Western Energy Services Corp (WRG) ニュース

Trump + Keystone + North Dakota + ExxonMobil (Tillerson) = WRG @ $10+



Masterpiece Theatre rules!
YouTube

Share buyback

Western may purchase for cancellation up to 5,550,000 Common Shares in the capital of Western ("Common Shares"), which is 9.9% of Western's public float as at November 30, 2014. As of November 30, 2014, Western had 74.9 million issued and outstanding Common Shares. Pursuant to the rules of the TSX, the maximum number of Common Shares that the Company may purchase in any one day is 55,536 Common Shares or 25% of the Company's average daily trading volume of 222,145Common Shares on the TSX. Western may also make one block purchase per calendar week which exceeds the daily purchase restriction. Any Common Shares purchased pursuant to the Bid will be cancelled by the Company.

The Bid will commence on December 17, 2014 and will terminate on the earlier of: (i)December 16, 2015; and (ii) the date on which the maximum number of Common Shares are purchased pursuant to the Bid. Purchases of Common Shares under the Bid will be effected through the facilities of the TSX or any other exchange designated by the Ontario Securities Commission for the purposes of section 101.2 of theSecurities Act (Ontario) at the market price at the time of purchase.

Not the way I see it!

$10 more likely.

LOOKS LIKE 3's COMING

NEWS RELEASE
WESTERN ENERGY SERVICES CORP.
2014 THIRD QUARTER FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST
FOR IMMEDIATE RELEASE: October 16, 2014

CALGARY, ALBERTA - Western Energy Services Corp. (“Western”) (TSX: WRG) announces that it intends to
release its 2014 third quarter financial and operating results after market close on Thursday, October 30th,
2014 and has scheduled a conference call and webcast to begin promptly at 12:00 Noon MST (2:00 p.m. EST)
on Friday, October 31, 2014.

The conference call dial-in number is 1-888-231-8191

A live webcast of the conference call will be accessible on Western’s website at www.wesc.ca by selecting
“Investors”, then “Webcasts”. Shortly after the live webcast, an archived version will be available for
approximately 14 days.

An archived recording of the conference call will also be available approximately one hour after the completion
of the call until November 14, 2014 by dialing 1-855-859-2056 or 416-849-0833, passcode 15225905.

Western is an oilfield service company which provides contract drilling services in Canada through its division
Horizon Drilling and in the United States through its wholly-owned subsidiary Stoneham Drilling Corporation.
In Canada, Western also provides well servicing through its division Eagle Well Servicing and provides oilfield
rental services through its division Aero Rental Services.

http://www.wesc.ca/upload/news_release/79/01/2014_10_16announceresults_conference_call_final.pdf

When is the WRG coming quarterly release?

WRG is starting to look like a real attractive buy these days!

Dropping oil prices may hit U.S. fracking firms hard

October 10, 2014

North American crude is expensive to pump, and the falling oil prices will only make production more difficult. In the past four weeks, oil prices across the globe have fallen about eight percent. The U.S. price per barrel closed at $85.77, the lowest it has been since December 2012.

According to a recent report by Goldman Sachs Group Inc., $90 per barrel and below will affect hydraulic fracturing projects in the U.S. Many producers break even around $80 to $85 per barrel.

Related: More efficient fracking means more oil and natural gas:
http://permianshale.com/news/id/107806/efficient-fracking-means-oil-natural-gas/

The first drillers to be affected by the declining crude oil prices will be those in the outskirts of North Dakota’s Bakken Shale, according to Paul Sankey, an energy analyst with Wolfe Research LLC. Sankey said if prices drop another $4 to $5 per barrel companies will be forced to cut back on their capital budgets. Shares for Continental Resources Inc. and Whiting Petroleum Corp., both focused in the Bakken, fell by more the five percent on Thursday.

Although oil prices are falling, not all U.S. oil producers have to be worried. The Eagle Ford Shale and Permian Basin in Texas will still remain valuable to drillers. According to an analysis done by Robert W. Baird & Co., if prices fell to $53 per barrel certain areas in the Eagle Ford would still be profitable.

Read the full article by The Wall Street Journal here:
http://online.wsj.com/articles/fracking-firms-get-tested-by-oils-price-drop-1412899027

Powerhouse results!

And looks like I am speaking to myself!

Hello!

This company is worth $100 per share or I am a monkey's uncle.

Speaking of which, this company - Western Energy Services Corp (WRG) - is more fun than a barrel of monkeys!

Ref:
http://en.wikipedia.org/wiki/Monkey's_uncle

Unconventional energy 'could renew East-West power struggle'

10 hours ago

Unconventional energy like shale gas could 'crowd out' coal, suggests the paper.

