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Oil and Gas Roundup — Jan. 4

January 04, 2016
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

State rig count down 1 to 87; U.S. number falls 2 to 698

The number of rigs exploring for oil and natural gas in Oklahoma dropped by 1 to 87 last week, while the overall U.S. drilling rig count fell 2 units to 698 during the shortened holiday week. The total is down 1,113 rigs from the same week a year ago, according to Baker Hughes.

Land-based rigs fell 3 units to 672 from a week ago, while those drilling offshore rose 1 unit to 25 rigs. These counts are down 1,072 and 30 units, respectively, from a year ago. Rigs drilling in inland waters were unchanged this week at 1 unit.

Oil-directed rigs were down 2 units to 536. This is down 946 units from the same week a year ago. Gas-directed rigs now total 162, unchanged from last week.

Rigs engaged in horizontal drilling lost 5 units to 549, still down 787 year-over-year. Directional drilling rigs were unchanged at 60 units.

Canada’s total rig count plunged 43 units this week to 83, down 125 year-over-year. Gas-directed rigs dropped 11 units to 71, while oil-directed rigs lost 32 units to 12.

Among the major oil and gas producing states, North Dakota, at 53, and California, at 7, were both down 2 rigs from a week ago. Two other states lost 1 rig this week: West Virginia, 15; and Ohio, 14. Seven states were unchanged from a week ago: New Mexico, 38; Colorado, 24; Wyoming, 17; Kansas, 12; Alaska, 11; Utah, 3; and Arkansas, 1.

Pennsylvania, at 27 rigs this week, was up 1 unit. Texas and Louisiana were both up 2 units to respective counts of 321 and 58.

Oklahoma regulators take action on Edmond earthquakes

The Oklahoma Corporation Commission said Monday it has asked operators of five nearby saltwater disposal wells to reduce volumes after a swarm of earthquakes hit the Edmond area in the past week.

Central Oklahoma residents have been shaken by a spate of earthquakes, including a 4.3-magnitude quake Dec. 29 and a 4.2-magnitude on New Year's Day. In all, 14 earthquakes greater than 2.5-magnitude have been reported in the Edmond area in the past week, according to the United States Geological Survey.

The latest action marks a continuation of the Corporation Commission's strategy of targeting targeting saltwater disposal wells in the deep Arbuckle formation. Researchers have linked high-volume disposal of the produced water that comes up with oil and natural gas to the state's ongoing escalation of man-made earthquakes.

The commission said there are five operating Arbuckle disposal wells within 10 miles of the recent Edmond earthquake activity. Disposal wells within 3.5 miles will be directed to reduce disposal volumes 50 percent, while the others are to cut volumes by 25 percent. All Arbuckle disposal wells within 15 miles are expected to test reservoir pressures.

Read The Oklahoman story.

EPA set to formally publish haze plan for Texas, Okla.

U.S. EPA is on track to formally publish on Tuesday the final version of its contested regional haze plan for Texas and Oklahoma. But if the plan has sparked heated objections from power producers and state officials, it's not clear that those complaints will lead to a lawsuit.

Under federal law, any side can seek a review by the U.S. Court of Appeals for the District of Columbia Circuit within 60 days of the rule's publication in the Federal Register. At the state level, that decision will rest with Texas Attorney General Ken Paxton (R), whose office is already challenging the Obama administration's Clean Power Plan and EPA's recently announced standard for ground-level ozone. In an email this afternoon, spokeswoman Cynthia Meyer said only that the attorney general's office is reviewing the rule.

In releasing the final plan last month, EPA officials made few changes to a draft rolled out in late 2014. The plan is geared to eventually cut sulfur dioxide emissions by some 230,000 tons annually and improve visibility at the Wichita Mountains Wildlife Refuge in Oklahoma as well as Big Bend National Park and Guadalupe Mountains National Park in Texas. The latter is home to the state's highest point, Guadalupe Peak, with a height of more than 8,700 feet.

The new regulations will not affect any Oklahoma electric plants. In Texas, however, they will require added emissions controls at seven of the eight plants over three to five years, with an estimated price tag of about $2 billion, according to the Texas Commission on Environmental Quality. The federal plan will in part supplant a 2009 state strategy for reducing haze-related pollution that EPA officials had found wanting.

— E&E News.

Obama's offshore drilling moves could tie hands of successor

President Obama has a chance to significantly tie the hands of his successor and his or her energy policy with the upcoming five-year plan for offshore drilling leases.

The Bureau of Ocean Energy Management (BOEM), part of the Interior Department, is likely in January or February to move forward on setting a schedule for lease sales for offshore oil and natural gas drilling rights, and to put the finishing touches on it later in the year.
The program will cover 2017 to 2022, and only lease sales scheduled in the plan can take place.

The most contentious provisions of the plan, whose first draft was released in early 2015, are the proposals to allow offshore drilling in the Atlantic Ocean for the first time ever and to sell more drilling rights in the Arctic Ocean north of Alaska.
Given the significant resource potential and the possible environmental and climate impacts of drilling, along with the long time period the plan covers, Obama’s under great pressure from greens and industry to get the program right.

The groups and their allies in Congress, like presidential candidate Sen. Bernie Sanders (I-Vt.) and Sen. Jeff Merkley (D-Ore.), think that the best place to start cutting off fossil fuel supplies is on federal land and waters, which are the easiest to control through policy.

Read more at The Hill.

U.K. oil, gas output rises for first time in 15 years

Britain's oil and gas output rose in 2015 for the first time since the turn of the millennium, industry body Oil & Gas UK said on Monday, reversing a declining trend but coming as oil prices are trading at a seven-year low.

The industry group, which represents oil producers active in the North Sea such as BP, Shell or ExxonMobil, expects British oil and gas production to have risen 7-8 percent, much higher than a 3-4 percent increase it predicted in September.

Britain's oil and gas output has more than halved in the past 15 years due to easy-to-reach resources running low and a lack of investment in new areas.

But a renewed push to explore new areas of the North Sea over the past four years has meant new fields started up in 2015, including Taqa's Cladhan oil field in resource-rich waters near the Shetland Islands, and boosted output year on year.

"The industry-wide focus on improving production efficiency coupled with investments of more than 50 billion pounds over the last four years to bring new fields on stream across the last twelve months is paying off and yielding a better result," said Oil and Gas UK chief executive Deirdre Michie in a statement.

Final production figures, released by the government, were not yet available but Oil and Gas UK said it had based its estimate on data for the first 10 months of 2015 and average production assumptions for November and December.

Read more at Reuters.
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