NR 2003-02
January 28, 2003

Contact: Ed Wilson
Mark Oldfield
Don Drysdale
(916) 323-1886

Natural Gas Production Rises Again

SACRAMENTO -- According to the 2001 Annual Report of the State Oil and Gas Supervisor, released today by the California Department of Conservation, oil production decreased in California for the sixth straight year, while natural gas production continued an incremental rise over the same six-year period.

According to the report, oil production was down across the board from last year’s figures – 3.8 percent for onshore fields, 7.4 percent for state offshore leases and 7.6 percent for federal offshore leases, for an overall decline of 4.5 percent. Average production was about 800,000 barrels of oil per day, compared to 842,000 per day in 2000. California continued to rank fourth among oil producing states behind Louisiana, Texas and Alaska, respectively.

California produced 293.7 million barrels of oil in 2001 from 47,263 wells in 206 active oil fields, including federal offshore fields. The 2000 figure was 307.4 million barrels. The all-time high for the state was 423.9 million barrels in 1985.

"Typically, oil fields experience a decline in production over time,” said Ken Henderson, acting state oil and gas supervisor. “Oil fields have a lifespan, just like many other natural resources. If additional resources aren’t discovered, production totals go down.”

Henderson added, however, that oil production should remain a viable industry in California well into the current century. Even with declining annual production, enhancements in techniques to recover oil and additional oil discoveries are expected to extend the life of the state’s oil supplies.

The Midway-Sunset oil field in Kern County continued as the state's leading

oil producer in 2001 at 51.7 million barrels, down from 58 million the previous year.

Kern County continued its longstanding position as the state’s leading oil-producing county, accounting for 200.8 million barrels, or 68 percent of the state’s total production. Kern County contains 2.3 billion of the state’s known oil reserves of 3.4 billion barrels.

Meanwhile, net natural gas production rose to about 380 billion cubic feet, up from 379.1 billion cubic feet in 2000. Although it was the sixth straight year gas production has risen in the state, the figure is well below the peak year for natural gas in the state, 1968, when 714.9 billion cubic feet were produced.

The Elk Hills oil field in Kern County continued to be the state's largest producer of gas associated with oil production, with 152 billion cubic feet. The Rio Vista Gas field in Contra Costa, Solano and Sacramento counties continued to be the leading producer of "dry" gas (natural gas not produced in conjunction with oil), with 18.3 billion cubic feet.

Other highlights from the report include:

  • Prices for Kern River heavy crude oil began the year at $15.75 per barrel, peaked at $22.50 on May 18 and then began a decline to $11 per barrel on Nov. 15. At the end of the year, the price was $13.25.

  • Natural gas prices spiked to $14.32 per million Btu in January, capping a gradual increase that began in 2000. The price remained high for the first half of the year, but fell to $3.69 in July and remained below $4 the rest of the year.

The Annual Report is available free of charge as a paper volume from any Division office, or it can be accessed online at Call (916) 445-9686 for more information.

In addition to regulating oil, gas and geothermal wells, the Department of Conservation studies and maps earthquakes and other geologic phenomena; maps and classifies areas containing mineral deposits; ensures reclamation of land used for mining; administers agricultural and open-space land conservation programs; and promotes beverage container recycling.