Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
EnerCom’s Oil & Gas 360®

Natural Gas Roundup

December 10, 2015

NATURAL GAS INVENTORY (Week Ended 12/4/15)

Current: 3,880 Bcf
Actual Injection/(Withdrawal), per EIA: (76) Bcf

Economist Average Estimate, per Bloomberg: (63) Bcf

Previous: 3,956 Bcf

Click here for the chart with five year averages.

PLS - We Close 30 Deals a Year


*SEC Reserves Price Deck Down 48% for 2016 – Oil & Gas 360®

With the end of 2015 quickly approaching, and companies preparing for a lower Securities Exchange Commission (SEC) price deck for reserves reporting, proved reserves for oil and gas companies are likely to diminish significantly in the near future. The dramatic decrease in oil prices since November of last year has pulled the SEC’s price deck down to about $50.13, based off the average of the price for WTI on the first day of every month this year, falling within 1% of EnerCom Analytic’s estimate, made in September. That represents a 48% decline from $94.99 in 2014. – Read More

*Alaska Governor Calls for State’s First Income Tax in Nearly Four Decades – The Wall Street Journal

Alaska Gov. Bill Walker on Wednesday proposed instituting a personal income tax in the state for the first time in nearly four decades—and cutting the annual oil royalties check all citizens receive—as part of a plan to shore up a budget that has been hammered by a steep decline in oil production and prices. His proposals are likely to ignite fierce opposition in a state where low taxes and the annual Permanent Fund dividend check, which averaged a record $2,072 this year, are widely seen as unassailable rights. “This is a major paradigm shift in how the state of Alaska conducts business,” Mr. Walker, an independent, said in a news conference in the state capital, Juneau. – Read More

*Mexico Gobbling Up Cheap U.S. Natural Gas Via Pipeline – Barron’s

Mexico’s economy is slowly benefitting from energy reform: cheap U.S. natural gas filling new pipelines is lowering electricity bills. Deflationary pricing — electricity costs are down more than 15% this year– hasn’t benefitted the iShares MSCI Mexico Capped exchange-traded fund (EWW), which is down 11% this year. But cheap natural gas imports from the United States should continue, and continue to benefit Mexico’s manufacturing sector. This makes rising interest rates less of a risk in 2016, writes Carlos Capistran, an analyst at Bank of America/Merrill Lynch. – Read More

*Oil and Gas Spending Cuts are Inevitable for 2016 – Will Production Follow? – Oil & Gas 360®

Budget layouts and capital expenditure plans for 2016 are trickling onto the newswires, with EQT Corp. (ticker: EQT), Noble Energy (ticker: NBL) and PDC Energy (ticker: PDCE) all unveiling their plans within the week. To date, the plans are mirror images of 2015: less spending, more production. Spending for 2015 was significantly below 2014 levels. Based on EnerCom’s E&P Weekly Benchmarking Report, the average 2015 capex (on a trailing twelve month basis) decreased by 15% in Q3’15 compared to the prior year’s period. – Read More

*State of Energy: Natural gas as the sector’s “bright spot” – San Antonio Business Journal

West Texas Intermediate crude oil prices are trading just above $37 per barrel this afternoon but industry experts believe that natural gas remains a bright spot on the horizon. More than 200 energy industry professionals gathered at the Pearl Stable on Wednesday afternoon for the “State of Energy” address sponsored by Shale Magazine, the San Antonio Hispanic Chamber of Commerce and the South Texas Energy & Economic Roundtable. The event included seven guest speakers — many of whom spoke about new business opportunities involving the natural gas industry. – Read More

*Official: U.S. concerned taxpayers may face coal cleanup hit – Reuters

The Obama administration is concerned that a subsidy of coal mine cleanup could leave taxpayers with multibillion-dollar liabilities, a U.S. Interior Department official said on Tuesday. The program, known as self-bonding, allows some of the country’s largest coal companies to forego insurance on a share of future mine cleanup costs. Roughly $3.6 billion in self-bond liabilities could fall to taxpayers and righting the program “is a huge priority,” said Janice Schneider, Assistant Secretary for Land and Minerals Management at the Interior Department. – Read More

