Tuesday

Active rigs: 183

RBN Energy: California natural gas demand in the state's post-nuclear era.

The June 2013 decision by Southern California Edison (SCE) to permanently shut down its San Onofre Nuclear Generation Station (SONGS)—the largest power generator in the region—got the attention of the natural gas industry, and for good reason.  Natural gas interests view gas-fired generation as the logical replacement for the now-gone 2,200 MW nuclear capacity, but many other forces are at work. In this two-part series we examine southern California’s electricity cunundrum, and how big a part natural gas is likely to play in keeping the lights and air conditioning on and the pool pumps pumping.

The two-unit, 2,200-MW SONGS facility for years was a linchpin in the region’s electric grid. A relatively low-cost, around-the-clock generator at a pivotal location, San Onofre provided critical voltage support—an electrical engineer’s way of saying it kept the grid on an even keel. Natural gas interests expect SONGS capacity to be replaced by gas fired generation. And gas will surely have a significant role in the electricity future of the Los Angeles Basin, San Diego, and California as a whole. But because of state policies and Federal rules, among other things, utilities and merchant power companies may well end up consuming less gas than they do now, and commercial and industrial firms may use more.

Rigzone is reporting: October 22, 2013: Ultra pays $650 million for 49,000 acres in the Uinta that currently has 38 producing wells, 4,000 bopd. $/acres = $13,265/acre. Ultra has been acquiring leasehold interest in  Pinedale since 1997 and is now the largest interest owner in the field.

The oil acquisition fits the company’s strategy of profitable growth with exceptional returns at oil prices well below $75 per barrel.

Rigzone is reporting: massive spending projected as industry develops US shale. This seems to be at variance with what Algore said recently, suggesting that so much money has poured into fossil fuel, we are looking at a "carbon bubble." The only bubble I see, is Algore's bubblehead.

Now that the land grab of U.S. shale oil and natural gas acreage has ended, the oil and gas industry faces a new question – how it will fund the commercialization of unconventional resources. Cash flow issues have already been seen among oil and gas companies seeking to develop shale, raising questions about financing and how companies will handle spending, according to a panel of industry experts at the Bloomberg Oil & Gas Conference Thursday in Houston.

The development of shale resources might prove the exception to the ability of companies to raise funds in capital markets, said Gray. Estimates of the amount of capital needed range from $2 trillion to $5 trillion, but the market capital of shale participants is less than $1 trillion. Companies currently are needing to go to capital markets for $40 to $50 billion a year of capital now and have been spending beyond cash flow, but some suggestions indicate that spending may double or triple. Fundamentally, the industry could face a $2 trillion gap in funding.

Keep 'em until spring: Reuters via Rigzone is reporting -- Dutch government asks sea law tribunal to release the Greenpeace pirates. Keep 'em until the spring. The spring of 2020.

Algore should be presenting an award later this year to the US oil and gas industry for reducing CO2 emissions by another 3.8% this year.