Valor | Energy Connection – Sep. 22, 2025

September 22, 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.

• Big oil returns to exploration with a bang
• Summary: Major oil firms like BP and Shell are shifting back to exploration in key areas like Guyana and Brazil, driven by energy security concerns and poor returns from renewable investments. A prime example is BP’s biggest discovery in 25 years in Brazil, a 500-meter hydrocarbon column with an estimated 2.0-2.5 billion barrels of recoverable oil equivalent. This strategic reset is backed by significant financial shifts, with BP increasing its annual upstream investment to $10 billion while cutting over $5 billion from its clean energy spending.
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1. US rig count rises for third straight week, Baker Hughes says
2. Summary: For the third straight week, the U.S. oil and gas rig count rose, climbing by three to 542 as of Sept 19, its highest level since July, though it remains down 8% year-over-year. This increase was driven entirely by oil rigs, which rose by two to a new total of 418, their highest since July, while the number of natural gas rigs held steady at 118 for the week. Despite a planned 4% capex cut in 2025, the EIA projects crude output will rise to 13.4 million bpd and a 61% gas price hike will boost gas output to 106.6 bcfd.
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1. Could US LNG become a victim of its own success?
2. Summary: U.S. LNG investment is booming despite the risk of an oversupply, driven by strong global demand as Europe plans to ban Russian imports from 2028 and Asian demand grows. Despite a potential near-term margin squeeze, the long-term (15-20 year) Free-on-Board contracts for U.S. LNG offer offtakers unrivaled trading optionality and arbitrage opportunities. This boom is supported by a deep pool of capital from infrastructure funds, strategic investors, and debt markets, as well as supportive U.S. government policies.
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• Natural gas price hits $2.88 as storage surplus pressures market
• Summary: U.S. natural gas futures extended losses to a three-week low, with the October contract settling down 1.74% on September 19 at $2.888 per MMBtu amid a growing storage surplus. A recent bearish EIA report revealed a weekly storage injection of 90 billion cubic feet (Bcf), higher than the expected 81 Bcf, pushing total U.S. inventories to 6.3% above their five-year average. The oversupply is compounded by U.S. dry gas production of 107.6 Bcf/day (+6.1% y/y) outpacing demand of 73.1 Bcf/day (-4.6% y/y), weighing heavily on the market.
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• Oversupply and demand fears push WTI to $62.68, Brent to $66.68
• Summary: On Friday, oil prices fell, with West Texas Intermediate crude settling down 1.40% at $62.68 a barrel and Brent crude dropping 1.13% to $66.68, capping a volatile week. The decline was driven by oversupply concerns as OPEC+ loosens its output cuts and weak demand signals, including a surprising 4 million barrel jump in U.S. distillate stockpiles. This bearish sentiment overshadowed the Federal Reserve’s first quarter-point rate cut of 2025, which failed to boost any demand amid signs of slowing U.S. economic activity.
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1. Natural gas: America’s secret weapon in the AI power race
2. Summary: Natural gas producers anticipate that rising electricity demand and consumer energy bills, which are up over 35%, will accelerate the approval of new U.S. gas infrastructure. This comes as U.S. power demand is projected to rise by 2.4% annually through 2030, with AI-related data centers accounting for about two-thirds of this incremental growth. Goldman Sachs forecasts that over $700 billion in grid investment is needed through 2030 and sees natural gas as best positioned to meet this demand due to its flexibility and abundance.
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1. Scientists find the invisible culprit behind dry oil wells
2. Summary: To understand why oil wells often run dry prematurely, Penn State researchers have used the Bridges-2 supercomputer to develop a new “4D” seismic imaging method for oil exploration. The method adds a time dimension and analyzes signal amplitude, revealing hidden rock formations that block access to untapped oil reserves, which standard 3D scans can miss. This technique, proven in a 9-square-mile area, can show that drilling deeper may unlock more oil, and the team is now expanding its work to analyze full-scale oil fields.
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