OPEC member Kuwait does not expect any coordinated action to be decided during the group's upcoming meeting in Vienna on June 2, the country's acting oil minister said on Thursday.

The "focus of the meeting will be to think and look around ... about what could be done further to stabilize the markets," Anas al-Saleh, told Reuters in Tokyo, Japan, on the sidelines of a Kuwait-Japan business seminar.

An earlier plan to agree on measures to stabilize soaring oil production that pulled down crude prices LCOc1 by more than 70 percent between mid-2014 and early 2016 failed during producer talks in Qatar's capital Doha in April.

At the April meeting, OPEC rivals Saudi Arabia and Iran could not agree on deal terms, triggering criticism that the producers' cartel had lost its ability to act.

At the next official meeting of the Organization of the Petroleum Exporting Countries (OPEC), scheduled for June 2 in Austria's capital Vienna, al-Saleh said the focus would be on dialog, not market intervention.

"The expectation is to have more dialogue between OPEC members, and then from that we will be able to determine what would be the proper action going forward," he said.

Al-Saleh also said recent price increases from 12-year lows hit early in the year to around $47.50 per barrel for Brent crude futures were justified.

"Based on the decrease in production that has been shown in the last three weeks, I assume fundamentally the price represents the fall of production," he said.

While OPEC members and Russia have kept output high in a fierce battle for market share, production in other regions including the Americas, Asia and Africa has fallen sharply, fast eroding a global supply overhang that reached as much as 2 million barrels per day last year.

http://www.reuters.com/article/us-opec-kuwait-idUSKCN0Y30BH

May 11 The price of Brent crude oil should rebound in the next year to about $76 a barrel as consumption continues to increase in coming years, a key U.S. energy agency said on Wednesday.

The U.S. Energy Information Administration anticipates increased growth in fuel consumption, largely through growth in emerging economies in Asia, the Middle East and Africa, it said in an international outlook for the energy market.

This is the first EIA International Energy Outlook report since September 2014. The EIA said that due to the glut of supply, it expects the spread between U.S. crude and Brent to remain between $0 and $10 a barrel.

The EIA said it expects liquids production to grow by 30.5 million barrels/day by 2040. It said world GDP growth should average 3.3 percent in the next 25 years, largely due to stronger economic growth in emerging nations.

http://www.reuters.com/article/usa-oil-outlook-idUSN9N0ZF01I

At least a fifth of Nigerian oil production, equivalent to almost 400,000 barrels a day, has been shut down as a pipeline closure added to disruptions caused by militant attacks.

Royal Dutch Shell Plc declared force majeure -- a legal clause that allows it to stop shipments without breaching contracts -- on exports of Bonny Light crude following the discovery Tuesday of a leak on the Nembe Creek Trunk Line, according to a statement Wednesday. The incident comes amid escalating attacks by militants operating in the Niger River delta, which have already halted shipments from the Forcados terminal and the Okan oil platform.

“‘We don’t know if it’s an attack or sabotage” on the Nembe Creek line, Lagos-based Sola Omole, a spokesman for Aiteo Exploration and Production Co., the operator of the pipeline, said by phone. “It is only when the contractor gets to the site and takes a look at it that we can say definitively that this is the cause of the problem. ”

A resurgence of attacks on oil infrastructure caused Nigerian production to drop to the lowest in 20 years last month, compounding the impact of slumping crude prices on Africa’s largest economy. Formerly the continent’s largest oil producer, the nation has slipped into second place after Angola, according to data compiled by Bloomberg.

Production Halt

The Nembe Creek Trunk Line runs for 100 kilometers (62 miles) through the Nigeria’s oil producing region to the Bonny crude oil terminal and has a capacity of 600,000 barrels a day, according to Shell’s website. At least 78,000 barrels a day of Aiteo’s crude output has been shut down because of the leak, Omole said. Shell said the force majeure covers all Bonny Light shipments -- scheduled at 217,000 barrels a day next month -- without specifying how much production could be disrupted.

The shutdown last week of Chevron Corp.’s Okan platform, which feeds the Escravos export facility, affected 90,000 barrels a day of production. About 200,000 barrels a day of output has been halted at Shell’s Forcados terminal since February.

