Rig productivity may be a game changer very few investors are taking into consideration, as each rig can produce over 4X what it did a couple of years ago, according to Capital Economics.
In 2014 a rig could pump out about 6,000 barrels of oil per day. Today, a new rig can pump out an average of 27,000 barrels per day. That of course doesn't necessarily mean each well can meet the capacity of the rig, but with the improvement in identifying top-producing wells, it's almost a guarantee they'll come close to it.
What this suggests is the new rigs being added in the U.S. may be pumping out far more oil than the market is looking for, which would offset the decline in production from low-cost shale producers much stronger than expected.
When combined with the increase in production from some OPEC countries, it could be a strong headwind in the months ahead if the new rigs contribute a lot more supply than is being priced in.
More on new oil rigs and increased productivity.
Showing posts with label Oil Rigs. Show all posts
Showing posts with label Oil Rigs. Show all posts
Wednesday, June 22, 2016
Tuesday, September 28, 2010
BP's (NYSE:BP) Don Suttles Sees Offshore Drilling Returning in Stages
The oil moratorium and new regulations imposed on the offshore oil industry by the Obama administration will probably result in a slow restart of drilling once the moratorium is lifted, according to BP's (NYSE:BP) chief operating officer Don Suttles.
Suttles said concerning interim regulations, that "Certain equipment, certain wells, certain rigs are going to find it easier to meet those requirements," adding that will probably ultimately lead to a "phased restart" of offshore drilling in the Gulf of Mexico.
William Reilly, a co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, said when asked about the speed with which drilling will resume and the moratorium lifted, that he and co-Chair Bob Graham "have both raised a number of questions" concerning "just how much one needs to do" to increase the quality of oversight of the 33 oil rigs remaining in the Gulf.
"It's not entirely clear what remains to be done," Reilly said.
In other words, this is an over-response, not matter how it's spun. What more can be done than to ensure equipment is working properly and workers are trained to do their jobs well, and there is testing and follow up to verify it?
While Reilly didn't say it, he does seem to be frustrated over attempting to make something perfect in a world where perfection is impossible.
Suttles said concerning interim regulations, that "Certain equipment, certain wells, certain rigs are going to find it easier to meet those requirements," adding that will probably ultimately lead to a "phased restart" of offshore drilling in the Gulf of Mexico.
William Reilly, a co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, said when asked about the speed with which drilling will resume and the moratorium lifted, that he and co-Chair Bob Graham "have both raised a number of questions" concerning "just how much one needs to do" to increase the quality of oversight of the 33 oil rigs remaining in the Gulf.
"It's not entirely clear what remains to be done," Reilly said.
In other words, this is an over-response, not matter how it's spun. What more can be done than to ensure equipment is working properly and workers are trained to do their jobs well, and there is testing and follow up to verify it?
While Reilly didn't say it, he does seem to be frustrated over attempting to make something perfect in a world where perfection is impossible.
Friday, September 17, 2010
Judge Extends BP (NYSE:BP) Lawsuit Claims Until April 2011
A battle over time has been engaged in the hundreds of lawsuits filed against BP (NYSE:BP) and other companies related to the Gulf oil spill, and the judge has issued several decisions in response to it.
Judge Carl Barbier, the judge overseeing the cases, said as far as the time-frame to file lawsuits against the defendants, plaintiffs will be given until April 20, 2011. That's exactly a year since the explosion on the Deepwater Horizon oil rig which led to 11 deaths and oil spilling into the Gulf.
As far as the limitation of liability in connection to Transocean (NYSE:RIG), a trial date has been set for October 2011 do deal with that issue.
Lawyers for the plaintiffs have been pushing for things to go quicker, while BP and others have said they need more time to produce evidence. The judge in that area has sided with the defendants, saying they need a realistic amount of time to mount a defense.
Over the issue of whether or not plaintiffs should be required to go through the $20 billion compensation fund set up by BP to see if they qualify before being allowed to file a lawsuit, the judge hasn't made a ruling on that yet.
Judge Carl Barbier, the judge overseeing the cases, said as far as the time-frame to file lawsuits against the defendants, plaintiffs will be given until April 20, 2011. That's exactly a year since the explosion on the Deepwater Horizon oil rig which led to 11 deaths and oil spilling into the Gulf.
As far as the limitation of liability in connection to Transocean (NYSE:RIG), a trial date has been set for October 2011 do deal with that issue.
Lawyers for the plaintiffs have been pushing for things to go quicker, while BP and others have said they need more time to produce evidence. The judge in that area has sided with the defendants, saying they need a realistic amount of time to mount a defense.
