Australia’s MinRes unveils oil, gas reserves estimates
Diversified Australian mining firm Mineral Resources (MinRes) has released an initial oil and gas reserves estimates for its onshore Perth basin assets in Western Australia (WA) state.
MinRes' best estimate contingent (2C) reserves for its Lockyer gas prospect totals 435PJ (1.62bn m³) of sales gas and 3.3mn bl of condensate, the firm said on 16 September, with the resource located on state exploration permits 368 and 426.
The Erregulla oil project holds 2C reserves of 31.6mn bl of oil equivalent (boe) and is as one of the largest onshore discoveries since Chevron's Barrow Island field in 1964, MinRes said.
An analyst note from Australian equities research firm E&P on 16 September valued the resource at about A$500mn, saying that given MinRes has flagged a review of development and partnering opportunities a full asset sale would be unsurprising. The note suggested Australian independent Beach Energy and Japanese trading firm Mitsui could be interested, considering the firms' partnership in the 250 TJ/d Waitsia project which has a reserve life of around 10-11 years.
The 2C resource would support about five years of production at 250 TJ/d, while a 160 TJ/d plant would produce for about 7.5 years, E&P said. The strong flow rates of about 80-105 TJ/d suggests fewer wells would be needed and development costs could be reduced.
As a major lithium and iron ore producer, the miner has challenged the WA government's onshore gas export ban, previously saying that sanctioning a 250 TJ/d plant for the site depends on it receiving permits to export 85pc of the gas as LNG.
Exports of gas from onshore basins should only proceed once the domestic WA market is well-supplied, a parliamentary committee report last month suggested. This comes ahead of expected [annual shortfalls into the 2030s] (https://direct.argusmedia.com/newsandanalysis/article/2518646) as the state shuts down its coal-fired power stations.
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Energy firms on alert after flooding in Europe: Update
Energy firms on alert after flooding in Europe: Update
Adds details throughout Warsaw, 16 September (Argus) — Torrential rain has led to major flooding across large swathes of central and eastern Europe, causing power outages and significant damage to transport infrastructure in southwest Poland and the Czech Republic. Parts of Austria, Germany, Hungary, Slovakia and Romania are also affected. In Poland, most of the affected areas so far are in the southwest of the country close to the border with the Czech Republic including the towns of Jelenia Gora, Klodzko, Nysa and Glucholazy. Urban areas further down the Odra river are also at risk including the cities of Wroclaw and Opole, where elevated water levels are expected in the coming days. The Polish government held an emergency meeting earlier today and a state of emergency has since been declared in the affected areas. Polish utility company Tauron, which operates the electricity distribution network in the worst affected area, said some of its infrastructure was disconnected in several towns including Klodzko and Glucholazy. But Poland's power grid operator PSE said there has been no damage to transmission infrastructure. Likewise, Polish gas pipeline operator Gaz-System said it has not suffered any damage but remains in crisis mode. Polish train operator PKP Intercity suspended passenger rail traffic to and from the Czech Republic on 15 September until further notice, while local TV showed images of damaged road and waterways infrastructure, including bridges and dams as well as retail fuel stations. Poland's wholesale coal market, which is usually busy in the autumn, could stall in flood-hit areas for a few weeks as priority is given to the clean-up operation and repairing transport infrastructure, according to traders in the country. But Polish biofuel firm Bioagra, which operates a bioethanol plant near the flood-hit town of Nysa, told Argus that the facility continues to operate normally. In the Czech Republic, Orlen Unipetrol — operator of 108,000 b/d Litvinov and 66,000 b/d Kralupy refineries — said all its production sites continue to operate although the company has shut 11 of its service stations in the country. The firm said its crisis management team at each production site is monitoring the situation and it is in contact with authorities. Elsewhere in the Czech Republic, utility Veolia has had to shut plants in Ostrava and Krnov. Hungarian oil firm Mol — which operates service stations in Poland, the Czech Republic and Slovakia, as well as refineries in Hungary and Slovakia — told Argus that preparatory flood prevention works are underway. It is in contact with authorities and there is currently no threat to security of fuel supply, it