The TCJA generally lowers income tax rates for individual taxpayers, significantly reduces the income tax rate for corporations, and eliminates the corporate alternative minimum tax (AMT). It also provides a large new tax deduction for most owners of pass-through entities and significantly increases individual AMT and estate tax exemptions.

Taxpayers in the oil and gas industry are affected because they hold their assets and investments in a variety of entity types, including C corporations, partnerships, S corporations, and directly by individuals.

The TCJA also eliminates or limits many tax breaks, and much of the tax relief is only temporary. The key changes that affect taxpayers in the oil and gas industry are outlined below.

Reduced Corporate Income Tax Rate

The corporate income tax rate was reduced to a flat 21% from 35% starting in 2018.

Oil prices declined sharply from above $100 per barrel in late 2014 to below $30 per barrel in early 2016. Prices have slowly risen since early 2016 and are slightly above $60 per barrel at the beginning of 2018.

With this dip in prices, many exploration and production companies generated net operating losses (NOLs) during the past few years. However, with prices rising, some companies are generating profit again and are also looking to monetize certain oil and gas properties. If companies are in a taxable income position or plan to sell properties at a gain, the corporate rate reduction could be favorable.

New Deduction from Pass-Through Entities

The TCJA provides taxpayers that are operating businesses through pass-through entities such as partnerships and S corporations a special deduction under new Section 199A. This new deduction will impact a large amount of taxpayers in the oil and gas industry because a significant number of businesses are structured through partnerships owned primarily by large private equity groups (PEGs), private investors, and family groups.

The deduction is equal to the lesser of:

• The combined qualified business income amount
• 20% of the excess of the taxpayer’s taxable income determined before the Section 199A deduction over the taxpayer’s adjusted net capital gain

Combined Qualified Business Income

Subject to certain limitations discussed below, the combined qualified business income amount for a taxable year generally equals the aggregate of 20% of the taxpayer’s qualified business income with respect to each qualified trade or business.

Qualified and Specified Service Trade or Business

A qualified trade or business is any trade or business other than:

• A specified service trade or business
• A trade or business involving the performance of services as an employee

A specified service trade or business :

• Involves the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such a trade or business is the reputation or skill of one or more employees or owners
• Performing services involving investing and investment management, trading, or dealing in securities, partnership interests, or commodities

The definition of specified service trade or business specifically excludes engineering and architecture businesses.

Limitations

Although a taxpayer’s combined qualified business income amount will generally equal 20% of the aggregate amount of qualified business income from each qualified trade or business, the calculation is subject to limitations.

Specifically, the qualified business income for each qualified trade or business is limited to the greater of:

• 50% of the W-2 wages with respect to the qualified trade or business
• The sum of 25% of the W-2 wages with respect to such trade or business and 2.5% of the unadjusted basis immediately after acquisition of all qualified property

While the statute doesn’t provide any guidance on the phrase unadjusted basis immediately after acquisition of all qualified property, it presumably refers to the initial cost basis of the qualified property.

In general, qualified property is tangible property subject to the allowance for depreciation and satisfies three additional requirements:

• The property must be held by, and available for use in, the qualified trade or business at the close of the taxable year.
• It must be used at any point during the taxable year in the production of qualified business income.
• The depreciable period of the property must not end before the close of the taxable year.

It’s important to note that these limitations are determined separately for each qualified trade or business of the taxpayer. A taxpayer can’t use excess W-2 wages or qualified property from one qualified trade or business to increase the limitation with respect to a second qualified trade or business.

The W-2 wages and qualified property limitations don’t apply to certain small taxpayers. Specifically, the limitations don’t apply if a taxpayer’s taxable income before the Section 199A deduction doesn’t exceed $315,000 for joint return filers or $157,500 for other filers.

Complexity for Partners, Shareholders

The deduction is calculated at the partner or shareholder level. This provides additional complexity for partners or shareholders of oil and gas partnerships or S corporations, respectively.

Separately stated items and calculations determined at the partner or shareholder level, such as intangible drilling costs and depletion, will impact the determination of the deduction. The deduction will also impact each partner’s and shareholder’s outside tax basis in their capital account and stock, respectively.

Full Expensing of Tangible Property

This provision could be a significant benefit because the oil and gas industry is very capital intensive.

