News From The Oil Patch 5/18/2015

For the 22nd week in a row, Baker Hughes reported a drop in its weekly tally of active oil and gas drilling rigs, 888 as of Friday, down six for the week.  There were 77 rigs actively drilling in Canada, up two, and they list 14 in Kansas, up four from last week. Independent Oil and Gas Service reported 32 active rigs west of Wichita, down one, and 17 in eastern Kansas, up three.  There are 112 rigs listed as stacked or idle, out of 122 total inactive rigs statewide.  Independent's Red Top Rig Report lists two Kansas contractors drilling in Ellis County and one in Russell County. 
 
There were just 42 drilling permits for new locations in Kansas last week, 928 so far this year.  There were 19 in eastern Kansas, and 23 west of Wichita, including one each in Barton, Ellis and Stafford Counties.  For April, there were just 195 drilling permits for new locations in Kansas, compared to 857 in April of 2014.  For the month there were five new drilling permits filed in Barton County, seven in Ellis County, three in Russell County and five in Stafford County.
 
Independent Oil & Gas Service reported 78 well completions last week, 2,047 so far this year.  We spotted three in Barton County, two in Ellis County and two in Stafford County.  There were 34 completions east of Wichita.  Of the 44 completed wells in western Kansas, 16 were dry holes.  That's a total of 472 well completions during the month of April, down from 510 in April last year.  There were ten completions reported in April in Barton County, seven in Ellis County, four in Russell County and ten in Stafford County.
 
Independent's new monthly completions report indicates a total of 57 dry holes completed across the state in April, which is 267 so far this year compared to 2,165 at this time last year. Two dry holes were completed last week in Barton County, one in Ellis County and one in Stafford County.
 
WPX Energy plans to hire 40 to 50 engineers and geologists at its Oklahoma headquarters.  That's the word from Chief Executive Rick Muncrief in an interview with Reuters.  WPX is North Dakota's eleventh-largest oil producer.  Muncrief says he'd add one or two drilling rigs in North Dakota if oil prices stabilized around $65 per barrel.  
 
The U.S. oil industry is challenging new rules aimed at reducing the risk of catastrophic accidents involving crude moved by rail.  The American Petroleum Institute petitioned the U.S. Circuit Court of Appeals in Washington, D.C. to block a requirement that railroad tank cars known to fail be phased out or upgraded.  The petition filed late Monday also challenges a requirement for more advanced braking systems on fuel-hauling trains. Environmental groups say the new rules don’t go far enough. They are considering their own legal challenge.
 
The Obama administration gave conditional approval to allow Shell to start drilling for oil off the Alaskan coast this summer.  The U.S. Bureau of Ocean Energy Management listed  18 separate conditions for drilling in the Chukchi Sea, opening the door for Shell to invest another $1 billion in the region.  Shell first got the go-ahead to drill in the Arctic waters in 2012, but an oil rig ran aground and the US Coast Guard had to rescue some crew members.  That prompted the Department of the Interior to block the project until the company addressed safety issues.
 
Deep-water drilling is set to resume near the site of the catastrophic BP well blowout five years ago.  A Louisiana-based oil company plans to drill into the Macondo reservoir near BP's ill-fated well blowout, according to federal records reviewed by The Associated Press.  Harper's Magazine first reported the drilling plans late Tuesday.  LLOG's permit to drill a new well near BP's site was approved April 13 by the Bureau of Safety and Environmental Enforcement, an agency overseeing offshore oil and gas drilling operations. The company's exploration plan was approved last October following an environmental review by a sister agency, the Bureau of Ocean Energy Management.
 
A Texas lawyer representing thousands of claimants in the BP oil spill settlement has asked a federal judge to delay a decision on how much the company owes in environmental fines for the 2010 disaster.  Attorney Brent Coon urged the judge to wait, because imposing a multi-billion-dollar penalty now would only result in further delays in payments to individual victims.  BP faces a Clean Water Act penalty as high as $13.7 billion for environmental damage caused by the oil spill.  US Judge Carl Barbier, who is overseeing all oil spill litigation, could rule on the penalty at any time.