News From The Oil Patch 11/3/2014
03 November 2014
The benchmark West Texas Intermediate and Brent crude prices have fallen more than 25% since mid-June. Instead of cutting production, some OPEC members—including Saudi Arabia—have cut prices, signaling a price war. Some in the kingdom’s top ranks think it is allowing a revenue decline it can’t afford, according to reporting by the Wall Street Journal. Others believe Saudi Arabia should accept the recent oil price fall and concentrate on increasing its market share, particularly in Asia.
Nymex crude contracts for December delivery were six cents lower by midday Monday, at $80.48/bbl. London Brent prices gaines 31 cents at $86.17/bbl.
According to the latest numbers from the Kansas Geological Survey, Kansas operators produced another 4.25 million barrels of oil in July, bringing the total so far this year to 28.36 million barrels.
Crude oil production for Texas was up more than 20 percent year-on-year to just over 2.2 million barrels per day, a state regulator said. The Texas Railroad Commission released preliminary figures for August, saying Wednesday production of 2.23 million bpd was up 24 percent from August 2013.
The Kansas Corporation Commission reported 662 intent-to-drill notices filed in October, up from 622 in September and down from 639 in October of last year. In the last thirty days, the KCC noted 18 new intents filed in Barton County, 14 in Ellis County, eight in Russell County, and seven in Stafford County
Independent Oil & Gas Service last week reported 120 new well completions across Kansas, for a year-to-date total of 4,881. There were 52 east of Wichita. Of the 68 in western Kansas, 29 were described as dry holes.
There were 142 drilling permits issued for new locations across Kansas last week. There were 93 in eastern Kansas and 49 in western Kansas, including four new permits in Barton County and seven in Ellis County.
Baker Hughes reported 1,929 active drilling rigs across the US Friday, up two for the week. There were 1,353 horizontal rigs in use, 211 directional rigs and 365 vertical rigs. The count in Canada was 429, up three for the week. In Kansas, Baker Hughes reported 26 active rigs, up five. Independent Oil & Gas Service reports, 126 active rigs statewide, 40 east of Wichita, up five, and 86 in western Kansas down two from last week. There were 26 rigs listed as pending and 82 that were stacked or idle.
The oil industry in California is spending a LOT of money to defeat ballot measures in two counties that would ban fracking, steam injection and other "high intensity" drilling processes. To date, firms such as Chevron and industry groups have chipped in more than $7 million to a campaign to defeat Measure P. That compares to nearly $300,000 spent so far by the environmental groups supporting the measures. A spokesman for the "no" campaign says passage of Measure P would effectively shut down all new drilling operations in Santa Barbara County.
The oil & gas industry is shelling out big bucks to stop a ballot measure that would earmark five percent of North Dakota's extraction taxes to environmental projects. The American Petroleum Institute has already shelled out over one million dollars opposing the measure. The North Dakota Petroleum Council's president says now is not the time to divert oil tax funds without a plan. Ron Ness says just 16% of the tax monies are already earmarked, and says there's not a lot left to fix roads, bridges, and sewers.
The Texas Railroad Commission, which regulates oil and gas activity, has added a new wrinkle to the fracking debate. Oil & gas companies in Texas must now research a site's seismic history before they can get a permit to use the site for a disposal well of fracking waste and produced water. The commission adopted new rules Tuesday that require oil and gas companies to include either a printed copy or screenshot of the seismic data for the area in their permit application. That will include instances of previous earthquakes within the 100-square-mile region around the proposed drilling site.
A group of oil & gas lawyers announced they've been granted class action status in their lawsuit in Arkansas against SEECO, an independent oil and gas exploration and production company based in Houston. Their complaint alleges the company skimmed over $100 million from landowners and others by underpaying royalties over the last eight years.
American Energy Partners' affiliate in the Permian Basin of Texas has purchased oil assets there and plans an innitial public offering soon. The company, founded by former Chesapeake Energy CEO Aubrey McClendon. Since July 31, they've bought production of 1,400 barrels of oil equivalent per day, and about 27,000 net acres in leases. That brings their total to 90,000 net acres. The company says an IPO for American Energy-Permian Basin will be held within the next year.
Native tribes on the Fort Berthold Indian Reservation plan their own Bakken plays. The Mandan, Hidatsa and Arikara Nation is planning to drill the first tribe-owned oil wells on its North Dakota reservation next year. The tribe currently receives a fraction of the money already generated by the 1,300 plus wells on the reservation, but will take home 82% of the cash produced by the four new wells.
"There is now no reason for people in Europe to stay cold this winter." So says the president of the European Commission after witnesses the signing of a deal that will resume Russian natural gas supplies to the Ukraine this winter. The deal comes after several months of delays during the conflict in Ukraine.