By JOHN P. TRETBAR
Eagle Communications
Last week's rig counts show a big drop in horizontal drilling in both the southwestern and northeastern United States. Baker Hughes reports the horizontal rig count posted a two percent dip last week, dropping 10 rigs from the week before. The count in the Permian Basin dropped by four rigs. So did the Marcellus shale of the northeastern US. The counts in Pennsylvania and West Virginia were each down two. Ohio was up three. New Mexico was down four rigs. Oklahoma dropped by two rigs.
So far this year, 144 operators have spudded 566 wells across Kansas, down from mid-June last year by 97 wells. Total well-bore footage is down 23 percent. The Kansas Rig Count from Independent Oil & Gas Service is up four percent from a week ago and 33 percent higher than a month ago, but remains 20 percent behind a year ago. Operators Friday were drilling on one lease in Barton County and one in Ellis County.
Kansas Common crude starts the week at $62 per barrel after gaining a dollar and a quarter on Friday. U.S. crude futures closed more than a dollar higher Friday. The benchmark contract settled at $71.78 per barrel. London Brent was trading over $76 per barrel Monday morning.
Operators completed 52 wells statewide last week, 817 so far this year, compared to 731 a year ago. Independent Oil & Gas Service reports three new completions in Barton County, one in Ellis County, one in Russell County and one in Stafford County.
Regulators in Kansas approved 49 new drilling permits last week, with 11 in Western Kansas including three in Barton County. That's 822 new drilling locations statewide, compared to 716 a year ago.
The government reports an increase in crude inventories and crude production. U.S. crude inventories increased last week by nearly eight million barrels to just over 467 million barrels as of June 9. The Energy Information Administration says that's about equal to the five-year average for this time of year. Domestic crude production last week increased slightly to just over 12.4 million barrels per day. The Energy Information Administration said U.S. crude imports dropped last week by 19-thousand barrels per day to 6.4 million. The four-week average is unchanged from a year ago.
The number-three crude producing state in the U.S. reported a slight increase in crude production in April. The North Dakota Department of Mineral Resources reported output of 1.13 million barrels per day, up about ten thousand barrels from the month before. By way of comparison, the number-two state New Mexico produces over 1.7 million barrels per day. Texas pumps about five million barrels per day. The gas capture rate in North Dakota remained at 95 percent, but officials say the amount of natural gas recovered at oil wells in North Dakota set an all time record in April.
OPEC left its forecast for global oil demand growth steady for a fourth month but warned that the world economy faces rising uncertainty and slower growth in the second half of this year. The cartel's monthly oil market report also notes dropping refinery margins in May along the U.S. Gulf Coast for a second straight month, which could bring good news for diesel prices. So-called crack spreads dropped to their lowest level this year. The report credits an increase in fuel deliveries for the downturn.
A tribe in North Dakota is buying an idle crude-oil pipeline. The Mandan, Hidatsa and Arikara Nation bought the pipeline from the energy company Enbridge to deliver oil from wells on its reservation to the broader market. They hope to have the pipeline up and running in a year, connecting oil facilities on the reservation to Enbridge's large network. Officials did not disclose the sale price. State reports show more than 2,600 active oil and gas wells on the reservation, pumping nearly 150-thousand barrels of oil per day in February.