December 17, 2015

NATURAL GAS INVENTORY (Week Ended 12/11/15)

Current: 3,846 Bcf

Actual Injection/(Withdrawal), per EIA: (34) Bcf

Economist Average Estimate, per Bloomberg: (40) Bcf

Previous: 3,880 Bcf

Click here for the chart with five year averages.

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*Interested in Acquiring STACK Acreage? Range Resources is Listening. – Oil & Gas 360®

Less than one month after selling its Nora assets in Virginia for $876 million, Range Resources (ticker: RRC) has another attractive piece of acreage on the block. The Fort Worth-based E&P is marketing its leasehold in the STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher Counties) trend of Oklahoma, according to a recent company presentation titled “STACK Opportunity.” RRC’s position consists of 28,493 acres that are entirely held by production (76% operated) and is delivering net production of 6.6 MMcfe/d (83.5% gas). – Read More

*Good Things Come to Those Gas Bulls Who Wait Two More Years – Bloomberg

Don’t fret, U.S. natural gas bulls. Futures prices point to better days ahead — if you’re willing to wait two years. Record-breaking warm temperatures for this time of year may have pushed U.S. gas prices for delivery next month to the lowest level in 16 years, but prices for the fuel for 2018 and 2019 delivery have hardly budged. In fact, the cost of securing supplies for December 2018 was $1.271 per million British thermal units more than for this January’s contract, its biggest premium in data going back to 2008. – Read More

*Natural Gas Falls to All-Time Inflation-Adjusted Low – The Wall Street Journal

Natural-gas fell to the lowest ever inflation-adjusted price in its history of Nymex trading on Wednesday as extremely warm weather continues to limit demand. Prices for the front-month January contract settled down 3.2 cents, or 1.8%, at $1.79 a million British thermal units on the New York Mercantile Exchange. That is the lowest settlement since March 24, 1999. Gas prices have been falling precipitously in recent weeks because of the combination of record-high stockpiles and a December that could be the worst for heating demand in history. – Read More

*Charif Souki Out as CEO of Cheniere Energy – Oil & Gas 360®

Cheniere Energy’s (ticker: LNG) first LNG shipment is just weeks away, and the man who co-founded the colossal operation will not be present to witness his company’s achievement. Charif Souki, the former Chairman, President and Chief Executive Officer of Cheniere Energy, has been removed from his position effective immediately, the company said in a news release on Sunday, December 13, 2015. Souki co-founded Cheniere Energy in 1996 and guided the company from an unknown to one that revolutionized the highly publicized (and highly capital intensive) LNG market. – Read More

*Oil price slide unlikely to scuttle Shell’s takeover of BG – Reuters

Royal Dutch Shell’s takeover of BG Group may look less attractive after the slide in oil prices but the fact the same investors own nearly half of both firms means the deal is still likely to go through. Investors holding about 43 percent of Shell’s shares also hold 53 percent of BG, according to Reuters data. For example, Blackrock, Franklin Mutual Advisers and Norges together hold more than 12 percent of Shell and nearly 7.5 percent of BG. – Read More

*Dispute With Egypt Threatens Israeli Gas Plan – The Wall Street Journal

A dispute between Israel and Egypt over a natural-gas deal is threatening to derail ambitious but controversial plans by Israeli leader Benjamin Netanyahu to turn his country into a fossil-fuel powerhouse. Egypt has frozen plans to import Israeli gas after an international arbiter ruled that the North African country’s state-owned energy companies owed $1.76 billion to state-owned Israel Electric Corp., or IEC, demanding that Israel drop this and another arbitration case over gas. Mr. Netanyahu says he is sending a special envoy to Egypt to mediate the quarrel. – Read More

*Energy Market Upside: Pioneer Natural Resources Keeps Leverage Low – Oil & Gas 360®

Lower oil prices have put strain on even the best of companies. Those that have managed to maintain strong balance sheets stand to weather the storm the best, as low oil prices persist. Pioneer Natural Resources (ticker: PXD) has kept its debt load low compared to its peers, giving it more breathing room in the current price environment. In EnerCom’s E&P Weekly, Pioneer has the lowest debt-to-market cap ratio of any large-cap company. According to EnerCom Analytics, PXD carries a 13% debt-to-market cap ratio, compared to a median of 56% among its large-cap peers. – Read More

*USGS Estimates 53 Trillion Cubic Feet of Gas Resources in Barnett Shale – USGS Press Release

The Barnett Shale contains estimated mean volumes of 53 trillion cubic feet of shale natural gas, 172 million barrels of shale oil and 176 million barrels of natural gas liquids, according to an updated assessment by the U.S. Geological Survey. This estimate is for undiscovered, technically recoverable resources. The previous USGS assessment of the Barnett Shale, which is located in Texas, was released in 2003 as part of an assessment of conventional and unconventional (continuous) reservoirs of the Bend Arch-Fort Worth Basin Province. – Read More

*Repsol, Statoil Announce Asset Swap Involving Eagle Ford and Norway Positions – Oil & Gas 360®

No oil and gas companies were in attendance for Major League Baseball’s winter meetings (baseball’s equivalent of Christmas with its free agent signings, discussions, swaps and trades), but two industry giants independently agreed to a swap of their own on December 11, 2015. Norway’s Statoil (ticker: STO) and Spain’s Repsol (ticker: REPYY) will trade acreage positions in a non-cash, straightforward exchange. Much of the swaps on Repsol’s side stem from its $13 billion acquisition of Talisman Energy last year. Repsol’s global footprint spanned more than 50 countries upon completion. – Read More

*Spending bill could disrupt efforts to put new rules on gas drilling, emissions – Pittsburgh Post-Gazette

A grab bag spending bill passed by the state Senate on Thursday would disrupt state regulators’ efforts to implement new rules for oil and gas drilling and power plant carbon emissions while creating a $12 million incentive program to help expand access to natural gas. The House could vote as early as this weekend on the budget-related fiscal code amendments, known as House Bill 1327. Gov. Tom Wolf, a Democrat, “opposes loading up the fiscal code to gut oil and gas regulations or slow implementation of the Clean Power Plan,” his spokesman Jeffrey Sheridan said. – Read More

*COP21 Doesn’t Change Our More Coal, Oil, and Natural Gas Reality – Forbes

Dr. James Hansen (“the father of global warming”) and the 20,000 protesters who took to the Paris streets afterwards are blasting the recent COP21 climate agreement, with the former calling it a “fraud.” One main reason is that the Paris accord is non-binding, therefore “based on a voluntary basis which allows nations to set their own voluntary CO2 targets and policies without any legally binding caps or international oversight.” There are NO emissions reduction targets from countries before 2020. – Read More

*Energy Market Upside: EQT Corp. Welcomes 2016 with $1 Billion CapEx Plan—Self-Funded – Oil & Gas 360®

The oil and gas market is approaching the end of 2015—which will no doubt go down as a highly tumultuous year for the industry. In spite of the dive in oil prices, some companies have positioned themselves well for capturing the upside through advantageous acquisitions, reliable takeaway capacity, attractive hedges and low-cost production. Or a combination of factors. Today’s focus is EQT Corporation, a Marcellus/Utica pure play headquartered in Pittsburgh, Pennsylvania. – 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.

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