By JOHN P. TRETBAR
Kansas oil-and-gas operators filed 165 intent-to-drill notices with the KCC last month, including eight in Barton County, five in Ellis County, eight in Russell County and six in Stafford County. So far this year, the KCC reports 1,635 new intents, compared to 1,298 through October of last year. By this time in 2014, when prices were starting to drop from record highs, operators had filed drilling notice on 5,815 new wells.
Baker Hughes reported 1,067 active rigs across the U.S., down one oil rig. Texas was down four rigs, while Oklahoma gained three.
Independent Oil & Gas Service reports a slight increase in the weekly drilling rig count in Kansas. There are 30 rigs in western Kansas that are moving in, rigging up, drilling or relocating, up one from last week. The count east of Wichita was unchanged at ten active rigs. Operators are about to spud one well in Ellis County, two in Russell County and one in Stafford County. They’re moving in rotary drilling tools at another Stafford County lease, and they’re moving in completion tools at one site in Ellis County.
There were 60 permits for drilling at new locations filed last week across Kansas, 38 east of Wichita and 22 in the western half of the state. There are four new permits in Ellis County, two in Russell County and three in Stafford County. So far this year, 1,539 permits are on file, which marks a big improvement over the 1,190 permits filed through the first week in November last year.
Independent Oil & Gas Service reports 41 new well completions for the week, 1,294 so far this year. There were 25 new completions in eastern Kansas and 16 west of Wichita, including one each in Barton, Ellis, Russell and Stafford counties.
Crude inventories spiked last week, increasing by 3.2 million barrels to 426 million, about two percent above the five-year average for this time of year. Crude production also increased. EIA reported total production of 11.188 million barrels per day for the week ending October 26. That’s up 315 thousand barrels per day over the week before, and 1.6 million barrels per day more than a year ago.
Texas regulators reported a significant drop in production. The state produced an estimated 90.3 million barrels in August, the latest numbers available from the Texas Railroad Commission. That’s down more than eight million barrels from the month before, and about 300,000 barrels lower than August of last year.
The Trump administration announced it is exempting eight countries from the Iran oil sanctions, which officially resumed Monday. Those exemptions reportedly included some of the largest importers of oil from the Islamic republic. Those countries’ imports from Iran have already dropped dramatically, and officials say shipments from Iran are expected to drop by as much as 1.7 million barrels a day. Reuters reported major Asian buyers of Iran’s crude have already cut purchases to a 32-month low. China, India and South Korea last month imported 1.13 million barrels per day from Iran, down nearly 41% from a year ago and the lowest totals since the previous sanctions were lifted.
Chevron doubled its profits in the third quarter on record high quarterly production of nearly three million barrels per day. Chevron posted a profit of $4.05 billion for the quarter, more than double its earnings from a year ago. Royal Dutch Shell reported third quarter profits were up 60% to $12.1 billion, the highest in four years. Exxon Mobil beat expectations for quarterly profit and revenue, but reported another drop in total oil and gas production. Quarterly profits for the world’s largest publicly traded oil and gas company surged 57 percent to $6.24 billion.
Oil and gas giant Chesapeake Energy reported third-quarter net income of $84 million, after reporting a loss in the same period a year ago. The Oklahoma company also announced its purchase of Texas producer WildHorse Resource Development for nearly $4 billion.
The Canadian Press reports record oil exports by rail out of Canada in August, an eleven percent increase to more than 229-thousand barrels per day. That’s nearly double the oil-by-rail exports from Canada in August of last year. An analyst from the Royal Bank says Canadian producers are losing millions of dollars a day in discounted prices. The region does not have enough export pipeline space, and those barrels can’t go into storage in Alberta because there’s no room. The traditional solution, to put the stranded oil in railroad cars, won’t work because that capacity is also full and growing too slowly to make a difference. The bank predicts fourth-quarter rail exports will increase to about a quarter million barrels per day.
Some Canadian producers are getting so desperate to get crude to market they’re using trucks, some of them traveling 500 to 600 miles to the nearest pipeline or rail terminals. Bloomberg reports the country’s crude-by-truck exports nearly doubled due to pipeline bottlenecks to almost 230,000 barrels in August.