[AirlinePilot]

Energy investment a casualty of the recession

"The oil and gas industry indeed has universally been affected by and reacted to the downturn in crude pricing. In addition to cutting non-critical expenditures, capital investments have taken a toll. The data reveals that across virtually all geographies, capital expenditure spending has increased a paltry 4.7% in 2009 compared to the prior year. Fiscal year 2009 will continue to exhibit marked decreases in earnings, revenues, and cash flows. While the industry continues to cut costs and react to what is the new normal, capital investment spending is a casualty of the crude oil slump as cash flow pressures prevail."

http://www.pennenergy.com/index/petrole ... nergy.html

$this->bbcode_second_pass_quote('', ' ')overall drilling activity was down 46 percent between the second quarter of 2009 to the same period last year

[JJ]

$this->bbcode_second_pass_quote('TheAntiDoomer', '')$this->bbcode_second_pass_quote('', ' ')overall drilling activity was down 46 percent between the second quarter of 2009 to the same period last year

[mcgowanjm]

AP is correct. And the reason for the "glut"
is the economy is collapsing.
And remember last week? O dedicating $3.6 billion to the grid?
$this->bbcode_second_pass_quote('', '
')There are always many problems with the use of electricity. It is certainly costly. Duncan notes that, according to the International Energy Agency, the worldwide investment funds required for electricity from 2003 to 2030 will be about $9.66 trillion. That sort of money is simply not available. In the 2000 version of his essay, Duncan adds that electric power systems are "complex, voracious of fuel, polluting, and require 24h-7d-52w maintenance and operations."

[copious.abundance]

U.S. Rig Count for October Up 35 to 1,044

LINK

[Maddog78]

Nice to see that rig count steadily creeping back up.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Energy Cycle Set To Move Higher In 2010
Posted: Nov 13, 2009 14:22 PM by Eric Fox

The exploration and production industry is planning a major ramp in drilling activity in 2010, as it positions itself to take advantage of anticipated higher demand due to an improving economy and hopefully higher natural gas prices.

Many of the companies have not yet set official capital budgets for 2010, but a look at management commentary during third-quarter earnings season indicates that a higher level of activity is in the works.

[...]

Energy Cycle May Accelerate In 2010

The energy industry is deeply cyclical, which many investors found out the hard way last year. The latest evidence suggests that the cycle is moving from a tepid recovery to one that may accelerate sharply in 2010.

The hits keep coming!

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Pertamina plans 77% capital spending increase
Nov 13, 2009
Eric Watkins, OGJ Oil Diplomacy Editor

LOS ANGELES, Nov. 13 -- Indonesia’s state-owned PT Pertamina, aiming for an 11% boost in oil production, expects to increase capital expenditure to $4.15 billion in 2010—a 77% increase over spending in 2009, according to a company official.

“The increase in capital expenditures was made to meet the increasing number of new projects and preparations to build a number of refineries,” said Pertamina financial director Frederick Siahaan.

"This is our prediction, but we still need approval from the shareholder meeting," said Frederick, who noted that as much as $2.5 billion would be secured from loans, including $1 billion in dollar-denominated bonds and 1 trillion rupiah in rupiah-denominated bonds.

[...]

[Maddog78]

That's great news. Those Co. are really planning to pick it up.
Wild news about Devon. They have 159 wells drilled not yet fracced!
I thought we had a lot with over 30.


$this->bbcode_second_pass_quote('OilFinder2', '&')gt;>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Energy Cycle Set To Move Higher In 2010
Posted: Nov 13, 2009 14:22 PM by Eric Fox

The exploration and production industry is planning a major ramp in drilling activity in 2010, as it positions itself to take advantage of anticipated higher demand due to an improving economy and hopefully higher natural gas prices.

Many of the companies have not yet set official capital budgets for 2010, but a look at management commentary during third-quarter earnings season indicates that a higher level of activity is in the works.

[...]

Energy Cycle May Accelerate In 2010

The energy industry is deeply cyclical, which many investors found out the hard way last year. The latest evidence suggests that the cycle is moving from a tepid recovery to one that may accelerate sharply in 2010.

[Maddog78]

The strong take over the weak. Life goes on and wells get drilled.


http://www.ogfj.com/index/article-displ ... _223m.html

$this->bbcode_second_pass_quote('', 'N')ewfield offers $223M for TXCO assets


Published: Nov 9, 2009
Mikaila Adams
Associate Editor, OGFJ

After filing for bankruptcy earlier in the year, San Antonio-based TXCO Resources Inc. has agreed to sell a large portion of its assets for $223 million to Houston-based Newfield Exploration Co. The purchase price is to be paid in cash at closing with no financing contingencies. Newfield has agreed to an earnest money deposit of $20 million. Read OGFJ's November 2007 interview with TXCO's chairman and CEO James Sigmon.

In February, TXCO retained Goldman Sachs & Co. to review strategic alternatives and, on August 27, retained the investment banking firm of Global Hunter Securities LLC to help market its assets.

Newfield initially bid $211 million in mid-October to acquire substantially all of TXCO's assets. An offer from another third party to purchase all of the company's assets prompted Newfield to increase its bid to $223 million.

