News From The Oil Patch 1/26/2015

Kansas Common Crude finished the week lower.  Friday's price at NCRA was $35.25/bbl, the lowest price since March 11, 2009.   In early Monday trading, Nymex benchmark crude contracts were a couple of pennies higher at $45.61, while London Brent was down 19 cents at $48.60/bbl.
 
There were 50 drilling permits issued last week for new locations across Kansas.  There were 27 east of Wichita, and 23 in western Kansas, including four in Barton County, one in Ellis County, one in Russell County and one in Stafford County.
 
Independent Oil & Gas reports 109 well completions in Kansas last week, including 71 in eastern Kansas.  There were 18 dry holes among the 38 completions west of Wichita.
 
Baker Hughes says its count of active drilling rigs nationwide dropped by 43 last week to 1,633.  The count in Canada was unchanged at 432.  In Kansas, there were 23 rigs actively drilling for oil and gas, down one.  The broader count from Independent Oil & Gas Service indicates 73 active rigs statewide.  There were 16 east of Wichita, up one, and 57 in western Kansas, down ten.  41 rigs are listed as pending.
 
An energy analyst in North Dakota is offering some dramatic predictions. Jim Arthaud of MBI Energy Services tells CNN he's expecting to see 20,000 layoffs in the state by June because of the plummeting price of crude oil.  The number of rigs actively drilling in North Dakota dropped to 161 last week, down from 187 a year ago and the lowest level in five years.  But Arthaud is predicting that number will drop to just 50 active rigs by June.
 
North Dakota health officials said Monday drinking water is safe to use following an oil spill in the Montana waters of the Yellowstone River.  About 1,200 barrels of crude spilled from the Bridger Pipeline into the Yellowstone River, just about 50 miles from its confluence with the Missouri River. Officials did not believe the spilled oil had crossed from Montana into North Dakota.  In a statement Monday, officials said they are still monitoring water levels, though the most recent test data show pollution is well below the threat level.
 
The Kansas Corporation Commission  is giving an oil company one more chance to pay fines levied in September or face the prospect of shutting down for two years if the company doesn't comply.  The Topeka Capital Journal describes the Viva Oil Companyas long on violations and short on paperwork.  The company has been involved in 18 KCC penalty dockets regarding 87 violations in the last year and a half, including 11 license suspensions, more than any other oil company in the state.  Commissioners decided to allow Viva to pay off the remaining $60,000 in fines in $15,000 installments through May.  The agreement approved Tuesday adds another $10,000 to the penalties if the company misses a payment deadline.  In the meantime, the commission is allowing the company to resume production.
 
Lawmakers in Oklahoma are taking a second-look at tax incentives in the patch.  The Oklahoma Policy Institute, a self-described non-partisan policy think-tank, now says those incentives will cost the state $516 million in revenue during the current fiscal year.  The institute opposed those changes last year.  The Daily Oklahoman reports trade groups includintg the Oklahoma Oil and Gas Association and the Oklahoma  Independent Petroleum Association were critical of the institute's numbers.  
 
Schlumberger will pay $1.7 billion for a stake in Eurasia Drilling.  Bloomberg calls that a bet by the the world's largest oilfield services provider that economic sanctions won't hold back Russia's energy industry.  By buying into Russa's largest driller, Schlumberger is putting aside widespread concerns about economic sanctions and the state of Russia's economy.
 
The developer of the Keystone XL oil pipeline took its first steps in Nebraska since the state's supreme court cleared the way for the new route.  Officials with TransCanada filed paperwork in nine counties to acquire access to land that's needed for the construction and operation of the pipeline's new leg across the state. The route still faces challenges as opponents have filed lawsuits to block eminent domain and to overturn the state law that allowed the governor to approve the route.  A spokesman says TransCanada will work to get those easements voluntarily.
 
Enterprise Product Partners is looking for global customers to buy ultra-light crude oil.  Bloomberg reports the Texas firm is offering to export 600,000 barrels per month of condensate.  The government approved such exports last year.  The product can be exported if it is run through a distillation tower to boil off volatile gases.  The policy-change may boost supplies ready to be sold overseas to as much as a million barrels per day by the end of the year, according to Citigroup.