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2015-01-11 14:40:00

2015: DROP E&P SPENDING

2015: DROP E&P SPENDING

Global capital expenditures for oil and gas exploration and production projects are expected to drop 17% to $571 billion in 2015, according to Cowen and Co.'s annual study of 476 oil and gas companies' E&P capex budgets. The study assumes an average West Texas Intermediate price of $70/bbl.

The decline represents the third largest in global expenditures since 1985. The largest was the 33% plunge in 1986 when oil prices plunged below $10/bbl.

The study acknowledges, however, that current crude prices are hovering around $50/bbl, indicating there is significant downside risk to those projections. If oil prices average $60/bbl, US E&P spending would drop 30-35%.

Based upon the expectation of $70/bbl WTI, international E&P spending is expected to decline at least 15%, while spending under a $55-60/bbl average price could decline by as much as 20%. International E&P spending typically holds up for longer and declines by less than North American spending during oil spending down cycles, the study notes.

Spending is expected to hold up in the Middle East, where small increases will come from Abu Dhabi National Oil Co. (ADNOC), Kuwait Oil Co., Saudi Aramco, and Qatar Petroleum.

The seven supermajors are estimated to be down by 9-15% due in part to the completion of or reduced spending on LNG projects.

Based on the expectation of $70/bbl WTI, 186 companies that were surveyed are planning an average decline in expenditures in the US of 22% to $119 billion. US declines are likely to be the most severe in vertical drilling, in some of the secondary plays, and on the periphery of some basins, the study says.

Drilling in the cores of the Eagle Ford, Permian, and Bakken will hold up surprisingly well, according to the study. Its model, however, indicates that in the event of a 20% drop in spending that the rig count could decline 550 units from the fourth quarter average. The study also anticipates completions to fare better than drilling in 2015.

US companies with the biggest budget cuts in 2015 compared with 2014 are SandRidge Energy Inc. at 63%, Whiting Petroleum Corp. at 41%, Continental Resources Inc. at 40%.

In Canada, meanwhile, 110 companies surveyed are estimating a decline of 24% in the region. Encana Corp. is expected to slash its spending 47% from 2014, while Husky Energy Inc. is expected to reduce its budget by 37%.

ogj.com

Tags: OIL, GAS, PRICES, EXPLORATION, PRODUCTION

Chronicle:

2015: DROP E&P SPENDING
2018, July, 16, 10:35:00

CHINA'S INVESTMENT FOR NIGERIA: $14+3 BLN

AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.

2015: DROP E&P SPENDING
2018, July, 16, 10:30:00

LIBYA'S OIL DOWN 160 TBD

REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.

2015: DROP E&P SPENDING
2018, July, 16, 10:25:00

BAHRAIN'S GDP UP 3.2%

IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.

2015: DROP E&P SPENDING
2018, July, 16, 10:20:00

NIGERIA'S GDP UP 2%

IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.

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