Articles

Created by: Duston Erwin at 9/17/2012 10:46:53 AM | 0 comments. | 2198 views.

BY TED GRIGGS

Advocate business writer

September 16, 2012

A year after oil companies began gobbling up leases in the Tuscaloosa Marine Shale, 19 wells are producing or under way, but some industry experts expect a big increase in drilling to hit next year.

Most of the leases are now over a year old, and oil and gas companies typically sign three-year leases with options for two-year extensions, said Kirk Barrell, president of Amelia Resourcess LLC in The Woodlands, Texas.

“I think this play has to accelerate drastically next year,” Barrell said.

Barrell said it’s an exciting time in the Tuscaloosa, a shale formation that stretches across the middle of Louisiana and is being targeted for oil production.

There’s a basket of good operators, and they’re getting some good wells, Barrell said.

For example, two of Encana Corp.’s most recent wells had 30-day initial daily production rates of 933 barrels and 1,072 barrels.

“I would say we’re very pleased with the reservoir performance. As a matter of fact, I’m excited about the reservoir performance,” Eric Marsh, executive vice president and senior vice president of Encana USA Division, said during the Barclay’s CEO/Power Conference on Sept. 6.

Encana has 355,000 acres leased in the Tuscaloosa with an estimated 9.4 billion barrels of oil, Marsh said. The company has around 1,250 well sites, has drilled and completed five wells, and plans to drill seven more this year.

The Tuscaloosa has a couple of things in its favor, Marsh said. There is a significant amount of infrastructure in place, and the oil itself, Louisiana Light Sweet crude, can fetch $15 or more per barrel than the benchmark crude, West Texas Intermediate.

In the last year, the premium for a barrel of Louisiana Light Sweet has ranged from $8.50 to as much as $29.75, according to Bloomberg. This week the price for Louisiana Light Sweet was more than $17 higher than the benchmark West Texas Intermediate price, which has been in the $95 to $97 range in September.

Encana has said its target estimate for its Tuscaloosa Marine Shale wells’ potential production, also known as estimated ultimate recovery, is the equivalent of 730,000 barrels of oil per well (worth around $83.2 million at this week’s prices).

Encana has “a reasonably high confidence level” that it will achieve its target recoveries, spokesman Doug Hock said.

Halcón Resources Chief Executive Officer Floyd Williams, who also spoke at the Barclays conference, said he expects wells in the formation to produce the equivalent of 600,000 to 700,000 barrels per well.

Halcón began leasing around six or seven months ago and expects to lease 100,000 to 150,000 acres, Williams said. The company has around 60,000 acres under lease, and the price has jumped from $250 an acre to around $1,000.

With those kind of production results expected, local officials have begun scrambling to prepare residents to nab some of the expected job bonanza when the shale booms.

“We do have a good feeling about the oilfield shale over here in this parish,” said Dennis Manshack, West Feliciana Parish director of economic development. “The well that they (Devon Energy) did complete is almost 500 barrels a day with a tight choke on it.”

The well’s daily production could actually be two or three times that amount, Manshack said. Drilling companies often restrict the flow during initial production, but let the well flow more rapidly once full production begins.

Manshack said he has done some preliminary reviews of what happened in the Haynesville Shale in northwest Louisiana and the Marcellus Shale in Pennsylvania.

Drilling activity in those shale formations, and others, led to big increases in the demand for skilled labor and services, such as housing, for those workers.

With the proper training, residents of West Feliciana, East Feliciana and Pointe Coupee parishes could fill many of those jobs, Manshack said. The West Feliciana Police Jury and the Economic Development Board are working together now to plan for “the inevitable” boom.

However, Louisiana Oil and Gas Association spokesman Ragan Dickens, who has twice addressed West Feliciana officials, said it’s too early to tell whether the Tuscaloosa will be similar to the Haynvesville Shale, a natural gas-producer that triggered a drilling frenzy that helped drive down natural gas prices to a point where producers are favoring oil plays.

“The jury’s still out,” Dickens said of Tuscaloosa’s outlook.

“There’s definitely resources in the ground … but they’re still trying to figure out how to extract those.”

People in that area, and Dickens as well, hope the Tuscaloosa will bring the same kind of economic impact that the Haynvesville did, Dickens said. There are lots of positive signs — eight of the biggest players in natural gas have leased acreage in the Tuscaloosa — but it’s impossible to say what will happen.

West Feliciana officials have already met with representatives of Council Development Corp.’s Morgan City location and Baton Rouge Community College.

Council Development is owned by PEC Premier Safety Management Training and provides accelerated training for onshore and offshore oilfield workers, Manshack said. A nine-day course can prepare workers for an entry-level job in the oilfield.

The community college is designing a number of courses for the parish that will help residents and students gain welding, electrical/instrumentation and carpentry skills, Manshack said. Those skills can help residents get jobs in industry and the oil field.

“These courses cost. The Police Jury’s not going to be able to foot the whole bill,” Manshack said. “But we need to train some people so we can get some of those people in the industry, to make them productive.”