The San Antonio-based oil and gas exploration company was focused on the Maverick Basin in South Texas and holds nearly 630,000 net acres in the block.

[Maddog78]

Shell plans to pick things up a little.


http://www.bloomberg.com/apps/news?pid= ... Mc65PZBa7w



$this->bbcode_second_pass_quote('', 'S')hell Plans to Expand Gulf of Mexico, Kazakhstan Exploration Share Business
By Eduard Gismatullin

Nov. 24 (Bloomberg) -- Royal Dutch Shell Plc is planning to expand exploration in the U.S. Gulf of Mexico and Kazakhstan as Europe’s largest oil company seeks to maintain output.

The company is designing a development plan for its West Boreas discovery in the Gulf of Mexico, which may hold 100 million barrels of resources, said Malcolm Brinded, Shell’s executive director for international production and exploration.

Plans for a second platform at the deepwater Mars field in the gulf, which may add 100,000 barrels of oil equivalent a day of output, are also being evaluated, Brinded said today. In January, The Hague-based company postponed an investment decision on upgrading the Mars platform because of high industry costs and lower oil prices.

In Kazakhstan, Shell and its partners in the Pearls project in the Caspian Sea may make a final investment decision in 2011, Brinded said in a presentation posted today on Shell’s Web site.

“The potential here runs to the hundreds of millions of barrels,” Brinded said, referring to “significant” oil discoveries at Khazar-1 in 2007 and Auezov-1 in 2008. Shell plans to drill a third exploration well into the nearby Tulpar structure next year, he said.

[Maddog78]

http://www.rigzone.com/news/article.asp?a_id=82785

Rig count is slowly rebounding.
I found this part interesting and bolded part of it for pstarr.
Seems like the decline rates for shale gas wells aren't quite the 95% he likes to use.


$this->bbcode_second_pass_quote('', '
')snip.................
Although a general consensus has formed that the land rig count will continue to increase during 2010, it would be wise to balance optimism with a sense of caution in the current recovery. While the recovery periods in each of the last two cycles generally exhibited an up and to the right pattern (for two and six years respectively), the present upturn is occurring in a noisy environment where multiple variables could take a course that would result in a plateauing rig count or possibly even a second bottom. That said, we would hasten to note that any material retrenchment appears unlikely in the near term given the increased inquiry levels being received by drilling contractors and the expected uptick in E&P capex next year.

snip..............

Other variables include more efficient drilling technology, shallow decline rates for wells drilled in new shale plays, the threat of additional LNG imports and the ultimate magnitude of the production response to the rig count decline. In addition, high natural gas inventories remain a significant concern. Gas in storage currently stands at 3,833 bcf, 10% above the year ago level and 12% higher than the five-year average.

snip................

[copious.abundance]

$this->bbcode_second_pass_quote('AirlinePilot', 'C')ontinued rig declines and speculation that it gets worse before it gets better.

Link

[AirlinePilot]

Supporting my previous premise....

Even with the larger rebound in crude price we still have the lingering effects of low crude prices last year.

http://www.bloomberg.com/apps/news?pid= ... nm2BeGMveI

[copious.abundance]

Or, maybe not.

>>> The coming oil glut that will force prices to drop sharply <<<

[shortonsense]

$this->bbcode_second_pass_quote('AirlinePilot', 'S')upporting my previous premise.... Even with the larger rebound in crude price we still have the lingering effects of low crude prices last year. link

[AirlinePilot]

Shortonsense,

As has been painfully pointed out to you many times there is a world outside other than your own. Look around for goodness sake.

I endured a 2 week inability to get gasoline along with several hundred thousand fellow south easterners last summer. I guess since it didnt affect you you "missed" it.

There are MANY places around the globe right now that cannot afford the price of crude. You keep burying your head in the sand and I'm sure it all just goes away soon.

[copious.abundance]

Once again AP has to invoke a temporary, hurricane-induced gasoline shortage, caused not by a real shortage of oil or gasoline but by oil and gasoline infrastructure being disabled by the hurricanes, to keep alive his dreams of doom. Elsewhere the world had surpluses of oil, and the price was crashing.



That's like saying there was a shortage of electricity during the 3-day blackout I endured a few years ago due to a severe windstorm. Um, no, that's not a shortage of electricty, that's the electricity infrastructure being disabled by severe weather.



There is a difference between infrasturture and distribution system damage casued by natural disasters, and shortages of the commodities themselves.

[copious.abundance]

Oh yeah, I should also mention . . . . Since this is a thread about "credit crunch impacts on production," any oil/gas production disabled by natural disasters hardly has anything to do with the topic of this thread . . . . unless you're willing to admit that the credit crunch caused the hurricanes.

[shortonsense]

$this->bbcode_second_pass_quote('AirlinePilot', 'S')hortonsense,

As has been painfully pointed out to you many times there is a world outside other than your own. Look around for goodness sake.

I endured a 2 week inability to get gasoline along with several hundred thousand fellow south easterners last summer. I guess since it didnt affect you you "missed" it.