Analysis by the father of American Geopolitics Dr. Daniel Fine, MIT.

Posts tagged ‘Tulsa’

Analysis: Oil market glut will lead to declining prices through 2020 by Dr. Daniel Fine


The Full article  in the Farmington Daily Times Energy Magazine (USA TODAY)

With the OPEC-Russia meeting ahead, the price of oil is at a crossroad.

President Trump wants lower prices for gasoline at the pump and the Democratic Party wants a shortage to lift prices higher. This is the 2020 presidential election, to re-elect Trump or a create a Democratic left-center White House.

Is OPEC-Russia ready to sustain output cutbacks for $70 Brent Oil or continue revenue maximum against market share? Curiously, in the conversation at Vienna the Oxy purchase of Anadarko will resonate. Why? Oxy must now increase its export of oil to lower its debt (Warren Buffet and more) and prevent a serious management miscalculation of paying too much for Anadarko.

Permian Delaware shale, with new high volume pipelines completed soon, must find expanding import markets of l.5 million barrels of oil per day or the equivalent of OPEC-Russia resuming late 2016 output for export.

As this writer concludes this column for the The Farmington Daily Times’ Energy Magazine, which Is going on hiatus in San Juan County after this edition, there is no change in an outlook that dates back to the oil price crash of 2014-2016.

There is too much oil (over-supply) against world demand for it.

Exxon-XTO in the Permian is prepared for $40 per barrel, and to still add  $82 billion value in the New Mexican Permian or the Delaware in the next 40 years.

However, along with Chevron, Oxy,  EOG and Pioneer, it must have a market for the economic recovery of reserves estimated at nearly 47 billion barrels in the Permian Delaware Basin. They must export against OPEC-Russia production.

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The lifting cost of Saudi Aramco oil remains lower than Permian Shale. Saudi Aramco has sold debt (bonds) and 63% of its cash flow goes to its government? With oil demand slack and sluggish, and electric vehicles preparing for a 2024 market challenge both technically and politically (zero emissions).

While associated natural gas has partially become a free commodity from Permian Delaware producers, natural gas is up next, after coal, as a target for Green Energy. It should resemble oil on a smaller scale as price dependent entirely on exports in the form of LNG.

Will Persian Gulf, Australian, and Russian natural gas production roll backward in favor of American LNG? American exporters today cannot compete in a $5 per ton Asian LNG market.

Some San Juan Basin producers at the recent San Juan Basin Energy Conference openly discussed shifting capital spending

from natural gas to oil development.

This writer reaffirms his $50 average price for WTI oil in 2019 presented for the smaller independent producers at a briefing at Merrion Oil last December, but beginning early in 2020 forecasts a second half average of $38 per barrel .

In New Mexico, the Governor can adjust the Energy Transition Act basic law next February, but it should be a petroleum-revenue 30 day session without serious oil and gas organized opposition.

New Mexico is now a hybrid Green State with more exportable oil and gas than every OPEC country except Iraq and Saudi Arabia, and yet it will impose the most effective rules for methane capture.

No amount of ad hominem distraction against its policy and leadership will change this direction, and the nation could follow with the outcome of the national election next year.

Daniel Fine is the associate director of New Mexico Tech’s Center for Energy Policy. The opinions expressed are his own.”

 

Energy Industry Looks To The Future At 2019 San Juan Basin Energy Conference A recent influx of dynamic, new oil and gas operators are bringing innovative applications of modern technology to restore the San Juan Basin to its place as a leading basin in the United States


 


NEWS PROVIDED BY

LOGOS RESOURCES LLC

Mar 15, 2019, 09:52 ET

The San Juan Basin Energy Conference was founded to provide a forum for exchange of ideas regarding the development of the abundant energy resources found in the region. The theme of this year’s conference is “Looking to the Future”. A recent influx of dynamic oil and gas operators, bringing innovative applications of modern technology to the Gallup sandstone and the Mancos shale formations, promises to restore the San Juan Basin to its place as one of leading basins in the United States.

