Companies Continue to Drill Despite Low Oil and Gas Prices
Associated Press - February 29, 2016 11:40 am
Contracts with landowners are forcing a small number of companies to drill for oil and natural gas regardless of unfavorable market conditions.
The Wichita Eagle reports that producers are required by contract to drill in a newly acquired lease within a few years in order to maintain the land lease.
Kansas Independent Oil & Gas Association President Ed Cross says forcing producers to be picky about their leases keeps them thinking about the long-term success of their companies.
But other producers are taking advantage of lows costs in hopes for future profit. Some, like Rod Andersen of Kansas Petroleum Resources of Wichita, are testing wells at discounted prices and leaving the good ones uncompleted until oil and gas prices turn up.