Published by the Oklahoman, May 25, 2019

State rig count unchanged at 103 this week

Oklahoma’s rig count remained at 103 this week as the number of working rigs nationally continued to fall, Baker Hughes reported Friday.

The national working rig count declined by four to 983, off 76 from the 1,059 that were drilling the same week a year ago. The number of rigs drilling for oil declined by five to 797, while the number of rigs drilling for natural gas increased by one, to 186.

In Oklahoma, 140 rigs were operating the same week a year ago. The number of rigs working in the Cana Woodford basin declined by three, to 45.

The most active fields this week, Baker Hughes said, were the Permian in west Texas and southeast New Mexico at 451, the south Texas Eagle Ford at 75, the Marcellus Shale at 62, the Williston at 57 and the Haynesville at 50.

Stopped-trains bill is signed into state law

A bill that would authorize local law officers to cite train owners or operators for blocking a road-rail intersection for longer than 10 minutes without good reason was signed Friday by Gov. Kevin Stitt.

The law authorizes local police, deputy sheriffs and highway patrol troopers to issue citations to train operators for lengthier intersection blockages, mirroring existing Oklahoma Corporation Commission rules.

http://oklahoman.com/article/5632290/oklahoman-business-cover-briefs-for-may-25-2019

“I think we feel really good about the NGL markets, and think that’s going to continue to strengthen, and so that makes up for softness in gas in the near term,” Antero CFO Glen Warren said during the first quarter earnings call earlier this month. Antero reported a 44% increase in year/year liquids volumes in 1Q2019.

NGI’s Patrick Rau, director of strategy and research, estimated that Appalachia’s E&Ps set their budgets this year based on a median expected New York Mercantile Exchange (Nymex) price of $2.85/MMBtu. If the rest of the current year strip holds, however, the final 2019 Nymex strip would be $2.76. The next 12-month strip, he added, is even lower at just $2.68.

By Ruth Hayhurst for Drill or Drop, May 9, 2019

Results from the latest government survey on fracking shows that public opposition has risen to its highest level so far and support dropped to a record low.

The quarterly Wave tracker survey indicates that opponents regard fracking as a risky or unsafe process and are concerned about earthquakes and the impact on climate change.

The survey was conducted in March 2019 at a time when the shale gas industry was calling for a relaxation of regulations on fracking-induced earth tremors. There were also continuing discussions about government proposals to make non-fracking shale gas schemes permitted development, avoiding the formal planning process.

Opposition

According to the latest results, 40 percent of participants opposed fracking, up from 35 percent in the most recent survey conducted in December 2018, and up from 21 percent in December 2013.

This survey saw the largest increase in opposition since it was first carried out and the third consecutive rise in opposition.

Strong opposition was also at record levels, up to 16 percent, compared with 13 percent in the previous survey.

As in previous surveys, the results found that opposition was higher among people who knew more about fracking.

Among people who said they knew a lot or a little about fracking, 16 percent of people said they supported the process and 56 percent said they opposed.

Opposition to fracking was highest in north-west England (50 percent), Wales (49 percent) and Scotland (49 percent). It was lowest in London (30 percent), east England (31 percent) and the west midlands (32 percent).

The main reasons why people opposed fracking were:

Loss or destruction of natural environment – 57 percent, (down from 62 percent)
Risk of earthquakes – 45 percent (up from 40 percent after a previous rise from 26 percent)
Risk of contamination to water supply – 23 percent (up slightly from 22 percent)
Too much risk/uncertainty – 26 percent (up from 20 percent)
Not a safe process – 29 percent (up from 24 percent)
Use of chemicals – 16 percent (up from 15 percent)

Support

Support for fracking fell to 12 percent of participants, down slightly on 13 percent in the previous survey. This is the lowest level recorded by the survey so far and is 17 percentage points below the peak in March 2014.

Strong support for fracking remained unchanged at 2 percent.

The gap between support and opposition is now at its biggest so far. The 28 percent difference increased six percentage points from the previous survey and passed the previous high of 23 percent reached in September 2017.

The main reasons people gave for supporting fracking were:

Need to use all available energy sources – 35 percent (up from 34 percent)
Reduces dependence on other fossil fuels – 33 percent (up from 26 percent)
Reduces dependence on other countries for UK energy – 26 percent (up from 25 percent)
May result in cheaper energy bills – 21 percent (unchanged on the previous survey)
Positive impact on the UK economy – 17 percent (down from 19 percent)
Some 45 percent of participants neither supported nor opposed fracking. This was 2 percent down on the previous survey and the lowest figure since December 2015.

Three (3) percent said they did not know whether they supported or opposed, down one point on the previous survey.

The survey found that 77 percent of people who knew less about fracking said they neither support nor opposed it. Among this group, support was 6 percent and opposition was 17 percent.

