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July 25, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI up 0.60 to close at $48.49

Brent up 2.15 to close at $50.75

Natural gas up 0.04 at $2.94

---------------

CLOSING OIL & GAS STOCKS

Anadarko (APC) up 1.51 at 45.72

Apache (APA) up 0.90 at 48.86

Chevron (CVX) up 1.19 at 104.39

ConocoPhillips (COP) up 1.04 at 43.65

Devon (DVN) up 1.24 at 32.98

Energy Transfer Partners (ETP) up 0.22 at 20.22

EOG Resources (EOG) up 1.56 at 94.87

ExxonMobil (XOM) up 0.40 at 80.27

Halcon (HK) up 0.15 at 6.93

Marathon Oil Corp. (MRO) up 0.46 at 12.34

Noble Energy (NBL) up 0.84 at 29.02

Occidental Petroleum (OXY) up 1.60 at 61.01

Parsley Energy (PE) up 1.28 at 29.52

Phillips 66 (PSX) up 1.80 at 84.45

Pioneer Natural Resources (PXD) up 2.50 at 162.60

Valero (VLO) up 0.76 at 68.44

---------------

CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) down 0.35 at 68.84

CenterPoint (CNP) down 0.25 at 27.92

Entergy (ETR) down 0.89 to close at 75.42

Exelon Generation (EXC) down 0.18 at 37.02

NRG (NRG) down 0.27 at 25.01

Vistra Energy (VST) up 0.01 at 16.61

By Mike Shiloh

July 24, 2017

Spivey Paup Joins Recurrent Energy for New Austin Office: News Release

Spivey Paup has joined Recurrent Energy, a leading U.S. solar project developer, as development director where he will lead the company’s project development activities in Texas and the eastern United States.

Spivey is based in Austin, where the company will open a new office. 

Prior to joining Recurrent Energy, Spivey spent nine years at E.ON Climate & Renewables North America developing wind and solar projects and growing the company’s solar and battery storage business. At E.ON Climate & Renewables he served as director of solar development.

Prior to his career in renewable energy, he served as senior policy advisor for the U.S. House of Representatives in the Office of Congressman John R. Carter

Spivey received his bachelor’s in international studies from Texas A&M. He then decided to pursue his passion for alternative energy solutions and earned his master’s in business administration from the University of Texas.

About Recurrent Energy:

Based in the U.S., Recurrent Energy is a wholly owned subsidiary of Canadian Solar and functions as the U.S. development arm of Canadian Solar. Since 2006, Recurrent Energy has successfully developed and sold approximately 1.9 gigawatts (GWp) of solar PV projects ranging from commercial rooftop arrays to utility-scale ground mount power plants. Recurrent Energy has more than 500 megawatts (MW) under development in the state of Texas.

By Recurrent Energy

July 24, 2017

UPDATED: US Attorney General Ted Cruz?: Washington Post

The Washington Post in Tuesday editions cites unnamed sources, saying President Donald Trump and his advisors are talking about replacing Jeff Sessions as US attorney general, and are considering both Texas Senator Ted Cruz and former New York City Mayor Rudy Giuliani for the post, "among the names being floated."

University of Texas School of Law professor Steve Vladek is noted in the Post article as speculating that President Trump could make a recess appointment of a new attorney general, while Congress is on the traditional summer break, bypassing Congressional approval of a new AG.

UPDATE: Monday night, an aide to Cruz released a statement saying, "The stories being reported in the media tonight are false. My focus is and will remain on fighting every day to defend 28 million Texans in the US Senate."

 

By Mike Shiloh

July 24, 2017

Oncor and Sharyland Agree To Swap Assets

In a unique arrangement, Texas' Oncor Electricity Delivery Co. LLC is swapping assets with Sharyland Utilities LP in a deal worth an estimated $400 million.

In the proposed exchange, Sharyland will receive ownership of about 258 miles of 345 KV transmission lines in Central and West Texas, and Oncor will receive Sharyland's retail distribution assets and operations (of similar value to Oncor's transmission lines), including 54,000 retail customers and its distribution network.

Sharyland customers will, therefore, become Oncor customers; in making the announcement on Monday, Sharyland said its customers can expect significant electricity rate reductions under Oncor.

Sharyland will keep its transmission systems in the Panhandle and in the Stanton and McAllen areas.

Oncor's contribution to the deal is said to have little effect on its distribution systems, which include 122,000 miles of transmission and distribution lines.

The deal will first have to be approved by the Public Utility Commission of Texas and is then expected to close by the end of the year.

By Mike Shiloh

July 24, 2017

Halliburton Demand, Profit Increases

Oil services giant tempers great news with note that growth signs are "plateauing"

Halliburton Co. celebrated increased North American demand for its services, announcing Monday a profit for the second quarter up 83% to $2.77 billion.

The Houston-based company noted increased demand for well construction and pumping services so far this year.

The announced profit beat analysts expectations.

Net profit was $28 million for the quarter ended June 30th, compared with an overall $3.21 billion loss for the second quarter last year (though the 2Q 2016 loss included a $3.5 billion charge connected to Halliburton's failed Baker Hughes deal).

In it's announcement of profits on Monday, though, Halliburton expressed cautious optimism about the rest of the year, qualifying that with the statement that "today, rig count growth is showing signs of plateauing, and customers are tapping the brakes.

"This tapping of the brakes is happening all over the place in North America."

Halliburton stock was down more than 4% including late Monday trading after the close.

