Iraq is negotiating with Exxon Mobil Corp. and Petrochina Co. to develop two oil fields in the south of the country as it seeks to maintain overall production at about 4.8 million barrels a day for the rest of 2016, Deputy Oil Minister Fayyad Al-Nima said.

The companies have submitted offers to develop the Artawi and Nahran Omar fields, which Iraq’s Oil Ministry hopes will produce a combined 550,000 barrels a day, Al-Nima said Wednesday in an interview in Baghdad. The fields together are pumping about 70,000 barrels daily, and the ministry wants to start the project in six months, he said. Al-Nima assumed the duties of oil minister after Adel Abdul Mahdi suspended his participation in the cabinet in March.

Iraq, OPEC’s second-biggest member, is producing 4.78 million barrels a day, with 4 million barrels coming from fields in the south, Al-Nima said. The self-governing Kurdish region in northern Iraq contributed the remainder, pumping more than 700,000 barrels a day independently of the central government, he said. Exports from the south are averaging 3.19 million barrels a day, and the ministry sees shipments reaching 3.2 million by month-end and staying at about that same level until the end of the year, he said.

http://www.bloomberg.com/news/articles/2016-07-27/iraq-seeks-exxon-petrochina-help-to-develop-two-oil-fields

Capital expenditure cuts of $150 billion for 2016 and 2017 by U.S. exploration and production companies are expected to result in average production losses of 4.2 million barrels per day in the Lower 48 through 2020, according to Wood Mackenzie.

This is not only a trend in the U.S., with upstream companies around the world trimming capex by more than $370 billion for 2016 and 2017. Wood Mackenzie believes that this will impact oil production and the world will result in 7 billion fewer barrels of oil through 2020.

“The plays that saw the highest proportion of their capital expenditure cut were Eagle Ford and the Bakken,” said Jeanie Oudin, Wood Mackenzie Senior Research Manager, Lower 48. “That’s because the two plays were in full-scale development, with most operators' acreage held by production at the time oil prices began to fall, allowing for a more responsive slowdown in activity,” she added, asquoted by Oil and Gas Journal.

While Bakken and Eagle Ford plays account for thirty-six percent of those cuts, the Midland and Delaware Basins have witnessed fewer declines in drilling activity.

“People expected that overall tight oil production would collapse when companies stopped drilling; however, it hasn’t collapsed, it’s only declined,” said Oudin. “Not only have operators built up a backlog of DUC wells, they are also utilizing longer laterals and enhanced completions to increase the productivity of wells as they bring them online. They’re just not adding new volumes as quickly.”Related: Forget The Glut – This Is Why Oil Prices Will Rise

When the shale boom started, the output from the new wells dropped by 90 percent in the first-year itself. By 2012, North Dakota’s Bakken shale four-month decline rate reduced to 31 percent, and in 2015, the decline rate stood at only 16 percent for the same time frame, according to data compiled and analyzed by oilfield analytics firm NavPort for Reuters.

Similarly, in the Permian Basin of West Texas, the drop from the peak production through the fourth month of a new well’s life has improved from 31 percent decline in 2012 to 18 percent in 2015.

"We're exposing more of the reservoir and breaking it up so we don't get as sharp a decline," Scott Sheffield, chief executive of Pioneer Natural Resources Co, a top Permian producer, told a recent energy conference, reports Reuters.

The recovery in crude prices from below $30 to $50 per barrel has led to an increase in the onshore oil active rotary rig count, as measured by Baker Hughes, which will lead to an increase in production from new wells after a few months, as shown in the chart below.



Nevertheless, the Eagle Ford rig count is still 60 percent below previous year’s numbers.Related: Faulty Data? Why The Oil Glut Could Be Much Smaller Than Believed

Higher crude prices have also encouraged companies with a strong balance sheet to announce large mergers and acquisitions (M&A). The average value of the deals stood at $182 million, in the second quarter of 2016, the largest since the third quarter of 2014, which further increased to $199 million for the seven deals announced in the first three weeks of July, reports the U.S. Energy Information Administration.

The largest among the deals was the $560-million purchase of Permian Basin leasehold interests by Diamondback Energy from Luxe Energy LLC.