Tangible drilling costs, lease and well equipment, pipelines, and all other tangible personal property can be fully deducted when acquired and placed in service after September 27, 2017, and before January 1, 2023. The full deduction is phased down by 20% each year in taxable years beginning on or after January 1, 2023:

• 2023–80%
• 2024–60%
• 2025–40%
• 2026–20%
• 2027–0%

The new tax law also permits used property to be eligible for the full expensing provision. This change may impact merger and acquisition transactions by motivating buyers to structure deals as actual or deemed asset acquisitions rather than stock acquisitions. This is accomplished by enabling the buyer to immediately deduct a significant portion of the purchase price and generate NOLs in the year of purchase to offset future taxable income.

Limitation on Deduction of Net Interest Expense

For companies with high leverage, the limitation on deduction of net interest expense could offset some benefit of the lower tax rates.

The new tax law limits the deductibility of net interest expense to 30% of taxable income before interest, the NOL deduction (discussed below), the pass-through deduction, and, for years before 2022, depreciation, amortization, and depletion. Businesses with average annual gross receipts of $25 million or less are exempted from the limit.

Repeal of Domestic Production Activities Deduction

The repeal of Section 199 could offset some benefit of the lower tax rates for oil and gas companies that are generating qualified production activity income.

Repeal of Corporate AMT

The repeal of AMT for corporations is favorable for the oil and gas industry. In addition to taxpayers being able to fully deduct tangible drilling costs as explained above, corporate taxpayers will now be able to fully deduct intangible drilling costs without a potential preference for AMT purposes. Integrated oil and gas corporations would still be required to capitalize 30%of those costs ratably over a 60-month period beginning in the month in which they were incurred.

For mining companies, taxpayers were generally limited to only cost depletion for AMT purposes even though for regular tax purpose they were allowed the higher of cost or percentage depletion. Historically, a lot of mining companies have been in an AMT position due to the preference for percentage depletion.

Limitation on Net Operating Losses

As mentioned above, many oil and gas companies generated NOL carryforwards because of low commodity prices in recent years.

The new tax law eliminates the ability to carryback NOL to prior years for NOLs generated in tax years ending after December 31, 2017, and limits NOL carryforwards generated in tax years beginning after December 31, 2017, to 80% of taxable income. NOL carryforwards generated in tax years ending on or before December 31, 2017, won’t have this 80% limitation and continue to have a carryforward period of 20 years. However, NOL carryforwards generated in tax years beginning after December 31, 2017, won’t expire.

This could impact a taxpayer’s ability to carryback NOL to receive cash refunds of taxes paid in a prior year. It may also trigger a tax liability from taxable income generated in a future year due to the inability to fully offset the taxable income with NOL carryforwards.

This article originally posted on OilandGas360

USING THE STAGE COMPLETIONS BOWHEAD II, 117 STAGES WERE FRACTURED IN RECORD TIME

An operator in the Eagle Ford Basin completed an extended reach well with 116 Bowhead II collet activated cementable sliding sleeves. During the deployment and installation of the 15,000 psi (103 MPa) Stage Completions system, the operator was able to gain efficiencies by pre-bucking the Bowhead II valves to the casing joints allowing for a safer handling of equipment on the rig floor, a significantly reduced installation time and much tighter fracture stage spacing thanks to the shorter overall length of the Stage Completions’ hardware. The fracturing operation launched on April 24, 2017 stimulating 117 intervals with the Bowhead Technology in a record time of 160 hours and accurately placing 11.6 million lbs (5,800 tons) of sand and 361,000 bbl (57,394 m3) of fluid at a maximum sand concentration of 4.7 ppg (563 kg/m3) and 42 bbl/min (5 m3/min) average rate breaking the previous record number of stages in a single well.

The success of the operation is a result of the simplicity of the technology, running a dissolvable ball on a collet that activates the sliding sleeves and eliminates the need of employing coiled tubing or wireline.

VIEW CASE STUDY HERE

Article originally published at oilandgas360.com

The current commodity cycle is a reminder that the oil and gas sector is dynamic and fundamentals are subject to change without notice. With change comes opportunity and the need for an expert with more information and experience in valuation. EnerCom is an oil and gas valuation expert.Investments in private (or illiquid) energy companies carry more perceived risk than public equity or debt, because of informational opaqueness, uncertainty surrounding the economics of a company’s specific operations, asset quality,

Investments in private (or illiquid) energy companies carry more perceived risk than public equity or debt, because of informational opaqueness, uncertainty surrounding the economics of a company’s specific operations, asset quality, condition of the capital markets, company capital structure, management quality, commodity markets and macroeconomic trends. Limited partner investors should be asking for more, not less information from their general partners.

EnerCom’s Process is Supported by Proprietary Data, Analysis & Market Insight

We believe that the market dynamics demand more frequent valuations of private company investments that reflect current market conditions, not just the value of the last financing. Higher risk makes an independent valuation of your investments in private companies a vital element for both differentiating your platforms with institutions when raising funds and maintaining their long-term confidence.

