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Oil and Gas Roundup — Jan. 27

January 27, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State rig count rises by one to 187

The number of drilling rigs actively exploring for oil or natural gas in Oklahoma rose by one this week to 187, Baker Hughes Inc. reported Friday.

The tally is down three from a year ago, when it was 190.

Nationwide, the net number of drilling rigs did not change this week, remaining at 1,777, said Houston-based Baker Hughes. That's up 24 rigs from a year ago.

Of the rigs operating this week across the country, 1,416 were exploring for oil, 356 for gas and five were listed as miscellaneous.

Friday on the New York Mercantile Exchange, benchmark U.S. crude oil for March delivery fell 68 cents to close at $96.64 a barrel. For the week, oil gained $2.27 a barrel, or 2.4 percent.

Meanwhile, the price of natural gas soared nearly 10 percent Friday amid frigid temperatures across much of the nation. Gas jumped 45 cents to reach $5.18 per 1,000 cubic feet, the highest close since June 2010.

Natural gas prices reach four-year high

The price of natural gas reached a four-year high Friday as continued frigid temperatures throughout much of the country have led to unusually high demand.

The futures price for natural gas jumped 45 cents, or 10 percent, on the day to close at $5.18 per thousand cubic feet.

“We've seen a fundamental shift in gas pricing,” said Tony Say, president of Oklahoma City-based Clearwater Enterprises. “There's plenty of gas out there, but with these next few weeks of cold weather, we could be depleting storage numbers to dangerously low levels come April 1.

“There's going to be a big push to put gas back into storage this summer. If it's a hot summer, perhaps there could be significant summer usage and we could go into the following winter with very low numbers in storage.”

Read The Oklahoman story:

Oklahoma drillers look to reuse produced water

Oil and gas companies are burying an increasing amount of pipeline in the northern part of the state, but it isn't just for high-priced crude. They're also looking for efficient ways to transport and reuse expensive, toxic produced water.

The drillers are finding ways to mix the highly salty water with small amounts of fresh water to hydraulically fracture wells. Reusing produced water cuts down on the amount of fresh water and surface water drillers need for frack jobs, and pipelines are less costly than trucking.

In Perry, Devon Energy is starting to lay oil, natural gas and water pipelines in the same easement, a system it calls integrated facilities. The new method helps make the Mississippian-Woodford trend efficient and economical, said Mark Matalik, drilling engineering supervisor with Devon.

Coordinating the drilling schedules with the pipeline construction lets producing wells tap into the system, rather than using trucks to transport water, Matalik said.

Read more:

Ohio credits HF for lower heating bills

Had it not been for the current fracking boom, Ohioans might have been looking at 65 to 129 percent higher heating bills this January.

Columbia Gas of Ohio said this January’s average residential heating bill will be $142.19 to $146.19 for the 1.4 million households it serves, many of them in northwest Ohio.

That’s $6 to $10 more than what the utility projected at the beginning of the month, when it estimated this year’s January bills would average $136.19 per household.

Utility spokesman Chris Kozak said the additional $6 to $10 in charges are “pretty insignificant” considering the brutal cold snaps brought on by two unusual shifts of the Arctic Circle’s polar vortex over North America, the first bringing wind chills approaching -50 degrees and this weekend’s, which brought wind chills of more than -20 degrees.

Read more:

The Weekly Oil & Gas Follies

Each week, Forbes and Energy In Depth columnist David Blackmon will “briefly chronicle the week’s silliness, foibles, fake news and real news related to the oil and natural gas industry.”

Check out this week's here:
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