By JOHN P. TRETBAR
The Kansas Geological Survey reported statewide oil production in January topped 3.4 million barrels statewide, about half a million barrels more than last January. Barton County produced over 165,000 barrels, Ellis County 249,000-plus. Russell County operators produced more than 145,000 barrels, and Stafford County checks in with January production of 103,000 barrels.
The Kansas Geological Society recognized and named eight new oil fields in Kansas during its meeting April 25. That’s 19 new oil and gas fields so far this year, five more than the same period last year.
Supernova Energy announced it has more than doubled its stake in the Anderson Lease in Barton County. Through 2015, the 160-acre lease has produced more than 363-thousand barrels since it was drilled in 1956.
Baker Hughes reported 1,045 total active drilling rigs nationwide, up ten oil rigs and three gas rigs from last week. The number went up eight rigs in Texas and three each in Oklahoma and Colorado. Independent Oil & Gas Service reported a weekly count of 16 active drilling rigs in eastern Kansas, which is up one, and 26 west of Wichita, down two. Drilling is coming soon to one lease in Russell County and is underway at two sites in Ellis County. Operators are moving in completion tools at two sites in Barton County and five in Ellis County.
Independent Oil and Gas Service reported 39 new well completions across the state last week. For the year, operators have completed 569 wells. There was one completion in Barton County, and two in Stafford County. Operators completed 91 wells across the state last month. Fifty-one of those were in Western Kansas, and nearly half of those, 24, were dry holes.
There were 17 permits filed last week for drilling at new locations statewide, five east of Wichita and 12 in Western Kansas, including one in Ellis County. So far this year we’ve seen 552 new drilling permits: 15 in Barton County, 16 in Ellis County, one in Russell County and 11 in Stafford County. Kansas operators filed 128 permits to drill at new locations last month, 70 in the eastern half of the state, 58 west of Wichita, including five new permits in Barton County and three in Ellis County.
An investigation of Kansas saltwater disposal wells has found more than 2,000 that weren’t properly permitted. The Kansas Corporation Commission says the wells were approved, even though the public notices did not include the new, longer public-comment period. The inaccurate notices were give to commission staff, but the errors were not detected.
More earthquake activity last week leads to another regulatory directive to oil operators in Oklahoma. There were more than half a dozen temblors, including one near Anthony, Kansas. Quake activity in the Covington/Douglas area of Garfield County, Oklahoma prompted the Oklahoma Corporation Commission to order additional reductions in wastewater disposal volumes there. The commission also ordered integrity tests of bottom hole plugs in some wells to make sure the wastewater isn’t going into the basement rock. The commission says 23 active disposal wells fall under the new directive issued last week.
A partnership in Oklahoma headed by Alta Mesa Resources announced a venture to build a new pipeline from Central Oklahoma’s STACK play to the oil terminal at Cushing. The 65-mile, 16 inch Cimmaron Express will move 90,000 to 175,000 barrels per day beginning next year.
Discounts for West Texas crude have refiners on the East Coast hoping to buy more of it, but Reuters reports supply bottlenecks are making that difficult. Pipelines are at capacity, and rail service is largely unavailable. According to the government, just 46,000 barrels of crude have been shipped from the Gulf region to the East Coast in the last seven years, all during June of last year. Oil from the Permian Basin is selling at its steepest discount to WTI in three and a half years, $58 a barrel compared to $71 for the US benchmark.
The government offered some optimistic projections last week, suggesting once again that the US could be the world’s number-one oil producer by next year. The Energy Information Administration projects average production this year of 10.7 million barrels per day. Next year, they’ve raised expectations to 11.9 million barrels per day, and the agency projects we will end 2019 at more than 12 million. That’s a gain of nearly three million barrels per day over 2017. Russia, currently the world’s leading producer, managed output of 10.98 million barrels per day last year.
Royal Dutch Shell has agreed to sell its interest in oil sands producer Canadian Natural Resources Ltd. Oil and Gas Journal pegs the sale proceeds at $3.3 billion. The sale is expected to be completed on May 9, and is part of the company’s 3-year divestment program that included an earlier sale of Canadian oil sands interests for $7.5 billion.
China bought record volumes of crude last month, a four percent increase to 9.64 million barrels per day. Bloomberg reports some some refiners made purchases in advance of an international summit next month that could disrupt oil transport.
Renewed sanctions against Iran could spell the end of the current output agreement between OPEC and its allies. The Iraqi Oil Minister says OPEC will discuss the problem at its meeting later this month. Reuters notes that the possible removal of several hundred thousand barrels per day of Iran’s crude oil from the international marketplace will send prices sharply higher unless other producers step up to fill the gap. There are only a few big players that could do that, including Saudi Arabia, the United Arab Emirates, Kuwait, Russia and the United States.