(Phys.org)—A new paper led by the Smith School for Enterprise and the Environment at the University of Oxford examines the environmental, economic and political implications of unconventional fuel sources like shale gas and tight oil.
It suggests that these novel resources could be a 'blessing for the global economy', but also that the implications go far beyond the economic dimension – redrawing the global map in terms of trade balances, economic competitiveness and, most importantly, the geopolitical balance.

In the journal Applied Petrochemical Research, the authors suggest that rapid technological advances are unlocking previously uneconomic resources transforming the global energy landscape. Novel resources make the US more independent of fuel imports and the EU is likely to follow, says the paper. Taking the US as an example, the paper analyses data from the International Energy Agency (IEA) showing imports of natural gas have dropped to below three trillion cubic feet (tcf) while domestic production of natural gas has risen to more eight tcf per annum. While more than half of the US natural gas production comes from unconventional sources today, by 2040 the percentage could rise to more than 75%, according to the Oxford study.

Different property rights in European countries could make it more difficult to extract shale gas. However, the IEA estimates that the EU has more than 600 tcf of unconventional gas reserves, says the paper. While the 'environmentally conscious' European public have regarded such resources with some scepticism, the current situation in Ukraine and the rising tension between the East and West could 'draw public attention away from environmental issues towards energy security concerns', says the paper. At the moment, Europe is heavily dependent on gas from Russia, but the paper adds: 'Through ample gas production in the US and the potential of EU shale gas production, the West could strike back by intensifying transatlantic bonds and gaining independence of imports from the East.'

'It is tough to forecast how this situation will develop as political, economic and technological issues interact,' remarks author Oliver Inderwildi of the Smith School. He highlights how the United States is policing the seven global oil chokepoints, providing stability to the Middle East through diplomatic channels and military presence. According to Inderwildi, the critical question will be: 'Will this continue when the US only has to import relatively minor amounts of petroleum which are likely to come from Canada, Mexico and Venezuela?'

The paper notes that resources play a critical role in the power struggle between the West and Russia. New resources creating geopolitical shifts stem from advances in processes for extracting gas and oil, for example, through horizontal drilling, fractured cracking of shale rock and advanced chemicals that allow cracking of shale under 'relatively benign conditions'.

The authors argue there are 'valid concerns' about the environmental effect of the 'more emission intensive' process, but such problems are 'not insurmountable'. If coal were crowded out by shale gas and oil, this could lead to an overall reduction of greenhouse gases.The paper cites IEA data showing there has been a sustained decline in US greenhouse gases since 2010 while the US economy has grown year by year – due in part to coal being crowded out by cheap shale gas. The authors conclude that 'smart policies' are needed to ensure these resources are not only a winner for politics and economies but also for the environment.

The research paper was led by Dr Oliver Inderwildi from the University of Oxford in collaboration with Fabian Siegrist and Robert Dickson from Deloitte LLP in New York and Andrew Hagan from the World Economic Forum.


More information: "The feedstock curve: novel fuel resources, environmental conservation, the force of economics and the renewed East–West power struggle," Oliver R. Inderwildi, Fabian Siegrist, Robert Duane Dickson, Andrew J. Hagan.Applied Petrochemical Research, May 2014, http://link.springer.com/article/10.1007/s13203-014-0062-1/fulltext.html

Provided by Oxford University

http://phys.org/news/2014-06-unconventional-energy-renew-east-west-power.html

Western Energy Services Corp. 2014 First Quarter Results Conference Call and Webcast

And the price rises nicely on that announcement - looks like these guys are making money hand over fist.

Hallelujah!

Fourth Quarter 2013 Highlights:
• Operating Revenue totalled $119.8 million, a $43.4 million increase (or 57%) over the same period in the prior year due to the increased size and scale of Western's production services segment following the acquisition of IROC Energy Services Corp. ("IROC") on April 22, 2013, as well as higher utilization in the contract drilling segment in both Canada and the United States, coupled with a larger average drilling rig fleet in Canada. These increases were partially offset by decreased day rates in the United States, while day rates in Canada recovered in the fourth quarter of 2013 to remain unchanged, averaging approximately $28,900 in both the fourth quarters of 2013 and 2012;
• Utilization in the Canadian contract drilling segment improved to 65% as compared to 55% in the same period of 2012 and the CAODC industry average of 43%. In the United States, contract drilling utilization increased to 87% as compared to 62% in the same period of the prior year due to increased marketing efforts, the addition of the Company's first 1,500 hp AC ELR triple pad rig conversion to the United States fleet, and strong operational performance;
• Total well servicing hours in Western's production services segment increased significantly following the acquisition of IROC in the second quarter, increasing by 1,093% as compared to the same period in the prior year. Likewise, well servicing utilization improved to 53% as compared to 45% in the same period of the prior year;
• EBITDA totalled $43.5 million, a $12.1 million increase (or 39%) over the same period in the prior year. Included in EBITDA in the fourth quarter of 2013 is approximately $2 million in one-time personnel costs, which were partially offset by a $1.6 million increase in capitalized overhead. In addition, prior year EBITDA included $2.2 million of contracted shortfall commitment revenue. Normalizing for these three items, EBITDA increased $14.5 million (or 50%) from the same period in the prior year;
• Capital expenditures totalled $27.5 million and include $23.3 million of expansion capital, $3.8 million of maintenance capital and $0.4 million for critical spares and mainly relate to the drilling rig build program in the contract drilling segment relating to the construction of three drilling rigs, one of which was commissioned in the fourth quarter of 2013, with the remaining two rigs commissioned in the first quarter of 2014.
• Additionally, Western is pleased to announce a $31 million increase to the 2014 capital budget, which includes the construction of one 5,500m ELR AC triple drilling rig and one 4,500m telescopic ELR double drilling rig. With this capital announcement, coupled with Western's previously announced capital budget of $52 million, and $21 million in carry forward from Western's 2013 budget, Western's capital spending in 2014 is expected to total approximately $104 million.

