The State of Oil and Gas: July 15, 2024

I’m on vacation, which is why this post is two days late, so we’ll just be hitting highlights this time.

Gas prices have taken another nosedive and are at $2.19/MMBtu. Drilling rigs are at 584, having hit a low of 581 a couple weeks ago. Natural gas storage is at 3,199 Tcf, getting down close to the five-year average high.

The EPA has announced $850 million are available for reducing methane pollution from the oil and gas industry. That’s a real chunk of change.

Russia is making 50% more money from energy this year than it did last year.

Argent LNG is leasing property in preparation for a new LNG plant in Louisiana.

Texas produces so much natural gas that prices have gone negative in that area despite the recent heat wave.

The International Gas Union (IGU) released a report on international LNG, which essentially says supply is just a little higher than demand, but not high enough to be considered a comfortable cushion.

The Biden LNG approval pause has been paused by a Federal Court.

Hurricane Beryl and international instability have pushed oil prices higher.

As expected, natural gas production from the Marcellus/Utica area has increased with the Mountain Valley Pipeline going into operation.

Regardless of where you fall on the global warming argument spectrum, the fact that a company has been able to capture all (100%) of the carbon from a natural gas power plant is pretty impressive.

There’s a great article over at Hart Energy about refracing, but it’s behind a soft paywall. You only get a certain amount of free articles from them before you have to pay.

2 thoughts on “The State of Oil and Gas: July 15, 2024

  1. A few months back, I received a lease proposal for mineral rights I supposedly own in Marion County. The money was insignificant (low gross royalties and undefined levels of expenses that could be deducted) and the lease had no indemnification clause to hold me harmless for negligence. I told the company I had no interest in their proposal. Yesterday, I received a Purchase-Sale Agreement (proposal) from a different company (Coombs Resources Corporation) to purchase the mineral rights. Purchase price is $4,000 per acre. Coombs indicates they will perform due diligence and confirm my ownership interest and provide to me an “Oil and Gas Deed conveying title of the property to Buyer, free and clear of all liens or encumbrances, including but not limited to Deeds of Trust, tax and mechanics liens and Life Estates, save and except as herein indicated.” This due diligence and Deed work is to occur within 60 business days. Given the fact I have received two offers for the mineral rights I supposedly own, I have to assume there is activity underway, or soon to be underway on the property.

    Given the amount of litigation related to drilling and fracking, should I also seek some form of “after-sale” indemnification from this buyer or anyone the buyer assigns the purchased rights to?

    • When you sell, you should do so using a Quit Claim deed, or at worst, a Special Warranty deed. There should be no reason for you to be forced to use a General Warranty deed, which is what the language you quoted sounds like. General Warranty means you’re promising that you own the minerals, and you just don’t know that. Not in West Virginia. Also, selling for $4K/acre in Marion County is low in 2024. You can lease the minerals for $3K-$4K/acre, depending on exact location.

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