Barnett Shale

U.S. rig count up 42 percent from year ago

The number of active U.S. drillings declined by 20 this week, to 1,694, with 919 rigs drilling for natural gas, 765 for oil and 10 miscellaneous (primarily geothermal), according to Houston-based oilfield services firm Baker Hughes. But the year-end rig count was up by 505 rigs, or 42 percent, from the year-end 2009 count of 1,189.

The Texas rig count fell by 15 this week, to 731. In North Texas’ Barnett Shale, there were 86 rigs drilling Thursday, unchanged from a week earlier, according to RigData. The leading counties were Tarrant, 29 rigs; Montague, 14; Johnson, 11; and Wise, 9.

--Jack Z. Smith

Israel's own Barnett Shale

Throughout the 20th century, Tarrant County produced virtually no natural gas. But that all changed in the past decade, with the coming of the huge Barnett Shale play in North Texas, which has made Tarrant the leading natural gas-producer amoung Texas' 254 counties and the Barnett the largest gas-producing area in the U.S.

Correspondingly, Israel long has been lacking in oil and gas production and heavily dependent on foreign energy supplies, while surrounded by often-hostile Middle Eastern countries with enormous reserves of oil and natural gas. But that situation appears as if it soon will change, with a big natural gas find off the Israeli coast that is chronicled in a New York Times article today. 

--Jack Z. Smith   

Pain at pump proliferates

The average price for a gallon of regular gasoline in the Fort Worth-Arlington area hit $2.91 today, up slightly more than a nickel from a week earlier. If the price continues to increase at that rate, $3-a-gallon gas will be the norm in a scant two weeks.

A year ago, the average pump price for regular was 47.6 cents lower.

In Texas, the average regular price today was $2.91, same as the local price. But the national average soared to $3.07 today, six cents higher than a week ago and 45 cents more than a year ago. In California, the price is $3.32.

The latest fuel prices are from the Daily Fuel Gauge Report compiled by the auto club AAA, Oil Price Information Service and Wright Express.

The pain at the pump could become more excruciating. Some analysts think the national average for regular gas will hit $3.75 by spring, an Associated Press report noted today. And former Shell Oil President John Hofmeister recently said that Americans could be coping with $5 gas in 2012.

--Jack Z. Smith 

23 indictments in major North Texas oil theft

Twenty-three sealed felony indictments have been returned by a Montague County grand jury against 10 persons for widespread theft of more than $1 million worth of oil from North Texas well sites.

The indictments are the result of a three-year criminal investigation that is ongoing, Wise County Sheriff’s Office Capt. Kevin Benton said late this afternoon in response to questions from the Star-Telegram.

“We’re still doing interviews,” Benton said. “We hope there will be additional indictments to follow. In fact, we expect there to be.”

--Jack Z. Smith

See full story in Thursday's Star-Telegram.

Brazil: It takes two big oilfields to tango

Two big Brazilian offshore oil fields just got bigger, according to a Bloomberg News story filed today.

Petroleo Brasileiro SA (aka Petrobas), Brazil’s state-controlled oil producer, said two fields in the Tupi and Iracema deepwater areas hold 8.3 billion barrels of recoverable crude oil, exceeding prior estimates of five to eight billion. The Lula field in the Tupi area has 6.5 billion barrels and the Cernambi field at Iracema holds 1.8 billion, Rio-based Petrobras said in a regulatory filing today. Petrobras declared the two areas off Brazil’s southeastern coast commercial after drilling 11 wells.

Petrobras, with proven reserves of 14.9 billion barrels, aims to boost that number to as much as 35 billion barrels by 2014 as it develops discoveries in deep Alantic Ocean waters, where Tupi and Iracema lie, Bloomberg reported.

Tupi is the second-biggest find in the Americas since Mexico discovered the Cantarell field in 1976. Tupi trails only the nearby Libra area offshore Brazil, which holds up to 15 billion barrels, Brazil's government estimates.

Brazil’s oil production hit a record high of nearly 2.1 million barrels a day in November.

--Jack Z. Smith

A look at the Gulf following BP oil spill

A one-hour video documentary, "The State of the Gulf-America’s Sea," will air in late February on all Texas public television stations, taking a broad look at the Gulf of Mexico in the wake of the massive BP oil spill that followed the explosion of the Deepwater Horizon offshore rig on April 20.

The program will air at 8 p.m. Feb. 24 on most PBS stations in Texas, including Dallas-based KERA-TV, Channel 13. It’s the fifth in a highly praised series of water resource documentaries produced by the Texas Parks and Wildlife Department and broadcast in partnership with PBS stations.

