Masters Of War

Come you masters of war You that build all the guns You that build the death planes You that build all the bombs You that hide behind walls You that hide behind desks I just want you to know I can see through your masks. You that never done nothin' But build to destroy You play with my world Like it's your little toy You put a gun in my hand And you hide from my eyes And you turn and run farther When the fast bullets fly. Like Judas of old You lie and deceive A world war can be won You want me to believe But I see through your eyes And I see through your brain Like I see through the water That runs down my drain. You fasten all the triggers For the others to fire Then you set back and watch When the death count gets higher You hide in your mansion' As young people's blood Flows out of their bodies And is buried in the mud. You've thrown the worst fear That can ever be hurled Fear to bring children Into the world For threatening my baby Unborn and unnamed You ain't worth the blood That runs in your veins. How much do I know To talk out of turn You might say that I'm young You might say I'm unlearned But there's one thing I know Though I'm younger than you That even Jesus would never Forgive what you do. Let me ask you one question Is your money that good Will it buy you forgiveness Do you think that it could I think you will find When your death takes its toll All the money you made Will never buy back your soul. And I hope that you die And your death'll come soon I will follow your casket In the pale afternoon And I'll watch while you're lowered Down to your deathbed And I'll stand over your grave 'Til I'm sure that you're dead.------- Bob Dylan 1963

Sunday, August 30, 2015

oil prices rise 17% on short covering; the frackers are still zombies anyway…

the movement of oil prices was again the overriding story affecting the fracking patch this past week, as they fell by more than 6% from last week on Monday, hit the same 6 and a half year lows on Wednesday, only to rise over 17% over Thursday and Friday to close higher for the first time in the last 9 weeks...after falling nearly 5% to $40.45 a barrel last week, oil prices crashed with the rest of the global markets on Monday, with the near term contract briefly trading with a 37 handle before steadying and closing at $38.24...oil prices then recovered Tuesday when the western stock markets rallied, closing at $39.31, only to slip back to close at $38.60 on Wednesday...with word of a Chinese stimulus and rising global markets continuing on Thursday, oil prices jumped 10% as "the shorts", or those who had sold oil that they didn't own earlier in the week, were forced to cover their positions (ie, buy oil to cover what they sold) at increasingly higher prices...the short covering rally continued on Friday, adding another 6% to oil prices, as the media attributed the price increase to Saudi military action in Yemen and a tropical storm approaching Florida as a threat to the Gulf of Mexico...

so you can all see what that price swing looked like in relationship to the recent collapse in oil prices, we'll include a chart below that tracks the price of the current oil contract on the NY Mercantile Exchange over the past 3 months…at the beginning of that period, you can see that oil had been trading around $60 a barrel, a price it had reached and stabilized at in early April, after dropping into the 40s in both January and March, which precipitated the shutdown of half the oil rigs that had been working in the US before the OPEC meeting that started the oil price crash...you can see that the $60 price level broke down in early July, when a confluence of issues in Europe and Asia made a global slowdown appear likely, and that oil prices have fallen steadily since...while we're looking at that, also note the little red and green rods at the bottom of the chart, which show the volume of trading on up (green) or down (red) days for each day for this contract (for delivery of oil in October)...notice that the volume of oil contracts traded spiked in early August, indicating a large number of contracts changing hands near the $45 a barrel price...that was the same price that oil had bottomed at in January and March, and apparently a lot of traders were betting that the same would happen here in August, but they were overwhelmed by those selling this paper oil...

August 29 2015 oil prices

now, although the media will attribute every move in the price of oil to some fundamental change, such as a buildup of oil inventories or a tropical storm threatening oil platforms in the Gulf, it seems pretty clear that the recent action on oil prices has largely been driven by bets placed by traders, which include those working the trading desks in the banks and commodity houses, rather than any fundamental change in the physical commodity or the demand for it....according to data from the Commodity Futures Trading Commission and NYMEX, hedge funds had accumulated one of the largest short positions in U.S. crude on record over the last two months, selling the equivalent of almost 160 million barrels of oil that they didn't own, in the hopes that they could buy oil back cheaper at some date in the future and deliver on their commitment to sell with a profit...once the price of oil started rising with the other global markets, they were on the wrong side of that trade and forced to buy oil to cover their positions, driving the price up farther than it would have otherwise risen...this short covering may not be over yet (there's no clear data on current positions) so we may see another few days or even weeks of volatile oil prices before they settle into a price range that is more representative of supply and demand factors rather than of gambling strategies...

nonetheless, even though the current oil prices are driven by market gamblers, it is those prices that the drillers must sell their oil at and the refineries must buy theirs at, except insofar as either drillers or users had already entered into a contract to buy or sell oil at an earlier price...at these prices, there is no doubt that the frackers are losing money on each barrel of oil that they produce, once all their overhead and expenses are accounted for...but stopping drilling and/or stopping production is not an option for them; they need to keep pumping out oil and selling it at whatever price they can get just to pay the interest on their debts; ie, whatever bank loans and or bond issues they had floated to finance their operations...at least 10 of them have gone bankrupt already, no doubt most of the rest of them are already zombies, virtually dead but still drilling and pumping out oil nonetheless...when we looked at 2nd quarter reports a few weeks back, most were already posting losses with oil at $60 a barrel; no doubt they're all operating in the red with oil prices at $45...

furthermore, their finances can only get worse from here...data compiled by Bloomberg this week indicates that the oil industry has $550 billion in bonds and loans that are due for repayment over the next five years, with bonds from 168 of those companies in North America, Europe and Asia now yielding more than 10%...of that, $72 billion in oil-related debt is maturing this year, $85 billion is due in 2016 and $129 billion matures in 2017...many of those bonds were originally sold to yield 3% or 4% when the oil patch was booming; so when they come due and must be reissued, the interest that they're paying on their bond principal will triple...in addition, many have borrowed money from banks based on the value of their recoverable reserves when last reviewed in October, when oil prices were still above $80 a barrel...if oil prices are still this low when the banks do their nextreview of oil company economically recoverable reserves two months from now, their bank lines of credit will be withdrawn...