EnerCom’s valuation practice is built on proprietary valuation models, industry intelligence and long-term relationships. Our guidance is based on the bedrock of objective operational and financial data subjected to rigorous analysis and assumptions that are checked and confirmed in the market. EnerCom brings to the table:

• Exclusive focus on the energy sector backed-up by our 22+ years of industry experience, proprietary databases and pricing models
• A multi-year, multi-quarter proprietary database of more than 155 U.S. and Canadian E&P, 80 oilfield service companies and 40 MLP infrastructure companies with financial and operational metrics
• Proprietary benchmarking indexes
• SFAS 157 Fair Value Measurements and IAS 39 Financial Instruments compliant
• A team of valuation specialists experienced in valuing companies at all stages of corporate maturity using proven methodologies and documentation
• Professionals plugged into the industry, working daily with oil and gas companies, keeping our fingers on the pulse of the business

EnerCom’s valuation and analytic services can provide the trusted independence and data you and your investors need so that you can keep your eyes on identifying opportunities and generating returns. To better understand the value of your investment, email EnerCom’s Managing Director Aaron Vandeford.

Current: 3,125 Bcf
Actual Injection/(Withdrawal), per EIA: 43 Bcf
Economist Average Estimate, per Bloomberg: 46 Bcf
Previous: 3,082 Bcf

NATURAL GAS IN THE MEDIA:

Halliburton Joins with Microsoft to Bring Big Data to the Oilfield

Cloud computing, internet of things will be major contributors to success in oil and gas Halliburton (ticker: HAL) and Microsoft (ticker: MSFT) announced a strategic partnership yesterday, combining a digital empire and a services giant. The partnership will strive to bring big data to the oilfield. According to the press release issued jointly by Halliburton and Microsoft, “researchers and engineers[Read More…]

Oilfield Tech and Innovation: Core Laboratories Enhancing Production

Unconventional EOR a major new frontier for the industry with a possible 50%+ recovery improvement The fourth day of EnerCom’s Oil & Gas Conference® saw the debut of the Oilfield Tech and Innovation Day, when companies with innovative ideas for oil and gas operations presented their technology. Core Laboratories (ticker: CLB) Reservoir Description VP Larry Bruno outlined the company’s current[Read More…]

BHP Looks to Sell its U.S. Shale Assets: We are Prepared to be Patient

Sale signals success for Paul Singer’s activist efforts BHP Billiton (ticker: BHP) announced its intent to exit its onshore U.S. oil and gas operations, after a long campaign by activist investor Paul Singer. BHP reported fiscal year-end results today, showing attributable profit of nearly $5.9 billion, or $1.107 per share. In the conference call, BHP CEO Andrew Mackenzie announced that[Read More…]

Sanchez Sells Dry Gas Portion of Eagle Ford Acreage for $105 Million

No current plans to develop sold properties Sanchez Energy (ticker: SN) announced the sale of a portion of its Eagle Ford assets last week in a $105 million all-cash deal. Sanchez is divesting the Javelina portion of its acreage, totaling about 70,000 acres. Unlike most of the company’s acreage, Javelina is entirely in the dry gas portion of the Eagle[Read More…]

Mexico Looks to Replicate U.S. Shale Success

Private companies may investigate Mexican portion of the Eagle Ford Mexico is beginning to recognize the benefits of private investment, and is opening its Burgos basin to development by private companies. This is notable as the Burgos basin has been the domain of state-owned PEMEX since 1938. The Burgos Basin is located directly south of Texas with mostly natural gas[Read More…]

Total Buys Maersk Oil in $7.45 Billion Deal

Synergies to generate $400 million/year in savings Total S.A. (ticker: TOT) announced the acquisition of Maersk Oil, a subsidiary of the Maersk Group, today in a deal valued at $7.45 billion. The transaction will make Total the second largest operator in the northwest Europe offshore region, with over 500 MBOEPD of production in the area. Adds 160 MBOEPD of production[Read More…]

Silver Run, Alta Mesa and Kingfisher Midstream Announce Merger

Estimated combined value of $3.8 billion Silver Run Acquisition Corporation II (ticker: SRUN) announced its merger with Alta Mesa Holdings and Kingfisher Midstream last week, forming Alta Mesa Resources. Silver Run is a special purpose acquisition company (SPAC) that rose just over $1 billion in its IPO in March. Led by James Hackett, the former chief executive of Anadarko Petroleum[Read More…]