Quarterly Dividend

On February 27, 2014, Western's Board of Directors declared a quarterly dividend of $0.075 per share, which will be paid on April 14, 2014, to shareholders of record at the close of business on March 31, 2014. The dividends are eligible dividends for Canadian income tax purposes. On a prospective basis, the declaration of dividends will be determined on a quarter-by-quarter basis by the Board of Directors.

Waste Management expands reach to Bakken region

Posted on August 2, 2013 at 12:17 pm by Zain Shauk

The U.S. oil and gas boom may be sweeping the nation, but it’s also producing a lot of garbage, and Houston-based Waste Management is expanding to clean it up.

North America’s largest waste company said Thursday it had acquired two businesses working in North Dakota that it will expand to help oil companies manage their refuse from the Bakken Shale play.

Waste Management already serves oil companies in other plays, especially the Marcellus shale region in Pennsylvania and New York.

The waste giant, like other companies in the industry, is working to find ways to meet the growing demand for environmental services from oil companies, which need to treat and dispose of oily drill cuttings, waste water and large quantities of mud, among other needs.

“I think it’s clearly a large growth opportunity,” said Harry Lamberton, vice president of energy and environmental services for Waste Management, in an interview with FuelFix in December.

Shale mess: Waste company bets $1.3 billion on fracturing cleanup

Waste Management said it acquired Summit Energy Services and Liquid Logistics, two North Dakota companies that do not currently specialize in environmental services. Summit works on well pad construction and maintenance, while Liquid Logistics works with tanks. But Waste Management chose to pick up the companies and their capabilities with the hopes of expanding them to perform the same environmental services business that Waste Management already provides in other areas, Lamberton said. The companies did not disclose financial details of the deals.

A similar effort to expand oil industry-oriented waste services prompted The Woodlands-based Waste Connections to buy Houston’s R360 Environmental Solutions for $1.3 billion last year.

With the latest deals, Waste Management will expand into the booming Bakken region.

The acquisitions will give Waste Management 140 employees in the area “and services including roustabout and oil well-site maintenance, road and well-site pad construction, storm water and erosion control management, aggregate crushing and sales, well monitoring pumping and more,” according to a news release. Waste Management plans to use the companies’ corporate infrastructures as a foundation upon which it will add on its waste-oriented services, Lamberton said.

“We were looking for the right kind of partner that had the same kind of focus on safety and compliance and the same culture of integrity that we have,” he said.

Waste Management: Houston waste company turning trash into oil

Waste Management’s most comprehensive oil industry environmental services offering, in the Marcellus region, aims to reduce the environmental effects of oil and gas wells, Lambert said.

One of its services there, for example, works to reduce truck traffic and waste by using waste heat from oil industry operations to evaporate water from mud and other messy materials that go into and out of a well, he said.

“It goes through a process where the technology we have, which will evaporate the liquid portion, consolidates what is kind of any resulting solids that you might have and then we haul that to the landfill,” Lamberton said. “You’re taking 10 trucks, 20 trucks and turning it into just one truck that ultimately has to leave the site.”

The effort not only helps manage waste smarter, but cuts down on the emissions and traffic typically involved with high levels of truck loads at well sites, he said in the December interview.

Other services can include sorting and hauling waste, cleaning up spills, and cleaning rigs before they relocate, he said.

But Summit and Liquid Logistics do not currently offer any of those environmental services, so Waste Management will be adding those capabilities in the Bakken area, as well as expanding the two companies’ well pad- and tank-related services to other regions, Lamberton said.

When Waste Management completes the change, it will be a competitive provider of environmental services to energy companies in the Bakken area because it will offer more services than others, Lamberton said.