it appears there was little in the oil production or throughput stats that influenced this week's price swings, because although a few key metrics reversed last week's changes, they generally moved back into the range we'd seen them in all summer, when oil prices first began to fall...US field production of crude oil fell slightly, from 9,348,000 barrels per day in the week ending August 14th to 9,337,000 barrels per day in the week ending August 21st...although that's about 3% off the early June peak, it's still 8.9% higher than our output during the same week last year, when our overproduction first started putting downward pressure on oil prices...meanwhile, our imports of crude oil fell by 839,000 barrels per day from their 18 week high of last week to 7,199,000 barrels per day in the week ending August 21, which brought the 4 week average of imports down to 7.5 million barrels per day, 1.7% below the same four-week period last year...with the Whiting Indiana refinery still down, US refinery inputs of crude oil fell for the 3rd week in a row, dropping from 16,775,000 barrels per day in the week of August 14th to 16,658,000 barrels per day in the current report; still, that's 1.5% higher than the 16,418,000 barrel per day refinery inputs of the same week in August last year, so total output isn't suffering ...the weekly Petroleum Status Report (62 pp pdf) reports our refineries were operating at 94.5% of their operable capacity last week, which was down from the post recession record 96.1% of their capacity they were running at in the last week of July...

with production and imports down much more than refineries operations, oil companies made up the difference by drawing oil out of storage; our commercial crude oil inventories in storage, which doesn't include the federal Strategic Petroleum Reserve, fell from 456,213,000 barrels on August 14th to 450,761,000 barrels as of August 21st...that's still more than 24.3% higher than the 362,545,000 barrels of crude we had stored in the same week last year, and as you  all know by now, the highest for this time of years in the 80 years that such records have been kept, a span that had never seen more than 400 million barrels of oil in storage before this year....

the price of oil has yet to put a major dent in the number of rigs the frackers have been operating....although Baker Hughes reported that the total rig count fell by 8 rigs to 877 in the week ending August 28th, the largest drop in their count since June 12th, it was gas rigs that were idled; total oil rigs rose for the 6th week in a row, as rigs drilling for oil increased from 674 last week to 675 this week, while rigs drilling for gas fell by 9 to 202....active oil rigs are now up by 37 from the 5 year low of 628 which they fell to on June 26th, but down 900 from the year ago count of 1575 and down 934 from the high of 1609 hit on October 10th of last year, while active gas rigs are down by 136 from a year ago and down by 154 from the recent peak of 356 gas rigs that were operating during the week of November 11th....

two more offshore platforms were idled this week, after 6 were shut down over the last two weeks, leaving 30 active, down from 66 offshore rigs that were operating a year ago....a net of 5 horizontal rigs were idled this week, bringing the fracking rig total down to 672, down from 1330 a year ago....including those offshore, 5 vertical well drillers were stacked, leaving 125 vertical rigs operating, down from 374 in the same week last year...meanwhile, 2 additional directional well drillers were put into operation, bringing the directional rig count up to 80, which was still down by 130 from the 210 directional rigs in use a year ago...

the major shale basins saw little change in total activity this week, as only the Eagle Ford in southeast Texas had two rigs idled, which dropped the count in that basin to 97, down from 203 a year earlier...on the other side of the state, drillers added 2 rigs in the Permian basin, which now has 255, down from 557 a year ago...but a total of 3 rigs were added in Texas oil & gas districts 5,and 10, which aren't demarcated  by a major shale basin, so Texas ended the week up 3 rigs to 386, but still down from 900 rigs a year ago...outside of Texas, only 3 of the major shale basins tracked by Baker Hughes saw changes this week, with the Marcellus and Niobrara each dropping a rig, and the Haynesville adding one...

other than Texas, no state saw their rig count increase...the Louisiana rig count was down 6 to 71, which was also down from 117 a year ago...that included the 2 offshore, 2 on southern inland lakes, and 3 more on land in the southern part of the state, while one land rig was added in the north...other states shedding rigs included New Mexico, down 3 to 50, and down from 94 a year ago, Colorado, down 1 to 36 and down from 75 a year ago, Oklahoma, down 1 to 105, and down from 212 rigs a year ago, and Pennsylvania, down 1 to 35, and down from 55 a year ago...with 19 rigs, the rig count in Ohio was unchanged, as was the count in other states that weren't mentioned here...


(note: more fracking related news from this week can be found here)

Time Lapse of Theft of Indigenous Land

View post on imgur.com

Wednesday, August 26, 2015

Sunday, August 23, 2015

frackers push to end the ban on oil exports as imports hit high for the year (w/ Ohio initiatives update)

you'll likely recall that last week we reported that Ohio Secretary of State Jon Husted had ruled that charter government proposals in Athens, Fulton and Medina counties could not appear on the November ballot because he felt they were designed to circumvent state law...apparently, his decision isn't the end of the story, because this week a handful of citizens from those 3 counties, backed by the Community Environmental Legal Defense Fund, sued Husted in his official capacity as secretary of state, charging that he can't invalidate petitions residents had signed “because of his particular quibbles over their content and legality”...so the question of these charter government ballot initiatives now goes to the Ohio Supreme court to be decided, where it would seem the odds are still stacked against them; as you'll recall, in the Monroe Falls case brought by Beck Energy, this same Supreme court ruled that local ordinances related to oil and gas drilling in the city were preempted by the 2004 state law that turned the power to regulate gas and oil drilling in the state over to the ODNR, a 4-3 decision which dissenting Justice William M. O’Neill said "was bought and paid for in campaign contributions they received" from the drilling industry...so we shouldn't be surprised to see the court to again rule in favor of the industry that has funded them...

one point of clarification on those initiatives: in talking about these three county charter government proposals, i had assumed they were all brought about for the same reason that Athens county initiated theirs; ie, in order to be able to zone against fracking and the out of state waste water injection wells that Athens county has been inundated with....however, the issue being addressed by Fulton and Medina county is different, in that they want local zoning control over the proposed Nexus pipeline, which we've also written about before...an article this week in the Toledo Blade clarifies that for the Fulton county issue, clearly making it a fight against gas pipelines....Medina county citizens, meanwhile, are engaged in an ill-advised campaign to have the Nexus route moved on to their neighbors to the south...that pipeline should be opposed unconditionally, and politically on the grounds that it is not needed to supply gas to anyone in Ohio, and is only being built to enrich the profits of the Houston company, who would be using it to export Ohio and Pennsylvania natural gas to Canada...


the total count of rigs drilling for gas and oil was little changed once again this past week, as Baker Hughes reported that a net of one rig was added in the week ending August 21st, as rigs drilling for oil increased by 2 to 674, working gas rigs were unchanged at 211, the last miscellaneous rig was shut down...but there was once again a major change in offshore rigs, as 3 were pulled from the Gulf of Mexico this week after 4 were added in the first week of August and 3 were pulled last week...that brings the offshore rig count down to 32, half of the 64 that were drilling offshore during the 3rd week of August a year ago...vertical rigs increased by 3 at the expense of 3 directional rigs, while one horizontal driller was added...that leaves the vertical rig count at 130, down from 366 a year ago, the horizontal rig count at 677, down from last year's 1321, and the directional count at 78, down from the 209 directional rigs that were in use last August 21st...

