Q2019, according to the Ohio Department of Natural Resources (ODNR). Unconventional oil production, also largely from the Utica, declined by 13% over the same period and came in at 5.8 million bbl.

Year/year figures were a bit different, as unconventional gas production dropped by 5% from 1Q2019 and oil production increased by 16%. Operators also faced headwinds early last year as they curbed spending and some production as investors searched for better returns and gas prices were low.

But 1Q2020 saw significant production...

West Texas Intermediate (WTI) futures were up around $40/bbl Friday, but the latest weekly tally by Baker Hughes Co. (BKR) showed the U.S. rig count continuing to grind lower, including another round of double-digit losses in the oil patch.

The U.S. count fell 13 rigs overall to end at 266, down from 967 in the year-ago period. The declines included 10 oil-directed rigs and three natural gas-directed. U.S. operators have now laid down 526 rigs since March 13.

Two rigs exited the Gulf of Mexico on the week, dropping its total to 11, versus 24 a year ago. Twelve horizontal rigs and four directional rigs exited the patch, partially offset by the addition of three vertical units.

In Canada, four rigs departed for the week, two oil-directed and two gas-directed. That left Canada with 17 overall, down sharply from 119 a year ago.

The combined North American rig count ended at 283, versus 1,086 at this time last year.

Among plays, the...

Tulsa-based Chisholm Oil & Gas Operating LLC, stung by low oil and gas prices and operational issues, is seeking to restructure through a Chapter 11 filing, an avenue more Lower 48 operators are pursuing in the wake of Covid-19.

The exploration and production (E&P) company, supported by private equity giants Apollo Global Management LLC and Ares Management LLC, works in Oklahoma’s Sooner Trend of the Anadarko Basin in Canadian and Kingfisher counties, aka the STACK.  It sought protection in U.S. Bankruptcy Court for the District of Delaware (No. 20-11593).

Last year, Chisholm took over Houston’s Gastar Exploration LLC, another Oklahoma-focused E&P, to build its pure-play status in the Midcontinent. Gastar ironically had emerged from bankruptcy earlier in 2019.

A “combination of operational issues and a decline in commodity prices pushed the company to evaluate options with respect to its current capital structure and...

Matador Resources Co. said Thursday it has brought five horizontal wells in the Permian Basin’s Delaware sub-basin into production, and it plans to bring 18 more wells and a natural gas processing plant online in the third quarter.

The five wells in Eddy County, NM, within the Ray State tract of the Rustler Breaks asset area, were completed and turned to sales in late May and early June, showing 24-hour initial potential (IP) test production of 12,500 boe/d, comprising 7,600 b/d oil and 29.5 MMcf/d natural gas.

The announcement follows the start of commercial production in April of six wells at the Rodney Robinson tract in Lee County, NM, which “continue to perform better than expected,” management said. The Ray State and Rodney Robinson wells are all two-mile laterals.

The independent is concluding completion operations at its five Leatherneck wells in the Arrowhead asset area, and it has begun completion of the initial 13 Boros wells at the...

FERC has issued a notice of inquiry (NOI) on its proposed index level used to calculate annual changes to interstate oil pipeline rate ceilings for the next five years, beginning July 1, 2021.

In its NOI, the Federal Energy Regulatory Commission proposes to use the Producer Price Index for Finished Goods (PPI-FG) plus 0.09% as the index level for the five-year period, based on the methodology developed by Alfred E. Kahn and established in Order No. 561.

Kahn was a U.S. economics professor and played a key role in the deregulation of the U.S. airline and energy industries through his understanding and application of marginal-cost theory.

The Kahn Methodology uses oil pipeline data on Page 700 in FERC Form No. 6 from the prior five-year period to determine an adjustment to be applied to the PPI-FG. Details on how the index works and the index proposal can be found here.

FERC is taking comments through Aug. 17 regarding the proposal and...

The impact fees paid by Pennsylvania’s unconventional natural gas producers in 2019 declined by 20% year/year to about $200.4 million, a drop that was primarily because of lower prices, according to the state Public Utility Commision (PUC).

