SMALL
PRODUCERS
Small Producers make up the majority of
Independents, which are non-integrated companies
that received nearly all of their revenue from
production at the well head. Independents or small
to medium sized nonmajors oil and gas producers in
the United States have been increasing on the rise
since the fall of oil prices in the 1980’s.
According to statistics kept by DOE’s Energy
Information Agency (EIA) small to medium
independents produced an average of 300 to 10,000
barrels of oil per day in 1992. By 2009
independents, often small family businesses produced
85% of the natural gas in the lower 48 states, and
60% of the oil. Since the mid 1990’s DOE has
sponsored four programs to assist small oil and gas
producers; Independents Program (1995-2003),
Microhole Technology (2004-2008), Stripper Well
Consortium (2000 – ongoing), and
Research Partnership
to Secure Energy for America (RPSEA Small Producers
program 2007- ongoing). These programs have focused
on assisting small independents to increase oil and
gas production through development of new
technologies, increased efficiency and cost-savings,
and teaming partnerships with universities and
research groups to provide technical expertise. |
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Technology
Tidbit of the Month
Shale Oil and Gas Impact on Independents
An editorial by John Dizard says, "US shale oil and gas
producers are victims of their own success." Oil and gas
independents have "saved America's industrial future and
global strategic position." However, the abundance of oil
and gas has caused a decrease in share prices. Range
Resources shares declined 18% in the past year and Cabot Oil
and Gas shares have declined 17%. Chesapeake shares are down
7%. Dizard notes that "E&P revenues (are) squeezed by
oversupply while investors in pipelines profit." The global
oil prices have remained weak, but not sufficiently for E&P
companies to make deep cuts in the directional drilling
budgets. The associated gas from oil share production has
offset the decline in conventional gas production and from
older shale gas fields. Production of natural gas and
liquids off the existing pipeline system and large volumes
from new plays has resulted in extensive pipeline planning
and expansion to reverse the transportation trend from the
southwest to northeast. Independent producers are scrambling
to transport the abundant oil and gas to the market,
resulting in sales at deep discounts.
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