while the two largest Texas shale basins, the Permian and the Eagle Ford, both saw rig increases over recent weeks, 2 rigs were pulled from both of those basins this week, leaving 253 in the Permian, down from 555 a year ago, and 99 in the Eagle Ford, down from 200 last year...the Barnett shale of north central Texas saw a reduction of 3 rigs, leaving 7, down from 26 that were drilling in that basin a year ago...that left Texas with 383 rigs, down a net 6 for the week, and down 505 from the 888 rigs that were working Texas a year ago...elsewhere, 2 rigs were pulled from the Utica shale, leaving 20, down from 44 last year, and one each were pulled from the Marcellus and the Niobrara chalk, leaving those basins with 52 and 31 rigs respectively, down from 76 and 62 a year ago...meanwhile, 3 rigs were added in the Williston basin, bringing that count up to 73, down from 192 last year, and two rigs were added in the Cana Woodford, the only basin to see a year over year increase, now at 39, up from 33 a year earlier...other than Texas, states with reduced rig counts included Pennsylvania, down 2 to 36, Colorado, down 1 to 37, Louisiana down 1 to 77, and West Virginia, down 1 to 17...meanwhile North Dakota and Oklahoma each added 3 rigs. bringing those totals to 72 and 106 respectively, while Wyoming added 1 to total 25 and Alaska, California, and Kansas each added a single rig, bringing all three states up to 13 active rigs each...

US crude oil output fell this week, but our oil imports were the highest since early April, and with a major refinery idled, that unexpectedly led to the largest increase in our inventories of oil in storage in 4 months, precipitating yet a further crash in the price of oil...US field production of crude oil fell for the third week in a row in the week ending August 14th, from 9,395,000 barrels per day last week to 9,348,000 barrels per day in this week's report...while that was down 2.7% from the modern record of 9,610,000 barrels per day set in the week ending June 5th, it was still 9.6% higher than our output of 8,556,000 barrels per day in the same week last year...our imports of crude oil, meanwhile, rose for the 3rd week in a row, jumping from 7,573,000 barrels per day in the week ending August 7th to 8,038,000 barrels per day in the current report...while that's 2.4% more than the same week last year, our 7.6 million barrels per day average crude imports of the last 4 weeks is still 0.9% lower than the same 4 week period of last year...

however, even with the increased oil supply brought about by that large increase in imports, that oil was not being put to use to the same degree as last week...due in large part to the unexpected August 8 outage at the BP refinery in Whiting, Indiana, the largest BP refinery and the largest in the US Midwest, U.S. crude oil refinery inputs dropped to 16,775,000 barrels per day, from the 17,029,000 barrel per day level of the week ending August 7th...so with greater supply and less refinery throughput, our crude oil inventories in storage rose by 2,620,000 barrels to 456,213,000 barrels in week ended August 14th, 24.3% more oil than the 367,019 ,000 barrels we had stored at the end of the 2nd week of August last year...that was, of course, more than was ever stored anytime in August in the 80 years that the EIA has records for, which had never seen the 400 million barrel inventory level breached before this year...that news of even higher inventories during the summer driving season when inventories usually fall sent oil prices down by 4.8% to a six and a half year low at $40.57 a barrel on Wednesday, and although the expiring September contract price inched up on Thursday on news of the first hurricane of the Atlantic season, oil prices for October delivery crashed again on Friday in the midst of a global market panic, briefly slipping below $40 a barrel, before closing the week at $40.45, capping the longest weekly losing streak for oil prices in 29 years...

so, if we've got plenty of oil stored, and with at least two refineries operating below capacity, why do we continue to import near fracking-era record amounts of crude oil?  one reason is the contango trade that we've talked about in the past, wherein contracts for oil to be delivered in the future are at a price somewhat higher than the cost of buying oil now, such that it pays for speculators to buy oil and pay for its storage, and enter into a contract to sell it back at a higher price in the future...at one point last week, the contract for oil to be delivered in December was more than a dollar a barrel higher than the current price, meaning that a speculator could buy oil at today's price, pay the fees to have it stored at Cushing or elsewhere, and sell it back in December with a clear profit...but as we should all know, for every contract there has to be a counterparty, and for everyone who's buying oil now with a contract to sell it in December, there was a seller of that oil at today's price and a someone else buying a contract to take delivery of that oil for a dollar more a barrel in December...so for every one who's trading oil like this, there is someone on the other side of those trades, be it a bank, commodities house, or an oil company, taking the other side of those contracts, and effectively betting against the contango trader...they both can't be right, and those who bet on higher prices in March and a month ago have since lost their shirts...

another reason for continued high imports of oil is that we're exporting more refined products than ever before...in the 2nd week of August, our total exports of refined petroleum products averaged 3,884,000 barrels per day, up 10.6% from the 3,512,000 barrels per day we were exporting in the same week last year...but that's also more than double the 1,851,000 barrels per day of refined products we were exporting in August 2009, and more than quadruple the 964,000 barrels per day of refined products we were exporting in August of 2004...we're also exporting more crude oil too, mostly mostly to Canada, where the lighter grades of distillates are blended with tar from the oil sands to produce diluted bitumen, or dilbit, which can then be delivered by pipeline...on a monthly basis, our total exports of crude and petroleum products hit a record 4,943,000 barrels per day in April, more than double the 2,432,000 total exports of April five years earlier...

but the week just ended was somewhat an anomaly, in that with the aforementioned refinery constraints, our total exports did not rise, and our total imports of refined products rose to 2,614,000 barrels per day, up from 1,927,000 barrels per day of refined product we imported just two weeks ago ...that was only the 2nd time in the past two years wherein our refined product imports topped 2.6 million barrels per day, and as a result our total imports of crude oil and petroleum products rose to 10,652,000 barrels per day, for our highest weekly total imports this year...subtracting the 4,460,000 barrels per day of crude and products that we exported this week means our net petroleum and product deficit was at 6,192,000 barrels per day for the week, which was also the greatest excess of crude and products imports over exports that we've seen this year...

but even with all the oil and products that we're importing, there's been an ongoing push by the frackers and their supporters to end the federal ban on crude oil exports, which was instituted in 1975, at a time when our production started to slip and domestic shortages developed...the reason the oil industry wants to export crude, even though we're importing so much, is simple; international oil prices have been running between $5 and $10 a barrel more than US oil prices...so if they're able to sell their crude overseas (Canada and Mexico are exempt from the ban), US prices for oil will quickly jump to the international price, and we'll be paying 10% to 20% more for our oil products than we otherwise would if our market remained protected...a bill to lift the ban has passed the U.S. House, and a similar bill cleared the U.S. Senate Energy Committee in July, and it will probably be taken up when the Congress returns from recess after Labor Day...a new report, published Friday by the Center for American Progress, predicted that US oil production will increase if the export ban ends, and that an average of 26,385 new oil wells would be drilled in the U.S. each year between 2016 and 2030 if the ban is lifted, 7,600 more wells per year than would be otherwise...as a result, an additional 137 square miles of land would be developed for oil each year...over 15 years, that would be 2055 more square miles of oil drilling sites than we'd otherwise see, or a total drilled out and fracked area more than 60% larger than the area of the state of Rhode Island...so if we want to save ourselves from that dystopian future, we'd better start pushing back against the frackers on that export issue now..


