What oil price pullback? asks Pioneer

On the face of it, the 16pc drop in US crude futures since May couldn’t have been more ill-timed for US independents.

Prior to this week, WTI futures had gained nearly 40pc from their low of $43/bl in March. That had spurred a small but growing club of producers such as Occidental, Devon, Chesapeake and WPX to raise their 2015 output guidance, in part by starting to clear a backlog of wells that were drilled but not completed.

Most of those independents have budgeted an average WTI price of $60/bl for 2015 while finalizing their plans. The step up also seemed to spur a nascent revival in the US rig countContinue reading

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Oil sands growth belies bleak outlook

Canada’s oil sands output will grow steadily through 2020 on the back of a series of new start-ups, but the outlook turns sour soon after as operators defer new investments due to low oil prices.

ExxonMobil has started output at its Kearl expansion several months ahead of schedule, doubling capacity to 220,000 b/d. It also started its Cold Lake Nabiye expansion, which will lift output to 40,000 b/d by the end of 2015 from 12,000 b/d in late February.  Continue reading

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Bakken is US divestiture hot spot

North Dakota’s Bakken region has become a hotspot for US independents looking to sell midstream assets such as pipelines to shore up their balance sheets to fund core drilling programs.

Bakken producers are under more pressure from shareholders to sign midstream divestments. That’s in part because regional infrastructure constraints and a longer distance from major refining and storage hubs have kept Bakken crudes at a steep discount to benchmark US WTI.

Hess sold a 50pc stake in its Bakken midstream assets to Global Infrastructure Partners for $2.675bn.  Continue reading

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Opposing views

Banks and research houses use proprietary tools, market intelligence and insights to make forecasts on everything from oil to gold to currencies and share prices. So it is no surprise when predictions vary.

But when they come up with completely opposite outlooks, it can be troubling. Recent views on US crude output, the surge of which was one of the main reasons behind the current plunge in prices, is a case in point. And it shows just how uncertain the path forward is.  Continue reading

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Permian Power

The Permian basin in Texas looks set to kick-off a rebound in US shale drilling activities as key producers in the region such as Apache, Occidental and Concho make aggressive plans to step up output.

Permian is bigger than the adjoining Eagle Ford area, which means more drilling opportunities, is close to the massive refining hub surrounding Houston and it saw a sharper pullback during the downturn – all making the basin prime for a rebound.

“No surprise that this is the first region to see several indications of increasing go forward activity,” investment bank Tudor Pickering Holt (TPH) said.  Continue reading

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