January 7, 2016


Current: 3,643 Bcf
Actual Injection/(Withdrawal), per EIA: (113) Bcf
Economist Average Estimate, per Bloomberg: (99) Bcf
Previous: 3,756 Bcf

Click here for the chart with five year averages.

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*TransCanada Sues U.S. Government over Keystone XL, Seeks $15 Billion for Breach of NAFTA – Oil & Gas 360®

Calgary-based TransCanada Corp. (ticker: TRP) announced today that it will sue the U.S. government, alleging President Barack Obama exceed his power under the U.S. Constitution when he rejected the Keystone XL pipeline project. The suit was filed in the U.S. Federal Court in Houston, Texas, according to a press release from TransCanada. “In its decision, the U.S. State Department acknowledged the denial was not based on the merits of the project,” said the company statement. – Read More

*Biggest No Longer Means Best in Qatar’s Strategy for LNG Wealth – Bloomberg

For Qatar, the world’s largest exporter of liquefied natural gas, preparing for a looming glut of the fuel isn’t about being the biggest seller. It’s about being the most efficient. Global LNG output is expected to rise by a third to about 330 million metric tons annually by 2018, according to Sanford C. Bernstein & Co. Most of the new fuel will come from the U.S. and Australia, which is poised to topple Qatar as the biggest supplier. Unlike Saudi Arabia, the largest oil shipper, Qatar won’t be fighting for market share at the expense of earnings. – Read More

*Natural Gas Prices Surge on Larger-Than-Expected Inventory Draw – The Wall Street Journal

Natural-gas futures soared Thursday after weekly inventory data showed that stockpiles fell more than expected last week. Natural-gas inventories shrank by 117 billion cubic feet in the week ended Jan. 1, the U.S. Energy Information Administration said Thursday. Analysts and traders surveyed by The Wall Street Journal had expected the agency to report a 100-bcf withdrawal. Futures for February delivery extended gains on the news and recently rose 11.3 cents, or 5%, to $2.380 a million British thermal unit on the New York Mercantile Exchange, on track for the highest settlement since November. – Read More

*Natural Gas Prices Close on Most Difficult Year Since 1999 – Oil & Gas 360®

Henry Hub prices in 2015 averaged $2.61/MMBtu, marking the lowest level of the millennium to date and are roughly 70% below the average price level in 2008, according to data from the Energy Information Administration (EIA). Prices dipped below $2.00/MMBtu for the first time in three years near the tail end of 2015, pressured by record inventory levels and unseasonably warm temperatures keeping the energy source in storage. The closing price of $2.33 today was, at first glance, a welcome sight for traders and producers, considering Henry Hub was hovering in the $1.80/MMBtu range in late November. – Read More

*Consol cuts natural gas budget again – Tribune-Review

Consol Energy Inc. again cut its budget for spending on natural gas exploration and production because of continued low prices, though it won’t rule out drilling a few new wells in 2016. The Cecil-based gas and coal producer on Wednesday announced a new capital budget plan and annual production estimates before a two-day financial conference in Miami. The budget of between $205 million and $325 million is less than the $400 million to $500 million it previously said it would spend, and well short of the $1.3 billion budget from 2014. – Read More

*Worst Year for Rigs in Quarter Century Closes With a Whimper – Bloomberg

Oil explorers shut down more rigs in U.S. fields to finish out the worst year for drilling cutbacks in almost three decades. Rigs targeting crude in the U.S. fell by 2 to 536 in the past week, Baker Hughes Inc. said on its website Thursday. Natural gas rigs were unchanged at 162, bringing the total of working rigs to 698. Drillers searching for oil this year idled the largest proportion of their rig fleet since at least 1988. In the 14 oil- and gas-rich regions tracked by Baker Hughes, rig counts declined or remained the same in all but two. – Read More

*Energy Market Upside: Range Resources Exploiting America’s Largest Shale Gas Play – Oil & Gas 360®

Range Resources Corporation is a low-cost producer focused on the Marcellus/Utica in the northeast United States. Range and its Chief Executive Officer, Jeff Ventura, are generally regarded as the founders of the Marcellus Shale play and used their early entry and expertise in the region to fuel America’s natural gas revolution. Many other Appalachia players have entered the fold since RRC’s discovery, but the Fort Worth-based company remains a key figure in the U.S.’s largest gas field. Below are some of the strengths of Range Resources Corporation: – Read More

*How much will the new DEP regulations cost the Marcellus Shale industry? – PennLive

The Marcellus Shale Coalition combed through the pages of the state Department of Environmental Protection’s new regulations for the oil and gas industry, and ultimately determined it will cost drillers more money. The new rules will cost the industry about $2 billion annually, the trade group said in a statement Wednesday afternoon. The Corbett administration in 2013 estimated the cost of compliance to be $53,000 to $75,000 annually. Current DEP estimates say the new regulations will cost unconventional drillers $6 million to $31 million annually, with an initial cost of between $41 million and $73 million incurred in the first three years. – Read More

*WPX Energy Ends an Active 2015 with Gathering System Sale – Oil & Gas 360®

Industry-wide divestiture levels were down on a year-over-year basis in 2015, but WPX Energy (ticker: WPX) did more than its fair share on the mergers and acquisitions front. On December 31, 2015, the Tulsa-based exploration and production company announced the sale of its gathering system in the San Juan Basin for approximately $309 million. In accordance with the transaction, WPX exceeded its 2015 deleveraging plan which aimed to divest anywhere from $400 to $500 million in assets before year-end 2015. Its sale process is listed below and follows its initial deleveraging announcement on August 5, 2015. – Read More

*Shell’s Kitimat LNG proposal is first to get key permit – Canadian Broadcasting Company

A joint venture company led by Shell has obtained the first permit to build a liquefied natural gas export facility in northern British Columbia, but the company has yet to make a final commitment to go ahead with the project. LNG Canada is the first in the province to receive a facility permit from the B.C. Oil and Gas Commission. The document outlines the requirements for design, construction and operation of the proposed facility in Kitimat, B.C. Director of external affairs Susannah Pierce said it’s a crucial development for the project, following environmental approval from federal and provincial authorities last June. – Read More

*What To Expect In Energy In 2016 – Forbes

2015 was an abysmal year across the energy space. It was one that investors in the sector won’t soon forget. Master Limited Partnerships (MLPs) lost their swagger, with the Alerian MLP Index (AMZ), a composite of the 50 most-prominent energy MLPs, losing 32.6% — the second worst performance on record. Many of the upstream (i.e., oil and gas producers) MLPs suffered losses of 80% or greater. The broader energy sector got hit hard too, with the Energy Select Sector SPDR ETF (XLE) down 24.7% on the year. Refiners were about the only segment of the traditional energy sector that performed above the broader market averages. – Read More

*Saudi Aramco Raises Prices to Asia Following Domestic Gasoline Price Hike – Oil & Gas 360®

Saudi Arabia plans to increase the price of its crude oil to Asia next month. The increase of OPEC’s largest producer’s official selling price (OSP) of its benchmark Arab Light to Asia comes in response to robust demand for its crude in Asian markets and to higher consumption at home during the hot summer months, reports Reuters. A survey conducted by Reuters forecast the Arab Light OSP to Asia would be raised by $0.25-$0.60 per barrel, putting it at parity with the Oman/Dubai average, which sat at $16.58 per barrel in November. – 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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