Marginal wells boost supply, revenues within our borders



Contact:  Erica Carr  405-525-3556

Marginal wells boost supply, revenues within our borders

Low-volume oil and gas operations continue to contribute significantly to the nation’s energy supply, according to the 2007 Interstate Oil and Gas Compact Commission (IOGCC) national study “Marginal Wells: Fuel for Economic Growth.”

For calendar year 2006, marginal wells (those that yield less than 10 barrels of oil or 60,000 cubic feet of gas per day) produced nearly 1.03 billion barrels of oil and 14.9 trillion cubic feet of natural gas. The report shows that while marginal gas production decreased slightly from the previous year, the number of marginal gas wells rose by 3 percent. Marginal oil production increased by 4 percent.

The IOGCC report also outlines the economic benefits these wells create. In 2006, states collected more than $1.2 billion in severance taxes from producing marginal wells, money that in many states is used for education. On a national level, every $1 million of marginal oil and gas produced creates nine jobs.

However, even at current prices the small operators that typically run marginal wells find them expensive to maintain, according to the report. In 2006, plugged and abandoned marginal wells resulted in a loss of $1.77 billion in economic output, $369.2 million in earnings reductions and 8,223 jobs.

“We must assure that appropriate efforts are made to extend the life of marginal wells so energy from domestic sources will continue to be available to all citizens of the nation,” said Roy Edwards, executive director of the Oklahoma Marginal Well Commission, which co-funded the report.

“Marginal wells supply quality jobs, valuable tax revenue and much-needed energy to our states and the nation,” said Gerry Baker, IOGCC acting executive director. “The states, industry, and federal government must work together to make certain marginal well operators and the states that regulate them have the information and tools necessary to ensure they are not prematurely abandoned.”

The full report may be obtained by contacting the IOGCC at 405-525-3556. An electronic version is available online at

The IOGCC, representing the governors of 30 member and eight associate states, promotes the conservation and efficient recovery of the nation’s oil and natural gas resources while protecting health, safety, and the environment. Established by the charter member states’ governors in 1935, it is the oldest, largest, and most effective interstate compact in the nation.