NB: links to more related news stories can be found here

Sunday, August 16, 2015

notes on 3 Ohio rulings, global rig counts, and global oil production

there were three fracking related decisions handed down in Ohio this week, netting two small victories and one big loss; first, the Ohio Oil and Gas Commission upheld the earlier decision by the ODNR to suspend operations at an American Water Management Services’ Weathersfield Township injection well in Trumbull county due to earthquakes of magnitude 1.7 and 2.1 that were induced by that injection in July and September of last year, a decision we had briefly discussed here...the company had argued that the ODNR intervention was “unlawful and/or unreasonable” and since they'd already spent over $5 million to drill and prepare those two wells, they should be allowed to use them...fortunately, the investor state dispute settlement provisions being pushed by the administration are not yet in effect, so the state will not be required to cover American Water Management for their lost potential profits...

the next decision came when Summit County Common Pleas Judge Mary Rowlands denied a temporary restraining order which would have allowed Spectra Energy to survey properties for their NEXUS pipeline without permission from landowners...as we mentioned last week, when discussing the Chesapeake Energy decision to put their Ohio natural gas production on hold until the Ohio Pipeline Energy Network is completed, the developers of the NEXUS pipeline had sued 91 property owners in Summit County who had refused company surveyors access to their property; Judge Rowland's decision to instead hold a trial in October to hear arguments about whether the Houston-based company should be granted access seems to at least put the NEXUS pipeline on hold till then....this NEXUS pipeline isn't your ordinary run of the mill gas transmission line, either...it's designed to deliver 1.5 billion cubic feet of natural gas per day across northern Ohio to Michigan, Chicago and Ontario, pumped along the way by 52,000 horsepower compression stations every 70 miles; that would be the equivalent of 1.7% of the total US natural gas production this year, and probably nearly 2% of the current US transmission trunkline capacity...a ten minute leak from such a pipeline would spew forth 10.4 million cubic feet of natural gas, certainly enough to wipe out any small town nearby...the industry argues that they have fail safe automatic shut offs on their pipelines, but just a month ago we saw a 5 million liter spill in Alberta when one such of those new fail safe pipelines failed to detect any leak...

finally, in a decision that culminates the weeks of news we've carried from Athens County, Ohio Secretary of State Jon Husted ruled that charter government proposals in Athens, Fulton and Medina counties cannot appear on the November ballot...moves by these three counties to transform themselves were initiated after the oil-industry funded Ohio Supreme court had ruled that local governments could not pass laws to regulate fracking because state laws give that authority solely to the ODNR...Athens, and presumably Fulton and Medina counties, had all gathered enough signatures to put the charter government proposals on the ballot, but in each county an oil company stooge filed a protest against the initiative, arguing that the charter amendment was county overreach and included unauthorized zoning regulations...those citizen protests then were forwarded to the Secretary of State, who had previously received $84,750 in oil industry contributions, and who did as expected and ruled those initiatives off the ballot in those counties, citing the Supreme Court decision that only the state has the authority to regulate oil and gas activity...this decision, then, seems to eliminate the possibility of any local legislation in the state in regards to fracking, at least until such time as Ohio laws are changed or oil industry funded public officials are defeated at the ballot box...

since we missed the rig count last week, we'll catch up on that next...over the past two weeks, Baker Hughes reported that a net of 10 additional drilling rigs were put into service in the US, with the entire increase in that count coming in the first week of August...oil rigs increased by 6 in that week and by 2 last week, to bring the current oil rig count up to 672, up from a low of 638 on July 17th, but down from the 1589 oil rigs in use a year ago, and down from the peak of 1609 oil rigs hit on October 10th of last year...gas rigs totaled 214 at the end of the week, after an increase of 4 in the first week of August and a decrease of two last week....despite the pickup in oil rigs over the last 4 weeks, the gas rig count has continued to slide, and is now down from 321 a year ago, and from 356 at the November 11 interim peak...there has also been an unusual fluctuation in the offshore rig count, as 4 were added in the first week of August only to have 3 withdrawn from operations last week....that leaves 35 rigs working offshore as of Friday, down from 62 a year ago, with 34 of those in the Gulf of Mexico and one off the shore of Alaska...

the drillers are again adding more horizontal rigs than other types, as 8 were added in the first week of August while 4 were added this week; that brings the horizontal rig count back up to 676, up from 650 four weeks ago, but down from 1329 a year ago...drillers also activated a net of 3 vertical rigs in the week ending August 7, but shut down 2 last week, leaving the vertical rig count at 129, down from 368 a year ago....meanwhile, the directional rig count was down 1 on August 7th and down another 2 last week, leaving it at 81, down from 216 a year earlier...

of the major horizontally fracked basins, the Permian basin of west Texas and New Mexico remains the most active, with 255 rigs, or nearly 30% of the 844 currently active rigs, working there this week, after 6 were added in the week of the 7th and another was added this week...however, that's still down from the 558 rigs that were drilling into that basin a year ago...activity in the Eagle Ford of southeast Texas has also increased, with 3 added this week after the net was unchanged the prior week...that brought the Eagle Ford count up to 101, which was still down from 199 a year earlier...the Williston basin, North Dakota home of the Bakken shale, ended the week with 70 rigs, down from 194 a year ago, after an addition of 1 rig last week and a removal of 2 rigs this week...meanwhile, 53 rigs remained in the natural gas yielding Marcellus of Pennsylvania and West Virginia, down from 77 a year ago, as 2 more rigs were withdrawn this week after a reduction of 1 last week...the rig count in Oklahoma's Cana Woodford remained unchanged at 37 after 2 weeks, while it's still the only basin to see an increase from the 34 rigs operating there a year ago...the Niobrara Chalk of the Rockies' front range ended the week with 32 rigs, down from 62 a year ago, after one rig was added this week, while the Haynesville shale of Louisiana netted no change from 30 rigs, down from 45 a year ago, after one was added last week and one was withdrawn this week...lastly, Ohio's Utica shale ended the week with 22 rigs, down from 44 a year ago, as one rig was pulled from the area in each of the last two weeks...

