EIA Forecast of Energy Prices
The Energy Information Administration has forecasted that oil and natural gas prices will rise slightly through 2011. It predicts oil to average $84/bbl in 2001, and that the Henry Hub spot price for natural gas will average $4.98/MMBtu in 2011, an incurease of 6% from 2010. EIA forecasts that US natural gas consumption will increase 3.8% from 2009 levels in 2010, then remain flat in 2011. It predicts total natural gas production to increase by 1.1 Bcf/d in 2010, an increase of 1.9%.
Devon Energy CEO Says Low Prices Will Mean Lower Rig Counts
John Richels, President of Devon Energy, said that the natural gas rig count will begin to fall by mid-2011 if prices continue to remain at $5/MMBtu or less. Richels said in a speech at the Houston Petroleum Club that drilling has remained high to hold leases bought in 2007 and 2008, and once that acreage is drilled enough to prevent lease expirations there will be little reason to continue drilling unless prices rise to the $6 to $7 range.
The US Baker Hughes rig count as of August 20 was 1,651 total rigs — 655 oil and 985 gas. This is up 666 from a year ago, or 68%. The Texas rig count was 716, up 344 from last year’s count of 372, or 92%. The state with the next highest rig count was Louisiana, with 184 rigs.
EOG Reports Results in Oil Window of Barnett Shale
EOG Resources reports that it has had significant success with wells in the Eastern Barnett ‘Combo Play.’ EOG says it has about 150,000 net acres in the liquids-rich portion of the Barnett. It says its Settle #1H has an EUR of 260,000 bbls of oil, 412,000 bbls of natural gas liquids and 3 Bcf of natural gas based on the first three months of production. Its Richardson 3H in Cooke County came on production at 325 bbls/d, and in Montague County, its King 1H had initial rates of 344/bbls/d, while its Olden B-1H had initial rates of 323 bbls/d and 1/7 MMcf/d, and its Alamo B-6H came on at 500 bbls/d.
EPA Postpones NY Meeting on Fracturing Study
The Environmental Protection Agency has been holding public hearings across the country on its study of hydraulic fracturing, mandated by Congress. It was forced to postpone a hearing scheduled to take place on August 12 in the Syracuse convention center. Originally that hearing was to take place at Brighamton University, but was moved after Binghamton said it wanted $40,000 to cover costs of an overflow crowd expected to exceed 8,000 people. No new date has been set. The agency originally scheduled three four-hour sessions for the New York meeting in anticipation of the larger crowds.
Range Resources Plublishes Contents of Frac Fluids
Range Resourcss has voluntarily published the chemicals used in its frac fluids in wells drilled in Pennsylvania. It has posted the information for three Marcellus wells on its website, and will publish the information for additional wells as they are drilled and completed.
Rosetta Resources Announces Results of Eagle Ford Shale Drilling
Rosetta Resources provided details of the results of its drilling in the Eagle Ford Shale in northern Webb County. In its Gates Ranch area, Rosetta has drilled 14 horizontal wells, and those wells have averaged 320 Bbl/d of condensate, 500 Bbl/d of natural gas liquids and 3.1 MMcf/d of gas for their first seven days of production. It said about 80% of the value from these wells is comprised of liquids. Wells costs are averaging $6.5-$7.5 million per well, with 13-15 frac stages per well. Rosetta expects to drill 30-35 Eagle Ford wells in 2010.
EOG Announces Eagle Ford Plans
EOG Resources has announced that it plans to drill 111 Eagle Ford wells this year and 245 Eagle Ford wells in 2011. EOG has about 505,0000 acres mostly in the oil window of the play. EOG said its recent Eagle Ford wells have had initial completion rates of 1,033, 1,022 and 625 Bbls/d of oil and condensate, and that its first two wells in Wilson County came on at rates of 707 and 836 Bbls/d.