“We’re bringing to North Dakota a much more sophisticated approach with different technologies, different approaches into that market to meet the environmental needs out there,” he said. “The folks up there in the exploration and production space are now going to have access to a much more sophisticated environmental services offering to what they’ve had access to before.”

http://fuelfix.com/blog/2013/08/02/waste-management-expands-reach-to-bakken-region/

Western Energy Services Corp. 2013 Second Quarter Results Conference Call and Webcast

Press Release: Western Energy Services Corp. – Wed, Jul 17, 2013 7:00 AM EDT

RELATED QUOTES
SymbolPriceChange
WRG.TO 7.98 +0.2100


CALGARY , July 17, 2013 /CNW/ - Western Energy Services Corp. ("Western") (WRG.TO) announces that it intends to release its 2013 Second Quarter results after market close on Wednesday, July 31, 2013 and has scheduled a conference call and webcast to begin promptly at 12:00 Noon MT (2:00 p.m. ET) on Thursday, August 1, 2013 .

The conference call dial-in number is 1-888-231-8191

A live webcast of the conference call will be accessible on Western's website at www.wesc.ca by selecting "Investors", then "Webcasts". Shortly after the live webcast, an archived version will be available for approximately 14 days.

An archived recording of the conference call will also be available approximately one hour after the completion of the call until August 15, 2013 by dialing 1-855-859-2056 or 1-416-849-0833, passcode 19950677.

Western is an oilfield service company which provides contract drilling services in Canada through its division Horizon Drilling and in the United States through its wholly-owned subsidiary Stoneham Drilling Corporation. In addition, Western provides well servicing in Canada through its division Eagle Well Servicing and provides oilfield rental services in Canada through its division AERO Rental Services.

SOURCE: Western Energy Services Corp.

Shale fields 'add 47% to global gas reserves'

Jun 10, 2013


Jeff Boggs of Consol Energy in in front of a rig exploring the Marcellus Shale outside Waynesburg, PA in April. Shale-based resources increase the world's total potential oil reserves by 11% and natural gas by 47%, according to a US report.


Shale-based resources increase the world's total potential oil reserves by 11 percent and natural gas by 47 percent, according to a US report released Monday.

In an initial assessment of shale oil resources and an update of shale gas reserves, the US Energy Information Agency said shale deposits could add 345 billion barrels of oil to global reserves, increasing the total to 3,357 billion barrels.

Shale gas adds 7,299 trillion cubic feet of natural gas, or 32 percent of the world total, the EIA report estimated.

The report seeks to quantify the potential global significance of the shale boom, after the exploitation of North American shale deposits has already transformed the US oil and gas industry.
It said an improvement in geologic data outside the US has allowed a better view of global resources.

However, it cautioned that the estimates are "highly uncertain and will remain so until they are extensively tested with production wells."
It also does not assess the economic viability of developing the resources.
Because of both geology and "above-the-ground conditions" such as political debates on shale, "the extent to which global technically recoverable shale resources will prove to be economically recoverable is not yet clear," the report said.

The US boom has been enabled by the controversial drilling technique of hydraulic fracturing, which involves pumping fluids deep into the rock to allow extraction.

Some countries, such as France and Bulgaria, have blocked fracking, while others, such as the Netherlands are studying the issue.

http://phys.org/news/2013-06-shale-fields-global-gas-reserves.html#inlRlv

EIA Says Worldwide Shale Oil And Gas Potential Is Huge

Kevin Bullis
June 10, 2013

A surge in oil and gas production from shale rock has transformed energy in the United States, helping reverse declines in oil production and prompting a massive shift from coal to natural gas electricity production that has led to a significant drop in carbon dioxide emissions (since burning coal releases more carbon dioxide than burning natural gas). A new report from the U.S. Energy Information Administration lends support to the idea that a similar transformation could take place outside the United States.


A map from a new Energy Information Administration report on shale oil and gas resources.

The map above gives a sense of just how widespread oil and gas resources are. The EIA report concludes that Russia has even more technically recoverable shale oil than the United States. Three countries have more shale gas—China, Argentina, and Algeria. Geologists have long known that some shale deposits contain large amounts of oil and gas, but it’s only recently that hydraulic fracturing and horizontal drilling technology have made it feasible to extract.

While other countries may have more of these resources than the United States, the impact in some of them may not be as great, or happen as quickly. It could take many years to develop resources in other countries because the geology is somewhat different—the techniques that work in the United States might not quite work elsewhere. What’s more, many countries don’t have the needed technological expertise. Some countries make it difficult for companies to set up and find ways to exploit the resources (see “ China Has Plenty of Shale Gas, But It Will Be Hard to Mine”).

What’s more, the United States had a lot of spare natural gas generating capacity, which made it easy to switch from coal to natural gas. In a place like China, where energy demand is quickly growing, there’s little spare capacity. Natural gas production might only serve to slightly slow the growth of electricity from coal plants, not reverse it.

