Kansas oil, gas production continued to decline in 2017



LAWRENCE — Kansas oil production decreased in 2017 even as oil prices increased, according to estimates from the Kansas Geological Survey (KGS) at the University of Kansas. Natural gas production fell as gas prices remained low and output in the state’s largest gas area continued to taper off.

“Oil prices rose fairly steadily in the first half of 2017 from the low $40s per barrel to the low $60s,” said KGS geologist David Newell. “Since then, the price has bounced between $60 and $65 a barrel, but the rate of drilling in Kansas hasn't picked up appreciably.”

Oil companies may not be confident that prices will be sustained in the future, or they may think the risk inherent in drilling isn’t worth taking unless prices rise further, Newell said. Prices peaked at about $100 per barrel in 2014 then fell to under $30 a barrel by early 2016 before rising again.

During the horizontal-drilling boom in south-central Kansas between 2012 and 2015, more than 700 wells were drilled in a tier of counties, including Harper, just north of the Oklahoma state line. Both oil and natural gas production in the area escalated rapidly. Due to the geologic characteristics of the producing zone, however, production rates started strong, then dropped drastically.

In 2015, Harper County soared from the middle of the pack to be the state’s top oil-producing county, but by 2017 it had slipped to ninth. Output in the area fell significantly in 2016 and continued to decline in 2017, with little new drilling.

“Even with prices back up between $60 and $65 per barrel today, I don't think drilling will substantially increase in the region unless prices substantially increase,” Newell said. 

Ellis County in western Kansas continued to be the top producing county in 2017 after regaining the lead in 2016. It has led for most of the past 50 years.

The top-10 oil-producing counties in 2017, in order, were Ellis, Haskell, Barton, Finney, Russell, Rooks, Ness, Stafford, Harper and Barber. All but Haskell County suffered losses.

Ellis County produced 2.64 million barrels — down 1.3 percent from the previous year — followed closely by Haskell County, which produced 2.45 million barrels, a 42 percent increase from the previous year.

“In 2015, 2016, and 2017 Haskell County has had somewhat of a mini drilling boom after several new Mississippian and Pennsylvanian fields were discovered,” Newell said.

Harper and Barber counties experienced the greatest declines, with production dropping 52 and 17 percent, respectively. Most of the oil in those counties comes from the Mississippian play that ignited the horizontal-drilling boom.

Statewide oil production of 35.8 million barrels in 2017 was a nearly 6 percent decline from the previous year. Oil production in Kansas, which fluctuates as prices rise and fall, peaked at 93 million barrels in 1966.

Natural gas production statewide in 2017 was about 216 billion cubic feet, a drop of 12 percent from 2016. At the beginning of 2017 the price was around $3 per thousand cubic feet. At the end of the year it was $2.50. By comparison, it reached $14 in 2008.

Production from the Hugoton Natural Gas Area in western Kansas — once the largest gas field in North America —  continued to decline, largely due to depletion. Production in the Hugoton Field, which peaked at 651 billion cubic feet in 1970, was 88 billion cubic feet in 2017.

“There are small pockets of relatively untapped gas in the Hugoton Field, but overall and despite any effect of price fluctuations, the field is depleting,” Newell said. “It will continue its long venerable decline in pressure and production rates pretty much unaffected by price.”

Natural gas production in all of the top-10 gas-producing counties was down, with the largest decline in Harper County at 26 percent.

Stevens County, which produced about 26 billion cubic feet, was the top producer. It was followed, in order, by Grant, Harper, Kearny, Barber, Haskell, Morton, Finney, Stanton and Seward counties. All are in the Hugoton natural gas area except Harper and Barber counties, where production was mainly from the Mississippian play.

Natural gas production from shallow coal beds in southeast Kansas remained low due to low prices. Drilling there for coal-bed natural gas has virtually ceased in recent years.

Current and historical production data for the entire state, as well as by county, field, lease and operator, are available online.

Wed, 04/04/2018

author

David Newell

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David Newell

Kansas Geological Survey

785-864-2183