News From The Oil Patch 10/27/2014
Kansas Common dropped to $70.25/bbl at NCRA on Wednesday, Oct. 22. That's the lowest price in McPherson since June 28 of 2012, which was also the last time Kansas Common dipped below $70 per barrel.
The national average for a gallon of regular was $3.043, seven tenths lower on the day, more than a nickel lower than last week, and thirty cents cheaper than last month. The average across Kansas was $2.978, three tenths of a cent lower on the day, but nearly six cents higher than last week.We found gasoline as cheap as $2.86/gallon in Hays and $2.97 in Great Bend. Gasoline prices in Kansas are at their lowest level since January.
Baker Hughes reported 1,927 active drilling rigs across the US, up nine from last week. There were 426 in Canada, up nine, and 21 in Kansas, down four. Independent Oil & Gas Service reported 123 active rigs in Kansas, with 35 east of Wichita, down two, and 88 in western Kansas, up one. There were 30 rigs pending their next location and 82 were idle or stacked.
Independent reported 127 drilling permits at new locations last week, for a year-to-date total of 6,076. There were 61 east of Wichita, and 66 new permits filed in western Kansas. That includes five in Barton County, one in Russell County and three in Stafford County.
There were 64 well-completions reported last week, 4,761 so far this year. Of the 40 completions west of Wichita, 19 were dry holes. There were 24 completions recorded east of Wichita.
USA Today is reporting a Russian economy being pushed toward recession by falling oil prices. A drop of $10/bbl costs Russia between 12 and 15 billion dollars a year. Cheap oil has also devalued Russia's currency by almost 20% this year. All this is happening as the latest round of sanctions cuts off Russian companies from Western financing.
Nelson Bunker Hunt died Tuesday in Dallas at age 88. He was an oil tycoon, but was perhaps best known for trying to corner the world's silver market with his brothers. In 1980 their holdings and contracts for purchases — corralling a third to half the world’s deliverable silver — had plunged from a $7 billion value in January to a $1.7 billion loss in March. Hunt famously commented "a billion dollars ain't what it used to be." The debacle endangered financial markets and brokerage houses, forcing federal regulators and the nation’s banks to step in with a $1 billion line of credit, a bailout that saved the system from a stampede and the Hunts from an immediate meltdown. The lawsuits that followed nearly bankrupted the Hunts, but the New York Times reports they managed to salvage millions and were not subjected to criminal charges.
New Mexico environmental regulators are considering a proposed rule that would allow the reuse of produced water in oilfield drilling operations. Environment Department Secretary David Martin says the state is working on the new rule that could help cut fresh water consumption in the patch. A draft of that rule is expected sometime this month. Martin says the changes are similar to those used in Texas, where produced water is already being reused in drilling and hydraulic fracturing operations.
Trilobite Testing of Hays announces it has acquired Superior Testers Enterprises of Great Bend, effective August 1st. Trilobite now offers drill stem, wireline and state testing services from 31 trucks in Kansas, Colorado, Oklahoma, Nebraska and the Texas Panhandle. The company now has six field offices in Great Bend, Hays, Hugoton, Oberlin, Pratt, and Scott City, plus a sales office in Wichita.
Argentina is warning of a possible eco-disaster if Britain continus to explore for oil off the coast of the Falkland Islands. Officials are warning that unilateral British drilling without Argentina's consent are dangerous, and without what he called "continental support," from Argentina, the projects risk a major spill. Buenos Aires has banned ships carrying the British flag from visiting its ports or carrying out “logistical operations”. Other South American nations including Brazil, Paraguay and Uruguay have followed suit.
Oil and gas giant Shell and its New Zealand partner were accused of unlawful offshore drilling in New Zealand, but managed to evade court prosecution and only received a warning letter. The government said Shell Todd Oil Services violated the law by not applying for a special resolution or marine permission for the offshore play.
Ducks Unlimited is among the big backers of a ballot measure in North Dakota that would dedicate a portion of the state's booming energy taxes to promote conservation efforts. Measure Five will be on the ballot in November. The oil industry is leading the opposition, contributing nearly half of the $2.2 million raised by foes of the measure. Business groups, farmers and education advocates are also against the plan.