KIOGA Oil & Natural Gas Production in Kansas Today Edward P. Cross, P.G., M.B.A. President Kansas Independent Oil & Gas Association Oil & Gas Small Business.

Slides:

Advertisements

Similar presentations

Robert Fisher, PG April 16, Discussion Topics Unconventional Gas Barnett Shale/Economics Example Plays How Fracking Works Production of Natural.

Advertisements

International Association of Oil and Gas Producers Oil and Gas Security of Supply for Europe Athens, 3 rd November, 2005.

SHALE AND THE US ECONOMY Kathleen B. Cooper October 22, 2013.

U.S. Energy Information Administration Independent Statistics & Analysis Global Oil Geopolitics Rio Oil & Gas Conference September 17, 2012|

Energy Technologies and Environmental Protection April 3 rd, 2006, Bucharest.

Industry Growth and Change 2014 Martz Summer Conference University of Colorado Law School Getches-Wilkinson Center for Natural Resources, Energy, and the.

U.S. Energy Information Administration Independent Statistics & Analysis The U.S. Natural Gas and Shale Production Outlook for North American.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for U.S. shale oil and gas IAEE/AEA Meeting January 4, 2014.

Ontario Petroleum Institute Ontario Petroleum Institute Brief 2015 Ontario Pre-Budget Consultation January 28, 2015.

The Role of Fiscal Regimes in Determining Competitiveness of Company Investments Marianne Kah 32 nd USAEE/IAEE North American Conference Petroleum Fiscal.

BY S. U. YAMUSA II AND A. H. ANSARI

Session 9. EFFECTS OF GOVERNMENT INTERVENTION— PRICE CONTROLS 2.7 Effects of Price Controls Without price controls, the market clears at the equilibrium.

ENERGIZING AMERICA: THE ROLE OF OIL AND NATURAL GAS IN AMERICA’S ENERGY FUTURE Rayola Dougher API Senior Economic Advisor,

U.S. Energy Information Administration Independent Statistics & Analysis The U.S. Oil and Natural Gas Production Outlook for PRG Energy Outlook.

U.S. Energy Information Administration Independent Statistics & Analysis Supply, Demand, and Export Outlook for North American Oil and Gas.

WORLD OIL AND NORTH AMERICAN NATURAL GAS OUTLOOK November 2006.

Natural Gas Makes the Future Work. 2 Outline Natural Gas in Relation to Other Commodities Today’s Market Fundamentals Natural Gas: Jobs, Revenue & Environment.

U.S. Energy Information Administration Independent Statistics & Analysis Lower oil prices and the energy outlook For Alaska Oil & Gas Association.

KIOGA A Brave New World Dynamic Challenges Facing Kansas Oil & Gas Industry Edward P. Cross, P.G., M.B.A. President Kansas Independent Oil & Gas Association.

The “Shale Revolution” Myths and Realities Trans-Atlantic Energy Dialogue Washington, DC December 10, 2013 J. David Hughes Global Sustainability Research.

1 What Happened? Why are We Talking about Exports? Natural Gas, Refined Products, and Crude Oil Pittsburgh Energy Law and Policy Institute August 2, 2013.

Pennsylvania’s Shale Gas Industry – What’s Ahead?.

U.S. Energy Information Administration Independent Statistics & Analysis EIA Drilling Productivity Report For Center on Global Energy Policy,

U.S. Energy Information Administration Independent Statistics & Analysis Federal Forecasters Conference – The Value of Government Forecasts.

1 Energy Company Valuations “It’s all in there!” Georgia State Economic Forecasting Conference May 25, 2005 Richard T. O’Brien Executive Vice President.

U.S. Energy Information Administration Independent Statistics & Analysis IEA and EIA: Similarities and Differences in Projections and Approaches.

A THREAT TO RURAL AMERICA Overview of EPA Proposed Rule.

