Energy companies blame weak earnings on glut of shale product
Posted: August 7, 2012 Filed under: Uncategorized | Tags: Markets, oil & gas companies
South Texas’ Eagle Ford Shale, rich in oil and natural-gas liquids, has so far avoided the drop in drilling activity caused by weak natural-gas prices
Reporting for the San Antonio Business Journal Sanford Nowlin says the impact of the shale drilling boom that plunged natural-gas prices to a 10-year low has spread for the first time into the market for natural-gas liquids. But the market glut has begun to take its toll on the companies that extract the product and get it to market.
“Williams Partners LP, Marathon Oil Corp.,Spectra Energy Corp., Apache Corp. and Devon Energy Corp. this week blamed a glut of propane and similar products for lower second-quarter earnings. Another round of diminished profits are expected next week as energy companies point to the impact of dropping prices for natural-gas liquids used in fuel production and for a variety of consumer uses.
“The price of an ethane-propane mix of natural-gas liquids was down 58 percent on Aug. 1 from its January peak, outpacing the 19 percent drop in crude from its high in February. Tudor, Pickering, Holt & Co. last month called the decline a ‘NGL bloodbath.’”