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Oil and Gas Roundup — Nov. 24

November 24, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, country and world:

Oklahoma rig count down 4 to 81; U.S. count falls by 10

The US drilling rig count lost 10 rigs—all targeting oil—to settle at 757 rigs working during the week ended Nov. 20, according to Baker Hughes Inc. data.

The count is now at its lowest level since Apr. 19, 2002, and down 1,172 units year-over-year. Since Aug. 21, the overall count has fallen 128 units after a short-lived summer rebound.

After rising last week for the first time in 11 weeks, oil-directed rigs now total 564, their lowest point since June 11, 2010, and down 1,010 year-over-year. Since Aug. 28, they’ve fallen 111 units.

Gas-directed rigs were unchanged from a week ago at 193.

Land-based rigs declined for the 13th straight week, dropping 6 units to 725, down 1,139 year-over-year. Rigs engaged in horizontal drilling fell 6 units 581, down 1,372 year-over-year. Directional drilling rigs decreased 3 units to 69.

Offshore rigs dropped 3 units to 30. Four rigs went offline offshore Louisiana, while 1 went online offshore Texas. Rigs drilling in inland waters edged down a unit to 2.

Canada also dropped 10 units this week, but most of those targeted gas. The country’s count is now 166, down 268 year-over-year. Gas-directed rigs lost 9 units to 99, while oil-directed rigs edged down a unit to 67.

In the major oil- and gas-producing states, Oklahoma and Louisiana each declined 4 units to respective totals of 81 and 65. Oklahoma’s total is its fewest since Nov. 20, 2009, and down 133 year-over-year. Louisiana’s total ties its lowest level since BHI began tracking states’ rig counts in December 2000.

The Mississippian dropped 3 units to 9, down 66 year-over-year.

Colorado and Wyoming each dropped 3 units to 29 and 21, respectively. For Colorado, it’s the state’s fewest since Mar. 14, 2003. The DJ-Niobrara edged down a unit to 27.

West Virginia lost 2 units to 14. Ohio edged down a unit to 19.

Six states were unchanged from a week ago: New Mexico, 38; Alaska, 13; Kansas and California, 10 each; Utah, 5; and Arkansas, 4.

North Dakota edged up 1 unit to 63. Pennsylvania rose 2 units to 30. Texas posted its second gain in 3 weeks, leading the states by adding 4 units to reach a total of 342, still down 564 year-over-year.

The Eagle Ford increased 2 units to 75, while the Permian dropped 4 units to 225, down 340 year-over-year.

— Oil & Gas Journal

Oil, gas cyber attacks increasing

Cyber attacks in the upstream oil and gas sector are increasing, according to Eric Knapp, the global director of cyber security solutions and technology for Honeywell Process Solutions.

At an annual meeting for Honeywell users in the EMEA region being held in Madrid this week, Knapp told Rigzone that the oil and gas industry is not only seeing more cyber threat activity, but that threats of this nature are becoming more advanced.

“In those sites that we support directly, we have seen that there’s an increase in activity. We can extrapolate from that that globally there’s an increase ... Malware creation and the cyber threat as an entity is an organization. Malware changes and evolves … we’re seeing activity increase across the board.”

Over the past 30 years, the oil and gas sector has been the target of well-known cyber attacks. One of the most famous was launched against Saudi Aramco in 2012 by the terrorist organization, Cutting Sword of Justice. The group launched the attack to stop oil and gas production in Saudi Arabia’s largest exporter within the Organization of the Petroleum Exporting Countries (OPEC), according to a white paper by Lockheed Martin Corporation.

— Rigzone.

OSHA expects to finalize long-stalled silica rule

The Obama administration anticipates a February release date for its final rule on occupational exposure to crystalline silica.

A timetable for the long-delayed Occupational Safety and Health Administration (OSHA) regulation was included in a wide-ranging agenda released Friday by the Office of Management and Budget. The final rule would affect hydraulic fracturing operations, which use silica sand to prop open shale passages, allowing hydrocarbons to flow through.

OSHA estimates the rule would save 700 lives and prevent 1,600 new cases of silicosis -- a fatal lung disease that can result from inhaling just a small amount of silica dust over time -- per year. Annual costs for implementation of the rule would total $664 million, according to the agency.

Frac sand producers, which are controlled by the Mine Safety and Health Administration, have had significant input on the rule. The National Industrial Sand Association's (NISA) occupational health program served as a model for OSHA's measures on workplace and medical monitoring.

But NISA and oil and gas trade groups have criticized OSHA's proposal to halve the permissible exposure limit (PEL) for silica. When properly enforced, the current limit effectively protects against silica-related disease, according to a joint comment on the draft rule submitted by the American Petroleum Institute and the Independent Petroleum Association of America.

"OSHA's selection of key studies, interpretation of study results, and application of data analysis models, however, are unbalanced with a bias towards accepting adverse effects as real and causally related to silica exposure, while discounting study results that conflict with such interpretations," the industry groups wrote.

"On balance, the associations do not believe that an objective assessment of the scientific literature supports the need to lower the PEL to protect workers."

— E&E News

EIA: Shale drilling boosted U.S. oil, gas reserves in 2014

Reserves of oil and natural gas in the United States shot higher last year, according to government data released Monday, setting records that reveal the extent to which a decade-long drilling boom has transformed the energy landscape.

Proved reserves of natural gas rose by 34.8 trillion cubic feet (tcf), or 10 percent, to a record high of 388.8 tcf in 2014, while oil reserves rose 3.4 billion barrels, or nine percent, to 39.9 billion barrels, the highest since 1972, the Energy Information Administration said in a statement.

The EIA describes proved reserves as oil and gas that can be extracted using current technology and under today's economic conditions. The increases, which were the sixth in a row, were driven by prolific production from shale plays that, through hydraulic fracturing, have produced vast amounts of fuel, creating a market glut and causing steep price drops.

The price of oil has fallen more than 50 percent since last summer and natural gas prices have been depressed for years, both due to oversupply. The Marcellus shale in Pennsylvania, which currently produces about 20 percent of the country's natural gas, contributed most to the increase in gas reserves, adding 10 tcf of proved reserves.

The Texas portions of the Eagle Ford and the Permian Basin saw the largest increase in oil reserves, adding 2.05 billion barrels. North Dakota saw the second largest increase, a gain of 362 million barrels, driven by the Bakken shale.

Production of oil and natural gas increased in 2014, the EIA said. Production of crude oil and lease condensate increased about 17 percent, from 7.4 to 8.7 million barrels per day. Gas output increased 6 percent, from 73 to 77 billion cubic feet per day.

— Reuters

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