Wednesday, April 02, 2008

In rural Kansas, landowners with small oil wells cash in on rising crude prices

Thanks to climbing prices for crude oil, some rural landowners in Kansas are finding their small oil wells might be quite profitable again, reports Rick Montgomery for The Kansas City Star.

"With the value of a barrel of oil around $100, "the word 'boom' is back in rural places like Barton County, Kan., where more than 1,600 oil wells operate," Montgomery writes. "Some produce 50 barrels daily, but most are so-called stripper wells, yielding fewer than 10 barrels. Last year, the assessed value of the county’s oil and gas properties topped $32 million. That’s about five times their 2000 value, and enough to pump millions of extra tax dollars into local coffers."

The prospect of such profits has investors such as Tim Cain, at right in Star photo, willing to spend $35,000 to drill a shallow well that might only produce a half barrel a day. He might even drill 20 wells on his land. Landowners who aren't willing to put up that money for their own drilling operations can cash in by leasing land to independent outfits such as Cain. Montgomery writes that "economic ripples" are easily seen in the "Land of Little Oil": "A repaved road with fresh stripes. A family’s new Denali. In Great Bend, no vacancy at the Angus Inn because of out-of-town crews laying pipe. A farm-implement dealership sold out of combines." (Read more)

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