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The Permian Basin has become a massive growth engine for the U.S. oil industry over the last few years. The driving force has been the discovery of new techniques that have unlocked the treasure trove of oil and gas trapped in the region’s tight underground rock formations. That has unleashed a wave of drilling that’s sent output soaring. Oil companies are now producing an ever-increasing gusher of cash flow thanks to the region’s low drilling costs, higher oil prices, and efficiency gains.

While the industry had been plowing that money into drilling more wells and acquiring additional land, it has recently reached an inflection point; many drillers no longer need to invest as much money to maintain a healthy growth rate. That has freed them up to allocate that cash to other activities. For the most part, they’re returning their growing windfalls to shareholders through higher dividends and stock buybacks.

Expect more money to continue flowing to investors

Oil companies are starting to reap the rewards of their investments in the Permian Basin. Many are now hauling in more cash than they need to fund growth, which is allowing them to send that money back to shareholders through rapidly rising dividends and significant share repurchase programs. That trend appears poised to continue as the industry turns this low-cost, oil-rich region into an ATM for investors.

 

 

 

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Source: The Motley Fool LLC.

May 14 (Reuters) – U.S. energy company Sempra Energy said on Tuesday the first liquefaction train at its $10 billion Cameron LNG (Liquified Natural Gas) export terminal in Louisiana started producing LNG.

Cameron is the fourth big LNG export facility to enter service in the Lower 48 U.S. state. It is keeping the United States on track to become the third-biggest LNG exporter in the world in 2019. They are behind Qatar and Australia.

Demand for natural gas, the cleanest of fossil fuels, is growing fast around the world. This is as more countries use it to meet increasing energy consumption.

The Target

The first three trains at Cameron will produce about 12 million tonnes per annum (MTPA) of LNG. This is roughly 1.7 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to fuel about five million U.S. homes for a day.

Sempra has said it expects Cameron 2 and 3 to enter service in the first and second quarters of 2020. Cameron is jointly owned by affiliates of Sempra, Total SA, Mitsui, and Japan LNG Investment LLC, a company jointly owned by Mitsubishi Corp and Nippon Yusen Kabushiki Kaisha (NYK). Sempra indirectly owns 50.2% of Cameron. McDermott International Inc and Chiyoda Corp are the lead contractors at Cameron.

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Source: gcaptain.com

Moreover, if you have further questions about LNG, feel free to reach out to us here.

Obviously, there’s a lot more than just three, but let me hit on the triad of pillars. Let’s learn more about the U.S Oil and Natural gas Industry here.

Producing at All-Time Record

Over this time, U.S. crude oil production has surged 140% to 12.2 million b/d, while gas output is up 55% to 88 Bcf/d.

The U.S. is now easily the world’s largest oil and gas producer, yielding 20% more oil and 25% more gas than Russia.

Will Still Supply the Bulk of Our Energy

Today, oil and gas are our two most important sources of energy, meeting 65% of total U.S. energy demand.

We lean on oil for 97% of our transportation needs, and increasingly, natural gas leads by generating 35% of all U.S. electricity.

This will be a cornerstone of meeting our climate change and environmental goals: “Thanks to Natural Gas, US CO2 Emissions Lowest Since 1985.”

Going Global

Not just being the largest oil and gas producer, The U.S. could also become the largest global seller of these essential fuels within five years.

Our total LNG export capacity stands to reach nearly 8 Bcf/d, or nearly 20% of the total global demand market.

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Source: Forbes.com

If you have further questions about the Oil and Natural Gas Industry , feel free to reach out to us here.

On Wednesday, U.S. president Donald Trump crushed any hopes of a trade deal with China when he announced that China “broke the deal” and that, as a consequence, the U.S. will enforce even higher tariffs on some imports from China starting on Friday, May 10.

According to some experts, however, the dip in crude prices is just temporary. With global crude supply tightening thanks to sanctions on Iran and Venezuela, as well as a surprise decline in U.S. crude production, long-term price projections are looking up. In fact, West Texas Intermediate and Brent futures are up by 30 percent or more year to date, and MarketWatch reports that analysts at Barclays are extremely optimistic, already increasing their third-quarter forecasts by $4 each for both benchmarks.

