News Release, Kansas Geological Survey, May 4, 2012
LAWRENCE--Oil production in Kansas rose and natural gas production dropped in 2011 as crude oil prices remained high and gas prices fell, according to estimates from the Kansas Geological Survey at the University of Kansas.
Kansas oil production increased about 2.5 percent between the end of 2010 and the end of 2011, from approximately 40.5 million barrels to 41.5 million barrels. Over the same period natural gas production in the state was down 6.6 percent, from about 333.2 billion cubic feet (bcf) in 2010 to 311.6 bcf in 2011.
"Except for 2009, the price of oil has generally risen steadily from $25 per barrel in 2002 to $100 or more per barrel today," said Survey geologist Lynn Watney. "During that time, Kansas oil production has increased 24 percent."
The cumulative value of the state's production increased from an estimated $2.79 billion in 2010 to $3.5 billion in 2011.
Higher oil prices have spurred increased activity, particularly horizontal drilling, in a tier of south-central Kansas counties along the Oklahoma border where nearly all of the 37 horizontal wells drilled in the state in 2011 are located. Still in the early stages of development, these wells had only a minimal impact on the state's increased production.
Horizontal wells, which start out vertical then turn in a horizontal direction to capitalize on a known oil-producing zone, cost several times more to drill, complete, and put on production than conventional vertical wells. The oil-bearing Mississippian rocks in southern Kansas, formed about 350 million years ago in shallow sea deposits, are 5,000 feet underground.
"Most of these horizontal wells in southern Kansas utilize staged-hydrofracturing techniques and target the poorly drained and less permeable Mississippian limestones," said Survey geologist David Newell. "These wells are a continuation of an oil play that started in north-central Oklahoma and progressed north into Kansas in mid-2010."
Hydrofracturing, informally called "fracking," involves fracturing rock layers by injecting fluids and sand under high pressure to increase permeability and free up trapped oil.
Production data are still not publicly available for most of the recently drilled wells in southern Kansas, but the best one to date--in Harper County--is pumping oil at a rate of 850 barrels per day and gas at a rate of 1600 thousand cubic feet (mcf) per day, Newell said. Production figures for that well are based on five months of reporting in 2011.
Despite the increased activity in south-central Kansas, all but one of the top ten oil-producing counties in 2011 was farther north in central Kansas or to the west.
Ellis County continued to lead with an estimated 3.4 million barrels--a 3% increase over 2010--followed by Barton, Russell, Rooks, and Barber counties. Barber County was the only south-central county in the top ten.
Barton, Russell, and Rooks, all produced between about 2 and 2.1 million barrels in 2011 and Barber County produced approximately 1.9 million. Russell County moved up from fifth in 2010 to third in 2011, and Barber County moved from seventh to fifth.
Rounding out the top ten producers were Ness, Haskell, Finney, Graham, and Stafford counties. Fourteenth-ranked Logan County had a 39% rise in production, the highest percentage increase in the state. New wells there are generally producing from the Lansing, Kansas City, and Marmaton groups of Pennsylvanian age.
In contrast to oil prices, natural gas prices have been falling since early 2010 from $5.70 per thousand cubic feet (mcf) at the wellhead to the current rate of around $2 per mcf, the lowest price in a decade, Watney said.
The cumulative value of natural gas in Kansas dropped from $1.33 billion in 2010 to $1.2 billion in 2011 as price and production fell.
"Gas supplies have increased in the past decade due to the development of large shale gas plays in the United States," Watney said. "Drilling of coal bed methane and conventional gas wells has continued to decline since 2006, clearly a reflection of the soft natural gas market."
The expansive Hugoton Gas Area in southwest Kansas remained the most prolific gas-producing region in the state even though production numbers there were down. All but two of the 2011 top ten gas-producing counties--Barber and Neosho--were in the Hugoton area.
Stevens County was again first with an estimated production of 4.4 bcf of gas, although that was down 9 percent from 2010. Grant, Kearny, Haskell, Barber, Morton, Finney, Seward, and Neosho counties followed.
As it did in oil production, Barber County rose from the seventh biggest producer of gas in 2010 to fifth in 2011 due to increased production there from the Mississippian. It was the only county in the top 10 gas-producing counties with rising production rates.
Natural gas in Neosho and other southeastern Kansas counties is produced mainly from shallow coal beds. Production of coalbed natural gas, also called coalbed methane, became profitable in Kansas in the early 2000s, but it has dropped off significantly since 2008 after the price of gas peaked at $14 per mcf before falling toward the current rate around $2 per mcf.
"Oil and gas development contributes to every economic sector of Kansas," Watney said. "As we can see from the production numbers, the value of oil and gas in the last decade closely correlates to that development."
Current and historical production data for the entire state, as well as by county and field, are available at http://www.kgs.ku.edu/PRS/petroDB.html.