Matthew Koch Institute for 21st Century Energy U.S. Chamber of Commerce

Natural Gas Markets and Reliability of the Electric Power Industry William Trapmann, Energy Information Administration Natural.

International Energy Outlook 2010 With Projections to 2035.

Peak Oil and the Small Independent  By John R. Barnes, Chairman & CEO B.W.O.C., Inc. and B&R Energy, LLC. Small Texas Based Independent Oil Companies.

Sally Odland Scarsdale High School Teachers Workshop November 2013 Supply/Price Dynamics of Unconventional Petroleum Production.

HIGH-TECH DIMENSIONS OF ENERGY Piotr Galitzine Chairman, TMK IPSCO USRBC Annual Meeting October 21, 2010.

Shale Gas Development Presentation to: APEC Unconventional Natural Gas Workshop Sally Kornfeld Team Leader – International Oil and Gas Activities Office.

Energy Information Administration Official Energy Statistics from the U.S. Government Annual Energy Outlook 2008 Energy Information Administration December.

1 Guy Caruso Administrator Energy Information Administration Georgetown University March 17, 2008 International Energy Outlook: The Future of Energy.

. “The fossil fuel deposits in California are incredible.” Governor Jerry Brown For the first time in nearly two decades, as a nation we are importing.

Energy Turmoil Donald A. Norman Manufacturers Alliance/MAPI May 20, 2008 Steel Manufacturers Association Annual Members Conference May 19-21, 2008.

What is the role of OPEC in the geopolitics of energy?

U.S. Energy Information Administration Independent Statistics & Analysis How much will low prices stimulate oil demand? For Oil and Money October.

1 National Security Consequences of U.S. Oil Dependency Independent Task Force Report COUNCIL ON FOREIGN RELATIONS.

2  World oil reserves  U.S. owns 2-3%  U.S. uses 25% The Importance of Energy Independence.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for Energy Markets for U.S. Chamber of Commerce October 15,

Richard Newell, SAIS, December 14, The Paul H. Nitze School of Advanced International Studies December 14, 2009 Washington, DC Richard Newell, Administrator.

U.S. Energy Information Administration Independent Statistics & Analysis Prospects for U.S. Oil & Natural Gas for The Aspen Institute: Global.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. For Bank.

U.S. Energy Information Administration Independent Statistics & Analysis Key Drivers Affecting the Outlook for Renewables For US Power & Renewable.

U.S. Energy Information Administration Independent Statistics & Analysis Lower oil prices and the energy outlook May 2015 Ottawa, Canada By.

Energy Information Administration Official Energy Statistics from the U.S. Government Annual Energy Outlook 2009 Early Release Energy Information Administration.

IOGCC 2003 Outlook for Natural Gas & Petroleum Guy Caruso Administrator Energy Information Administration IOGCC Conference Williamsburg, Virginia May 19,

MARCELLUSCOALITION.ORG Association for Energy Economics October 26, 2015 David Spigelmyer President Marcellus Shale Coalition.

International Gas Union Security of Supply; Another Perspective Ernesto A. López Anadón President of International Gas Union World Forum Regulation III.

U.S. Energy Information Administration Independent Statistics & Analysis Annual Energy Outlook 2015 United States Energy Association USEA Executive.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. For American.

U.S. Energy Information Administration Independent Statistics & Analysis Future Prospects for Oil Production for New America Foundation July.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. for FLAME.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for coal and electricity for National Coal Council November.

Bio-Fuels: Opportunities and Challenges 9 th Annual Farmer Cooperative Conference T. Randall Fortenbery Renk Agribusiness Institute Dept. of Ag and Applied.

U.S. Energy Information Administration Independent Statistics & Analysis Cyclical and Structural Changes in Oil Markets for Columbia University.

NS4054 Fall Term 2015 Fracking Regulations. Overview Oxford Analytica, US: Fracking Regulations Will be Minimal, August 2, 2015 On March 20, 2015 U.S.

