Newspaper article THE JOURNAL RECORD

Oklahoma Energy Industry Levels Off: Average Price for Oil in November Down to $58.81

Newspaper article THE JOURNAL RECORD

Oklahoma Energy Industry Levels Off: Average Price for Oil in November Down to $58.81

Article excerpt

In mid-2006, Oklahoma oil producers were receiving prices of more than $71 per barrel.

While prices remain high by historic standards, the average price received by state crude producers dropped to $58.81 by November and the Oklahoma energy industry has likely seen it peak, said Karr Ingham, an economist who compiles the Oklahoma Energy Index.

Ingham said the state energy industry has leveled off, a trend he said is likely to continue into 2007.

The value of Oklahoma's oil production in November totaled $317.1 million, up 29.6 percent from a year earlier but down 15.4 percent from $374.6 million in July, according to the Oklahoma Energy Index prepared by Ingham for the Oklahoma Independent Petroleum Association and the office of David Fleischaker, state secretary of energy. The index was established to track the state's energy industry.

The average price received for oil by Oklahoma producers in November totaled $58.81 per barrel, down from $72.25 per barrel in July. Natural gas prices also stabilized in 2006, Ingham said.

The state's active rig count declined along with oil and natural gas prices.

Oklahoma's average active drilling rig count in January totaled 175, according to Houston-based Baker Hughes. The state rig count has declined for five consecutive months after peaking at 195 in August.

Prices paid by exploration and production companies for drilling rigs also may have peaked.

Unit Drilling's dayrates for drilling rigs averaged a record $19,767 per day during the fourth quarter.

The Tulsa-based company's average dayrate for the fourth quarter was up 33.7 percent from $14,857 for the fourth quarter of 2005, which was up 55.9 percent from $9,529 for the fourth quarter of 2004.

But last week Unit reported current dayrates of $19,555, a slight drop from the fourth quarter. Unit has a fleet of 117 drilling rigs with 90 percent under contract. …

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