Oklahoma energy regulators OK move allowing well shut-ins

4/22/2020  apnews.com 

OKLAHOMA CITY (AP) — The Oklahoma Corporation Commission approved an emergency order on Wednesday that allows oil producers to stop or reduce production without losing their leases for non-production.

The three-member, all-Republican panel that regulates the oil and gas industry in Oklahoma issued its emergency order Wednesday amid a collapse in oil prices. The per-barrel price has plummeted as demand dried up, and an oversupply has limited storage capacity.

One Oklahoma producer who testified that he operates about 600 wells in the state said he is currently losing $200,000 monthly by producing from economically challenged wells.

“No one understands the oil business better than Oklahoma’s operators,” Commissioner Dana Murphy said in a statement after approving the order. “Today’s action by the Commission gives those operators the freedom and flexibility they need to respond to market forces and decide what actions to take to survive.”

The price of a barrel of U.S. oil to be delivered in June jumped 19% to settle at $13.78 on Wednesday. The big gain, though, means it has recovered just a fraction of its steep losses. The per-barrel price was close to $30 at the start of last week and nearly $60 at the beginning of the year.

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Saw this a day or so ago.  Came from  the. Houston Chronicle.

The Railroad Commission of Texas, the state agency that regulates the oil and gas industry, postponed a vote on a proposal to institute state-mandated oil production cuts until next month.

The three-member commission delayed action until its May 5 meeting after debating the issue for 30 minutes

SCOOP and STACK plays in Oklahoma have some of the highest break even costs of any unconventional oil basins - $53/barrel.  That makes it easier for operators to agree to shut in production.  Even if the price of a barrel begins to rebound it may be a long time before it gets above $53.

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