The drilling rig counts for the week of Thanksgiving were up nationwide but down slightly here in Kansas.  Independent Oil & Gas Service reports 10 active drilling rigs in eastern Kansas, up one, and 24 west of Wichita, down two.  In Barton County, they’re drilling at one site, preparing to spud at another, and moving in completion tools at two more.  They’re drilling on one lease in Ellis County and moving in completion tools at another.  They’re about to commence completion operations at one site each in Russell and Stafford counties.  Baker Hughes noted a total of 923 active rigs across the US, an increase of nine oil rigs and a decrease of one natural gas rig.

Independent Oil & Gas Service reported 28 new well completions last week, 1,196 so far this year. In Western Kansas, operators completed 25 wells last week, with a whopping 14 dry holes, three of those in Ellis County.  Completed wells in Barton and Stafford counties are producing pay dirt.  There were three wells completed in eastern Kansas, with one dry hole.

Across Kansas last week there were 17 permits filed for drilling at new locations, for a year-to-date total of 1,291.  There are six new permits east of Wichita, and 11 in western Kansas, including two in Ellis County, one in Russell County and one in Stafford County.

The Kansas Corporation Commission announced an investigation into energy operators who may have improperly notified the public about proposed saltwater disposal wells in their area.  The issue came up after a Chase County woman complained about more than two dozen drilling permits, but the probe will look into all disposal well permits dating back to 2008, when lawmakers implemented changes in the public notice regulations.  The changes included an expansion of the public-notice period from 15 days to 30 days. The public will be allowed to comment on the results of the investigation.  Commissioners ordered an investigative filing by February 19th.  Affected operators, intervenors and the public will then have until of April 5th to submit legal briefs and comments about the filing.  Commission staff  submit legal briefs by June 4th.  According to the KCC, the public can contact the Public Affairs office via letter or email. Once the comment period begins, you can submit a comment online by clicking on the “Your Opinion Matters” link on the home page at http://kcc.ks.gov/.

Analysts say the shutdown of the Keystone Pipeline because of a crude spill contributed to a big drop in domestic crude supplies.  The government said crude inventories fell by 1.86 million barrels last week.  Domestic crude prices jumped nearly two percent for the near-month Nymex contract to two-year highs. The market entered a state of backwardation for the first time in nearly three years, with later-term contracts costing less than more current ones.

South Dakota regulators said they could revoke TransCanada Corp’s permit to operate the Keystone crude oil pipeline in the state if an initial probe into the November 16 oil spill finds the company violated its license.  Reuters quotes members of the South Dakota Public Utilities Commission who say they’re waiting for forensic analysis, warning that if they find any of the permit’s construction or operational conditions were not met they could shut down the pipe until the problems are resolved.  Cleanup operations continued at the site as more than 100 workers recover heavy crude from the spill.  involving dozens of workers continued at the site.

A report from Reuters notes that Keystone has already exceeded it’s own risk-assessment for spills. Before constructing the pipeline, TransCanada provided a spill-risk assessment to regulators.  That professional risk assessment estimated the chance of a leak of more than 50 barrels to be “not more than once every seven to 11 years over the entire length of the pipeline in the United States.” According to its operating permit in South Dakota, where the line has leaked twice, the estimate was for a “spill no more than once every 41 years.”  There have been significant spills and more than a dozen smaller ones since Keystone began operations.  TransCanada’s spill analysis for the final leg of the Keystone XL expansion, which would cross Montana, South Dakota and Nebraska, estimates 2.2 leaks per decade with half of those at volumes of 3 barrels or less. It estimated that spills exceeding 1,000 barrels would occur at a rate of once per century.

MMEX Resources broke ground last week on its new crude distillation unit near Fort Stockton, Texas, expected to become the first oil refinery to open in the US in 40 years. Once completed, the 126 acre, $50 million project will be able to process 10,000 barrels of crude oil each day.

US authorities have arrested Hong Kong’s former home affairs secretary and the ex-foreign minister of Senegal for leading a multi-million dollar bribery scheme in Africa on behalf of a top Chinese energy company.  Media in Nigeria say some of the deals were arranged in the halls of the UN.  US officials say the pair sent huge bribes to high-level officials in Chad and Uganda to secure business advantages.

A Russian pipeline operator says that since more of the country’s low-sulfur crude oil is being diverted eastward to China, the quality of the country’s key westbound exports will continue to fall.  S&P Global Platts reported an announcement from the company Transneft, that the sulfur content in those exports will reach “a critical level” this year.

Producers in the Permian Basin of Texas are already burning off between three and four percent, or 40 billion cubic feet per year, of their natural gas. That’s above the state average in Texas. The Wall Street Journal now warns that the natural gas gusher in the Permian could force producers to cap wells or curtail drilling, because there’s no way to get that natural gas to market.  Pipelines running from the Permian to the Gulf are at capacity, and other markets are already being served from other sources.  The boom could go bust until new pipelines are built and some new power plants come online in Mexico. Prices at the Permian hub have already fallen to about 20% below those in Louisiana.