The Daily Digger

       Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money.      That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector.      The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest.       The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividen...

  Equinor, a Norwegian-owned petroleum company, has finally completed the sale of their onshore assets in the Bakken Shale. Their decision to sell their assets comes after a decade of multibillion-dollar losses and criticism for their bad investment choices. Equinor has sold all its operated and non-operated acreage (along with their midstream assets) in the Bakken region in North Dakota and Montana to Grayson Mill Energy for a total of $900 million.  They will continue to operate their assets for the coming four months, after which they'll hand over all of the operations to Grayson Mill Energy. Despite this significant change of ownership, Grayson Mill Energy has stated that nearly all field staff and many of those in the maintenance teams currently on the Bakken assets will remain after the transition.  What do we know about the Equinor Bakken Shale assets?  Equinor Bakken Shale Asset The Bakken region has dramatically evolved during the last decade's shale boom an...

  Last week, American Energy Partners Inc. stated its plans to acquire three oil and natural gas producers. The deal is valued at almost $11 million and includes companies in western Pennsylvania and West Virginia. American Energy Partners said it would obtain all of the stock and units of the three undisclosed companies. CEO Brad Domitrovitsch says: “ This transaction furthers our commitment to acquiring steady cash-flowing businesses while enhancing our ability to develop alternative green energy opportunities with the vast amount of acreage included in the package.”  The sale involves 467 wells currently yielding 1.25 Bcfe/d and midstream assets spread over 695 acres (includes 100% owned surface and mineral rights). Additionally, there are no drilling commitments or obligations for the properties. American Energy controls several subsidiaries, including:  Oilfield Basics LLC Hickman Geological Consulting LLC American Energy Solutions LLC Hydration Company of PA Gilbert...

  According to the world's largest oil traders, global oil demand is set for a rebound. Between now and the end of 2022, global consumption is expected to increase by up to 8 million barrels each day. Vitol Group, the world's largest oil trader, supports this statement.  In an interview with Bloomberg, Vitol's chief executive Russell Hardy said, "We'll need all eight cylinders to get through 2022". This, of course, is due to the lower than average demand for oil at the moment. Reopening economies and Asian markets will create a strong demand rebound by the end of this year and in 2022.  Although the demand for jet fuel will slowly increase, it will still be below average at the end of the year. Nevertheless, a surge in petrochemicals will offset the expected delay in jet fuel demand. Last year, the oil surplus reached a record of 1 billion barrels. This excess is already more than halfway drained, and experts believe it will be depleted by the third quarter th...

  Since the start of the pandemic, companies in the shale industry have laid off 102,000 workers. While the industry has slowly recovered in some states, some are still suffering and have needed to continue to lay off workers. Texas has been hit the worse, as they have had to lay off over 39,000 workers since February 2020. According to the Hobby School of Public Affairs, jobs in the shale industry dropped from 691,866 in March 2020 to 628,362 in March 2021, a 9% decline.  Losing these workers who comprise the OFS sector jeopardizes the development of innovative technologies that increase productivity, improve environmental performance, and decrease greenhouse gas emissions. Recent BLS (Bureau of Labor Statistics) revisions reported that in February 2021, job loss was 7,697. This is still significantly less than January 2021, which was 10,048. Despite workers still being laid off, this year seems to be better than last year as the sector was a rollercoaster ride with all of t...

  Like most politicians, President Biden made promises during his campaign that he has no intention of keeping. As a result, the domestic natural gas industry will likely suffer. With that, President Biden plans to roll out a new  infrastructure plan . Back in 2019, Biden stated his hopes to ban hydraulic fracturing. These statements came back to haunt him in his battle with Donald Trump to win the state of Pennsylvania. A large portion of the state's economy is the Marcellus shale natural gas production. Without the use of fracking, companies cannot produce natural gas.  During the initial part of the election campaign, Biden's staff persuaded the public that Biden would not ban fracking. However, the public was not convinced, so Biden traveled to Pittsburgh to discuss the critical role natural gas would play in his administration's energy plans.  Later, his campaign rolled out a "Clean Energy Plan", designed to achieve a national net-zero carbon emissions outcom...

            Climate change has been an ongoing topic in the past years and one of the main topics covered during the presidential campaign by then-presidential candidate Joe Biden. He had  threatened to remove  all fracking sites to reduce carbon emissions to zero. Of course, towards the end of the presidential campaign, Joe Biden became less hostile towards the fracking industry and devised a more reasonable way of reducing carbon emission.      On Monday, at least 10 chief executives from major U.S. oil companies (Exxon Mobil Corp., BP Plc, ConocoPhillips, Royal Dutch Shell Plc, Chevron Corp, and Devon Energy Corp) have decided to collaborate with the Biden administration in its campaign against climate change. White House National Climate Adviser Gina McCarthy has stated that oil industry leaders promised support for federal regulations. The main focus being limiting emissions of methane from wells and other oilfield equipm...

             Despite the increase in U.S. oil demand, big shale producers are focusing on their debt over drilling. They are keeping true to what they've told their investors by cutting costs throughout the whole industry. Contrary to publicly owned shale companies,  privately-owned  shale producers are now focusing on increasing their productivity, as we mentioned in a previous post.       This is good news for OPEC+, as this will restrain output and drive crude prices higher without unleashing a barrage of supply from U.S. rivals. The U.S. shale industry is slowly coming back, but this new approach will leave oil output below pre-pandemic levels until late next year. Michael Tran, managing director for RBC Capital Markets, stated that publicly traded explorers that remain restrained on output are aiding to keep crude prices up.  Michael Tran also said, "the more restrained shale drillers are this year, the more...

            Without a doubt, the shale industry has boosted job creations throughout the US. When the industry began to boom back in 2012, it created  1.8 million jobs . At the start of the fracking boom, workers were paid an average of $35.15 per hour, which was higher than the general economy's wages.      Experts even estimated that the shale industry would bring in $111 billion in federal and state government revenues in 2020. Unfortunately, due to the COVID-19 outbreak in 2020 and the  extreme cold weather  that affected major shale sites only a few weeks ago, the industry has taken a toll. Despite the oil and gas market steadily getting back on its feet, the negative effects are still being seen. Shale Workforce Cut      Major fracking companies and the companies that manufacture the equipment have had to cut down on personnel over the past months. An estimated 12,321 jobs cut over the past three month...