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News From the Oil Patch, July 16

BY JOHN P. TRETBAR

Crude prices dropped nearly four percent Monday, with the US benchmark falling below $69 a barrel.  Monday’s price for Kansas Common crude at CHS in McPherson was down three dollars to $58.25 per barrel.
Kansas operators filed 158 new drilling permits in June, 95 east of Wichita and 63 in the western have of the state, with one in Barton County, three in Ellis County, one in Russell County and two in Stafford County.  For the first six months of the year we’ve seen 820 new permits filed, which is slightly better than last year’s mid-year total of 718, and nearly double the six-month total of 432 in June of 2016..
Independent Oil & Gas Service reports 112 new well completions for the month of June, 40 in eastern Kansas and 72 west of Wichita, including four in Barton County, five in Ellis County and two in Stafford County.  During the first half of this year, Kansas operators completed 735 oil and gas wells.  Last year at the end of June we reported 661 completions, and the mid-year total the year before was 635.
Independent Oil & Gas reported 25 newly-completed wells across Kansas for the week, 816 so far this year, with eight new completions east of Wichita, and 17 in the western half of the state.  There were two completions reported in Barton County and one in Ellis County.
Operators filed 31 new permits for drilling at new locations across the state last week, 15 in eastern Kansas and 16 west of Wichita, bringing the total to 885 new permits so far this year.  There are three new permits in Barton County, one in Ellis County and two in Russell County.
Kansas rig count totals are nearly 20% higher than a month ago and nearly 30% higher than last year at this time.   Independent Oil & Gas Service reported 20 active drilling rigs in eastern Kansas, down one, and 29 west of Wichita, which is unchanged.   Operators report drilling underway at one lease in Stafford County, and drilling about to commence at two sites in Stafford County and one in Barton County.  They’re moving in completion tools to four wells in Barton County and six in Ellis County. Baker Hughes reported 1,054 active rigs nationwide, up two gas rigs, and Canada checks in with 197 active drilling rigs, up 15.
OPEC now forecasts global oil demand will top 100 million barrels per day for the first time next year, but also warned of possible market disruptions due to trade tensions. Saudi Arabia’s oil production jumped by nearly 500,000 barrels per day (bpd) in June, as that country and others try to rein in prices. Output from OPEC was up 173,000 bpd.
Libyan oil production returns to normal levels after the suspension of oil loading at four ports was lifted. The national oil company said Wednesday rebel blockades had cut down daily production to about 80 percent of the country’s pre-conflict production, and cost the company about $67 million per day.
Oil & Gas lease sales in New Mexico set another monthly record in June, and the total for the fiscal year is nearly five million dollars higher than the previous record.  That money goes to the Land Maintenance Fund and benefits education and water resource managers in New Mexico. The June sale by the State Land Office set a record of $4.9 million in lease sales in June.  The total for fiscal 2018 was $106.9 million.  State Land Commissioner Aubrey Dunn says they actually sold fewer acres for more money, at about $1,057 an acre.
A county in northern North Dakota is preparing to use produced water from the oil field to help control dust on some gravel roads. Radio station KFGO in Fargo reports commissioners in Ward County, North Dakota approved a request for a brine storage tank and distribution equipment.  Authorities say the produced water contains magnesium and calcium chlorides, which are commonly used in road-dust control, and they insist that it’s safe when used appropriately.

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