County of marker: Harding County
Location of marker: Canam Hwy (US-85/SD-20), Centennial Park, Buffalo
Marker erected: July 3, 2009
Marker erected by: Harding County Chamber of Commerce
Marker text:
Energy Production in Harding County
Oil was discovered in South Dakota in Harding County in 1953. In 2008, the state produced a record 1.7 million barrels of total crude oil from 162 wells with the large majority of South Dakota's oil being produced in Harding County. All of South Dakota's natural gas comes from three gas fields southwest of Buffalo.
The first oil and gas test hole was drilled in 1928. In 1954 the discovery oil well was the #1 State A, drilled to a depth of 8681 feet in the Red River formation by Shell Oil Co. The well began production in April, 1954. Initial production was 80 barrels of API gravity oil and 200 barrels of water per day. Through 1999, the total lifetime oil production from the well was 341,169 barrels of incremental oil. The well is now idle because of a high gas oil ratio, due to the air injection project.
the Buffalo discovery in 1954 caused a small spike in drilling, up to 45 wells in 1956 and 1957 and then an average of 15 to 20 wells per year, drilled in the next ten years or so. By 1965 there were 30 wells producing or ready to produce. These were the first development wells in the Buffalo Field. From 1965 to 1975 there were about 200 holes drilled in the state - many in Harding County. Drilling in the 70's spread out over the county. Other oil fields were being discovered and developed north and east of Buffalo, while the Buffalo Field continued to expand in drilling and production of oil.
The list of major companies that have operated in Harding County is impressive, including Champlin, Chevron, Gulf, Mobil, Pennzoil, Phillips, Shell, Sinclair, Texico and Union. In 1977, Koch Exploration entered the scene and organized part of the Buffalo Field in the process of unitization to increase production from the Red River formation at 8500 feet below land surface through the use of enhanced recovery, which involves injecting air or water into the producing formation, which pushes oil to recovery wells. the technique is used to recover oil that would otherwise remain trapped in the oil reservoir rock using conventional production methods. Compressor units were built to inject air under 4 or 5 thousand pounds of pressure into the oil reservoir to push oil toward recovery wells. Unitization has been done 8 times in the county, 3 for air injection and 5 for water flood, all with the objective to enhance the production of oil from mature oil fields where production was declining or at a very low level.
In 1995, Koch Exploration sold out to Continental Resources. At that time horizontal drilling was started, utilizing mainly older vertical wells with declining oil production. Horizontal drilling involves either drilling a new vertical hole or re-entering an existing vertical well that already penetrates the production formation. The drill bit is then turned so it moves horizontally into the formation. These horizontal holes, or "laterals", can be extended for thousands of feet, exposing far more of the producing formation to the drill hole than a conventional vertical drill hole, resulting in more oil production. This was more economical than drilling new ells and it also saved many wells from abandonment, thus preventing the drilling of unnecessary wells to produce the oil in place. many older wells have increased production several times over, and they should continue to be commercial wells for some time to come.
In addition to Continental Resources are Luft Exploration, Citation Oil & Gas, Prima Exploration, Murex Petroleum and Wyoming Resources.
Shallow gas was discovered in the West Short Pine Hills. Spyglass Cedar Creek, a company out of Texas, has drilled 15 producing gas wells and has constructed a connecting pipeline, with two compressor stations, to the Williston Basin gas lines that runs from Montana to the Black Hills. Operators of gas wells in Harding County are Clark Blake, Bowers Ol & Gas, Inland Oil & Gas, Nearburg Productions, Sands Oil Co., and Spyglass Operating.
Energy production has been an economic boom for Harding County. The oil field, along with the gas field, is the largest employer in the county. While many small towns in South Dakota have no means of keeping their young people at home, energy has provided jobs for local people and has brought people into the area.
A 4.5% severance tax on minerals also benefits both the State of South Dakota and Harding County as each receives half of the severance tax, which the county uses to maintain the roads in the energy fields. The school also receives s share of the county's half, in addition, wells on South Dakota School and Public Lands send approximately $4 million to the SD Department of Education.
Energy production will continue to be an important part of life in Harding County for many years in the future.