January 21, 2016

NATURAL GAS INVENTORY (Week Ended 1/15/16)

Current: 3,297 Bcf
Actual Injection/(Withdrawal), per EIA: (178) Bcf
Economist Average Estimate, per Bloomberg: (181) Bcf
Previous: 3,475 Bcf

Click here for the chart with five year averages.

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*Coal: Knock, Knock, Knocking on Heaven’s Door – Oil & Gas 360®

Government policy can be used as a powerful industry killer. Ask the coal miners in Appalachia. In a 2008 speech candidate Obama warned that “if somebody wants to build a coal power plant it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.” Many in the business community were shocked that a man who later became president of the United States had essentially declared war on an iconic American industry. – Read More

*LNG Merger Urged As Low Oil Prices Bite And Exports Become Less Attractive – Forbes

Low oil prices are accelerating the urge to merge among petroleum producers with the latest speculated deal being a tie-up between two new producers of liquefied natural gas (LNG), Australian-based Santos and Origin Energy. Neither company has confirmed that they are talking but the logic behind a deal is compelling for potential cost savings and because it could be a way of limiting future LNG exports. Both Santos and Origin joined the LNG rush when oil prices were trending up and it made financial sense to liquefy natural gas for sale to a energy-hungry Asia. – Read More

*Shale Gas Drillers Emerge as Refuge for Investors in Energy Rout – Bloomberg

U.S. natural gas drillers are emerging as an unlikely bright spot in this week’s collapse of energy stocks. Shale gas producer Southwestern Energy Co. led the S&P 500 Index Wednesday as energy investors flocked to producers of the power-plant fuel in the face of sliding oil prices. Gas explorers Chesapeake Energy Corp. and Range Resources Corp. were the second- and third-best. EQT Corp. and Cabot Oil & Gas Corp. were also up. – Read More

*Range Resources to Benefit from Mariner East 1 Startup – Oil & Gas 360®

Range Resources (ticker: RRC) has always prided itself on optionality and takeaway capacity, and the commissioning of the Mariner East 1 pipeline is about to add to its portfolio. Mariner East 1 will be fully operational in February 2016, according to an article on TankTerminals.com that was relayed to the RRC site. Mariner East 1 will serve as a vital piece of ethane exports and is currently rated at about 70 MBOPD, but the previous inability to export the resource had rates running well below its maximum capacity. – Read More

*Israeli group finds signs of large east Mediterranean gas field – Reuters

An Israeli exploration group has discovered signs of another large natural gas field off Israel’s coast, it said on Sunday. A number of the world’s biggest gas deposits have been found offshore Israel, Egypt and Cyprus in recent years, and oil and gas companies have been spending money to find more. A group lead by Isramco Negev and Modiin Energy said a resource report showed there could be an estimated total of 8.9 trillion cubic feet (tcf) of natural gas at the Daniel East and West fields. – Read More

*Natural Gas May Have Trumped Coal in 2015, Report Says – TIME

Last year was a rough one for coal companies in the United States. Many of the industry’s largest companies filed for bankruptcy, President Obama issued rules that will force the retirement of many coal fired power plants across the country and an international agreement in Paris that led many countries to commit to limiting the production of electricity from coal. Now, a new report shows power companies may have burned more natural gas than coal in 2015. – Read More

*Spring Borrowing Base Redeterminations: a Preview – Oil & Gas 360®

Haynes and Boone polled banks, producers, private equity firms, professional services and oilservice companies in January to take an early pulse of the spring redetermination expectations from the industry and the financial institutions supplying the credit. Key findings by Haynes and Boone: – Read More

*What Lifting Sanctions on Iran Means for India – The Wall Street Journal

The nuclear deal between Iran and six world powers to end sanctions on the Islamic Republic came into effect Saturday evening and is expected to be a mixed blessing for India, which maintained trade relations with Tehran during the economic and financial restrictions. The deal will likely nudge up crude oil supplies from Tehran but have an adverse impact on India’s farm commodities, experts and industry officials say, as Iran now has a wider market in which to shop. – Read More

*Shell Exits Abu Dhabi Sour Gas Project – Oil & Gas 360®

Royal Dutch Shell (ticker: RDSA) announced today that the company will not continue the joint development of the Bab sour gas reservoirs with Abu Dhabi National Oil Company (ADNOC). According to a press release put out by Shell today, the company concluded “the development of the project does not fit with the company’s strategy, particularly in the economic climate prevailing in the energy industry.” – Read More

*McClendon’s American Energy Partners to drill in shale in Argentina with YPF – Akron Beacon Journal

The man who led the push to drill in Ohio’s Utica Shale wants to drill in a new venue: Argentina. Aubrey K. McClendon of Oklahoma-based American Energy Partners LP, a player in Ohio’s Utica Shale, has signed an agreement with YPF, Argentina’s No. 1 oil company. The companies will partner in drilling in the Vaca Muerta Shale in Argentina’s Neuquen Province. The plans call for drilling on 147,600 acres in the Neuquen Basin in western Argentina in two stages, and the project will get underway later this year. – Read More

*Russia likely to scale down China gas supply plans – Reuters

Russia is likely to scale back volumes of gas it plans to ship to China later this decade, sources close to energy giant Gazprom say, due to the dive in global energy prices and uncertainty hanging over the Chinese economy. The sources insist the hugely expensive pipeline project – part of President Vladimir Putin’s strategic shift eastwards – will go ahead on time. However, they acknowledge sales to China will initially be lower than envisaged when Moscow reached the $400 billion deal with Beijing in May 2014. – Read More

*Thick Hedge Book and New Pipelines Power Antero Resources into 2016 – Oil & Gas 360®

Attractive hedges have the ability to make a significant impact on company balance sheets, and its positive effects (along with access to favorably priced markets) are apparent in a January 13 business update from Antero Resources (ticker: AR). The Appalachia-focused producer reported a realized natural gas price (after settled commodity derivatives) of $4.40/Mcf in Q4’15 – a staggering $2.13 positive differential to Nymex spot prices. – 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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