said. Hungarian authorities expect water levels on the river Danube at Budapest to continue rising until the weekend, which could affect Veolia's 428MW gas-fired power plant at Gonyu upstream from the capital and potentially power firm MVM's 2GW Paks nuclear plant downstream from Budapest. Floods on smaller rivers Lajta and Raba in northwest Hungary are also yet to peak. Austrian refiner OMV said it has put in place precautionary safety and mitigation measures at its 193,700 b/d Schwechat refinery and two other sites at Gansendorf and Lobau in the federal state of Lower Austria, which was declared a disaster region on 15 September. No damage to property or people has been reported so far but OMV has closed four retail stations temporarily in the state as a precaution, it said. By Tomasz Stepien and Bela Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shale sector consolidation far from over
Shale sector consolidation far from over
New York, 16 September (Argus) — After a blockbuster year for US oil and gas deals, the pace of acquisitions is unlikely to ease as assets in basins outside the Permian increasingly catch the eye of potential suitors. A slight pause is expected around the presidential elections in November, before transactions — which have surpassed $100bn so far in 2024 — pick up through to the end of the year and into 2025, both in terms of takeovers and recent acquirers looking to dispose of assets that no longer compete for capital in their combined portfolios. The initial rush of deal-making in the Permian basin of west Texas and southeastern New Mexico, which kicked off in late 2023, has now spread to other regions across the shale patch. "What's driving that is really operators are focused on consolidating operations in the areas that they're already operating in," consulting firm Ernst & Young's strategy and transactions energy partner, Bruce On, says. The opportunities to make savings by leveraging and sharing logistical networks, supply chains, technology and experience around drilling and well completions have been key drivers as capital discipline remains the sector's guiding light. While the Permian was the focal point of deal-making in the second half of 2023 — with transactions in excess of $89bn and accounting for 92pc of total deal-making — that is no longer the case, according to consultancy Rystad Energy. The Permian's share of overall mergers and acquisitions (M&A) fell to 46pc in the first half of 2024 and was about 18pc in the second half, as of the end of August, Rystad says. "This declining share is attributed to the limited remaining opportunities in the basin, which has also resulted in tougher competition among potential buyers and premium valuations," Rystad vice-president for upstream Atul Raina says. The shift has seen other basins come to the fore, such as North Dakota's Bakken, Pennsylvania's Marcellus and South Texas' Eagle Ford. The share of deal value in the Bakken rose to 12pc of all M&A transactions in the first half of 2024, from virtually nothing in the second half of 2023, Rystad says. The Marcellus accounted for 14pc of deal-making and Eagle Ford 13pc, over the same period. Permian envy Examples of buyers looking further afield include US independent SM Energy, which bought assets in Utah's Uinta basin from private equity-backed XCL Resources for $2bn. "We'd love to add that kind of asset in the Permian," SM Energy chief financial officer Wade Purcell says. "Getting something of size anywhere near that price, that's really hard right now." As part of the latest acquisition spree, recent buyers are looking to see how their combined asset base fits and what they want to offload. "They're quickly looking to go to market with those non-core assets, so we expect to see this cycle that will accelerate additional M&A activity in the sector," Ernst & Young's On says. Just this week, US independent producer APA announced the sale of non-core Permian assets to an undisclosed buyer for $950mn. That built on the company's sale of other Permian and Eagle Ford assets for a combined $700mn earlier this year. "Through multiple transactions completed this year, we have high-graded and focused our US asset base," chief executive John Christmann says. The proceeds will go towards paying down debt taken on as part of APA's $4.5bn all-stock takeover of Permian-focused Callon Petroleum at the start of the year. More than $46bn worth of upstream assets remain on the market in the US, with shale accounting for 80pc of the total, according to Rystad. Private equity-backed operators are likely to keep selling off assets to take advantage of rising demand from public peers to add inventory and build scale. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Energy firms on alert after flooding in central Europe
