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• Falling backlog of DUC wells is latest sign of shale slowdown
  The inventory of drilled but uncompleted wells across US oilfields declined by 10% to 7,574...
  The inventory of drilled but uncompleted wells across US oilfields declined by 10% to 7,574 between May and November 2019, the steepest drop since 2016, providing fresh evidence of a shale slowdown.

  
  

  The drop adds to a growing body of evidence that shale explorers, pushed by investors to prioritize profits over production, are stepping on the brakes. That’s bad news for oilfield services companies that have depended on rising shale growth for their prosperity. When Halliburton Co., owner of the world’s biggest fleet of fracking pumps, reports on its fourth quarter on Jan. 21, analysts expect to see a 29% earnings decline from a year earlier, excluding certain items.

  
  

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• US LNG exports to China to remain limited until tariffs lifted
  A 25% tariff on US liquefied natural gas will continue to discourage Chinese buyers from substantially...
  A 25% tariff on US liquefied natural gas will continue to discourage Chinese buyers from substantially increasing purchases of the fuel despite the Chinese government's pledge to boost purchases of US energy by $52.4 billion. "We expect the Chinese government to remove, reduce or approve tariff exemption before incremental LNG imports from the US can be meaningful," said IHS Markit's Jenny Yang.
  
  “For China to massively increase imports of ... LNG from the U.S., while tariffs remain in place, is going to be challenging,” said Gavin Thompson, Wood Mackenzie’s Asia Pacific vice chair.
  
  China’s demand for LNG over and above existing contracts is expected to be about 15 million to 25 million tonnes a year over the next two years, according to analysts.
  
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• Permian Operator Lilis Energy Receives Take-Private Offer
  Struggling Permian Basin operator...
  
  

  
  
  Struggling Permian Basin operator Lilis Energy Inc. said Jan. 13 it has received a non-binding cash take-private offer from a major shareholder.
  
  The offer, made by Minneapolis-based alternative investment firm Värde Partners Inc., continues a trend of take-private offers for public oil and gas companies that began to emerge last year.
  
  Värde Partners is proposing to acquire the roughly 75% of outstanding shares of Lilis common stock it doesn’t already own in a cash merger transaction for $0.25 per common share. The non-binding cash offer is expected to expire Feb 17.
  
  

  
  

  
  

  
  

  
  
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• Oil steadies as Chinese economy offsets trade optimism
  NEW YORK — Oil prices steadied on Friday as sluggish economic growth in China, the world’s biggest...
  NEW YORK — Oil prices steadied on Friday as sluggish economic growth in China, the world’s biggest crude importer, raised concerns over fuel demand and countered optimism from the signing of a China-U.S. trade deal.
  
  Brent crude futures rose 23 cents to settle at $64.85 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 2 cents to settle at $58.54 a barrel.
  
  For the week, Brent fell 0.2%, while WTI lost 0.8%
  
  China’s economy, the world’s second-largest, grew by 6.1% in 2019, its slowest expansion in 29 years, government data showed on Friday.
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• Mark Papa expects consolidation among smaller shale players
  Slowing US oil production growth over the next five years will likely encourage oil giants to swallow...
  Slowing US oil production growth over the next five years will likely encourage oil giants to swallow smaller shale firms, says Schlumberger non-executive chairman and shale pioneer Mark Papa. Papa sees US shale output rising by just 400,000 barrels per day this year and by 100,000 to 500,000 bpd through 2025, in part due to high shale well decline rates and the shorter life of shale basins.

  
  

  He cited the shorter life and high decline rates of shale reservoirs such as the Bakken in North Dakota and the Eagle Ford in Texas.

  
  

  “I’m not saying that the U.S. shale oil will go away but I’m saying it will become a less powerful force as we go through the 2020s than it was in the previous decade,” he said.

  
  

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