on a state basis, then, Texas ended this week with 390 rigs, after adding 8 rigs last week and 6 this week, which was still down from 908 a year ago...Oklahoma ended with 103, down from 209 a year ago, as they saw 4 rigs idled this week...Louisiana also saw 4 rigs pulled this week, but after 4 were added last week, leaving the state with 78 rigs, 33 of which were offshore, and which was down from their total of 116 in the 2nd week of August last year...North Dakota added a rig last week but pulled 2 this week, leaving them with 71, down from 182 a year ago; New Mexico, down 2 this week and unchanged last week, finished with 52, down from 94 a year ago, while Pennsylvania was down 3 last week and 1 this week to end at 38, down from 51 a year ago...Colorado also ended the week with 38 active rigs, down from 75 a year earlier, as 2 there were idled last week, only to see 2 restarted this week...Ohio finished with 19, down from 42 a year ago, as we saw a rig pulled out in each of the last two weeks...other notable changes saw West Virginia up two then down 1 to end at 18, down from 29 a year ago, and saw Kansas add 5 over the last two weeks to bring their total back to 12, still down from 26 a year ago...

Baker Hughes has also updated the international rig count with the averages for July, which showed the global rig count at 2,167, up from 2,136 in June but down from 3608 a year earlier, with most of those year over year reductions in North America...the average rig count in the Middle East fell from 401 in June to 391 in July, which was down from 432 a year earlier...notable changes in the region included Iraq, down 9 rigs to 44, Kuwait, down 6 rigs also to 44, Oman down 4 rigs to 67, and Pakistan, up 6 rigs to 23...the Saudis averaged 123 rigs in July, up from 121 in June and up from 105 in July a year ago....Latin America saw a net decline of 1 rig last month to 313 rigs, down from 407 a year ago, as the area added 7 land based rigs and shut down 8 offshore...within the region, Mexico saw a reduction of 6 rigs to 45 while Venezuela added 4 to reach 70...the Asia / Pacific region saw 212 rigs active in July, 3 fewer than in June and down from 253 last year, as India added 3 to bring their total to 116 and several countries cut one rig each...in Europe, the rig count fell 5 to 108, down from 153 last July, as Turkey and Italy each cut two rigs, while African nations averaged 94 rigs for the month, down 9 from from June and down 43 from a year ago, as Libya, Nigeria and Angola each reduced their active rig count by 2...

however, the Canadians added 54 rigs in July, for an average of 179, which was still down from 350 in July a year ago...also included in the release of the weekly count with US rigs, they added 15 in the week ending July 31st, reduced their count by 7 in the first week of August, and added 3 in the week just ended, to finish with 211 rigs as of August 14th...over the last two weeks, Canadians have shut down 12 oil rigs, leaving 100, while they've added 8 gas directed rigs, to bring the count of gas rigs to 111...the Canadian count is now down 190 rigs from last year's 401, with oil rigs down 124 and gas rigs down 66...

even with the ongoing reduction in rig counts, however, the global oversupply of oil continues to grow, putting further downward pressure on oil prices...this week Bloomberg reported that the output of OPEC reached a 3 year high in July, as they increased output by 105,000 barrels a days to average 31.5 million barrels a day over the month, which is up from their 2014 average of 30.075 million barrels a day...that was despite another 39,200 barrel a day drop in Libyan output, wherein they produced 373,000 barrels per day in July, well down from their 928,000 barrels per day average in 2013, as Iran, Iraq, Angola and Saudi Arabia all saw output increase by more than 30,000 barrels per day for the month, with Iraq increasing production by 46,700 barrels a day to 4.1 million...Russia, the world's largest oil producer outside of OPEC, saw its output slip from from 10.71 million barrels per day in June to 10.65 barrels per day in July, but that had been preceded by a string of monthly post Soviet era records since January...

in the US, our field production of crude oil fell during the most recent reporting week, from 9,465,000 barrels per day in the week ending July 31st to 9,395,000 barrels per day in the week ending August 7th...while that's down a bit more than 2% from the record oil production of the 1st week in June, it's still 11.1% higher than our output during the same week last year...meanwhile, our imports of crude oil jumped again, rising from 7,180,000 barrels per day in the week ending July 31st to 7,573,000 barrels per day in the current report...while that's up 10,000 barrels per day from the first week in August a year ago, we check the weekly Petroleum Status Report (62 pp pdf) to find the four week average of imports, which at 7.6 million barrels per day is 1.1% lower than the same 4 week period a year ago....with refineries still running at 96.1% of capacity, our crude oil inventories in storage fell once again, from 455,275,000 barrels last week to 453,593,000 barrels in the this week's report....that was still 24.1% more oil than the 365,618,000 barrels we had stored in the first week of August last year, and in fact much higher than had ever been stored in mid July in the 80 years of EIA record keeping, which had never seen a 400 million barrel inventory level before this year...


(see more related news here)

Wednesday, August 12, 2015

What the Latest Currency 'War' is All About by Pepe Escobar


When the US embarks on perennial quantitative easing, that's OK. When the EU does QE as well, that's OK. But when the Bank of China decides it's in the best interest of the nation to let the yuan go down a bit instead of infinitely up, that's Armageddon.


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Geopolitics complicate fight against ISIL

Monday, August 10, 2015

Iraq: "A War Crime, Pure and Simple"

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Lies Matter ! !: Exposing Nixon’s Vietnam Lies


LIES MATTER! !

Just as Afghanistan  and Iraq were wars of choice, so was Nam a war of choice. They were based on lies and ended with more lies. 

We are perfecting these wars of choice.
Why?
Because we can.

The American peeps have grown immune to war. 
Hell we even condone it.

That is until its your son, daughter, brother, sister, mother, father, or some other loved one comes back in a body bag.

Even then some will say "He/she died for our country. 

How ignorant and absurd.

If you all want to have another war send the old men to die.

Hell I'll go. I am 65 and goona die soon any way.
Let the young people live so they can perhaps end wars. 

Every politician and war monger should be sent to the front lines.
Along with their entire families.

Let them smell the stench of death before they make us pay with our blood sweat and tears.