Oil futures recouped losses following the Bonny Light force majeure, with international benchmark Brent crude gaining as much as 1.3 percent to $46.13 a barrel on the London-based ICE Futures Europe exchange.

Delta Avengers

A group calling itself the Niger Delta Avengers said on its website that it was responsible for the attack on the Chevron facility. The authenticity of the claim could not be verified by Bloomberg News.

Nigeria’s armed forces are aware of a new group “who have vowed to cripple economic activities,” Brigadier General Rabe Abubakar said in a statement on Tuesday. “The military will employ all available means and measures within its rule of engagement to crush any individual or group that engages in the destruction of strategic assets and facilities of the government.”

International producers including Shell and Chevron began evacuating non-essential workers and contractors from major oil production facilities as part of safety measures, Chika Onuebgu, Rivers state chairman of the Trade Union Congress of Nigeria, said by phone Tuesday. “It is not a lock-down, it is just a precautionary measure” and oil operations continue in areas not affected by attacks.

The current attacks echo a similar wave of violence between 2006 and 2009, which ended after militants accepted an amnesty from late-President Umaru Musa Yar’Adua, disarming in exchange for cash payments. The militants have been frustrated by current President Muhammadu Buhari’s decision to scale back the allowances.

The International Energy Agency estimated last month that Nigeria could lose an estimated $1 billion in revenue by May, when it expects repairs on Forcados to be completed. The terminal may not restart until June, Kachikwu said April 20.

“The government needs to address this very quickly,” Onuegbu says. “Insecurity is becoming a big problem in the Niger delta with the return of these attacks.”

http://www.bloomberg.com/news/articles/2016-05-11/nigeria-oil-output-drops-further-as-leak-compounds-security-woes

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The West's energy watchdog, the International Energy Agency, faces a possible legal split from its parent body following decades of friction and fresh disagreements over cooperation with China, a document seen by Reuters shows.

Any divorce from the Paris-based founder, the Organisation for Economic Co-operation and Development (OECD), might complicate funding and confuse governance of the IEA, whose role includes coordinated stocks releases to address global oil shortfalls.

The dispute also highlights the complexity of cooperation between China and Western organizations such as the OECD, which has a stated commitment to democracy and market economies.

An OECD document, seen by Reuters, said that its council sent a letter to the IEA in April proposing a separation, citing years of IEA resistance to OECD rules on administration, financial audits and the China issue.

"The IEA started negotiating with China in 2016 to establish an IEA center in Beijing, without prior consultation with the OECD which, as the IEA was aware, was itself negotiating with China to create a policy center and a country office," the document said.

The OECD declined to comment, as did an IEA spokeswoman, who said any separation would be a decision for member states.

Created in 1961 to stimulate economic progress and world trade, the OECD originated from the Organisation for European Economic Co-operation, set up in 1948 to help administer the Marshall Plan to reconstruct Europe with U.S. financial aid.

The IEA was established in 1974 at the proposal of U.S. Secretary of State Henry Kissinger to help industrialized nations deal with the oil crisis after the Arab embargo squeezed supplies and sent prices surging.

Since then, energy markets have changed radically. OPEC no longer has the same power, non-IEA China has overtaken the United States as the biggest energy user and the shale revolution has turned the latter into a net exporter.

The IEA's Executive Director Fatih Birol has made strengthening ties with emerging powers the agency's top priority, choosing China for his first trip into the job and breaking with the practice of previous chiefs, who began their tenure by visiting an IEA country.

Should a separation take place, the OECD said it would "assist and support the IEA to ensure that the productivity and effectiveness of the IEA remain unimpaired during transition".

But it also said that it would then be up to "the IEA member countries to provide the IEA with all the necessary powers and capacities to administer itself as a fully independent international organization."

Compared with the much bigger OECD, which groups 34 of the world's leading economies and has about 2,500 staff, the IEA has 240 employees and 29 member states, all of which are also OECD members.

