updated: 4/17/2008 9:13:40 AM

[UPDATED] Oil And Gas Drilling on The Rise in Indiana

InsideINdianaBusiness.com Report

 Indiana Department of Natural Resources Division of Oil and Gas Director Herschel McDivitt admits Indiana is not a major oil producing state.

The state says Indiana is issuing oil and gas permits at rates not seen for more than 30 years. Indiana Department of Natural Resources Division of Oil and Gas Director Herschel McDivitt says oil and gas operators are increasingly looking at Indiana resources as oil and gas prices hit record levels. The majority of permits being issued are for oil and gas well activity in southwest Indiana. Indiana operators produced a total of 1.7 million barrels of crude oil in 2007, an average of 4,730 barrels per day.

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Source: Inside INdiana Business

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Press Release

With oil and gas prices hitting record levels, more Hoosier oil and gas operators are starting to look for—and find—these valuable resources beneath Indiana.

"We continue to issue permits at rates not seen in Indiana for more than 30 years," said Herschel McDivitt, director of the DNR Division of Oil and Gas.

In 2006, the DNR issued a total of 490 permits for oil and gas well activity; 2007 permitting was slightly less with 483 permits. The top five counties for oil and gas permitting activity last year were Posey (86), Sullivan (73), Gibson (73), Pike (50) and Knox (41). Other counties with high oil and gas activity included Spencer (31), Daviess (21), Warrick (13), Greene (11) and Jackson (10). All of these counties are located in south-western Indiana, except Jackson in the south-central portion.

Most of the permits issued in 2007 in Posey, Gibson, Pike and Spencer counties went to operators looking to produce crude oil. These counties have the greatest number of active oil production wells in the state. Most of Indiana’s crude oil is produced from the Illinois Basin, an oval-shaped geologic basin covering approximately 60,000 square miles, including most of Illinois, southwestern Indiana and western Kentucky. Posey has more than 1,700 active oil production wells. Gibson has around 1,600, Pike has just over 850 and Spencer has more than 580 total active oil wells.

The majority of the permits issued in Sullivan, Knox and Greene counties were for natural gas well activity. Operators in these counties primarily seek to develop wells in the New Albany Shale formation. Many of the wells there are horizontal wells, where the well bore is drilled horizontally through the producing formation often to distances of more than 4,000 feet from the actual drilling site. This type of drilling is becoming more common in Indiana and allows operators to produce larger tracts of land from a single drilling site. Other counties with wells permitted for New Albany Shale production include Harrison, Daviess, Pike, Dubois, Vigo, Clay and Owen. Harrison has the greatest number of New Albany Shale active gas wells, with more than 230.

The CountryMark Cooperative is the largest purchaser of crude oil in the southwestern Indiana portion of the Illinois Basin. Its refinery at Mount Vernon processes approximately 23,500 barrels of crude oil daily. One barrel equals 42 gallons. Indiana operators produced a total of 1.7 million barrels of crude oil in 2007, an average of 4,730 barrels per day. The average price paid to Indiana operators for their crude oil is usually $4 to $5 less per barrel than the nationally published market prices for other types of crude oil.

To view graphs showing complete oil and gas statistics for the state's counties, please see the Division of Oil and Gas Web site at: dnr.IN.gov/dnroil. Go to the “Publications” page and scroll to the bottom to find Indiana Oil and Gas Statistics.”

Source: Indiana Department of Natural Resources

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