*How’s it Going at COP21? – Oil & Gas 360®

Canada surprised attendees and negotiators at the climate talks in Paris on Sunday by calling for a more ambitious target for cutting greenhouse gases than the UN’s own 2-degree target, the National Observer reported. “Canada’s Environment and Climate Change Minister Catherine McKenna told a stunned crowd that she wants the Paris agreement to restrict planetary warming to just 1.5 Celsius warming —not two degrees.” The National Observer said that “Claire Martin, a Green Party observer, said, “‘I was freaking out.’” – Read More

*2016 Ford F-150 returns option to run on natural gas – Detroit Free Press

Production of the 2016 Ford F-150 full-size pickup that can run on compressed natural gas has begun at the Kansas City assembly plant in Claycomo, Mo. Ford last offered the F-150 with the capability of running on CNG or propane for the 2014 model year by making adjustment to the 3.7-liter V6 engine. The alternate fuel option was not available on the 2015 pickup that was an all-new generation of the light-duty truck. The choice returns for the 2016 model year but this time it is a larger engine. – Read More

*Shipping LNG on U.S.-Built Ships a Double-Edged Sword: 100 New LNG Carriers Required – Oil & Gas 360®

Cheniere Energy (ticker: LNG) is expected to begin shipping 3.5 Bcf/d of liquefied natural gas (LNG) from its Sabine Pass terminal in Louisiana early next year, with an additional 6.27 Bcf/d of capacity expected to come online in the U.S. before 2019. The increased capacity will turn the U.S. into a net exporter, requiring more than 100 more LNG carriers to ship the LNG to customers around the world, according to new research from the U.S. Government Accountability Office (GAO). The GAO’s study also explored what it would mean for the U.S. economy if LNG exported from the U.S. was also shipped using LNG carriers built here in the United States. – Read More

*Singapore LNG Futures Could Launch Next Month – The Wall Street Journal

In a chilly market for frozen gas transported by ship, Singapore is working to entrench itself as the region’s primary trading hub for the energy source. The city state’s main market operator, Singapore Exchange Ltd., is set to launch cash-settled futures and swaps contracts for liquefied natural gas as early as January, it said this week. The new contracts, which have received regulatory approval, will allow LNG traders to hedge the price up to a year ahead, the exchange told The Wall Street Journal. They will be the first contracts based on Singapore’s new benchmark price for LNG, known—after the city’s famous cocktail—as the Singapore SLInG. – Read More

*Natural gas waits for the next boom – MetroNews West Virginia

You frequently heard the term “game changer” to describe the impact on energy production when the natural gas boom hit several years ago because of improved hydraulic fracturing technology. But as with any dramatic shift in direction, one is never quite sure where it’s headed. In West Virginia, the boom has settled into a lull.  Drillers have discovered and tapped into so much gas that there is a glut, driving down prices below profitability.  The Wall Street Journal reported recently that when EQT Corp. drilled into one gas-gorged well in Greene County, Pennsylvania last summer it actually hurt its business. – Read More

*Norway Offers New Acreage on its Continental Shelf for the First Time Since 1994 – Oil & Gas 360®

The Norwegian Ministry of Petroleum and Energy is expected to announce the rewards of the 23rd licensing round on the Norwegian continental shelf (NCS) late in the first half of 2016. The 23rd licensing round will include the first new acreage on the NCS offered by Norway since 1994. The acreage being offered in this round includes the south-east of the Barents Sea, which is an area that was added to Norway’s territorial borders following a treaty with Russia in 2011. The 175,000 square kilometer (67,567 square mile) zone situated north of Russia’s Kola Peninsula and the Norwegian coast was the center of a dispute that started in the 1970s over fishing rights. – Read More

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable.  This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note.  This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results.  EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services.  In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies.  As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note.