Energy Ink Magazine | Oil Prices. Oil News. Total Coverage.
100 Word Energy Headline Articles
Eagle Ford NG is Virtually Worthless (May 2019)
Natural Gas prices at the West Texas Waha hub have collapsed. The Midland Reporter Telegram reports than NG prices literally hit zero (0¢ per mmBtu) What is a BTU? Worse, last month some drillers had to actually pay midstream operators to take their unwanted gas.
Why this is happening is a multi-fold issue. The drop began when El Paso Natural Gas Pipeline began to see problems at two compressor stations in New Mexico which cut takeaway capacity coming from the Permian. The next issue is oversupply. Most NG coming out of the Permian’s’ Delaware Basin goes to plants in Pecos County, TX. These plants have so much gas available that they are outrunning their delivery capacity.
The national benchmark, Henry Hub, price per mmBtu has been around $2.55.
Saudi Aramco is revealed to be worth a staggering amount of money (May 2019)
Saudi Aramco, the Saudi Arabian owned EP company has long held its financials close to the vest until now. According to Moody’s rating service, Aramco’s recent prospectus for a bond offering aimed at helping it buy a 70% share of Saudi Basic Industries Corp revealed $355.9 Billion dollars in revenue with profits at $111 billion for the SA in 2018. Royal Dutch Shell, the world’s largest publicly traded energy company, in contrast, made $23.4 billion.
The Saudi’s had planned on taking SA public last year which would have led to the world’s largest public offering ever with the company valued at $2 Trillion dollars. The offering is currently on hold.
Frac Hits Lead to Potential Legal Problems (April 2019)
Despite there being seemingly plenty of room, the shale play landscape is getting tighter, especially around the best pay zones in the Permian Basin. With longer laterals and higher pressure completions comes the potential for “frac hits,” where a newly fracked well infringes on the lease holdings of another horizontal or even a traditional well’s domain.
Such hits could lead to large loss of production damage claims. Concerns over frac hits are leading to conversations about new regulations to protect claims on existing as well as abandoned wells.