Spending

The U.S. oilfield services sector may be moving toward a positive environment, but the sustainability of exploration and production (E&P) spending “remains uncertain” because of weak natural gas prices and a continued oversupply, Moody’s Investors Service said Thursday.

The U.S. oilfield services sector may be moving toward a positive environment, but the sustainability of exploration and production (E&P) spending “remains uncertain” because of weak natural gas prices and a continued oversupply, Moody’s Investors Service said Thursday.

XTO Energy Inc.’s natural gas-weighted production jumped 23% in 3Q2009 from a year ago even with fewer rigs in operation and spending down 5%, the company said last week. The independent now expects annual output will be up by the same amount, 23%, from 2008.

XTO Energy Inc.’s natural gas-weighted production jumped 23% in 3Q2009 from a year ago even with fewer rigs in operation and spending down 5%, the company said Wednesday. The independent is now forecasting annual output will be up by the same amount, 23%, from 2008.

Marathon Oil Corp. has completed drilling all four development wells on the deepwater Gulf of Mexico (GOM) Droshky project, but onshore spending has been curtailed because of lower natural gas prices, the producer said. Well completions at the Droshky project are under way and production is on track to begin in 2010, with peak net output estimated at 43 MMcf/d of natural gas and 45,000 b/d of oil (see NGI, Nov. 3, 2008). Marathon earned $413 million net (58 cents/share) in 2Q2009, compared with $774 million ($1.08) in 2Q2008. The producer’s average realized U.S. gas price was $3.60/Mcf in 2Q2009, compared with $8.66 a year earlier. U.S. E&P operations lost $41 million in the quarter versus earnings of $359 million in 2Q2008, as revenues plunged 60% on lower commodity prices. Marathon’s net U.S. gas sales fell quarter/quarter to 365 MMcf/d from 431 MMcf/d, and U.S. hydrocarbon liquids sales rose slightly to 64,000 boe/d from 63,000 boe/d. The company’s integrated gas segment, which includes liquefied natural gas, reported profits plunging to $13 million in 2Q2009 from $102 million in 2Q2008, mostly on lower price realizations.

Marathon Oil Corp. completed drilling all four development wells on the deepwater Gulf of Mexico (GOM) Droshky project, but onshore spending has been curtailed because of lower natural gas prices, the producer said Monday.

The House last Tuesday overwhelmingly approved legislation (HR 1622) that reauthorizes federal spending for research and development of natural gas vehicles (NGV) for five years, while across the U.S. the bandwagon is forming in support of transportation powered by a home-grown, plentiful and cheap fuel.

The House Tuesday overwhelmingly approved legislation (HR 1622) that reauthorizes federal spending for research and development of natural gas vehicles (NGV) for five years, while across the U.S. the bandwagon is forming in support of transportation powered by a home-grown, plentiful and cheap fuel.

Even though California utilities have been spending billions of dollars pushing renewables and energy efficiency while preparing for stringent greenhouse gas (GHG) emission restrictions that start in 2012, a host of legislative proposals dealing with all of those issues and more were kicked around in an all-day meeting of the state Senate Energy, Utilities and Communications Committee last Tuesday. Most of the 34 items passed.