Intensity

Commodity prices may not encourage too many rigs to rise in North America in the near-term, but as oil and gas producers experiment with longer laterals and increased fractures, there’s a bit more optimism among sand operators.

The Permian Basin, as well as the Eagle Ford and Bakken shales, which today are considered the “big three” drivers of U.S. oil production, would remain economic at current costs if West Texas Intermediate (WTI) crude oil prices were to fall to $65/bbl, according to an analysis by Raymond James & Associates Inc. In fact, 13 of 20 onshore oil plays evaluated would breakeven below $65 using current costs, said analysts.

ExxonMobil Corp. CEO Rex Tillerson on Friday said North America is in the midst of an “historic energy transformation.” And “the world is watching.”

Australia’s BHP Billiton Ltd. has offered to buy shale patch pioneer Petrohawk Energy Corp. for $12.1 billion in a deal that would more than double unit BHP Billiton Petroleum’s resource base and grow proved reserves by about 30%, it said. Petrohawk shares took flight on the news as investors also delivered uplift to a flock of the company’s peers.

Forecasts predicting the number and intensity of hurricanes predicted to affect the United States abound every year, but a Shell Exploration and Production (E&P) executive said last week that a long-term forecast “bluntly, has nothing to do with our preparations.”

Forecasts predicting the number and intensity of hurricanes predicted to affect the United States abound every year, but a Shell Exploration and Production (E&P) executive said Monday that a long-term forecast “bluntly, has nothing to do with our preparations.”

Pacific Gas & Electric stepped up the intensity of its Operational Flow Orders, issuing a systemwide Stage 3 high-inventory OFO for Saturday carrying penalties of $5/Dth for exceeding a 5% tolerance on positive daily imbalances. Normally PG&E’s high-inventory OFOs are Stage 2 with $1 penalties.

With the crucial vote less than a week away, the Chicago Mercantile Exchange (CME) and IntercontinentalExchange (ICE) continue to turn up the intensity in their respective pursuits of acquiring and merging with the Chicago Board of Trade (CBOT). On Tuesday, ICE resubmitted its merger proposal to CBOT, while CME touted the approval of its bid by additional advisory firms.

North American exploration and production (E&P) “capital intensity,” otherwise defined as finding and development (F&D) costs, appears likely to be 20% higher than average this year, twice the long-term 10% historical trend but less than a year ago. Higher oilfield service costs are pushing up F&D costs, said energy analyst John Gerdes, but the rise also follows the continued growth in domestic resource plays, most notably, shale gas.