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IOGsi RED TOP NEWS:
WEEK #43, October 22, 2020
IOGsi Week #43, OCTOBER 22, 2020 Highlights - There were 12 new oil and gas Drilling Permits issued in Kansas this past week by the Kansas Corporation Commission. This brings the year-to-date total of new drill locations issued to 358, compared to 876 locations a year ago (-59%).
COFFEYVILLE RESOURCES reported Kansas crude prices dropped by $1.00 / bbl from a week ago (-3.2%). Kansas Common price at the close of the day on October 21st was $30.25 / bbl, Southcentral Kansas crude $32.00 / bbl and Eastern Kansas crude $27.50 / bbl.
The total number of active drilling rigs in Kansas (moving to or currently on drill sites) was up to 15 compared to 13 a week ago (+15%). A month ago, there were 10 active rigs (+50%). This same time a year ago, 30 rotary rigs were active in the State (-50%).
Statewide this year, 392 wells have been drilled with total footage drilled (TFD) of 1,286,575 ft. TFD in Kansas last year over the same period was 3,395,811 ft (-62%). Average well total depth in 2020 is 3,282 ft compared to 3,545 ft a year ago. Of the TFD this year, 1,113,511 ft has been drilled in the western ranges (-63%) and 173,064 ft in the eastern ranges of the State (-51%). There are 138 active well operators drilling wells in the state this year compared to 244 a year ago (-43%).
In other news, the September Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because mitigation and reopening efforts related to the 2019 novel coronavirus disease (COVID-19) continue to evolve, according to U.S. Energy Information Administration (EIA), Washington, D.C. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply patterns in 2020. This STEO assumes U.S. gross domestic product declined by 4.4% in the first half of 2020 from the same period a year ago and will rise beginning in the third quarter of 2020, with year-over-year growth of 3.5% in 2021. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit.
EIA reported that U.S. crude oil production averaged 11.0 million b/d in July (the most recent month for which historical data are available), up 0.5 million b/d from June. In May, U.S. crude oil production reached a two-and-a-half-year low of 10.0 million b/d, resulting from curtailed production amid low oil prices. Since then, U.S. production has increased mainly because tight oil operators have brought wells back online in response to rising prices. EIA estimates that production rose to 11.2 million b/d in September. However, EIA expects U.S. crude oil production to generally decline to an average of 11.0 million b/d in the second quarter of 2021 because new drilling activity will not generate enough production to offset declines from existing wells. EIA expects drilling activity to rise later in 2021, contributing to U.S. crude oil production returning to 11.2 million b/d in the fourth quarter of 2021. On an annual average basis, EIA expects U.S. crude oil production to fall from 12.2 million b/d in 2019 to 11.5 million b/d in 2020 and 11.1 million b/d in 2021.