American Oil and Gas Reporter - July 2024 - 33

ConventionSec tion: Kansas Independent Oil & Gas Association
Looking ahead to KIOGA's 2025 legislative
agenda, Cross notes that November's
elections constitute a major factor.
" At least eight of the 40 state senators
have said they are not running again, so
we know there will be at least eight new
faces over there, and the numbers are
similar for the House, " he reports. " As it
is after every election cycle, we will have
to spend a lot of time educating them
about the oil and gas industry, much of
which will take place before the session. "
Doing so helps suppress bad ideas before
they become bad bills, Wreath reflects.
" Part of KIOGA's mission is to proactively
engage legislators to make sure damaging
bills do not bubble up, " he says.
Kansas Cooperation
According to Cross, the Kansas oil
and gas industry is working, though perhaps
not at a breakneck pace. " People
are busy, but not as busy as some times
in the past, " he characterizes. " People
are drilling and doing stuff, but I don't
think there is a lot of wildcatting. It is
about maintenance, drilling on their own
leases, using enhanced recovery and such. "
Wreath notes that the state's rig count
is in the low 30s, well short of the low 60s
it saw in summer 2022 and about a fifth of
what it was in 2013. He attributes much
of the decline to evolving cost structures.
" Operators make drilling decisions on
risk/reward bases that deal with how many
barrels of oil they must find to payout a
well, " Wreath describes. " When the minimum
was on the order of about 6,000 barrels
there was a lot of rig activity because
those wells are easier to find. Now it is
more like 10,000 barrels in western Kansas
and even higher in southwestern Kansas. "
Although producers' steel costs have
dropped some, he says, those for drilling
mud and cement remain elevated, as are
labor rates. " That is why we are not
drilling like crazy with oil at $75 a barrel, "
he reasons. " It gets to that risk/reward
function of how many barrels one must
find to payout capital costs. I don't know
if Kansas can ever hope to bring that
number back down to 6,000, but perhaps
we can bring it closer to 8,000. "
While the rig count is a valuable indicator,
Wreath emphasizes that relying
only on it exclusively paints too simplistic
a picture of industry health. " Kansas still
has a lot of producing wells and our cost
structure for those has not increased as
much, " he relates. " There are no magic
bullets, but good operators try to reduce
costs by looking carefully at their electric
bills and their chemical programs and
anything else they can do to reduce downhole
failures. "
To the extent that Wreath can identify
a common mood among Kansas producers,
he describes it as " measured, " as companies
conserve capital for their best projects.
" We are applying 3-D seismic to highgrade
our drilling projects, drilling only
those locations with the best chance of
good reserves, " he conveys. " A lot of
new seismic technology has come to
Kansas, particularly wireless technologies
that have driven down costs and improved
reliability. Kansas also is blessed with
excellent seismic processing companies
that do great work. "
Wreath indicates that the state's producers
seem more willing to partner in
joint 3-D seismic shoots than in other
states, a culture of cooperation that he
suggests runs strong. " In Kansas, if you
need a neighboring disposal well for your
saltwater, operators tend to be very cooperative, "
he says. " In other states, the
attitude tends to be more of a competitive,
dog-eat-dog approach. But if you cooperate
with somebody today, you know it can
come back to you if you are on the
opposite side of that fence tomorrow. "
That solidarity is a big reason Wreath
says he enjoys attending KIOGA events,
especially the annual convention. " I am
most looking forward to engaging with
all the old friends that show up at the
convention faithfully every year, " he
confirms. " Part of it is also a learning
opportunity, as well as a chance to hear
from policymakers. "
The theme for the 2024 convention is
" Tune In To Energy Issues, " Cross says,
and the format will largely mirror that of
recent years. " It will be an exciting
meeting that will cover a lot of good topics, "
he promises. " Not every one of them
will be a warning to people about what is
coming for them next. We will learn
about technologies and techniques that
can help with production. "
American Energy Institute Chief Executive
Officer Jason Isaac, who also is a
fellow at the Texas Public Policy Institute,
will offer keynote remarks during the
annual industry luncheon, Cross notes.
The conference will once again feature its
annual congressional panel, he continues,
as well as presentations from Spilman,
Thomas & Battle attorney James Elliott,
who is litigating the methane rule, a primer
on the new Kansas Geological Survey oil
and gas mapper scheduled to go live this
autumn, and a presentation on improving
oil and gas production using nanotechnology.
" We also will have the 'Hunt for Oil
Party' on Monday evening, " Cross adds.
" People can gather their hunting party,
come in their camo and enjoy a beast
feast in a fun evening to relax and visit
with friends. "
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American Oil and Gas Reporter - July 2024

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