Rig Count Falls by Three as Operations Stabilize

Offshore activity down by one-third since July Drilling activity decreased last week as operators approach equilibrium in the current oil price market, according to Baker Hughes’ Weekly Rig Count. The total number of rigs active in the U.S. fell by three last week, bringing the total number of rigs in the country to 946. One land-based rig shut down, and[Read More…]

Shell to Mull Buying Israeli, Cyprus Gas for Egypt Plant

From Bloomberg Royal Dutch Shell Plc is seeking creative solutions to bring gas from Israel and Cyprus to market, a step that could help turn the Mediterranean region into a major gas-producing hub. Shell is in talks to buy natural gas from Israel’s Leviathan field, combine it with output from Cyprus’s Aphrodite field, in which it owns a 35 percent[Read More…]

American LNG Is Taking the Scenic Route to Chile

From Bloomberg When the tanker Provalys left Louisiana for Chile last month with a full load of U.S. liquefied natural gas, it sailed around South America instead of taking a shortcut through the expanded Panama Canal. Not only may the route be cheaper without canal transit fees, but advances in technology mean less of the fuel would end up lost[Read More…]

Whatever Happened to Indonesia’s Mighty Oil and Gas Industry?

From Bloomberg Once a cornerstone of the economy, Indonesia’s oil and gas sector is in a slump, even as the country’s appetite for energy soars. Hit by a drop in global prices, changing regulations and competition from neighbors that are proving more attractive to international energy companies, Southeast Asia’s biggest economy is facing a decline in oil revenue and steadily rising[Read More…]

View All 360 Articles

Current: 463,165
Actual Build/(Withdrawal): (3,327)
Economist Average Estimate: (3,257)
Previous: 466,492

CRUDE OIL IN THE MEDIA:

BHP Looks to Sell its U.S. Shale Assets: We are Prepared to be Patient

Sale signals success for Paul Singer’s activist efforts BHP Billiton (ticker: BHP) announced its intent to exit its onshore U.S. oil and gas operations, after a long campaign by activist investor Paul Singer. BHP reported fiscal year-end results today, showing attributable profit of nearly $5.9 billion, or $1.107 per share. In the conference call, BHP CEO Andrew Mackenzie announced that[Read More…]

Sanchez Sells Dry Gas Portion of Eagle Ford Acreage for $105 Million

No current plans to develop sold properties Sanchez Energy (ticker: SN) announced the sale of a portion of its Eagle Ford assets last week in a $105 million all-cash deal. Sanchez is divesting the Javelina portion of its acreage, totaling about 70,000 acres. Unlike most of the company’s acreage, Javelina is entirely in the dry gas portion of the Eagle[Read More…]

Mexico Looks to Replicate U.S. Shale Success

Private companies may investigate Mexican portion of the Eagle Ford Mexico is beginning to recognize the benefits of private investment, and is opening its Burgos basin to development by private companies. This is notable as the Burgos basin has been the domain of state-owned PEMEX since 1938. The Burgos Basin is located directly south of Texas with mostly natural gas[Read More…]

Total Buys Maersk Oil in $7.45 Billion Deal

Synergies to generate $400 million/year in savings Total S.A. (ticker: TOT) announced the acquisition of Maersk Oil, a subsidiary of the Maersk Group, today in a deal valued at $7.45 billion. The transaction will make Total the second largest operator in the northwest Europe offshore region, with over 500 MBOEPD of production in the area. Adds 160 MBOEPD of production[Read More…]

Silver Run, Alta Mesa and Kingfisher Midstream Announce Merger

Estimated combined value of $3.8 billion Silver Run Acquisition Corporation II (ticker: SRUN) announced its merger with Alta Mesa Holdings and Kingfisher Midstream last week, forming Alta Mesa Resources. Silver Run is a special purpose acquisition company (SPAC) that rose just over $1 billion in its IPO in March. Led by James Hackett, the former chief executive of Anadarko Petroleum[Read More…]

Rig Count Falls by Three as Operations Stabilize

Offshore activity down by one-third since July Drilling activity decreased last week as operators approach equilibrium in the current oil price market, according to Baker Hughes’ Weekly Rig Count. The total number of rigs active in the U.S. fell by three last week, bringing the total number of rigs in the country to 946. One land-based rig shut down, and[Read More…]

Shell Loads Oil in Libya for the First Time in Five Years

From Bloomberg Royal Dutch Shell Plc, the world’s largest oil trader, is said to have loaded its first crude from Libya in five years over the weekend, adding to evidence of the OPEC nation’s comeback. The cargo on Saturday is for 600,000 barrels of crude from the Zueitina port, according to two people familiar with the matter who asked not[Read More…]

Goodbye contango? Oil’s long march toward backwardation

From Reuters “The rebalancing of the oil market desired by the leading producers has been a stubborn process,” the International Energy Agency wrote in its latest monthly oil market report. The agency’s evident frustration about the slow and uneven pace of rebalancing, and the conflicting signals about whether it is happening at all, is shared by many traders, analysts and[Read More…]

Whatever Happened to Indonesia’s Mighty Oil and Gas Industry?

