Valor | Energy Connection – Oct. 20, 2025

October 20, 2025 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

• U.S. oil growth shifts from Shale to Gulf
• Summary: U.S. oil growth is shifting from maturing shale fields to the Gulf of Mexico, where output is projected to rise from 1.8 million barrels per day (bpd) to 2.4 million bpd by 2027. Driven by tech advances and lower breakevens (offshore as low as $20/bbl vs. $48/bbl shale average), deepwater projects like BP’s $5B Tiber-Guadalupe are gaining favor. The EIA forecasts Gulf output reaching 1.96 million bpd in 2026, offsetting slowing onshore growth and highlighting offshore’s rising importance under supportive federal policies.
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1. Texas’ orphaned well count hits highest level in nearly 20 years​
2. Summary: Texas’ orphaned oil and gas well count reached 10,029, the highest level since August 2006, according to watchdog group Commission Shift and confirmed by the Railroad Commission. Although the agency plugs about 1,300 wells annually, critics argue this pace is insufficient, leaving leaking wells unaddressed while the backlog continues to grow due to market conditions. In response, the legislature passed Senate Bill 1150 to tighten rules for inactive wells, scrutinize transfers, and require compliance plans, though calls for stricter bonding remain.
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1. Supply and demand fears drag oil prices lower
2. Summary: Oil prices fell in early Asian trade Monday, with Brent crude down 0.29% to $61.11 and WTI down 0.35% to $57.34, continuing a third consecutive weekly decline of over 2% for both. The drop is driven by supply concerns as OPEC+ unwinds cuts and the IEA forecasts a 2026 surplus, coupled with demand fears stemming from escalating U.S.-China trade tensions. Easing geopolitical risks and record-high U.S. oil production are also adding to the downward pressure on prices, according to analysts.
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• Kazakhstan monitors oil after Russian gas plant hit
• Summary: Kazakhstan’s energy ministry is monitoring its oil production after Ukrainian drones struck Russia’s Orenburg gas plant, over 1,000 km from the border, causing it to halt gas intake from Kazakhstan’s Karachaganak project. The drone attack, which Ukraine’s General Staff confirmed, may impact Karachaganak’s co-produced oil and gas output, highlighting Ukraine’s expanding long-range strike capabilities. Ukraine also claimed a strike on the 170,000 bpd Novokuibyshevsk refinery, damaging a primary crude processing unit.
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• NextDecade greenlights $6.7 billion LNG expansion
• Summary: U.S. LNG developer NextDecade announced a positive final investment decision (FID) on Train 5 at its Rio Grande LNG facility, committing $6.7 billion to the expansion project. Train 5 will add approximately 6 million tonnes per annum (MTPA) of capacity, bringing the total under construction to ~30 MTPA, supported by 4.5 MTPA in 20-year sales agreements with JERA, EQT, and ConocoPhillips. This FID follows Train 4’s approval and other U.S. LNG project sanctions this year, with Train 5’s completion and first commercial delivery expected in the first half of 2031.
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1. LNG boom impacts U.S. consumer prices
2. Summary: U.S. LNG exports hit record highs, reaching 9.4 million tons in September (up from 9.3 million in August), driven by strong global demand, particularly from Europe. This export boom is contributing to higher U.S. natural gas prices (up ~$1/MMBtu year-over-year), creating tension with the goal of cheap domestic energy. As shale basins mature, executives say prices must hit $5/MMBtu to incentivize drilling in costlier areas, with LNG exports potentially rising from 14 Bcf/d (July) to 27 Bcf/d according to analysts.
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1. U.S. rig count rebounds, showing industry resilience
2. Summary: According to Baker Hughes, the U.S. oil and gas rig count saw a minor increase for the week ending October 18, rising slightly to 547, though the total count is still down 37 rigs (6%) year-over-year. Oil rigs held steady at 418, while gas rigs rose by one to 121, their highest count since August; the Texas rig count fell by one to 237, its lowest since September 2021. Despite planned 4% capex cuts, the EIA projects 2025 crude output will rise to 13.5 million bpd and gas output will reach 107.1 bcfd amid a projected 56% gas price increase.
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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.