[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Immediate Use of Ivermectin Medicine Globally Can End COVID-19 Pandemic: Scientists

COVID Fraud – Lawyers & Medical Experts start legal proceedings against W.H.O and World Leaders for ‘Crimes against Humanity’

School Board Nazi struggles to breathe while she orders kids to wear masks…

Warren says she'll run for reelection to Senate

WiThheld rouTers ... The laTesT of many roadblocks --- To Arizona SenaTe's audiT of 2020 elecTion

Windham ResidenTs ... Refuse --- To Be Silenced

When Cruelty Actually Is The Point

Fauci's agency spent over $400k on experiments grafting aborted fetal scalps onto mice and rats

Who Is Bill Gates? (Full Documentary, 2020)

Here Is What Republican Voters Really Believe in. It's a Shame the GOP Has No Idea

guTTing america ... going back --- on Track

“The ElecTion is Over”... Trump HaTer Cindy McCain Trashes Arizona ElecTion AudiT ---“Ludicrous” (VIDEO)

DissidenT Episcopalians awarded $100 million worTh of property ... as U.S. Supreme CourT --- declines To Take up Fort WorTh case

Joe Biden needs to stop lying about the cause of the border crisis and start fixing it

George W. Bush says ... The Republican ParTy has a shoT aT fuTure elecTions if iT curbs --- iTs 'whiTe Anglo-Saxon ProTesTanTism' ( heriTage )

BREAKING EXCLUSIVE - TGP’s Jordan Conradson InTerviews AZ AudiT DirecTor Ken BenneTT — HUGE DEVELOPMENTS ... Including Plans To Triple OuTpuT --- QuesTions on Number of FraudulenT BalloTs (VIDEO)

Can Democrats Avoid a Wipeout in 2022?

Biden declares war on America -- literally

Former Trump assisTanT says ... 'freighT Train' of elecTion resulT audiTs coming --- 'The MAGA movemenT is demanding answers'

Tim Scott's 2024 Star Rises After Biden Rebuttal

“We Will Find MisTakes – IrregulariTies ... We Probably Are Going To Find OuTright Fraud” --- AZ GOP Chair Dr. Kelli Ward Give - UpdaTe on HisToric AudiT (VIDEO)

Australia security official warns nations are ‘beating drums’ of war amid Asia-Pacific tensions

Former Obama White House advisor Seth Andrew arrested, accused of stealing from charter school he founded

This is fo sucking funny ... Joe has no clue --- The dumbocrap leaders are in a hearT aTTack panic!!.

The voter suppression lie

War Room ... Rachel Maddow Is Worried abouT whaT AZ ElecTion AudiT will Find — She Knows Georgia Is NexT

Conspiracy Queen Rachel Maddow ... Panics Over --- ‘Dangerous’ Arizona Vote AudiT

‘True To iTs docTrine’ ... ConservaTives plan for a new church afTer UniTed MeThodism spliTs --- over homosexualiTy debaTe

Michael Eric Dyson - WhiTe People Can Help BLM ...by Holding RacisT RelaTives --- ‘To AccounT’ aT Thanksgiving

Derek Chauvin ... The GreaT --- WhiTe DefendanT

New Mexico state trooper executed by Mexican cartel member… Horrific Video

John Kerry in Earth Day wonderland

Democrats Are Cheaters

Derek Chauvin's FaTe ... Is Now in The Hands --- of The Jury

Fools' overture

Democrats Are Terrified of Georgia

Climate Media vs. Climate Science

Why We Black Leaders Support Voter ID Laws

Pelosi: ‘No Plans' to Bring a Court-Packing Bill to the House Floor – at This Time

B-1 Bombers Are Deploying To Norway For The First Time With An Eye On Nearby Russia And The Arctic

High School Coach Fired After Refusing To Enforce “Insane” Outdoor Masks During Sports

CNN Says Chinese-Style Fonts Are Racist

Gran Torino Denounced for Anti-Asian Racism

'It Is Still Not Safe To Go Outside,' Says Fauci's Head In A Jar In Year 2739

Biden Re-Ignites the Waco Fire

Over 500 White People Have Been Killed By Cops Since 2020. There Has Been No Rioting Over Those Deaths.

Buttigieg on Exaggerated Infrastructure Jobs Estimate: ‘I Should Have Been More Precise’

Videos - ChrisTians Tear Down MeTal Fences ... Denounce The Closure Of GraceLife Church --- Due To A COVID-19 ResTricTions

Pete BuTTigieg ... To evangelical vaccine hold-ouTs --- Maybe iT's parT of God's plan

TINHORN FLATS ... The Symbol of Modern Day America --- AgainsT Tyranny


Status: Not Logged In; Sign In

Business
See other Business Articles

Title: Gas Liquids ‘Bloodbath’ Brings Shale Pain to Oil Market
Source: Bloomberg
URL Source: http://www.bloomberg.com/news/print ... -shale-pain-to-oil-market.html
Published: Aug 2, 2012
Author: Edward Klump and Mike Lee
Post Date: 2012-08-02 11:31:44 by Brian S
Keywords: None
Views: 1028
Comments: 1

The shale boom that sent natural-gas prices to a 10-year low is being felt for the first time in the oil markets.

Williams Partners LP (WPZ) joined Marathon Oil Corp. (MRO) and Devon Energy Corp. (DVN) yesterday in blaming a glut of propane and related products for lower profits in the second quarter. Next week more companies are expected to show the effects of falling prices for so-called natural-gas liquids used in backyard barbecues and motor fuels as producer Chesapeake Energy Corp. (CHK) and Targa Resources Partners LP (NGLS), a pipeline and storage company whose trading symbol is NGLS, release earnings.

