Iran will probably struggle to restore lost crude production if it secures a deal to ease sanctions because the condition of halted fields will have deteriorated and more investment will be needed, according to Wood Mackenzie Ltd.

The country would be able to increase crude output by 120,000 barrels a day by the end of the year if it reaches an agreement on its nuclear program, according to a report by the Edinburgh-based consultant and Verisk Maplecroft. The report forecasts a further daily increase of 260,000 barrels by the end of 2016 and 220,000 barrels the following year.

Iran and world powers are working towards an agreement that would ease sanctions on the OPEC member’s oil sales in return for curtailing its nuclear activity. A “deal leading to the unwinding of sanctions is likely,” Wood Mackenzie estimates. Restrictions imposed on Iran’s oil trade in 2012 have curbed its shipments by about 50 percent.

“We have taken a conservative view of the pace of ramp-up of production should sanctions be removed,” Lindsay Grant, an analyst at Wood Mackenzie, said in an interview in London. “This is because of the uncertainty around the ability of the fields to produce at pre shut-in levels and whether or not there has been any reservoir or facility degradation.”

With sufficient investment by international oil companies, Iran could raise production to 4.4 million barrels a day by 2025, according to the report. The country will need to offer “competitive” terms to prospective investors because other producer nations are currently seeking investment, it said.

http://www.bloomberg.com/news/articles/2015-06-25/iran-seen-struggling-by-woodmac-to-restore-lost-oil-after-deal

Lukoil, Russia's No.2 oil producer, expects its earnings before interest, taxes, depreciation and amortisation (EBITDA) to increase by $2 billion this year, Chief Executive Vagit Alekperov told the company's annual general meeting on Thursday.

Lukoil's EBITDA fell to $15.6 billion last year from $16.7 billion in 2013.

http://www.reuters.com/article/2015/06/25/russia-lukoil-ebitda-idUSR4N0W501320150625

Russia's second biggest oil producer, Lukoil, expects its oil output in Russia to decline by around 2 million tonnes, Ravil Maganov, the company's deputy president on exploration and production, said on Thursday.

The company had planned to produce 86 million tonnes (1.73 million barrels per day) of oil this year, on a par with 2014 results.

http://www.reuters.com/article/2015/06/25/russia-lukoil-output-idUSL8N0ZB2A620150625

Israel's security cabinet approves gas deal with Noble, Delek

 Israel's security cabinet voted on Thursday in favour of a plan that would allow a U.S.-Israeli energy group to keep control of most of the country's natural gas deposits but would also put some others up for sale.

The decision is set to end months of uncertainty and will likely to be welcomed by Texas-based Noble Energy and Israeli conglomerate Delek Group. Their control of two sizeable gas fields was put in doubt late last year after they were branded a monopoly.

Details of the agreement have yet to be made public, but industry sources have said Noble and Delek will be allowed to keep control of Leviathan, the world's largest offshore gas discovery of the past decade.

"We are establishing a significantly more competitive market and putting in place mechanisms that will prevent price gouging," Eugene Kandel, a top economic advisor to Prime Minister Benjamin Netanyahu who led negotiations with Noble and Delek, said on Army Radio.

The 10-member cabinet for security and diplomatic affairs was an unusual forum to handle a primarily economic issue, but it allowed Netanyahu greater control. After voting in favour of the proposal unanimously, the government is widely expected to approve it.

"It is of decisive importance to move quickly to develop and expand the natural gas fields that have been discovered off Israel's shores out of concern for state security and the foreign relations of the State of Israel," a cabinet statement said after the meeting ended.

The deal gives Delek subsidiaries Avner Oil and Delek Drilling six years to sell their individual 15.625 percent stakes in another large field, Tamar, while Noble will have to lower its stake in that project to 25 percent from 36 percent, industry sources said.

Delek and Noble will also be forced to sell their stakes in two smaller fields, Tanin and Karish, in up to 18 months.

Tamar, with reserves of about 10 trillion cubic feet (tcf), began production in 2013 for the domestic market. Leviathan, which holds an estimated 22 tcf, is primarily earmarked for exports and is expected take three years to bring online. Tanin and Karish have a combined 3 tcf.

Israel's energy sector was blindsided in December when the anti-trust regulator deemed Noble and Delek a monopoly and could be forced to sell off their assets.

Noble in response halted investments in Israel, the companies threatened legal action and a number of long-term, multi-billion dollar export deals to Egypt and Jordan were thrown into jeopardy.

