Since days when shale oil and gas technologies were discovered, the U.S. energy industry has been evolving more rapidly than ever before. Many changes are amazing especially when you put them on an industry map. At Rextag not only do we keep you aware of major projects such as pipelines or LNG terminals placed in service. Even less significant news are still important to us, be it new wells drilled or processing plants put to regular maintenance.
Daily improvements often come unnoticed but you can still follow these together with us. Our main input is to “clip it” to the related map: map of crude oil refineries or that of natural gas compressor stations. Where do you get and follow your important industry news? Maybe you are subscribed to your favorite social media feeds or industry journals. Whatever your choice is, you are looking for the story. What happened? Who made it happen? WHY does this matter? (Remember, it is all about ‘What’s in It For Me’ (WIIFM) principle).
How Rextag blog helps? Here we are concerned with looking at things both CLOSELY and FROM A DISTANCE.
"Looking closely" means reflecting where exactly the object is located.
"From a distance" means helping you see a broader picture.
New power plant added in North-East? See exactly what kind of transmission lines approach it and where do they go. Are there other power plants around? GIS data do not come as a mere dot on a map. We collect so many additional data attributes: operator and owner records, physical parameters and production data. Sometimes you will be lucky to grab some specific area maps we share on our blog. Often, there is data behind it as well. Who are top midstream operators in Permian this year? What mileage falls to the share or Kinder Morgan in the San-Juan basin? Do you know? Do you want to know?
All right, then let us see WHERE things happen. Read this blog, capture the energy infrastructure mapped and stay aware with Rextag data!
Vital (Formerly Laredo) Expands in Midland, Purchases Acreage From Driftwood Energy
Vital Energy Inc. has made a significant acquisition, purchasing 11,200 net acres in Upton and Reagan counties, Texas. The deal, which involved a combination of cash and stock, was worth almost $214 million. This move comes shortly after the company's rebranding from Laredo Petroleum just one month ago.
2022 A&Ds in O&G Summary and Trends for the past 4 years
More than 60% of all A&D deals by value are in US oil and gas companies. Despite their leading market position, U.S. fields are developing unevenly, and investors are quite cautious about investing in them at this stage. The top 5 oil & gas industry A&D deals in 2022 were concluded by Omega Acquisition, Tokyo Gas, Diamondback Energy, Suncor Energy, and IMM Private Equity. The main motives of oil and gas companies to carry out A&D transactions can be considered the achievement of the synergy effect, and the presence of fundamental shocks in the market.
$3 Billion Deal, Marathon Oil Buys Ensign Natural Resources
Up to $1.5 Billion for Percussion Petroleum in the Permian Basin
Around 25,000 net acres in the Permian are being sold by Percussion Petroleum II, looking to fetch up to $1.5 billion, as some sources bet on rising oil prices to pocket more than double what it paid in 2021. The company spent $375 million plus contingent payments a year ago to buy the bulk of its assets in one of the most prolific crude-producing areas in the U.S. from Oasis PetroleumInc. The oil prices increased to triple digits and buyers wanted to gain a toehold in the basin, whereas backers of private shale companies such as Percussion use it as a chance to exit their investments with big profits. Remarkably, U.S. crude oil futures have grown about 50% to approximately $109/bbl since June 29, 2021, when Percussion closed its deal with Oasis.
Crude oil pipelines in North America: a current perspective
Being the main means of transferring crude oil around the world, pipelines rapidly route oil and its derivative products (gasoline, jet fuel, diesel fuel, heating oil, and heavier fuel oils) to refineries and empower other businesses. The U.S. and Canada solely make North America a major oil hub for more than 90,000 miles of crude oil and petroleum product pipelines, which are connected to more than 140 refineries daily processing about 20 million barrels of oil. Compared to 2010, U.S. crude oil production has increased more than twice: from 5.4 to 11.5 million barrels a day. Therefore, newly produced oil obliged energy companies to expand their pipeline networks, but it has only increased by 56%. According to the latest data, Plains manages the largest pipeline network across the U.S. and Canada (its diameter is at least 10 inches) which is the 14,919-mile network that spans from the northwestern tip of Alberta down to the southern coasts of Texas and Louisiana. The place where all these various spreading pipeline networks carry crude oil is refineries, where it is transformed into different petroleum products. Gulf Coast (PADD 3) possesses several refineries with the largest throughput in North America that process more than 500,000 barrels per day. Not only does the development of new pipelines give a plethora of opportunities for economic growth but also it remains a contentious issue in Canada and the U.S., with the cancellation of the KeystoneXL pipeline emblematic of growing anti-pipeline sentiment. In 2021, only 14 petroleum liquids pipeline construction plans were completed in the U.S., which is considered the lowest amount of new pipelines and expansions ever since 2013. Anti-pipeline sentiment did not come out unexpectedly as leaks and spills in just the last decade have resulted in billions of dollars of damages. From 2010 to 2020, the Pipelineand Hazardous Materials Safety Administration reported 983 incidents that resulted in 149,000 spilled and unrecovered barrels of oil, even five fatalities, 27 injuries, and more than $2.5B in damages.