Under its autonomous status, its governing board consists of energy ministers of member countries, which contribute four fifths of its budget of around 27 million euros ($30.74 million) with the rest generated from sales of publications.

http://www.reuters.com/article/us-iea-oecd-split-idUSKCN0Y20O1

May 11 Oilfield services provider John Wood Group Plc warned that full-year core earnings would be about 20 percent lower than the last year, as it had seen further margin pressure due to lower activity by customers.

The company said the expected fall in EBITA was in line with analysts' current expectations, which it put at about $377 million, according a consensus it had compiled.

John Wood reported EBITA of $470 million last year.

http://www.reuters.com/article/john-wood-outlook-idUSL3N1882GS

French utility Engie is looking to offload its oil and gas assets in Indonesia and Malaysia as a package in a sale process being run by Bank of America Merrill Lynch, according to a document seen by Reuters.

Engie, which joins a number of European utilities in selling oil and gas exploration and production assets after a sharp drop in energy prices, is looking to raise up to $500 million from the sale, several banking sources close to the process said.

The first bidding round for the assets is scheduled to be completed in mid-June, a banking source said.

The package consists of five assets including a 33.3 percent working interest in the Muara Bakau offshore gas and very light oil project in Indonesia operated by Italy's Eni. In Malaysia, Engie is selling 20 percent stakes in two exploration blocks, according to the document seen by Reuters.

"Engie's preference is to divest the entire interests in its upstream portfolio in Indonesia and Malaysia in a single package," the sales memorandum said.

Engie and Bank of America declined to comment.

Potential buyers include Asian oil firms such as Indonesia's Pertamina, Malaysia's Petronas, Thailand's PTT Exploration and Production (PTTEP) and Japan's Inpex and Mitsui, as well as companies backed by private equity funds, the sources said.

Several other major oil companies have put assets in Southeast Asia on the block in recent months, including Chevron and ConocoPhillips.

Deal making in the oil and gas sector has significantly slowed down since the sharp fall in oil prices nearly two years ago while the number of assets on the market has climbed as companies seek to raise cash.

Other European utilities such as RWE, EDF , Enel and Centrica are also looking to sell upstream oil and gas assets.

In a separate process, the French utility, formerly known as GDF Suez, is selling its 60 percent stake in the Bonaparte natural gas project in Australia, one of the sources said.

Engie is not marketing its northwest European and North African assets but would be willing to consider offers for them, according to several of the sources.

http://www.reuters.com/article/engie-ma-idUSL5N1873ZS

Mexican oil regulators have finalised contracts on a key first round of mature-field blocks, but only 19 of 25 deals were signed after some bidders failed to muster the appropriate guarantees to complete the process.

http://www.upstreamonline.com/live/1432336/mexico-onshore-bidders-bail-on-contracts?utm_source=twitterfeed&utm_medium=twitter

Parex Resources Inc., a company focused on Colombian oil and gas exploration and production, is pleased to announce unaudited financial and operating results for the three months ended March 31, 2016. All amounts herein are in United States dollars unless otherwise stated.

Q1 2016 Financial and Operational Highlights

Production averaged 28,900 barrels of oil equivalent per day ('boe/d'), an 8 percent increase over the comparative quarter in the prior year. Oil production for the quarter was 28,702 barrels of oil per day ('bbl/d');
Generated $15.5 million in funds flow from operations. Realized sales price of $27.10/boe was a $8.11/boe discount to the average Brent price; the operating netback was $8.06/boe and funds flow netback was $5.35/boe;
Quarter-over-quarter, transportation expenses decreased by $0.60/bbl (5%) and operating expenses decreased by $1.64/bbl (25%);
Capital expenditures for the quarter were $4.5 million compared to $27.0 million in the same period of the previous year. Although no wells were drilled during the First Quarter, our 2016 drilling program commenced in May 2016; and,
Strengthened the balance sheet further with $80.0 million in net positive working capital compared to $76.7 million in the previous quarter.

Parex continues to maintain a strong financial position: debt free, an undrawn bank facility and holding $91.5 million of cash as at March 31, 2016.

