The oil and gas industry continues to navigate the effects of the Russia-Saudi oil war and Covid-19. Throughout recent months, US oil prices continually hit new record lows, reaching numbers unseen since the Persian Gulf War. Consequently, US producers have scrambled to shield themselves from permanent damage during the downturn. Here are five considerations E&P companies can take to mitigate risks of curtailing production or shutting-in wells.
The oil and gas industry continues to navigate the effects of the Russia-Saudi oil war and Covid-19. Throughout recent months, US oil prices continually hit new record lows, reaching numbers unseen since the Persian Gulf War. Consequently, US producers have scrambled to shield themselves from permanent damage during the downturn, with six significant players expected to shut some 300,000 barrels per day (bpd) of crude for May and June. For other producers, the process of shutting in wells to downsize risk is paramount. Below, we will dig deeper into what led to the current climate and three important lease provisions to review before shutting-in your wells.
Given the current oil and gas market, it’s understandable that many companies are choosing to outsource their land work. There are several reasons why an organization may opt for this avenue. From a lack of on-site resources, limited bandwidth, and scalability concerns, land management companies like Cinco Energy can plug into your existing company structure and provide a multitude of benefits when you’re stretched thin or looking for a partner. Here are the top advantages of outsourcing your land work.
Last week, NAPE kicked off its first-ever virtual summer conference. Hosted on the newly created digital NAPE Network, the event offers a safe gathering place for over 1,500 attendees in the oil and gas industry. Already off to a great start, buyers, sellers, and investors have until August 27 to enjoy signature NAPE features, including networking, job boards, presentations, and roundtable discussions featuring experts from around the world.
Cinco Energy Management Group, a leading oil & gas-focused land management firm, celebrates its 30th anniversary this year. In 1990, the current CEO and Founder Randy Nichols established the company as Cinco Land & Exploration Company. Building upon his early career as a company landman for independent E&Ps, Nichols started the company to provide superior quality land and title services to the oil and gas industry. The name “Cinco” was inspired by the five members of the Nichols family and the company’s first project in a Spanish-speaking area of South Texas.
The oil and gas industry is no stranger to market headwinds and unpredictable business cycles. However, the uncertainty of the COVID-19 pandemic and the Russian-Saudi price war have sent crude to record lows and rapidly intensified the financial hardship of many oil and gas companies. The depressed prices and lower demand forecasts have led most US producers to make deep budget cuts and will force others into bankruptcy in potentially greater numbers than what we saw in 2015. That year, 69 companies filed for bankruptcy protection. To add insult to injury for at-risk companies, lay-offs and furloughs will deprive resources allocated day-to-day functions, including maintaining assets and records.
Internal land departments of E&P companies are no strangers to keeping up with the demands of their department. The typical lifecycle of a land department requires experience in a multitude of skills, from specific functions like leasing and due diligence to transient roles that may arise during a special project. Having the right resources and information is critical to success for daily land management. Throughout the six lifecycle stages of a land department are distinct responsibilities needed to produce results.
Events such as market changes, shifting internal strategies, staff turnover, and new acquisitions can impact a company’s operational efficacy and require different resource allocation. No group in an E&P company is more familiar with rapidly changing priorities than the land department. Maintaining the right resources in the land department can be a challenge for companies that must keep up with ebbs and flows of the development cycle and daily land work. Here are three common challenges that we see facing many in-house land departments.