By JOHN P. TRETBAR
Eagle Communications
Crude prices in Kansas are down 12% from a year ago. Rig counts are down 21%.
Kansas Common crude starts the New Year at $62 per barrel at CHS in McPherson. That's down $2.25 per barrel from a month ago, and $8.50 per barrel lower than a year ago.
Crude prices on the Nymex ended the year at $71.65 per barrel Friday, down 12 cents on the day. That price is down more than eight dollars in the last year. Prices were still dropping by lunchtime Tuesday.
The last Kansas Rig Count of the year from Independent Oil & Gas Service was unchanged in western Kansas at 21 active rigs. The tally east of Wichita is up two at 16 rigs. The total is down 21% from a year ago. The Rotary Rig Count from Baker Hughes ended the year up two at 622 active rigs. The Texas tally was up three. New Mexico was down one.
Operators across Kansas completed 28 wells last week. Among them were 13 in western Kansas including one new well in Russell County.
Independent Oil and Gas Service reports 1,692 newly-completed wells through the end of the year, up about six percent over the total of 1,589 wells at the end of 2022. Kansas regulators okayed 1,284 new drilling permits across the state in 2023, down about 18% from the 1,581 permits recorded at the end of 2022.
Kansas operators pumped 76,646 barrels of crude oil per day in the eight months through August in the latest tally from the Kansas Geological Survey. That's down more than a thousand barrels per day from last year, but about thirty barrels per day higher than the tally through August of 2021. Barton County operators produced 4,125 barrels per day, up by 120 barrels per day from last year and up 300 barrels per day from the year before. Ellis County checks in with 5,985 barrels per day, up 600 barrels from last year, but down nearly 300 from the year before. Russell County produced over 3,600 barrels per day, increasing slightly over last year, but down slightly from two years ago. Stafford County is down from last year but ahead of the year before, pumping over 2,400 barrels per day.
Kansas crude production in August averaged 73,000 barrels per day, down 2.6% from September and nearly five percent lower than a year ago, when output averaged over 77,000 thousand barrels per day. Kansas ranks 12th among crude-producing states. Texas continues to lead the way, pumping 5.6 million barrels per day, more than all other states combined.
Each month, the government re-benchmarks its crude-production estimates, fine tuning weekly data for monthly reporting. December's re-benchmarking pumped up output to 13,330,000 barrels per day for the week though December 15, a record. Database adjustments added 189,000 barrels per day to the weekly report.
Weekly domestic crude-oil production set yet another all-time record, the sixth weekly all-time record in three months. The Energy Information Administration reports output of 13,337,000 barrels for the week through December 22. The weekly average has exceeded 13 million barrels per day for the last 12 weeks in a row, and before that only twice in history.
The government reported the biggest monthly crude-oil production total ever, over 410 million barrels for the month of October. That's an average of 13,248,483 barrels per day.
U.S. crude inventories dropped by nearly seven million barrels last week to 436.6 million barrels. EIA said U.S. stockpiles are about one percent below the five year average for this time of year.
The government says imports dropped to 6.3 million barrels per day, down nearly half a million barrels per day from the week before. The four week average is more than eight percent higher than the same four weeks a year ago.
The U.S. has become a net energy exporter in recent years, thanks in large part to the export of Liquefied Natural Gas. Last year European LNG imports rose to an all-time high and accounted for 64% of total U.S. exports, according to the Energy Information Administration. U.S. LNG exports averaged 10.6 billion cubic feet per day last year, increasing by nine percent compared with 2021. Energy Information Administration forecasts continuing growth this year. The report says our spike in exports was driven by strong European demand, high international natural-gas prices, and expanded U.S. liquefaction capacity.
U.S. shale executives are bracing for more big merger and acquisitions in the oil patch. A new report suggests some folks don't like the idea. According to a quarterly survey by the Federal Reserve Bank of Dallas, U.S. energy producers are expecting more huge acquisitions after Chevron took over Hess Corp. and Exxon Mobil bought Pioneer Natural Resources. Together those two deals are worth more than $112 billion. Survey respondents expect more to come in the year ahead. According to a Bloomberg report that's not good news for the companies that provide crews and equipment to oil producers. One respondent suggests the move will impede growth in the oilfield service sector, and could lead to problems for small independent operators, like most of those in Kansas, who could be priced out of the market.
Hess Corp. was the high bidder in a U.S. auction for drilling rights in the Gulf of Mexico, which raised a total of $382 million from oil giants before the Biden administration imposes a two-year hiatus for future sales. Reuters reports the total is the biggest return from an offshore lease sale since 2015.
Regulators in the number-three crude-producing state report October output dropped by 35-thousand barrels per day to just over 1.2 million. The North Dakota Department of Mineral Resources says completions were down, but rig counts and permits were up from the month before.
Venezuela has now signed a third joint venture for crude production since the U.S. eased sanctions. Spain's super-major RepSol follows Chevron and France’s Maurel & Prom into Venezuela. The OPEC member boasts the world's largest proven oil reserves but faces what are among the world's biggest market obstacles, including sanctions, corruption and infrastructure decay.