By JOHN P. TRETBAR
Independent Oil & Gas Service reports a nearly 12% drop in the number of active drilling rigs in Kansas last week. There were 12 active rigs east of Wichita, down three, and 25 in the western half of the state, down two. They’re drilling at one site in Stafford County, and report drilling ahead on one lease in Ellis County. Operators are moving in completion tools at two leases in Barton County, three in Ellis County, one in Russell County and two in Stafford County. Baker Hughes reports 913 active rigs across the USA, a drop of seven oil rigs and a decline of eight rigs exploring for natural gas. Canada saw a drop of ten for a weekly total of 202 active rigs.
Kansas operators filed 25 permits for drilling at new locations last week, which brings the year-to-date total to 1,165 permits. There were 11 filed east of Wichita and 25 in western Kansas, including one in Barton County, one in Russell County and one in Stafford County.
Independent Oil & Gas Service reported 41 new well completions last week, 1,081 so far this year. There were 17 completions in eastern Kansas, and 24 west of Wichita, including two in Barton County, one in Ellis County and three in Stafford County.
The Republican-dominated Oklahoma Senate is urging its House colleagues to double the state’s oil and gas production tax, from two to four percent, as a way to break a stalemate to fix a $215 million budget shortfall. The Senate adopted the resolution on a voice vote last week, suggesting they will have enough votes to increase the gross production tax. The Daily Oklahoman reported that House Republicans put forth a series of tax hikes in a bill last week that fell short of the needed three-fourth’s majority. Democrats blocked the measure and demanded an increase in the Gross Production Tax. Over the weekend, the House leadership stalled their own bill, which included a production tax increase.
The evidence is mounting of a link between oilfield saltwater disposal wells to a recent spike in earthquakes. Research at the University of Colorado found that a string of earthquakes along the Colorado-New Mexico border since 2001 has been caused by wastewater disposal wells. Seismometers recorded hundreds of quakes in the Raton Basin of northern New Mexico and southern Colorado between 2008 and 2010, but experts say the seismic activity began to increase much earlier, in 2001, about two years after large-scale wastewater injection in the area began.
Railroad companies face a deadline at the end of the year to phase out the “less safe” DOT-111 tank cars, and the Bismarck Tribune reports those companies are well on their way to compliance, thanks in large part to a resurgence of pipeline deliveries. By January, DOT-111 tankers without a protective steel layer known as a jacket can no longer carry crude oil. Those cars with the jacket must be phased out two months later. The U.S. Dept. of Transportation reported a dramatic drop in the number of these cars carrying crude oil, from more than 14 thousand four years ago, to just 366 last year.
There’s lots of oilfield work available in the Permian Basin of Texas, where analysts and employers are frustrated by equipment and personnel (particularly drivers). Big employers in the patch hope to replenish a workforce that was gutted by layoffs over the last couple of years due to low prices. According to the Houston Chronicle, large and small oil field services companies that drill, frack and haul equipment, supplies and wastewater are finding far fewer people willing to work for a boom-and-bust industry. One small employer says his company is losing $7,000 a day because it still doesn’t have enough truck drivers to deliver equipment to its crews. The downturn cost the state of Texas a total of 100,000 jobs, one third of the state’s energy workforce. The newspaper reports operators have hired just 30,000 workers in the region since the recovery began last year. Equipment and personnel shortages have led oil companies to leave more than 2,400 dormant wells untapped for months in West Texas.
As OPEC negotiates the extension of its oil production cuts, the cartel is also quietly working on an exit strategy in an effort to reassure investors it won’t flood the market once the curbs finally expire. Bloomberg quotes people familiar with the deliberations who say the full strategy probably won’t be unveiled until later next year.
An oil and gas industry group is seeking to highlight what it says is an increase in protester attacks on oil pipelines and other energy infrastructure. They announced an online database listing incidents of “eco-terrorism, sabotage, arson, vandalism and violence.” The Energy Builders Coalition announcement comes two days after a bipartisan group of 84 members of Congress sent a letter to the U.S. Attorney General expressing concern about recent incidents and asking if existing laws are enough to adequately prosecute criminal acts.
A hedge-fund manager in Asia says China’s plan to base its oil contracts on its own currency will be a “wake up call” for investors, and that the “Petro-Yuan” will be a “huge story” in the energy industry globally. Adam Levinson of Graticule Asset Management Asia tells Bloomberg TV the move will serve as a hedging tool for Chinese companies, and aids their broader agenda of increasing the use of the yuan in trade settlement. Levinson says Chinese oil companies will probably be anchor investors in Saudi Arabia’s initial public offering of its state oil company, Saudi Aramco.