Wyo. Sees Increased Oil Production
Wednesday April 9, 6:42 pm ET
By Bob Moen, Associated Press Writer
Wyo. Sees Second Year of Increased Oil Production
CHEYENNE, Wyo. (AP) -- For the second straight year, Wyoming oil fields recorded increased production.
In 2007, oil production in the state hit 54.1 million barrels, an increase of 1.1 million barrels, or 2 percent, over 2006, Don Likwartz, supervisor of the state Oil and Gas Conservation Commission, said Wednesday.
"That's ... two years of increase we've had so far after 21 long years of no increases," Likwartz said.
Wyoming will retain its ranking as the seventh largest oil producing state in the nation, he said.
"We were just under 3 percent of the total production in the United States in '06, and I think we'll still at about that same level," he said,
Until 2006, oil production in Wyoming had been on a downward slide since 1985.
But new recovery techniques in older fields and oil recovered as a byproduct in natural gas fields have reversed the trend.
For instance, the 100-year-old Salt Creek field north of Casper had been considered all but tapped out until Anadarko Petroleum Corp. began pumping carbon dioxide into the ground to capture oil that couldn't be recovered by conventional drilling methods.
And drilling in the Jonah and Pinedale natural gas fields in southwest Wyoming has yielded oil on the side.
"The number one oil field is going to be the Jonah gas field," Likwartz said.
Salt Creek will rank second in production, followed by the Pinedale natural gas field.
Still, the majority of Wyoming's oil fields are seeing declining production because they are old and don't have CO2 injection, he said.
Thirteen of the state's top 25 producing oil fields are at least 75 years old and many are producing mostly water with a little oil, Likwartz said.
"So it's a large oil skimming operation off of large water production," he said.
However, high oil prices are spurring more interest in using CO2 in Wyoming, and Exxon plans to increase the amount of CO2 it can deliver to oil producers by 97 million cubic feet a day in 2010.
Likwartz said he expects increasing production from fields using CO2 recovery over the next several years.
"So it looks good from that standpoint for continued oil production increases," he said.
The only potential problem is pipeline capacity to move the additional production to market, he said.
Just as a lack of natural gas pipeline capacity has depressed Wyoming gas prices, the same lack of oil pipeline capacity is forcing down Wyoming oil prices, Likwartz said.
"For the month of March, Wyoming received $8.50 less than it should have for its oil," he said. "Almost all of the pipeline capacity is full."
Possible oil pipeline expansions outside Wyoming could free up some space for Wyoming oil in the coming years, he said.
