Oil prices continued to drop to unprecedented lows last week, and there were regulators wanting to impose new restrictions on those that produce hydrocarbon. This news did not waiver the ongoing interest in Williams Companies Inc. (NYSE: WMB), who received interest from another potential buyer. Let’s take a closer look at the developing stories in Texas energy.
The first item to address is the falling oil prices that dropped below $40 a barrel last week. This comes as Baker Hughes (NYSE: BHI) also announced an increase in oil drilling rigs, leading to more concerns of oversupply in the industry. These two stories are indications of an industry in a struggle that hasn’t been felt for more than six years. The Wall Street Journal reported that the U.S. crude oil prices actually dropped to $39.86 on August 21st on the New York Mercantile Exchange.
This last week also brought some other uninvited news from the U.S. Environmental Protection Agency (EPA). The EPA is looking to cut methane emissions emitted from the energy industry. The agency wants to impose these emission restrictions on oil wells and natural gas facilities across the nation. It hopes that these efforts will lower emissions by 40 to 45 percent by 2025. How will the lower percentages be obtained? The EPA goes on to say that it can be achieved through improved lead detection and improvements to capture technology.
When Warren Buffett makes a move in the market, it doesn’t go unnoticed. This past week the billionaire investors firm Berkshire Hathaway Inc. (NYSE: BRK) sold all of their shares from several Houston-based energy companies. This prompted several other investors to follow suit by pulling out of Phillips 66 (NYSE: PSX) and National Oilwell Varco Inc. (NYSE: NOV). Reports say that the Nebraska-based firm had held almost 7.5 million shares of Philips 66 and nearly 1.98 million in National Oilwell Varco.
Meanwhile, another Houston-based energy company is taking the opportunity to bid on The Williams Companies Inc. Spectra Energy Corp. (NYSE: SE) announced their bid for the Oklahoma-based company this past week. Those close to the news have stated that even though Spectra is half the size of The Williams Companies they still intend on bidding on their entire operation. Bidders have all submitted their opening round bids in the month of July, and the final bids will be due at the end of August.
It seems that Black Elk Energy Offshore Operations LLC is not having the same luck as The Williams Companies Inc. This past week federal prosecutors officially filed criminal charges against the company. This Houston-based energy company caused the 2012 rig explosion that led to the untimely death of three of its workers. The downward spiral the company has faced ever since has led their creditors to file for involuntary Chapter 7 bankruptcy.