“We (oil industry) Produce Wealth While They (politicians) Produce Nothing”

In Home, News by wp_sysadmin

Today’s Key Takeaways:  Expectation reset in the oil sector? 2023:  rising production and improved results for US oil and gas industry. 2024:  new technology to extract natural gas. Pebble raises capital to advance project. UAF receives $9m to study carbon capture project at proposed coal plant.


We’re on the Verge of a Reset of Expectations in the Oil Sector
David Messler, OilPrice.Com, January 1, 2024

  • Oilfield services operators focused on land-drilling could see the weakness they experienced in Q-4, 2023, and continue into Q-1, 2024.
  • Lower prices bring about a sharp curtailment of drilling and a moderate reduction in completion activity in shale.
  • Oilfield services sources: we are just about in balance with legacy shale declines, drilling just enough to move production higher incrementally higher.

Despite a late Santa rally in the oilpatch this week, it’s probably time to recognize that we are on the verge of a reset of expectations for the oil sector in the developing, likely 2024 price environment for WTI and Brent. We are about one inventory build away from a trip back into the $60’s for WTI and the low $70’s for Brent. Do we stay there for long? I doubt it, and will discuss why in this article, but it could happen. In this article I will discuss what I see as the most likely scenario for 2024. 



The US Domestic Oil Industry Closes A Remarkably Strong 2023
David Blackmon, Forbes, December 31, 2023

As 2023 comes to a close, the United States is producing more oil and more natural gas than ever before, even in the face of efforts by government planners to force a move to other, greener, sources of energy. In fact, thanks to a major uptick in per-well recoveries in shale wells, the US is now producing more oil per day than any single nation has ever achieved. The fact that this has all been accomplished despite a domestic rig count that dropped by well over 20% during the year, according to Enverus, makes this one of the most remarkable outcomes in the industry’s long history.

This outcome becomes even more remarkable given that it comes amid a presidential administration whose leaders repeatedly stress their desires to end the industry within a decade and serves as a reminder of the industry’s extraordinary resilience. In a piece I wrote here in March, 2021, I noted, “The history of the oil and gas business in the United States is that every time the ‘experts’ all line up to declare it to be dead, it finds a way to come roaring back.”

The reality is that these 2023 results represent a continuation of the nascent boom I wrote about in that 2021 story. At that time, I predicted that this burgeoning post-COVID boom would not be another drilling bonanza like the nation witnessed during the early days of the Eagle Ford Shale and the Permian Basin boom. Instead, it would be a more stable period of rising production and improving results created by adoption of new technologies, process efficiencies, economies of scale, and strong financial discipline.



2024 Will Usher New Tech to Extract Natural Gas: Upwing Chief
Jov Onsat, Rigzone, January 2, 2023

Greater demand for natural gas in the United States is expected to drive the deployment of new technologies to recover otherwise inaccessible reserves in the country starting this year, according to the chief executive of Upwing Energy LLC.

“There is an increased demand for new sources of natural gas, along with potentially increased exports due to global gas market disruptions,” Herman Artinian told Rigzone recently. “Colliding with increased energy demand, recent geopolitical conflicts have destabilized some of our most reliable hydrocarbon producers.”

In response to more appetite for natural gas, US producers will seek “new ways to ensure it has ample natural gas inventories and access to reserves to sustain the energy demands of its citizens,” Artinian said. “To address uncertainty in energy security, producers will more readily embrace technologies that help them reach previously inaccessible domestic reserves of natural gas.”


Northern Dynasty raises capital for Pebble
Shane Lasley, December 31, 2023

Northern Dynasty Minerals Ltd. Dec. 21 announced a nice holiday surprise as it closed US$15 million in convertible notes and roughly C$3.4 million in non-brokered private placement offerings.

Despite the uncertainty surrounding the status of Pebble, Kopernik Global Investors LLC out of Florida has purchased convertible notes (basically a loan that gives the option to be paid out as shares) toward the sum of US$15 million, whereas Northern Dynasty also issued and sold 8.56 million units of its company at a price of C40 cents per unit, totaling C$3.4 million (US$2.6 million).

“These funds will be used by the company to continue to advance the Pebble project in a responsible manner for the benefit of all Alaskans, especially those in southwest Alaska closest to the Pebble project,” said Northern Dynasty President and CEO Ron Thiessen. “This way all Alaskans can benefit from both the valuable fisheries and world-class mineral resource assets the State has to offer; not one of the other.”

While the air still hangs thick with suspension as the State of Alaska waits to see if the U.S. Supreme Court will hear its case arguing that the Environmental Protection Agency breached the state’s constitutional rights when it emplaced restrictions on permits for developing a mine at the world-class Pebble project, North Dynasty has not let its guard down despite the apparent line being permanently drawn by the federal agency.

With billions of pounds of copper, hundreds of thousands of kilograms of rhenium, hundreds of millions of pounds of molybdenum, and millions of ounces of gold and silver, this multi-billion-dollar project that is becoming more and more critical to a clean energy transition, is becoming more and more difficult to sweep aside.

With the latest round of funding, Northern Dynasty and the Pebble Partnership can continue to pursue what they see as an important domestic source of metals critical to the energy transition, as well as new foundation for Alaska’s economy.


Biden administration awards $9M grant to research carbon capture for proposed Southcentral Alaska coal power plant
Wesley Earl, Alaska Public Media, December 29, 2023

The University of Alaska Fairbanks is set to receive a $9 million dollar grant from the Biden administration to research a project that would aim to capture carbon emission from a proposed coal power plant in the Susitna Valley in Southcentral.

Northern Journal reporter Nat Herz says the idea is that the project would help reduce carbon emissions and help combat global warming. 

Herz says the idea of carbon capture storage, or CCS, is drawing attention at the state level, though critics say it’s expensive, and may not have a large impact on emissions.