The “NGL bloodbath,” as it was dubbed by Tudor, Pickering, Holt & Co. last month, is rippling across the oil and gas industry as explorers cut production and reduce cash flow projections, service companies forecast lower demand for drilling rigs, and pipeline partnerships suffer falling revenue for their gas liquids processing plants. The price of an ethane- propane NGL mix is down 58 percent from a high in January, outpacing the 19 percent drop in crude from a February peak.

“The same thing is now happening to liquids that happened to natural gas itself,” said James Williams, an energy economist at WTRG Economics in London, Arkansas. “We now have too much. We have an oversupply, so it’s depressing the price.”

NGL Disappointment

U.S. energy producers had counted on more lucrative oil and gas liquids to lift profits as the price of gas in New York tumbled earlier this year to an intraday low of $1.902 in April. As companies drilled for more liquids, the same oversupplies that gutted gas prices began to deflate NGLs.

Gas liquids are a heavier, or “wetter” component produced along with natural gas, and can include ethane, propane, butane, isobutane and natural gasoline. Gas liquids supply from the Rocky Mountain region of the U.S. has increased at a 47 percent compound annual growth rate since 2006, when explorers first started seeking to add more liquids to production, Tudor Pickering said in a July 12 report.

With demand staying flat while supplies rose, the average price of a mixture of ethane and propane plunged 53 percent in the second quarter from a year earlier, data compiled by Bloomberg show.

Williams, which gathers and processes gas from the Gulf of Mexico to Wyoming, said its net income fell to 29 cents per unit from 91 cents in the same quarter of 2011.

Negative Effects

“Our earnings were negatively affected by a rapid, significant decline in NGL prices,” Alan Armstrong, chief executive officer of parent Williams Cos. (WMB) said in a statement. The warm winter and downtime at chemical plants that consume NGLs were the main drivers of the decrease, he said.

Pipeline companies Targa and Enbridge Energy Partners LP (EEP), both based in Houston, which process gas to separate NGLs, warned of lower earnings in part because of the collapse of liquids prices. Both companies get revenue by keeping and selling a portion of the liquids they produce at their gas- processing plants, according to T.J. Schultz, an analyst with RBC Capital Markets.

Enterprise Products Partners LP (EPD), the second biggest U.S. pipeline operator, is moving away from that practice in favor of charging a flat fee for processing, Chief Executive Officer Mike Creel said in a conference call yesterday. The company claimed 96,000 barrels a day of NGLs in the second quarter compared to 120,000 a year earlier.

Devon Shift

Rapidly falling gas liquids prices and NGL plant shutdowns contributed to earnings declines at Devon, which sold NGLs for an average of $31.42 a barrel in the second quarter, 26 percent less than a year earlier. Oklahoma City-based Devon now is moving some of its drilling rigs away from gas and gas liquids fields to look for oil, Chief Executive Officer John Richels said on a conference call.

Marathon, based in Houston, cut its rig count in Oklahoma’s Anadarko Woodford formation to two from six because of lower NGL prices, which were to blame in part for a 5.8 percent decline in second-quarter net income from the first quarter, the company said yesterday.

Because NGLs comprise about 60 percent of Chesapeake’s overall liquids production, lower prices will have a significant impact on the Oklahoma City-based company when it reports earnings Aug. 6, said Mark Hanson, an analyst at Morningstar Investor Service in Chicago.

“There’s lots of moving pieces with Chesapeake but we’ll probably see a downward revision for operating cash flow this year” as a result of falling NGL prices, Hanson said in a telephone interview. The negative effects will extend into the rest of 2012 if the NGL market continues to deteriorate and Chesapeake accelerates production of those commodities, he said.

Service Companies

Service companies also felt the effect as cutbacks trickled down to drilling operations. Nabors Industries Ltd. (NBR), the world’s largest provider of land drilling rigs, said the market deteriorated sharply toward the end of the second quarter.

“Operators are even more reluctant to sign contract extensions of meaningful length since both cash flow and drilling budgets are declining,” Tony Petrello, chief executive officer, said on a conference call.

In some areas, Houston-based Baker Hughes Inc. (BHI), an energy service provider, is seeing its own pricing pressured by the declines.

“I characterize it as a knife fight right now in terms of pricing,” Martin Craighead, chief executive officer at Baker Hughes, said July 20 on a conference call.

Potential Rebound

There may be some rebound in pricing in the second half of the year as winter temperatures trigger more demand for the heating fuel propane and a ramp-up in exports provides a bigger market for ethane, according to Tudor Pickering analyst Bradley Olsen.

Ethane supply will likely outpace incremental demand increases until new chemical plants that use the liquids as raw materials for their products come on line around the middle of the decade, Devon’s Richels said.

“As long as natural gas prices remain low, we’d expect ethane prices also to be weak in this period,” he said.


Poster Comment:

DRILL BABY, DRILL!!! lol

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

#1. To: Brian S (#0)

“The same thing is now happening to liquids that happened to natural gas itself,” said James Williams, an energy economist at WTRG Economics in London, Arkansas. “We now have too much. We have an oversupply, so it’s depressing the price.”

BUWAHAHAHAHAHAHA....where the hell did they find him?

There's nothing in London but ARk Rectors 1 & 2.

and This guy.....8D

And a huge gas pipeline. You can smell the pumping station every time you pass by.

mcgowanjm  posted on  2012-08-02   11:51:07 ET  Reply   Trace   Private Reply  


TopPage UpFull ThreadPage DownBottom/Latest

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Please report web page problems, questions and comments to webmaster@libertysflame.com