The nine-day course is around $3,000, Manshack said.

West Feliciana has little in the way of economic development funding, he said. But with the kind of potential the Tuscaloosa Marine Shale offers, local officials can try to get help from state legislators and officials, as well as private industry.

Manshack said West Feliciana hopes to be able to have the training programs in place in January.

Dickens said sitting down with the oil and gas industry, as Caddo and Bossier parishes did, to talk about things like roads, permitting and the environment, is a good idea.

(from: http://theadvocate.com/news/business/3819413-123/shale-could-see-more-drilling)

Created by: Duston Erwin at 9/11/2012 11:21:52 AM | 1 comments. | 1769 views.
Hello all,
 
This is just a reminder about the meeting Thursday September 13, at 6pm at Bistro Byronz on Government Street.  Our speaker is Tony Marino, and HBP Issues will be the topic.  Please RSVP by Wednesday September 12 if you havent already done so. You may also pay your dues at the meeting if you have not already done so. 
 
If you have not renewed your dues and cannot make it to the meeting, you can mail them to the address below.  Dues are $35.
 
Also, we still have openings for the golf tournament and are still in need of hole sponsors and food and beverage sponsors.  Its not too late!!!  The golf tourney flyer is attached if you need one.
 
The Fall Seminar has been set for Friday September 28 at the Bluffs.  The flyer is attached.  It is a half day seminar worth 4 total credits from AAPL, including 1 ethics credit.  Anyone playing in the golf tournament gets in free.  The fee for BRAPL members is $50, $60 for non-BRAPL members, and $25 for students. 
 
Thanks,
Jenn

Links:

BRAPL 2012 Fall Seminar
BRAPL 2012 Golf Tournament
Created by: Duston Erwin at 9/4/2012 11:19:50 PM | 0 comments. | 1729 views.
Hello all,
 
I hope everyone faired well with the storm and now has power restored.  We have rescheduled the August meeting to Thursday September 13 at Bistro Byronz on Government Street at 6pm. Our speaker is Tony Marino of Slattery, Marino & Roberts in New Orleans, and he will be discussing HBP issues. Please RSVP by Wednesday September 12 as we need to give a head count to the restaurant. 
 
If you have not paid your dues yet, you can bring them to the meeting.
 
Thanks,
Jenn
jtassin1383@gmail.com
Created by: Duston Erwin at 8/28/2012 3:34:28 PM | 0 comments. | 1871 views.

:::UPDATE FROM THE PRESIDENT:::

Members:

It is with both a sense of caution as well as regret that we will cancel our scheduled member meeting on Thursday evening.  Unfortunately, our continued monitoring of the projected path of Hurricane Isaac has not diminished the chance of significant negative impact on our area.  While it appears that the storm will fail to meet prior projections as to strength, it now appears that the Baton Rouge area will experience continued assault from hurricane and gale force winds as well as large amounts of rain as the NHC now predicts that the eastern eyewall of the storm will rake along a large swath of the I-10 and Airline corridors in Ascension and East Baton Rouge Parish before crossing the river and meandering northwestward past New Roads and through central Louisiana.

Let us also not forget that our speaker, Mr. Marino, would be traveling from the New Orleans area to speak to us, and would likely encounter more obstacles in reaching our meeting than ourselves, and I am sure that he would want to be nearer home during this time as well.

I hope that all of you have had time to complete your storm preparations and will be able to spend this time with friends and family in safety as we await this storm’s arrival and eventual departure.  We will let you know of our plans to reschedule in the coming days. 

-- Dion

Created by: Chad Bergeron at 7/17/2012 2:19:06 PM | 0 comments. | 2076 views.

How states are regulating fracking

Hydraulic Fracturing

_

Armed with new drilling techniques, companies are spreading out across the United States, cracking open shale rock in search of vast new stores of natural gas. It’s not an exaggeration to say that hydraulic fracturing, or “fracking,” has revolutionized the U.S. energy industry. Cheap natural gas has become America’s top source for electricity, displacing coal and bringing back jobs to once-decaying states like Ohio.

But the fracking boom has also led to plenty of environmental concerns. Local communities are worried that the chemicals used to pry open the shale rock can contaminate nearby drinking water supplies. (So far, there’s scant evidence this is happening in places like Pennsylvania, but the science is still in its infancy.) Excess gas is often vented off, producing air pollution. And the disposal of fracking wastewater underground appears to be linked to earthquakes in places like Ohio.

Confronted with these worries, states have responded with a patchwork of different regulations. But there’s a lot of variation between different states. And here’s a good way to track what’s going on: A helpful series of new maps, put together by Resources for the Future (RFF), gives an overview of how 31 states with significant shale gas reserves are treating different aspects of fracking.

