By JOHN P. TRETBAR
Drilling activity in Kansas is on the rebound. Independent Oil & Gas Service reports drilling is underway at one site each in Barton, Ellis and Russell counties, and operators are about to spud one well in Russell County and three in Stafford County. There are 15 drilling rigs actively exploring for oil and gas in eastern Kansas, up five over last week, and 33 west of Wichita, up three.
Operators filed for 44 permits to drill at new locations across the state last week, 27 in eastern Kansas and 17 west of Wichita, including one new permit in Ellis County. That’s 1,583 new permits so far this year, up from 1,227 a year ago at this time.
Independent Oil & Gas Service reports 32 newly completed wells across Kansas in the last week. That’s 1,326 completions so far this year. There were ten east of Wichita and 22 in the western half of the state, including two in Barton County.
Kansas operators pumped 2.95 million barrels of crude oil in July, bringing our total so far this year to 20.51 million barrels. According to the latest numbers from the Kansas Geological Survey, July production across the state was up 30,000 barrels from June but is down 40,000 barrels from totals reported at this time a year ago. KGS reports Barton County adding 145,000 barrels in July. Ellis County continues to lead the state, producing 221,000 barrels. Russell County pumped 131,000 barrels, while Stafford County added 87,000 barrels. Haskell County operators produced more than 214,000 barrels. In Finney County, operators produced 162,000 barrels.
EIA reported Kansas production in August was up 1.2% over July to 96,000 barrels per day. That’s down 3.1% from the total last August.
Kansas Common crude at CHS in McPherson was fetching $50.50/bbl after dropping half a dollar on Friday. That’s three dollars less than a week ago, but three dollars more than a year ago.
There’s yet another setback for the Keystone Pipeline, as a U.S. Judge last week blocked construction of the last leg the system. District Judge Brian Morris issued a 54-page order saying the administration must conduct a more strenuous environmental review, including consideration of the impact of global warming and oil prices. The Great Falls Tribune reports TransCanada already has begun delivering and staging pipe in parts of Montana, and expects to begin construction next year.
Some of the world’s largest energy companies spent tens of millions of dollars to defeat ballot initiatives in the U.S. that would have limited their industry. They had mixed success. Voters in Colorado rejected a measure that would have increased the setback distances for new oil and gas drilling. In the State of Washington voters said “no” to a new carbon tax on polluting industries. But in Florida, voters passed a ban on offshore oil drilling in state waters. Voters in Oklahoma rejected a ballot question proposed by the Legislature that would have used some of their new oil-tax revenue to set up a budget hedge fund to protect against volatile oil and gas prices.
The U.S. Energy Information Administration reported record crude oil production in the U.S. last week, a whopping 11.58 million barrels per day. That’s the most anywhere, and an increase of 600,000 barrels per day over last week. We’re nearly two million barrels per day ahead of a year ago.
Monthly numbers from the EIA show October domestic crude production averaged 11.4 million barrels per day. The government predicts the production for the year 2018 will average 10.9 million barrels per day, and next year we’ll be over 12.1 million. EIA expects U.S. crude futures prices next year will average about seven dollars lower than London Brent, which they expect to average $72 a barrel in 2019.
The government reported a big boost in domestic crude oil stockpiles, up 5.8 million barrels from last week. We’re currently holding about three percent more than the five-year average for this time of year: 431.8 million barrels.
U.S. crude imports averaged 7.5 million barrels per day last week, up by 195,000 barrels per day. The four-week average is about 1.2% less than the same four-week period last year.
OPEC is now debating a production cut in advance of the cartel’s meeting next month, and Saudi Arabia says it will cut output by about one million barrels per day, to prevent an oversupplied market. Russia says it will follow the lead of the full cartel after its meeting next month.