Staggering -- July 10, 2015

This is really quite staggering. Earlier the North Dakota Director's Cut was posted showing that despite all the activity slowdown, crude oil production in North Dakota increased almost 3% over the previous month.

Now, Rigzone is reporting that Texas has increased its oil production by 16% month-over-month:

While crude oil production in the U.S. seems to have leveled off, oil production in Texas continues to move forward at a brisk pace.

The Energy Information Administration (EIA) said that US oil production declined slightly by 0.5 percent or 50,000 barrels per day (bpd) in May from the prior month to an average of 9.7 million bpd.

In Texas, however, crude oil production increased 16 percent in May to 107 million barrels (3.6 million bpd) from 92 million barrels (3.1 million bpd) in May 2014, according the Texas Petro Index.

The surplus of oil in Texas and worldwide has created a softening of price. Prices declined on the New York Mercantile Exchange (NYMEX) on July 7 to $51.98 the lowest price since April 13 and a 17 percent drop since its 2015 high of $62.58 in May. The six-year low was set on March 18 at $42.03.

The recently release Texas Petro Index shows that crude oil prices averaged a decline of 43 percent in May compared to the same month last year. Crude oil prices averaged $55.95 in May and $98.32 in May 2014.

With the decline in price come the decline in the rig count, drilling permits, oil completions and even employment. The rig count is down 58 percent with just 375 rigs running in Texas in May. Drilling permits were off 61 percent, oil well completions were down 36 percent, and employment declined 3 percent.

Imagine what crude oil production could be -- if the price was right?

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Pioneer Isn't Waiting For A Better Price

Reuters over at Rigzone is reporting:

U.S. shale exploration and production company Pioneer Natural Resources Co said on Wednesday it is increasing drilling activity in Texas following the sale of its stake in an Eagle Ford shale pipeline and processing business.

The Dallas company's optimism stands out in a market unnerved by a 15 percent drop in crude prices since late June. Pioneer Chief Executive Scott Sheffield told Reuters in April that his company would start adding rigs this month if market conditions warranted more drilling.

North Dakota oil producer WPX Energy Inc said last month it would add two drilling rigs later this year, a decision that is unchanged despite the recent crude oil price drop.

Half a dozen or so other companies in the crowded U.S. shale industry have indicated they may add rigs but have so far not made definite moves as they wait to see where crude prices settle.

Pioneer said it has already added two drilling rigs in the Permian Basin this month and plans to add an average of two per month during the balance of the year as long as the crude oil price "remains constructive."

The increased drilling is not expected to have a big impact on 2015 production, which had been forecast to grow more than 10 percent, but it will push capital spending up $350 million to $2.2 billion, the company said. More rigs are planned for early next year.

Pioneer said it plans to add eight horizontal rigs in Texas shale basins, bringing the total rig count to 36, or the same number it had before the price of oil collapsed by more than half.

Pioneer, which owned 50.1 percent of the Eagle Ford pipeline and processing business before the sale, said its share of the proceeds from Enterprise Product Partners LP is $530 million at closing and about $500 million a year after closing.

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Also Staggering: Petrobras Announces $58 Billion Asset Sale

Bloomberg at Rigzone is reporting:

Petroleo Brasileiro SA’s $58 billion asset sale proposal would be unprecedented for the oil industry -- and for good reason. It may be impossible to pull off.

The plan, released last week by the Brazilian state-run oil company known as Petrobras, calls for $15.1 billion in divestments by the end of 2016 and an additional $42.6 billion by 2018, part of which will come from restructuring.

The last company to come close to Petrobras’s target was BP Plc, when it sold more than $30 billion in a downsizing strategy after the Deepwater Horizon oil spill.

Chief Executive Officer Aldemir Bendine’s strategy is to cut debt without abandoning plans to develop oil discoveries 200 miles off the coast of Rio de Janeiro. Selling assets would help Petrobras avoid an alternate debt-reduction strategy that frightens shareholders -- a dilutive share offering while the stock is near its lowest in a decade.

But the assets are coming to market as a collapse in oil prices weighs on asset values and the financial wherewithal of would-be buyers.

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Where Are The Chinese?

Rigzone explains the recent "absence" of the Chinese in North American energy arena, but the tea leaves suggest they are coming back ... and it could be big.