Over the issue of whether or not plaintiffs should be required to go through the $20 billion compensation fund set up by BP to see if they qualify before being allowed to file a lawsuit, the judge hasn't made a ruling on that yet.
Wednesday, August 25, 2010
Transocean (NYSE:RIG) Survivor: No Idea Rig Wasn't Safe
Daun Winslow, Transocean (NYSE:RIG) performance division manager, who was on the Deepwater Horizon oil rig when it exploded, testified before an investigative panel entailing the Coast Guard and Bureau of Ocean Energy Management, Regulation and Enforcement, saying there was no clue that the oil rig had problems before it exploded.
When queried on the conditions before the blast, Winslow said, "I wouldn't have been down in the smoke area, having a cup of coffee" if it had been known.
After surviving the original blast which killed eleven workers, Winslow ended up being in charge of the battle to extinguish the fire and figure out a way to shut down the damaged well.
When asked about worker concerns over the pressure, Winslow said if that was the case, they should have shut it down.
"Whatever you do you don't continue forward until you understand that," said Winslow.
Inquiries continue into the cause and circumstances surrounding the explosion and what caused it and why precautions in place didn't protect it from further damage.
When queried on the conditions before the blast, Winslow said, "I wouldn't have been down in the smoke area, having a cup of coffee" if it had been known.
After surviving the original blast which killed eleven workers, Winslow ended up being in charge of the battle to extinguish the fire and figure out a way to shut down the damaged well.
When asked about worker concerns over the pressure, Winslow said if that was the case, they should have shut it down.
"Whatever you do you don't continue forward until you understand that," said Winslow.
Inquiries continue into the cause and circumstances surrounding the explosion and what caused it and why precautions in place didn't protect it from further damage.
Tuesday, July 20, 2010
Salazar Says No To Lifting Oil Drilling Moratorium: BP (NYSE:BP)
Ken Salazar announced the new moratorium, caused by BP (NYSE:BP) massive oil spill. He said, "So long as the spill is out there and has not been contained and the oil spill response capabilities are all being consumed by the current spill, it's too risky" to lift the moratorium. The revised version identifies at risk wells based on technologies and oil drilling configurations rather than the depth of water. The prior moratoriums focus was banning oil drilling below 500 feet.
Bobby Jindal, Louisiana's Governor said, "This second suspension of deepwater drilling is a clear sign that the administration is unwilling to follow the advice of their own scientist. The ultimate effect of this second moratorium is the same as the first. To shut down drilling operations in the Gulf and risk killing an estimated 20,000 jobs in Louisiana."
The new ban suspends drilling of 21 oil rigs in the Gulf, that's only 12 less than what the original moratorium would have affected. Several oil companies have said they'll go to other countries due to the ban on drilling. One of which is the largest U.S. deepwater oil driller, Diamond Offshore Drilling Inc.
Bobby Jindal, Louisiana's Governor said, "This second suspension of deepwater drilling is a clear sign that the administration is unwilling to follow the advice of their own scientist. The ultimate effect of this second moratorium is the same as the first. To shut down drilling operations in the Gulf and risk killing an estimated 20,000 jobs in Louisiana."
The new ban suspends drilling of 21 oil rigs in the Gulf, that's only 12 less than what the original moratorium would have affected. Several oil companies have said they'll go to other countries due to the ban on drilling. One of which is the largest U.S. deepwater oil driller, Diamond Offshore Drilling Inc.
Friday, October 3, 2008
Oil Joins Other Commodities in Steep Losses
After dropping by $4.56 yesterday, oil futures continued to plunge in after-hours trading, falling another 1.2 percent to as low as $92.81 on the New York Mercantile Exchange.
Other commodities have been struggling as well, as the Reuters/Jefferies CRB Index of 19 commodities was down to its lowest level in close to a year, with corn, copper and silver especially losing; all of them in their worst weekly drop in over 20 years.
For the week oil is down 13 percent, as concerns of demand continuing to fall because of fears about the poor economic conditions. The report by the Labor Department showed jobless claims for the week ending September 27 are their highest since September 2001,
Since the high of $147.27 on July 11, oil has fallen by 37 percent.
The use of fuel in the U.S. also fell to its lowest level since October 2001, averaging only 19 million barrels a day.
With the economic news seemingly getting worse by the day, there are an increasing number of people questioning the validity of spending $700 billion on a bailout that probably will make no difference at all, and in will all likelihood make the problems last longer than if we would just let it work its way through the market.
