Plunging Oil Prices Hurt Kansas Producers

Plunging crude prices are hitting oil producers especially hard in Kansas. That is because the oil industry in the state is dominated by small, independent operators who depend heavily on the cash flow from producing wells to pay to drill new ones.

The Kansas Independent Oil and Gas Association says the low prices are causing many companies to re-evaluate their drilling plans.

Analysts say the growth in new drilling across the country will slow as drillers avoid rock that is either not well understood or known to be unproductive. At high oil prices, that drilling can be profitable but at low oil prices the drilling is either too risky or unprofitable.

That is particularly true in Kansas, where the majority of oil wells are low-producing.