Peaks, Plans and (Persnickety) Prices Gas Storage: Finance, Investment, and Strategy Summit October 19, 2010 Houston, Texas James M. Kendell, Director.

U.S. Energy Information Administration Independent Statistics & Analysis Oil markets -- a view from EIA for State of the Oil Markets Panel.

U.S. Energy Information Administration Independent Statistics & Analysis Outlook for shale gas and tight oil development in the U.S. For Joint.

Understanding the Impacts of Incremental Gas Supply on the Flow Dynamics Across the North American Grid Canadian Institute Vancouver, BC November 20, 2006.

U.S. Energy Information Administration Independent Statistics & Analysis North American Energy Markets for Energy Mexico 2016 January 26, 2016|

U.S. Ambassador’s Speakers Series Rio de Janeiro 10 March 2016 Geopolitics of Energy: Where do we go from here? Edward C. Chow Senior Fellow.

International Association of Oil and Gas Producers Europe’s Indigenous Oil and Gas Production GSE Workshop Brussels – 24th May 2007.

International Energy Outlook:

Energy in Colorado The Economic Impact

Low-Income Energy Assistance In FY 2009 & The Short Term Energy Outlook October, 2008.

Presentation transcript:

KIOGA Oil & Natural Gas Production in Kansas Today Edward P. Cross, P.G., M.B.A. President Kansas Independent Oil & Gas Association Oil & Gas Small Business Opportunities Conference Kansas State Fair Grounds Encampment Building Hutchinson, Kansas November 27, 2012

What Powers the U.S. KIOGA

Despite Growth in Renewables, World Consumption of Oil and Gas Will Continue to Increase Source: EIA, International Energy Outlook, 2012

Are we about to enter the age of fossil fuels? KIOGA

U.S. Natural Gas Production KIOGA

Crude Oil Market Structure Oligopoly Oligopoly OPEC Cartel Collude to Influence Market Prices OPEC Cartel Collude to Influence Market Prices U.S. Producers are Price-Takers not Price-Makers U.S. Producers are Price-Takers not Price-Makers Cost Structure Optimization Determines Profit Cost Structure Optimization Determines Profit

KIOGA Crude Oil Market Dynamics When supply is lowered from S 1 to S 2, price rises from P 1 to P 2

KIOGA Internal Cost Structure Determines Profitability Kansas Oil & Gas Producers are Price-takers not price-makers

KIOGA Effect of Supply Constraints Kansas Oil & Gas Producers Strive to Improve Operating Efficiencies

KIOGA What is Marginal Oil & Gas Lower edge of profitability Lower edge of profitability High Cost High Cost Low Yield Low Yield 10 barrels of oil per day or less 10 barrels of oil per day or less 60 thousand cubic feet (Mcf) of natural gas per day or less 60 thousand cubic feet (Mcf) of natural gas per day or less

Who are Independents? Small Businesses Small Businesses Drill and produce crude oil and natural gas Drill and produce crude oil and natural gas Not integrated Not integrated Sell crude and natural gas to purchasers Sell crude and natural gas to purchasers Do not generate and market end-products Do not generate and market end-products KIOGA

Kansas Oil & Gas Industry Statistics First Oil Well = 1860 First Oil Well = 1860 Miami County Miami County First Natural Gas Well = 1873 First Natural Gas Well = 1873 Montgomery County Montgomery County Current # of Oil Wells = 40,850 Current # of Oil Wells = 40,850 Current # of Gas Wells = 18,639 Current # of Gas Wells = 18,639 Current # of Injection Wells = 15,428 Current # of Injection Wells = 15,428 Current Total # of Wells = 74,654 Current Total # of Wells = 74,654 Current # of Operators = 2,113 Current # of Operators = 2,113 Current Oil Production 41.6 Million Barrels Annually 114,000 Barrels per Day Increased 5 of last 6 years Ranked 9 th Among 31 Oil Producing States Current Natural Gas Production 313 Billion Cubic Feet Annually 860 million Cubic Feet per Day Ranked 9 th Among the 32 Natural Gas Producing States Drilling Permits Issued in 2012 = 5, MSL Permits (through November 13 th ) Permits Issued in 2011 = 5, MSL Permits Number of Active Drilling Rigs = 147