Since the fees were enacted in 2012, operators have paid nearly $2 billion to the PUC for distribution to local communities and state agencies.

Pennsylvania is the nation’s second largest gas-producing state behind Texas. Operators working in the Marcellus, Upper Devonian and Utica shales reported 6.8 Tcf of production last year, up 11.4% compared with 2018. However, the average price of gas declined from $3.09/MMBtu to $2.63 over the same time, which helped drive a $42.6 million annual decline in impact fee collections, regulators said.

The fee is levied annually on all unconventional wells during their first 15 years of operation, as long as they produce more than 90 Mcf. It is calculated using a...

EQM Midstream Partners LP is now a subsidiary of Equitrans Midstream Corp. after the two companies completed a merger on Wednesday that was set into motion two years ago.

EQM’s common units have stopped trading on the New York Stock Exchange. The two companies agreed to a share-for-unit exchange in February in which each EQM outstanding common unit would be exchanged for 2.44 shares of Equitrans.

Equitrans was created after EQT Corp. in 2018 completed a complex separation of its upstream and midstream assets, which did not give Equitrans complete ownership of EQM. EQT, which is now Equitrans’ largest producer customer, spun-off Equitrans following a buying spree in 2016 and 2017 that ballooned the assets and created the need to simplify its corporate structure.

Appalachian pure-play EQT recently sold half of its equity stake in Equitrans, which is now the nation’s third largest natural gas gatherer, with assets spread across the Marcellus and...

A push to revamp allowed natural gas flaring in Texas oilfields is underway, with potential changes coming as soon as this fall.

The Railroad Commission of Texas (RRC) on Tuesday heard from oil and gas executives about how to curb flaring, with an industry coalition issuing recommendations on best practices. Covid-19 has crushed energy demand and reduced activity across the state, particularly in the Permian Basin and Eagle Ford Shale, and some analysts expect flaring to decline sharply in the second half of the year.

Still, as drilling activity slowly resumes, Texas regulators will face more pressure to reduce gas flaring and other emissions, Commission Chairman Wayne Christian said Tuesday. Now is “an opportune time” to address the issue, as investors have begun to eschew exploration and production (E&P) companies that don’t make efforts to reduce emissions overall.

Texas needs to have policies to “drastically reduce” flaring because...

North Dakota is keeping a wary eye on the continuing legal challenges facing the Dakota Access Pipeline (DAPL), which carries 40% of the daily oil supplies from the prolific Bakken Shale.

Department of Mineral Resources Director Lynn Helms during a webinar last Friday sounded alarm bells regarding an ongoing legal action that seeks an injunction to shut down DAPL while additional environmental impact work is done.

“The state is extremely concerned about the potential shutdown,” Helms said. “We’re talking about a situation in the middle of all the current [pandemic and economic] destruction that would add a whole new magnitude of destruction” to the Bakken market.

Helms said he talked to one of the state’s three largest operators that has 80% of their oil hedged, while operating the state’s lone remaining active hydraulic fracturing crew and shutting in very little production. This operator is dependent on DAPL to get its production down to...

Canadian oil firms face toll hikes if they win their fight against Enbridge Inc.’s plan to convert its Mainline into a contract service from a common carrier filled by monthly bookings, the company told the Canada Energy Regulator (CER).

“Risk of loss of volumes, and the potential for a tolling spiral, clearly support doing all that can reasonably be done to secure long-term commitments for service on the Mainline,” said a CER filing by Enbridge.

The Calgary pipeline conglomerate said evolving competition and common carrier cost-of-service regulation create prospects of toll inflation. The 70-year-old Mainline delivers about 3 million b/d, which is two-thirds of Canadian production.

The common carrier regulatory regime allows pipelines to preserve revenue by raising tolls if their traffic drops. New contract service lines now under construction, the Trans Mountain expansion and Keystone XL, are liable to drain off Mainline flows, Enbridge...

Crude exports from the Port of Corpus Christi in South Texas are continuing to boom even amidst the coronavirus pandemic, and projects and enhancements appear poised to solidify its dominance along the Gulf Coast.

