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oil price recovery

Oil Price Recovery Drives Oil and Gas Industry Surge in High-Value Deals in 2021

A total of 74 billion-dollar deals were undertaken in the oil and gas industry last year. This is in comparison to only 40 in 2020 says GlobalData. The leading data and analytics company notes that oil price recovery encouraged companies to undertake more high-value deals. This is to push forward their growth plans. The largest deal in terms of value for 2021 is towards the end of the year. It is when prices were at multi-year highs. It involved the proposed US$13.9 billion acquisition of North Sea operator Lundin Energy by Aker BP.

GlobalData’s latest report, ‘Global M&A Deals in 2021 – Top Themes by Sector’, reveals that global mergers and acquisitions (M&A) activity in the oil and gas industry grew annually by 16% to reach US$335 billion in 2021, considering M&As with known deal value. All regions reported an increase in deal value in 2021. They did not include China, the Middle East, and Africa with the comparison to the previous year. However, in terms of deal volume, M&A activity was largely flat at around 1800 oil and gas deals in 2021.

The upstream sector contributed to the highest M&A transaction value of US$120 billion in 2021. It also recorded the highest growth of 48% compared to 2020.

Ravindra Puranik, Oil & Gas Analyst at GlobalData, comments: “This growth in deal-making was largely driven by the shale and subsea themes. The US shale plays, particularly the Permian Basin, remained the most attractive target for oil and gas M&As in 2021. The oil and gas assets in the North Sea also witnessed several deals in the last year.” This includes the one involving Lundin Energy.

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Source: World Pipelines

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U.S. Rig Count

U.S. Rig Count Sees Massive Climb On Higher Oil Prices

The number of active drilling rigs in the United States rose by 22 this week—the 16th straight weekly increase to the number of oil and gas rigs in the United States and the largest single-week rise since February 2018. Continue reading to learn more about U.S Rig Count.

The total rig count now sits at 635 as the price of a WTI barrel slipped this week from its multi-year highs.

Baker Hughes reported this week that the total active rig figure—oil, gas, and miscellaneous—is 238 rigs higher than the rig count this time in 2021.

Oil-directed rigs rose 19 to 516, while gas-directed rigs were up by 2 to 118. Miscellaneous rigs were also up 1.

U.S. weekly production of crude oil this week increased, breaking its recent downward trend. Crude production for the week ending February 4  rose 100,000 bpd to 11.6 million bpd, according to the Energy Information Administration.

The rig count in the Permian Basin rose by 7 this week, bringing the total rig count in the prolific Permian basin to 301. The nation’s second most prolific basin, the Eagle Ford, saw its count rise by 4 to 54.

Primary Vision’s Frac Spread Count, which tracks the number of completion crews finishing off previously drilled wells, shows that completion crews rose for the fifth week in a row by 3 to 264 for week ending February 4. The frac spread count is now up 89 from a year ago.

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Source: Oil Price

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gas price increase

Gas Price Increase – Why is the price of gas going up again?

According to AAA, the average price per gallon in Connecticut was $3.58. It was a massive gas price increase!

There is more pain at the pump across Connecticut and nationwide as gas prices climb higher once again.

“It sucks. It’s terrible, I hate it,” said Aiden Roche of Bristol.

“Frustrating, yeah I’m not OK with it. We need to do something about it,” said Meilany Caimares of Hartford.

There are a couple of reasons why it’s costing you more to fill up your tank, according to AAA. The cold winter weather is driving up demand for oil, and tensions between Russia and Ukraine are also contributing.

“Those political tensions are driving crude oil prices. And crude oil prices make up about three-fourths of what we pay at the pump,” said AAA spokesperson Tracy Noble. “Crude oil is closing just around $90 per barrel, and that’s $30 per barrel higher than we were seeing in August,” she said.

For drivers, it can take a toll on their finances, eating into other parts of their budgets just to be able to get to and from wherever they need to go.

“As a college student paying tuition, absolutely, yeah it’s terrible right now,” Caimares said.

“I mean it costs me pretty much double to fill an economy car and for people who don’t own economy cars it makes a big difference,” said Andrew Shields of Watertown.

