Price jump revives exploration plans

Wednesday, March 8th 2000, 12:00 am

By: News On 6

TULSA, Okla. (AP) -- Oklahoma oil producers are taking advantage of high prices to recoup losses of 1998 and revive exploration, an industry official says. Some producers are beginning to make "significant plans to drill wells," said Mickey Thompson, executive vice president of the Oklahoma Independent Petroleum Association.

The number of active drilling rigs in Oklahoma totaled 77 last week, up from 68 a week earlier. Oklahoma crude oil prices jumped to a nine-year high of $31.25 per barrel on Tuesday with predictions that the Organization of Petroleum Exporting Countries won't increase production until at least July.

"What they are doing is exactly what independent producers in Oklahoma are doing," Thompson said. "They are making up the difference from what they lost in 1998."

OPEC cut oil output last March by nearly 2 million barrels a day in order to boost record low oil prices. Supplies have dwindled, driving up prices.

The last time the state's benchmark grade of crude oil soared above $31 was Nov. 29, 1990, when it closed at $32.35 per barrel. But some producers are wary.

"It's not going to last," said Tom Oly of Claremore-based Eagle Resources, a small oil and gas company. "Technically, it cannot be sustained. There is no fundamental reason for oil to be this high."

Thompson agreed that prices eventually will decrease. "There is too much political pressure for the price not to go down," he said.

Oklahoma motorists currently are paying an average of $1.41 for a gallon of self-serve unleaded, said Chuck Mai, spokesman for the American Automobile Association in Oklahoma.

The U.S. Department of Energy estimates that the average price for gasoline in the United States could range from $1.46 to $1.80 a gallon during the peak driving months of summer.

"It's going to take a while for prices to come back down, but I don't see them approaching the levels the Department of Energy is talking about," Mai said.