ODESSA, TX.–The oil and gas industry owes no one an apology. Oil and gas has lifted more humans from poverty than any other industry in history. Inexpensive and accessible energy has provided a standard of living of which our ancestors could only dream, allowing foundational transformations in technology, transportation, heating, cooling, and massive increases in global food supply and overall public health.
The Permian Basin may be predominately in West Texas, but the prolific Delaware sub-basin extends well across the New Mexico state line. And thanks to development activity in the Delaware, and to a lesser extent in the Central Basin Platform, New Mexico set new records for both crude oil and natural gas production in March, according to a report issued in mid-June by the U.S Energy Information Administration.
Large U.S. Producers Leverage Stronger Prices To Lock In Hedge Positions
June 2021 Web Exclusive: Financial Update
HOUSTON–Oil and natural gas prices are as volatile and unpredictable as ever. Without the protection of effective hedging programs, producing companies’ cash flows are subject to the whims of the market. Those without hedges will benefit from prices moving higher while those with hedges in place may lose upside, but when prices move the other direction, companies without hedges on their produced volumes are fully exposed to the downside risk.
The “merger of equals” between Cabot Oil & Gas and Cimarex Energy announced on May 24 is the latest development in the industry’s ongoing realignment shift as U.S. operators position for the future by making strategic moves to fortify their corporate strengths and reinforce any perceived weaknesses.
With the downturn of 2020 at last in the rearview mirror, the outlook for oil and gas prices is bolstering confidence among independent playmakers.
Oil prices have improved significantly this year on expectations that widespread vaccinations will bring the COVID-19 pandemic under control, global energy law firm Haynes and Boone noted in its semi-annual survey of the price ranges that banks use for reserve-based lending.
Pressure pumping is a competitive business. To stay busy regardless of activity levels, companies who secure the capital to build new fleets must design them with flexibility and performance in mind.