Saturday, December 27, 2014

EIA: Gas in Storage -49 Bcf to 3.246 Tcf

The EIA reported this week that working gas in storage was down 49 Bcf to 3.246 Tcf.  The weekly withdrawal was only a quarter of last year's (-193 Bcf) and 64% below the five year average (-138 Bcf).  The market reacted strongly to these numbers, as the price of gas dropped precipitously during the week, with the Henry Hub spot price finishing at $2.74/MMBtu.

The current storage level is now 4.8% above last year (3.096 Tcf, a difference of 150 Bcf) and 4.9% below the five year average (3.415 Tcf, a difference of 169 Bcf).  Given another disappointing storage report like this one and the difference between the current and average will be wiped out, erasing a 60 percentage point difference from back in April.


Friday, December 19, 2014

U.S. Rig Count: -18 to 1,875

The Baker Hughes U.S. rig count was down 18 this week (45 for the past two weeks) to 1,875.  Oil rigs were down ten to 1,536, gas rigs were down eight to 338 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were down 11 to 1,356, vertical rigs were down six to 324 and directional rigs were down one to 195.  Among gas rigs, horizontal rigs were down six to 255, directional rigs were down two to 56 and vertical rigs were unchanged at 27.

Man Bites Dog: Comstock Moving Two Rigs From Eagle Ford to Haynesville!

I don't think I've ever typed these words, but a company is moving rigs from the Eagle Ford Shale to the Haynesville.  Comstock Resources announced this week that it is halting exploration in the Tuscaloosa Marine Shale and the Eagle Ford and is restarting ops in the Haynesville in early 2015.  Comstock will drop its sole rig in the Tuscaloosa, drop two rigs in the Eagle Ford and move two of the Eagle Ford rigs to north Louisiana.

Quoting the press release:
"Comstock believes that improved completion technology, including longer laterals, will provide strong returns on drilling projects at current natural gas prices. 

Forest and Sabine Close "Merger"

I "quotationalizeify" the word merger in the title because, as we've previously noted, it's more a case of Sabine Oil and Gas buying Forest Oil and assuming its public listing.  In any case, the deal closed yesterday, but complications arose when Forest got delisted by the NYSE.  Unfortunately, the deal couldn't close before the slide in the oil and gas market got the better of Forest's stock.  While the terms of the deal didn't seem to change a whole lot, they had to arrange some new financing.  The stock currently is trading on the OTC Bulletin Board with the expectation that things will change and it will meet the NYSE listing requirements, but right now you can get two shares for less than the cost of a first class stamp.

Thursday, December 18, 2014

J-W Buys Some Petrohawk Cotton Valley Action

A few weeks ago, BHP Billiton/Petrohawk sold J-W Operating its interest in acreage in the Cotton Valley formation in North Louisiana.  The sale covered "approximately 1,200 wellbores and associated gathering lines and compressor facilities" in the Elm Grove and Caspiana fields.  This likely is good news for the owners of these properties, as J-W will be a lot more attentive to these wells than BHP, which seems more interested in landing big fish than dealing with the small potatoes of existing CV wells.

EIA: Storage -64 Bcf to 3.295 Tcf; The Streams Finally Cross

The EIA reported this morning that working gas in storage was down 64 Bcf to 3.295 Tcf.  The weekly withdrawal was 75% lower than last year (-256 Bcf) and 59% below the five year average (-157 Bcf).  The current storage level is now 6 Bcf above last year (3.289), but is still 7.3% below the five year average (3.553 Tcf, a difference of 258 Bcf).



Cuomo Finally Decides to Ban Fracking in NY

The administration of New York governor Andrew Cuomo announced yesterday that the state's temporary moratorium on hydraulic fracturing implemented in 2008 would become permanent.  This decision makes the Marcellus Shale that underlies New York inaccessible to exploration and production.

The state Department of Environmental Conservation issued its legally binding recommendation based on the recommendation of the state's acting state health commissioner, a medical doctor.  The decision was made on the grounds that the health impacts of fracking are unknown, but in reality, it was a calculated political decision by Cuomo who has been conspicuously absent from the debate.

Tuesday, December 16, 2014

Encana: Hayneswhat?

