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New USGS assessment indicates Wolfcamp shale holds an estimated 20 billion barrels of oil

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The Wolfcamp shale in the Midland Basin portion of Texas’ Permian Basin province contains an estimated mean of 20 billion bbls of oil, 16 trillion cu ft of associated natural gas, and 1.6 billion bbls of natural gas liquids, according to an assessment by the US Geological Survey. This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources. The estimate of continuous oil in the Midland Basin Wolfcamp shale assessment is nearly three times larger than that of the 2013 USGS Bakken-Three Forks resource assessment, making this the largest estimated continuous oil accumulation that USGS has assessed in the United States to date. “The fact that this is the largest assessment of continuous oil we have ever done just goes ...

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New report: Banning fracking could have devastating impact on Texas, American economy

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If hydraulic fracturing were banned, Texas could lose 1.5 million jobs and $196 billion in annual GDP by 2022, a new report from the US Chamber of Commerce Energy Institute finds. The fourth installment of the institute’s Energy Accountability Series details the devastating economic impacts that America, especially Texas, could face if the “Keep it in the Ground” movement succeeded in banning hydraulic fracturing for oil and natural gas.

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CONSOL Energy, Noble Energy to separate Marcellus Shale joint venture

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CONSOL Energy and Noble Energy jointly announced that the two companies have entered into a definitive agreement to separate their Marcellus Shale 50-50 Joint Venture (the "Exchange Agreement"). The two companies have negotiated a separation of the Joint Venture that was formed in 2011 for the exploration, development, and operation of primarily Marcellus Shale properties in Pennsylvania and West Virginia.

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‘Permian Panic’ draws operators, boosts US onshore rig count

Scandrill’s Scan Vision rig is working for Anadarko in the Permian Basin. The 1,500-hp AC rig was recently upgraded and includes a multidirectional walking system for pad drilling that has a total lift capacity of 2.4 million lb. Scandrill plans to eventually update its whole fleet with AC kits. All of the company’s remaining SCR rigs have been fitted with 7,500-psi, 1,600-hp mud pumps.

Low oil prices may be leaving the global drilling industry cold, but right now the Permian Basin is red hot. It’s so hot that people are calling it the “Permian Panic” – companies are rushing to snap up acreage because it is considered the lowest-cost US tight oil play with the best producing rock in North America. “The Permian is the key of all the tight oil plays,” said Skip York, VP Integrated Energy at Wood Mackenzie. The firm estimates that approximately a quarter of global oil and gas mergers and acquisitions (M&A) this year have taken place in the Permian.

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Burke: Positive indicators point to potential recovery first for shales; offshore must wait longer

The drilling industry is seeing some positive signals. One is that CAPEX reductions, a leading indicator for the industry, are starting to slow down, 
Thomas Burke, President and CEO of Rowan Companies and 2016 IADC Chairman, said at the IADC Houston Chapter Luncheon on 11 October.

In hindsight, the indicators of an impending downturn were clear back in 2014 or even earlier. Still, when it hit, the downturn caught most of the industry by surprise. This has caused massive disruptions as companies realized that their assumptions and projects were flat wrong, Thomas Burke, President and CEO of Rowan Companies, said at an IADC Houston Chapter luncheon on 11 October. Further, Mr Burke, who also serves as 2016 IADC Chairman, pointed to the difficulties that drilling contractors face in planning for their business. “When you have to make investments in expensive assets that are going to last a long time, it takes a lot of capital, and you have to make assumptions about what’s going to happen,” he said. “We have to make long-term decisions based on short-term oil prices.”

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Caterpillar eases Tier 4 transition with 3512E engine

The 3512E, Caterpillar’s Tier 4-compliant engine, has a similar skid size to the commonly used 3512C for an easier transition from Tier 2 to Tier 4 engines.

By the end of 2017, drilling contractors will need to have transitioned to engines compliant with the US Environmental Protection Agency’s (EPA) Tier 4 standards for non-road diesel engines. The EPA’s flexibility provisions had allowed onshore drillers and OEMs in North America to continue using Tier 2 engines, but the flexibility period will end next year.

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Barclays survey: 2017 spending poised to grow 3% to 8% at current prices

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A mid-year survey of more than 200 companies shows that global upstream spending is poised to grow in 2017 after consecutive years of declines. The Barclays Upstream Spending Survey estimated that spending will increase by approximately 3% to 8% at current oil prices. Large-cap E&P companies are expected to increase North American CAPEX by as much as 50% next year, although international oil companies (IOCs) – particularly those in the offshore sector – will still be very cautious in their spending.

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