If the recovery in oil prices continues in the second half of the year, a few companies are likely to revise their capex up, however, if prices again correct, this will deliver a blow to the improving sentiment across the industry.

http://oilprice.com/Energy/Crude-Oil/Low-Oil-Prices-Kill-Off-7-Billion-Barrels-Of-Oil-Production.html

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Brazil’s oil exports used to cover Chinese debt obligations

Brazil is considering scrapping nationalistic oil legislation – which was implemented by President Dilma Rousseff – in favor of a concession model which would attract more international investment. While the legislation was put in place to primarily benefit Petrobras, widespread corruption in the state-run oil company and low oil prices have led to the change of heart. While the changing of legislation may take up to a couple of years, its implementation would remove the obligation for Petrobras to operate all oil fields – encouraging outside investment.

According to our ClipperData, Brazilian crude exports averaged just shy of 600,000 bpd last year, and are currently closer to 560,000 bpd this year. The leading recipient of Brazilian crude is China, accounting for about a third of exports. Brazil currently has a $10 billion credit line with China, which it is repaying in cash or oil, depending upon China’s request.

This is in addition to a deal where Petrobras sends up to 200,000 bpd per month to China, in a long-term deal struck in 2009 (hark, their last financial crisis). Uruguay is a close second in terms of export volumes, while the U.S is a distant third, accounting for ~10%. India is fourth.

http://fuelfix.com/blog/2016/07/27/market-currents-brazils-oil-exports-used-to-cover-chinese-debt-obligations/

Cyprus received expressions of interest from ENI, Total, Statoil, Exxon Mobil, Qatar Petroleum, and Cairn in a licensing round for offshore hydrocarbon blocks which lapsed last week, its energy ministry said on Wednesday.

Cyprus had placed three offshore blocks up for exploration. The most pronounced interest from two consortia and one company was for an offshore sea block in close proximity to the Zohr field offshore Egypt, where ENI reported the discovery of an estimated 30 trillion cubic feet of natural gas last year.

The east Mediterranean island is located in the Levant basin, where both Israel and Egypt have made some of the world's biggest natural gas discoveries in the past decade.

Cyprus found an estimated 4.5 trillion cubic feet of natural gas in one prospect in late 2011.

Cairn through its Capricorn Oil unit had applied jointly with Israel's Avner and Delek over one block, ENI and Total jointly over two blocks, ENI on its own over another, Exxon Mobil and Qatar Petroleum over one, and Statoil Upsilon Netherlands B.V. on its own, a news release from the Cypriot energy ministry said.

http://www.reuters.com/article/cyprus-gas-bids-idUSL8N1AD38L

Foreign engineering companies have bid to build Saudi Aramco's clean fuels project at the state oil giant's Ras Tanura refinery, industry sources told Reuters.

The bid deadline was July 17 for the $2 billion-plus scheme which will remove sulphur from refined oil products and is part of a drive by the kingdom to meet stricter environmental standards in export markets.

The project is split into two packages, one which includes the clean fuels units and the other for the supporting utilities and offsites.

Companies which bid for both packages, sources said, were:

-Japan's JGC

-South Korea's GS

-Hyundai Engineering and Construction

-Samsung Engineering

-Tecnicas Reunidas

Companies that only bid for the utilities and offsites package were:

-UK's Petrofac

-India's Larsen and Toubro

Saudi Aramco does not discuss ongoing business plans, it said in response to a Reuters emailed query.

Both Samsung Engineering and Hyundai Engineering & Construction confirmed they had bid for both packages but declined to give other details.

A spokesman for JGC in Yokohama said the company is interested in the project, but declined to comment on whether or not it bid.

Petrofac and GS Engineering & Construction Corp declined to comment.

Tecnicas Reunidad declined to comment while Larsen and Toubro did not immediately respond to an emailed request for comment.

The Ras Tanura project, including a naphtha hydrotreater, was to be part of a second phase of upgrades to Aramco's refineries and was originally due to go on stream in 2016.

There had been fears the project would be scrapped, part of a long list of schemes scrapped by global oil majors which have been paring back investments to cope with lower oil prices.

This was not helped by the fact there have been at least three rounds of bidding for the project.

However, Saudi Aramco has said it is proceeding with its key projects. Chief Executive Amin Nasser saying last week it was evaluating the project at its largest and oldest oil refinery in Ras Tanura.

