- Oklahoma’s energy regulator said oil producers can close wells without losing their leases, the first victory for struggling U.S. companies seeking relief from states following the market crash.
In an emergency order, the state energy regulator that oil companies could consider their unprofitable production economic waste, allowing oil and gas producers with money-losing wells to retain leases that could otherwise be voided if they halted output. Oklahoma was the fourth-largest oil producer in 2019, with output of about 580,000 barrels per day, but its production costs are among the highest in the country. More than half of the rigs operating in the state at the beginning of the year have been laid down, leaving just 24 currently, according to Baker Hughes figures.
New Mexico on Tuesday agreed to allow producers to apply to shut in output on state lands for at least 30 days, and Texas regulators also are considering mandated production cuts to halt losses. North Dakota is weighing aid for producers, but pushed back on the idea of limiting output at a meeting Tuesday.
Eddie Rongey, an Oklahoma producer who operates some 600 wells, testified that he is losing $200,000 a month by producing from “economically challenged wells,” according to the order. Rongey sought the order to prevent having shut-ins jeopardize his leases.
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Source: Reuters - 🏆 2. / 97 Read more »