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Natural gas production from U.S. shale fields can keep growing for decades, giving Washington a powerful diplomatic tool to counter the geopolitical influence of other energy exporters such as Russia, industry executives and government officials said at a conference here.
Already the world’s largest gas producer, the United States can expand shale gas output another 60 percent in the coming decades, according to at least one estimate. So far, liquefied natural gas (LNG) has been spared from retaliatory tariffs in U.S. President Donald Trump’s intensifying trade conflicts with China and other countries.
“We see a century of natural gas supply in U.S. shale,†Ryan Lance, chief executive of U.S. shale producer ConocoPhillips said this week at the triennial World Gas Conference in Washington. “Shale’s abundance is real and it’s not going away.â€
The United States currently produces about 72 billion cubic feet (bcf) of natural gas each day, a figure that is expected to grow by 7 bcf per day this year. And within 20 years, U.S. shale gas output should grow an additional 60 percent, according to a study from IHS Markit Ltd.
While Trump’s tariffs against China, Europe, Mexico, Canada and others have cast a short-term pall over Washington’s energy ambitions, the administration has repeatedly said it is eager to expand fossil fuel supplies to global allies through supply agreements and technology sharing. Trump is also rolling back domestic regulations to encourage more oil and gas production.
The strategy, which Trump dubs “energy dominance,†is aimed at making the United States a viable alternative to rival energy producers like Russia, as Washington seeks to forge bonds with big consumers like China.
“We’re sharing our energy value with the world,†Rick Perry, the U.S. secretary of energy, said this week at the conference. (continued on page 2)
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Conoco and its U.S. peers have sharply ramped up natural gas production in the past decade, using hydraulic fracturing technology to tap shale fields in Texas, Pennsylvania and elsewhere.
The United States is also boosting export capacity. LNG facilities from Cheniere Energy Inc, Tellurian Inc and others are either operating or planned across the U.S. Gulf Coast.
“What the U.S. has done for the world with shale gas is given another form of affordable, competitive energy that can be relied upon,†said Jack Fusco, Cheniere’s CEO, said at the conference.
Cheniere, one of the largest exporters of U.S. natural gas, has shipped more than 350 LNG cargos to 28 countries around the globe, including China.
“Gas is much more of a global market than it used to be,†Dan Yergin, an energy economist and IHS Markit vice chairman, said at the conference this week.
The ramp-up in U.S. shale gas production coincides with a demand spike from power producers, with coal-fired generation increasingly anathema across the developing world. Industry executives have aggressively touted gas as a way to increase access to affordable electricity and limit greenhouse gas emissions.
“This shale gale has boosted the U.S. economy and transformed markets around the world,†Darren Woods, CEO of Exxon Mobil Corp, said at the conference.
Exxon has the most drilling rigs operating in the Permian Basin of West Texas and New Mexico, the second-largest U.S. gas producing region. By 2025, the company wants to more than triple its Permian output to more than 600,000 barrels of oil equivalent per day.
Rising U.S. output has not gone unnoticed by major consumers around the world, with South Korea, China and others eager for stable fuel sources.
“There’s going to be a big difference in the way the global gas market works in the future compared to how it’s worked in the past,†said Rusty Braziel of RBN Energy consultancy.
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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