Last week, Aramco signed deals to build a 50-billion riyal ($13.33 billion) plus gas project in Fadhili and has said more projects are in the pipeline to keep up with growing gas demand needs for power generation and industry.

http://www.reuters.com/article/saudi-aramco-refinery-idUSL8N1AC3WC

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French oil and gas company Total said it had met its cost saving target ahead of schedule as it reported a better-than-expected rise in second quarter net profit led by increased output and a rebound in oil prices.

Total said it had achieved $900 million in savings so far this year. On top of $1.5 billon saved last year, this brings it to its targeted $2.4 billion of savings for the period leading up to the end of 2016. It now hopes to save more by year-end.

Chief Executive Officer Patrick Pouyanne said that while oil prices remained volatile, Brent crude had recovered from the start of the year to average $46 per barrel in the second quarter.

"Total captured the benefit of this rebound, and adjusted net income rose to $2.2 billion in the second quarter 2016 (versus the first quarter), an increase of 33 percent compared to the first quarter," Pouyanne said in statement.

Compared with a year ago though, the fourth-biggest western oil company's revenue fell 17 percent to $37.215 billion, reflecting much lower oil prices and even though oil production in the quarter rose by over 5 percent.

A Reuters poll of analysts had forecast second quarter net adjusted profit of $1.9 billion, expecting production levels to be lower.

Total said the increase in oil output due to new projects coming on stream was dampened by deteriorating security in Nigeria and Yemen, and forest fires in Canada.

It said projects in Bolivia and Kazakhstan were expected to start in the second half of the year, helping it meet a 4 percent production growth target in 2016.

Capital expenditure in 2016 is expected to be $18-19 billion, it added.

Total kept its dividend unchanged for the second quarter, at 0.61 euros per share to be paid in January.

http://www.reuters.com/article/total-results-idUSP6N196037

Anglo/Dutch oil giant Royal Dutch Shell on Thursday posted a sharp drop in second quarter 2016 profit compared to a year earlier quarter as lower oil and gas prices weighed on the company’s earnings.

On a current cost of supplies (CCS) basis, Shell’s 2Q 2016 earnings were $239 million, a drop of 93% from $3.361 billion in the first quarter of 2015.

On a CCS basis, Shell’s 2Q 2016 earnings, excluding identified items, were $1.045bn, a fall of 72% from $3.76bn in the second quarter of 2015.

Shell explained that, compared with the second quarter 2015, CCS earnings attributable to shareholders excluding identified items were impacted by the decline in oil, gas and LNG prices, the depreciation step-up resulting from the BG acquisition, weaker refining industry conditions, and increased taxation. Earnings benefited from increased production volumes from BG assets.

During the quarter, Shell’s capital investment was $6.3bn.

Oil and gas production in 2Q 2016 was 3.508 million barrels of oil equivalent per day, an increase of 28% compared with the second quarter 2015. The impact of BG on the second quarter 2016 production was an increase of 768 thousand boe/d.

Shell’s CEO Ben van Beurden said: “Downstream and Integrated Gas businesses contributed strongly to the results, alongside Shell’s self-help programme. However, lower oil prices continue to be a significant challenge across the business, particularly in the Upstream.

“We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects.”

http://www.offshoreenergytoday.com/shell-posts-sharp-drop-in-profit-over-low-oil-prices/

Italian major Eni has been ordered to stand trial in a long-running case of alleged bribery in Algeria involving related company Saipem, which used to be a full Eni subsidiary.

Milan-based Eni on Wednesday confirmed reports that it has been ordered by a judge in Italy to stand trial over the alleged actions, but denied it was involved in any wrongdoing.

“In relation to court proceeding for the alleged bribery case relating to Saipem’s activities in Algeria, Eni acknowledges that the new GUP (judge for the preliminary hearing) in charge of the case decided the commitment for trial for Eni,” a brief statement on Wednesday read.

“Eni continues to deny any illegal conduct and is confident that this will be ascertained in court proceeding.”

Reuters reported earlier in the day that the Italian judge had ordered Eni, Saipem and immediate past Eni chief executive Paolo Scaroni to stand trial over the allegations.

Saipem has stated to various media outlets that it is confident that the impending trial will prove any allegations against it are groundless.

A lawyer acting for Scaroni told Bloomberg that he is confident judges will prove his client's innocence.

In October a Milan court ruled that Saipem and five individuals should stand trial on charges that the contractor secured deals in Algeria through bribery. However, that ruling cleared Eni and Scaroni in the case.

