Oil Producers Roundup

Oil Producers Roundup

Submitted by adil on Tue, 12/31/2013 - 15:09

While 2013 draws to an end, the oil market has been receiving encouraging supply side news all around. Throughout the year, the oil prices faced a steady downside trend, owing to numerous new explorations, sluggish global economy, actual reduction on reliance on fossil fuels and enabling technology for shale oil extraction. This year saw USA produce crude more than enough for its own consumption, which had pushed down not only West Intermediate but also hopes of OPEC countries for a price gain.

This week we heard the news about BP finding a large oil well off the Gulf of Mexico. It is the company's biggest find in the waters after gigantic rig disaster that was worst ever in US history. The spill had led to outrage from environmental activists as marine ecosystems were destroyed, and clean up costs ran in billions. The finding comes after the ban on off shore drilling was lifted in 2010. This discovery follows the trend of findings in the region, where first one came at Kaskida in 2006 and Tiber in 2009.

Hess Corporation, one of the biggest oil conglomerates slashed its fourth quarter production guidelines for first two months. The production guidance was reduced by 10,000 barrels to 310,000 from 320,000 barrels. The corporation made this move after finalizing sale of its Natuna A Field in Indonesia and higher production downtime due to maintenance activities at other fields. However, the overriding factor behind this measure can be easily attributed to crude price slump in the first two months of last quarter of this year. As a result, the company anticipated sequentially lower revenues. It seems that Hess is waiting its stockpiles for a better price.

From Brazil it has come to light that state run Petroleo Brasileiro SA, commonly known as Petrobras, has been confirming the presence of gas and light oil in an extension well present off shore. Commonly known as Moita Bonita – 1, this ultra deepwater well is expected to extend oil and gas extraction by significant amounts. The well is present in Sergie-Alagoas Basin in the state of Sergie at a water depth of 2800 meters.

Some other news comes from Comstock Resource Inc. and Patterson-UTI Energy Inc an onshore contract driller. Comstock as one of the leading domestic energy explorer has earmarked $450 million for oil wells drilling and completion activities. This budget is allocated for completing the drilling of 29 wells in South Texas-based Eagle Ford Shale, $260 million to drill 59 wells at the same location and another $50 million will be spent for drilling 10 wells at East Texas-based Eagle Ford Shale. The company will use $29 million for various capital investments.

Patterson-UTI Energy Inc. announced that it would be facing significant costs for operating mechanical rig fleet. The company expects to face expenses worth $37.8 million in total. Part of this expense will be related to decommissioning 48 mechanical drilling rigs; parts of these rigs are expected to be auctioned separately, whereas remainder of components will be used to maintain existing fleet of rigs. At present, the company has 55 rigs that are out of contract.