Drilling Rigs In Oklahoma Reaches 10-year High

Friday, June 23rd 2006, 10:55 am

By: News On 6

OKLAHOMA CITY (AP) -- High energy prices has led to a major expansion in oil and gas exploration activity in Oklahoma, where the number of operating drilling rigs has reached a 10-year high.

Oil-field services company Baker Hughes Inc. said the number of active rigs in Oklahoma reached 181 by June 16. The all-time record was set in early 1982, when Oklahoma drilling rigs topped 880.

The Oklahoma Energy Index, which measures everything from oil and natural gas prices to production and energy employment in the Oklahoma oil patch, increased to 204.5 in April, up from 201.8 in March and 13 percent higher than April 2005.

Karr Ingham, the economist who compiles the index, said the high cost of fossil fuel has driven the recent growth. Crude oil prices have remained higher than $60 a barrel. Natural gas prices, although retreating from post-hurricane highs, remain in the $6 to $8 per thousand cubic feet range, he said.

Before a major oil industry decline in the state in the 1980s, Oklahoma averaged about 250 drilling rigs.

"We still have a long ways to go to get back to the point that we used to think was normal," said Harold Hamm of Enid, the chairman of the Oklahoma Independent Petroleum Association.

Rig supply has been tight because of the increased drilling, but that should moderate with newer rigs entering the market, he said.

"I don't think the wait time is real long for operators that have been in business a long time," Hamm said. "But if you are a startup with no contacts or experience with a drilling contractor, you're probably not going to get a rig real quick."