News From The Oil Patch 11/24/2014

Baker Hughes reported 1,929 active oil and gas rigs on Friday, up one, and 434 in Canada, up 32. There were 25 in Kansas, down two.  Independent Oil & Gas reports 121 active drilling rigs across Kansas, 36 east of Wichita, down one, and 85 west of Wichita unchanged.  There were 33 rigs listed as pending their next assignment.
 
Independent Oil & Gas Service reports 162 drilling permits issued for new locations in Kansas last week.  There were 104 east of Wichita, and 58 in western Kansas, including six in Barton County, one in Ellis County, two in Russell County and one in Stafford County.  
 
There were 127 newly-completed wells across Kansas last week.  There were 61 in eastern Kansas, and 66 west of Wichita, including one in Ellis County, and 15 dry holes. 
 
Bloomberg reported that if oil, as predicted, averages $75 per barrel early next year, 19 US shale regions would no longer be profitable. Among them, the Eaglebine and Eagle Ford plays, which together pumped about 413,000 barrels per day.  The expansion of U.S. oil supply to more than 9 million barrels a day is contributing to a global glut, driving down prices by as much as 32 percent since June. 
 
Operators in North Dakota are pushing back against pending state rules to condition Bakken crude oil before it is shipped by rail.  According to reporting by Platts, the industry estimates increased costs of tens of millions of dollars, increased risk to pipeline a gathering infrastructure, and increased conflict with federal regulations.  Some big players: Hess, Marathon Oil and Continental Resources among them, reject requirements to require dramatically reduced "Reid Vapor Pressure," a measure of the volatility of the product.  Just testing crude for so-called "Reid Vapor Pressure" would cost one service hub an estimated $96,000 per day, plus $1.2 million for the new equipment, according to reporting by Platts.  They also warn of increased flaring and emissions, overheating of crude oil, increased fire risk, and temperature requirements that go beyond design specs for some pipelines.
 
The FBI is opening a permanent office in western North Dakota's oil patch to help the area deal with rising crime that has followed the state's oil boom. Police have found themselves dealing with human and drug trafficking, organized crime and homicides.  Staff for Sen. John Hoeven said there is no firm timeline for the office to open. The FBI is looking for places to lease at the moment.  Hoeven said he anticipates that the office will have four FBI agents, an analyst and clerical staff.
 
The Kansas Geological Survey is moving into a new phase of a multiyear study to test the safety and efficacy of injecting carbon dioxide from industrial sources into the ground to produce hard-to-reach oil and to permanently store CO2 deep underground.  The U.S. Department of Energy has given the green light to proceed with plans that include drilling wells for enhanced oil recovery and sequestration of CO2 in the Wellington oil and gas field southwest of Wichita. DOE has provided $11.5 million since 2009 to the KGS for CO2 projects. This phase of activity will involve another $11.2 million investment by DOE.  Wichita-based Berexco will begin drilling the wells this spring.