2016 Guidance & Operational Update

We had previously released that assuming Brent oil prices of $35-$40/bbl, we expected our 2016 capital expenditures budget and funds flow from operations to be approximately $40-$80 million and production of 29,000 boe/d. With current Brent oil prices approximately $45/bbl, we now anticipate 2016 capital expenditures to increase to $80-$100 million and to be funded from funds flow from operations. In addition, we have approximately $80 million of net working capital, no debt and an undrawn bank facility available for future growth opportunities. Production guidance for 2016 will remain at 29,000 boe/d pending review and evaluation of exploration drilling results.

Our 2016 drilling program has recently commenced with the Jaruki-1 exploration prospect on the Cabrestero Block in the Llanos Basin. Overall, we are targeting to drill up to 9 exploration wells and 4 appraisal/development wells. As part of this program, Parex plans to drill 3 wells in the Middle Magdalena Basin and acquire approximately 400 km2 of 3D seismic on Block VIM-1 in the Lower Magdalena Basin.

http://www.oilvoice.com/n/Parex-Resources-announces-first-quarter-2016-results/f266da4888d0.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29

The International Energy Agency issued a downbeat forecast for US light tight oil production levels through 2020 Wednesday, predicting that overall shale output would not flatten out even at $60/b average oil prices over the period.

In a presentation at the Platts Global Crude Oil Summit, IEA chief economist Laszlo Varro gave an updated set of scenarios that appeared more negative than the agency's previous World Energy Outlook, published in November 2015.

Varro also addressed the effect of climate change policies on investment and said even under a scenario that sees global temperatures rise 2 degrees Celsius, investment in oil production would still be needed.

Long-term demand for diesel looks "quite robust" despite recent air quality concerns, he added.

The latest forecast expects US light tight oil production to decline by 3 million b/d in the 2015-2020 period if oil prices average $40/b over the period and would still decline slightly at $60/b.

Only at $70/b prices would light tight oil production rise slightly, while $100/b prices would result in a 1.5 million b/d increase over the period, according to the forecast.

"The US oil industry is fighting very hard and I'm really impressed by how hard they fight, but they cannot overcome the laws of gravity. So investment is declining in the US quite significantly," Varro said.

November's World Energy Outlook forecast that a $60/b oil price in the 2014-2020 period would be enough to lift light tight oil output slightly and that output would rise by 2 million b/d at a $100/b average price. It said output would fall by a little over 2 million b/d at a $40/b oil price.

Varro highlighted the contribution made by shale developments to the flexibility of global supply, saying this reversed a half-century trend.

"There's roughly a 4.5 million b/d flexibility in US light tight oil production depending on oil prices, which can come to the market very, very rapidly," he said.

"For almost half a century, the oil industry was moving into bigger and bigger, more and more complex ... projects. The industry was moving from two or three-year North Sea offshore projects to a 10-year Brazilian deep offshore project ... projects became bigger, the investment forecasts became more and more rigid," Varro said.

"Then suddenly came light tight oil in the US, where the average project type is $10 million not $10 billion, where the project implementation time is three months and not 10 years. So a half-century long trend toward increasing complexity and increasing project size was broken and that led to a very different oil supply which can react to the demand changes much more rapidly," he added.

On Tuesday, the US Energy Information Administration forecast US oil production would fall from 9.43 million b/d in 2015 to 8.6 million b/d in 2016 and 8.19 million b/d in 2017, attributing the decline entirely to onshore plays in the Lower 48 states.

http://www.platts.com/latest-news/oil/london/latest-iea-us-shale-scenario-paints-worsening-21434369

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BP Plc, rig-owner Nabors Industries Ltd. and explorer Pioneer Natural Resources Co. all said in the past 24 hours that prices above $50 will encourage more drilling or provide the needed boost to cash flow. With oil bouncing close to $45 a barrel, an industry that has been shaving costs to stay competitive is ready for signs of stability at a price level less than half of 2014’s average.

At an average price of $53 per barrel of oil means the world’s 50 biggest publicly traded companies in the industry can stop bleeding cash, according to oilfield consultant Wood Mackenzie Ltd. Nabors, which owns the world’s largest fleet of onshore drilling rigs, said it has already been talking with several large customers about plans to boost work in the second half of the year if prices rise "comfortably" above $50.