By Mike Shiloh

July 24, 2017

Anadarko Cuts CapEx, Posts 2Q Loss, Lowers Forecast

Anadarko Petroleum Corp. stocks fell more than 3% after the close Monday when the company announced it's cutting capital expenditures by $300 million from its 2017 budget.

Capex had been expected to be in the $4.5-to-$4.7 billion range; it's now down to $4.2-$4.4 billion.

The company also announced a loss of $415 million on revenue of $2.7 billion for the second quarter; that loss was bigger than analysts expected.

The loss, though, was considerably smaller than Anadarko's second-quarter loss a year ago of $692 million.

And the company lowered its production forecast for the year.

While lamenting Anadarko's cuts' effects on stockholders, analysts hailed the company's move as the beginning of "discipline" among oil drillers, which have been increasing shale production even as those increases weigh heavily against oil prices.

By Mike Shiloh

July 24, 2017

TAMEST Shale Task Force to Brief Energy Resources Committee Wednesday: News Release

TAMEST Logo

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TAMEST Shale Task Force

TAMEST President, Shale Task Force Members to Give Testimony to Texas House Energy Resources Committee on Wednesday

TAMEST President Gordon England and members of the TAMEST Shale Task Force will brief lawmakers at the Texas Capitol Wednesday, July 26th at 2:00 p.m. in Room E2.010 on the recently released TAMEST Shale Task Force report.

The Texas House Energy Resources Committee has invited members of the TAMEST Shale Task Force to give testimony on the TAMEST report, Environmental and Community Impacts of Shale Development in Texas. The briefing will focus on overall findings as well as key highlights from the seismicity, water and transportation chapters. The hearing will be open to the public and will also be available via livestream.

TAMEST looks forward to sharing our experience from this report. We hope this briefing can help lawmakers and others find ways to enhance the positive impacts of shale development while reducing or mitigating negative ones.

The Cynthia and George Mitchell Foundation Provides Additional Funds to TAMEST for Shale Report

The TAMEST Shale Task Force was made possible in part by the support and partnership of The Cynthia and George Mitchell Foundation. The Mitchell Foundation has provided additional funds to further support communications and outreach for the report.


To learn more about the report, visit www.tamest.org/shale-task-force/.

By TAMEST

July 24, 2017

Worth Noting: US Crude Oil Production By Region

By EIA

July 22, 2017

TER Reader Nails Cultural Changes

A subscriber to The Texas Energy Report notes an article in the July 16th Powersource, "Now That Oil and Gas Jobs Are Returning, Will Workers Return?"  (The Texas Energy Report NewsClips July 18th, 2017)

The story points out how oilfield workers were at one time more attached to the tough work than perhaps they are now, and today's oil workers need to be of a new breed, considering new tech, equipment, digitization and big data.

And the article points out a disconnect between the industry and young workers: The old "rough and tumble" in the oilfields will no longer suffice.

The now-stereotyped oilfield boss shouting obscenities to motivate workers is giving way to more safety concerns and could disappear as companies desire more professional workers.

"I know times really have changed," as our reader observed a 180-degree from the wildcat era, "now that it's considered acceptable for men to cuss in front of women (and vice versa) but field bosses will have to be polite."

By Mike Shiloh

July 22, 2017

Sanchez Completes Operated Production Sell-Down

Houston-based company exits Oklahoma production, positions itself for the future

Sanchez Midstream Partners has closed on the long-expected sale of its production assets, located in Oklahoma, details of which were not disclosed at the company's announcement this week.

Sanchez CEO Gerry Willinger commented that the sale "of our remaining operated production assets further reduces our exposure to a price-sensitive revenue stream and is consistent with our strategy of focusing on stable, fee-based midstream activities."

The Rest of the Story, Subscribers Only

By Mike Shiloh

July 22, 2017

Waste Management: Turn Closed Landfills to Renewables

Waste Management is adding to the list of covered trash landfills in Massachusetts that have been converted to renewable energy sites.

The Houston-based waste recovery and recycling company, working with New York-based Captona Partners, has built a solar array of 11,286 panels over a former 19-acre landfill site, expecting to generate 3.6 megawatts electrical capacity.

That's enough power to run 700 homes in the area around the site at Berkley, Massachusetts, about 29 miles south of Boston.

The Rest of the Story, Subscribers Only

By Mike Shiloh

July 21, 2017

Ft. Worth's Burnett Explores In South Florida Preserve

The National Park Service says Ft Worth's Burnett Oil Company Inc. is finished, at least for now, with its search for oil and gas in the Big Cypress National Preserve, one of several large preserves in the far southern mainland of Florida.

The Park Service okayed the seismic exploration using large vibrating metal plates to record underground signals to indicate underground petrochemicals, and while the agency said it's not yet been told whether Burnett found any oil, environmental groups were active in monitoring and complaining about the work.

In fact, such groups took the case to federal court in an attempt to stop Burnett's efforts, but a federal judge in Ft. Myers, northwest of the preserve, found that the exploration of 70,000 acres should be allowed with 47 stipulations from the Park Service, according to our friends at the Naples Daily News.

Those stipulations included limited tree cutting and avoiding certain wildlife habitats.

By Mike Shiloh

July 21, 2017

TexNet Earthquake Study Expanding

The TexNet system continues to expand the number of seismic stations in the study of Texas earthquakes, their effects and their causes.

Geologist Dr. Peter Hennings told the Midland chapter of the Society of Independent Professional Earth Scientists that he expects to find out soon whether the increase in earthquakes around the state is caused by oil drilling.