From Bloomberg Once a cornerstone of the economy, Indonesia’s oil and gas sector is in a slump, even as the country’s appetite for energy soars. Hit by a drop in global prices, changing regulations and competition from neighbors that are proving more attractive to international energy companies, Southeast Asia’s biggest economy is facing a decline in oil revenue and steadily rising[Read More…]

OPEC Oil-Glut Fight Could Last Years

From Bloomberg When OPEC and Russia first embarked on their strategy to clear a global oil glut, it was expected to succeed within six months. It now looks like the battle could last for years. The Organization of Petroleum Exporting Countries and its partners plan to wrap up their production cuts next spring, already nine months later than originally expected.[Read More…]

Oil Slips as Rising Production Outweighs Shrinking U.S. Supplies

From Bloomberg Oil declined to the lowest level in more than three weeks as investors focused in on a rise in U.S. crude production, even as stockpiles slipped by the most since September. Futures fell for a third day, dropping 1.6 percent in New York. While crude inventories continued to decline, losing 8.95 million barrels last week, U.S. output gained[Read More…]

View All 360 Articles

MLP Scorecard is our weekly distribution of information emerging from the world of master limited partnerships.

This week’s Scorecard report delivers 33 comparative metrics on 59 MLPs in the industry. All of the MLPs in the list have traded publicly for at least four quarters. The EnerCom MLP group includes 4 E&Ps and 55 Midstream and Other operations. Market capitalization ranges from under $10 million to more than $56 billion.

View EnerCom’s MLP Scorecard

MLP IN THE MEDIA:

Goodbye contango? Oil’s long march toward backwardation

From Reuters “The rebalancing of the oil market desired by the leading producers has been a stubborn process,” the International Energy Agency wrote in its latest monthly oil market report. The agency’s evident frustration about the slow and uneven pace of rebalancing, and the conflicting signals about whether it is happening at all, is shared by many traders, analysts and[Read More…]

Pullback in U.S. Frac Sand Use Pressures Producers

From Reuters U.S. shale oil companies are pulling back on the amount of sand they use to hydraulically fracture new wells, responding to rising prices of the material that are driving up costs. Investors worry a slowdown in sand use, combined with new mining capacity coming online, could lead to a glut of the material and bring down prices. The[Read More…]

OPEC Oil-Glut Fight Could Last Years

From Bloomberg When OPEC and Russia first embarked on their strategy to clear a global oil glut, it was expected to succeed within six months. It now looks like the battle could last for years. The Organization of Petroleum Exporting Countries and its partners plan to wrap up their production cuts next spring, already nine months later than originally expected.[Read More…]

SCOOP/STACK Comes to the Effective Rig Count

Anadarko EERC is 404, 2.5 times higher than reported rig count EnerCom has added the Anadarko Basin to the Effective Rig Count, bringing in the second most active basin in the U.S. With the addition of the Anadarko Basin, the EERC is now 2,407, well above peak levels in 2014. In the Anadarko Basin, the reported rig count is 129,[Read More…]

View All 360 Articles

Current: 3,038 Bcf
Actual Injection/(Withdrawal), per EIA: 28 Bcf
Economist Average Estimate, per Bloomberg: 37 Bcf
Previous: 3,010 Bcf

NATURAL GAS IN THE MEDIA:

Sanchez Energy Production Climbs 43% Over Q1, Company Expects to Complete all 132 Gross DUCs within 12 Months of Anadarko Acquisition Close

EnerCom presenter SN brings in 3,800 BOEPD Comanche well It seems like the majority of shale producers have been reporting significant increases in production for Q2 over Q1, and Sanchez Energy (ticker: SN) is no exception. Sanchez announced second quarter results today, showing net income of $24.2 million, or $0.31 per share. Sanchez produced about 73,341 BOEPD this quarter, which[Read More…]

59 Year Record: U.S. Is a Net Exporter of Natural Gas for First Time Since 1958

Exports outweigh imports in February, April, May: EIA The U.S. has been a net exporter of natural gas for three of the first five months of 2017, according to a note released by the EIA. This is historically significant, as February, April and May are so far the only months in which the U.S has been a net exporter of[Read More…]

