Saturday, November 28, 2015

U.S. Rig Count: -13 to 744

The Baker Hughes U.S. rig count was down 13 this week to 744.  Given current commodity prices, expect this trend to continue.  Oil rigs were down nine to 555 and gas rigs were down four to 189.  By type, horizontal rigs were down 12 to 569, vertical rigs were up two to 109 and directional rigs were down three to 66.  Among gas rigs, horizontal rigs were down five to 140, directional rigs were down three to 26 and vertical rigs were up four to 23.

Yipes! EIA: Gas in Storage +9 Bcf to 4.009 Tcf

The EIA reported Wednesday that working gas in storage was up 9 Bcf to a new record high 4.009 Tcf.  The weekly injection 141 Bcf (!!!) greater than the same week last year's withdrawal and 36 Bcf higher than the five year average withdrawal.  The current storage level is now 16.0% higher than last year (3.455 Tcf, a difference of 554 Bcf) and 6.7% above the five year average (3.757 Tcf, a difference of 252 Bcf).


Tuesday, November 24, 2015

2014 U.S. Natural Gas Proved Reserves Up 9.8% to 388.8 Tcf

The EIA announced its annual assessment of proved reserves of oil and gas in the U.S. for year end 2014  It concluded that proved natural gas reserves had increased 34.8 Tcf to 338.8 Tcf, an increase of 9.8%.  The Haynesville Shale is the fifth largest natural gas field (using 2013 PR numbers), while the Marcellus Shale is the largest.  With proved reserve increases, West Virginia became the fourth largest state in terms of proved reserves this year, surpassed only by Texas, Pennsylvania and Oklahoma).

A 10% increase in proved reserves seems high given the low price of gas, but it is likely a nod to technological advances and improved understanding of how to tap gas from existing fields.  This has become evident in the Haynesville as companies have fine tuned their production approach to greatly increase expected ultimate recoveries.  The official definition of proved reserves:
"Proved reserves are estimated volumes of hydrocarbon resources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. Reserves estimates change from year to year as new discoveries are made, as existing fields are more thoroughly appraised, as existing reserves are produced, and as prices and technologies change."

Friday, November 20, 2015

U.S. Rig Count: -10 to 757

The Baker Hughes U.S. rig count was down 10 this week to 757.  Oil rigs were down ten to 564, while gas rigs were unchanged at 193.  By type, horizontal rigs were down six to 581, vertical rigs were down one to 107 and directional rigs were down three to 69.  Among gas rigs, horizontal rigs were up two to 145, directional rigs were down two to 29 and vertical rigs were unchanged at 19.

Thursday, November 19, 2015

EIA: Gas in Storage +15 Bcf to 4.000 Tcf

Boom!  The EIA reported this morning that working gas in storage was up 15 Bcf to another new record high of 4.0 Tcf.  The weekly injection was 24 Bcf higher than last year (-9 Bcf) and 27 Bcf higher than the five year average (-12 Bcf).  The current storage level is now 11.2% above last year (3.596, a difference of 404 Bcf) and 5.5% higher than the five year average (3.793 Tcf, a difference of 207 Bcf).


This week's report proves, yet again, that I'm not much of a prognosticator.  I thought storage wouldn't hit 4 Tcf.  Powered by wishful thinking, I stuck to my guns last week in the face of a higher than expected injection.  In any case, save the coming of a new ice age, pressure on storage at the end of injection season looks to be the norm for years to come.  With El Nino still in place, it looks to be a long winter for natural gas.  Maybe I should make a strong negative prediction - I'm not exactly on a winning streak these days...

Friday, November 13, 2015

U.S. Rig Count: -4 to 767

The Baker Hughes U.S. rig count was down four this week to 767.  Oil rigs were up two to 574, while gas rigs were down six to 193.  By type, horizontal rigs were up two to 587, vertical rigs were up three to 108 and directional rigs were down nine to 72.  Among gas rigs, horizontal rigs were down two to 143, directional rigs were down three to 31 and vertical rigs were down one to 19.

EIA: Gas in Storage +49 Bcf to 3.978 Tcf

Oh, El Nino!  A new record high:  the EIA reported this morning that working gas in storage was up 49 Bcf to 3.978 Tcf.  It looks to be raging towards 4 Tcf, endangering my fateful prediction from last week that it would not break through the mystical 4.  But I'm going to stick with last week's prediction.

The weekly injection was 4% higher than last year (+47 Bcf) but more than double the five year average (+23 Bcf).  The current storage level is now 10.3% higher than last year (3.605 Tcf, a difference of 373 Bcf) and 4.5% above the five year average (3.805 Tcf, a difference of 373 Bcf).


Tuesday, November 10, 2015

U.S. Rig Count: -4 to 771

The Baker Hughes U.S. rig count was down four last week to 771.  Oil rigs were down six to 572 and gas rigs were up two to 199.  By type, horizontal rigs were up eight to 585, vertical rigs were down seven to 105 and directional rigs were down five to 81.  Among gas rigs, horizontal rigs were down one to 145, directional rigs were unchanged at 34 and vertical rigs were up three to 20.

Thursday, November 5, 2015

EIA: Gas in Storage +52 Bcf to 3.929 Tcf

The EIA announced this morning that working gas in storage was up 52 Bcf to 3.929 Tcf.  The weekly injection was 42% lower than last year (a huge +90 Bcf) and 10% below the five year average (+58  Bcf).  The current storage level is now 10.4% above last year (3.558 Tcf, a difference of 371 Bcf) and 3.9% higher than the five year average (3.782 Tcf).


If this year's injection (red line) follows last year's trend (dark blue line), storage will scrape and maybe even cross the 4 Tcf level, which would be a first.  Over the past seven years, the first withdrawal of the season occurred anywhere from the first week of November (once) to the first week of December (also once).  The average is around the third week, but heating demands will start to level off the net injections and the red line should start to flatten before turning downward.  Don't wager on my input, but I don't expect storage to cross the 4 Tcf line this year.  (Hopefully not my famous last words.)