U.S. spent nearly billion on imported oil in June, highest in 2009

Energy expert T. Boone Pickens is providing ongoing monthly updates of the level of foreign oil imported by the United States, noting that the June 2009 import level was the highest so far this year.

Pickens said that based on the latest figures from the U.S. Department of Energy's Energy Information Administration (EIA), the U.S. imported 64 percent of its oil, or 354 million barrels in June 2009, sending approximately .7 billion overseas to foreign governments, a 13 percent increase from the .6 billion spent in May.

"The amount of oil we import each month remains the largest threat to our national and economic security. Last month alone we exported nearly billion for imported oil, our worst month thus far in 2009. Americans know that we cannot continue to be susceptible to the dramatic fluctuations and manipulations in oil price and the impact that has on them at the pump,” Pickens said.

He is promoting the “Pickens Plan,” a plan for the U.S. to utilize more wind and solar energy, plus using more domestic natural gas to fuel America’s vehicle fleet.

In the first six months of this year, the U.S. has imported 2.23 billion barrels of oil.

Flying J and Pilot announce preliminary merger agreement

Flying J Inc. and Pilot Travel Centers LLC have announced a preliminary merger agreement that will provide a framework for Flying J's core travel plaza business to emerge from Chapter 11 bankruptcy protection. Under the terms of the Letter of Intent filed with the U.S. Bankruptcy Court in Delaware, the value indicated would allow all Flying J creditor obligations to be paid in full. Pilot has also agreed to provide 0 million in Debtor-in-Possession financing for Flying J's operations, subject to Court approval and various conditions.

"After a careful and exhaustive review of the alternatives available, we have concluded that a merger with Pilot represents the best possible outcome for Flying J, our creditors, our customers, and our employees," said Crystal Call Maggelet, Chairman of the Board of Flying J. "Over the next few months, we will negotiate definitive agreements to merge our companies. This transaction will allow us to emerge from the bankruptcy process relatively quickly thereafter and to start a new chapter in the Flying J story."

Jimmy Haslam, CEO of Pilot, said, "We believe that by combining Flying J and Pilot we will better serve our customers by more efficiently providing them with the products and services they need. We look forward to working closely with Flying J and its employees during the Chapter 11 emergence process, and as we take the next steps of a new beginning for both of our companies."

The preliminary merger agreement with Pilot pertains specifically to Flying J's core travel plaza business, and it excludes Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum, and Transportation Alliance Bank. Flying J is in the process of pursuing or evaluating alternatives for each of these other businesses.

Flying J filed for Chapter 11 protections on December 22, 2008, after a precipitous drop in oil prices and disruption in the credit markets brought to bear significant short-term pressure on the company's liquidity position.

API: U.S. second quarter drilling activity falls nearly 50 percent from one year ago

The API reported last month that for the second quarter in a row, drilling activity in the U.S. exploration and production industry fell to levels not seen since 2003-2004.

The report “API’s 2009 Quarterly Well Completion Report: Second Quarter” revealed an estimated 8,038 oil wells, natural gas wells, and dry holes were completed in the second quarter of 2009, down 46 percent from 2008’s second quarter.

“The U.S. drilling decline that began last quarter in connection with the current downturn in economic activity has continued in earnest in the second quarter of 2009 as companies proceed with caution in an uncertain year,” said Hazem Arafa, director of API’s statistics department.

While natural gas continues to be the primary target for domestic drilling, with an estimated 4,225 natural gas wells completed in the second quarter of 2009, activity was down 43 percent from 2008’s second quarter, the most severe quarterly decline this decade. Oil well completion activity, meanwhile, continued to subside, with total estimated oil well completions in second-quarter 2009 falling 53 percent below year-ago levels.

API also reported total estimated footage of 48.1 million feet drilled in the second quarter of 2009, a 53 percent percent decline from second-quarter 2008.

EIA: West Texas Intermediate to average per barrel for remainder of 2009

After climbing for much of the year, the spot price of West Texas Intermediate (WTI) crude oil hovered around per barrel through most of June. The price of WTI crude oil is expected to average near per barrel through the second half of 2009, an increase of about compared with the average for the first half of the year. The WTI spot price is projected to rise slowly as economic conditions improve, and to average about per barrel in 2010.

U.S average prices for regular-grade gasoline, which reached .69 per gallon in EIA's June 22 weekly survey, have fallen back slightly. Gasoline prices are expected to stay near current levels but will be strongly influenced by any changes in crude oil prices. The annual average regular-grade gasoline retail price in 2009 is expected to be .36 per gallon. Higher projected crude oil prices next year are expected to boost the average price to .69 per gallon in 2010. Annual average diesel fuel retail prices are expected to be .46 and .79 per gallon in 2009 and 2010, respectively.