Regional producers continue to leverage their experiences to apply industry-best practices in efficient implementation of the recently-surging development. The San Juan Basin Energy Conference 2019, sponsored in part by Hilcorp, Whiptail Midstream, and LOGOS Resources II, LLC brings together the basin’s top companies and industry experts to share views on the industry and discuss plans for the future within the San Juan Basin.

Tickets and sponsorship information are available at sanjuanbasin2019.com. Ticket prices are $250/person and sponsorship prices range from $1,000$10,000. Net proceeds will go to San Juan College’s research park, Four Corners Innovations, Inc.

FOUR CORNERS INNOVATIONS, INC.
DOLORES SILSETH
(505) 566-3402
SILSETHD@4CII.ORG

SOURCE LOGOS RESOURCES LLC

Related Links

http://www.logosresourcesllc.com

Dr. Daniel Fine: Oil and gas: A look at what 2018 may bring


by Daniel Fine, Energy Magazine – Daily Times USA TODAY

Trump leads mass deregulation effort; comeback seen for San Juan Basin

For more of the article go here-> http://www.daily-times.com/story/money/business/2017/12/24/fine-oil-and-gas-look-what-2018-may-bring/956281001/

“The price of oil in 2018 will be volatile with commodity market traders selling on signals of OPEC-Russia “cheating” or members producing more oil than the extended Algiers Agreement output quotas. This should be expected as U.S. shale producers push past 10 million barrels per day and exceed 1970 as the all-time high for the United States.
At 10.4 million bpd (barrels per day), American oil production will surpass Saudi Arabia and Russia.  Herein lies the price range: 2015 all over again.
Real OPEC and Russian output will break Algiers (1.8 million barrels off the world market until September). Price range to $62.50 WTI high in the first half of the year and $38.65 at end of the second half or one year from today; 2019 would resemble most of 2015.
There is a second threat to price and production in the Southwest and Dakota. Hedge funds invested in public or listed companies want share buy-backs or dividends. In short, they want to make money now as opposed to operators sinking more cashflow into new production projects. The conflict inside Hess is the first example.
Traditional oil operators are 5-year business planners for returns on investment while the new private equity owners or investors are quarterly or payback pressure points for higher stock market share prices and distribution. OPEC/Russia is the external market threat leading to the lower price range alongside an internal investor/owner threat of less cash flow plow back for future production projects and more for short-term return on investment.
Oil price and production will also reflect Saudi Arabian domestic instability over its simultaneous offensive against Iranian influence in the Middle East and social and economic modernization against traditionalism. The plan is for less dependence on oil exports with technology and manufacturing in the national economy: social change and the status of women in the “revolution.”

 

Our View: Limiting oil imports would help to protect American producers


By A-J Editorial Board

The full article is here-> http://lubbockonline.com/filed-online/2016-04-28/our-view-limiting-oil-imports-would-help-protect-american-producers#.Vyf6UPkrLIU

“When the price of oil drops, so does the cost of gasoline. But while people are enjoying paying lower prices at gasoline pumps, plunges in oil prices can cause economic damage in Texas.

And it can put American oil producers out of business when the price of foreign oil imports gets cheaper than the costs of extracting oil from the ground in the U.S.

Oil producers in the Panhandle recently announced the Panhandle Import Reduction Initiative. Their hope is to limit the amount of oil that can be imported from other countries.

We wish them success in getting sympathetic ears to hear their initiative and gathering like-minded people to help further it.

They are right that a limitation should be set on the amount of oil imports from the Organization of Petroleum Exporting Countries.

Representatives of OPEC’s 18 nations recently met in Doha, Qatar. Among their topics of discussion was whether to freeze oil production levels.

The nations didn’t reach an agreement on the subject.

“OPEC and Russia and various countries met and decided they weren’t going to freeze oil and, in fact, OPEC said they will increase production again. This will drive the price down to $26 (a barrel) again,” said oil producer Tom Cambridge.”

This is what an oil bust looks like by Jonathan Thompson


Low prices have energy companies and communities reeling as rig counts plummet and unemployment climbs.