Tao Dao Man 











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Christianity and the Nagasaki Crime


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Sunday, August 9, 2015

How the US militarizes the world's police, not just Ferguson's



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Chesapeake putting Ohio production "on hold"; US refineries refining at a record pace...

the ongoing drop in the price of oil had to have been the most important fracking related story this week, not because it fell by that much, but because the price of oil has been unable to find an equilibrium for much more than a day or two at a time since late June...this week the price deterioration continued with very little volatility, suggesting that even at these low levels, there aren't many speculators looking at oil as a bargain, even at today's low prices...after closing last week at a price of $47.12 a barrel, the near term contract for WTI, the US crude oil benchmark, headed down on Monday on news that Saudi Arabia and Iraq continued to pump near record levels and closed Monday at $45.17 a barrel; it was then up a bit on Tuesday, but went back in the tank on Wednesday when weekly oil production data was released, showing elevated gasoline inventories and another rebound in US output...prices then continued to fall the rest of the week, and closed down 79c at $43.87 a barrel on Friday, after Baker Hughes data showed US drillers were still adding oil rigs...

as a lot has happened with the price of oil since the last time we discussed it, we'll include a graph of US oil prices over the past year, so you can all see what has been happening...the graph below shows the past year's track of the near term contract price per barrel of the US benchmark oil, West Texas Intermediate (WTI), sitting at or to be delivered to the oil depot in Cushing Oklahoma...we can see that oil had been falling most of last summer, even as drillers were still adding rigs and expanding production....and we know that oil drilling continued into the fall, with the rig count peaking in October, even as oil prices slipped below $80 while the global surplus was developing...we can then see the first collapse of prices beginning in the last week of November, when the price of oil fell from $78 to $65 in the days immediately following the OPEC decision to continue their level of production...oil prices then fell below $45 a barrel in intra-day trading in mid January, a level at which 97% of US shale wells became unprofitable, before climbing back up above $58 again in February...they touched the January lows again in March before moving back up to near $60, in a range where they stayed for most of the second quarter...but even at those prices, most independent drillers reported losses during that period, and now they've fallen another 28% from the $61.01 price of June 23rd...

August 7 2015 clssing oil prices

in addition to the companies that reported lower 2nd quarter earnings or losses last week, a handful of companies also reported their 2nd quarter results this week; Marathon Oil posted a $386 million loss for the second quarter. even after "dramatic reductions in production costs and across-the-board spending cuts", more than reversing the $360 million profit they posted during the same time period last year; Rice Energy, who drills for oil and gas in the Marcellus in southwestern Pennsylvania and in the Utica in Ohio, reported a loss of $69.7 million in the 2nd quarter, worse than the $7.9 million, or 6 cents per share loss they reported in the 2nd quarter of 2014; Rex Energy, another Pennsylvania and Ohio driller, recorded a loss of  $155.2 million, or $2.87 per share, for the second quarter, as their revenues fells 37% from the same period last year, even though their production rose by 6%; Continental Resources Inc, the second-largest oil producer in the Bakken shale, reported their net income dropped 99%, from $103.5 million last year to $403 thousand this year, even as their average daily production increased 35%, and Gulfport Energy reported a net loss of $31.3 million even as their production increased by 196% compared to the second quarter of 2014...and remember, all those losses were incurred when oil was within a few dollars of $60 a barrel..

in covering the fracker's 2nd quarter earnings and losses last week, we noted that Chesapeake Energy, the 2nd largest natural gas producer in the US and operator of more than half of Ohio's wells, had suspended paying their dividend, even after they had paid one through the last 14 years of their mostly cash flow negative history; on Wednesday they reported a loss of $4.15 billion, or $6.27 per share, for the 2nd quarter, in contrast to the profit of $145 million they made in the 2nd quarter last year...much of their 2nd quarter loss resulted from a $4.02 billion write-down on several gas & oil properties that they'd overpaid for during the McClendon era, but even excluding the write off, they still showed losses of $83 million in the quarter on revenues of $3.03 billion, which were 41.1% lower than a year earlier...

responding to their poor cash flow position and the steep drop in oil & gas prices, Chesapeake has now announced that they'll be selling some of the million acres of Ohio Utica shale land that they have under lease, which have the potential for thousands of shale wells...although they haven't specified which land they'll be selling, the Columbus Business First’s article on the asset sale quotes their top Utica executive citing 300,000 acres of dry-gas heavy Belmont and Jefferson county land as the part of their portfolio that's "a bit asset-long"...this isn't the first time that Chesapeake been so squeezed as to need to divest themselves of potentially profitable properties; in October, we reported they were forced to sell 413,000 acres with 1,500 wells in West Virginia and southwest Pennsylvania to their rival Southwestern Energy Corp for $5.38 billion, in order to raise enough cash to keep their Ohio operations running...

in another sign that they're still in deep trouble, they also announced they'll be putting their Ohio natural gas production on hold until such time as the Ohio Pipeline Energy Network is completed, a project that will allow them to ship Ohio gas to the Gulf Coast, where there are several LNG export terminals under construction on existing regasification sites already in operation, and many more in the planning stages...that Chesapeake is waiting for the pipelines before they sell their gas should give us an idea of how bad the gas glut has become in these parts, and how important it is to the frackers that they get that pipeline infrastructure in place in order to move their products out of our area...as we've pointed out previously, Marcellus frackers have been netting less than $2 per mmBTU at the wellhead for their natural gas; without pipelines, Utica gas can't be yielding much more...

the push to put those pipelines in place was underscored this week when the developers of the Nexus Pipeline filed suit against 91 residents of Summit county seeking a restraining order that would allow pipeline surveyors, who have been accompanied by off-duty cops, on their property to complete surveys for their 1.5 billion cubic feet per day pipeline; how they think they can force that through when they have yet to get FERC approval for the pipeline that will impact 3479 Ohio properties is beyond me, but that's what they're trying to do...this would seem to be an issue area politicians should be interested in intervening in; this week Columbia Gas of Ohio announced that their typical budget-billing customer would see nearly a 20% cut in their gas bill this winter, and it's almost certain that industrial customers and utilities such as AEP and First Energy, who are mandated by Obama's energy plan to switch away from coal, will be getting similar discounts on the natural gas that they'll use..so keeping that underpriced gas in our area instead of sending to the Gulf to be exported to Europe and Asia should be in everyone's interest; the out of state pipeline companies should have little political pull..

as we noted earlier, US field production of crude oil rose in this week's report, from 9,413,000 barrels per day in the week ending July 24 to 9,465,000 barrels per day in the week ending July 31st; while that's still almost 1 1/2% off the early June peak, it's still 12.0% higher than our output during the same week last year...meanwhile, our imports of crude oil also fell for the 2nd week in a row, from 7,545,000 barrels per day the prior week to 7,180,000 barrels per day in the week ending July 31st, still, over the last four weeks, crude oil imports averaged 7.5 million barrels per day, just 0.4% less than the same period last year...in addition, last week saw another drop in crude oil crude oil inventories in storage, from 459,682,000 barrels on January 24th to 455,275,000 barrels as of July 31st...that's still more than 24.5% higher than the amount of crude we had stored in the same week last year, and as you should all know by now, the highest for this time of years in the 80 years that such records have been kept....so, with imports and inventories down and production up just a bit, where did that oil go?  through our refineries; in the week ending July 31st, U.S. crude oil refinery inputs averaged a record 17,075,000 barrels a day, as the weekly Petroleum Status Report (62 pp pdf) reports our refineries were operating at a post recession record 96.1% of their capacity last week, as gasoline production averaged 10.0 million barrels per day...and we have a chart for that, too, since it is at a new record high…