The Rest of the Story, Subscribers Only

By Mike Shiloh

July 21, 2017

Vanguard to Emerge from Bankruptcy August 1st

A Texas bankruptcy court has given the okay to a reorganization plan for Houston-based Vanguard Natural Resources LLC, which owns hundreds of oil wells in the Permian, Gulf Coast and Anadarko basins and in various other states.

The company said this week that the plan will "significantly reduce long-term debt and annual interest payments."

Under the plan to take effect August 1st, Vanguard will reorganize as a Delaware corporation to be called Vanguard Natural Resources Inc.

The company said it will then issue about $78 million in new second lein notes to replace existing second leins, and new shares of common stock to Vanguard's senior note holders.

By Mike Shiloh

July 21, 2017

LyondellBasell's Largest Capital Investment Ever To Be Built in Houston Area

LyondellBasell said Friday it's moving forward with its plan for a huge chemical plant along the Gulf Coast that is expected to create thousands of jobs during the construction phase and about 160 permanent jobs when it becomes operational.

The company calls it the largest propylene oxide and tertiary butyl alcohol plant in the world, to be built in the Houston area at cost of about $2.4 billion.

Both chemicals are used, among other things, for high-octane gasoline.

It's to be "the single largest capital investment in the company's history."

The majority of the products will be exported via the Houston Ship Channel.

"This new project," said Greater Houston Partnership CEO Bob Harvey, "further advances Houston's position as a global hub of petrochemical manufacturing, leveraging Houston's strategic access to the Americas and top markets around the world."

By Mike Shiloh

July 21, 2017

Texas Oil and Gas Production Statistics for May 2017: RRC

AUSTIN –– Production for May 2017 as reported to the Railroad Commission of Texas (Commission) is 76,381,908 barrels of crude oil and 560,452,280 mcf (thousand cubic feet) of total gas from oil and gas wells. These preliminary figures are based on production volumes reported by operators and will be updated as late and corrected production reports are received. Production reported to the Commission for May 2016, was: 73,131,246 barrels of crude oil preliminarily, updated to a current figure of 84,500,034 barrels; and 600,746,804 mcf of total gas preliminarily, updated to a current figure of 702,548,969 mcf.

The Commission reports that from June 2016 to May 2017, total Texas reported production was 988 million barrels of crude oil and 7.7 trillion cubic feet of total gas. Crude oil production reported by the Commission is limited to oil produced from oil leases and does not include condensate, which is reported separately by the Commission.

Texas preliminary May 2017 crude oil production averaged 2,463,933 barrels daily, compared to the 2,359,072 barrels daily average of May 2016.

Texas preliminary May 2017 total gas production averaged 18,079,106 mcf a day, compared to the 19,378,929 mcf daily average of May 2016.

Texas production in May 2017 came from 179,857 oil wells and 93,397 gas wells.

For additional oil and gas production statistics, visit the Commission’s website at http://www.rrc.texas.gov/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/.
 

TABLE 1 – MAY 2017 TEXAS TOP TEN CRUDE OIL PRODUCING COUNTIES RANKED BY PRELIMINARY PRODUCTION

RANK

COUNTY

CRUDE OIL (BBLS)

    1.

MIDLAND

6,519,028

    2.

KARNES

6,198,387

    3.

LA SALLE

4,122,025

    4.

DEWITT

3,917,136

    5.

MARTIN

3,715,258

    6.

REEVES

3,660,625

    7.

UPTON

3,597,274

    8.

ANDREWS

3,020,542

    9.

GONZALES

2,714,094

  10.

LOVING

2,636,815


TABLE 2 – MAY 2017 TEXAS TOP TEN TOTAL GAS (GAS WELL GAS & CASINGHEAD) PRODUCING COUNTIES RANKED BY PRELIMINARY PRODUCTION

RANK

COUNTY

TOTAL GAS (MCF)

    1.

WEBB

39,627,806

    2.

TARRANT

37,402,891

    3.

PANOLA

21,446,488

    4.

KARNES

20,632,502

    5.

DIMMIT

19,673,842

    6.

DEWITT

17,893,036

    7.

JOHNSON

17,765,372

    8.

REEVES

17,381,601

    9.

MIDLAND

15,976,468

  10.

WISE

15,589,301

 
TABLE 3 – MAY 2017 TEXAS TOP TEN TOTAL CONDENSATE PRODUCING COUNTIES RANKED BY PRELIMINARY PRODUCTION

RANK

COUNTY

CONDENSATE (BBLS)

    1.

DIMMIT

1,430,034

    2.

CULBERSON

1,112,906

    3.

KARNES

1,003,530

    4.

WEBB

756,866

    5.

DEWITT

736,768

    6.

REEVES

539,117

    7.

LOVING

342,924

    8.

LIVE OAK

266,423

    9.

LA SALLE

204,925

  10.

HEMPHILL

148,072

###

By Railroad Commission of Texas

July 20, 2017

Underfunded Texas Energy Pensions On Bloomberg Troubled List

Companies with lowest ratios of pension funds-versus-obligations topped by Intel, but GE has largest pension shortfall among S&P 500: Bloomberg list

Some Texas energy companies are on Bloomberg's new list of underfunded retirement pension plans, among them Anadarko Petroleum and Freeport McMoRan, both based in the Houston area.

Bloomberg says its search of major US company pension plans found that, among the 200 biggest S&P 500 defined-benefit plans based on assets, a full 186 of them don't have enough money to fund retirees, both current and future, largely because of poor asset returns since the Great Recession.

