It’s hard to believe that it has been over 50 years since Jed Clampett struck it rich when his hunting rifle accidentally went off and unleashed a backwoods gusher. Since then, rifles and shotguns have been replaced by more sophisticated methods of exploration and extraction, leading to an oil boom the likes of which haven’t been seen in the U.S. in decades.
Today, the United States is the world’s largest producer of both crude oil and natural gas, surpassing Saudi Arabia and Russia in 2014 according to the International Energy Agency. As new discoveries are made and production facilities change, the places in the U.S. that account for the most production vary, but here are the top five areas based on a recent article on OilPrice.com.
Crude is king in Texas, and with nearly 3 million barrels per day extracted from oil fields in places like the Eagle Ford and Permian basins, over a third of the total U.S. production comes from the Lone Star State. If Texas were its own country (some would argue it is), it would be the 6th-largest oil producer in the world.
2. The Gulf of Mexico
The second-largest source of oil in the U.S isn’t on land at all, it comes from federally-owned waters in the Gulf of Mexico. The 1.3 million barrels produced daily from Gulf wells accounts for over 16% of U.S. production. The Gulf isn’t the only place offshore deposits might be explored in the near future. The Obama administration has proposed opening waters off Georgia, North Carolina, South Carolina and Virginia to development of an estimated 4.7 billion barrels of oil reserves and 37.5 trillion cubic feet of natural gas.
3. North Dakota
In April of 2014, North Dakota broke the million-barrels-per-day mark, pushing it into third place on the list of largest U.S. oil-producers. Technological advances in shale extraction from the Bakken field raised production up nearly 1,000% between 2012 and 2013, adding to an economic boom that has given North Dakota the lowest unemployment rate in the nation since 2009. With proven reserves of nearly 4 billion barrels, that’s not likely to change in the near future.
With 560,000 barrels of daily production, the Golden State edges out Alaska for fourth place among producers. This number has been declining steadily though due to environmental restrictions and a long-term drought that has made it difficult to expand production. The state has proved reserves of 3 billion barrels, but visions of a new oil boom have been tempered by politics and a 96% downgrade in the recoverability of those reserves.
Declining production from aging fields has caused Alaskan output to drop from 2 million barrels per day to a current level of only 530,000, less than a fifth of that coming out of Texas. Nonetheless, the state still holds onto fifth place, and recent tax incentives to encourage drilling could augur well for the future.
New discoveries in states like Oklahoma (#6) and Louisiana (#8) will likely keep those traditional top producers high in the ranks, and fracking along with other evolving technologies have brought New Mexico (#7), Colorado (#9), Utah (#10) and Wyoming into the game as major players.
Barring major new discoveries, these states will likely remain at the top of the list for the foreseeable future, with Texas, North Dakota and the Gulf leading the way.
The oil and gas experts at BWAB don’t limit our search for investments to the Top 5 producing states, though. We have properties in 26 states across the U.S. and we continue to identify hidden opportunities to acquire high-quality oil and gas properties that offer excellent values for both institutions and individual investors.
We invite you to visit our website, BWAB.com, to learn more about our investment strategy, philosophy, and proven record in maximizing investor returns by building value at the field level through capital reinvestment, operational improvements and enhanced recovery and cost control.