Inconvenient Time for Canadian Crude: US Gulf Coast Is Glutted
Canadian heavy crude, being deeply discounted for several years due to a lack of pipelines, is eventually trading like a “North American” grade, moving in tandem with U.S. sour crudes sold on the GulfCoast thanks to Enbridge’s expansion of its 3 pipeline late last year. Meanwhile, the Gulf is full of sour crude over Washington’s largest-ever release from the Strategic Petroleum Reserve (SPR) that will amount to 180 MMbbl during six months, trying to tame exorbitant fuel prices after the Russian invasion of Ukraine. The market is flooded with millions of barrels of sour crude from storage caverns in Louisiana and Texas. At the world’s biggest heavy crude refining center, U.S. Gulf Coast, heavy grades like Mars and Poseidon are languishing. According to U.S. Energy Information Administration (EIA) data, Canada exports around 4.3 MMbbl/d to the United States, whereas until last year demand to ship crude on export pipelines increased capacity, leaving barrels bottlenecked in Hardisty.
Merger of Equals: Whiting and Oasis $6B Deal
The two Bakken shale producers announced in a joint statement on March 7 that they had reached an agreement to unite in a $6 billion "merger of equals." Combining these two companies will create a leading Williston Basin position with assets covering approximately 972,000 net acres, production of 167,800 boe/d, and an enhanced free cash flow generation that will generate capital returns to shareholders. A historic collapse in oil prices prompted both Whiting and Oasis oil companies to file for Chapter 11 bankruptcy protection in 2020. Thus, the merger can be viewed as a preventive measure to avoid going out of business.
All Eyes Are on the Rocky Mountains State, as PDC Acquires Great Western for $1.3B
Great Western Petroleum's assets will be acquired by PDC Energy for $1.3 billion. Via this deal, PDC Energy’s position in the D-J basin increases roughly to 230,000 net acres. Denver-based Great Western has core operations in Weld and Adams counties in Colorado with 54,000 net acres and about 55,000 boe/d (42% oil / 67% liquids) of PDP. As part of the agreement, the acquisition will be financed by issuing 4 million shares of common stock to existing Great Western shareholders and by providing $543 million in cash to the company. All in all, PDC expects to increase its total production by 25% and its oil production by 35% as a result of the deal. The deal should also result in some synergies including a 15% reduction in overall cost per BOE.
Lime Rock Resources Starts the Year With a Bang — a Money Bang!
Still waters run deep: after patiently waiting for 2 years, Lime Rock Resources starts the year with a pair of acquisitions worth $358.5 million The two acquisitions include Abraxas Petroleum’s Williston Basin position in North Dakota: about 3,500 acres of land and 19,400 boed of net production, as well as properties situated in Burleson, Milam, and Robertson in Texas from a third party, that contain 46,000 contiguous net acres and produce 7,700 boed as of the closing of the deal. The company intends to intensify its focus on low-risk opportunities and margins, which will significantly boost Lime’s market position going further.
Evolution Acquires Non-operated Wyoming Natural Gas Interests
Evolution Petroleum just spend a fortune on Jonah’s Field right after acquiring Hamilton Dome Field in Wyoming. The price of the transaction is $29.4 million. The Houston-based company aims to diversify into natural gas assets, providing access to the western markets through the Opal market hub, with the optionality to flow to the east. That transaction took effect on February 1. We anticipate closing on or about April 1.
Ain't Nothing Like a $2 Billion Deal: Oasis Sells Midstream Affiliate to Crestwood
Crestwood & Oasis Midstream merge to create a top Williston #basin player. $1.8 billion deal is expected to close during the Q1 of 2022. The transaction will result in a 21.7% ownership stake for Oasis in Crestwood common units. The remaining ownership of Oasis in Crestwood will also be of benefit to the company since it will create a diversified midstream operator with a strong balance sheet and a bullish outlook after this accretive merger.