Domestic exploration, production and development have been transformed by technological advances leading to an explosion of unconventional and conventional production of oil, natural gas and natural gas liquids. The first stage of this recent transformation was the land grab and lease maintenance drilling in the early part of the decade. Now, the second stage has begun, which is the rationalization of acreage portfolios and more deliberate exploitation of reserves. Ultimately this stage will require billions of dollars of capital expenditures to fully develop the possible and probable reserves unlocked by this new technology. Oil and gas companies will spend about $723-billion on exploration and production in 2014, an increase of 6.1 percent over 2013, Barclays Bank said in a recent report. Where will the money come from?
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In The Headlines
Eric Dzuba | Dräeger Safety
138. That’s a new high, according to OSHA, of fatal injuries to oil and gas extraction workers in 2012, a 23 percent increase from 2011. More than 800 workers lost their lives on the job in the seven year stretch from 2003 to 2010. In a world where oil and gas companies produce millions of barrels per day, protecting these workers is a challenging task. Production can drop from millions of barrels a day to zero when a refinery shuts down due to an accident. Companies that develop and implement practices designed to promote a stronger safety culture, not only better serve their workers, but they also protect their bottom lines.
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Topic of Discussion
Jon McCarter | EY
With an average of almost four transactions every day, oil and gas has remained one of the most active and resilient global sectors for M&A. While total oil and gas transaction activity was down in 2013 compared to 2012, oil and gas M&A has generally remained robust in the face of macro-economic headwinds. As we look forward to 2014, we see the M&A market being driven by the continuation of a number of trends observed in 2013, as well as by some new factors coming into play.
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