News From The Oil Patch 3/2/2015
The US drilling rig count from Baker Hughes was down for the 11th consecutive week, dropping another 43 rigs Friday at 1,267. The count in Canada was down 30 to 330 rigs. In Kansas there were 17 rigs actively drilling, down one. The broader count from Independent Oil & Gas Service was higher, totalling 65 rigs, 14 east of Wichita, up one, and 51 in western Kansas up three for the week.
The weekly drilling permit numbers reflect an industry in retreat. Independent Oil & Gas Service reports 33 permits for new locations across Kansas last week. The year to date figure is 363 new permits, compared to 943 at this time last year.
Producers in western Kansas finished 20 dry holes out of 107 total well completions last week. There were 76 completions east of Wichita. The 183 completions statewide bring the total this year to 908 completed wells.
SandRidge Energy quarterly earnings came up 25% short of last year at $346.9 million. The company report noted details from its Mid-Continent operations in the Mississippian Lime formation of Kansas and Oklahoma. During the fourth quarter, 121 lateral wells in our area had an average 3-day Initial Production of 378 barrels of oil equivalent per day. Total Mid-Continent production was over 76 thousand barrels of oil equivalent per day. The company had revenue of $346.9 million for the quarter, down more than 25% from the same quarter last year.
President Barack Obama vetoed a bill authorizing the Keystone Pipeline expansion. An override vote was expected March 5 in the Senate. The operator of the Pipeline says it will wait out a pair of lawsuits before continuing efforts to force Nebraska landowners to agree to the project. TransCanada is not opposing court efforts to halt eminent domain proceedings until the landowner lawsuits are resolved.
A House committee began its investigation into the State Department's environmental impact statement for the Keystone expansion. Committee leaders are demanding copies of comments received from other federal departments in what appeared to be the closing actions of the Department of State on the assessment.
The State of Ohio's interest in stopping local fracking bans comes into focus in a report from the state's Department of Natural Resources. Ohio's natural gas production has tripled in one year. Ohio oil production doubled to more than 3.5 million barrels last year. That shakes out to about $350,000 in severance tax revenue.
North Dakota has signed off on a $1.1 billion program designed to buck up the state’s infrastructure needs as it adjusts to changing times. The state has that $1.1 billion in surplus in the bank. The state also has amassed $2.4 billion in its Legacy Fund, a rainy-day account that cannot be touched until 2017. The state’s two-year budget has been adjusted downward by $4 billion as oil and gas companies scale back extraction projects and lay off workers.
It is getting cheaper to rent an apartment in North Dakota’s oil patch. According to Reuters, home rentals in the state have slipped between 15 and 20% in the last two months as producers cut spending and the state continues to build new apartment buildings. There are still about 1,800 energy-related jobs unfilled in the No. 2 U.S. oil-producing state, and there is still demand for apartments. But the accommodation shortage is nothing like it was when the state’s oil boom began six years ago.
Despite the slump in the oil patch, the North Dakota Census Office expects the state's population to grow by more than 60,000 residents in the next five years. The Bismark Tribune reports that's only slightly lower than the pre-slump predictions.
The Sinopec Group has denied Wall Street Journal reports of plans of a merger with either of two other state-owned oil firms. The country is working on strucural reform of its oil and gas industry which is expected to have significant impact on the current system.in the next five years. The Bismark Tribune reports that's only slightly lower than the pre-slump predictions.
A Houston pipeline company that found a way around the decades-old legal ban on exporting U.S. oil is now the subject of a government investigation, after companies including BP complained that Enterprise Products Partners is trying dominate the export business and muscle out competitors. The Wall Street Journal reports the probe stems from Enterprise’s purchase last fall of rival pipeline and logistics firm, Oiltanking Partners. The $5.9 billion deal gave Enterprise control of the single largest oil-storage operator on the Gulf Coast. Users complain that Enterprise has started charging a per-barrel loading fee that raises the costs of their exports compared with Enterprise’s own shipments.