News From The Oil Patch 5/27/2014
27 May 2014
Baker Hughes reported 1,857 active drilling rigs in the US last week, down four from the week before. The count in Canada was up one at 154 rigs, while in Kansas there were 32 active drilling rigs, down two. Independent oil and gas reports 135 total rigs last week in Kansas, with 43 east of Wichita, up eight, and 92 in western Kansas, down one for the week.
There were 151 drilling permits issued at new locations across Kansas last week for a total thus far this year of 3,083. There was one new drilling permit in Barton County, none in Ellis County, three in Russell County, and four in Stafford County.
There were 112 new well completions reported for a year to date total of 2,564. Independent reports four completed wells in Barton County, two in Ellis County, one in Russell County and none in Stafford County.
Chesapeake Energy is spinning off its drilling-rig business in a move that affects roughly half its workforce. The new company will be named Seventy Seven Energy Inc. The unit current employes 5,200 of the the Chesapeake's 10,800 employees. Also announced last week were $3.1 billion in new asset sales from Pennsulvania to Wyoming. That brings the total to more than $4 billion in asset sales since Doug Lawler took over as CEO.
Kansas political leaders along with the energy and agriculture industries are worried about something that U.S. Rep. Tim Huelskamp said could be a "death knell" for growth in western Kansas — the lesser prairie chicken is now listed as a "threatened" species. The listing comes with certain protections and requires industries that operate on the prairie chicken's habitat to follow new regulations. At least one oil company is pulling out of western Kansas because of the new regulations. Mike Vess of Vess Oil Corp told Fox News that his company is established enough to survive, but smaller ones might not and hourly workers and subcontracters such as geologists and water haulers will be hit hard. Producers say they had too little time to digest new regulations and figure out how to avoid potential criminal and civil penalties. Vess is asking federal officials to suspend the enforcement of the new regulations for six months so both sides can talk about best practices.
The EPA proposed new rules that would force about 150 refineries in 30 states to rein in air pollution. Among the new standards will be fenceline monitoring for benzene instead of directly out of the stack, increased flare management, and new emission standards for the "cokers" used to heat up the raw petroleum.
The panel that regulates the Texas oil and gas industry is waiting for more information before it will accept that there are any links between increased seismic activity and drilling activity. Executive Director Milton Rister told lawmakers the Texas Railroad Commission is reviewing how it regulates wells used for storing wastewater from drilling. But he declined to offer specifics and warned lawmakers against any knee-jerk reactions that could have a negative impact on the industry. The Commission's staff seismologist testified he hopes to have a "definitive statement" within a year, but he warned there may never been any definitive answers.
The full 5th Circuit Court of Appeals will not revisit BP's failed bid to block businesses without proof of damage from recovering money from the Gulf Oil Spill settlement. A court panel in March authorized resumption of the so-called "business economic loss" claims, and the full court has now voted to let that ruling stand. The oil company is considering its options.
A federal judge has dismissed lawsuits from several people in North Dakota who claimed they are owed millions of dollars from oil drilling companies that burned and wasted natural gas instead of capturing it. U.S. District Judge Daniel Hovland's ruling says the federal government lacks jurisdiction in the cases because the mineral owners did not "exhaust administrative remedies" with state regulators. Derrick Braaten, a Bismarck lawyer representing mineral rights owners, says the loss in royalties amounts to more than $200 million to the dozen or so clients. Braaten says he's disappointed with Hovland's ruling and may appeal.
A tornado ripped across North Dakota Monday evening (5/26) south of Watford City, injuring nine people and destroying at least a dozen RVs at an oilfield camp.
A Chinese fishing vessel rammed and sank a Vietnamese fishing boat near a deepwater oil drilling rig placed in disputed waters off the coast of Vietnam. Ten fishermen were rescued. The collision Monday afternoon (5/26) could escalate the already high tensions between China and Vietnam over that oil rig.
Houston may be far from the huge oil plays busting out all over Texas, but it's the energy capital, and the local economy is shining. An economist for the Greater Houston Partnership tells the local Fox affiliate that anybody in Houston is somehow being touched by the boom that's doubled year-over-year drilling activity and ten-thousand new wells so far this year. Unemployment is plummeting to pre-downturn levels and an actual labor shortage could be on the horizon. At better than 3 million barrels every day, thousands of new jobs get created and plenty of royalty cash starts hitting bank accounts. And that has Main Street booming.
It wasn't the fracking, so much as it was the low-flying helicopters that scared those bunnies in Pennsylvania. But that didn't stop the Lehigh Valley Morning Call from offering one of the best and worst headlines ever: "Rabbits terrorized by fracking company's tactics, lawsuit claims." The exploration company uses choppers equipped with seismic gear as they search the Marcellus Shale. Plaintiff Susan Knowlden says her "teeth rattled in her head" and it "scared the you-know-what" out of her prized show rabbits.