Archive for Saturday, February 5, 2005

Kansas energy industry posts record year

February 5, 2005

Advertisement

Surging oil and gas prices led to a record-breaking year in the state's energy industry in 2004, according to data compiled by the Kansas Geological Survey.

Wells in the state produced $3.5 billion worth of oil and natural gas, the most in state history and a 17 percent increase over the previous year.

"You double the price of oil and natural gas, and it certainly makes for a better year," said Nick Powell, president of Colt Energy, which operates wells in Douglas County and elsewhere in Kansas. "The bottom line is, this is the best time to be in the business."

Kansas produced 33.9 million barrels of oil last year, almost exactly the same as 2003. But because of an increase in oil prices -- from $25 per barrel at the beginning of the year to $50 a barrel toward the end -- the oil was worth $1.3 billion, about $400,000 more than the previous year.

Gas production declined 4 percent last year to 405 billion cubic feet. But, as with oil, the value increased from $2.1 billion to $2.2 billion.

The money does more than boost incomes for energy producers, said Tim Carr, who heads the Kansas University-based survey's energy research operations. The revenue creates jobs and taxes for the state, too.

"Frankly, it's in the right place for an economic stimulus," he said. "It's not in Johnson County or Topeka or even Lawrence for that matter. It's in Great Bend, it's in Dodge City, it's in Liberal and Chanute -- in places that need to have an economic shot in the arm."

If prices remain high, he said, the number of oil and gas wells should increase.

Powell, whose firm operates about 500 wells, said many producers had been investing their profits into existing wells in recent years.

"Once they get through that process, and they see prices are still high, they'll spend more money doing new wells," he said. "It's just a matter of how much it's worth."

Commenting has been disabled for this item.

loading...