Hugoton Oil and Gas Study

With plenty of oil and gas still trapped underground, the challenge is not finding it, but getting it out of the rocks

CONTENTS

Hugoton study–page 1

From the Director–page 2

Field Conference–page 2

New Publications–page 3

A Place To Visit–page 4

Earth Science Week–page 4

One of Kansas’s most important natural resources—the Hugoton gas area in southwest Kansas—has provided the State with jobs and billions of dollars in tax revenues for decades. Recently, the Kansas legislature took steps to insure that the Hugoton will continue to benefit the State for years to come.

The Hugoton is the largest natural gas field in North America and the second largest in the world. The Kansas portion of the Hugoton has produced nearly 27 trillion cubic feet of natural gas since its development in the 1930’s. In 1995, the Hugoton provided about $80 million in severance taxes to the State, and probably an equal or greater amount from ad valorum, sales, and income taxes on royalty owners, companies, and employees. This does not include indirect taxes on the goods and services purchased by the oil and gas industry; taxes paid by refineries, distributors, and manufacturers of hydrocarbon-based commodities; or property taxes paid to the counties.

Like any non-renewable resource, gas in the Hugoton won’t last forever. After years of production, the hydrocarbons are not gone, but the natural pressure that brings them to the surface is. With plenty of oil and gas still trapped underground, the challenge is not finding it, but getting it out of the rocks. The key is understanding the complexities of the reservoirs. That’s what a new study by the Kansas Geological Survey is all about.

The 1998 Kansas Legislature approved funding for the KGS to study the oil and gas reservoirs of the Hugoton and its associated fields in southwest Kansas. Legislative funding of $150,000 per year is to be matched with private sector contributions. And both the public and industry will benefit: the State from increased and long-term economic activity and tax revenues, and the oil and gas industry from improved information that will allow it to drill and produce the remaining oil and gas reserves more efficiently.

This comprehensive study will bring together all the data from the Hugoton field and a 15-county area surrounding it,” said Tim Carr, chief of the Survey’s Petroleum Research Section. “It will provide producers, regulators, royalty owners, and scientists with a common understanding of the area and a solid basis for making decisions about the future of the field.”

Online February 10, 2003

Comments to: lbrosius@kgs.ku.edu

Kansas Geological Survey

URL:http://www.kgs.ku.edu/Publications/GeoRecord/1998/vol4.3/Page1.html