HEW-TEX SWD INDUSTRY NEWS ROOM
WorldOil.com : By RACHEL ADAMS-HEARD on 4/16/2019
HOUSTON (Bloomberg) — Solaris Water Midstream, which handles water supplies and disposal for Marathon Oil, is closing in on a deal with another driller as explorers increasingly outsource one of the key components of fracing.
Backed by private equity investor Trilantic North America, Solaris has “a couple” letters of intent with oil producers in the works and expects to be handling the wastewater needs for another driller in the future, Greg Mullin, the company’s senior vice president of commercial, said at a conference in Fort Worth, Texas.
The Permian basin’s budding water business is only getting bigger as oil producers seek to cash in on infrastructure used to transport water to wells and to dispose of it after it’s been blasted into shale rock with sand and chemicals. Private equity-backed companies like Solaris have been buying the assets from drillers to become their service providers. Read more…
Oilfield wastewater disposal volumes are expected to double in the Permian Basin within the next two to three years, a new analysis from global energy intelligence firm Wood Mackenzie shows.
As drilling activity continues to expand in the arid region between West Texas and southeastern New Mexico, hydraulic fracturing has resulted in growing challenges in sourcing water and what to do with wastewater from completed wells. Read more…
- Chevron plans to acquire Anadarko Petroleum in a cash and stock deal the company valued at $33 billion.
- The transaction values Anadarko at $65 per share, a 37% premium to Thursday’s closing price.
- Chevron’s deal represents the 11th biggest ever for an energy and power company, according to Refinitiv.
Chevron announced on Friday it will acquire oil and gas driller Anadarko Petroleum in a cash and stock deal valued at $33 billion, marking one of the biggest energy sector mergers in years and a transformative moment for one of the industry’s dominant players. Read more…
Investments in midstream assets have paid off for the region’s oil and gas producers.
Oil and gas companies have poured billions of dollars into developing the Permian Basin over the last several years. In addition to buying land and drilling more wells, many have invested in building out the necessary midstream infrastructure to move their growing production out of the region. That infrastructure investment has proven to be a smart one, as an increasing number of drillers are cashing in on these assets by selling them to private equity funds or midstream-focused companies for a significant premium to their initial investment.
Concho Resources (NYSE:CXO) and WPX Energy (NYSE:WPX) are the latest to cash in on a midstream investment; they both recently sold their stake in Oryx Midstream to private equity fund Stonepeak Infrastructure Partners. These sales highlight the value oil and gas producers are creating by investing in early-stage midstream developments.
Ringing the register
Stonepeak Infrastructure Partners is buying Oryx Midstream from drillers Concho Resources and WPX Energy as well as private equity funds Quantum Energy Partners and Post Oak Energy Capital for $3.6 billion. Oryx operates oil gathering and transportation systems that move crude from wells in the Delaware Basin to longer-haul pipelines that take it out of the region. Read more…
American petroleum exports to overtake Russia within 5 years
Second wave of U.S. shale revolution to hit geopolitics: IEA
Oil trader Paul Vega is at the vanguard of shale’s next revolution.
Driving his pick-up truck through the heartland of the Permian basin — the vast tract of west Texas scrub where one of history’s greatest oil booms means miles-long traffic jams — Vega says there’s more crude being pumped than America’s refineries can absorb. Today, the primary task of trading houses like his is getting the stuff overseas.
“We buy it, we truck it, we put it on a pipeline, and there it goes to the port — and from there to the world,” said Vega, who heads the office of global commodities trader Trafigura Group in Midland, the region’s oil industry hub.
What started as an American phenomenon is now being felt around the world as U.S. oil exports surge to levels unthinkable only a few years ago. The flow of crude will keep growing over the next few years with huge consequences for the oil industry, global politics and even whole economies. OPEC, for example, will face challenges keeping oil prices high, while Washington has a new, and potent, diplomatic weapon. Read more…
The nation’s biggest energy players, Exxon Mobil and Chevron, are emerging as the biggest competitors in the booming Permian Basin, and they’re set to duke it out in the region for more than a decade to come, analysts said Friday.
Earlier this month, Exxon Mobil and Chevron both said they planned to grow their Permian Basin production to about 1 million barrels of oil equivalent a day within five years, roughly tripling their current output.
“These players are set to increase collective output to over 2.5 million barrels of oil equivalent per day by 2030, leaving all well-established shale producers behind,” said Artem Abramov, head of shale research at Norwegian research firm Rystad Energy. Read more…
HOUSTON (Bloomberg) — Exxon Mobil plans to reduce the cost of pumping oil in the Permian to about $15/bbl, a level only seen in the giant oil fields of the Middle East.
The scale of Exxon’s drilling means that it can spread its costs over such a big operation that the basin will become competitive with almost anywhere in the world, Staale Gjervik, president of XTO Energy, the supermajor’s shale division, said in an interview.
Development, operating and land acquisition costs will be “in and around $15/bbl,” he said on the sidelines of the CERAWeek Conference by IHS Markit in Houston. “The way we are approaching it is very unique compared to most, if not really everybody out there, as far as the scale.”
The shale revolution has made the Permian into the world’s largest shale field, with production topping 4 MMbpd, almost as much as Iraq, OPEC’s second-biggest member. But the rapid growth has often meant that producers burn cash flow to reinvest in the expansion, prompting investors to call on them to focus more on returns in 2019.
Exxon plans to deploy 55 rigs in the Permian this year, by far the most of any driller, as it aims to increase output in the region fivefold to about 1 MMbpd by 2024. Its strategy also includes building its own takeaway infrastructure from separation tanks to pipelines, and it’s even joining a giant conduit project to make sure its oil doesn’t get stuck in bottlenecks that have depressed prices in West Texas. Read more…
The ambitious shale growth plans of the U.S. supermajors could in the future allow them to control so much of U.S. shale oil production that they could also control the price of the U.S. light tight oil going to foreign markets in an ‘OPEC of their own kind,’ Investing.com quoted John Kilduff, founding partner at Again Capital, as saying.
If the U.S. supermajors, such as Exxon and Chevron, end up controlling a lot of the U.S. shale production with their plans to significantly boost Permian production, and if smaller shale players bleed cash and decide to sell acreage and operations to Big Oil, then supermajors could be the ones determining the price of light crude oil, according to Kilduff.
Exxon and Chevron both announced increased targets for their Permian production last week. Chevron now sees its Permian unconventional net oil-equivalent production rising to 600,000 bpd by the end of 2020, and to 900,000 bpd by the end of 2023. Exxon revised up its Permian growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024, which would be an increase of almost 80 percent. Read more…
The global energy giant is trying to keep up with its big oil peers.
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