April 16th, 2018
Regulators respond to a string of more than a dozen earthquakes in northwestern Oklahoma last week by placing limits on one oil and gas producer’s saltwater disposal. The Oklahoma Corporation Commission directed operator M. M. Energy to reduce disposal volumes from 17-thousand to five thousand barrels per day at a disposal well in Garfield County, Oklahoma. The commission called this an “ongoing situation” and said further actions are possible. The first quake occurred on Saturday (4/7), registering at magnitude 4.6, and was followed by several others, including a 4.5 temblor near Perry, Oklahoma early the following Monday (4/9), according to the U.S. Geological Survey. The quakes were felt across parts of southern Kansas and as far north as Great Bend.
Independent Oil & Gas Service reported nine active drilling rigs in eastern Kansas for the week, which is up two, and 31 west of Wichita, up one. Operators were moving in completion tools at two sites in Barton County, five in Ellis County and three in Stafford County. Baker Hughes on Friday reported 1008 active drilling rigs coast to coast, up seven oil rigs including five in Oklahoma and Texas. The total reflects a drop of two rigs exploring for natural gas. The rig count across Canada was 102, down nine rigs.
Operators filed 13 new permits for drilling at new locations across the state last week, six east of Wichita and seven in western Kansas, for a year-to-date total of 428 permits. There’s one new permit on file in Barton County and one in Ellis County.
Independent Oil & Gas Service reported 31 new well completions for the week, including 15 east of Wichita and 16 in western Kansas. Barton County notched two new completed wells according to the latest numbers. That’s 447 new well completions so far this year.
The first quarter of 2018 marked some slight improvements over the last couple of years in the Kansas oil patch, but the state is still well behind the huge numbers posted three years ago. Independent Oil & Gas Service reports 402 total completions for the first quarter, which is slightly higher than last year (349) and the year before (392). But the total is less than one-third of the 1,394 wells completed during the first three months of 2015.
Barton County operators completed four oil and gas wells in March and 12 during the first quarter of 2018. Ellis County reported three in April and 12 so far this year. Russell County reports three so far this year, two in March. Stafford County notched ten completions during the first three months of the year after adding four in March.
More than one in every four newly-completed oil and gas wells in western Kansas so far this year have failed to produce pay dirt. Out of 91 completions west of Wichita in March, 24 were dry holes. That’s 54 dry holes out of 214 total completions for the first quarter of 2018.
Operators last month filed 144 permits for drilling at new locations the state, bringing the total to 396 year-to-date. The quarterly total is slightly higher than last year (383), more than double the year before (192), but less than two-thirds of the first-quarter total from 2015 (669).
The Kansas Geological Society met in March to recognize and name six new oil fields across the state. That brings to 12 the total of new pool and infield wildcat discoveries so far this year.
The government reports US crude inventories grew by 3.3 million barrels last week. Gasoline inventories increased by half a million barrels. The US Energy Information Administration said imports were up 752,000 barrels per day over the prior week, but the four-week average is less than the same period last year.
Annual natural gas production in the U.S. is on pace to break records in 2018 and 2019, according to the monthly short-term energy outlook from EIA. Natural gas consumption is expected to rise over the next two years, with power generation the leading driver.
China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude oil imports loading in May by 40 percent after Saudi Aramco set higher-than-expected prices. Two refineries in northern Asia told CNBC they each planned to reduce May orders from Saudi Arabia by 10 percent.
There are currently a slew of job openings in the oil patch of North Dakota, but you may want to investigate housing before you apply. The Williston area, which is in the heart of the Bakken play, is in the midst of a single-family housing shortage. The Bismarck Tribune reports real-estate agents sold 110 homes during the first quarter of this year, the most ever for a three month period in the area. Officials are still unsure how new employees might get housing through the summer. State officials say the state has a “huge, huge need” for personnel for fracking, driving, drone and pipeline operations, as well as health-care professionals and teachers. The number of job openings for March reached its highest level since 2015. This is not the first time officials in North Dakota have faced this problem. Back in 2012, as the Bakken play was first bearing fruit, officials wrestled with increased demand for everything from new roads and housing to law enforcement and sewer service.