Kansas Geological Survey, Open File Report 98-56
by Timothy R. Carr
Kansas Geological Survey
Open-File Report 98-56
As a result of a drastic drop in oil prices and relatively soft gas prices during 1998, the overall revenue generated by oil and gas production in Kansas is expected to decrease from 1997 levels by more than $600 million at the wellhead (Table 1). This decrease will have a significant impact on the Kansas economy and employment. Using regional economic multipliers from the US Department of Commerce an attempt was made to estimate the potential economic impact to the Kansas economy and the Kansas oil and gas industry. Based on preliminary analysis the Kansas economy could receive a negative impact of $900 million and employment in the oil and gas industry could be reduced by more than 5,000 people.
Table 1 - Summary of Kansas oil and gas production, and value at wellhead for 1997 and 1998.
| Year | Oil Production Barrels * 1,000 |
Average Price $/bbl |
Total Oil Value $ * 1,000 |
Gas Production Mcf *1,000 |
Average Price $/Mcf |
Total Gas Value $ * 1,000 |
|---|---|---|---|---|---|---|
| 1997 | 39,836 | $18.63 | $742,145 | 692,295 | $2.18 | $1,509,203 |
| 1998 (est.) | 29,082** | $11.76* | $342,000 | 630,000*** | $2.03* | $1,271,000 |
* Average prices through November 1998. Gas price is average of spot
market prices reported to the Natural Gas Clearinghouse, Inc (NGC). Oil
price is the average purchase price for the best quality crude as reported
by Koch Industries, Wichita.
** Estimated oil production using reported production during the first six
months of 1998 (see Figure 2).
** *Estimated gas production using reported production during the first
six months of 1998 (see Figure 5).
Next Page--1998 Oil Production