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2001 Kansas Oil & Gas
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Kansas Geological Survey Open-file Report 2002-38 |
Oil Production
Oil production in Kansas is from online databases at the Kansas Geological Survey (http://www.kgs. ku.edu/PRS/petroDB.html). The production data are sales volumes reported to the Kansas Department of Revenue. Monthly production from 1990 through 2001 shows the significant influence of wellhead price on oil production (Figure 2). The decrease in nominal prices from 1990 through 1999 is reflected by decreases in monthly production of more than 2,000,000 barrels per month. The increase in price from January 1999 until present appears to have arrested the production decline and resulted in small increases. Even the short duration decrease in price during late 2001 and early 2002 appears to have affected monthly production.
Kansas oil production is dominated by low volume economically
marginal wells that are extremely sensitive to wellhead prices. Over 98% of
the oil wells in Kansas average less than 15 BOPD, and approximately 36,885
wells (96% of the number of wells) producing 74.8% of the state's oil would
be classified as stripper production2.
Figure 2 - Kansas monthly oil production, and
average monthly wellhead price for 1990 through
2001. Average monthly wellhead prices are current through July 2002.
In 2001, the wellhead value of oil production was estimated at just over $754 million (Figure 3). Monthly value decreased significantly in the last four months as oil prices decreased from $23.00 per barrel to less than $16.00 per barrel. The effect was to decrease wellhead value by approximately $100 million. The rebound wellhead price in 2002 to above $20 per barrel should result in an increase in monthly value to 60-70 million. If prices remain firm production volumes are expected to increase. The value for oil at the wellhead is a decrease of almost $200 million from the 2000 wellhead value (Table 1).
Figure 3 - Kansas monthly and cumulative value of oil production for 2001. The estimated wellhead value of oil production is $754 million. The decrease in monthly value in the last four months is a result of a significant decrease in posted price per barrel of oil of more than $5.00 (see Figure 2).
Notes: 2 Oil production in 2001 may be subject to minor upward revision.
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Last updated August 2002
http://www.kgs.ku.edu/PRS/publication/ofr2002-38/P1-04.html