March 27th, 2017
The State of Kansas produced just 37.9 million barrels of crude oil last year, according to the latest numbers from the Kansas Geological Survey. If borne out by tax figures from the Revenue Department, that would be the lowest annual production total since 2007. KGS says Ellis County produced 2.67 million barrels of crude last year. Harper County was next at 2.01 million. Barton County weighed in with 2016 production of 1.73 million barrels. Haskell (1.72M) and Finney County (1.67M) were next, followed by Russell County with 1.62 million barrels, and Stafford County at 1.1 million barrels.
Baker Hughes reports an increase of 21 rigs targeting oil last week among 809 total active rigs across the U.S. Canada reports another big drop, down 91 to 185 active rigs. Independent Oil & Gas Service reports 13 active rigs in eastern Kansas, up one, and 25 active rigs west of Wichita, also up one. They’re drilling at two sites in Ellis County and one site in Russell County. They’re moving in rotary drilling tools at one lease in Barton County, and moving in completion tools at sites in Barton, Ellis and Stafford counties.
Operators filed 22 drilling permits for new locations across the state last week. That’s 337 so far this year. There were six new permits filed in eastern Kansas and 16 west of Wichita, including one in Barton County, one in Ellis county and two in Stafford County.
Independent Oil & Gas reports 30 new well completions across Kansas, 346 year-to-date. There were 11 new well completions east of Wichita, and 19 in western Kansas. Of those, eight were dry holes. There was one completion reported in Ellis County last week.
Weatherford and Schlumberger last week announced a joint venture called OneStim to deliver completion products and services for unconventional energy plays in the US and Canada. According to a news release, Weatherford will receive a one-time $535 million cash payment from Schlumberger, which will hold a 70% share, manage the joint venture, and consolidate it for reporting purposes.
Saudi Arabia has reduced the state oil company Saudi Aramco’s tax rates nearly 40%. They’re still paying 50%. The Saudi finance minister says revenue reductions are replaced by other sources of revenue. The company’s CEO says the cut to 50 percent from 85 percent brings the company in line with international benchmarks.
Last week an appeals court in Colorado rewrote the standards by which regulators consider public health and environmental concerns when issuing permits for new oil and gas wells in the state. The court held that the law creating the Colorado Oil and Gas Conservation Commission mandates that oil and gas development in Colorado be regulated “…subject to the protection of public health, safety, and welfare, including protection of the environment and wildlife resources.” That’s a much stricter standard than the COGCC’s interpretation, a balancing oil and gas industry interests against public health, safety and welfare. A spokesman for the commission told the Denver Post they are evaluating whether to appeal to the state supreme court.
Some of the world’s largest oil companies are about to pump billions of dollars into unconventional shale production in the US, utilizing cost saving practices developed by independents in West Texas. Bloomberg reports Exxon Mobil, Chevron, and Royal Dutch Shell will spend a combined $10 billion this year, up from next to nothing only a few years ago. The big guys are learning from independent producers how to save money, drilling multiple wells from the same pad. Shell is for the first time drilling five wells from a single well pad, each about 20 feet apart. Thanks to the time save moving rigs from site to site, Shell said it’s now able to drill 16 wells with a single rig every year, up from six wells in a year just four years ago. With multiple wells on the same pad, a single fracking crew can work several weeks consecutively without having to travel. Shell says it spends about $5.5 million per well today in the Permian Basin of Texas, down nearly 60 percent from 2013.
The oil industry’s recovery in North Dakota will hinge on finding workers. The Bismarck Tribune cites estimates from Job Service North Dakota of between 1,000 and 1,500 oilpatch jobs in northwest North Dakota. There are 50 drilling rigs now operating in North Dakota, up from 32 at this time last year. Companies expect to do more hydraulic fracturing this year after many postponed operations while oil prices were low. The Department of Mineral Resources’ latest estimate pegs the number of wells drilled but awaiting completion at 802. Director Lynn Helms says operators are shifting from running the minimum number of rigs to incremental increases throughout 2017.