As far as gasoline prices, we're seeing them drop, but they're lagging behind the decline in oil prices as it's taking a little time for refineries to get back on line. Once that happens we should see gas prices start to mirror more closely the oil price drops.
Other commodities have been struggling as well, as the Reuters/Jefferies CRB Index of 19 commodities was down to its lowest level in close to a year, with corn, copper and silver especially losing; all of them in their worst weekly drop in over 20 years.
For the week oil is down 13 percent, as concerns of demand continuing to fall because of fears about the poor economic conditions. The report by the Labor Department showed jobless claims for the week ending September 27 are their highest since September 2001,
Since the high of $147.27 on July 11, oil has fallen by 37 percent.
The use of fuel in the U.S. also fell to its lowest level since October 2001, averaging only 19 million barrels a day.
With the economic news seemingly getting worse by the day, there are an increasing number of people questioning the validity of spending $700 billion on a bailout that probably will make no difference at all, and in will all likelihood make the problems last longer than if we would just let it work its way through the market.
As far as gasoline prices, we're seeing them drop, but they're lagging behind the decline in oil prices as it's taking a little time for refineries to get back on line. Once that happens we should see gas prices start to mirror more closely the oil price drops.
Tuesday, September 30, 2008
Third Quarter Oil Price Drop Largest in 17 Years
Oil experienced one of its largest price swings in history during the third quarter as prices fluctuated within a range of $56 a barrel. From its record high of $147.27 a barrel on July 11, it went a low as $90.51 a barrel on September 16.
Overall in the quarter oil futures fell by 28 percent, the largest fall since 1991.
Along with the obvious economic factors which have slowed down oil demand, there is also the strengthening of the U.S. dollar during that period as well.
November delivery for crude oil fell to close to $40 during the quarter to settle at $100.64 at about 3:00 p.m on the NYMEX. That's the first time it has fallen in seven quarters. It went up by $4.27 in today's trading.
When you take into account OPEC announcing they're cutting production, and the two hurricanes recently hitting the south and disrupting oil flow, it's really an amazing event that the black liguid has stayed this low. Add the ongoing Nigerian attacks on their pipelines and rigs, along with the conflict between Russia and Georgia and it's even more astounding.
It seems like oil futures are completely driven by demand at this time, as according to Deutsche Bank the price of Oil for 2009 New York will probably drop by 23 percent to around $92.50 a barrel. At this time U.S. demand for petroleum has dropped about 4 percent from the same period last year.
Although gas prices increased by almost 9 cents today, overall its followed the decline in oil for the quarter, dropping by 11 percent to end at a nationwide average of $3.633 a gallon, according to AAA.
Overall in the quarter oil futures fell by 28 percent, the largest fall since 1991.
Along with the obvious economic factors which have slowed down oil demand, there is also the strengthening of the U.S. dollar during that period as well.
November delivery for crude oil fell to close to $40 during the quarter to settle at $100.64 at about 3:00 p.m on the NYMEX. That's the first time it has fallen in seven quarters. It went up by $4.27 in today's trading.
When you take into account OPEC announcing they're cutting production, and the two hurricanes recently hitting the south and disrupting oil flow, it's really an amazing event that the black liguid has stayed this low. Add the ongoing Nigerian attacks on their pipelines and rigs, along with the conflict between Russia and Georgia and it's even more astounding.
It seems like oil futures are completely driven by demand at this time, as according to Deutsche Bank the price of Oil for 2009 New York will probably drop by 23 percent to around $92.50 a barrel. At this time U.S. demand for petroleum has dropped about 4 percent from the same period last year.
Although gas prices increased by almost 9 cents today, overall its followed the decline in oil for the quarter, dropping by 11 percent to end at a nationwide average of $3.633 a gallon, according to AAA.
Thursday, September 25, 2008
Oil Prices Fluctuate on Demand and Economic Concerns
Uncertainty is the word floating around concerning oil prices, as investors await the decision concerning the government bailout plan, the decreasing demand for oil, and the time it will take to bring platforms and rigs back to production from recent storms.
Other factors in the mix are the cut in production announced by OPEC earlier in September, as well as the continued threat to Nigerian oil procution by regional terrorists.
The potentially serious consequences on the value of the dollar from the ill-advised financial bailout is also on the minds of oil investors going forward.
Fear and uncertainty keep oil and other commodities in an unpredictable mode. We'll see continued fluctuation in prices going forward until things settle down. Early morning trading on the NYMEX had November deliver for sweet crude dropping to $105.57, although they continue to move up and down from positive to negative territory.
