Mexico To Delay / Cancel Major Deep Water Exploration Projects -- February 18, 2015

Reporting tomorrow:
California Resources Corp (CRC), OXY USA spin-off, forecast 7 cents, before market opens:
Cheniere Energy (LNG), forecast, a 26-cent loss; after market close;
Denbury (DNR), forecast 23 cents, before market opens;
Linn Energy (LINE), forecast 6 cents, before market opens;
Nobel Energy (NBL), forecast 34 cents; before market opens;

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Mexico To Cancel / Delay Deep-Sea Projects

When the slump in oil prices hit, I said the following would be most vulnerable:

• North Sea (off-shore)
• ultra-deepwater ventures in the Atlantic off Brazil and Angola (off-shore)
• Canadian oil sands
• the Arctic

It turns out "stripper wells" needed to be added to that list. Be that as it may, it was pretty obvious that deep-sea projects would be most vulnerable. Today, Reuters via Rigzone is reporting:

Mexico's state-run oil company Pemex has postponed some deep water exploration projects and will cut jobs as part of a raft of planned capital delays due to slumping crude prices.

Pemex said on Monday it would delay execution of capital projects including major refinery reconfigurations and ultra-low sulfur fuel projects because of a sharp fall in oil prices.

"There are ... some exploration projects in deep waters, those that carry higher risks, well if we haven't started them then they will be delayed," Lozoya told local radio.

As noted before,

"With all the big oil projects that are being delayed or canceled, 2017, and possibly 2016, is going to be a huge year for oil investors."

My hunch is that in 2016 / 2017 there will be a relative shortage of oil with these big projects delayed or canceled.

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Update On Talisman / Repsol Deal

Previously posted, this is an update being reported by Rigzone: 

Talisman Energy Inc common shareholders on Wednesday voted to approve an $8.3 billion offer for the Canadian oil and gas producer from Repsol SA, clearing the way for the Spanish company to acquire Talisman's worldwide operations. 

Talisman common and preferred shareholders both voted nearly unanimously in favor of Repsol's December 16, 2014, offer to pay $8 per share for the company, a 56 percent premium to the day-prior closing price for the company on the Toronto Stock Exchange. 

Repsol will also assume Talisman's $4.7 billion long-term debt. Though the deal still requires regulatory approval, expected by mid-year, the vote is a crucial step towards completing Repsol's acquisition of Canada's No.5 independent oil producer.

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Dutch Earthquakes

Posted several times previously, this is simply an update on something that fascinates me for some reason. Being reported by Reuters at Rigzone, also:

Royal Dutch Shell, Exxon Mobil Corp and the Dutch government ignored the danger of earthquakes caused by gas extraction at the massive Groningen gas field for decades, the Dutch Safety Board said on Wednesday.

Its critical report is one of several recommendations to the government of Liberal Party Prime Minister Mark Rutte in coming months about production levels at the Groningen field.

The issue has become a political flashpoint ahead of local elections. The correlation between gas extraction and earthquakes was clear in 1993, but "the risks to residents were not recognised" until 2013, the report said.

The board's year-long inquiry concluded that the Economy Ministry, State Supervision of Mines and NAM, the Shell-Exxon Mobil joint venture which operates the gas field, worked collectively to maximise production.

"The parties concerned considered the safety risk to the population to be negligible and thus disregarded the uncertainties surrounding this risk assessment," it said. They "failed to act with due care for citizen safety in Groningen."

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MRO Cuts CAPEX A Second Time

Reuters via Rigzone is reporting: 

Marathon Oil Corp on Wednesday cut its 2015 budget by another 20 percent to $3.5 billion and said its fourth-quarter profit rose, boosted by a gain related to the sale of oil and gas properties in Angola and Norway.

Profit in the quarter was $926 million, or $1.37 per share, compared with $375 million, or 54 cents in the year-ago period.

Marathon, which previously said it was slashing 2015 spending about 20 percent in December, said it would make a second budget cut of another 20 percent.