OGI May 2020

Oil and Gas Investor Magazine - May 2020

Oil and Gas Investor's cover story in this issue analyzes the first wave of the COVID-19 induced demand destruction and OPEC+ instigated supply surge, but that is just the first chapter of this epic drama that will take months and likely years to unfold entirely. Realistically, the world needs to recover from the coronavirus before the oil markets are going to return to any kind of a semblance of yesteryear’s prices led by renewed demand. And if the bug takes hold again for a round two, timing is anyone’s bet.

Also in this issue:

  • Debt markets are bifurcated, with questions arising over E&Ps’ ability to pay upcoming maturities.
  • Locked up in an MLP bankruptcy for nearly two years, Maverick Natural Resources has new management and a new business model aimed at the relentless pursuit of free cash flow.
  • Historic service cost lows and fewer barriers to entry could trigger investment back into the U.S. Gulf of Mexico … even at $30 oil.
  • Between a historic oil price crash and resource maturity, some say the Bakken may have only five or six good drilling years left. What’s the opportunity now?
  • In oil and gas, the decision to not hedge has always been at producers’ own peril. Fewer E&Ps have hedges in place than in prior years, according to a survey, which suggests a difficult path through the recent price collapse.

Cover Story

OFS: Lower-for-Longer Scenario

As E&Ps jam the brakes on capex spend, the largest U.S. oilfield service providers respond in unison, cutting costs where they can and laying down equipment where they must.

Oil Market: Full Reverse

Market forces are at competing odds, with a silent virus killing global demand for oil and foreign antagonists pushing more volumes into the supply pipeline. How does it end, and who wins—or just remains standing?

The E&P Survival Guide

Amid a pandemic and a disastrously timed OPEC+ supply war, executives, analysts and consultants advise hedging strategies, keeping a close watch on markets and, potentially, rebuilding business plans from the ground up.

Feature

Born in the Bakken

U.S. tight rock oil production exceeded 9 million barrels per day in March, according to the U.S. Energy Information Administration. The story began 20 years ago in Richland County, Mont., with a prospector, two wildcatters, Halliburton and a bold venture: land a lateral in the middle Bakken—and frac it.

E&P Business Strategies: Hedging in Tough Times

In oil and gas, the decision to not hedge has always been at producers’ own peril. Fewer E&Ps have hedges in place than in prior years, according to a survey, which suggests a difficult path through the recent price collapse.

E&P Capital Market Trends: Dwindling Debt Options

Debt markets are bifurcated, with questions arising over E&Ps’ ability to pay upcoming maturities.

E&P Company Turnaround: Rough Riders

Locked up in an MLP bankruptcy for nearly two years, Maverick Natural Resources has new management and a business model aimed at the relentless pursuit of free cash flow.

Executive Q&A: The Masked Oilman

We’re taking a departure from the normal here. But what’s ‘normal’ right now anyway? And what will be normal next quarter? So, we asked.

Gulf of Mexico: The Water’s Fine

Historic service cost lows and fewer barriers to entry could trigger investment back into the U.S. Gulf of Mexico … even at $30 oil.

The Bakken Takes a Hit

Between a historic oil price crash and resource maturity, some say the Bakken may have only five or six good drilling years left. What’s the opportunity now?

A&D Trends

A&D Trends: Oil Soaked

First-quarter M&A grinded out a mere $770 million in deals—about one-tenth of typical values—as oil and gas companies drowned in oversupply, according to an April report.

At Closing

Oil and Gas Investor At Closing: Seize the Day

Lower for longer oil prices eventually will lead to stronger for longer—but only for the survivors.

E&P Momentum

Déjà Vu All Over Again

Faced with a devastating collapse in oil prices in a global battle for market share, some Texas producers are calling for the return of proration.

From the Editor-in-Chief

From OGI Editor-in-Chief: Will OPEC+ Cuts Matter?

Following a brief but ill-timed market share war that pushed millions of barrels of oil into a glutted world, Saudi Arabia and Russia are now trying to put that genie back into the bottle. But will it matter?

New Financings

Funds Flow for Midstream

Private-equity sponsor Tailwater Capital LLC tied up a fourth fund in what otherwise has been a largely barren landscape for capital raising. Its Tailwater Energy Fund IV LP raised $1.1 billion in capital commitments.

On the Money

On the Money: Anxiety over Crude, Product Inventories

There is fear that crude and product inventories held in storage will be filled to tank tops in the near term.