"It’s not just about touching $50," Fraser McKay, vice president of corporate analysis at Wood Mackenzie in Houston, said Tuesday in a phone interview. "It’s about touching, maintaining and having the perception of future prices above $50 a barrel before you start sanctioning projects that are economic at $50 a barrel."

Spending Cuts

The global oil industry slashed more than $100 billion in spending last year and is in the midst of further cuts this year to survive what Schlumberger Ltd. has called the industry’s worst-ever financial crisis. In North America alone, spending is expected to drop by half from last year.

Prices have rebounded by about two-thirds from a 12-year low, with Brent, the international crude benchmark, trading above $45 a barrel Tuesday. The rally has explorers from BP to Pioneer looking ahead to an eventual recovery as they release first quarter earnings this week. Next year, BP will be able to balance cash flow with shareholder payouts and capital spending at an oil price of $50 to $55 a barrel, down from a previous estimate of $60, the London-based explorer said. Pioneer expects to add as many as 10 horizontal drilling rigs when oil reaches $50 and the outlook for supply and demand of crude is positive, the company said Monday in its earnings statement.

For every $5 that oil prices climb, above a baseline of $37, Continental Resources Inc. adds another roughly $200 million in revenue, Chief Operating Officer Jack Stark said last month in an interview in New Orleans. By the time oil prices reach $52, the Oklahoma City-based explorer would probably look at adding more rigs, he said.

"We won’t chase price spikes," Stark said. "We’re committed to being patient."

Failed Rally

Yet even talk of ramping up again is bringing a stinging reminder of last year’s failed attempt to restart activity too quickly after oil prices rose.

"We got out ahead of ourselves -- bit of a head fake there," Tony Petrello, chief executive at Nabors, told analysts and investors Tuesday on a conference call. "We’re going to be a little more guarded here."

Exactly when oil prices hit that level and how long they need to stay there is a question no one can say for sure. Nabors said the activity could start up in the middle of the third quarter or into the final three months of this year. Continental estimated that supply and demand could be nearing balance later this year and be "absolutely in balance" or in need of more oil next year.

"The absolute timing may be off a bit," Stark said, "but ultimately it’s going to happen."

- See more at: http://www.rigzone.com/news/oil_gas/a/144215/Oils_Magic_Number_Becomes_50_a_Barrel_for_Promise_of_Recovery?rss=true#sthash.dAXfgmIq.dpuf

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U.S. crude oil refinery inputs averaged 16.2 million barrels per day during the week ending May 6, 2016, 193,000 barrels per day more than the previous week’s average. Refineries operated at 89.1% of their operable capacity last week. Gasoline production increased last week, averaging about 10.1 million barrels per day. Distillate fuel production increased last week, averaging over 4.6 million barrels per day.

U.S. crude oil imports averaged about 7.7 million barrels per day last week, down by 5,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged about 7.8 million barrels per day, 8.4% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 779,000 barrels per day. Distillate fuel imports averaged 118,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week. At 540.0 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. Total motor gasoline inventories decreased by 1.2 million barrels last week, but are well above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.6 million barrels last week but are well above the upper limit of the average range for this time of year. Propane/propylene inventories rose 1.3 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories decreased by 1.4 million barrels last week.

Total products supplied over the last four-week period averaged about 20.1 million barrels per day, up by 3.5% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.5 million barrels per day, up by 5.1% from the same period last year. Distillate fuel product supplied averaged 4.1 million barrels per day over the last four weeks, up by 0.7% from the same period last year. Jet fuel product supplied is up 2.1% compared to the same four-week period last year.

Cushing inventories grow 1.5 mln

http://ir.eia.gov/wpsr/wpsrsummary.pdf

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                                             Last Week     Previous Week    Last Year
       
Domestic Production 'ooo....... 8,802                 8,825               9,374

http://ir.eia.gov/wpsr/overview.pdf

In the fall of 2011, Tom Spalding, a slim geologist with salt-and-pepper hair, stood before the board of directors of Pioneer Natural Resources, an oil and gas exploration company, to make a presentation unlike any he’d made in his 14 years there.

