Denton has become ground zero in Texas in the fight over hydraulic fracturing.

Written by Peggy Heinkel-WolfeStaff . Posted in Enhanced Energy Recovery & Oil Industry Blog

By Peggy Heinkel-WolfeStaff   This email address is being protected from spambots. You need JavaScript enabled to view it.

Published: 12 July 2014 11:02 PM

Denton Record Chronicle: Hearing on possible fracking ban part of Tuesday’s meeting  

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A local and long-simmering fight over the effects of fracking on Denton neighborhoods is morphing into a statewide battleground over a city’s right to police what happens within its boundaries. The city staff is preparing for a large crowd when the Denton City Council takes up a proposed ban on hydraulic fracturing during its regular meeting Tuesday night, including requiring speakers to register in advance. Outgoing Texas Railroad Commission Chairman Barry Smitherman wrote a letter to Mayor Chris Watts and the City Council on Friday urging them not to approve the ban, calling oil and gas drilling a pillar of the Texas economy.

Under the city charter, the council must hold a public hearing on an initiative petition before taking a vote on the matter.

A group of Denton residents organized the initiative in the spring, delivering the signatures of nearly 2,000 registered voters supporting the ban. If the council passes the ban Tuesday, Denton would be the first city in Texas to ban fracking inside its city limits. New York’s highest court has upheld city-imposed bans on fracking in Dryden and Middlefield.

More than 170 cities in New York have used their zoning authority, as Dryden did, to ban the drilling technique. In Colorado, several cities have declared a long-term moratorium or banned fracking despite pressure from the governor’s office. In Ohio, some cities moved to regulate fracking under local control they had until the Ohio Legislature started rolling back the authority.

In Pennsylvania, the state legislature made a similar move against local authority. A group of residents sued to strike down the law. The state’s highest court agreed that the law substantially violated due process and people’s reliance on rational zoning regulations.Denton’s proposed ban taps a city’s well-established policing powers, including those that protect the health and safety of residents.

City staff released an advisory Friday saying they will open registration for speakers beginning at 1 p.m. Tuesday. Speakers planning to bring audio or visual materials must submit their material to the city secretary by noon Monday. Resident Cathy McMullen, who helped organize the initiative, said she expects a competing petition to be delivered Tuesday night. Canvassers have been in town for several weeks working for Taylor Petition Management of Colorado Springs, Colorado. Owner Tracy Taylor declined to answer questions about the scope of work being performed in Denton and who had hired his company to circulate a plebiscite petition in support of fracking. “Any questions or comments need to come from Denton Taxpayers for a Strong Economy,” Taylor said.

The group did not return multiple calls for comment. Unlike initiative and referendum petitions, under the charter, a plebiscite petition does not bind the City Council to any action. Originally, workers were being paid $2 per signature for the plebiscite petition. Organizers increased payment last week to $2.50 per signature with bonuses, according to a private Facebook group post obtained by the Denton Record-Chronicle. If a worker averaged more than 50 signatures per day, they would receive another 75 cents per signature at the end of the drive. If they averaged more than 60 signatures, they would be paid $1 per signature bonus. The author of the post, Charles Chavez, also said the company would pay another 50 cents per signature toward hotel and travel expenses and the work had to be finished by Tuesday. Taylor Petition Management is one of about 30 licensed petitioners in Colorado.

Texas does not require petition companies to be licensed, according to Alicia Pierce, a spokeswoman for the Texas secretary of state. If Denton doesn’t approve the ban Tuesday night — leaving the matter for the November ballot instead — Alpine may become the first city in Texas to ban fracking. Residents went before the City Council there on July 1 and requested a ban on hydraulic fracturing. Like Denton, Alpine, near Big Bend, is also a home-rule city.

PEGGY on Twitter at @phwolfeDRC.