Other factors in the mix are the cut in production announced by OPEC earlier in September, as well as the continued threat to Nigerian oil procution by regional terrorists.
The potentially serious consequences on the value of the dollar from the ill-advised financial bailout is also on the minds of oil investors going forward.
Fear and uncertainty keep oil and other commodities in an unpredictable mode. We'll see continued fluctuation in prices going forward until things settle down. Early morning trading on the NYMEX had November deliver for sweet crude dropping to $105.57, although they continue to move up and down from positive to negative territory.
Friday, September 5, 2008
Oil Drops to 5-month Low on Weak Demand, other Factors
Oil continues to plunge from its record high which reached $147 a barrel in July, as it dropped by over $2 a barrel, after settling the lowest on Thursday since April 4. Brent crude followed suit in London as it declined by over $2 a barrel as well, finishing at $103.95.
With China decreasing imports after the Olympics and consumers driving less, oil prices will probably continue to fall. Other factors include the ongoing storm season and the unknown decision by OPEC on what it will do going ahead. The weak U.S and world economy will continue to affect the price also.
The rise in value of the U.S. dollar will also continue to drive down oil prices.
With the Louisiana Offshore Oil Port, (largest oil-import terminal in the U.S.) saying they started offloading oil tankers early Thursday morning, it's also thought it could help keep oil prices down because of the quick resumption of delivery.
Friday, April 11, 2008
Weekend Oil News Roundup
Energy Sector Roundup: Oil Out of Gas
Oil ended the day flat, keeping its distance from that $112.21 a barrel record set earlier in the week. Light, sweet crude for May delivery fell 70 cents to $109.41 on the New York Mercantile Exchange. But retail gas and diesel prices jumped to new records.
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Mexico leftists camp in Congress to stop oil plan
Leftist lawmakers blocked both houses of Mexico's Congress on Friday after an all-night sleepover protest against an oil reform plan that could open the state-run sector to more foreign investment.
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Oil Rises Above $110 a Barrel
Oil prices rose above $110 a barrel Friday after slipping from a record high at midweek as investors locked in profits from a stronger U.S. dollar.
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Pemex and Mexican Peak Oil Mean Expensive Oil
Pemex better start exploring for more oil in the Gulf of Mexico or its going to pump out all its reserves in less than ten years. Mexican President Felipe Calderon went on national television last night in Mexico and told his countrymen (in Spanish, we presume), "We have to act now because we're running out of time and out of oil."
What's he talking about?
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Oil steadies on weak dollar, demand revisions
Oil prices steadied on Friday as supply concerns and the weak dollar countered expectations that growing economic problems will slow global demand this year.
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Bakken Shale in US may hold 3.7 bln bbl oil - USGS
A shale rock formation that stretches across Montana and North Dakota could hold about 3.7 billion barrels of oil, the biggest single deposit in the United States except for Alaska, the U.S. Geological Survey said this week.
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Oil ended the day flat, keeping its distance from that $112.21 a barrel record set earlier in the week. Light, sweet crude for May delivery fell 70 cents to $109.41 on the New York Mercantile Exchange. But retail gas and diesel prices jumped to new records.
=====
Mexico leftists camp in Congress to stop oil plan
Leftist lawmakers blocked both houses of Mexico's Congress on Friday after an all-night sleepover protest against an oil reform plan that could open the state-run sector to more foreign investment.
=====
Oil Rises Above $110 a Barrel
Oil prices rose above $110 a barrel Friday after slipping from a record high at midweek as investors locked in profits from a stronger U.S. dollar.
=====
Pemex and Mexican Peak Oil Mean Expensive Oil
Pemex better start exploring for more oil in the Gulf of Mexico or its going to pump out all its reserves in less than ten years. Mexican President Felipe Calderon went on national television last night in Mexico and told his countrymen (in Spanish, we presume), "We have to act now because we're running out of time and out of oil."
What's he talking about?
=====
Oil steadies on weak dollar, demand revisions
Oil prices steadied on Friday as supply concerns and the weak dollar countered expectations that growing economic problems will slow global demand this year.
=====
Bakken Shale in US may hold 3.7 bln bbl oil - USGS
A shale rock formation that stretches across Montana and North Dakota could hold about 3.7 billion barrels of oil, the biggest single deposit in the United States except for Alaska, the U.S. Geological Survey said this week.
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Friday, March 28, 2008
Oil News around the Internet
Weekend roundup for oil news
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Oil falls after Iraq restores pipeline flows
Oil fell $2 on Friday after Iraq swiftly restarted a crude pipeline system that had been hit by a bomb attack the day before.
