News From The Oil Patch 5/11/2015
11 May 2015
Oil drilling rig counts continue their slide, but the declines may be slowing down. The nationwide count was down eleven for the week at 894 active drilling rigs. That's the smallest decline in 22 consecutive weeks of declines, during which more than a thousand rigs have left the patch. Baker Hughes reported 75 in Canada, down 4, and just ten in Kansas, down one for the week and less than a third of the Baker Hughes count a year ago. The broader counts were higher than last week, with Independent Oil & Gas Service reporting 14 active rigs east of Wichita, up three, and 33 in western Kansas, up one. The number of rigs waiting for their next location assignment was down 7 to 52. The number of rigs listed as shut down, stacked or idle was down one to 122. That's 44 higher than a year ago.
There were just 28 new drilling permits filed across Kansas last week. That's 886 year-to-date, compared to 2,577 a year ago. Twelve were east of Wichita, and 16 were in western Kansas, including one in Russell County and two in Stafford County.
We're trailing last year's numbers in completions as well. Independent Oil & Gas Service reports 103 completions statewide, 1,969 so far this year, compared to 2,270 a year ago at this time. There were 55 completions in eastern Kansas, just six dry holes among the 48 completions west of Wichita. There were four completions in Barton County last week, one in Ellis County, two in Russell County, and two in Stafford county.
The Kansas Corporation Commission reports 200 new intent-to-drill notices filed across Kansas in April of this year, compared to 865 in April of 2014. Just 865 intents in Kansas so far this year compared to 2,552 by April of last year. There were ten in Barton County, seven in Ellis County, three in Russell County, and five in Stafford County.
Despite all the talk about layoffs in the oilpatch due to slumping oil prices, Alberta, Canada posted job growth to a three-month high in April. Statistics Canada reported the province's natural resources sector lost about 3,500 positions in April, but they were outnumbered by professional and public service jobs.
A train that derailed and caught fire early Wednesday in rural North Dakota was hauling crude from the state's oil patch, raising questions in some quarters about whether new state standards intended to reduce the volatility of such shipments are sufficient. Residents of Heimdal who were evacuated have returned home.
Texas cities would no longer be able to ban oil and gas companies from drilling inside municipal limits under a bill lawmakers sent to Governor Greg Abbott. Final passage of the legislation in the state Senate on Monday is a win for the oil and gas industry which considered the bill one of its top priorities of the year.
Operators are touting a new refinery in North Dakota, the first of its kind nationwide in nearly 40 years, as a boost for the state's economy. MDU Resources and Calumet Specialty Products Partners announced the Dakota Prairie refinery started producing diesel fuel primarily for users within the state. More than two-thirds of North Dakota's diesel fuel is currently imported into the state. The Dakota Prairie refinery is designed to process 20,000 barrels of oil per day from the state's Bakken shale reserve. Up to 7,000 bpd worth of production in the form of diesel fuel will be sold to in-state customers.
Seattle Mayor Ed Murray says the Port of Seattle can't host Royal Dutch Shell's offshore Arctic oil-drilling fleet unless it gets a new land-use permit. Shell has been hoping to base its fleet at the port's Terminal 5. Environmentalists have already sued over the plan, saying the port broke state law in February when it signed a two-year lease with Foss Maritime, which is working with Shell. Murray says city planners reviewed the planned use of Terminal 5 as a base for the drilling fleet and found that it would violate the port's land-use permit, which allows a cargo terminal on the site. Shell has argued that its planned activities at the terminal - such as docking, equipment loading and crew changes - are no more environmentally risky than loading or unloading shipping containers.
The ripple effect of last year’s dramatic drop in crude prices continues to spread throughout the industry. Pioneer Natural Resources lost $78 million during the first-quarter of this year. One of the largest operators in West Texas, Pioneer reported the financial hit even as it cut capital spending on drilling by 15 percent. The company has also been able to hedge its finances, selling oil at a premium to the market price. Revenue was down more than 40 percent from a year ago, when the company earned a $123 million profit. Pioneer announced it will close its Denver office and cut the number of people working out of its Trinidad, Colorado field office by nearly half.
Devon Energy on Tuesday posted a first-quarter loss of $3.6 billion, led by a noncash accoun6ting charge from lower oil prices. The Oklahoma City-based oil and natural gas producer recorded a $5.46 billion asset impairment charge because the oil in the ground Devon has yet to produce is worth a little more than half of what it was one year ago. Despite lower prices, Devon reported record oil production of 272,000 barrels per day in the first quarter, up 55 percent from the year-ago quarter and 12,000 barrels per day more than the top of the company’s guidance range.
Occidental Petroleum named 33-year company veteran Vicki Hollub to become the first female chief executive officer of a major U.S. oil company. Hollub will assume control of the company’s oil and natural gas business worldwide as an interim step to succeeding current CEO Stephen Chazen. Occidental said in March that Chazen, 68, would step down at the 2016 annual meeting.