So far, the impact of increased shale gas production has been limited outside the United States. Because natural gas is relatively expensive to export and requires the construction of specialized infrastructure, prices for natural gas have fallen sharply inside the United States, but not outside the country.

But it has had one impact: increased natural gas production in the U.S. has led to increases in coal consumption elsewhere. Unlike natural gas, coal is relatively easy to export. When demand for it dropped in the U.S., it was shipped abroad, lowering coal prices and contributing to an increase in coal use—and carbon dioxide emissions.

http://www.technologyreview.com/view/515906/eia-says-worldwide-shale-oil-and-gas-potential-is-huge/

WRG Makes Bullish Cross Above Critical Moving Average

6/10/2013 @ 2:10PM

In trading on Monday, shares of Western Energy Services Corp ( Toronto: WRG) crossed above their 200 day moving average of $7.27, changing hands as high as $7.40 per share. Western Energy Services Corp shares are currently trading up about 2.4% on the day. The chart below shows the one year performance of WRG shares, versus its 200 day moving average:


Looking at the chart above, WRG’s low point in its 52 week range is $5.32 per share, with $8.51 as the 52 week high point — that compares with a last trade of $7.36.

http://www.forbes.com/sites/energystockchannel/2013/06/10/wrg-makes-bullish-cross-above-critical-moving-average/?partner=yahootix

The Best Way To Invest In 'America's Natural Gas Highway'

By Nathan Slaughter | The StreetAuthority Network – 7 hours ago

Would you pay $2.10 for a gallon of gas?

I know I would. According to AAA, the nationwide average for a gallon of gasoline is $3.59... Diesel is even more expensive at $3.91.

Yet despite high fuel costs across the country, a select group of drivers are paying only $2.10 a gallon... about $1.50 below the national average.

What's the catch?

To be honest, there isn't one. These drivers aren't getting some "special deal," and this isn't some publicity stunt that's only available to a select few. They're simply filling up their tanks with a different kind of transportation fuel -- one that could make early investors a lot of money.

Let me explain...

Over the past decade, new technologies like horizontal drilling and hydraulic fracturing have unlocked waves of natural gas reserves that were previously thought inaccessible. As a result, gas prices have plummeted to $4.11 per million British thermal units... well below the 10-year high of $10.79 hit in 2008.

With natural gas prices hovering near record lows, companies across the board are looking for ways to take advantage of the new cheap energy source... and who better to benefit than the transportation industry?

All over the nation, companies with heavy transportation costs are introducing vehicles that run off natural gas into their regular operations. In 2011, United Parcel Service ( UPS) added 48 trucks that run off natural gas to its shipping fleet, bringing the total number of vehicles in its fleet running on natural gas to 1,100.

Right now, the average compressed natural gas (CNG) equivalent to a gallon of gasoline costs $2.10. With roughly 250,000 natural-gas vehicles already diving on U.S. roads -- and CNG prices roughly $1.50 per gallon cheaper than gasoline -- the number of CNG vehicles on the road is going nowhere but up.

But while there's ample incentive for truck owners to switch from diesel to CNG, there's still one big obstacle: lack of infrastructure.

After all, you wouldn't want to be on a lonely stretch of highway somewhere on the outskirts of Omaha running on 'E' without a CNG station in sight.

That's why Clean Energy Fuels ( CLNE) is in the middle of a bold initiative to install hundreds of natural gas-based fueling stations along the nation's most heavily-traveled arteries.

Clean Energy Fuels operates an interesting business. It's one of the few companies focusing on putting natural gas fueling stations along America's busiest corridors.

Judging by the pace at which the company continues to land new customers, the plan appears to be working.

Since Clean Energy unveiled its plan last year to add fueling stations to existing Pilot-Flying J truck stops in more than 30 states, the company has picked up more than 100 customers.

More and more of the nation's largest freight delivery firms are willing to at least test-drive CNG powered trucks. Some are making the full transition and converting their entire fleets.

And with fueling stations along the nation's busiest routes -- such as Los Angeles and Chicago to Atlanta, the Texas Triangle, and major corridors in the Midwest and Northeast -- Clean Energy is well-positioned to maintain its dominant lead in the fuel market.

The company already fills up 25,000 vehicles at 273 locations each week -- and I fully expect that number to continue growing.

Risks to Consider: There are, of course, a few things that could go wrong. If the price of natural gas rallies, it could be a deterrent for companies considering making the switch from traditional gasoline-burning vehicles to those that run off CNG.

Action to Take --> But seeing as America now has as much natural gas as Saudi Arabia has oil, I think the trend of "cheap" natural gas is here to stay. And with the price of CNG about $1.50 less than a gallon of gasoline... this looks like a huge opportunity for investors in Clean Energy Fuels.

http://finance.yahoo.com/news/best-way-invest-americas-natural-163000735.html

SHALE Fueling Chemicals Boom

A resurgence in the chemicals industry is in progress, primarily driven by unprecedented growth in U.S. oil and gas production. The discovery of abundant reserves of natural gas trapped within SHALE rock and new and economical methods of extraction are the primary factors driving such production growth.

