Shale Industry Group Charts Capex, Employee Cuts

YOUNGSTOWN, Ohio – The Marcellus Shale Coalition, an industry-funded advocacy group based in Pittsburgh, reported Monday that 22 energy companies with operations in Pennsylvania have reduced capital expenditures anywhere from 12% to 74%.

These 22 companies have also furloughed workers and/or closed offices, the coalition said.

“Pennsylvania has experienced widespread job loss and massive capital expenditure reductions due to depressed global oil prices and regional natural gas commodity basis differentials that have resulted in record low prices for gas,” the coalition said.

Chesapeake Energy Corp. has reduced capital expenditures by as much as 48% or $3.5 billion; Shell by $15 billion and Consol Energy by 29%, according to the coalition.

Companies shedding workers and offices include Halliburton, Kennamental, Noble Energy, U.S. Steel and Weatherford International, which has operations in Youngstown.

In charting the reductions, the industry group warned, “Higher energy taxes coupled with Pennsylvania’s unfavorable business tax structure places Pennsylvania’s natural gas investments at a competitive disadvantage with other leading shale-producing states.”

Pa. Gov. Tom Wolf has proposed a 5% severance tax on the value of natural gas and then 4.7 cents for every thousand cubic feet.

The governor’s budget-balancing proposal remains stalled in the Pennsylvania legislature.

Pennsylvania’s shale drilling impact fees are among the lowest in the nation. Wolf’s proposal would give the commonwealth one of the highest tax rates on natural gas, according to the industry, and deter shale gas exploration.

With natural gas and crude oil prices remaining low, so is the number of active oil and gas rigs in the United States. Texas oilfield service company Baker Hughes reports 857 rigs were active nationwide during the week ended July 17, six fewer than the previous week.

Here are the capex and employee reductions charts distributed by the Marcellus Shale Coalition:

CAPITAL EXPENDITURE REDUCTIONS
Companies with Operations in Pennsylvania

COMPANY CAPEX REDUCTION
Anadarko Petroleum 33% ($7.18-7.74 billion to $5.4-5.8 billion)
CalFrac 40% ($360 million to $215 million)
Cabot Oil & Gas Corporation 44% ($1.6 billion to $900 million)
Chevron 12% ($39.8 billion to $35 billion)
Chesapeake Energy Corporation 40-48% ($6.7 billion to $3.5-4 billion)
CONSOL Energy 29% ($1.3 billion to $920 million)
Eclipse Resources 20% ($800 million to $640 million)
EOG Resources 40% ($8.1-8.3 billion to $4.9-5.1 billion)
EQT Corporation 24% ($2.7 billion to $2.05 billion)
Exxon Mobil 12% ($38.5 billion to $34 billion)
National Fuel Gas (Seneca Resources) 4-10% ($1.03-1.28 billion to $990 million-1.15 billion)
Noble Energy 40% ($4.8 billion to $2.9 billion)
Range Resources Corporation 40% ($1.45 billion to $870 million)
Rex Energy Corporation 61% ($350-365 million to $135-145 million)
Rice Energy, LP 19% ($1.1 billion to $890 million)
Schlumberger 30% reduction in one quarter
Shell $15 billion reduction from 2015-2017
Southwestern Energy 24% ($2.6 billion to $2 billion)
Statoil 10% ($20 billion to $18 billion)
Stone Energy 100% ($214 million to $0)
Warren Resources 74% ($80 million to $21 million)
Weatherford International 38% ($1.45 billion to $900 million)

LAYOFFS AND OFFICE CLOSURES
Companies with Operations in Pennsylvania

COMPANY ANNOUNCED LAYOFFS / CLOSURES
Baker Hughes 7,000 employees
Chevron 162 employees in Pennsylvania
Drager 150 employees in Pennsylvania
Halliburton 5,000 – 6,500 employees
Halliburton 90 employees and Indiana County office closure
Hog Father’s BBQ New location on hold
Kennametal Inc. 1,000 employees
Nabors Energy 3,480 employees
Noble Energy 125 employees; closes Ardmore, OK andDenver, CO office
Noble Energy 20 employees in Southwest Pennsylvania
Range Resources Corporation 100 employees in Oklahoma City
Schlumberger 9,000 employees
Technip 6,000 employees
U.S. Steel 756 employees in OH and TX; 614 employees inLorain, OH
Universal Well Services (Meadville, PA) Less than 50 employees
Weatherford International 5,000 employees

 SOURCE: Marcellus Shale Coalition

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