The survey simply underscores the broad reach of the pension funding crisis: The top 200 are underfunded by a total of $382 billion.

The Rest of the Story, Subscribers Only

By Mike Shiloh

July 20, 2017

Russia Ran Campaign Against U.S. Oil, Gas Activity: Mills

By Alex Mills

Russia has been in the news just about every day this year.

The top news story recently involves Russia’s involvement in the 2016 Presidential elections, which was highlighted in a Jan. 6 report issued by the Office of the Director of National Intelligence.

The declassified version of the report, entitled “Assessing Russian Activities and Intentions in Recent U.S. Elections,” included an analytic assessment drafted and coordinated among the Central Intelligence Agency, Federal Bureau of Investigation, and the National Security Agency.

“We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the U.S. presidential election,” the report stated under its Key Judgments section.

Even though the primary focus of the report focused on the presidential election and the political process, it also included Russian influence on U.S. energy policy, including running “anti-fracking programming, highlighting environmental issues and the impacts on public health.  This is likely reflective of the Russian Government’s concern about the impact on fracking and U.S. natural gas production on the global energy market and the potential challenges to Gazprom’s profitability.” 

Gazprom is Russia’s national oil and gas company.

Now, two members of Congress have sent a letter to the Secretary of Treasury requesting an investigation concerning allegations that Russia has attempted to harm the domestic oil and gas industry by funding environmental groups that seek to eliminate hydraulic fracturing in the U.S. and elsewhere.

House Science, Space and Technology Committee chairman Lamar Smith (R-TX) and energy subcommittee chairman Randy Weber (R-TX) stated in a letter to Treasury Secretary Steve Mnuchin that Russia has tried to “suppress the widespread adoption of fracking in Europe and the U.S.”

“If you connect the dots, it is clear that Russia is funding U.S. environmental groups in an effort to suppress our domestic oil and gas industry, specifically hydraulic fracking,” said Smith.

“They have established an elaborate scheme that funnels money through shell companies in Bermuda,” he said. “This scheme may violate federal law and certainly distorts the market. The American people deserve to know the truth and I am confident Secretary Mnuchin will investigate the allegations.”

Smith said the panel is already conducting oversight into “what appears to be a concerted effort by foreign entities to funnel millions of dollars through various non-profit entities to influence the market.”

Crude oil and natural gas production has increased in the U.S. since 2008 because of new technological developments in drilling, completion, and production techniques from shale.  Hydraulic fracturing and horizontal drilling have fueled an “energy renaissance” in the United States, creating more competition between Russia and the U.S. for global energy markets.  Exports of liquefied natural gas (LNG), crude oil and petroleum products from the U.S. are in direct competition with Russian oil and gas exports, which accounted for 68 percent of that country’s export revenue in 2013.

Citing news reports and IRS documents, the congressmen requested the investigation into major environmental groups, including the Sierra Club Foundation, League of Conservation Voters Education Fund, and Natural Resources Defense Council, alleging those groups received Russian money to fund their anti-fracking protests.

Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely of the author.

By Alex Mills

July 18, 2017

British Wind Energy Construction Follows Offshore Oil Playbook

A wind generation project off the northeastern coast of Great Britain is trying out a well used technique from the offshore oil and gas industry -- float and submerge.

Five wind turbines are being put out to sea off the coast of Blyth, England, by EDF Energy Renewables as part of the Blyth Offshore Demonstrator Wind Farm.

Renewable Energy Magazine describes concrete gravity based foundations will act as support structures for the turbines' installation.

They're being tugged down the River Tyne and then will float about four miles off the coast, where they will then be lowered to the sea bed -- the first use on offshore wind turbines of the method used in offshore oil platform construction.

The turbines to be used in the Blyth project are also the largest to be used on an offshore wind farm, the magazine says.

By Mike Shiloh

July 18, 2017

Energy Hunter Resources to Buy 10-Thousand Active Permian Acres

Energy Hunter Resources says its entered into a $22.6 million purchase agreement with Lubbock Energy Partners LLC that's expected to close later this summer.

Energy Hunter, an E&P, says the deal includes almost 10,000 net acres in Cochran County, part of the San Andres play in the Permian Basin with all including existing producing vertical wells.

The company calls it a 50/50 cash and restricted stock transaction, and notes "positive drilling economics down to $30 a barrel."

By Mike Shiloh

July 18, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI down 0.16 to close at $46.24

Brent up 0.28 to close at $48.70

Natural gas down 0.01 at $3.01

---------------

CLOSING OIL & GAS STOCKS

Anadarko (APC) down 1.45 at 43.77

Apache (APA) down 0.95 at 47.73

Chevron (CVX) down 0.49 at 103.72

ConocoPhillips (COP) down 0.12 at 43.07

Devon (DVN) up 0.01 at 31.36

Energy Transfer Partners (ETP) up 0.05 at 20.60

EOG Resources (EOG) down 0.20 at 91.70

ExxonMobil (XOM) down 0.26 at 80.60

Halcon (HK) up 0.01 at 6.57

Marathon Oil Corp. (MRO) up 0.09 at 11.68

Noble Energy (NBL) down 0.35 at 28.35

Occidental Petroleum (OXY) up 0.20 at 60.24

Parsley Energy (PE) down 0.36 at 28.13

Phillips 66 (PSX) up 0.15 at 81.96

Pioneer Natural Resources (PXD) down 1.33 at 161.50

Valero (VLO) up 0.08 at 67.51

---------------

CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) down 0.19 at 68.36

CenterPoint (CNP) up 0.01 at 27.78

Entergy (ETR) up 0.03 to close at 75.64

Exelon Generation (EXC) up 0.13 at 37.16

NRG (NRG) up 0.50 at 23.42

Vistra Energy (VST) up 0.07 at 16.03

By Mike Shiloh

July 18, 2017

Energy News Headlines Are Sometimes a Little, Well, Opaque

"Writing headlines is a specialty. There are outstanding writers who will tell you they couldn't write a headline to save their lives." - the late Washington Post editor Bill Walsh

Headline writing is not an exact science, and of course it is often done under deadline pressure by those who didn't write the news story.