PDC Energy: Delaware Basin Production Accelerates in Q2

Revenue up 93% YOY; first Delaware XRL producing 2,000 BOEPD for 100 days; PDC spuds 44 Wattenberg wells in Q2 PDC Energy (ticker: PDCE) announced second quarter results today, showing net income of $41.2 million, or $0.62 per share. This considerably exceeds the $95.5 million loss the company took in Q2 2016, and is almost equal to the $46.1 million[Read More…]

A Significant Gas Discovery in New Mexico’s San Juan Basin

IP 30 of 12.9 MMcf/d from Mancos shale — highest in 14 years: BP BP (ticker: BP) announced a discovery in New Mexico today, with strong results from a natural gas well in the Mancos Shale in the San Juan Basin. The NEBU 602 Com 1H well targets the Mancos Shale with a 10,000’ lateral in San Juan County, New[Read More…]

You’re the CEO, How Will You Develop Your Acreage?

Once you’ve locked up the acreage, the permits and the capital, drilling and developing shale plays is fraught with difficult operational decisions. How do companies know if they’re making the right choices when it comes to field development and drilling plans? SunTrust Robinson Humphrey recently held a conference call outlining operational issues facing U.S. shale producers. In the call, experts[Read More…]

SM Energy Increases Production Guidance on Outperforming Wells

Forecasts up 0.8 MMBOE to 45.5 MMBOE SM Energy (ticker: SM) released second quarter results today, showing a net loss of $119.9 million, or ($1.08) per diluted share. After adjusting for derivatives and other special charges, SM reports an adjusted net loss of $35.5 million. SM produced 11.3 MMBOE in Q2 2017, which is 7% higher than Q2 2016 production,[Read More…]

Tropical Storm Drives Largest Offshore Rig Decrease in a Year

Tropical storm Emily forces Louisiana activity down U.S. drilling activity decreased this week, erasing half of the gains from last week, according to Baker Hughes’ Rig Count. A total of four rigs came offline in the U.S. this week, bringing the total number of rigs active in the country down to 954. This change was driven by a sharp decrease[Read More…]

Southwestern Grows Production, Retires Debt

12,000’ lateral well produces 37.7 MMcf/d Southwestern Energy (ticker: SWN) announced second quarter results today, showing net income of $224 million, or $0.45 per share. This result is substantially superior to the $620 million loss the company incurred in Q2 2016. Southwestern produced 222 Bcfe this quarter, which exceeds first quarter production by 9%. This increase comes despite third-party gathering[Read More…]

Heavyweight Operators Talk Technology

Oil and gas heavyweights Noble Energy (ticker: NBL) and Occidental Petroleum (ticker: OXY) discussed operations today in their second quarter earnings calls. Noble Eagle Ford production up 60% sequentially Noble Energy (ticker: NBL) announced a net loss of $1.5 billion, or $3.20 per share. This loss is primarily due to the company’s $1.225 billion sale of its Marcellus upstream assets,[Read More…]

“Rambo” Frac Delivers a New Marcellus Productivity Record for Chesapeake

61.8 MMcf/d from a single well Chesapeake Energy (ticker: CHK) reported net earnings today, showing results of $470 million, or $0.47 per share. Revenues for Q2 were up by 41% year-over-year, mostly due to improved commodity prices. Total production was flat sequentially, but oil production was up by 6%. Chesapeake reports that one of its newest Marcellus wells has set[Read More…]

WPX Finds Success with 330’ Spacing in Wolfcamp A

40% oil production growth in 2017 WPX Energy (ticker: WPX) released second quarter results today, showing net income of $72 million, or $0.18 per share. WPX set a new record for total liquids production this quarter, producing 72,400 BPD. This is 17% higher than the company’s previous best, 62,000 BPD in Q4 2015. This quarter was WPX’s third consecutive record[Read More…]

NATURAL GAS INVENTORY (Week Ended 7/14/2017)

Current: 2,973 Bcf
Actual Injection/(Withdrawal), per EIA: 28 Bcf
Economist Average Estimate, per Bloomberg: 34 Bcf
Previous: 2,945 Bcf

NATURAL GAS IN THE MEDIA:

ExxonMobil Abandons Discussions to Develop Expensive Indonesian Gas Field

46 Tcf of proven reserves in East Natuna, but $10-$15 natgas required to make it economic ExxonMobil (ticker: XOM) has pulled out of developing the Indonesian East Natuna gas field, after more than 20 years of consideration. First discovered in 1973, the East Natuna gas field is located in the South China Sea near Indonesia and Malaysia. Estimates have put[Read More…]

