Arkansas ranks among nation’s top 10 natural gas producers

Fueled by billions of dollars of new investment in the Fayetteville Shale, Arkansas is now the 7th largest producer of marketed natural gas, trailing only Texas, Wyoming, Oklahoma, New Mexico, Colorado and Louisiana.

Two of the top 10 companies producing in Arkansas are Fort Smith-based Stephens Production (4th) and Fort Smith-based Hanna Oil & Gas (9th).

Arkansas leapfrogged states such as California, Utah and Alaska to jump into the nation’s top 10 in 2008, and has remained strongly in the position in 2009 and throughout 2010. The surprising ranking comes from recent annual reports compiled by the Energy Information Administration, housed in the U.S. Department of Energy, and requested information from the Arkansas Oil and Gas Commission (AOGC).

According to the EIA ranking, Arkansas’ annual production of marketed natural gas jumped nearly 140 percent from 187 billion cubit feet (bcf) to 446.5 bcf between 2004-2008. Sales of Arkansas natural gas continued to grow in 2009, spiking 53% to 683 bcf of production, according to the most recent figures from AOGC. Many companies — including Arkansas’ top producer, Southwestern Energy — have warned that production could slow in 2010 due to depressed natural gas prices. (Marketed production is the total gross withdrawals from Arkansas wells, less the output used for repressuring, quantities vented and flared, and nonhydrocarbon gases removed in treating or processing operations.)

Today, more than two-thirds of the state’s natural gas drilling and production operations are located within the Fayetteville Shale, the unconventional gas reservoir that covers several counties in central and eastern Arkansas. Fayetteville Shale leaders Southwestern Energy, Chesapeake Energy and other independent drillers have driven billions of dollars of investment into the Arkansas shale play.

Although current data shows Arkansas’ natural gas production continues to grow in 2010, the state still lags well behind the top six natural gas-producing states in the U.S. — each generating over a trillion cubit feet (tcf) of output annually.

Overall, Texas produces 6 tcf of natural gas each year, about 30 percent of the nation’s total production. Second-place Wyoming produces 2.2 tcf, while the remaining top-producing states range between 1.4 and 1.9 tcf.

Altogether, U.S. marketed production in 2009 totaled 21.8 tcf. After Arkansas, Utah, Alaska and Kansas round out the top ten.

According to the AOGC, the list of top natural gas producing companies in Arkansas in 2009 ranks as follows:
1. SEECO (subsidiary of Southwestern Energy)
2. Chesapeake
3. XTO Energy
4. Stephens Production
5. Forest Oil
6. One Tec
7. Petrohawk
8. KCS Resources
9. Hanna Oil & Gas
10. Sedna Energy