John P. Tretbar
Kansas gasoline prices have dropped nearly three cents per gallon in the last week, prompting AAA to list the state #8 among the nation’s top 10 largest weekly price changes. At $2.618, we’re down more than a nickel from a month ago, but we’re still paying 40 cents more than last year at this time. We’re still seeing $2.63 per gallon in Great Bend, and $2.62 most retailers in Hays. Triple-A reported the national average on Monday was nearly $2.84/gal.
Reuters is reporting the king of Saudi Arabia stepped in to block the initial public stock offering at Saudi Aramco. King Salman reportedly met with family members, bankers, and senior oil executives, including a former Aramco CEO, and heard warnings about tough new disclosure requirements possibly undermining, rather than helping, the kingdom. By late June the king pulled the plug on the IPO, but Reuters reports preparations were already slowing down. By April, Aramco stopped paying retainer fees to some of the banks working on the deal.
The Financial Times reports Aramco’s concession agreement with the state has now been limited to 40 years, from a previous contract that gave it access in perpetuity. The move came as part of the kingdom’s preparations for the now delayed stock market flotation of the company.
Rig counts plummeted across the U.S., but are on the increase here in Kansas. Independent Oil & Gas Service reported a 13% increase in the number of active drilling rigs across Kansas, 17 east of Wichita, up three, and 33 in the western half of the state, which is also up three. Operators report drilling underway at one site and drilling ahead at two more in Barton County. They’re about to spud two wells in Stafford County. And, completion activity is underway at two wells in Barton County, five in Ellis county and one in Stafford County. Baker Hughes reported 1,044 active U.S. drilling rigs, a drop of nine oil rigs and four seeking natural gas. Louisiana was down seven rigs, which the count in North Dakota was down four. Texas added three rigs. The count in Canada was 229 active rigs, up 17 for the week.
Kansas operators have filed 1,134 new permits so far this year, including 31 last week. There are 12 new drilling permits east of Wichita and 19 in western Kansas, including two in Stafford County.
Independent Oil & Gas Service reported 46 new well completions for the week, 12 east of Wichita and 34 in western Kansas. That brings the total to 996 so far this year. Of the 34 newly-completed wells west of Wichita last week, 14 were dry holes. There was one completion reported in Barton County, two dry holes in Ellis County, a dry hole in Russell County and one in Stafford County.
The U.S. Energy Information Administration is for the third time reporting all-time high domestic crude oil production of eleven million barrels per day, up from 10.9 million a week ago.
The government said also said U.S. crude-oil inventories dropped 5.8 million barrels, and are now down to the five-year average for this time of year. Imports were down 1.5 million barrels. Gasoline inventories were up another 1.2 million barrels and are about six percent above the five-year average
The Oklahoma energy industry is fighting back in Kingfisher County, where commissioners in May banned the practice of moving produced and treated water for oil and gas operations through temporary pipes in ditches along county roads. The county still allows those pipes, but only to transport fresh water. The Oklahoma Oil and Gas Association filed suit, asserting that state law gives the Corporation Commission exclusive jurisdiction over oil and gas operations. The Daily Oklahoman reports the change could add millions of dollars in costs, significantly increase truck traffic and increase the use of fresh water when companies previously relied on recycled oil-field water.
The State of Texas is asking the federal government for at least $12 billion for a nearly 60-mile “spine” of concrete seawalls, earthen barriers, floating gates and steel levees…flood protection in anticipation of more and bigger storms along the Gulf Coast. The project would stretch from the Louisiana border to the industrial enclaves south of Houston, one of the world’s largest concentrations of petrochemical facilities, including nearly one-third of the nation’s refining capacity. Last month, the government fast-tracked an initial $3.9 billion for three separate, smaller storm barrier projects to protect oil facilities.
Operators are using ever-increasing amounts of water to fuel the fracking boom in the Permian Basin. A study out of Duke University found that the region’s water use in hydraulic fracturing went from nearly two Olympic-sized swimming pools (4,900 cubic meters) per well in 2011, to 42,500 cubic meters per well in 2016 — an increase of almost 800 percent.
A candidate for Governor of New Mexico is calling for that state’s first toll roads to serve the New Mexico side of the booming Permian Basin. One of the most productive oil and gas areas in the world also boasts some of the most dangerous roads. Steve Pearce told a group of business leaders his plan would be financed by private companies, without taxpayer dollars, and would ultimately be maintained by tolls. Pearce estimates the initial run of 130 miles of toll roads would cost about $260 million, and hopes it could be done in two years, according to reporting in the Hobbs (New Mexico) News-Sun.
ConocoPhillips says it has reached an agreement with Venezuela to recover nearly $2 billion awarded for assets seized by the government a decade ago. State-owned PDVSA has agreed to recognize the judgment and make the first $500 million payment within 90 days. The rest would be paid out over a period of four years. In exchange, Conoco agrees to suspend its legal efforts to seize a refinery and other assets in the Caribbean.