New methods of extraction such as horizontal drilling and hydraulic fracturing have provided access to SHALE reserves which were earlier inaccessible. They have also lowered associated costs, in turn pushing down prices of many key inputs for petrochemical production and ethane in particular. Ethane is used to produce ethylene, the starting point in the production of plastics like polyethylene.

As a result, petrochemical majors like The Dow Chemical Company ( DOW), Exxon Mobil Corporation ( XOM) and CPChem – a joint venture of Chevron Corporation ( CVX) and Phillips 66 ( PSX) – are helping the U.S. chemicals sector grow by setting up facilities to produce ethylene from ethane. Yet, only about three years ago the chemicals industry was projected to decline over the long term.

The likes of Dow Chemical were earlier considering investing in the Middle East and going into production of specialized products. However, the SHALE powered resurgence has changed the situation quite radically. According to the chief economist of the American Chemistry Council ( ACC), the U.S. is now the ideal location for chemical manufacturers.

The ACC says that no fewer than 17 projects have been initiated only to produce ethane from ethylene. The companies setting up these projects are not limited to the U.S. Royal Dutch Shell plc (RDS.A), LyondellBasell Industries NV( LYB), Braskem S.A. ( BAK) of Brazil and Formosa Plastics from Thailand are also looking to set up facilities for ethylene production.

Goldman Sachs Group Inc. ( GS) believes that SHALE gas investments and production are being driven by the high prices of crude oil worldwide. This has led to the higher investment in the U.S. oil and gas industry. In 2011, exploration and production expenditure amounted to $138 billion in the U.S. compared to $35 billion in China, $10 billion in Russia and $5 billion in Saudi Arabia. Goldman Sachs’ global head of commodity research believes that a tax regime which is favorable has also led to an increase in investments.

The rise in crude prices has subsequently led to an increase in the cost of naptha, which is produced from oil. Naptha accounts for around half of the world’s ethylene production and now costs around $100 a barrel, increasing marginally over last year. On the other hand, the price of ethane has declined from 80 cents from over a year ago to below 23 cents. This is a consequence of the additions to natural gas capacity over the period.

It is of course generally being accepted that the price of ethane will increase over time. The chief executive of Dow Chemical, Andrew Liveris believes prices will stabilize on the higher side of thirty cents. But investment research group Alembic believes that even if ethane costs between 40-50 cents per gallon, the cost of production of ethylene will be between $400-500 a ton in the U.S. compared to $1,200 a ton in Europe. This has led to companies like Bayer setting up ethane manufacturing facilities in the U.S.

Not just the chemicals sector, the rise in SHALE gas production has led to positive effects for the entire economy. Prices of electricity have fallen and energy independence has increased. Former U.S. secretaries of energy Bill Richardson and Spencer Abraham believe the U.S. could even emerge as a net exporter of liquefied natural gas by 2016. The U.S. Department of Energy thinks LNG exports could in turn spark off $47 billion in new economic activity for the U.S. by 2020.

Additionally, the use of gas in place of coal to generate power has led to carbon emissions in the U.S. falling to levels last witnessed in 1992 in the first quarter of 2012. Clearly, the SHALE gas revolution is here to stay.

http://finance.yahoo.com/news/shale-fueling-chemicals-boom-214057624.html

Energy policy shifting as abundance replaces scarcity: Obama adviser

Wed, Feb 27 2013
By Roberta Rampton
reuters.com

WASHINGTON (Reuters) - As U.S. oil and natural gas production booms, the Obama administration's energy policy has been "fluid" by necessity to adapt to the huge economic opportunities and climate challenges posed by growth, the top White House energy and climate adviser said on Wednesday.

In a speech to a room packed with energy analysts and lobbyists, Obama adviser Heather Zichal acknowledged that U.S. energy policy "might not look perfectly pretty from the outside" as it evolves to shifting supply-and-demand scenarios.

"It is a little bit fluid, but the landscape is changing," Zichal said at the Center for Strategic and International Studies, a Washington think-tank.

The White House wants to ensure oil and gas production is done as safety as possible, while investing in research and development of renewable forms of energy and addressing climate change, she said.

"I think that those goals will really help this administration deliver on an energy policy that makes a lot of sense," Zichal said.

"Energy is the common thread that links these three issues: our economy, our security and our climate," she said.

SHALE REVOLUTION

Hydraulic fracturing, or "fracking," has blasted massive new supplies of oil and natural gas from SHALE rock deep beneath the earth. After decades of policies built around being dependent on imports of foreign oil, lawmakers and the administration are grappling with whether and how to allow more exports.

