Trinidad & Tobago oil & gas prices up, EOG Resources tells SEC
Monday, September 11 2017 @ 12:00 AM AST
Contributed by: AleemKhan
* EOG RESOURCES SEC FILING SHOWS:
* TRINIDAD & TOBAGO OIL AND GAS PRICES RISING
- - OIL UP 36%
- - GAS UP 32%
* THOUGH NOT BACK TO 2014 LEVELS...
* ...PRICES FIND SUPPORT ABOVE 2016 FLOOR
New York-listed EOG Resources Inc.'s revenue from Trinidad and Tobago for the six months ended June 30 climbed 16 per cent to US$146.2 million from US$125.5 million, the company said in its Securities and Exchange Commission (SEC) filing September 1). EOG Resources' T&T operating income over the same period improved 88 per cent, the company said, from US$25.9 million in the half-year 2016 to US$48.7 million this 2017 half-year ended June 30.
EOG Resources also told the SEC it has been getting a 36 per cent better price per barrel of crude oil from T&T, averaging US$29.83 per barrel up to the six months ended June 30, 2016, to now US$40.63 per barrel for the six months ended June 30, this year. EOG Resources told the SEC its cost per barrel of oil equivalent (boe) was US$27.33 up to the six months ended June 30, down from US$29.53 a year earlier.
Since the precipitous decline from 2014 highs above US$110 per barrel, oil has remained range-bound between US$34 and US$67 per barrel combining West Texas Intermediate (WTI) and Brent historical data. Up to press time Friday, the last trading day of the week, WTI was quoted on the New York Mercantile Exchange (NYMEX) for US$47.29 per barrel while Brent closed at US$52.75 per barrel. Spot natural gas prices on Friday closed at US$3.07 per million British thermal units (mmbtu). Contractual arrangements between the National Gas Company (NGC) and EOG Resources account for the difference between spot prices and EOG's prices reported to the SEC. Prices remain far from their 2014 highs, but have not retested their 2016 lows of US$28 per barrel of oil in January, and US$1.73 per mmbtu of gas in April.
The increase is consistent with government's results. Finance Minister Colm Imbert said in his May 10 mid-year budget review: "Honourable Members will recall that the 2017 budget was predicated on an average oil price of US$48 per barrel and a natural gas price of US$2.25 per mmbtu. I can now report that in the first six months of the fiscal year, the corresponding prices have averaged US$50.45 per barrel and US$3.30 per mmbtu respectively. We have therefore increased the expected tax collections from the energy sector for 2017 to $3.6 billion, compared with the original budget projection of $2.6 billion, an increase of $1 billion."
Though production of natural gas from EOG assets in T&T declined from 355 million cubic feet per day (mmcfd) to 314 mmcfd, gas prices improved 32 per cent from US$1.88 per thousand cubic feet (mcf) up to the six months ended June 30, 2016 to US$2.48 per thousand cubic feet (mcf) up to the six months ended June 30 this year.
EOG Resources said in its filing: "Natural gas deliveries for the second quarter of 2017 decreased 98 mmcfd, or 8 per cent, compared to the same period of 2016 due primarily to lower deliveries in the United States (65 mmcfd) and Trinidad (29 mmcfd). The decrease in the United States was due primarily to the 2016 sale of EOG's Johnson County, Texas, Barnett Shale, Haynesville and South Texas natural gas assets, partially offset by increased production of associated natural gas from the Permian Basin and the Rocky Mountain area and the 2016 transactions with the Yates Entities. The decrease in Trinidad was primarily due to lower contractual deliveries. EOG's composite wellhead natural gas price for the second quarter of 2017 increased 56 per cent to $2.25 per mcf compared to $1.44 per mcf for the same period of 2016."
Overall, EOG's output from T&T went down though, from a 59.9 million barrels of oil equivalent per day (mbdoed) producer for the six months ended June 30, 2016, to a 53.1 mboed business for the six months ended June 30, this year.
EOG Resources said in its SEC filing: "Depreciation, depletion and amortization (DD&A) expenses for the first six months of 2017 decreased US$110 million to US$1,681 million from US$1,791 million for the same prior year period. DD&A expenses associated with oil and gas properties for the first six months of 2017 were US$111 million lower than the same prior year period. The decrease primarily reflects decreased rates in the United States (US$229 million) and Trinidad (US$12 million) and decreased production in Trinidad (US$9 million), partially offset by increased production in the United States (US$137 million) and the United Kingdom (US$4 million). DD&A unit rates in the United States decreased primarily due to upward reserve revisions and reserves added at lower cost as a result of increased efficiencies."
EOG SPENT US$52 MILLION IN EXPLORATION
The company later added: "Exploration costs of US$92 million for the first six months of 2017 increased US$32 million from US$60 million for the same prior year period primarily due to increased geological and geophysical costs in Trinidad (US$20 million) and the United States (US$11 million)."
EOG Resources invested money exploring for new oil and gas in T&T, the company told the SEC. EOG said: "Total exploration and development expenditures of US$2,131 million for the first six months of 2017 were US$928 million higher than the same period of 2016 primarily due to increased exploration and drilling expenditures in the United States (US$481 million) and Trinidad (US$52 million); increased facilities expenditures (US$127 million); increased leasehold acquisitions (US$234 million, including US$154 million of non-cash property exchanges); and increased geological and geophysical expenditures (US$31 million)."
FROM THE HALF-YEAR PERSPECTIVE IT WAS THE SAME TREND: RISING OIL AND GAS PRICES
EOG RESOURCES COST PER BARREL OF OIL EQUIVALENT (BOE)