News From The Oil Patch 10/21/2014

Baker Hughes reported 1,918 active drilling rigs nationwide, down 12 for the week.  There were 417 in Canada, down three, and 25 in Kansas unchanged.  Independent Oil & Gas Service reported 122 active rigs across Kansas, 37 east of Wichita, unchanged, and up two to 87 rigs in western Kansas.  There were 23 rigs listed as pending their next location assignment and 82 that were stacked or idle.
There were 100 well completions reported last week, which is 4,687 so far this year. There were 65 east of Wichita.  Of the new well completions 35 in western Kansas last week, six were dry holes. Independent Oil & Gas Service reports 144 drilling permits at new locations in Kansas last week, which is 5,949 so far this year.  There 71 east of Wichita, and 73 in western Kansas, including four in Barton County, three in Ellis County, two is Russell County and one in Stattord County.
The Kansas Geological Society recognized and named 25 new oil and gas field in Kansas at it's September 23rd meeting.  Among those new fields were the Hyacinth Northwest and Sack West fields in Ellis County, and the Hart South field in Stafford County.
The latest numbers from the KGS put the Sunflower State on track to produce more than 48 million barrels of crude this year, which would be an increase of nearly half a million barrels compared to last year.  Production through June totaled 24.11 million barrels.  
Over the past five years, the number of horizontal rigs deployed in the U.S. has almost quadrupled, from 379 in early 2009 to 1,353 last Friday.  Almost all the recent gains in U.S. oil production are the result of horizontal drilling techniques. As the number of horizontal drill rigs has exploded, the number of vertical rigs in the U.S. has gone in the opposite direction, falling almost 70 percent over the past seven years.  Last week that count was down to 370 vertical rigs.
The European Union has decided NOT to label Canadian oil sands as dirtier than other forms of crude oil.  This removes a major obstacle to Canadian exports to Europe.  According to the Wall Street Journal, the EU planned legislation to penalize fuels made from the oil sands of Alberta, which are viewed as being more polluting to produce than other varieties.  European refiners wil be freer to import greater volumes of the Canadian bitumen because it has now been placed in the same category as conventional oil.  The change is the result of what the Journal described as "unrelenting lobbying by Canada."
North Dakota produced a record 35 million barrels of oil in August, according to figures released Wednesday by the state's Industrial Commission. August also marked the Bakken oil formation's one billionth barrel of production in North Dakota. Production rose to 1.13 million barrels per day in August, an increase of more than 17-thousand barrels per day.
August's statewide flaring rate hit 27 percent, up a percentage point from July. The flaring rate on Fort Berthold Indian Reservation, which produces roughly one third of North Dakota's oil, flared at a rate of 35.5 percent rate, boosting the statewide numbers.
The state's top oil regulator says North Dakota oil prices have slipped from about $90 a barrel in June to as low as $66.25 in one market on Wednesday, and that could halt drilling in several counties and force the state to reevaluate its budget.
Bloomberg is reporting that Occidental Petroleum is trying to sell assets in North Dakota for upwards of three billion dollars.  An investment bank is helping the company sell about 335,000 net drilling acres in the Williston Basin.  According to the report, the Bakken formation has proved less successful for Oxy because of higher costs.  Analysts say it's mostly undeveloped acreage, adding that Occidental is restructuring to focus on its most profitable operations.
Texas oil production topped 3.1 million barrels per day in July, the highest number in at least 33 years. If Texas were a country it would rank eighth in the world in terms of oil production.  A year ago, Texas ranked 15th.
One of the largest oil and gas producers in the booming Eagle Ford shale formation in south Texas does not for now plan to develop Mexican projects across the border. Anadarko Petroleum's international exploration drilling manager Tim Tirlia first said they were "staying out" of onshore plays in Mexico., but later dialed that back, saying they were still evaluating some onshore projects but are more heavily focused on deep water opportunities. Reuters reports Tirlia declined to comment on whether lawlessness in northern Mexico would make projects too costly.  Another firm, Lewis Energy, says its costs are about 30 percent higher south of the border in part because of additional security needs.
The government announced the proposed sale this March of 43.5 million acres in offshore leases near Louisiana, Mississippi and Alabama.  The Oil and Gas Journal reports production could reach 460-894 million bbl of oil and 1.9-3.9 tcf of natural gas. Sites range from three to 230 nautical miles offshore into federal waters up to more than 11,000 feet deep.