Contradictory headlines have been relatively common in the energy press over the past few years, especially when it comes to oil prices, with some analysts bullishly predicting crude at $70 a barrel any day now, while investment houses look for a bottom.

Even renewables can be a little hard to track based on headlines when one considers seemingly contradictory articles from the same day in early July: "When the temperature rises in Texas, even the wind turbines take a break" vs. "High winds on hot days could help lower electric bills" (from The Texas Energy Report NewsClips July 7th).

Of course, winds can die down in the heat but when they do blow hot and strong they're a great help to power generation; not necessarily contradictory.

But in a July 14th opinion piece in Forbes, Texas energy consultant David Blackmon took it a step further: Occasionally, headlines don't exactly reflect the stories below them and require delving into the articles themselves.

As examples he points to two stories from the June 14th Dallas Morning News:

For instance, "Trump Won't Declare Dallas Firm's Dakota Access Pipeline A Major Disaster - Well, no, that's not at all an accurate description.  The state of North Dakota's governor - Doug Burgum - did not ask President Trump to declare the Dakota Access Pipeline to be a 'major disaster,'" wrote Blackmon.

"Governor Burgum did ask the President to declare the site of the months-long protest/riot action against the Dakota Access Pipeline to be a "major disaster" in an effort to seek federal help in footing the $38 million bill for policing the often-violent protesters and cleaning up the epic mess they left behind when they finally cleared their illegal site.  

"Given that it was the federal government, under Barack Obama, that allowed these rioters to illegally occupy the site for half a year, it would seem that the Governor had a valid complaint.  President Trump disagreed, which is his right.  Either way, it would have been nice for the headline writer to accurately portray the content of the article."

Blackmon also notes the headline, "Trump's Failure to Fill Energy Panel Is Stalling Shovel-Ready Projects - Well, not exactly.  Again, the headline writer misleads the readers," he wrote.

"The story itself is fairly accurate:  The Federal Energy Regulatory Commission (FERC) is missing three commissioners due to resignations of Obama holdovers that took place early this year.  

"While President Trump was fairly slow in submitting nominees to fill those vacant seats, the truth is the nominees were submitted weeks ago, and it is Senate Democrats - who have stalled every Trump nominee for any position - who are preventing the panel from being filled."

Blackmon's conclusions, while political, do reflect the intricate nature of energy reporting today: "So if you're sitting at your desk feeling more than a little confused about what is going on in the oil and gas world, don't feel alone. You have plenty of company. Trust me."

By Mike Shiloh

July 18, 2017

EIA Sees Continued Oil Output Growth To Come

The Energy Information Administration's monthly report indicates a continued rise in crude oil ouput over the six weeks is expected -- growth of 113,000 barrels per day to 5.585 million barrels a day -- with the Permian Basin expected to see the largest climb.

See the EIA report here.

 

By Mike Shiloh

July 18, 2017

Renewable Biofuel Research Continuing at UW: ExxonMobil

Stated goal: Direct transformation of biomass such as corn husks into diesel and jet fuel

ExxonMobil is continuing its partnership with the University of Wisconsin- Madison for continued research into the conversion of biomass into advanced transportation fuels.

An example is the transformation of corn stalks, leaves and cobs into cellulosic ethanol -- but researchers at the university have been working to reduce the number of steps needed in the process of converting non-food corn byproducts directly into diesel and jet fuel rather than simply into an ethanol additive to already existing fuel.

The Rest of the Story, Subscribers Only

By Mike Shiloh

July 17, 2017

US House Action to Spur Energy Development: The Hill

The US House of Representatives will vote on four energy or environment bills this week designed both to crack down on federal regulatory efforts and spur energy development, reports The Hill.

"The Rules Committee on Monday will begin the process of bringing to the floor Rep. Pete Olson's (R-Texas) bill to slow down the EPA's regulatory schedule for ozone pollution.

"Republicans and industry groups have rallied around the bill as a way to help states and localities come into compliance with current ozone standards before new ones roll out.

"Later in the week, the House will vote on three energy bills.

"One would extend permitting for hydropower facilities; another would ease restrictions on energy imports and exports with Canada and Mexico; and the third would overhaul the permitting of interstate natural gas pipeline projects."   

