Figures released Tuesday show the state had over $628 million in gross natural gas and oil production revenue in 2012, with Floyd County leading the state with a fifth of that total.
According to figures from the state Department of Revenue and released by the Kentucky Oil and Gas Association, Kentucky had $348 million in gas production and $280 million in oil production in 2012.
Floyd County was the top producing county in the state, with $130 million in production, which is all derived from natural gas, according to KOGA Executive Director Andrew McNeill. That is nearly double Pike County’s $72 million in combined oil and gas production, which was second in the state, and represents more than a third of the natural gas produced in all of Kentucky.
The Kinzer Companies’ Doug Hyden, who serves as president of KOGA, said gas production plays a significant role in the state and local economy, as natural gas is subject to the same 4.5 percent severance tax as coal. Under that formula, Floyd County’s production accounted for $5.85 million in tax revenue, with half of that amount going directly into the state’s general fund and the other half distributed equally among gas-producing counties.
“Kentucky’s oil and natural gas producers support local economies and provide good jobs to hard-working Kentuckians,” Hyden said. “We’re looking to the future to grow jobs and increase production in the Commonwealth.”
McNeill said Floyd County’s gas production also has a more direct impact on the economy, thanks to rights payments to gas well owners, which amount to around 12.5 percent.
While Floyd County is by far the largest gas producer in the state, Hyden said the $130 million figure is by no means a record.
“It’s down somewhat, if you compare it to 2006 or 2007, when gas was going for $6 and $7, compared to $3 and $4 lately,” Hyden said.
Hyden said gas prices have been held down by warmer weather, the poor economy and a glut of natural gas. He said he does not expect a rebound in gas prices in the near future.
“I see prices being flat over the next two or three years,” Hyden said.
Behind Floyd and Pike counties, other top producing counties in 2012 were Letcher, with $49 million; Bell, with $29 million; Knott, with $27 million; Lee, with $24 million; and Martin, with $14 million.