News From The Oil Patch, June 3
John P. Tretbar
Kansas regulators report 93 new intent-to-drill notices in May, 413 so far this year, compared to 448 through May of last year. Barton County records five new intents, ten so far this year. Ellis County has a new one for a total of three. The KCC reports one new intent in Russell County. That's four so far this year. In Stafford County there are six for the year, with two new ones reported in May.
Independent Oil and Gas Service reports 26 new well completions for the week, with one each in Barton, Ellis and Russell counties, out of 12 in Western Kansas.
Regulators gave their okay to 40 new drilling locations in Kansas, including one new permit in Russell County, out of 21 west of Wichita. That's 377 new permits so far this year, compared to 529 a year ago at this time.
Oil and gas activity in Kansas lags behind last year, which was nothing to brag about. Drilling activity is down 34% from last year, a year that saw statewide crude production drop to its lowest total on record. The Kansas Rig Count is up seven percent from a month ago but down six percent from a year ago. The tally is up two rigs at 19 in the western half of the state.
The Rotary Rig Count from Baker Hughes was down one oil rig and up one gas rig for a total of 600 active rigs. The tallies in Oklahoma and New Mexico were each down one. Louisiana was up one.
Domestic commercial crude inventories dropped by 4.2 million barrels a day last week according to the Energy Information Administration. Stockpiles are about four percent below the five-year average, at 454 million barrels.
The government bought another half million barrels of crude oil last week as part of ongoing efforts to refill the Strategic Petroleum Reserve. Total strategic reserves topped 618 million barrels back in October of 2021. Following the Ukraine invasion and subsequent Russian sanctions, the government sold off millions of barrels at over $95 a barrel. Now they're buying it back at under $80. The Energy Information Administration reports 369.3 million barrels of total strategic reserves as of May 24, up more than 3.5 million barrels since refill operations resumed in April. That marks a savings of more than $52 million.
The US is a net petroleum exporter, but continues to import more crude oil than we ship out by just under 1.8 million barrels per day. Petroleum product exports tip the balance. Crude imports averaged just under 6.7 million barrels a day last week. Crude exports averaged 4.2 Million barrels per day.
A slight increase in crude production in Alaska accounts for the slight increase nationwide. EIA reports total output of 13,122,000 barrels per day, up six thousand barrels from a week ago. Average output and average cumulative output so far this year are each up more than a million barrels a day from a year ago.
The top oil-and-gas regulator in Texas reports a big seasonal drop in February crude production from totals that were already below average. Operators in the Lone Star State pumped 131 million barrels in February, down 16 million barrels a day from January and 700-thousand daily barrels lower than a year earlier. Output in January was already below average from severe winter weather. Natural Gas production was down ten percent from a month earlier, and four percent lower year-over-year.
Output in the number-three producing state was up in March compared to February, but the daily average, in the longer month, was down two percent. The North Dakota Department of Mineral Resources reports crude-oil production reached 1.22 million barrels a day. Natural gas production reached an all-time record, as did the number of producing oil and gas wells in the state.
The United Arab Emirates makes good on recent promises to refocus on natural gas, by purchasing it's first-ever equity stake in a U.S. company. Abu Dhabi National Oil Company, or ADNOC, is buying a 12-percent stake in a Texas Liquefied Natural Gas export facility, along with a 20-year supply agreement. The announcement makes no mention of either the price or the Administration's current pause on LNG export permitting. ADNOC also recently announced it's buying part of a gas project in the east-African nation of Mozambique, and a chemical plant in Europe. Abu Dhabi join the U.S. and Saudi Arabia among major oil producers refocusing exploration and marketing toward natural gas. Saudi-Aramco is following through on its announced plans to expand into LNG with the purchase of a huge facility in Australia.