Sep 19, 2023

News from the Oil Patch: U.S. approaches production record

Posted Sep 19, 2023 9:00 PM

News from the Oil Patch, Sep. 19
John P. Tretbar

U.S. crude reaches its highest price point since November of 2022. WTI was trading over $92 per barrel Tuesday. London Brent was over $95. Kansas Common crude at CHS in McPherson started the week at $81 a barrel, adding half a dollar Friday to reach a ten-month high.

Kansas regulators okayed 37 new drilling locations last week, 879 so far this year. That's 293 permits behind last year at this time. There are 20 new permits in Western Kansas, including five in Ellis County and one in Stafford County. Independent Oil & Gas Service reported 25 newly-completed wells across the state, including one in Barton County and one in Ellis County. There are fourteen in eastern Kansas and eleven west of Wichita. That's 1,215 well-completions so far this year, which is up 64 wells from the total a year ago.

The Kansas Rig Count from Independent Oil & Gas Service is unchanged from last week, with 12 active rigs east of Wichita and 24 in the western half of the state. The totals are down 16% from a month ago and down 39% from last year at this time. Drilling was underway Friday on one lease in Barton County, three in Ellis County and one in Stafford County.

The Rotary Rig Count from Baker Hughes was nine wells higher (eight gas and two oil). The tally in Texas was up seven rigs while New Mexico was down two.

Weekly crude production is within a few wildcat strikes of the all-time record. U.S. operators pumped 12.92 million barrels per day in the week through September 8. That's an increase of more than 100,000 barrels per day. This marks only the 11th time operators have topped 12.9 million barrels per day.

U.S. crude inventories increased by four million barrels last week but remain at 15-month lows. The government's weekly tally of over 420 million barrels marks the first increase in U.S. stockpiles in five weeks. But the total is the lowest since June 24th of 2022, and is two percent below the five-year seasonal average.

EIA reports U.S. crude imports increased 812,000 barrels per day to an average of 7.6 million barrels per day last week. The four-week average is 13% higher than a year ago.

Kansas production outpaces last year, according to the latest data from the Kansas Geological Survey. Total statewide output in May reached 11.6 million barrels, or 77,138 barrels per day. That's up 627 barrels per day from a year ago. Output in Barton County averaged 4,117 barrel per day. Ellis County pumped 6,025 barrel per day. Russell County was over 3,700 barrels per day. Each marked a slight increase year over year. Stafford County dropped to 2,484 barrels per day, down from a year ago by 63 barrels per day.

North Dakota improved crude production to 1,180,611 barrels per day in July, up more than 14-thousand barrels per day over updated June totals. The Department of Mineral Resources said operators managed the best gas-capture rate ever at 96%. They also raised natural-gas production to another all-time high. The state has come a long way from a decade ago, when that stretch of the oil patch was visible from space because of natural gas flaring. In 2014, regulators established 74% as the first of several annual goals for increasing natural gas capture. Last week the North Dakota Petroleum Council, a trade association, pointed to advances in technology, improved coordination, and the build-out of new gas infrastructure, for the dramatic turnaround in flaring and venting statistics.