August 2015 refinery inputs

the above chart was featured in the Today in Energy Report of August 7th from the US EIA, wherein i've accidentally included a clip of their opening lines, telling us that US refineries have been processing over 17 million barrels per day for the past 4 weeks, which has never happened before in the time they've kept those records...what the chart shows in the grey band is the range of crude processed by US refineries for any given date over the 5 year period from 2010 to 2014, with the dashed line indicating the average of that; then the dark blue line shows the daily refinery inputs for 2014, which obviously forms the top band of the 5 year range, and the red line indicates refinery inputs so far for 2015...so what the chart in effect shows is that every day in 2014 set a new 5 year record for refinery throughput, and so far every day in 2015 topped 2014...while there were a few weeks in the 2004 to 2006 period where refinery inputs topped 16 million barrels per day, the last month is the first time we've seen the 17 million barrel per day clip breached..

with the refineries running flat out as they have been, refined products supplied have also been above their average range...in the week ending July 31st, total products supplied averaged 20,338,000 barrels per day, up from 19,633,000 barrels per day in the same week a year ago...gasoline output has averaged 9.5 million barrels per day over the last 4 weeks, up by 5.4% from the same period last year...total motor gasoline inventories increased by 0.8 million barrels last week, although like stocks of crude oil, they've been trending lower in the summer driving season, and are only up 1.3% from a year ago...inventories of distillate fuel oil are up 15.9% from the same week last year, inventories of kerosene type jet fuel are 26.8% higher, and inventories of propane/propylene, a petrochemical feedstock, are 32.0% higher than they were on August 1st last year..and we're also consuming more; our consumption of gasoline was up 2.9% in the first 5 months of this year as cumulative travel for 2015 was up by 3.4% and vehicle miles driven in the US over the prior year topped 3 trillion at 3,080,600 million, up from 2,996,249 million in the year ending May 2014...we're also exporting more too; in the week ending July 31st, our total exports of crude oil and petroleum products was at a record 4,460,000 barrels per day, 17.2% higher than in the same week a year ago...


(the above was crossposted from Focus on Fracking, where there’s more )

The Obama Administration Just Blew Off Human Trafficking Concerns to Pass the TPP

The Obama Administration Just Blew Off Human Trafficking Concerns to Pass the TPP

Friday, August 7, 2015

Pentagon prepares for century of climate emergencies and oil wars

Pentagon prepares for century of climate emergencies and oil wars | Middle East Eye

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Two research documents published in recent months by the US Army reveal the military establishment’s latest thinking in startlingly frank terms. The research not only lends credence to environmental warnings about how climate change will fuel political instability, but also vindicates concerns about how looming resource shortages could destabilise the global economy.

Sunday, August 2, 2015

the frackers’ 2nd quarter earnings and losses, more industry layoffs, et al

the unusual changes in the oil patch metrics we saw last week reversed themselves this week, so all of our speculation on possible energy markets changes they might have indicated have gone by the boards...US field production of crude oil, which had been holding near its early June record until last week, fell 1.5% in this week's report, from 9,558,000 barrels per day in the week ending July 17th to 9,413,000 barrels per day in the week ending July 24th; though that's still up 11.5% from the 8,443,000 barrels per day production in the same week last year, it's now more than 2% off the record of 9,610,000 barrels per day produced in first week of June this year....our imports of crude oil also fell, from 7,941,000 barrels per day last week to 7,545,000 barrels per day in the current reporting week, which was down 2.6% from the same week last year, but still left the 4 week average over 7.5 million barrels per day, 1.0% above the same four-week period last year...with lower production and imports, our inventories of crude oil in storage fell by 0.9%, from 463,885,000 barrels in last week's report to 459,682,000 barrels as of July 24th...that's still 25.1% more than the 367,374,000 barrels that were reported stored on July 25th of last year, and still nearly 20% more oil than had ever been stored at the end of July in the 80 years of EIA record keeping, which had never seen 400 million barrels of oil in storage before this year... 

likewise, after the unusual increase in drilling rigs last week, after oil prices had been falling for month, the total count of rigs in operation this past week fell once again, although oil drilling rigs did increase again for the 5th week in a row...Baker Hughes reported that in the week ending July 31st, the number of active drilling rigs in the US fell by to 874, with oil rigs up 5 to 664, gas rigs down 7 to 209, and miscellaneous rigs unchanged at 1; that was down by 1,015 rigs from the 1,889 that were running at the end of July last year, with oil rigs down from 1573, gas rigs down from 313, and miscellaneous rigs down from 3...while 6 land based drilling rigs were taken out of operation this week, leaving 841, one rig was set up on a lake in Louisiana, bring the inland lake total to 5, and 3 rigs were added offshore in the Gulf, which now has 34...the shift to conventional drilling has also reversed, as there were 126 vertical rigs in operation, 5 less than last week, while horizontal drilling rigs increased by 2 to 664 and directional rigs increased by 1 to 84...

the largest increase in rigs this week was in the Cana Woodford, where 4 were added, bringing the total to 37; the count there is up from 32 a year ago, and it's the only shale basin in the US to see an increase in rigs over the past year..in addition, 3 rigs were added in the Permian basin, and the Utica and the Williston shales each saw an increase of 1 rig...meanwhile, 3 rigs were pulled out of the Marcellus, 2 were pulled from the Eagle Ford, and one was pulled from the Granite Wash....

the state rig totals don't match up well with the basin counts, however...we know Oklahoma drillers added 4 rigs in the Cana Woodford, but the net change for the state is zero...that would suggest that 3 conventional rigs were shut down in the state, and that a Granite Wash rig also was removed from OK...elsewhere, the Kansas rig count was reduced by 4 to 7, the Utah count was reduced by 3 to 4, the Pennsylvania count was reduced by 2 to 42, the Alaskan count was reduced by 2 to 9, the Colorado count was reduced by 1 to 38, and the rig count in West Virginia was reduced by 1 to 19....states adding rigs included New Mexico, where rigs increased by 3 to 54, Louisiana, where rigs increased by 2 to 78 with the removal of two land rigs and the addition of 4 on the water, North Dakota, where the rigcount increased by 1 to 70, Ohio, where the rig count increased by 1 to 21, Texas, where the rig count increased by 1 to to 375, and Wyoming, where the rig count increased by 1 to 22...in addition, single rigs were added in Alabama and Mississippi, which now have 2 and 3 rigs in operation respectively...