U.S. Coal Finds Market in Europe, Gas Too

U.S. responsible for 40% of the world’s new gas production by 2022: IEA A report by the EIA indicated that coal exports — for both steam coal, used for power generation, and metallurgical coal, used for refining steel — have increased by 58% from Q1 of 2016 to Q1 of 2017. The majority of the increase was in steam coal, which grew by 6[Read More…]

Effective Rig Count Breaks 2,000 for First Time in June

Permian EERC pushes to 1,135 EnerCom released its monthly EnerCom Effective Rig Count today. The Effective Rig Count now reports an equivalent 2,015 rigs active in the U.S., up from 1954 last month. The Effective Rig Count adjusts reported rig counts for increasing efficiency in drilling and completions. There are significantly fewer rigs active in the U.S. today than in[Read More…]

BAM: It’s Earnings Season (Again)-Q2’17 Estimates

Seems like just yesterday it was year-end and Q1 reporting season. But time flies in the public company world. EnerCom, Inc. has compiled second quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 110 E&P and 81 OilService companies in our database. Download EnerCom’s full chart of estimates. The median OilServices company earnings estimate[Read More…]

North Dakota Gas Production, Producing Wells Break Records set Last Month

1,854 MMcf/d produced in May The North Dakota Industrial Commission released its latest Oil and Gas Production Report today, outlining hydrocarbon activity in the state for May 2017. 13,876 wells producing The NDIC reported that oil production fell in May, averaging 1,040 MBOPD. This is down slightly from the 1,050 MBOPD produced in North Dakota in April. 95% of all[Read More…]

CONSOL Energy Breaking into Separate Coal and Nat. Gas Companies

CONSOL Energy (ticker: CNX), a Pittsburgh based coal mining and natural gas exploration company plans to split the corporation into two separate companies, one focusing on natural gas exploration and production, the other focusing on coal mining. The company’s Pennsylvania Mining Complex, which is comprised of the Bailey, Enlow Fork, and Harvey mines as well as a coal preparation plant,[Read More…]

U.S. Rig Count Unchanged, Canada adds 16

Permian grows to 373 rigs The U.S. rig count was unchanged this week, seemingly signaling a response to lowering oil prices, according to Baker Hughes’ Weekly Rig Count. The total number of rigs active in the U.S. is still 952, the same as last week. However, one land rig came online and one inland waters rig shut down, giving a[Read More…]

Onshore Mexico Bid Round 2.3 Will Yield $2 Billion in Investment

Mexico’s continuing oil and gas reform: 21 of 24 onshore oil and gas blocks auctioned off in Round 2.3 The winners of the Mexican Energy Reform Onshore Bid Round 2.3 were announced today. Of the 24 blocks available through the most recent auction, 21 were sold to investors from North America and Asia, which Mexico’s oil and gas regulator CNH[Read More…]

PetroQuest Reports Its Largest Cotton Valley Well Yet

First multi-well pad yields average of 2,120 BOEPD per well PetroQuest Energy (ticker: PQ) has announced the results of its first multi-well pad in the Cotton Valley, showing encouraging results. The three wells drilled in this pad had a combined 24 hour IP of 38,167 Mcfe/d, split between 27,697 Mcf of gas, 1m678 bbl of NGLs and 67 bbl of[Read More…]

CRUDE OIL INVENTORY’000 bbls (Week Ended 7/14/2017)

Current: 490,623
Actual Build/(Withdrawal): (4,727)
Economist Average Estimate: (3,463)
Previous: 495,350

CRUDE OIL IN THE MEDIA:

Effective Rig Count Breaks 2,000 for First Time in June

Permian EERC pushes to 1,135 EnerCom released its monthly EnerCom Effective Rig Count today. The Effective Rig Count now reports an equivalent 2,015 rigs active in the U.S., up from 1954 last month. The Effective Rig Count adjusts reported rig counts for increasing efficiency in drilling and completions. There are significantly fewer rigs active in the U.S. today than in[Read More…]

BAM: It’s Earnings Season (Again)-Q2’17 Estimates

Seems like just yesterday it was year-end and Q1 reporting season. But time flies in the public company world. EnerCom, Inc. has compiled second quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 110 E&P and 81 OilService companies in our database. Download EnerCom’s full chart of estimates. The median OilServices company earnings estimate[Read More…]

North Dakota Gas Production, Producing Wells Break Records set Last Month

1,854 MMcf/d produced in May The North Dakota Industrial Commission released its latest Oil and Gas Production Report today, outlining hydrocarbon activity in the state for May 2017. 13,876 wells producing The NDIC reported that oil production fell in May, averaging 1,040 MBOPD. This is down slightly from the 1,050 MBOPD produced in North Dakota in April. 95% of all[Read More…]