By The Hill

July 17, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI down 0.52 to close at $46.02

Brent down 0.52 to close at $48.39

Natural gas up 0.04 at $3.02

---------------

CLOSING OIL & GAS STOCKS

Anadarko (APC) up 0.49 at 45.22

Apache (APA) up 0.12 at 48.68

Chevron (CVX) down 0.23 at 104.21

ConocoPhillips (COP) down 0.26 at 43.19

Devon (DVN) down 0.30 at 31.35

Energy Transfer Partners (ETP) up 0.10 at 20.55

EOG Resources (EOG) up 0.03 at 91.90

ExxonMobil (XOM) down 0.42 at 80.86

Halcon (HK) down 0.22 at 6.56

Marathon Oil Corp. (MRO) down 0.06 at 11.59

Noble Energy (NBL) up 0.44 at 28.70

Occidental Petroleum (OXY) up 0.22 at 60.04

Parsley Energy (PE) down 0.22 at 28.49

Phillips 66 (PSX) down 0.39 at 81.81

Pioneer Natural Resources (PXD) up 1.89 at 162.83

Valero (VLO) down 0.61 at 67.43

---------------

CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) up 0.38 at 68.55

CenterPoint (CNP) up 0.15 at 27.77

Entergy (ETR) up 0.12 to close at 75.61

Exelon Generation (EXC) up 0.97 at 37.03

NRG (NRG) down 0.32 at 22.92

Vistra Energy (VST) down 0.06 at 15.96

By Mike Shiloh

July 14, 2017

Weekly US Rig Count Steady, 2 Oil Up and 2 Gas Down: Baker Hughes

The oil and gas rig count held steady for the week, according to weekly figures from Baker Hughes (now a GE company).

The count of active US rigs remains at 952, as the number of oil rigs climbed by two to offset the natural gas rig decline of two overall.

The Permian Basin added four rigs for a total of 373, with Midland and Reeves counties accounting for about 30% of the total.

The offshore rig count is flat at 21, down by one year over year.

By Mike Shiloh

July 14, 2017

Governor Abbott Announces For Reelection As Special Session Nears

Governor Greg Abbott announced his intention to run for reelection as governor at a rally in downtown San Antonio on Friday afternoon.

It's been four years to the day that Abbott announced his first gubernatorial campaign.

No Democrat has come forward to run against Abbott, though the state party has begun a search for a candidate.

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By Mike Shiloh

July 14, 2017

Oncor Suitor States Intent, Concern While Berkshire Hathaway Offer Considered

Oncor says formal consideration of Warren Buffett's offer is several steps away, but alternative offer from Elliott may emerge quickly

A publicized Berkshire Hathaway offer to buy Texas' largest electricity distributor is in the works and so far is the only deal being considered by the board of directors of Dallas-based Oncor Electric Delivery Company LLC.

The board met Friday and while as a private board its outcome is not made public, it likely considered recommending to its parent company a previously-announced $9 billion offer from Warren Buffett's Berkshire Hathaway Energy to buy Oncor out of bankruptcy court.

But whatever the board's desire, it first has to be okayed by the parent company Energy Future Holdings, and then would have to seek approval from bankruptcy court before the deal can go forward.

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By Mike Shiloh

July 14, 2017

Big Oil Just Woke Up to Threat of Rising Electric Car Demand: Bloomberg

The world’s biggest oil producers are starting to take electric vehicles seriously as a long-term threat, Bloomberg writes in Friday editions of its magazine.

OPEC quintupled its forecast for sales of plug-in EVs, and oil producers from Exxon Mobil Corp. to BP Plc also revised up their outlooks in the past year, according to a study by Bloomberg New Energy Finance released on Friday.

The London-based researcher expects those cars to reduce oil demand 8 million barrels by 2040, more than the current combined production of Iran and Iraq. 

Growing popularity of EVs increases the risk that oil demand will stagnate in the decades ahead, raising questions about the more than $700 billion a year that’s flowing into fossil-fuel industries.

While the oil producers’ outlook isn’t nearly as aggressive as BNEF’s, the numbers indicate an acceleration in the number of EVs likely to be in the global fleet.

“The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others,” Colin McKerracher, head of advanced-transport analysis at BNEF in London, wrote in a note to clients.

“There is significant disagreement on how fast adoption will be, and views are changing quickly.”

By Bloomberg

July 13, 2017

NRG Partners With UK Group in Texas Wind Project

NRG Energy is partnering an interest in the Erath County Buckthorn Wind Power Project with UK investor-manager John Laing Group PLC.

It's the Laing Group's first investment in Texas, it's second wind farm stake in the US.

The Laing Group stake is a 90% shareholding interest in the uncompleted wind farm southwest of Ft. Worth, the company said.

When it's completed in the fourth quarter of this year, the project will use 29 turbines for a total installed capacity generation of more than 100 MW.

By Mike Shiloh

July 13, 2017

Tennessee Shipper Admits Improper Radioactive Containers To Midland Companies

A Tennessee company has admitted it failed to properly test containers used for shipping radioactive materials in March and October 2014 to companies in Midland, Texas and El Reno, Oklahoma.

Berthold Technologies has taken a plea bargain admitting that devices used to measure the density of fluids in natural gas fracking operations were shipped from Oak Ridge, Tennessee in improperly inspected containers, according to the Maryville Daily Times of Tennessee.

Berthold will work with US Department of Transportation to work out any problems that may have arisen with the devices shipped to customers in the past ten years.

 

By Polly Ross Hughes

July 13, 2017

Williams Hillabee Pipeline Expansion In Progress

Williams Partners LP's long-planned Hillabee pipeline expansion is underway, the company said this week, with a first phase under construction, a second phase expected to be finished by 2020, and the third and final phase to be completed by 2021.

Williams says capacity in Alabama for the big Transco pipeline system will be increased by 818,400 Dekatherms per day and the expansion will allow delivery of natural gas to Florida via the new Sabal Trail pipeline for the ever-increasing natural gas-electricity generation markets.

The Transco main line delivers natural gas between South Texas and New York, along with 12 states in the Eastern and Southeastern US.