Here, for instance, is a look at which states require companies to disclose the chemicals they use in drilling. (Fracking is exempt from federal disclosure rules under the Safe Water Drinking Act.) Some states, like Pennsylvania — which sits above the gas-rich Marcellus shale formation — now require a full disclosure of chemicals. By contrast, Kansas, which is just beginning to see widespread fracking activity, is further behind:

Meanwhile, the map below details how different states treat the “venting” or release of excess gas into the air. Just 22 of the 31 gas states have restrictions on this process, which can release both heat-trapping methane into the atmosphere as well as “volatile organic compounds” such as benzene that can produce smog and trigger health problems. Some states ban this practice entirely; others restrict it to emergencies or require that operators not harm public health:

There are many more maps on RFF’s Web site, which is worth poking around on. In an introductory essay, RFF’s Nathan Richardson notes that these maps still provide just a partial picture — the details of laws matter, and more importantly, different states may enforce their rules with different levels of vigor. But it’s an invaluable resource all the same.

The regulation of fracking has become a low-level campaign issue, as well. The Obama administration is gradually putting forward federal regulations. The Department of Interior is drafting rules for fracking on publicly-owned lands (where about 38 percent of the country’s gas reserves sit, according to the American Petroleum Institute). The Environmental Protection Agency, meanwhile, is slowly getting in on regulation and has proposed rules that will require all producers to phase out venting by 2015 and capture their waste methane instead.

Mitt Romney, by contrast, has criticized the federal approach. In his “Believe in America” economic plan (pdf), he warns that the EPA should not “pursue overly aggressive interventions designed to discourage fracking altogether.” By contrast, Romney praises states for having “carefully and effectively regulated the process for decades.” Indeed, many Republicans believe that fracking regulations should be mainly left to the states, which can issue rules more speedily and can tailor regulations to the specific needs of their communities. Environmentalists, by contrast, worry that this will create a race to the bottom whereby states pare back their rules — or enforce them weakly — in order to compete for business.

Both sides agree that addressing the public health and environmental aspects of fracking isn’t costless. The International Energy Agency recently estimated that addressing all of the various concerns could boost the price of natural gas by roughly 7 percent. Yet the IEA also warned that if these rules weren’t adopted, public outcry and protests could stop the shale gas boom altogether. Anti-fracking protests like those in New York state could become the norm. And that, the IEA notes, could prove even more costly to the gas industry.

Created by: Chad Bergeron at 7/17/2012 2:00:21 PM | 0 comments. | 1897 views.

 

June 8th, 2012 | LOGA
The International Energy Agency (IEA) reports: Natural gas is well on its way to a bright future, according to a new report from the International Energy Agency (IEA) that projects China will more than double consumption over the next five years while lower prices from the unconventional gas revolution will continue to benefit the United States. 

The report, Medium-Term Gas Market Report 2012, released today at the World Gas Conference 2012, says China will become the third-largest gas importer behind Europe and Asia Oceania, driving a 2.7% average annual growth in global gas demand through 2017 (up from the 2.4% annual growth rate predicted in last year’s report). During the period, North America will become a net LNG exporter, while Japanese imports will increase, although by how much will hinge on the country’s nuclear policies. 

Medium-Term Gas Market Report 2012, part of a series of IEA medium-term market reports also featuring coal, oil and renewable energy, presents detailed forecasts for the next five years of sectoral demand by region plus supply and trade. An in-depth analysis addresses infrastructure investments in LNG and pipelines. 

The release of Medium-Term Gas Market Report 2012 comes a week after the IEA issued a special report, Golden Rules for a Golden Age of Gas, which looks at the environmental impacts of unconventional gas production and how those impacts are being – and might be – addressed over the next 25 years. 

“The Golden Age of Gas has dawned in North America , but its continued expansion worldwide depends on producing gas and bringing it to the market in a way that is friendly to investors and society as a whole,” IEA Executive Director Maria van der Hoeven said during the launch of Medium-Term Gas Market Report 2012. “As gas competes against other energy sources in all market segments, notably in the power sector, pricing conditions are a key element to keep it competitive everywhere. This medium-term report aims to facilitate investor decisions by providing a timely, in-depth analysis of the current trends and what we expect to take place over the coming five years.” 

While Medium-Term Gas Market Report 2012 sees growth for natural gas in most regions, low economic growth, relatively high gas prices and strong growth of renewable energies will limit demand in Europe . Successful and timely developments of new resources should lift gas demand in the Middle East, Africa and Asia.

The report identifies other future sources of supply, with most incremental gas production coming from the Former Soviet Union (FSU) and North America . Further growth in unconventional gas will come mostly from shale gas in North America plus tight gas and coalbed methane (CBM) production elsewhere. Shale gas developments in other regions are likely to be concentrated in China and Poland. 

Other key findings of the report include: 

A quarter of new gas demand will come from China , another quarter from the Middle East and other Asian countries together, and a fifth from North America. 

Low gas prices will result in gas generating almost as much electricity as coal in the United States by 2017.

Global gas trade will expand by 35%, driven by LNG and pipeline gas exports from the FSU region; most of this expansion occurs from 2015 onwards, following a period of further tightening of global gas markets. 

Natural gas is the most important commodity with no global market price yet. Divergence among regional gas prices will decline but remain a feature of global gas markets. The emergence of a spot price in Asia would aid regional producers and buyers.