Activity

The worst may be over for the oil market as drilling activity begins to inch up across the United States, but the bullish narrative is bearish for natural gas prices as associated volumes begin to grow, according to energy analysts.

The worst may be over for the oil market as drilling activity begins to inch up across the United States, but the bullish narrative is bearish for natural gas prices as associated volumes begin to grow, according to energy analysts.

The U.S. Environmental Protection Agency (EPA) has told Texas regulators that “there is a significant possibility that North Texas earthquake activity is associated with [energy industry] disposal wells.” The assertion is part of a report on the state’s underground injection control (UIC) program sent to the Railroad Commission of Texas (RRC) last week.

Activity in the U.S. onshore again appears to be heading north, as producers slowly raise rigs and open their wallets for bolt-on acquisitions. West Texas is the No. 1 destination, but even the long neglected natural gas-rich Haynesville and Fayetteville shales may be getting more love in the second half of this year.

Despite predictions that the oil and gas industry would consolidate in the wake of low commodity prices, merger and acquisition (M&A) activity during the first half of 2016 fell to levels not seen since 2008-09, according to a report by Deloitte Center for Energy Solutions.

EnLink Midstream, the natural gas gathering/transportation partnership controlled by Devon Energy Corp., is accelerating its services in the Permian Basin and Central Oklahoma as activity strengthens across West Texas and into the Midcontinent. Natural gas demand also is growing, expanding services in Louisiana, management said.

Weatherford International plc has undergone a significant cost restructuring during the downturn, including a 42% reduction in its workforce over the past 18 months, management told investors during the company’s quarterly conference call Thursday.

The oil and gas industry has finally “reached the bottom” of the downcycle, Schlumberger Ltd. CEO Paal Kibsgaard told investors Friday during the international oilfield services (OFS) giant’s 2Q2016 earnings call.

Oil and natural gas activity across the Midcontinent “improved considerably” during the second quarter, and the outlook for future activity has turned positive for the first time this year, the Federal Reserve Bank of Kansas City said Friday.