By Mike Shiloh

July 13, 2017

Trump Officials Urged to Stop Dumping of Offshore Fracking Waste Into Gulf of Mexico

Center for Biological Diversity News Release

DALLAS— A Trump administration proposal to continue allowing oil companies to dump unlimited amounts of offshore fracking chemicals into the Gulf of Mexico violates federal law and threatens imperiled marine wildlife, the Center for Biological Diversity warned this week.

In a letter to the Environmental Protection Agency’s Region 6 office on its proposed wastewater-discharge permit for offshore oil and gas drilling activities off the coasts of Louisiana, Texas and Mississippi — where thousands of offshore drilling platforms are located — the Center explained that the proposed permit violates the Clean Water Act because it causes an undue degradation of the marine environment. The Center’s letter notes that “scientific research has indicated that 40 percent of the chemicals used in fracking can harm aquatic animals and other wildlife.”

“The Trump administration is letting the oil industry dump unlimited amounts of toxic fracking chemicals into these wildlife-rich waters,” said Center attorney Kristen Monsell. “The EPA is supposed to protect ocean water quality, not turn a blind eye as oil companies use the Gulf as a garbage dump for fracking waste.”

Earlier this year the EPA’s Region 6 office responded to a Freedom of Information Act request from the Center for records analyzing the effects of fracking chemicals on Gulf water quality and marine life. Officials said they didn’t have any responsive records, meaning the agency has been allowing the oil industry to dump its fracking wastewater into the Gulf without studying its environmental impacts, as federal law requires.

Federal waters off Texas, Louisiana and Mississippi host the largest concentration of offshore oil and gas drilling activities in the country. Previous records requests revealed that oil companies dumped more than 75 billion gallons of wastewater into these waters in 2014 alone.   

At least 10 fracking chemicals routinely used in offshore fracking could kill or harm a broad variety of marine species, including marine mammals and fish, Center scientists have found. The California Council on Science and Technology has identified some common fracking chemicals to be among the most toxic in the world to marine animals.

Fracking chemicals raise grave ecological concerns because the Gulf of Mexico is important habitat for whales, sea turtles and fish and contains critical habitat for imperiled loggerhead sea turtles. Dolphins and other species in the Gulf are still suffering lingering effects from the Deepwater Horizon oil spill.

“It’s the EPA’s job to safeguard our oceans from being contaminated with fracking wastewater,” Monsell said. “The agency has no business rubber-stamping the dumping of dangerous, disgusting chemicals without even trying to understand the risks.”

The Center for Biological Diversity is a national, nonprofit conservation organization with more than 1.3 million members and online activists dedicated to the protection of endangered species and wild places.

By Center for Biological Diversity

July 13, 2017

Dynegy Streamlines Power Portfolio With Sales

Houston-based Dynegy has been buying and selling this year to strengthen and streamline it's electricity generation portfolio; it's latest move is an agreeement to sell three US power plants for a total of $300 million.

Two Massachusetts natural gas-fired plants were recently bought from the French energy company Engie SA in a deal that included an agreement with the Federal Energy Regulatory Commission to sell off two plants within six months.

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By Mike Shiloh

July 13, 2017

Mills: Oil, Gas, Coal Dominate U.S. Energy Mix

By Alex Mills

Even though renewable energy has been the darling of state and federal governments for more than a decade, the old fossil fuels – oil, natural gas and coal – continue to generate most of America’s energy.

Fossil fuels have provided more than 80% of total U.S. energy consumption for more than 100 years, according to the Energy Information Administration (EIA). 

EIA released a report last week stating that fossil fuels accounted for 81 percent of U.S. energy consumption in 2016.

Petroleum, which encompasses nearly all transportation fuels and several petroleum-based fuels used in homes, businesses, and industries, continues to be the largest source of energy consumption. Petroleum consumption has increased in each of the past 4 years.

Consumption of natural gas has risen in 9 of the past 10 years. As recently as 2006, the United States consumed more coal than natural gas (in energy-equivalent terms), but as natural gas consumption has increased, particularly in the electric power sector, natural gas use in 2016 was about twice that of coal.

Coal consumption fell nearly 9 percent in 2016, following a 14 percent drop in 2015. Overall, US coal consumption has declined almost 38 percent since 2005. In each of the past 20 years, the power sector has accounted for more than 90% of total U.S. coal consumption.

In 2016, the renewable share of energy consumption in the United States was 10.5 percent, according to EIA. This was the largest renewable share since the 1930s, when overall energy consumption was lower, and the amount of biomass consumption (mainly wood) was relatively high. The greatest growth in renewables over the past decade has been in solar and wind electricity generation. Liquid biofuel consumption—more than half of which is ethanol blended into motor gasoline—has also increased in recent years, contributing to the growing renewable share of total energy consumption.

Many of the federal tax subsidies for wind and solar were scheduled to expire, but were extended in 2015.

The Investment Tax Credit provides a 30 percent tax credit for the cost to develop solar energy projects. This credit is now extended until the end of 2019, when it will begin to decrease incrementally until 2022. In 2022 and beyond, a 10 percent tax credit for both utility and commercially operated solar projects will be available, while the tax credits for residential solar projects will expire in 2022. Before the extension took effect, the tax credit was set to decrease from 30 percent to 10 percent, or expire completely, depending on the sector, in 2016.

The Production Tax Credit, as it relates to the generation of electricity from wind plants, provides a 2.3 cent per kilowatthour (kWh) tax credit for the first 10 years of production. This rate currently applies to plants that are under construction by the end of 2016. After 2016, the value of the tax credit for wind generation will decrease incrementally until it expires in 2020. Before the extension, the tax credit had expired at the end of 2014.

Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely of the author.

By Alex Mills

July 13, 2017

Imperial Capital Energy Expansion

Imperial Capital is expanding its institutional research and investment banking division in Houston with several new hires.

The company's investment banking energy group now includes Kevin Andrews, Daniel DeSnyder, Lenny Bianco and Chris Lang each moving over from small- and mid-cap investment service Wonderlich Securities.

They join Imperial Capital Group LLC's senior analysts Jason Wangler, Irene Haas and Jiuying Ye.

By Mike Shiloh

July 13, 2017

Houston's Erin Energy Plans Nigerian Coastal Well Spud

Houston-based Erin Energy is expecting to add to its current production with a new well off the coast of Nigeria later this month.

The company says it's contacted Pacific Drilling to spud the Oyo-9 well in the Oyo field about 46 miles off the Nigerian coast and a driling rig is on its way to the location.

The well, at a rate of more than six thousand barrels per day, is expected to double Erin's production quota, which is currently based on the company's success with it's Oyo-8 well in the vacinity.

The Oyo field was discovered in 1995, among the first to be found off Nigeria's coast, with a drilling depth of about 1,345 feet.

By Mike Shiloh

July 13, 2017

Texas Wind Generation Record for 2017 So Far; Capacity Growing: Recharge News

Wind generation was responsible for a record 20.7% of power consumption in Texas' main electric grid through June of this year, up from 15.1% for the entirety of 2016,.

The Electric Reliability Council of Texas continues to find ways to both reliably integrate increasing quantities of wind energy into its system operations and actively improve the power quality, Recharge News reports.

And the industry continues to add gigawatts of capacity in blustery regions of the state.

By Mike Shiloh

July 12, 2017

TCEQ Erred In Power Plant Tax Exemption Denial: Appeals Court

A Texas appeals court has ruled that the Texas Commission on Environmental Quality made misinterpreted the Texas Tax Code when it denied property tax exemptions to several power plants.

The Third Court of Appeals in Austin ruled Tuesday that a lower court also erred in upholding the TCEQ's decision against the eight power plants based on their pollution control equipment, according to Law360.

The eight plants are Freestone Power Generation LLC, Freeport Energy Center LLC, Brazos Valley Energy LLC, Tenaska Gateway Partners Ltd., Ennis Power Co. LLC, Wise Power Co. LLC, Midlothian Energy LLC and Hays Energy LLC.

By Law 360

July 12, 2017

Houston's Talos, Consortium In "Historic" Gulf Crude Find

First Mexican private oil discovery in 80 years could be among the biggest finds ever with 2 billion barrel yield, company says

One of the biggest crude oil discoveries in history has been found in the Gulf of Mexico, a consortium of British, Mexican and US companies announced Wednesday.

The Zama-1 well, nearly 40 miles off the coast of Mexico's southeastern state of Tabasco, can yield an estimated 1.4 billion, up to 2 billion barrels of light oil, the companies said.

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By Mike Shiloh

July 11, 2017

RRC: Texas Drilling Permits and Completions Statistics for June 2017

AUSTIN –– The Railroad Commission of Texas (Commission) issued a total of 1,305 original drilling permits in June 2017 compared to 656 in June 2016. The June total included 1,131 permits to drill new oil or gas wells, 11 to re-enter plugged well bores and 163 for re-completions of existing well bores. The breakdown of well types for those permits issued June 2017 included 330 oil, 70 gas, 817 oil or gas, 70 injection, two service and 16 other permits.

In June 2017, Commission staff processed 510 oil, 96 gas, 43 injection and zero other completions compared to 700 oil, 165 gas, 31 injection and four other completions in June 2016. Total well completions processed for 2017 year to date are 3,872; down from 6,429 recorded during the same period in 2016.

According to Baker Hughes Inc., the Texas rig count as of July 7 was 463, representing about 49 percent of all active rigs in the United States.

For additional drilling permit and completion statistics, visit the Commission’s website at http://www.rrc.texas.gov/oil-gas/research-and-statistics/well-information/monthly-drilling-completion-and-plugging-summaries/  

By Railroad Commission of Texas

July 11, 2017

Halcon Up More Than 50% On $1.4 Billion North Dakota Asset Sale

Shares in Houston-based Halcon Resources Corp. were up more than 51% on the day after Tuesday's announcement of an agreement to sell assets in North Dakota's Williston Basin -- about all of Halcon's holdings there -- for $1.4 billion cash to a subsidiary of fellow Houston company Bruin E&P Partners LLC.

The Bakken-area assets yield about 29,000 barrels of oil equivalent each day, according to Halcon.

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By Mike Shiloh

July 11, 2017

NOVA Chemicals Buys Into Texas, Louisiana

Canada's NOVA Chemicals Corp. has closed on two transactions announced earlier this year, including it's entry into the Gulf Coast market.

Calgary-based NOVA acquired an indirect 88% ownership interest in Williams Partners LP's olefins plant at Geismar, Louisiana, south of Baton Rouge, which produces nearly two billion pounds of ethylene a year.

As part of the deal (price undisclosed by the seller) NOVA also received 525 acres of undeveloped land adjacent to that plant, which the company describes as riverfront property that will be used in the future.

The company also acquired Williams' interest in the Ethylene Trading Hub in Mont Belvieu, east of Houston.

By Mike Shiloh