By John Kemp
LONDON Jan 8 While other states struggle with
how best to regulate horizontal drilling and hydraulic
fracturing, or wonder whether to permit the practice at all,
Kansas is actively courting fracking firms in the hope of
repeating North Dakota's oil boom.
Interest centres on the Mississippian Lime Play (MLP), a
porous limestone formation found under parts of southern and
western Kansas as well as across the boundary in northern
The Mississippian Lime has already produced more than 1
billion barrels of oil in the state since 1915 from conventional
wells but was considered largely tapped out.
Now horizontal drilling and hydraulic fracturing have
kindled hopes of a new oil rush as drillers unlock oil and gas
previously trapped in impermeable parts of the rock formation.
"The potential economic benefits to Kansas could be
significant, resulting in hundreds of wells drilled, billions of
dollars in investment, thousands of jobs and industry activity
in the MLP for the next 20 to 30 years," the Kansas Department
of Commerce enthuses on a special website created to promote the
The Kansas Corporation Commission (KCC), which regulates oil
and gas, has already organised tours of both North Dakota and
Oklahoma to understand the transformative impact of the oil boom
and its impact on local residents.
And in November, state leaders, including Governor Sam
Brownback, hosted a high-level conference to hear an update on
drilling and discuss how Kansas businesses could benefit from
oil and gas activity.
In the first 10 months of last year, 143 horizontal wells
were drilled in the state, up from 50 in the whole of 2011 and
10 in 2010. Just over 30 rigs were drilling at the end of
October, of which 18 were working on horizontal wells. Half were
contracted to Sandridge, which holds by far the largest
position in Mississippian acreage in the state.
Production from the Mississippian remains tiny compared with
the state's conventional oil output let alone more mature
unconventional plays such as the Bakken and Eagle Ford. Kansas
has more than 46,000 active oil wells (mostly stripper wells
producing less than 10 barrels per day) and another 24,000
Unconventional oil and gas production amounted to only
10,000 barrels of oil-equivalent at the end of October, 3.8
percent of the state total. Nevertheless, there is evident
excitement at the potential for hydraulic-fracturing to bring a
Bakken-like boost to the state economy.
The Brownback administration is unashamedly pro-business,
and keen to encourage economic development.
The state is solidly Republican. All state-wide
officeholders, both U.S. senators and all four U.S.
representatives are from the party, which also controls both
chambers of the state legislature by lop-sided majorities (32-8
in the state senate and 92-33 in the lower house).
State agencies are also sympathetic to fracking. In a
basically favourable "public information circular" published in
May 2012, the Kansas Geological Survey (KGS) explained that of
244,000 conventional vertical wells drilled in the state since
1947, some 57,000 wells have already been hydraulically
fractured, without ill-effect.
In contrast to other states, which have agonised over the
potential for fracking to lead to contamination of other rock
formations and drinking water resources, KGS argued "strong
economic incentives compel operators to avoid propagating
fractures beyond the target formation and into adjacent areas."
"Kansas has not encountered the problems some other states
have, and no documented cases of ground-water contamination by
hydraulic fracturing have been reported in the state."
"Kansas' favorable geologic setting, its regulatory process,
and its successful history of hydraulic fracturing and fluid
management make it one of the safer regions of the country to
employ the practice."
In case anyone doubted the state's enthusiasm, the Kansas
Corporation Commission has published a note by the KGS and the
University of Kansas which states bluntly:
"Induced seismicity (earthquakes) has not been related to
hydraulic fracturing. The U.S. Geological Survey has stated that
there is no evidence to suggest that hydraulic fracturing itself
is the cause of the increased rate of earthquakes in the
Wastewater injection can trigger seismic activity but the
KCC and KGS downplay the risk. "It is important to remember that
those (waste) fluids are the result of any oil and gas
production, and independent of the practice of hydraulic
"Earthquakes would someday have occurred anyway as a result
of slowly accumulating forces in the earth ... injection just
speeds up the process."
SCOPING THE PLAY
Most drilling has so far occurred in parts of the
Mississippian in Oklahoma, where more than twice as many rigs
are operating and holes have been drilled.
In Kansas, exploration companies are still trying to scope
out the play and identify sweet spots. Most wells have been
drilled in just three counties along the Oklahoma border
(Harper, Barber and Comanche) though wildcats have been sunk in
another nine and the play underlies parts of 34 counties in
Early exploration was directed towards natural gas, but with
gas prices stuck at just $3-4 per million British thermal units
(mmBtu), the focus has switched to finding fairways with more
condensate and crude.
"The Lime is a reasonably low-cost play where hydrocarbons
have been found before, with lots of (conventional) wells
drilled in the past," the Oil and Gas Financial Journal wrote in
August 2012 ("Horizontal drilling boosts production in
Mississippi Lime" Aug 1).
"The nice thing about this trend versus shale is that it
requires low-horsepower equipment, and smaller players can be
"The limestone's porosity and natural fractures also can
mean less expense on the drilling and hydraulic fracturing parts
of the project. Expenses can total half and even a fourth of
typical unconventional well efforts."
By far the largest operator across the Mississippian is
Sandridge, with larger companies like Chesapeake, Range
Resources, Shell and Devon playing a
much smaller role in the area.
The Mississippian Lime is just one layer in the vast
Anadarko sedimentary basin. In other parts of the Anadarko,
Continental Resources is targeting production from the
For the time being, the Mississippian Lime remains a highly
speculative play. "No one knows for sure" how much drilling
there may eventually be, the Kansas Corporation Commission
admits. "The activity in the Oklahoma region of the MLP has been
encouraging, but it could be another 12-18 months before the
state has a more realistic estimate of the economic impact."
But if significant quantities of oil can be produced from
the Mississippian, drillers and frackers will find no state more