Record tonnage was moved in the first quarter, according to the port’s Omar Garcia, chief external affairs officer. Although oil production has declined in nearby basins and exports have declined since then, volumes continue to come in strong.

RBN Energy LLC estimated that Corpus export volumes through 2018 and the first half of 2019 averaged about 500,000 b/d, surpassing Houston and Beaumont, which is on the Houston Ship Channel. Crude exports from the Corpus/Ingleside area topped 1 million b/d for the first time in September, and have stayed around 1-1.5 million b/d ever since.

The gains are traced mostly to the Cactus II and Epic oil pipelines that move supply south from the Permian Basin, as well as the Gray Oak Pipeline, which...

Although global oil demand is expected to fall by a record 8.1 million b/d in 2020 because of Covid-19, 2021 should be a much different story, the International Energy Agency (IEA) said Tuesday.

In its June Oil Market Report (OMR), the global energy watchdog said it expects global oil production to fall by 7.2 million b/d in 2020, before recovering by 1.8 million b/d in 2021, assuming full compliance by the Organization of the Petroleum Exporting Countries and its allies, aka OPEC-plus, with coordinated production cuts.

However, this modest recovery “comes nowhere close to meeting the forecast recovery in oil demand of 5.7 million b/d, even considering the need to draw down surplus stocks that built up in 2020,” researchers said.

“That suggests that the market may present producers with an opportunity to ramp up more quickly than dictated by current OPEC-plus policy or U.S. and other non-OPEC production could recover more strongly than...

Colombia’s National Hydrocarbons Agency (ANH) will award contracts for hydraulic fracturing pilot projects to interested companies by October, according to media reports.

ExxonMobil and ConocoPhillips, along with Colombia’s state oil company Ecopetrol SA, are among firms that have expressed formal interest in these pilot projects, which ANH director  Armando Zamora said should start “as soon as possible.”

The pilots are seen as a way to demonstrate the resource in place and as a means to highlight what impacts the procedure might have on the environment. Fracturing has been controversial in Colombia and was recently declared in the lower house of congress as legal.

Crude production in Colombia is projected to fall to 750,000-850,000 b/d this year based on a Brent crude oil price range of $25-45/bbl, from a target of around 900,000 b/d at the start of the year, the government said at the end of April.

Some estimates see foreign...

Following last Friday’s sell-off, natural gas futures gave up further ground Monday on modestly cooler weather forecasts and lingering concerns about the coronavirus pandemic and its impact on industrial energy demand. Persistently low liquefied natural gas (LNG) volumes also continued to weigh on markets.

The July Nymex contract settled at $1.669/MMBtu, down 6.2 cents day/day, falling to its lowest level to date this month. August declined 5.5 cents to $1.760.

NGI’s Spot Gas National Avg. declined 5.5 cents to $1.415.

While temperatures remain consistently hot across Texas and southwestern states, parts of the West and East could see cooling, with increased heat expectations pushed to late June from earlier forecasts that called for higher temperatures this week, according to NatGasWeather.

“A weather system will stall over the East this week with heavy showers and thunderstorms, [and] comfortable highs of 70s and 80s,” the firm said....

Denver-based Extraction Oil & Gas Inc. announced Sunday it has filed for Chapter 11 bankruptcy protection in the District of Delaware, citing the impacts of Covid-19 and low commodity prices on its business.

Extraction, which operates exclusively in the Denver-Julesburg (DJ) Basin, said in May that it had engaged strategic advisers because of concerns about meeting debt commitments, and that it had suspended drilling and completions activity in the DJ.

The company has secured $125 million in debtor-in-possession financing, which, subject to court approval, is expected to provide sufficient liquidity to continue business operations and minimize disruption during the Chapter 11 cases.

Additionally, Extraction said it has entered into a restructuring support agreement with certain of its unsecured noteholders in order to facilitate a swift exit from Chapter 11.

Extraction reported total production of 94,247 boe/d in the first quarter,...