Energy firms on alert after flooding in central Europe
Warsaw, 16 September (Argus) — Torrential rain has led to major flooding across large swathes of central and eastern Europe, causing power outages and significant damage to transport infrastructure in southwest Poland and the Czech Republic. Parts of Austria, Germany, Hungary, Slovakia and Romania are also affected. In Poland, most of the affected areas so far are in the southwest part of the country close to the border with the Czech Republic including the towns of Jelenia Gora, Klodzko, Nysa and Glucholazy. Urban areas further down the Odra river are also at risk including the cities of Wroclaw and Opole, where elevated water levels are expected in the coming days. The Polish government held an emergency meeting earlier today. Prime minister Donald Tusk said he has ordered preparations for the declaration of a state of natural disaster. Polish utility company Tauron, which operates the electricity distribution system in the worst affected area, said some of its infrastructure was disconnected in several towns including Klodzko and Glucholazy. Polish train operator PKP Intercity suspended passenger rail traffic to and from the Czech Republic on 15 September until further notice. And local TV showed images of damaged road and waterways infrastructure, including bridges and dams as well as retail fuel stations. Polish biofuel firm Bioagra, which operates a bioethanol plant near the flood-hit town of Nysa, told Argus that the facility continues to operate normally. In the Czech Republic, Orlen Unipetrol — operator of 108,000 b/d Litvinov and 66,000 b/d Kralupy refineries — said all its production sites continue to operate although the company has shut 11 of its service stations in the country. The firm said its crisis management team at each production site is monitoring the situation and is in contact with authorities. Hungarian oil firm Mol — which operates service stations in Poland, the Czech Republic and Slovakia, as well as refineries in Hungary and Slovakia — told Argus that preparatory flood prevention works are underway. It is in contact with authorities and there is currently no threat to security of fuel supply, it said. By Tomasz Stepien and Bela Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Judge blocks federal flaring rule in 5 states
Judge blocks federal flaring rule in 5 states
Washington, 13 September (Argus) — A federal judge has blocked the US Bureau of Land Management (BLM) from enforcing restrictions on the volume of natural gas that can be lost to flaring on federal lands in North Dakota, Montana, Texas, Wyoming and Utah. Those states were likely to prevail in a lawsuit that said BLM was "arbitrary and capricious" in finalizing a rule that limited the amount of natural gas that producers could flare on federal land, US District Court for the District of North Dakota judge Daniel Traynor in North Dakota wrote in an order on Thursday. The judge issued a preliminary injunction blocking the rule in those states while the litigation is pending. BLM said it was reviewing the court's ruling. The ruling deals another blow to BLM's efforts to stop operators from flaring vast amounts of natural gas on federal land without paying any royalties. The agency tried to limit the practice through a rule in 2016, but a federal judge blocked those limits in 2020 for veering too far into climate policy, rather than focusing on a mandate to prevent waste of natural resources. BLM's latest attempt at the rule sought to limit leaks from oilfield equipment, in addition to imposing strict limits on "royalty-free" flaring that would have started to apply in December. The agency expected the rule would capture an additional 1.2mn cf/d of natural gas and generate an additional $51mn/yr in royalties. Traynor, in his ruling, said the flaring restrictions and other parts of the rule "add nothing more than a layer of federal regulation on top of existing federal regulation" and was not "reasonably explained". The judge faulted BLM for differences in the regulatory treatment of flaring and venting — releasing gas directly into the atmosphere — even though the two practices would result in the same volumes of natural gas lost to waste. Oil and gas producers largely opposed BLM's regulations, which they argued were duplicative of other regulations and would raise operating costs. US senator John Hoeven (R-North Dakota) said the court ruling was welcome for stopping "overregulation that is handcuffing our domestic energy producers". Routine flaring is set to be largely prohibited under a separate methane rule from the US Environmental Protection Agency, but that rule will not fully take effect until 2029 at the earliest. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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