The full article is here-> http://www.hcn.org/articles/this-is-what-an-oil-bust-looks-like

“In early March, Daniel Fine, associate director of the New Mexico Center for Energy Policy, told a gathering of tribal energy officials that the oil bust is officially on. Those gathered, however, sure as heck didn’t need an expert to tell them that. In the oil and gas patches it has become clear that the economic gains of the so-called shale revolution are being wiped away by one of the worst fossil fuel downturns in U.S. history.

Now, the oil companies are crying for help. First, they got the crude oil export ban lifted. Next they want proposed federal rules on methane emissions weakened or scrapped. As if any of that will help.

Back in 2010, the price of a barrel of Brent crude (the international oil price benchmark) topped $80. That made it profitable to extract oil from tight shale formations, which is especially costly. A drilling frenzy ensued, domestic oil production skyrocketed, oil companies raked in profits and oil patch communities prospered.

But all that new oil on the market, plus China’s slowing economic growth, began to dampen oil prices in the summer of 2014. Instead of curtailing production to keep prices afloat, OPEC’s leaders launched a thinly veiled price war, clearly aimed at putting U.S. producers out of business. Here are some indicators that OPEC won the war:

The U.S. rig count has collapsed to levels not seen since, well, ever. With both oil and natural gas prices at near-record lows, it simply doesn’t make economic sense to spend up to $10 million to drill a well. So the rigs are shutting down. In September 2014, 1,931 oil and gas rigs were operating in the U.S.; today there are just 476. That’s a 75 percent decrease, and it’s still some 50 percent lower than the 1987 count, which followed what was considered the biggest, baddest bust ever, until now. Tom Dugan, who runs an oil and gas production company in northwest New Mexico, told the Farmington Daily Times, “It’s the hardest bust I’ve been through and I have been in this business for 57 years.”

New Mexico Tech Hosts first of its kind forum on Induced Seismicity


New Mexico Tech is hosting a first-of-its-kind workshop that will address the relationship between petroleum drilling and earthquakes, or “induced seismicity.”

The event will feature a series of guest speakers and will be August 21, 2014 in Fidel Center Ballroom on campus in Socorro. The event starts at 9 a.m., with three speakers in the morning and four speakers after lunch.

Over the past few decades, scientists have been examining the relationship between oil exploration – specifically hydraulic fracturing (or fracking) and horizontal drilling – and the increasing number of small earthquakes in the same areas. Several studies have examined the timing and location of seismic activity in Arkansas, Ohio, New Mexico and other states.

“A growing number of Earth scientists are looking at the relationship between oil exploration and seismic activity,” said Dr. Van Romero, Vice President of Research at New Mexico Tech. “With this workshop, we hope to place New Mexico Tech researchers at the forefront of the discussions about the topic.”

Romero will open the day-long event with a welcome to all participants. Hydrology professor Dr. Mark Person of New Mexico Tech is coordinating the event.

He said, “This is becoming a more important topic in recent years due to the large volumes of produced saline water that must be re-injected into deep subsurface reservoirs. If we can get a firm handle on the mechanisms controlling seismicity associated with saline water disposal practices, hopefully we can come up with some practical suggestions for best management practices.”

Guest speakers include the following:

Dr. Mark Person, New Mexico Tech – “Induced Seismicity events in the Midcontinent U.S.A.”
Dr. David Dempsey and Dr. Sharad Kelkar, Los Alamos National Lab, “Couple Geomechanical Hydrologic Models”
Dr. Andrew Delorey, Los Alamos National Lab, “Probing the Critical Stress State In Reservoirs”
Dr. Sue Bilek, New Mexico Tech, “Seismic Monitoring of Induced Seismic Events”
Dr. Sutin Holland and Dr. Randy Keller, Oklahoma Geological Survey, “Oklahoma Seismicity and Potential Cases of Induced Seismicity”
Dr. Reid Grigg and Dr. Bob Balch, New Mexico Tech, “Induced Seismicity in Paradise Valley, Utah”
Dr. Peter Mozley, New Mexico Tech, “Field Observations of Sedimentary and Crystalline Basement Fault Permeability”
The workshop is free and open to the public. To register, please email Gina Chavez at gchavez@admin.nmt.edu.

– NMT –

By Thomas Guengerich/New Mexico Tech

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