Source: FOX61
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U.S. drillers

As oil nears $100 a barrel, U.S. drillers get busy in costly shale basins

As U.S. oil rises toward $100 a barrel, producers in some high-cost shale basins are buying properties and adding rigs and frack crews in places that fell silent when prices crashed early in the pandemic two years ago. U.S. drillers get busy in costly shale basins now.

Benchmark U.S. prices last week topped $93 a barrel, up around 65% in the last 52 weeks and the highest since 2014. U.S. producers are cranking up spending at double-digit rates as fuel demand has soared and fears have waned that OPEC will again punish them by flooding the market with crude that is cheaper to produce.

Some executives say current high prices and relatively low service costs make production economics the best in years. Firms are buying U.S. oil, pipeline, and gas processing rivals in a bet that higher prices will more than cover rising costs of labor and equipment.

New activity is stirring in secondary oilfields like Colorado’s DJ Basin, Wyoming’s Powder River, Louisiana’s Haynesville, and North Dakota’s Bakken shale, which last year lost its spot as the second-largest U.S. oil-producing region.

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Source: Reuters

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Permian Basin Oil

Permian Basin oil and gas deals getting bigger as market recovers from COVID-19

There are three recent acquisitions of oil- and gas-producing assets in the Permian Basin. And yes, it moved more than $1 billion in the last week! This is as the market for fossil fuels in the U.S. grows along with production in the basin. This is one of the nation’s most active.

Domestic oil was trading at about $88 per barrel. It goes up from about $85 a barrel a week ago, per data from Nasdaq.

The increased value in oil was followed by growth in oil and gas rigs with the Permian Basin adding one rig in the past week for a nation-leading total of 293 rigs – an increase of 101 from a year ago, as of Friday per the latest data from Baker Hughes.

New Mexico and Texas, which share the Permian, had 94 and 294 rigs, respectively – holding the top two rig counts in the nation, Baker Hughes reported.

Amid that growth more companies sought to increase their presence in the leading basin in early 2022.

Earthstone Energy announced Monday it acquired lands in the eastern Midland Basin, a section of the greater Permian in West Texas, for about $860 million from Bighorn Permian Resources.

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Source: Carlsbad Current-Argus

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Oil News

Oil Posts Its Strongest January in Decades as Market Tightens

LATEST OIL NEWS – Oil had its biggest January gain in at least 30 years as robust demand outpaced fresh supply.

The global benchmark settled above $91 a barrel, posting a 17% gain this month. The combination of booming demand, scratchy supply and dwindling stockpiles has helped crude soar this month, with top banks and oil companies saying prices may soon pass $100 a barrel.

Crude’s rally is really “a supply story,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Crude is flying in the face of a strong U.S. dollar and a weak global stock market. It comes down to its own fundamentals more than anything else.”

Traders were greeted Monday with a familiar set of drivers, from the weather to stockpiles. Low temperatures in the U.S. have been boosting demand for fuels, as Boston reported a daily snow record over the weekend and New York’s Central Park received more than 8 inches (20 centimeters.) An oil pipeline in Ecuador was damaged by a rockslide, potentially endangering supply. Meanwhile, oil held on tankers fell by more than 20% last week, the latest sign of ebbing inventories.

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Source: Bloomberg

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United States Natural Gas

United States Natural Gas Is No Longer Too Dirty for France

In October 2020, the French government blocked a $7 billion deal between Engie, a partially state-owned French energy enterprise, and NextDecade, a U.S. liquefied natural gas (LNG) company, because the gas was too dirty. But recently, it was revealed that a new, 11-year deal was quietly signed for that same fuel last June—this time between Engie and Cheniere Energy, a different U.S. LNG company.

Most of the details of the new deal came from a recently unsealed letter by the U.S. Energy Department, in which Cheniere asks for “confidential treatment” of the purchase. Neither company has announced the agreement, and Cheniere has declined comment on the multibillion-dollar LNG deal. Meanwhile, French news outlets have reported that Engie did its best to keep things “under the radar” and might have gone so far as to use a code name to limit publicity.

