News From The Oil Patch 8/24/2015
Oil's price plunge accelerated Monday in line with the selloff in global financial markets. West Texas Intermediate crude futures briefly dropped under $38 a barrel but regained some ground. Oil prices were off more than four percent in late trading on Monday. The Nymex benchmark contract was down $1.66 to $38.79/bbl. London Brent was off $2.07 to $43.39/bbl.
Kansas common crude started the week Monday at $30.50/bbl at NCRA. Friday's close was down 75 cents on the day to the lowest price in six and a half years. The last time Kansas Common was that cheap was March 2, 2009 when the posted price in McPherson was $29.75/bbl.
Baker Hughes reports 885 active oil and gas rigs across the US on Friday, up one from the week before, but still down about a thousand from last year at this time. The oil rig count was up two to 674, marking the firth week in a row of increases. There were 208 active rigs in Canada, down three, and 13 in Kansas, up one. Independent Oil & Gas Service notes sixty total active rigs statewide, up just over nine percent from a week ago, and 20% higher than a month ago, but still only about half of the count last year at this time. There were 25 active rigs east of Wichita, up eight, and 35 in western Kansas, down three. There are 45 rigs listed as pending their next location assignment, and 119 rigs that were stacked or otherwise shut down.
There were 29 new drilling permits issued for new locations in Kansas last week, bring this year's total to 1,607. There were 21 new permits filed in eastern Kansas, and eight west of Wichita, including one in Barton and one in Ellis County.
Independent Oil & Gas Service reports 26 new well completions last week, statewide, for a year-to-date total of 2,840. There were 13 east of Wichita and 13 in western Kansas. Of those there were four dry holes. There was one new completion in Barton County last week and one in Ellis County.
The Kansas Geological Survey recently published oil production by county through April. Harper County has just 582 active wells but produced more than 1.2 million barrels of crude to lead the state for the first four months of the year. Ellis County had nearly five times as many wells, 2,526, but produced less oil, about 1.02 million barrels of crude. Barton County had 1,828 active wells and 669-thousand barrels of production. Russell County produced 628 thousand barrels and Stafford County pumped 415,000 barrels through April.
There were 48,136 active oil wells in Kansas, producing 15.9 million barrels of oil through the end of April.
Abilene Oil and Gas has acquired additional acreage in Kansas through three separate transactions and entered into a loan agreement to finance the purchase. ABL has acquired 49% working interests in the Pratt County Prospect, Rawlins County Prospect and Rodinia Resources joint venture projects. Drilling could commence late this year or in early 2016. The company also says drilling at the Central Kansas Uplift Appraisal and Development Project will re-commence in the coming weeks.
The Tulsa World newspaper tells us disposal well operators across Oklahoma since March have spent more than $35 million to adjust the depths of their saltwater disposal wells with the aim of reducing the risk of contributing to earthquake activity. The actions came after the Oklahoma Corporation Commission three times this year issued new directives, telling operators in certain "areas of interest" to either adjust their disposal well depths or reduce disposal volumes.
EPA unveiled new plans this week designed to slash methane emissions from oil and gas production by nearly half in the next ten years. The government says the new regs will cost the industry between $320 million and $420 million by 2025, but insists reduced health care costs and other benefits would total about $460 million to $550 million.
Harold Hamm of Continental Resources will headline a huge group of energy executives and experts meeting in Florida to plot election-year strategy with a focus on ending the US ban oil oil exports. The Energy Exports Executive Summit is December 8th in Amelia Island, Florida.