The Denton City Council has denied a resident-driven initiative to ban hydraulic fracturing in the city limits

How they voted:

Yes (to deny): Jim Engelbrecht, Joey Hawkins, Greg Johnson, John Ryan, Chris Watts

No: Kevin Roden, Dalton Gregory

What’s next? Under the city charter, the initiative to ban hydraulic fracturing goes to Denton voters. The City Council has called that election for Nov. 4.

Declining Terms of Trade: Why Only The Most Efficient Will Survive The Cost Price Squeeze.

Written by Neeraj Nandurdikar. Posted in Enhanced Energy Recovery & Oil Industry Blog

Nandurdikar Neeraj by Neeraj Nandurdikar

This paper was presented at the OTC Conference Houston, Tx May 2014.

 Neeraj Nandurdikar works for Independent Project Analysis and as a consultant to executives in Fortune 500 companies in Oil and Gas sector. His role is to help executives improve their capital projects performance and manage their capital projects portfolio with focus on very large projects.

He has conducted due diligence work, risk assessment and risk mitigation on project systems, organizational structure reviews and quantified analysis of risks to project budgets, schedule, and production performance. 

Mr. Nandurikar has worked with senior management in oil and gas companies on devising country entry strategies, building portfolio management tools, stakeholder management workshops, root cause analysis.

He has also been involved in business development, relationship building, and P/L experience of over 8 eight years in a business that has delivered more than 10 percent growth y-o-y. His academic qualifications are: MBA Wharton School, Univ of Pennsylvania; MSc Petroleum Engineering Univ of Tulsa; BSc Maharashtra Institute of Technology.


 

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State's oil and gas regulators to investigate whether injection wells induce seismic events

Written by Nick Snow. OGJ Washington Editor. Posted in Enhanced Energy Recovery & Oil Industry Blog

http://www.ogj.com/articles/2014/04/states-to-investigate-whether-injection-wells-induce-seismic-events.html


Nick-Snow-OJC-Journal-EditorWASHINGTON, DC, Apr. 30, 2014

 

By Nick Snow. OGJ Washington Editor

 


 State oil and gas regulators and geologic surveys are forming a working group with the Interstate Oil & Gas Conservation Commission and Groundwater Protection Council to examine whether a relationship exists between injection wells and seismic events in several states, IOGCC said on Apr. 29.

It said the US Environmental Protection Agency estimates there are nearly 150,000 Class II Underground Injection Control (UIC) wells across the country the oil and gas industry uses to dispose of produced water or enhance resource recovery.

State agencies participating in the Induced Seismicity by Injection Work Group will collaborate and share science, research, and practical experience to equip the states with the best decision making tools to evaluate the possible connections between seismic events and injection wells, minimize risk, and enhance appropriate readiness when seismic events occur, according to IOGCC.

Participating states aim to include additional stakeholders as they discuss that issue, including industry, environmental groups, and the scientific community, the Oklahoma City-based association of state oil and gas regulators said.

Repsol drills dry hole offshore Trinidad and Tobago

Written by Curtis Williams. Posted in Enhanced Energy Recovery & Oil Industry Blog


http://www.ogj.com/articles/2014/04/repsol-drills-dry-hole-offshore-trinidad-and-tobago.html



Curtis Williams17 April 2014.  Port of Spain.

 

By Curtis Williams. Oil & Gas Journal Correspondent.

Oil & Gas Journal, PenWell Media; Tulsa, Oklahoma.


 Spain’s Repsol has drilled a dry hole with its Pinter One offshore Trinidad and Tobago’s east coast. The dry hole represents a major failure for the company, which has been trying to boost its falling crude production from its Teak Samman and Pouis acreage.*

Repsol began drilling Pinter One on Dec. 26, 2013, and wrapped up the well in February after reaching its total depth of 13,000 ft.

The failure also has major implications for the announced discovery of 32 million bbl of recoverable reserves by Bayfield Energy, which has since been sold to Trinity Exploration & Production Co.

