U.S. Oil Inventories Resume Trend Of Weekly Declines
September 2020 Web Exclusive: Inventory and Market Update
After a one-week departure, data from the U.S. Energy Information Administration show that U.S. crude oil inventories returned to an extended trendline of withdrawals in the second and third weeks of September, marking nine of the previous 12 weeks with a reduction in commercial storage volumes.
HOUSTON–Oil and gas companies have restarted shut-in wells and are turning their attention back to resuming new well development activity. In the meantime, however, natural depletion continues to take a toll in fields everywhere, but especially in high-decline rate shale reservoirs. Like a shaken bottle of champagne that explodes when its cork is popped, shale wells come on fast with high initial production rates, but decline very rapidly within the first six months of production.
To get a reading on the state of the industry and survey the road ahead, AOGR presented questions to Tom Jorden, chief executive officer of Cimarex Energy; Richard Dealy, executive vice president and chief financial officer of Pioneer Natural Resources; Trent Latshaw, president of Latshaw Drilling Company; Kelcy Warren, CEO and chairman of the board of directors at Energy Transfer LP; Stuart MacDonald, director of petroleum land management programs in the college of business at the University of Texas Permian Basin; and Greg White, director-resources at Arena Investors.
HOUSTON–Headwinds in the global market will likely continue to hinder the activation of completion crews in the remainder of 2020 as the oil and gas industry, along with other economic sectors, continues to face challenges both domestically and abroad. Through the remainder of the year, we see completion activity rebounding from second-quarter lows to reach a peak of 115 crews, but averaging closer to 105 per week as a lot of equipment remains on the sidelines.
With West Texas Intermediate crude oil prices hovering around $40 a barrel and Henry Hub natural gas prices below $2 an Mcf, oil and gas producers are focusing on controlling their costs. For many of them, this means finding ways to improve the efficiency of the treatment systems, gathering lines and processing facilities that help move their product from the wellhead to the sales point.
HOUSTON–Real-time pressure monitoring during hydraulic fracturing provides critical insights to allow operators to optimize frac designs, modify pump schedules on the fly, prevent fracture communication and maximize the performance of each stage pumped in every well on a pad.