9/22/2004

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Contact: Rex Buchanan, Kansas Geological Survey, (785) 864-2106; or Tim Carr (785-864-2135)

Higher oil prices lead to more drilling and production, Kansas geologists report

LAWRENCE -- Higher energy prices have pumped up Kansas oil production, according to geologists at the University of Kansas' Kansas Geological Survey.

Kansas oil production has increased for five consecutive years. If current trends continue, the state's oil fields will produce more oil than they have for any year since the mid-1990s.

Survey geologist Tim Carr predicts that oil production in the state in 2004 will be up about 1.1 percent from last year and up about 3 percent over 2002. At current rates, 2004 production would total 34.3 million barrels, or about 94,000 barrels per day.

"This uptick in production is really because of the increase in oil prices," said Carr, head of the Survey's energy research section. "With prices for Kansas crude staying pretty consistently above $30 per barrel, companies can afford to invest in the technology to maintain and increase production from old wells and to explore for new resources."

New techniques, such as three-dimensional seismic reflection, provide detailed information about subsurface geology. That allows companies to drill more effectively in areas that had been extensively explored for oil. The result is that Kansas production has increased slightly every year since 1999.

Despite the increase in production, Kansas fields produce only about a quarter of the oil that they pumped 50 years ago. In 1956, Kansas production peaked at 124 million barrels. Production has generally declined since then, except from 1979 to 1985, when high oil prices temporarily reversed the decline.

"The current string of five straight years of increased production, from 1999 to the present, is one of the few times that production has increased since the 1950s, and it's the longest period of increased production since the early 1980s," Carr said.

Production numbers aren't the only sign of increased activity in Kansas oil fields. David Williams of the Conservation Division of the Kansas Corporation Commission, estimates that 3,500 "intents to drill" will be filed with the state in 2004. That compares to 2,626 in 2003 and 1,716 in 2002.

"The last time we saw more than 3,500 intents filed in one year was 1991," said Williams. "In April of this year, 420 permits were issued. That's the highest monthly total since November 1990."

Kansas isn't the only Great Plains state that has seen increased production. Colorado production is up about 3 percent over last year, North Dakota is about 5 percent higher, and Montana production is up slightly. Kansas produces more oil than those states, however, ranking eighth among the nation's states in oil production.

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