By JOHN P. TRETBAR
Independent Oil and Gas Service reported a nearly 18% increase in the number of active oil and gas drilling rigs in Kansas last week. There were seven active rigs east of Wichita, up one, and 26 in western Kansas, up four. They’re drilling at two sites in Barton County, and moving in completion tools at sites in Barton, Ellis and Stafford counties. Baker Hughes reported 847 active rigs nationwide last week, an increse of eleven rigs targeting oil and a decrease of three targeting natural gas. Canada reported 118 active rigs last week, a seasonal decrease of 14 rigs.
Independent Oil & Gas reported 44 new well completions last week, and 17 of them were dry holes. There were 19 completions in eastern Kansas, four of them dry holes. West of Wichita there were 25 completions with 13 dry holes reported. There was one completion in Ellis County and one in Stafford County, both were dry holes. Russell County reported two new well completions.
For the month of March, there were 90 new well completions statewide, including three in Barton County, six in ellis County and two in Stafford County. There were 55 completions reported last month in western Kansas, but 24 of them were dry holes. There was one dry hole completed in Barton County, two in Ellis County and one in Stafford County. Producers in eastern Kansas completed 35 wells last month, with just one dry hole.
Operators filed 24 permits to drill in new locations across Kansas last week. That’s 414 so far this year. There were 11 permits filed in eastern Kansas and 13 west of Wichita, including one each in Barton and Stafford counties. That brings the monthly total for March to 134 drilling permits across Kansas, 67 east of Wichita and 67 in the western half of the state.
Energy Transfer Partners, the company building the Dakota Access Pipeline, filed for tariff approval with the Federal Energy Regulatory Commission late Thursday to begin shipping oil from North Dakota to Illinois beginning May 14. The government must approve pipeline shipments across state lines under the Interstate Commerce Act. Dakota Access will join up with another interstate project, called the Energy Transfer Crude Oil Pipeline, to move crude from Illinois to refineries in Texas. That pipeline also will begin moving crude oil on the same day.
Russia’s state-owned oil company Rosneft might end up owning Citgo, a US energy company based in Houston, Texas. This isn’t a direct takeover. Instead, it hinges on the ability of Venezuela’s state-run oil company to pay back its Russian loan. The Venezuelan company has owned Citgo since the 1980s. The company was used as collateral for the loan. Both Republican and Democratic lawmakers are highly alarmed. Members of Congress wrote to the Trump Administration, warning that it could be a big problem for US national security if Russia gets a hold of Citgo. Venezuela has been desperate for cash. In exchange for a loan from Rosneft in December, Venezuela’s oil company put up a 49.9% stake in Citgo as collateral.
Big banks appear to be freeing up cash held to cover bad loans, and could soon increase lending in the oil patch. According to a report from Bloomberg, at least three big banks, JP Morgan Chase, Wells Fargo and citigroup said in earnings reports that rising crude prices have helped them free up a combined $370 million previously set aside to cover bad energy loans during the price downturn. Meanwhile, Reuters reports some big new bets in the oil patch by investors who lost big last year due to bankruptcies in the industry. In the first quarter of this year, private equity funds raised $19.8 billion for energy ventures. That’s nearly three times the total in the same period last year.
Iran, was exempt from the OPEC oil production cut agreement last November, is now ready to join the initiative as long as there is consensus among the cartel’s members. The country’s oil minister adding that most OPEC members seem to be already in favor of the extension. He did not add details about how much Iran would be will to cut.
Reuters reports that surging West Texas oil production has pushed the value of the region’s spot crude to its lowest discount to the U.S. oil benchmark in nearly two years. Last week, WTI at Midland, Texas for May fell to a $1.65 a barrel discount to the U.S. benchmark. Four months ago, it traded at a $1.05 a barrel premium to WTI. Permian output is expected to rise to 2.29 million bpd in April, up 15 percent from a year ago, according to the U.S. Energy Information Administration.
Texas shale producers applied for more than 1,300 oil and gas drilling permits last month, mostly in the Permian basin, according to the state’s energy regulator. Data from the Texas Railroad Commission said that number is nearly triple the number a year ago at this time. The latest data also showed a decline in the number of well completions.
In North Dakota, oil production jumped above 1 million barrels per day in February, a 5.4 percent increase in production. Preliminary figures from the Department of Mineral Resources said Thursday the state produced an average of 1.034 million barrels per day in February, an increase of more than 52,000 barrels a day over January.
The Alaska House has passed legislation calling for structured draws from the state’s oil-wealth fund to help fill Alaska’s multibillion-dollar deficit. The House made numerous changes to a bill that passed the Senate, including the size of the dividend Alaskans initially would receive from the fund and the calculation of future dividends. The House also made the bill contingent upon legislative passage of a broad-based tax and the version of an oil tax and credit overhaul that passed the House. House Finance Committee Co-Chair Paul Seaton sees the language as a way to try to coax the Senate into negotiating on a more comprehensive fiscal plan.