The seeming about-face is evidence that the oil and gas landscape is evolving. Some exporters, such as Cheniere, have been able to position themselves as responsible companies. For instance, Cheniere has launched initiatives to work more closely with natural gas suppliers on managing greenhouse gas emissions. Its operations also go beyond the proposed methane regulations of the U.S. Environmental Protection Agency (EPA), and the company has even gone so far as to promise carbon-neutral LNG shipments to Europe (though it’s not clear how many).

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Source: FP  (Foreign Policy)

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Oil and Gas Expansions

Oil and Gas Expansions Planned in Permian Basin as Production Forecast to Rise This year

Another oil and gas operator sought expansions into the Permian Basin. It is in southeast New Mexico and West Texas. This is as the fossil fuel markets continued to grow in early 2022.

Split Rock Resources, based in Fort Worth, Texas, announced on January 18. The purchase is about $97.5 million worth of non-operated lands in the basin from a private seller. They are hoping to begin producing oil in western Delaware and eastern Midland sub-basins of the Permian.

The assets included in the deal were located in Eddy and Lea counties. It is in southeast New Mexico and Midland and Glasscock counties in Texas. Currently producing about 2,000 barrels of oil equivalent (Boe) per day.

They also included about 1,000 net acres targeting the productive Wolfcamp and Bon Spring formations.

The company hoped to double that production in 2022.

“The assets are operated by a diverse group of top-tier companies and 2022 development activities are expected to increase daily production rates to over 4,000 Boe per day,” read a statement from Split Rock.

Hydrocarbon processing capacity in the Permian was also set to expand. It is as Odessa, Texas base Saulsbury Industries receive an award. These are contracts to build and install a cryogenic gas processing facility in the Permian. Partnering with an unnamed “major” oil and gas producer, per a news release.

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Source: Carlsbad Current-Argus

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Energy Independence

In Quest for Energy Independence, Mexico Is Buying a Texas Oil Refinery

DEER PARK, Texas — Two giant murals, on storage tanks at an oil refinery here, depict the rebels led by Sam Houston. They secured Texas’ independence from Mexico in the 1830s. This week those murals will become the property of the Mexican national oil company. This means acquiring full control of the refinery. Let’s talk more about energy independence below.

The refinery purchase is part of President Andres Manuel López Obrador’s own bid for the independence of sorts. This is an effort to achieve energy self-sufficiency. Now, the president of Mexico is investing heavily in state-owned oil companies. They are placing a renewed emphasis on petroleum production and retreating from renewable energy. This is even as some oil giants like BP and Royal Dutch Shell are investing more in that sector.

Mr. López Obrador aims to eliminate most Mexican oil exports over the next two years. Above all that, the country can process more of it domestically. He wants to replace the gasoline and diesel supplies the country currently buys from other refineries in the United States with fuel produced domestically or by the refinery in Deer Park, which would be made from crude oil it imports from Mexico. The shift would be an ambitious leap for Petroleos Mexicanos, the company commonly known as Pemex.

Firstly, the company’s oil production is comparable to Chevron’s in recent years. As a result, this has been falling for more than a decade. Basically, it shoulders more than $100 billion in debt, the largest of any oil company in the world.

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Source: The New York times

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oil prices current

White House Helpless As Oil Prices Climb Higher

President Joe Biden announced plans to release up to 50 million barrels of oil from the strategic petroleum reserve. This is to lower retail fuel prices. Many analysts warned that any effect this move would have would be short-lived. Indeed, prices dropped for a very short. On the other hand, it is now on the climb again. This is with the number of three-digit price forecasts growing.

The strategic reserve release was already a desperate attempt to put a lid on gasoline prices, pushed up by crude oil prices, themselves the result of a faster rebound in global demand and production constraints among OPEC members. The Omicron variant of the coronavirus, like the SPR release plans, had a transitory negative effect on benchmarks, but before long, they were once again on the rise.

Morgan Stanley expects Brent crude to reach $90 per barrel later this year. This is also the price forecast of Goldman. JP Morgan recently said that crude could reach and exceed $100 this year, noting the decline in OPEC spare production capacity. The latest to join the bullish choir is Vitol, whose head for Asian operations told Bloomberg last week that oil had further up to go because of tight supply.

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Source: Oil Price

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