Using two flatscreens in Pioneer’s suburban Dallas boardroom, Spalding, the company’s vice president for geoscience, walked directors through the results of weeks of research. He and his team had explored for undiscovered oil in horizontal shales deep within the Permian Basin, a vast rock formation beneath West Texas. They had analyzed seismic data and core samples of 7,000 company wells as well as information on decades-old wells archived at the University of Texas. “When we first did it, we couldn’t believe it,” Spalding recalls. “We had to go back to check our measurements.”

He showed the board a schematic of 13 slabs stacked one atop another like something out of a Frank Gehry sketchbook. Almost every tier was splashed in bright red, signifying the presence of crude. Crucially, there was scant evidence of the saltwater zones that often dot such diagrams and can spell doom. It was all oil.

Pioneer’s chief executive officer, Scott Sheffield, watched with anticipation. He’d been drilling vertical wells in the Permian since 1979 with only modest success. After hearing his geologist, he ordered the drilling of two horizontal test wells.

Those wells cost four times what a vertical did, but wound up spewing seven times the crude. Sheffield called for more horizontals. He had the money to invest because he’d sold off seemingly sexier oil projects and avoided borrowing while other independent drillers were wagering yet again that oil prices would forever climb.

By 2015, Sheffield had stopped drilling new vertical wells altogether and diverted almost all of Pioneer’s effort and money into the Permian’s shale. All of which helps explain how Pioneer—a $26 billion company with less than a 10th of ExxonMobil’s market value, almost no oil fields beyond Texas, and the same boring CEO for more than 30 years—is now showing the world how to thrive amid the worst oil bust since the 1980s.

Sheffield doesn’t get out to West Texas that often. But he has brought Pioneer home, and he bristles a little at the suggestion that he’s just lucky to have those acres. He invokes Parsley, who died in October at the age of 86. “You shouldn’t sell long-life assets,” he says. “The best decision we ever made was never to sell the foundation of the company.”

http://www.bloomberg.com/news/articles/2016-05-11/how-oil-s-most-boring-ceo-found-himself-atop-10-billion-barrels

Chesapeake Energy, the second largest natural gas driller in the U.S. (behind Exxon Mobil) and one of the largest in the Marcellus/Utica, has been on a roller coaster for the past few years. 

Corporate raider Carl Icahn bought himself a big slice of the company, and along with another corporate raider/Chesapeake investor, Mason Hawkins, they tossed CEO Aubrey McClendon out the door. The two then installed their own guy, Doug Lawler, who proceeded to slash jobs and sell assets–all in a bid to prop up the company’s stock price so these two corporate raiders can make a buck on their investment. We call it disgusting. 

Others call it business as usual. The result? Chesapeake’s stock tanked and there were rumours of an impending bankruptcy. But then Chessy’s bankers decided to keep a $4 billion line of credit open in April. That helped set off a rally in the company’s stock. 

But the rally has evaporated like St. Elmo’s fire. In a recent filing with the Securities and Exchange Commission, Chesapeake spoke plainly about the possibility that if the price of natgas does not recover soon, they may not be able to meet their debt obligations in 2017. In other words, “We may be heading for bankruptcy next year, if…”

http://marcellusdrilling.com/2016/05/latest-sec-filing-shows-chesapeake-doesnt-rule-out-bankruptcy/

Perpetual Energy Inc. exchanged more of its senior debt for shares in Tourmaline Oil Corp.

The Calgary-based oil and gas company said it had swapped an additional C$2 million ($1.6 million) of 8.75 percent senior notes, on top of C$150 million exchanged on April 27, for a total of C$152 million of senior notes traded for 3.1 million Tourmaline shares, it said in a statement.

An aggregate C$211.8 million principal amount of senior notes have been tendered, including C$138.6 million held by Perpetual’s directors and officers, the company said. Perpetual has a maximum swap amount of C$235 million in senior notes.

The deadline for noteholders to accept a swap was extended to May 13 from May 10.

