Oklahoma activity highest in 15 years

The Associated Press contributed to this article

Producers taking advantage of higher oil and natural gas prices are drilling more new wells in Oklahoma than at any time in the last 15 years, energy regulators say.

The Oklahoma Corporation Commission issued 5,119 drilling permits to oil and gas producers last year, the most in a year since 1988, the commission said Jan. 8.

“It’s the best environment for our business in 20 years,” said Mickey Thompson, president of the Oklahoma Independent Petroleum Association.

State permits peaked at 22,685 in 1981.

Tight supplies and increased demand have sent prices of gas and oil up in the last year, and they are expected to remain high for some time before softening, analysts say.

Oklahoma natural gas prices averaged $4.42 per thousand cubic feet in the first eight months of 2003, up from $2.65 during the same period in 2002, state figures show.

Gas closed at $7.09 per mcf Jan. 8 on the New York Mercantile Exchange.

Oklahoma oil averaged $30.43 per 42-gallon barrel during the first eight months of 2003, up from $18.21 during the same period in 2002, the state says.

Oklahoma City-based Chesapeake Energy Corp., the top producer of Oklahoma gas, was the most active driller in the state last year by a wide margin, spending more than $500 million on new drilling projects in state fields.

“We have expectations that prices are going to stay at historically higher levels,” said Chesapeake spokesman Tom Price.

Oklahoma, the nation’s third-largest gas producing state, has several trillion cubic feet of proven gas reserves, the U.S. Department of Energy says.

“A great deal of this state is unexplored at significant depths,” Price said.