It’s Official: Saudi Arabia will Reduce Oil Exports to the U.S. to Boost Oil Prices

4-week average imports down 30% from May U.S. imports of oil from Saudi Arabia are falling fast, as the kingdom seeks a new way to prop up disappointing oil prices. One of the main stated goals of OPEC’s production cuts is to decrease global inventories, which are still well above historical averages. These large inventories weigh heavily on oil prices,[Read More…]

U.S. Rig Count Unchanged, Canada adds 16

Permian grows to 373 rigs The U.S. rig count was unchanged this week, seemingly signaling a response to lowering oil prices, according to Baker Hughes’ Weekly Rig Count. The total number of rigs active in the U.S. is still 952, the same as last week. However, one land rig came online and one inland waters rig shut down, giving a[Read More…]

Deeper OPEC Cuts Would Help Shale, Former Qatar Minister Warns

From Bloomberg OPEC would hurt itself and help U.S. shale producers if it adopted deeper cuts, the former oil minister of Qatar warned. “It’s not beneficial for OPEC to deepen their cuts because prices will go up and shale oil producers and others will take OPEC’s market share,” Abdullah al-Attiyah said in interview in Istanbul. “The problem is that there[Read More…]

Onshore Mexico Bid Round 2.3 Will Yield $2 Billion in Investment

Mexico’s continuing oil and gas reform: 21 of 24 onshore oil and gas blocks auctioned off in Round 2.3 The winners of the Mexican Energy Reform Onshore Bid Round 2.3 were announced today. Of the 24 blocks available through the most recent auction, 21 were sold to investors from North America and Asia, which Mexico’s oil and gas regulator CNH[Read More…]

OPEC Compliance Dives as Angola, Saudi Arabia Increase Production

Compliance falls below 100% OPEC’s grip on the oil market seems to be slipping away, as its newest Monthly Oil Market Report shows production rising, despite cuts. In its MOMR, OPEC gives two sources of production, levels directly reported by companies and levels reported by secondary sources such as Platts. Each country’s directly reported values are not considered reliable, though,[Read More…]

Going Private: Mexico’s First Private Offshore Well in 80 Years Pays Off Big

1.4 billion barrel discovery at 11,000 feet — en route to 14,000 Sierra Oil & Gas, Talos Energy and Premier Oil (ticker: PMO) have announced the discovery of a massive oil field in offshore Mexico, with more than 1 billion barrels of oil recoverable. According to the Financial Times, this is the fifth-largest oil discovery in the world in the[Read More…]

Halcon Shrinks Williston Footprint to Become Full-On Delaware-Focused Operator

Halcon Resources sells operated Williston assets for $1.4 billion Houston-based Halcon Resources Corp. (ticker: HK) announced Tuesday that the company sold its operated assets in the Willison Basin to an affiliate of Bruin E&P Partners, a portfolio company of Arclight Capital Partners, for $1.4 billion in cash. The company said it will keep its non-operated assets in the basin, although[Read More…]

“The 2016 competition drew one of the largest number of submissions ever, representing a broad range of industries and organizational sizes,” according to the LACP. “This year’s event was comprised of nearly 1,000 organizations representing upwards of a score of countries, so competition was exceptionally tough,” the LAPC said.

The annual report for Whiting was designed and produced by the EnerCom art department, and the copy was written by Whiting’s investor relations and communications management team with EnerCom. “The EnerCom team took our thematic cues from Whiting,” said EnerCom’s Art Director Lucas Oxoteguy.

Since our founding in 1994, EnerCom has written, designed and managed the production of more than 200 annual reports for the Oil & Gas industry.

The idea for 2016’s theme was that even in the environment of a severe commodity downturn such as the one the industry suffered through for two years, Whiting — and the U.S. oil and gas industry — would rise again, show new life, bring to bear new technologies and move forward. And that’s exactly what has happened.

“Whiting is a resurgent company that has invested in state-of-the-art technology that allows its geophysics teams to analyze its reservoirs at a molecular level, enabling accurate optimization of well completions and the ability to high-grade its assets,” said Aaron Vandeford, EnerCom Managing Director. “Whiting has a sharp focus on driving repeatable and profitable oil growth from its core resource plays in the Williston and DJ basins.”

The Whiting Petroleum 2016 Annual Report scored 96 out of 100 in the LACP judging scale. The EnerCom design consists of a full color cover plus 14 pages of full color feature material with custom photography provided by Whiting.

View our award winning designs here