Prosecutors at that time alleged that Saipem paid intermediaries €197 million ($216.7 million today) to win contracts worth €8 billion with Algeria’s state-owned Sonatrach. The charges related to events that took place up to the beginning of 2010.

http://www.upstreamonline.com/live/1439858/eni-to-stand-trial-over-algeria-payments?utm_source=twitterfeed&utm_medium=twitter

French oil services company Technip said on Thursday plans to cut spending due to the fall in oil prices was ahead of schedule as it reported a better-than-expected second quarter revenue.

* Technip says cost reduction plan ahead of schedule with 900 million euros ($995.94 million) savings to be delivered by 2016 (previously  700 million) out of the total planned of 1 billion euros.

* Technip says adjusted revenue at 2.8 billion euros, stable versus 1Q 16; balanced between both business segments.

* Says Adjusted operating income from recurring activities at 260 million euros, net Income of  123 million.

* Says upgrades 2016 objectives.

* Order intake in the second quarter at 1.5 billion euros.

* Says continue to expect for some time yet a slow rate of new orders and continued competitive pressure across the industry, notably for offshore developments: the prolonged and harsh downturn has not ended.

* Says received a successful early conclusion of the U.S. antitrust review from U.S. regulators.

http://www.reuters.com/article/technip-results-idUSP6N196038

2016 will see the start of a barren period for the offshore oilfield service (OFS) sector. A significant drop in project sanctioning brought about by the downturn, coupled with low rig dayrates, will see annual expenditure average $48.6 billion (bn) over 2016-2020, 25% lower than 2014's annual total of $65.3bn. The recent growth in offshore drilling seen since 2010 has been sharply halted - offshore well spuds saw an 8% reduction last year and a further 9% is anticipated for 2016. Even in the event of a rapid recovery in oil prices, offshore activity will be supressed as a result of final investment decisions (FIDs) for several developments in key offshore basins have been deferred - including Anadarko's flagship Shenandoah project and Woodside's Browse FLNG.

Asia - the largest-spending region - is predicted to see a 9% drop in drilling activity in 2016 as a result of Capex cuts from China's CNOOC as well as independents and supermajors cutting back in Indonesia and Malaysia. Also contributing to the decline is the scaling-back of operations by Chevron in the Gulf of Thailand - where in recent years the company has drilled thousands of wells. DW predicts offshore spending in Asia will decline to $15.2bn in 2017 before rallying slightly to $16.5bn by the 2020 - though it must be noted this is still 74% of 2014's peak.

Elsewhere, all other regions covered in this report will see declines in spending over the forecast period with the exception of the Middle East - where annual spending will increase 5% year-on-year from $6.6bn to $7.4bn over 2016-2020. This will largely be as a result of the full implementation of the giant South Pars gas development as well as brownfield developments of some of the world's largest offshore oilfields - namely Safaniya (Saudi Arabia) and Upper Zakum (United Arab Emirates).

As well as the drop in drilling activity, suppression of offshore rig dayrates will be a big issue for offshore OFS expenditure. The offshore drilling sector is currently heavily oversupplied with units brought to market during the boom years of 2011 to 2014, despite widespread scrapping of older rigs. DW therefore estimate offshore rig & crew spending will decline 2% year-on-year over 2016-2020.

Considering operators significantly cutting spending in most offshore plays and the current rig oversupply, DW foresee a flat trend in offshore OFS expenditure for the rest of the decade following declines in 2015 and 2016. Even in a scenario of a rapid recovery in oil prices, it is unlikely spending will recover to 2014 levels until well into the 2020s.

http://www.oilvoice.com/n/Global-Oilfield-Services-Offshore-Spending-Stuck-in-the-Doldrums/7b9a305863d0.aspx

A company set up by investment fund Emerstone Energy has won a contract for shale gas exploration in Ukraine, after Royal Dutch Shell PLC withdrew as separatist violence erupted in Ukraine's east.

State company Nadra Ukrainy on Wednesday named Yuzgas B.V. as the winner of the tender.

Shale would help Ukraine's ambitions to cut its gas purchases from Russia. Relations between the two plunged after Moscow's 2014 annexation of Crimea.

The Yuzivska Field of 7,800 square kilometers could, according to preliminary estimates, yield about 8-10 billion cubic metres of gas per year.