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Research and Markets: Learn About ATP Oil Gas Corporations Upstream Oil And Gas Assets Across The Globe
Research and Markets has announced the addition of "ATP Oil & Gas Corporation Oil and Gas Assets Report" to their offering.
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Oil down on end of week profit taking, restored Iraq oil flows, US eco worries
Oil extended earlier falls as end of week profit taking gained momentum amid a stronger dollar, news of increased oil flows from Nigeria, restored flows in Iraq and renewed worries over the US economic slowdown.
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Chavez against continued oil price rise
Venezuela is not interested in seeing oil prices rise further and is pushing to stabilize the market, President Hugo Chavez said Thursday following a visit to the site of a Brazilian refinery being built to process Venezuelan crude.
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US Oil and Gas Rig Count Up 24 This Week
The number of rigs actively exploring for oil and natural gas in the United States rose by 24 this week to 1,808.
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Sector Roundup: Oil Refiners Climb, Airline Shares Slip on Fuel Prices, Flight Cancellations
Shares of oil refiners rose Friday as oil prices deflated and a Soleil Securities analyst reiterated a "Buy" rating on Frontier Oil Corp. citing of a positive view on its North American assets.
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Meridian Resource to Present At IPAA Oil and Gas Investment Symposium
The Meridian Resource Corporation (NYSE:TMR) announced today that Chairman and CEO Joe Reeves will update investors and analysts on its current operations and future strategy at the IPAA Oil and Gas Investment Symposium in New York City on Monday, April 7, 2008 at 4:10 p.m. Eastern time.
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Oil falls after Iraq restores pipeline flows
Oil fell $2 on Friday after Iraq swiftly restarted a crude pipeline system that had been hit by a bomb attack the day before.
=====
Research and Markets: Learn About ATP Oil Gas Corporations Upstream Oil And Gas Assets Across The Globe
Research and Markets has announced the addition of "ATP Oil & Gas Corporation Oil and Gas Assets Report" to their offering.
=====
Oil down on end of week profit taking, restored Iraq oil flows, US eco worries
Oil extended earlier falls as end of week profit taking gained momentum amid a stronger dollar, news of increased oil flows from Nigeria, restored flows in Iraq and renewed worries over the US economic slowdown.
=====
Chavez against continued oil price rise
Venezuela is not interested in seeing oil prices rise further and is pushing to stabilize the market, President Hugo Chavez said Thursday following a visit to the site of a Brazilian refinery being built to process Venezuelan crude.
=====
US Oil and Gas Rig Count Up 24 This Week
The number of rigs actively exploring for oil and natural gas in the United States rose by 24 this week to 1,808.
=====
Sector Roundup: Oil Refiners Climb, Airline Shares Slip on Fuel Prices, Flight Cancellations
Shares of oil refiners rose Friday as oil prices deflated and a Soleil Securities analyst reiterated a "Buy" rating on Frontier Oil Corp. citing of a positive view on its North American assets.
=====
Meridian Resource to Present At IPAA Oil and Gas Investment Symposium
The Meridian Resource Corporation (NYSE:TMR) announced today that Chairman and CEO Joe Reeves will update investors and analysts on its current operations and future strategy at the IPAA Oil and Gas Investment Symposium in New York City on Monday, April 7, 2008 at 4:10 p.m. Eastern time.
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Friday, March 21, 2008
Active Oil and Gas Rig Count Drops by 8 in U.S.
Rigs in the U.S. currently active in exploration of oil and natural gas in the U.S. has declined by eight this week; now numbering 1,784.
Citing Baker Hughes Inc., the Houston Chronicle said the lowest level rigs have dropped to in the U.S. was 488 in 1999, whereas the high was 4,530 in 1981.
Breaking it down, oil rigs now stand at 341 in the U.S., while natural gas exploration rigs stand at 1,433. Ten of the rigs were listed as miscellaneous.
Rigs in Lousiana fell the most, with the state dropping four.
Last year the total number of rigs numbered 1,745.
Citing Baker Hughes Inc., the Houston Chronicle said the lowest level rigs have dropped to in the U.S. was 488 in 1999, whereas the high was 4,530 in 1981.
Breaking it down, oil rigs now stand at 341 in the U.S., while natural gas exploration rigs stand at 1,433. Ten of the rigs were listed as miscellaneous.
Rigs in Lousiana fell the most, with the state dropping four.
Last year the total number of rigs numbered 1,745.
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