Encana released its 2015 capital budget this week, much to the chagrin of all those Haynesville Encana landowners.  The company is so liquids-focused that it doesn't even label its gas plays on the map in its corporate presentation.  It instead generally refers to its natural gas leaseholds as "Natural gas optionality."


Haynesville Shale Rig Count Unchanged at 23

Last week's Haynesville Shale rig count was unchanged at 23.  Louisiana was down one (EXCO) to 15, while Texas was up one (XTO) to eight.


Monday, December 15, 2014

How's That Oily, Liquidy Thing Working Out for Ya?

In my best Sarah Palin voice, I've got to ask, "how's that oily, liquidy thing working out for ya?"  Not to dance on anyone's grave, but the plummeting price of oil has got to have executives of the independent formerly-natural-gas-now-oil-and-liquids companies banging their heads into a wall.  It's like 2012 in the natural gas market all over again.  They spent billions of dollars to forcibly shift into liquids and now the price oil makes those expensive acquisitions uneconomic.

For the past several years, I've mocked the wholesale shift away from natural gas as a case of the tail (stock analysts) wagging the dog, not because I foresaw the price of oil dropping 40% in four months.  I was more concerned with the lemming effect of gas guys piling into liquids, arriving late and paying too much.

Venture Global LNG Proposes Facility in Cameron

Venture Global LNG announced last week that it plans to invest $4.25 billion in an LNG export terminal at the Calcasieu Ship Channel in Cameron Parish, LA to export up to 10 million tonnes of liquefied natural gas abroad.  The company is planning for a 2016 construction start with operations beginning in 2019, pending approval of all its permits.

The linked article is written as if the project is a fait accompli, but the company only has DOE approval to export to any country with a free trade agreement with the U.S., which is the most basic approval.  To be viable, the terminal needs approval from FERC to build the infrastructure (not that hard to achieve) and from the DOE to export to non-free trade countries (much harder to get).  If all pending applications to the DOE are approved, it would be one of three export sites in Cameron Parish.

Friday, December 12, 2014

U.S. Rig Count: -27 to 1,893

The Baker Hughes U.S. rig count was down 27 this week to 1,893.  Oil rigs were down 29 to 1,546, gas rigs were up two to 346 and miscellaneous rigs were unchanged at one.  By type, horizontal rigs were down one to 1,367, vertical rigs were down 24 to 330 and directional rigs were down two to 196.  Among gas rigs, horizontal rigs were up five to 261, directional rigs were down one to 58 and those unloved vertical rigs were down two to 27.

EIA: Gas in Storage -51 Bcf to 3.359 Tcf

The EIA reported yesterday that working gas in storage was down 51 Bcf to 3.359 Tcf.  The withdrawal was 45% smaller than last year (-92 Bcf) and 29% smaller than the five year average (-72 Bcf).  The current storage level is now 5.2% below last year (3.545 Tcf, a difference of 186 Bcf) and 9.5% below the five year average (3.71 Tcf, a difference of 72 Bcf).


Monday, December 8, 2014

Haynesville Shale Rig Count: +1 to 23

The Haynesville Shale rig count was up one last week to 23.  Louisiana held at 16, while Texas was up one (XTO).


Saturday, December 6, 2014

U.S. Rig Count: +3 to 1,920

The Baker Hughes U.S. rig count was up three this week to 1,920.  Oil rigs were up three to 1,575, gas and miscellaneous rigs were unchanged at 344 and one, respectively.  By type, horizontal rigs were down three to 1,368, vertical rigs were up two to 354 and directional rigs were up four to 198. Among gas rigs, horizontal rigs were up one to 256, directional rigs were up one to 59 and vertical rigs were down two to 29.

Thursday, December 4, 2014

EIA: Gas in Storage -22 Bcf to 3.41 Tcf

What a difference a week makes!  After a huge withdrawal the previous week, the EIA reported this morning that last week's working gas in storage was down only 22 Bcf to 3.41 Tcf.  The withdrawal was 84% lower than last year (-141 Bcf) and 56% below the five year average (-50 Bcf).  The current storage level is now 6.2% below last year (3.637 Tcf, a difference of 227 Bcf) and 9.8% below the five year average (3.782 Tcf).


Monday, December 1, 2014

Haynesville Shale Rig Count Unchanged at 22

The Haynesville Shale rig count held at 22 last week, with Louisiana unchanged at 16 and Texas holding at six.