It is located in the Kharkiv and Donetsk regions in areas bordering territory seized by pro-Russian separatists. Since 2014 the conflict there has claimed more than 9,400 lives.

Ukraine in 2015 produced about 20 billion cubic meters of gas and imported 16.5 billion.

"In circumstances of falling world oil prices Ukraine sharply reduced the search of hydrocarbons," Nadra Ukrainy said in a statement without giving an exact amount of planned investments. "That is why it is important that the winner committed to invest several hundred million dollars into the programme of geological exploration at the Yuzivska site."

Yuzgas B.V. says on its website it was set up specifically for the tender by Emerstone Energy, owned by Emerstone Capital Partners.

The latter was founded by Jaroslav Kinach, head of a private Canadian company Iskander Energy Corp and a former Ukraine country head of the European Bank for Reconstruction and Development (EBRD).

http://www.reuters.com/article/ukraine-shalegas-idUSL8N1AD3EH

Amid an unprecedented global gasoline glut, the world’s oil refineries are finding a little solace in fuel oil, the product they try not to make. Russian plants, encouraged by the government, are making less and less of the substance that propels ships and is a feedstock in some power plants. With about three-quarters of that ever-diminishing output hitting export markets, fuel oil futures for North West Europe are close to the smallest discount to crude since 2014.

http://www.bloomberg.com/news/articles/2016-07-27/global-oil-refineries-get-surprise-gift-from-russia-chart

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"PADD 1 Is A Holy Mess" - Is This What Finally Drags Crude Oil Lower

Several months ago we reported that the next big threat to oil prices had nothing to do with oil fundamentals, either lack of demand or excess supply, or technicals, i.e., algo buying or selling, and everything to do with the upcoming glut of the most important crude byproduct: gasoline.

Sure enough, now that summer is here, this prediction is playing out just as expected and as Reuters reports, summer driving season is in full swing and American motorists are filling their tanks at a healthy clip, but that is not swelling the profit margins as much as usual at U.S. independent oil refiners such as PBF Energy and Valero Energy Corp.

How come?  As it turns out, the optimism that refiners had in the spring that the gasoline excess would clear out has not materialized. During the first quarter earning season, refining executives shrugged off the industry’s lousy earning as an aberration that would be remedied this summer. “We still are bullish gasoline and bullish octane," PBF CEO Tom Nimbley told investors in an earnings call back then. “The driving season really hasn't hit that hard yet.”

It has now, and while Nimbley was right about the surging summer demand, refiner margins are still being squeezed as gasoline and diesel inventories stubbornly sit well above five-year averages. Historically, summer gasoline demand usually fattens margins for refiners with seasonally high levels for the crack spread, the premium of a barrel of gasoline over a barrel of crude oil. But not this year said analysts who expect the situation to remain bleak in the weeks ahead unless there are large drawdowns in inventories.

Earlier today the DOE reported a modest 122K drawdown in gasoline stocks, which however is nowhere near enough to pressure gasoline inventories lower which remain much higher than they were last year at this time, and analysts have slashed earnings estimates for big U.S. refiners who report second-quarter results in coming weeks.

Nowhere is the situation more dire than the US East Coast, where refineries have been forced to cut production, just as we forecast several months ago they would have to as the relentless supply in crude did not balance out the demand for refined product. As Reuters points out, refiners on the East Coast, also known as "PADD 1" by the U.S. Energy Department, are typically the first to feel a profit pinch, because their margins tend to be thinner than those of other regions.

“PADD 1 is a holy mess,” said Andrew Lebow, senior partner at Commodity Research Group in Darien, Connecticut. “It is very unusual. If a market becomes extremely oversupplied, like PADD 1, they are going to have to cut runs.” That is another way of saying refiners will have to stay shut, which in turn will force crude to  build up in various on and offshore storage locations.

As a result, the U.S. gasoline crack spread a proxy for refiner margins, has dropped 34 percent in two weeks. On Wednesday, it hit a five-year low for this time of year below $13 a barrel. That is less than half the crack spread of $28 a barrel at this time last year.

http://www.zerohedge.com/news/2016-07-07/padd-1-holy-mess-what-finally-drags-crude-oil-lower

                                                Last Week  Week Before     Last Year

Domestic Production '000.......... .. 8,515            8,494               9,413
Alaska .......................................    482                449                   460

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

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U.S. crude oil refinery inputs averaged 16.6 million barrels per day during the week ending July 22, 2016, 277,000 barrels per day less than the previous week’s average. Refineries operated at 92.4% of their operable capacity last week. Gasoline production increased last week, averaging about 10.1 million barrels per day. Distillate fuel production decreased last week, averaging over 4.9 million barrels per day.