78 percent of participants were aware of fracking for shale gas. This was unchanged on the previous survey.

13 percent said they knew a lot about fracking (up 2 points from the previous survey). 45 percent said they knew a little and 19 percent were aware. 22 percent said they had never heard of fracking, unchanged on the previous survey.

According to the findings, awareness of fracking was higher among:

Men (82 percent, compared with 73 percent of women)
People aged 55+ (91 percent, compared with 58 percent of those aged 16-24)
Social grade AB (90 percent, compared with 64 percent of respondents in social grades DE)

Reaction:

Friends of the Earth clean energy campaigner, Jamie Peters, said: “With support for fracking at all all-time low and overwhelming public concern about climate change, it’s time to pull the plug on this destructive, unnecessary and unwanted industry.

“Ministers must listen to the mounting scientific evidence on climate change, huge backing for renewable energy, and growing demand for tougher action.

“This means abandoning support for climate-wrecking fracking and fossil fuels and instead championing energy saving and power from the wind, waves and sun. This is what the science requires and the public demand. It’s time to stop dithering and get on with it.”

A spokesperson for Frack Free Lancashire said: “The results are indicative of the battle the shale gas industry has faced since appearing in communities where they are not wanted. The long-term trends are clear: fracking is continuously and increasingly failing to win the support of communities, in spite of the intensive green-washing efforts by the industry.

“Support for renewable energy remains high, with 84 percent of respondents polled expressing support, and with strong support surging from 30 percent to 37 percent.

“With the damning report by the IPCC released last month, urgent global action to decarbonise is now needed. This also means there is no need or room for a new dirty fossil fuel industry like fracking.

“We require urgent political action on climate change and investment on clean energy sources if we are to mitigate the impending impacts of climate change.”

Methodology

The fieldwork was carried out for the Department of Business, Energy and Industrial Strategy from 13-24 March 2019 using the Kantar TNS Omnibus. The results of the Wave 29 tracker were based on face-to-face home interviews with a representative sample of 4,224 households in the UK.

The survey dropped a question on attitudes to fracking in July 2018 but reinstated it in September 2018.

https://www.desmog.co.uk/2019/05/09/poll-fracking-support-falls-record-low

By Nick Cunningham, Oil Price News, January 2019

The problems of shale gas giant EQT:

The Wall Street Journal reported earlier this month that even as EQT was breaking new frontiers in terms of the length of the shale wells the company was drilling, the economics proved highly disappointing. Last April, one shale gas well EQT drilled exceeded 18,000 feet, and EQT thought it could drill horizontal wells approaching 20,000 feet. “The decision to drill some of the longest horizontal wells ever in shale rocks turned into a costly misstep costing hundreds of millions of dollars,” the Wall Street Journal reported. EQT’s CEO said later in the year that its wells were encountering problems when they exceeded 15,000 feet.

https://oilprice.com/Energy/Energy-General/Warning-Signs-Flash-For-US-Shale.html

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By Bradley Olson, Rebecca Elliott and Christopher M. Matthews

From the Wall Street Journal, January 3, 2019

Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into an oil superpower.

The Wall Street Journal compared the well-productivity estimates that top shale-oil companies gave investors to projections from third parties about how much oil and gas the wells are now on track to pump over their lives, based on public data of how they have performed to date.

Two-thirds of projections made by the fracking companies between 2014 and 2017 in America’s four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota.

Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions.

The shale boom has lifted U.S. output to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal’s findings suggest current production levels may be hard to sustain without greater spending because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October.

As so often with DeSmog blog posts on this subject, it emphasizes the OIL fracking industry, though it mentions gas. To what extent is all this true of fracked gas?

Second question is how the final paragraph makes sense. For the oil and gas companies, they keep drilling furiously, to have cash coming into pay the debts, though the faster they drill the higher the debts climb.

For Wall Street executives, i guess they get bonuses for big loans and there’s no price for a loan that never gets repaid. But for the banks, how does it make sense to keep investing in companies that never make a profit? Maybe because on some level this is all play money, and they can’t lose?

Whenever it adds up to a huge crash it’ll be time for them to demand another huge bailout, and they know the government will comply?

Mary Wildfire, Roane County, WV

Capitalism in general, and the stock market in particular are like that too. Rapid shifts of capital are possible without considering more than the differential of the day or hour; the long term is really not a necessary consideration.

If you can make a profit today you can put your capital somewhere else tomorrow.

Where capital is separated from the firm that uses it, reliable information is needed for the long term investor. Where does he get it? That is a big problem, especially where a large, well established industry like oil and gas is concerned. They have large financial reserves and are experienced in influencing government (with baksheesh), the media (with advertising) and they can rely on inertia in public perception. How is a long term investor going to come across an accurate investment considering the long term?

How is a society to choose which industry to back, if rapid change is going on in one or both? There is a big problem to face. Investors should beware!