News From The Oil Patch 5/2/2016
One oil production company drilled nine different disposal wells in the seismic zone in southern Kansas that penetrated beneath the Arbuckle formation into the Pre-Campbrian rock layer beneath it. This is one of two ways oil-field waste water is being studied as a possible cause of earthquakes. Last year, the Kansas Corporation Commission ordered total-depth confirmation on all disposal wells within those areas of Harper and Sumner Counties. Producers were ordered to plug back any such wells that were drilled too deep. Based on information obtained under the Kansas Open Records Act, we have learned that Sand Ridge Exploration and Production has plugged back a total of nine disposal wells under the KCC order. There were an additional six disposal wells that were not subject to the KCC order that were drilled into PreCambrian rock and were plugged back. The concrete plug backs ranged in length from 19 feet to 499 feet.
Rig Counts were down again last week, nationwide and statewide. The latest Kansas rig count from Baker Hughes shows just four active drilling rigs across the state, down two. But Independent Oil & Gas Service last week showed 24 active rigs across the state, seven in eastern Kansas and 17 west of Wichita. Independent's online reports showed one site being prepared to spud and another where they're moving in rotary drilling tools in Barton County. They also showed drilling underway at one lease (1-Willson) in Russell County.
Completion and permit numbers were way down last week, with just 13 new drilling permits filed statewide, including one in Barton County, and 7 new well completions, one of those was in Russell County.
Statistics also show huge declines in new oil and gas field discoveries in Kansas. The KCC, KGS and the Kansas Geological Society recognized and named five new oil and gas fiels at its meeting April 13. That's just seven so far this year.
BP reported a nearly half-billion dollar loss for the three months of this year. Low oil prices and and payouts for the Gulf of Mexico oil spill took the oil company from a $2.1 billion dollar profit for the same period last year, to a $485 million loss this year. The first quarter losses were still lower than the $2.2bn loss for the three months through December. The oil giant took a $917m charge for the 2010 Gulf spill, taking their total costs to stockholders so far to $56.4 billion.
CNN reports the crash in crude prices has caused $67 billion in combined losses by 40 publicly-traded U.S. oil producers last year. The Energy Information Administration provides research that shows the bleeding is expected to continue at least early this year for many of those companies. The EIA report was focused on the largest on-shore oil companies, so many of the largest firms, with offshore production, were excluded from the report.The losses surpassed $1 billion each from struggling oil companies like EOG Resources, Devon Energy and Linn Energy as well as SandRidge Energy. SandRidge, the top producer in Kansas, recently admitted it's exploring a bankruptcy filing.
We've told you before about CO2-EOR, the practice of injecting carbon dioxide into producing oil wells to boost recovery. We're learning that some major economic and technological hurdles remain in North Dakota. The Forum News Service large-scale implementation is probably a decade away, citing a consultant speaking to lawmakers studying possible incentives to encourage the practice. A geologist from Houston-based IHS said if the technique can enhance oil recovery by 5 percent, it could yield a "long-term prize" of billions of additional barrels recovered from the Bakken and Three Forks shale formations beneath North Dakota and Montana.
An oil tanker laden with Libyan crude under sanctions from the UN was stranded near Malta, which refused entry. Now the Wall Street Journal reports that tanker is now heading back to North Africa bearing 650,000 barrels of crude from an oil company by Libya's eastern government.
The Supreme Court has rejected an appeal filed by a group of BP shareholders who were hoping to sue the company over the Gulg oil spill. The group claimed the company overstated the extent of its safety procedures, prompting them to invest in the company, and then lose money when BP's stock prices sank. According to the Web site "The Hill," an appeals court rejected the investors' class action suit in September. The high court rejected the appeal of that ruling without comment on Monday.
Flooding across Texas has inundated oil production facilities, flushing crude oil and chemicals into rivers across the state. The Texas Railroad Commission, which regulates oil and gas drilling and production sites, said it has responded effectively to those incidents. But some others are not so sure, calling the situation a "potential disaster."