The United States could surpass Saudi Arabia as the world's top oil producer by 2017, and within years could become a net exporter of natural gas.

Zichal noted the administration is finalizing new rules for disclosing chemicals used in fracking on public lands, and tougher standards for fracking wells and wastewater.

"We're not glossing over the challenges of natural gas development, but we're also not ignoring the opportunity natural gas presents for jobs and for the climate," she said.

The White House recognizes the impact oil and natural gas production has had on the economy, creating jobs and bringing manufacturing operations from companies like Dow Chemical Co and Ford Motor Co back from overseas, Zichal said.

She did not shed new light on how the administration will rule on permitting exports to more countries, decisions expected sometime this year. Zichal repeated that the White House is "not opposed to the notion of exports" but wants to ensure they don't "undermine" American consumers.

Zichal said she is spending "a lot of time talking to the rail industry" about infrastructure needs to move a glut of oil from the U.S. Midwest to refineries on the coast, another outcome of the sudden bounty of oil supplies.

But she shied away from discussing White House thinking on the Keystone XL pipeline, a project designed to ship oil from Canada and North Dakota to Gulf refineries.

Zichal said the decision-making process is in the hands of the State Department. The project has been stalled for years pending a decision by the administration.

(Reporting by Roberta Rampton; Editing by Lisa Shumaker)

http://www.reuters.com/article/2013/02/28/us-obama-energy-idUSBRE91R06H20130228

ExxonMobil Chemical chief says SHALE gas is 'transforming America's energy future'

By: Frank Esposito
March 26, 2013
plasticsnews.com

HOUSTON — North America's ongoing SHALE gas revolution can lead even an experienced executive like Stephen Pryor to speak in extremes.

"The world is on the cusp of a new age of unconventional energy," Pryor, president of global plastics and chemicals giant ExxonMobil Chemical Co., said March 20 at the IHS World Petrochemical Conference in Houston. "It is transforming America's energy future, unleashing economic growth and improving the environment."

"It's unlike anything we've seen in this country since the dawning of the age of oil, some 150 years ago in Pennsylvania's Marcellus SHALE region."

In an interview with Plastics News, Pryor added that the rise of SHALE gas "is positive news for everybody in petrochemical value chain — for an efficient producer like ExxonMobil and for custom fabricators in the U.S. and around the world."

For Houston-based ExxonMobil Chemical, the SHALE boom is manifesting itself in a massive expansion of its petrochemicals site in Baytown, Texas. The multibillion dollar expansion will add a new ethylene cracker and almost 3 billion pounds of PE capacity. Pryor said the expansion will double the site's PE capacity and increase its ethylene capacity by as much as 70 percent.

Across the industry, at least six world-scale ethylene crackers are planned for North America — projects that could boost the region's ethylene capacity by 33 percent.

"These projects may not all materialize, but the U.S. is clearly in an expansion mode," added Pryor, who joined ExxonMobil predecessor Mobil Oil Corp. in 1971. "It's a tremendous opportunity for growth of U.S. chemical exports."

New resin and feedstock capacity resulting from SHALE gas also could have an echo effect on North American plastic processing and fabricating, according to Pryor.

"For fabricators, they're going to see a major wave in new investment," he said. But Pryor stopped short of saying that the new capacity could lead to lower or even more stable PE prices. "The [PE] market sets the price, and it's hard to say how that's going to play out," he explained.

A portion of that new PE likely will be exported from the region, since, as Pryor pointed out, "the growth of [PE] supply will be larger than the growth of demand in this country."

In a larger sense, SHALE gas and oil has had a dramatic impact on the U.S. and North America. Pryor said the region could be a net exporter of energy by 2025. Oil and gas development could create as many as 3 million jobs in the U.S. alone and could increase U.S. GDP growth by 2-3 percent by the end of the decade.

U.S. oil and gas reserves have increased 50 percent since 2005. The country now is estimated to have enough SHALE gas reserves to last 100 years. And, according to Pryor, this growth was accomplished by "private enterprises and innovative entrepreneurs … not a government policy that picked winners and losers."

"Five years ago, the U.S. was on the verge of being a net energy importer," he said. "Growing supplies of natural gas changed that."

ExxonMobil also has kept an eye on environmental impact as it has moved ahead. In the past decade, the firm has spent $1.3 billion on environmental efforts at Baytown, resulting in improved efficiency and reduced omissions. Those investments also have created "stronger, lighter, lower-cost packaging solutions" — including thinner PE film — with reduced environmental impact, Pryor said.

He added that oil and natural gas discovery methods — primarily hydraulic fracturing ("fracking") and horizontal drilling — can be done safely.

"The environment is always of major importance, but fracking isn't new," said Pryor, whose 42-year career includes numerous refining and chemical posts with Mobil and ExxonMobil and a current position on the American Chemistry Council's executive committee. "The industry has drilled a million wells without any impact on the water table. We know how to do it safely without any environmental damage."

