Farms, Ranches Show Evidence of Oil Money
So far, farm and ranch improvements are the rewards of land lease money; royalties could well be next
Published on: March 1, 2012
Evidence of new money is all over southern Kansas farms and ranches.
New fences, new and improved farm ponds, new outbuildings, new paint, new vehicles, new equipment.
Money was certainly not made with farm crops last year. The drought wiped out much of the wheat crop and decimated most fall row crops. But that loss has been offset for many southern Kansas farmers with money from leasing their land for oil and gas drilling.
It's all about the new oil and gas play in the Mississippi Lime, a formation that underlines much of northern Oklahoma and southern Kansas.
In the last six months to a year, leases for drilling on farm lands have been a hot commodity. Lines have stretched through the halls and out the doors in county courthouses as landmen search for records on land ownership.
Leasing activity is now spreading northward and inching westward as the first exploratory wells are drilled in southern Kansas.
It remains to be seen how big production may grow, but already wells are producing and the Kansas Water Office and Kansas State University dedicated this year's Water Issues Forum to talking about the impact on the water supply, the threat of contamination and the impact on the infrastructure of southern Kansas.
Cowley County hay farmer and broker Roger Black said ponds in the Flint Hills are in the best shape in years, thanks to dry weather that emptied ponds them last summer and oil money that paid for cleaning them out and making them deeper. Pastures have benefited too.
"I can't think of a year when I've seem so many trees cleared out," he said. "These guys finally have money and they need to spend so it doesn't all go to taxes, and they are putting that money into their ranching operations."
Even if the promise of the biggest boom ever goes bust, he said, that positive impact will last a long, long time in farm and ranch improvements already made.
Oilmen are cautiously optimistic. Booms and busts have been part of Kansas life for a long, long time. But with millions of acres under lease, every new well that comes in a producer -- and so far most of them have -- means more drilling activity.