KIOGA

Kansas Oil & Gas Fields

KIOGA Kansas Oil & Gas Industry Statistics Supports 67,000 Kansas Jobs and $2.7 billion in family income Supports 67,000 Kansas Jobs and $2.7 billion in family income Invests over $1 billion in rural Kansas annually Invests over $1 billion in rural Kansas annually Average Daily Oil Well Production = 2.79 BOPD Average Daily Oil Well Production = 2.79 BOPD 72% of Total Kansas Crude Oil Production from Marginal Wells 72% of Total Kansas Crude Oil Production from Marginal Wells 94% of Total Kansas Oil Wells 94% of Total Kansas Oil Wells Average Daily Natural Gas Well Production = 46 Mcf/Day Average Daily Natural Gas Well Production = 46 Mcf/Day 74% of Total Kansas Natural Gas Production from Marginal Wells 74% of Total Kansas Natural Gas Production from Marginal Wells 81% of Total Kansas Natural Gas Wells 81% of Total Kansas Natural Gas Wells

KIOGA

Kansas Oil & Gas Industry Taxation Severance Tax up nearly 69% since 2000 Severance Tax up nearly 69% since 2000 Oil tax collections up 121% over last 2 years Oil tax collections up 121% over last 2 years Ad Valorem Tax up 171% since 2000 Ad Valorem Tax up 171% since 2000 Oil tax collections up 40% over last 2 years Oil tax collections up 40% over last 2 years Average effective tax rate = 11.61% Average effective tax rate = 11.61% Reduce ROI by 26.5% Reduce ROI by 26.5% KIOGA

Conventional Oil & Gas Development

Conventional Well Drilling Hodgeman County, Kansas October 17, 2012 KIOGA

Unconventional Plays Reservoir - seal - and source rock are all one in the same Reservoir - seal - and source rock are all one in the same

Unconventional Well Drilling Dunn County, North Dakota, October 11, 2012 KIOGA

Mississippian Limestone Play One of newest oil plays in U.S. One of newest oil plays in U.S. Emerging Play Emerging Play Northern OK and southern KS Northern OK and southern KS $1.2 - $1.5 billion Capex plans $1.2 - $1.5 billion Capex plans BOE per day in first 30 days BOE per day in first 30 days $3 - $3.5 million drilling & completion costs $3 - $3.5 million drilling & completion costs 4,500 feet vertical and 4,500 feet lateral 4,500 feet vertical and 4,500 feet lateral Could add up to 13% to Kansas production Could add up to 13% to Kansas production KIOGA

Key Challenges facing the Kansas Oil & Gas Industry Federal Tax Provisions are Critical Federal Tax Provisions are Critical Repealing oil & gas tax provisions would result in $3.9 billion negative impact on the Kansas economy Repealing oil & gas tax provisions would result in $3.9 billion negative impact on the Kansas economy Reduces Kansas jobs Reduces Kansas jobs Increases dependence on foreign energy supplies Increases dependence on foreign energy supplies Regulatory Over-reach Regulatory Over-reach Hydraulic fracturing Hydraulic fracturing 65-year old technology 65-year old technology Ably and aggressively regulated by States Ably and aggressively regulated by States Industry under siege from numerous federal regulatory agencies Industry under siege from numerous federal regulatory agencies EPA ~ OSHA ~ USFWS ~ Others EPA ~ OSHA ~ USFWS ~ Others

Energy for the Future KIOGA

Thank You Kansas Independent Oil & Gas Association Edward Cross, President