In Good Company

In Good Company

Reese Energy Consulting today recognizes our newest producer and midstream clients who came on board with us in 2020. Besides the great projects we had the opportunity to tackle, they’re also a group of terrific folks—and that’s always a sweet bonus prize. Our thanks go out to:

Learn more about our own group of terrific folks and range of upstream, midstream, and downstream services at www.ReeseEnergyConsulting.com.

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Contango Strikes Again

Contango Strikes Again

Wilkie Colyer knows a target-rich environment when he sees it. Little more than a month ago, the CEO of Houston-based Contango Oil & Gas remarked on the company’s acquisition of Tulsa-based Mid-Con Energy as a response to “an industry in dire need of consolidation.” The $400 million all-stock deal expanded Contango’s presence in Okla., and Wyo., and added to a portfolio that includes operations in the Permian and offshore in the Gulf of Mexico. But flirtations with distressed and stranded assets in need of a new home didn’t stop there; as a matter of fact, it’s part and parcel of this E&P’s broader business strategy to strike when the iron is hot. Reese Energy Consulting today is following the latest strike by Contango, which will pick up a bank-owned package deal for $58 million that grows its presence in two of the company’s core operating areas by 182,000 net acres. The acquisition includes 7.5 MBOED of production and 18.3 MMBOE of PDP, oily, low-decline reserves in Wyo.’s Big Horn Basin and the Central Basin Platform and Northwest Shelf areas of the Permian. Looks like a bullseye. 

EVX Midstream

Contango Oil & Gas Company is an independent oil and gas company based in Houston, Texas, focused on the exploration, development, production and acquisition of natural gas and oil properties both onshore and offshore in the shallow waters of the Gulf of Mexico.

contango.com

What do you think?

Learn more about REC and our M&A services at www.ReeseEnergyConsulting.com.

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The New Pipeline Landscape vs the Law of Diminishing Returns

The New Pipeline Landscape vs the Law of Diminishing Returns

The nation’s pipeline projects this year have met with volcanic reactions that canceled three majors in the Eastern Atlantic, stalled several others, and turned upside down at least three already in service. These are the facts at hand, which now bring even greater challenges to natural gas and power utilities in need of more fuel to meet consumer demand; refineries that require feedstock; petrochemical facilities that depend on supplies to produce raw materials used globally; and U.S. producers who transport oil and gas to end markets. If the current pipeline landscape subsists, the aftereffects are predicted to bring seriously diminishing returns in an era of carbon-neutral goals.

Rystad Energy

Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Their products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike. 

www.rystadenergy.com

The nation’s pipeline projects this year have met with volcanic reactions that canceled three majors in the Eastern Atlantic, stalled several others, and turned upside down at least three already in service. These are the facts at hand, which now bring even greater challenges to natural gas and power utilities in need of more fuel to meet consumer demand; refineries that require feedstock; petrochemical facilities that depend on supplies to produce raw materials used globally; and U.S. producers who transport oil and gas to end markets. If the current pipeline landscape subsists, the aftereffects are predicted to bring seriously diminishing returns in an era of carbon-neutral goals.

According to Rystad Energy, if the Dakota Access Pipeline (DAPL) is shut down in August following a July court mandate to halt operations and empty its line of Bakken crude oil, an initial 300,000 BPD will have to be transported by rail. The DAPL is the largest outbound Bakken pipeline, which means other pipelines and refineries will need to absorb at least 900,000 BPD. And as far as those “other” pipelines, the DAPL ruling came on the heels of a court-ordered closure earlier in July of the Bakken’s Tesoro High Plains Pipeline that’s been in operation for 67 years. As curtailed volumes in the Bakken are expected to come back online later this year, Rystad foresees significant bottlenecks ahead with the lack of primary exit routes. This suggests more rail, more trucks, more flaring, and more emissions. Again, diminishing returns.

Rystad also predicts gas output from the Permian will rebound during the second half of this year and is expected to return to record levels by late 2021. That’s the good news. The bad news is that regulatory obstacles and belt-tightening have delayed or put on hold several pipelines to feed supplies to the East Coast, Gulf Coast LNG facilities, and Mexico. With the need for new gas takeaway projects from the Permian beginning in 2023, Rystad estimates another period of increased gas flaring citing it’s highly possible that any new pipelines will be approved too late, resulting again in a situation with insufficient infrastructure.

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