U.S. crude oil imports averaged over 8.4 million barrels per day last week, up by 303,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 8.2 million barrels per day, 8.7% above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 869,000 barrels per day. Distillate fuel imports averaged 93,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.7 million barrels from the previous week. At 521.1 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. Total motor gasoline inventories increased by 0.5 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories decreased by 0.8 million barrels last week but are above the upper limit of the average range for this time of year. Propane/propylene inventories rose 2.2 million barrels last week and are at the upper limit of the average range. Total commercial petroleum inventories increased by 2.7 million barrels last week.

Total products supplied over the last four-week period averaged over 20.2 million barrels per day, up by 0.7% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged about 9.8 million barrels per day, up by 2.6% from the same period last year. Distillate fuel product supplied averaged over 3.7 million barrels per day over the last four weeks, up by 0.2% from the same period last year. Jet fuel product supplied is up 4.2% compared to the same four-week period last year.

Cushing inventory up 1.1 mln

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

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Range Resources, one of the largest (and the very first) Marcellus Shale drillers, issued their second quarter 2016 update.

While there was plenty of good news Range highlighted at the beginning of the release–Marcellus production was up 16% year over year at 1.379 billion cubic feet per day, costs were down 8%, total debt as low as it’s been since 2012–there was no getting over the 800-pound gorilla in the room: Range lost $225 million for the quarter in 2Q16, versus losing $119 million in 2Q15.

One of the things Range seems most jazzed about is buying Memorial Resource Development Corp. and drilling in Louisiana instead of the Marcellus.

CEO Jeff Ventura did mention the company can quickly ramp up drilling on 200 well pads in the Marcellus when/if the time is right.

http://marcellusdrilling.com/2016/07/range-resources-loses-225m-in-2q16-marcellus-production-up-16/

U.S. oil producer Hess Corp (HES.N) reported a smaller-than-expected quarterly loss, helped by its efforts to keep costs low, and the company further cut its exploration and production budget for the year.

Oil producers have been drastically cutting their capital budgets for the year in response to the slump in oil prices that began in June 2014. Hess cut its E&P budget by $300 million to $2.1 billion.

Hess also cut its production forecast for 2016, mainly because of unplanned downtime at two Gulf of Mexico fields.

The company now expects net production of 315,000-325,000 barrels of oil equivalent per day (boepd), down from its previous forecast of 330,000-350,000 boepd.

The oil producers' net loss narrowed to $392 million, or $1.29 per share, in the second quarter ended June 30 from $567 million, or $1.99 per share, a year earlier.

The company reported an adjusted loss of $1.10 per share, while quarterly revenue fell 34.4 percent to 1.27 billion.

Analysts were expecting a loss of $1.24 per share and revenue of $1.21 billion for the quarter, according to Thomson Reuters I/B/E/S.


http://www.reuters.com/article/hess-results-idUSL4N1AD44J

The parade of quarterly updates continues. CONSOL Energy, once one of the largest coal companies in the U.S., now one of the largest independent drillers in the Marcellus and Utica Shale, issued their update. And in interesting one it is.

After having idled its rigs, CONSOL reports they will begin a “modest” drilling program once again in August. However, the strategy is shifting. CONSOL plans to drill eight new Utica wells (in Monroe County, OH) and only two new Marcellus wells (in Washington County, PA).

CONSOL will own 100% of the Utica wells but only has a 50% working interest in the Marcellus wells–which may be the biggest reason why they are focusing on the Utica for now.

Also in the update: CONSOL’s natgas production jumped 32% in 2Q16 over 2Q15. The big financial news is that CONSOL lost $470 million in 2Q16, but that’s an improvement over 2Q15 when the company lost $603 million.

Revenue dropped almost in half–from $545 million in 2Q15 to $286 million in 2Q16. Yesterday’s comprehensive update contains breakdowns of production by shale play, details on a 10-well “plugless” completion, and much more.

http://marcellusdrilling.com/2016/07/consol-energy-to-restart-drilling-in-august-mainly-in-utica/