Oklahoma's oil production growing fast

While Oklahoma's oil production has doubled over the past five years, the state has been far outpaced by Texas and North Dakota. Industry leaders say oil production will continue to pick up in Oklahoma.
by Adam Wilmoth Modified: November 17, 2013 at 6:00 pm •  Published: November 17, 2013
Advertisement
;

Three new hotels have popped up and long-vacant buildings are filled in Alva as the newest oil boom has sent thousands of rig hands, service company employees and other workers to northern Oklahoma.

“It has been a real stimulus and has allowed us to make some capital improvements that were long overdue,” Alva Mayor Arden Chaffee said.

The story has been similar in western and southern Oklahoma, as producers have invested millions of dollars throughout the state in an effort to revive many of the state's oldest oil fields.

The boom has supported a new hotel and three recreational vehicle parks in Chickasha.

“We've had a lot of activity in this area,” said Bud Andrus, president of the Chickasha Chamber of Commerce. “Three previously empty buildings have been purchased by oil field support companies in the last six or eight months.”

Finding oil

Oil production in Oklahoma has nearly doubled since 2005, reversing three decades of declines in the state.

But at more than 300,000 barrels per day, the state's production is still well below 1980s rates of more than 450,000 barrels per day.

“It's been huge for Oklahoma,” said Michael Teague, Oklahoma's energy and environment secretary. “The state weathered the national recession and stayed pretty steady. A lot of that is because of the backbone of the oil and gas industry and the drilling and production in the state.”

Rural Oklahoma communities have seen unemployment levels tumble in recent years as oil and natural gas activity has expanded.

Unemployment in Alfalfa County now stands at 4 percent, down from 5.7 percent in 2009. In Woods County, the rate has dropped to 3.2 percent, down from 4.3 percent four years ago.

Rural communities also have received other benefits that are harder to quantify.

“Companies like ours tend to invest in those communities and sponsor charities, local organizations and sports teams,” said James Bennett, CEO of Oklahoma City-based SandRidge Energy Inc. “We tend to give back in the communities in which we operate.”

SandRidge was one of the first companies to focus on the Mississippian formation in northern Oklahoma and western Kansas. The company has seen its production jump from 4.6 million barrels of oil equivalent in 2013 to 14 million barrels this year.

“We're going to keep investing in this Mid-Continent area,” Bennett said. “Oklahoma is the cornerstone of our Mid-Continent activity. Kansas is still very relevant and big, but Oklahoma still gets the lion's share of the capital and resources.”

Bumps in the road

While rural Oklahoma communities have benefitted, the oil and gas activity also has led to increased costs, especially in road maintenance.

“These great big trucks are tearing up local roads, in particular county roads outside the city limits and where the well sites are,” Andrus said. “We're going to need some help from the state to keep those roads repaired.”

It's an issue the industry is aware of and is working to address.

“Clearly we need to make sure the oil and gas industry is not adversely affecting these communities and counties and leaving behind a bunch of torn-up roads and bridges. That's not good for anyone,” said Chad Warmington, president of the Mid-Continent Oil and Gas Association of Oklahoma.

Warmington pointed out that part of the tax revenue from oil and natural as production is earmarked for counties to perform repair and maintenance.

“Our policymakers have been smart in knowing that whenever production goes up, it's going to be associated with wear and tear on the roads,” he said.

In some cases, the production companies have directly taken over road maintenance in their areas. Companies also are looking for ways to reduce the number of trucks needed to complete operations.

“We're laying oil and gas and water lines and are moving our products via pipelines to centralized batteries as much as possible as opposed to bringing in water trucks and using trucks to haul out oil,” said Tony Vaughn, Devon Energy Corp.'s executive vice president of exploration and production.


by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
+ show more


It has been a real stimulus and has allowed us to make some capital improvements that were long overdue.”

Alva Mayor Arden Chaffee,

Trending Now


AROUND THE WEB

  1. 1
    Facebook Post Saves Drowning Teen
  2. 2
    Saturday's front page of the New York Times sports section is simple: LeBron James and transactions
  3. 3
    The 19th-century health scare that told women to worry about "bicycle face"
  4. 4
    Sex Valley: Tech's booming prostitution trade
  5. 5
    Colorado Is Consuming Way More Pot Than Anyone Ever Believed
+ show more