High Crude Oil, Natural Gas Prices Boost Oklahoma Energy Index

By Jerry Shottenkirk

Crude oil and natural gas prices have pushed the Oklahoma Energy Index to new heights.

The latest index, which was taken in April and reported Wednesday, shows a 5-percent increase from March and was 13 percent ahead of April 2007.

The index is a project of the Oklahoma Independent Petroleum Association and the office of state Secretary of Energy David Fleischaker. Oklahoma State Economist Karr Ingham compiles the numbers for the report.

Producers enjoyed a $109.36-per-barrel price, which eclipsed $100 for the first time. The average natural gas price for the month was $9.08 per thousand cubic feet. The total value of oil and gas production was more than $1.8 billion during the month, and 71 percent of the total came from natural gas.

The value of natural gas production was nearly $1.3 billion and oil production was valued at $540.2 million.

Ingham said the recent decrease in demand for gasoline might ultimately have an effect on the state’s energy business.

“No one knows what the future holds, but there exists at least the possibility that prices may break and decline in 2008,” Ingham said. “And the price-sensitive oil and natural gas industry in Oklahoma would most certainly be affected to one degree or another.”

While the price of oil gets most of the attention, it’s the price for natural gas that has lifted the state to new heights, said OIPA Chairman John Pilkington of Tulsa.

“Natural gas is what matters in Oklahoma,” Pilkington said. “For all the talk about crude oil prices and the spotlight rising prices focus on the industry, the lion’s share of exploration and production activity in Oklahoma remains directed to natural gas.”

Pilkington said natural gas prices usually take a similar path as crude oil.

“Perhaps more importantly, crude oil price declines typically result in natural gas price declines, and that means crude price trends will have a significant effect on the Oklahoma’s energy economy,” he said.

The value of production was approximately $1.2 billion in April 2007.

The Baker Hughes rig count for the month was 211, 19.2 percent ahead of the 177 rigs during the corresponding month. There were 1,955 intents to drill, 3.2 percent less than 2,020 intents in April 2007, and the intents year-to-date are at 4,963, 3.3 percent up from 4,803.

Originally published by Jerry Shottenkirk.

(c) 2008 Journal Record – Oklahoma City. Provided by ProQuest Information and Learning. All rights Reserved.