The United States has become one of the most important energy producers–and currently the fastest growing producer of “global energy supplies” — thanks to the shale oil boom in the West Texas Permian Basin. At the exact same time, China has become the fastest-growing energy consumer, especially when it comes to oil and liquefied natural gas–both of which the U.S. has in spades. “So while the dispute around tariffs goes far beyond trade balances,” argues Sheppard, “energy is one area where the two countries have a mutual interest in finding common ground.”

 

 

 

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Source: oilprice.com

Crude explorers deployed fewer rigs in U.S. fields this week amid an escalating U.S.-China trade war that weighed on oil prices.

Pressed by investors to show more austerity and return profits to shareholders, explorers spent the first five months of this year idling almost 10 percent of the onshore U.S. rig fleet. The outlook for oil demand has soured amid a protracted trade dispute between the U.S. and China, the world’s largest economies.

China Talks May Get Worse Before They Get Better, Asia Society’s Stone Fish Says.

 

 

 

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Source: Bloomberg.com

 

U.S. shale oil—which just four years ago was the world’s second most expensive oil resource—is now the second cheapest source of new oil supply globally, just behind the giant onshore oil fields in the Middle East, Rystad Energy said on Thursday.

Rystad Energy estimates in its latest cost of supply curve update that the average Brent Crude breakeven price for tight oil is now US$46 a barrel, just four dollars above the average $42 per barrel breakeven oil price for the giant onshore fields in Saudi Arabia and other Middle Eastern countries.

According to the Q1 Dallas Fed Energy Survey, with executives from 82 E&P firms chiming in, average breakeven prices to profitably drill a new well in the U.S. range from $48 to $54 per barrel, depending on the region. Drillers need $50 a barrel on average to profitably drill a new well, down from $52 per barrel when the same question was asked last year. Average breakeven prices in Midland in the Permian were $48, the lowest-cost in the U.S., and the lowest-cost region in the past three years.

 

 

 

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Source: oilprice.com

 

Vicki Hollub, the chief executive of Houston oil company Occidental Petroleum, won a bidding war for Anadarko Petroleum Corp. against oil giant Chevron Corp. And everything about the deal is why the center of gravity for the oil universe has moved to Texas.

With confidence in her company’s ability to operate the Anadarko assets at a lower cost, she pulled together a team to negotiate a $38 billion offer that includes two big partners: French petroleum company Total SA and Nebraska investment giant Warren Buffett.

Thanks to fracking and horizontal drilling technology developed here in North Texas and applied to the Permian Basin, Texas has become a major oil producer and the U.S. has become an oil exporter.

Houston oil executives no longer have to look to the furthest reaches of the world to boost production; a short flight to Midland brings them to one of the richest boom regions on the globe. Nobody has to negotiate with a Saudi or a Russian for access; in West Texas, the fiercest barriers to drilling are money, tumbleweeds and, in the case of Chevron, Hollub.

 

 

 

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Source: Dallasnews.com

 

Men work 100 hours a week. Roads are a mess. Electricity can be in short supply. But “anyone with a pulse” can make $100,000. You won’t believe what’s happening in the Permian Basin.

PECOS, Texas — Welcome to the Permian Basin, six hours west of Dallas.

Compared to the last West Texas oil boom in 2014, there’s almost four times more oil flowing in the Permian Basin.

Oil and gas companies have turned this dusty, desert landscape into a heavy industrial zone. Small towns, once sleepy, are now exploding. The pace is so frantic, I want to know if Texas has the infrastructure and resources to keep this up?

 

 

 

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Source: WFFA.com

Investment in the energy-rich shale sector in eastern Ohio continues to grow, reaching $74 billion since 2011, according to a report commissioned by JobsOhio.

The quarterly report, done by Cleveland State University’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs, shows that about two-thirds of that investment has been in drilling, land acquisition, building roads and other expenses tied to the “upstream” portion of oil and gas production.

The rest has been spent on activities such as collecting and gathering the oil and gas along with transmission lines and investments in natural-gas power plants and other uses.

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Source: The Alliance Review

U.S. West Texas Intermediate and international-benchmark Brent crude oil managed to eke-out a small gain for the holiday-shortened week, but the volatile, two-sided price action indicated cracks may be developing in the bullish narrative.

Despite hitting a new five-month high earlier in the week, it was Thursday’s gains which prevented the crude oil markets from closing lower for the week. Nonetheless, this week’s price action suggests a top-heavy market. However, we do realize that the below-average pre-holiday trade may have had an effect on trading.

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Source: OilPrice.com