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Oklahoma community draws lessons from previous hard times

Elk City is experiencing its third oil boom as the search for oil has led thousands of people to migrate to the far western Oklahoma boom town.
by Adam Wilmoth Published: July 30, 2012

The city and companies also are working to diversify within the energy industry.

To that effort, the city bought 160 acres just south of Interstate 40 and developed it as an industrial park.

“The city gave away or nearly gave away a lot of the property sites,” city councilman and longtime Elk City resident Tom Mike Johnson said. “I can't believe how quickly that built up. That cost the city a lot of money and it isn't generating much sales tax revenue, but those jobs are supporting families that have moved here, and those jobs are not just jobs in the field.”

Elk City-based Superior Fabrication Inc. began in 1997 by supplying parts for natural gas production in the Elk City area. The company since has expanded to 277 employees at three locations — including more than 200 in Elk City's industrial park — and is now manufacturing parts for oil and natural gas production for companies throughout the country and world.

“One thing that has helped us is that we can switch easily between equipment that treats natural gas and equipment that treats liquids,” Lakey said. “When the price of natural gas goes back up, we'll be positioned to make more of that product when the demand is there.”

Onward and upward

While Elk City residents already are preparing for the next downturn, they are hopeful that things will be different this time around.

There are some signs that the current growth could continue well into the future.

Apache Corp. recently completed its purchase of western Oklahoma acreage from Cordilla Energy Partners.

With the deal, Apache now operates about 1,125 wells in the area and will have 25 rigs searching for oil by the end of the summer. The company has identified another 10,000 potential well sites in the area, said Larry J. Bledsoe, Apache's district production manager in Elk City.

At a rate of about 250 wells a year, the company could be active in the area for another four decades.

“We have nothing now compared to what it could be,” Bledsoe said.

Houston-based Linn Energy also has a large presence in Elk City, operating 800 to 900 wells in the area. The company said it plans to invest $500 million to $600 million in wells between Elk City and Shamrock, Texas — 55 miles away — over the next few years. Its district office supports 59 Linn employees and 23 contract workers every day.

“We're really committed here,” said Paul Lamle, Linn Energy's district production superintendent in Elk City.

The jobs and money have returned to western Oklahoma, but for many residents throughout the area, the look is decidedly different.

Marjorie Anderson now runs Elk City's Homestead Title & Closing LLC. In her experience, there is far more money in western Oklahoma than most people realize. But the people who have been through the bust have learned from previous busts, she said.

“People who are third-generation oil are invested in banks and in land. They are using their money wisely,” she said.

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