this past week has brought us the first raft of quarterly reports from the major oil & gas companies and the independent frackers, so looking at how they did over the April thru June time-span, when oil prices pretty much stayed within a few dollars of $60 a barrel, should give us a sense of whether or not they can remain profitable, or even remain in business, in the current oil price environment, where oil has been trading below $50 a barrel over the past few weeks...understand that the financial situation for independent drillers, whose profitability is directly related to the wellhead price they receive for oil and gas, is quite different than that of the vertically integrated major oil companies, who have downstream oil refining and product marketing operations that are likely made even more profitable when oil prices are lower...

of the major oil companies reporting this week, Chevron reported net income of $571 million in the second quarter, barely one-tenth of the $5.7 billion income they reported in the second quarter of 2014...reporting the same day, Exxon saw 2nd quarter earnings of $4.2 billion, less than half of the $8.8 billion they earned in the same period last year, even though their oil and gas output rose by almost 4%, for both Chevron and Exxon, these results were the worst of the decade, and Chevron accompanied their earnings report with the announcement that they'd be cutting 1,500 jobs globally, including 950 in their corporate headquarters in Houston, and 500 at their corporate offices in San Ramon, California...

on Thursday, Royal Dutch Shell, based in The Hague, reported that 2nd quarter earnings, adjusted for inventory changes and excluding one-time items, were at $3.8 billion, almost 40% lower than the $6.1 billion they earned in the same period of 2014, as their exploration division saw revenues drop by 80 percent due lower oil prices...Shell, who has already indicated they believe that oil prices will remain depressed for several more years, responded by announcing they'd be slashing 6,500 staff and contractor jobs this year, and reducing 2015 capital expenditures to $30 billion, $7 billion lower than last year..

in contrast with the oil majors that have a large retail presence, ConocoPhillips, which had refocused its business on exploration, production and distribution of oil, reported a second-quarter 2015 net loss of $179 million, or ($0.15) per share, compared with second-quarter 2014 earnings of $2.1 billion, although part of that loss was related to a deferred tax charge from a change in Canada’s tax law; excluding that and non-cash items, they still managed to eke out $81 million in earnings from operations; they had already announced layoffs and cut their 2015-2017 capital spending plans from an initial $16 billion to $11.5 billion per year, and with Thursday's announcement indicated they'd  be further scaling back their deepwater and Gulf of Mexico operations....also taking a hit from a Canadian oil tax increase and other one time charges, Canada's Husky Energy, their 3rd largest integrated oil company, reported income of C$120 million in the second quarter, down 81% from their C$628 million in earnings a year earlier...they also reported their oil production rose slightly to 337,000 barrels of oil equivalent per day. from 334,000 per day in the 2nd quarter of 2014..

meanwhile, BP also reported a 2nd quarter loss of $6.3 billion, largely due to one-time charges from the Deepwater Horizon spill settlement with the US Gulf states, while it still had an operating profit from oil and gas exploration and production of $494 million in the second quarter, compared with $4.7 billion in the same quarter a year earlier, when oil prices were averaging over $100 a barrel...they are also warning of more layoffs ahead, including at corporate offices in Houston and Aberdeen..in addition, another British oil company, Centrica, announced it would cut 6,000 jobs, partly due to a reduced focus on oil and gas production, while Italy's biggest oil and gas industry contractor Saipem announced that not only is it cutting its earnings estimates, but that it also plans to cut 8,800 workers by 2017...

of the smaller frackers who reported this week, Range Resources of Ft Worth Texas reported that they lost $119 million in the second quarter this year, in contrast to their earnings of $171 million in the second quarter of 2014...they had already slashed their drilling budget to $870 million this year, $700 million less than in 2014, and had reduced their operations from 15 rigs to 10...they now plan to cut that to 6 rigs by year end...Houston-based Cabot Oil & Gas Corp reported a small second quarter loss of $14 million in the second quarter 2015,in contrast to $118.4 million profit in the same quarter last year; they had already seen a major loss of $221.8 million in the 4th quarter of 2014 and slashed their spending at that time, which seems to have ameliorated large losses going forward...

Pennsylvania based Consol Energy, with both coal and natural gas operations in Ohio, reported a net loss of $603 million during the quarter that ended June 30, much worse than the $25 million loss it reported in the 2nd quarter last year; despite a 45 percent increase in gas production, their revenue fell nearly 31 percent to $649 million, and they now plan to stop drilling new wells through next year...they had already announced a new round of layoffs, eliminating about 470 positions throughout the company, and also announced they would end retiree benefits for about 4,400 former employees by the end of this year...meanwhile, Pittsburgh based EQT Corporation eked out a $5.5 million profit in the quarter, down 95 percent from their earnings of $111 million last year, but they only managed that because of increased revenue from their midstream pipeline operations...Marcellus frackers have been netting less than $2 per mmBTU at the wellhead for their natural gas, so few have been able to maintain profitability...

Anadarko Petroleum, one of the larger oil-and-gas exploration and production companies, managed to report a profit of $61 million, or 12 cents a share, compared with earnings of $227 million, or 45 cents a share, a year earlier, but much of that was from hedging; excluding the hedging gains, Anadarko had a profit of 1 cent per share, which was still above analysts expectations of a 51 cent a share quarterly loss....and although Chesapeake Energy is not expected to report its 2nd quarter losses until this coming Wednesday, it has already announced it would suspend its dividend for the first time in 14 years... according to Bloomberg, Chesapeake has been cash-flow negative in 22 of the past 24 years,...

the oilfield service companies, the first to feel the hit when drillers cut back, also announced that they had made additional workforce cuts this week; as of quarterly filings on July 24th, Halliburton said it had cut nearly 14,000 jobs, 5000 more than it had previously announced, while Baker Hughes said it had laid off 13,000 employees, 2,500 more than it had previously reported....and on Thursday, Weatherford International announced an additional 1,000 job cuts, on top of the 10,000 workers who were laid off earlier this year...finally, Hercules Offshore did not have any earnings to report, as they announced they'll be filing for bankruptcy and turning control of what's left of the company over to bondholders...they'd already cut 40% of their workforce and cold-stacked 11 of their 20 offshore drilling rigs...they join  BPZ Resources, Quicksilver Resources, American Eagle Corp. and Dune Energy, who have all sought bankruptcy protection in recent months...


see more here