News From The Oil Patch 11/23/2015
A new report, released by the Oklahoma oil and gas industry, says a relatively small number of saltwater disposal wells in Oklahoma and nationwide can actually be linked to induced seismisity. A spokeswoman acknowledges that many of the studies cited in the report use models rather than actual wells, making such figures “speculative.” While scientists tend to agree that a small number of wells probably contributes to earthquakes, a research geophysicist with the U.S. Geological Survey said the report understates how many wells probably are involved but can’t yet be scientifically proven to be due to lack of resources and the complexity of the problem.
We're seeing a fairly dramatic downturn in well completions, with just 26 statewide, compared to 54 last week and 131 a year ago at this time. Independent Oil & Gas Service reports six dry holes out of 18 completions in western Kansas. There was one completion in Barton County. There were eight completions east of Wichita last week.
Operators filed 39 new drilling permits across Kansas last week. That's 2,109 permits statewide so far this year, compared to more than 6,700 last year at this time. There were 19 permits filed in eastern Kansas and 20 west of Wichita, including two in Barton County, three in Ellis County and one in Stafford County.
Baker Hughes on Friday reported 757 active drilling rigs nationwide, down ten for the week, and the count in Canada was also off ten at 166 active rigs. Independent Oil & Gas Service was unchanged statewide, with 16 active rigs east of Wichita, down two, and 27 in western Kansas, up two. There were 49 rigs listed as pending their next location assignment, up one from last week. The 137 rigs that were stacked or shut down was unchanged at 137 total inactive rigs. They were moving in rotary drilling tools at one site in Ellis County and one in Stafford County last week. Drilling was underway or about to start at three locations in Barton County.
The Kansas Geological Survey added new data through July last month showing the state has produced 27.6 million barrels of crude at more than 51,000 oil wells. So far this year, Barton County has produced just 1.1 million barrels through July. Ellis County's production was just shy of 1.8 million barrels. Russell County produced 1.1 million barrels and Stafford County checks in with 743-thousand barrels.
Bloomberg reports the state of North Dakota’s Bakken oil region produced less oil in September than it did a year earlier, the first time that has happened in more than a decade. Output fell as low oil prices, exacerbated by the region’s remoteness, caused companies to scale back drilling operations and delay completing new wells.
Preliminary data from a Texas energy regulator show crude oil production in the Lone Star State is down for the second straight month. The Texas Railroad Commission reports a full-month preliminary estimate for September at 83.3 million barrels, down about 8.3 percent from the previous month and the second straight month for a decline. Year-on-year, however, the daily production rate of 2.4 million barrels is 10 percent higher than for September 2014.
The closely-watched Texas Petro Index shows a big downturn in the Texas patch. The report is a cross section of economic indicators for the upstream oil and gas industry. A petroleum economist for the Texas Aliance of Energy Producers says just about every indicator is down compared to a year ago. Payroll data indicate job losses since December of more than 56,000, compared to the 30,000 job cuts reported through September by the Texas Workforce Commission.
Brazil’s state-run Petrobras is now the world’s most leveraged oil company. According to the Wall Street Journal, Petrobras had built up $127.5 billion in debt as of Sept. 30 after spending much of the past decade loading up on cheap foreign credit in an attempt to become a top-five global oil producer. It has yet to reach its production targets, and now investors and analysts are worried as nearly $24 billion in debts mature in 2016 and 2017.
Iran turns its back on OPEC, and the buzz-phrase, once again, is "market-share." Tehran will not negotiate with OPEC over increasing its oil exports once sanctions are lifted, said the country’s Oil Minister Bijan Namdar Zanganeh. He told reporters that Iran plans to double oil exports and sell an additional 500,000 barrels per day (bpd) despite the low crude price as the country needs to win back market share.
Canada's largest oil company, Suncor on Tuesday forecast lower production volumes next year even as it plans to boost capital spending on new projects and maintenance at existing operations. Suncor said production next year will range from 525,000 to 565,000 barrels a day, down from estimated output this year of 550,000 barrels a day. It cited scheduled maintenance at its oil sands plants for the reduction in production volumes.
The Russian military has destroyed numerous oil facilities and tankers controlled by the Islamic State group in Syria, sharply cutting its income. Russia's defense minister said Friday that Russian warplanes destroyed 15 oil refining and storage facilities in Syria and 525 trucks carrying oil during this week's bombing blitz. He said this deprived them of $1.5 million in daily income from oil sales.