Shares of Calgary-based Tourmaline rose 0.8 percent to C$29.68 at 9:58 a.m. in Toronto, and have gained 33 percent this year.

http://www.bloomberg.com/news/articles/2016-05-11/perpetual-energy-swaps-more-senior-notes-for-tourmaline-shares

Linn Energy on Wednesday became the largest oil and gas driller to file for bankruptcy protection since energy prices began their slide in 2014.

The company said it had reached an agreement with creditors to reorganize the company and planned to continue operating through the Chapter 11 bankruptcy process. Linn Energy reported about $8.3 billion in debt and employed 1,650 workers, including at its downtown Houston headquarters.

The filing comes after Linn Energy spent 2015 struggling with low prices and high debt and much of 2016 flirting with bankruptcy.

Linn Energy is one of the few oil producers designed to function like a partnership that pays out its cash flow to investors, and it sought to ensure those payments were safe by selling hedges on future production. In October, Linn Energy suspended those payments to preserve cash, but that wasn’t  enough to make debt payments.

Linn Energy  put off its creditors while it sought more time to negotiate with lenders. In March, the company said that bankruptcy “may be unavoidable.”

http://fuelfix.com/blog/2016/05/11/linn-energy-to-restructure-file-for-chapter-11-bankruptcy/

For a brief moment this week, Canadian natural gas was basically free.

While oil producers fretted over what production shut-ins, caused by a massive Alberta wildfire, would do to the price of Canadian crude oil, those same producers are big buyers of natural gas, and without them the price dropped to just C$0.05 per thousand cubic feet (mcf) on Monday. A shut-in is when the product is available but not able to reach the market.

"It was essentially free at the lows on Monday," said Martin King, an analyst at Alberta energy advisory FirstEnergy Capital, noting that these were the lowest AECO prices on record going back to at least 1985.

Oil sands companies around the Canadian energy center of Fort McMurray, Alberta, began to restart operations on Tuesday after the wildfire forced a week-long shutdown.

During the wildfire shutdowns, producers were not using gas to fuel cogeneration power plants that generate electricity and the steam used to cook the oil sands to produce crude.

As a result, the Canadian benchmark AECO hub in southeast Alberta averaged less than C$0.50/mcf on Monday, at one point dropping to an intraday low of just 5 cents, King said.

Natural gas prices have rebounded somewhat. With the return to production of one oil sands cogeneration plant at the Syncrude project this week and the expected restart of others in coming days, AECO prices have already climbed to around C$1/mcf.

But the high level of gas in storage after a mild winter means prices are expected to remain relatively cheap for the rest of the year, according to analysts.

AECO prices averaged C$4.47/mcf in 2014 and C$2.78 in 2015, but just C$1.62 so far in 2016, according to FirstEnergy.

To avoid filling Alberta's inventories to their maximum capacity, some drillers will likely have to cut output later this summer if they are not able to sell more gas to the already-oversupplied U.S. markets.

"Some producers will likely be forced to shut in some output because they won't get a decent price for their product, and some of the gas that is produced will probably make its way to the oversupplied U.S. market," said Kent Bayazitoglu, director of market analytics at energy consulting firm Gelber & Associates in Houston.

The biggest gas producers in Alberta include units of Encana Corp, Repsol SA, Canadian Natural Resources Ltd , Cenovus Energy Inc and Husky Energy Inc.

Canadian Natural is planning to shut in an additional 40 million cubic feet per day (mmcfd) by the end of 2016 because of low gas prices, a spokeswoman said, adding the decision was made before the wildfire outages. Canadian Natural said last week it already had about 43 mmcfd of gas shut in due to low gas prices.

"We've seen a couple of small producers in Alberta shut-in gas production due to low prices in recent months, but Canadian Natural's planned shut-ins may only be the tip of the iceberg based on how low AECO prices are," said Richard Redash, managing director, natural gas, at energy consultancy PIRA.

The low prices attracted U.S. buyers. So far in May, net imports of gas from Canada have averaged 5.6 billion cubic feet per day (bcfd), up from 5.4 bcfd in April. That is an increase of about 15 percent compared with the same period in 2013-2015, according to Thomson Reuters Analytics.

http://www.reuters.com/article/us-canada-wildfire-natgas-idUSKCN0Y30AL

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