Netanyahu quickly cobbled together a government committee to find a compromise and his intention to speed up development of the fields rather than demand a more sweeping divestment led to the resignation of the anti-trust regulator.

http://finance.yahoo.com/news/israels-security-cabinet-approves-gas-155136095.html

An update on what Rice Energy is up to, from none other than Rice’s vice president in charge of exploration, Derek Rice. Derek said at yesterday’s Hart Energy DUG East conference in Pittsburgh that his company is, this week, finishing up work on a Utica Shale well in Greene County, PA. Derek admitted there’s differing opinions within the company about whether or not they should be drilling Utica wells in PA. 

He says the rock is great, they’re convinced of that. The “problem” is that it costs a heck of a lot more to drill a deep Utica well than it does a Marcellus well. If Rice can squeeze more costs out of drilling a Utica well, it will be profitable. 

He also said something very interesting about the geography of the Utica–that he believes 90% of the gas that will come out of the Utica play will come from just three or four counties…

http://marcellusdrilling.com/2015/06/rice-energy-exec-90-of-utica-gas-will-come-from-3-4-counties/?utm_source=dlvr.it&utm_medium=twitter

Oil and natural gas producer Magnum Hunter Resources Corp said it expected to raise $600-$700 million by selling its 45.53 percent stake in its natural gas gathering subsidiary, Eureka Hunter Holdings.

A deal will allow Magnum Hunter to restructure its balance sheet and shore up liquidity, the company said. (1.usa.gov/1LEbpvK)

Magnum Hunter said in May it expected to raise about $50 million by selling a part of its interest in Eureka Hunter.

The company, focused on natural gas production in the Marcellus and Utica Shales, has been struggling to cope with weak prices for the fuel.

Magnum Hunter said in January it cut all capital spending as commodity prices were expected to remain low this year.

Magnum Hunter had $13.7 million in cash and cash equivalents and total debt of $951 million as of March 31, according to Thomson Reuters data.

Morgan Stanley Infrastructure, the U.S. bank's infrastructure investing arm, owns a majority stake in Eureka Hunter.

Eureka Hunter owns Eureka Hunter Pipeline LLC, which operates natural gas pipelines in southeastern Ohio and northern West Virginia

Eureka Hunter also owns TransTex Hunter LLC, which provides natural gas treating and processing service solutions.

http://www.reuters.com/article/2015/06/25/magnum-hunter-stakesale-idUSL3N0ZB3PY20150625

A spike in earthquakes across Oklahoma is forcing the state's energy regulator to urgently consider tougher restrictions on drilling activity, a spokesman said, calling it a "game changer."

From June 17 to 24, there have been 35 earthquakes of magnitude 3.0 or greater in the state, according to the Oklahoma Geological Survey. Particularly worrying for regulators, some of the recent quakes occurred in the Oklahoma City metropolitan area, where there are no high-volume wastewater injection wells.

The spike in quakes comes roughly two months after new rules governing the disposal of briny wastewater from drilling took full effect. Drillers were ordered by the Oklahoma Corporation Commission (OCC), which regulates the oil and gas industry, to stop disposing wastewater below the state's deepest rock formation, believed to be one of the main causes of the quakes, and to reduce the depth of wells that already go that deep.

"We have to approach it anew," said Matt Skinner, a spokesman for the OCC. "There's been a huge increase. That's a game-changer," he said, referring to the recent jump in tremors.

Oklahoma has been grappling with a rise in seismic activity since 2009, amid an expansion of drilling activity that has doubled the state's oil output in the last seven years.

The energy boom has created jobs and contributed to state coffers, but many residents are deeply uneasy about the tremors. Oklahoma has become ground zero in the oil industry's struggle to break the connection between production and earthquakes.

It was not immediately clear why there was a spike in quakes in the last eight days. Prior to this period, quakes of magnitude 3.0 or greater typically hit Oklahoma once or twice a day, according to data from the U.S. Geological Survey (USGS). Prior to 2009, there were only one or two such quakes in the state in a year.

Scientists attribute the general rise in tremors to soaring amounts of salty wastewater being injected underground. Injected liquid volumes have doubled from about 80 million barrels per month in 1997 to about 160 million barrels per month in 2013, according to a study by Stanford researchers published this month.

The drilling boom is due in part to the expanded use of hydraulic fracturing, or "fracking," to access oil and gas in tight shale formations, although the salty wastewater being injected into Oklahoma's disposal wells is found naturally in formations along with the oil and gas, and are not fracking fluids.

Other oil and gas states have also experienced increased seismic activity related to expanded water injection. Arkansas responded with a moratorium on disposal wells in the most sensitive areas, a plan favored by some Oklahoma activists and at least one state legislator.

But most of Oklahoma's elected officials have been reluctant to shackle an industry that directly generated more than 7 percent of state revenues last year in the form of production taxes from companies like Devon Energy Corp, SandRidge Energy Inc, and Chesapeake Energy Corp.

http://www.reuters.com/article/2015/06/25/oil-quakes-oklahoma-idUSL1N0ZA2PH20150625