Bayfield in 2012 announced on the London Stock Exchange that it made a discovery with its EG8 well on Galeota Block and that the discovery extends into Repsol’s acreage. EG8 was deviated from its surface location towards the southwest in order to target the crestal area of mapped horizons in the prospective EG2/EG5 Central fault block.

The well encountered 10 hydrocarbon-bearing sandstone reservoir zones between 1,364 ft and 6,000 ft below mean sea level. Preliminary analysis showed the vertical thickness of net hydrocarbon-bearing sands. It was drilled to a total depth of 8,133 ft with well sands totals of 421 ft, of which 352 ft is gas and 69 ft is oil.

Trinity Chief Executive Officer Joel Monty Pemberton told OGJ that while his company was aware of the failure, it was not sure to what extent the size of the company’s discovery has been negatively impacted. He said it was logical to expect it meant the size of the discovery will have to be downgraded, but he could not tell without the information from the well.


* Unamed sources advise EER of estimates that some $10,000,000 to $15,000,000 were spent on this venture offshore from Trinidad and Tobago.


 


North American Shale Plays Driving Growth at the Expense of Returns among Tier II Independents

Written by Chris DeLucia, Senior Analyst, IHS Energy. Posted in Enhanced Energy Recovery & Oil Industry Blog

http://unconventionalenergy.blogs.ihs.com/2014/04/08/north-american-shale-plays-driving-growth-at-the-expense-of-returns-among-tier-ii-independents/?blogsub=confirming#subscribe-blog


 Chris DeLuciaPosted by Chris DeLucia, Senior Analyst, IHS Energy. April 8, 2014
Chris DeLucia is a Senior Analyst with the IHS Energy Upstream Competition Service in Washington, DC, where he focuses on company strategy and trends within the upstream oil and gas sector. Prior to joining IHS, he spent several years working within the areas of investment banking and economics & capital markets research. Chris holds a BA in Economics and International Studies from Colby College, and an MPA in International Energy Policy Management from the Columbia University School of International and Public Affairs.


 

Tier II independents are focusing on North America - unconventionals production which will rise to 50% of their total output by about 2020—compared with less than 35% of total current production. This focus has led to declining returns on capital employed from 21% to 10% in the last 4 years.


In contrast with the more diversified upstream strategies pursued by the Global Players and larger Tier I Independents (E&P companies with the potential to generate >1 mmboe/d in production), the North America-focused companies within the smaller Tier II Independents peer group — BHP Billiton, Hess Corporation, Marathon Oil, Murphy Oil, Noble Energy, and Talisman Energy — share the common theme of increased portfolio concentration within North America. Production from the US and Canada accounted for more than 50% of combined global volumes for the peer group in 2013, versus ~35% as recently as 2010.


This portfolio concentration is the result of an increased focus on US and Canadian onshore unconventional resource plays, a strategy which has driven output growth in recent years. This trend is expected to continue, with IHS Energy’s Upstream Competition Service forecasting a ~6% production CAGR for the combined peer group over the next five years (compared with ~4.5% during the prior five-year period.)


The other side of this coin is the increasing peer group exposure to the challenging oil and gas market fundamentals in North America—reflected in continued low gas prices and substantial, cyclical discounts in regional crude oil prices relative to Brent. The result has been shrinking returns, with upstream ROCE (on a 3-year rolling basis) among the peer group declining from 21% in 2009 to less than 10% in 2013. This returns challenge is compounded by increased pressure from shareholders to improve returns and increase distributions to equity investors.


enhanced-oil-recover8As a result, several of these companies have identified the need to develop core areas in addition to North America, while also pursuing divestitures or farm-downs of interests in non-core areas in order to focus on higher-return and strategically important assets. The primary challenge for the Tier II peer group lies in determining the appropriate portfolio balance between the growth prospects provided by US and Canadian unconventionals, and the potentially stronger returns attainable outside the North America energy market.