Here's a little more detail from a TPWD announcement:

“America’s Sea” will explore the rich diversity of the Gulf, its flora and fauna, geology and hydrology. The program will weigh the variety of ecosystem services the Gulf provides to people and the forces that threaten it, from hypoxia zones to hurricanes and oil spills. Critical habitats such as marshes and seagrasses will be examined, along with water quality and climate change. Viewers will also see how pragmatic regulation and active fisheries management has protected and enhanced marine resources.

The opening segment, “Burden of Bounty," gives an overview of the Gulf, its ecology and economy. Segment 2, “Eyes of the Storms," covers Hurricane Ike and earlier storms. Segment 3 showcases managing fisheries for the future, using redfish as a case study. Segment 4, "What’s in the Water,” looks at problems like dead zones and red tide. Segment 5, "Climate of Changes," features experts discussing sea-level rise. The program concludes with “Action for the Oceans," showing ways to help protect the Gulf.

A companion website, Texas The State Of Water, will in January feature a preview of the documentary, and after the show airs, the full program. The website currently features a 2009 water documentary.

--Jack Z. Smith

Chesapeake: 350-plus new Barnett wells in 2011

Despite weak natural gas prices, Chesapeake Energy plans to drill 350 to 380 new Barnett Shale gas wells in North Texas in 2011 and keep about 20 drilling rigs active, the company’s top executive in its Fort Worth-based regional operation said today in an interview with the Star-Telegram.

The company will have drilled 411 wells in 2010 by year-end on Friday, said Julie Wilson, vice president-urban development.

Chesapeake has paid "just over a billion dollars" in royalties to owners of mineral rights from its North Texas production since establishing operations here, Wilson said.

The company's gross production in the Barnett is more than one billion cubic feet of natural gas per day, she said. That includes the share of production held by French oil giant Total, which shelled out $2.25 billion for a 25 percent stake in Chesapeake's Barnett holdings, under an agreement announced in January.

--Jack Z. Smith

See full story in Wednesday's Star-Telegram.

Holiday shoppers jack up gasoline demand

This report just in from Bloomberg News: 

U.S. gasoline demand at the pump jumped 4.6 percent last week as holiday shopping trumped the highest retail fuel prices in 26 months, according to data in a MasterCard Inc. SpendingPulse report.

Motorists bought an average 9.61 million barrels of the fuel a day in the week ended Dec. 24, up from 9.19 million the previous week, the second-biggest payments network company said. That’s the highest level of consumption since July 2 and the largest weekly increase in 10 months.

The average pump price rose 2 cents to $3 a gallon, 16 percent above a year earlier and the highest level since Oct. 17, 2008.

“Demand would be higher if gasoline prices were not as high as they are,” John Gamel, director of economic analysis for SpendingPulse, said today in an interview.

The surge in demand coincided with a jump in 2010 holiday retail sales, according to another SpendingPulse report today. Sales from Nov. 5 through Dec. 24 rose 5.5 percent for the best performance in five years. Gasoline demand was helped by Christmas falling on a Saturday, making Christmas Eve a holiday and giving consumers five weekdays to shop, Gamel said.

--Jack Z. Smith

Oil tops $91 a barrel

Oil prices rose above $91 per barrel today, in the final week of trading before the new year, the Associated Press reported. Here's an updated and condensed version of the report: 

Benchmark crude oil for February delivery rose 49 cents settle at $91.49 on the New York Mercantile Exchange (Nymex).

In other Nymex trading in January contracts: heating oil added less than a penny to settle at $2.52 per gallon; gasoline futures gave up 1.53 cents to settle at $2.41 per gallon and natural gas added 10.4 cents to settle at $4.22 per 1,000 cubic feet. In London, Brent crude added 53 cents to settle at $94.38 on the ICE Futures exchange.

--Jack Z. Smith

 

Five-buck gasoline?

Americans will pay a record $5 a gallon for gasoline by 2012, forecasts John Hofmeister, former president of Shell Oil and author of the book Why We Hate The Oil Companies: Straight Talk From An Energy Insider.

Hofmeister issued the prediction Sunday in an interview with Platts Energy Week Television, an all-energy news and talk show, according to a news release issued today by the Platts energy publishing and information firm.

Growing world crude oil demand, tighter supplies and inadequate policy responses by the U.S. government  will result in $5 gas, Hofmeister forecast. The average U.S. price for a gallon of regular gasoline hit an all-time high of $4.11 in July 2008, but pump prices tumbled later that year in the wake of falling oil prices. The U.S. average price for gasoline recently topped $3. The average price today in the Fort Worth-Arlington area was $2.87 for regular, according to the Fuel Gauge Report by AAA, Wright Express and Oil Price Information Service.

You can view Hofmeister's comments at http://www.plattsenergyweektv.com/

--Jack Z. Smith