He also defended proposed exports of liquefied natural gas (LNG) from the United States. ExxonMobil is working on a $10 billion LNG export project, but competitor Dow Chemical Co. has been vocal in opposing LNG exports, saying it would adversely affect natural gas pricing in the United States.

Pryor did not mention Dow by name, but he said that "calls to restrict exports … are a harmful departure from free trade principles."

Restricting exports, Pryor explained would make it difficult for the U.S. to sanction China for exporting rare earth minerals and to ask Japan to stop importing oil from Iran. Restrictions also could return the United States to the era of the price controls of the 1970s and 1980s which, he said, resulted in drops in production, supply shortages and diminished economic activity.

"Why would we discriminate vs. liquid natural gas but say it's OK to solidify it into plastic pellets?" Pryor asked. "Both are American products that create jobs. We have loads of gas, so we should do both."

http://www.plasticsnews.com/article/20130326/NEWS/130329936

SHALE gas boom in US threatens coal and plastic

By Clyde Russell, Reuters Mar 29 2013 , Launcheston, Australia

The advent of cheap natural gas in the US is soon going to displace expensive naphtha, the key building block for plastics, and already hurting coal prices Such is the impact of the SHALE gas revolution in the United States that it’s quite possible that babies born today will no longer play with plastic dolls and cars made in China.

It’s almost become a fait accompli that China is the world’s factory, but the early warning signs that this may be changing are starting to show.

The advent of cheap natural gas in the US is threatening to displace expensive naphtha in the production of petrochemicals, the key building blocks for plastics, synthetic fibres and solvents and cleaners.

While the SHALE gas boom is certainly no longer a secret, up to now its main impact has been in displacing coal in power generation in the US, and making inroads as both a heating and transport fuel.

While the US is planning to export some of its SHALE bounty as liquefied natural gas, in effect it is already exporting more energy in the form of coal, which has helped keep Asian prices soft even in the face of record Chinese and Indian imports.

The same sort of dynamic is likely to start hitting the Asian petrochemical sector in the next few years, as US output ramps up on the back of cheaper natural gas and producers from India to China struggle to compete given their reliance on oil-derived naphtha.

Sinopec, Asia’s largest refiner, admitted that it has been caught off guard by the advent of US competitors using cheaper feedstock. “This is something we did not expect before,” Wang Tianpu, Sinopec’s vice-chairman and president, said on March 25 at a briefing to announce the company’s results, which saw a 12.8 per cent slump in profits in 2012 from the year earlier. Sinopec will strive to lower its petrochemical costs by using less naphtha and optimising the product mix, Wang said. The problem for Sinopec, and other Asian producers, is that while this may help at the margins it’s not going to be enough to meet the threat of cheaper US petrochemicals.

While SHALE gas may become available in China, wide-scale production is still several years away and is unlikely to be as cheap as US supplies anyway. There is the possibility of cheaper LNG, but even this is unlikely as the market for the super-chilled gas is expected to remain tight for the next few years, even allowing for relatively small amounts of US exports.

This means existing major producers supplying Asia, namely Qatar, Australia, Malaysia and Indonesia, are still going to be able to charge oil-linked prices for LNG, thus meaning it will be no cheaper than naphtha as a feedstock for chemicals.

There is also the option of using gas liquids such as propane and butane as a feedstock, but these are also derived from crude production and are priced accordingly.

The prospect of coal gasification also holds promise, but even if this were to prove economically viable, which is by no means certain, it will take at least a decade to build any plants of sufficient scale to displace naphtha. This means Asian petrochemical producers are stuck with naphtha for the foreseeable future. Naphtha has managed to maintain its premium to Brent crude in a fairly narrow range since the 2008 financial crisis, and is currently around the mid-point at $120.65 a tonne.

What this shows is the enormous advantage natural gas users in the US are getting compared to Asian petrochemical producers. It’s little wonder that Dow Chemical, the largest US chemical maker, announced on March 18 that it intends to build several plants on the Gulf of Mexico using SHALE gas as a feedstock. It joins Exxon Mobil, Royal Dutch Shell and others in expanding capacity in the US as they bet cheap natural gas is here to stay. Of course, ultimately it won’t just be Asian petrochemical producers that suffer, it will be the downstream industries that use plastics and fibres as well.

For items that are mainly plastic, such as children’s toys, it isn’t a stretch to see US-based factories once again becoming cost competitive with China.

http://www.mydigitalfc.com/news/shale-gas-boom-us-threatens-coal-and-plastic-236

Comprehensive presentation:

http://jetslides.tv/lobby/882
http://www.wesc.ca/upload/media_element/70/03/wesc-presentation---firstenergy-east-coast-conference-nyc-mar-13-15-2013.pdf

From IROC to here.

I expect great things!

It was $18 - let's beat that.