News From The Oil Patch 4/18/2016
17 April 2016
The Kansas Geological Survey has released its year-end estimates for oil production across the state, and as you might expect the numbers are down. Total oil production for the year 2015 was 45.47 million barrels, a drop of about nine percent from the year before, and the lowest annual production total since 2012. Harper County production continued its rise to the top of the list of counties in Kansas, but that has slowed someone, up to 3.4 million barrels last year. Ellis County was next at just over three million barrels. Finney County came in third among countywide oil production totals last year at 2.16 million barrels. Barton County produced 1.97 million, Russell County produced 1.84 million, and then Stafford County with 1.25 million barrels.
The national rig count from Baker Hughes dropped by three to 440 active drilling rigs last week. There were 40 active righs in Canada, down one. Independent Oil & Gas Service reported six active drilling rigs in eastern Kansas last week, up one, and 19 west of Wichita, a gain of seven from the week before.
There were 22 drilling permits issued for new locations across Kansas last week, ten in eastern Kansas and 12 west of Wichita. Three of those were in Ellis County.
Independent Oil & Gas Service reported ten well completions last week, which makes 427 so far this year. There were two new completions east of Wichita and eight in western Kansas, which included three dry holes.
For the month of March, there were 63 new drilling permits issued statewide, thirty in eastern Kansas and 33 west of Wichita. There was one permit filed in Barton County last month, four in Ellis County, two in Russell County and one in Stafford County.
According to the monthly report from Independent Oil & Gas Service, producers completed 121 wells in March, three in Barton County, six in Ellis County and one in Russell County. Out of 121 completions in March, 21 were dry holes.
Independent also report on permits for the first quarter of 2016. The quarterly total of 200 permits is 391 less than the first quarter of last year, a dip of 66.2%
TransCanada has resumed sending oil through the Keystone Pipeline after a weeklong shutdown prompted by a leak and oil spill in southeastern South Dakota. The pipeline came back online Sunday, but with a reduced pressure. The company says it is continuing cleanup and land restoration at the site of the spill. TransCanada estimates about 400 barrels of heavy crude spilled. The company says there was no significant environmental impact or threat to public safety. The company has not released estimates on cleanup or repair costs.
A number of roadblocks surfaced in Energy Transfer Partners' Dakota Access pipeline proposal. If completed, the $3.8 billion pipeline would run from the Bakken Shale in western North Dakota through South Dakota, and Iowa to the refining and storage clusters near Patoka, Illinois, carrying half a million barrels of Bakken crude per day.
***The Standing Rock Sioux has set up a camp in North Dakota to protest the proposed pipeline. The Bismarck Tribune reports the "spirit camp" at the confluence of the Cannonball and Missouri rivers has been occupied for two weeks. The tribe opposes the pipeline because it fears a spill could contaminate its drinking water. The company maintains the pipeline will be a safe and cost-effective way to transport oil, and will create jobs and boost the economy.
***In Iowa a lawsuit has been filed against the utility regulators for authorizing use of eminent domain to access land for Dakota Access. The Des Moines Register reports the lawsuit was filed on behalf of the Northwest Iowa Landowners Association and individual landowners. The lawsuit says Dakota Access does not qualify as a utility and should not have the ability to use eminent domain to build a pipeline.
***The Environmental Protection Agency and two other federal agencies have asked the Army Corps of Engineers to more carefully review and revise its preliminary plan for the project, saying it should pay closer attention to the impact a spill would have on drinking water for Native American tribes as well as the impact on historic sites.
The Washington Post called it the starkest sign yet of the shifting fortunes of the coal industry. St. Louis-based Peabody Energy, the largest and most storied coal company in the U.S. announced early Wednesday that it was filing for Chapter 11 bankruptcy. In the filing the company cited an “unprecedented industry downturn,” which it attributed to a range of factors including what it called the “overproduction of domestic shale gas.” Cheap natural gas, driven by the shale boom, has been steadily eating into coal’s share of electricity generation.
Chevron Corp. is cutting 655 jobs in Houston as part of previously announced layoffs. The news comes after a year in which the energy sector lost 95,000 jobs by one estimate. Oil prices have plunged during the last two years because of high supply and weakening global demand.
Authorities in Norway say a drilling rig had breached two safety regulations when a huge wave slammed into the offshore platform's living quarters last year, killing one and injuring four. The agency said Friday "more lives could have been lost" had there been more people in their cabins on Dec. 30 when a huge wave hit the rig. The Petroleum Safety Authority says its investigation found the "superstructure was not dimensioned to resist horizontal wave loads."
Iran cranked up its pricing competition, hoping to win market share at a time when rival producers are trying to forge a deal on freezing output. The state run oil company will sell its Forozan Blend crude for May to Asia below the level offered by rival Saudi Aramco for Arab Medium. This is the third month the Persian Gulf state is giving the discount after setting it at a premium for almost seven years.