Sojourner hopeful payoff near for Southwest Mississippi oil wellsPublished 12:14am Thursday, June 20, 2013
NATCHEZ — With time and patience, all of the pain and headaches caused by Southwest Mississippi oil exploration efforts will be worth it.
That was the message Sen. Melanie Sojourner (R-Natchez) brought to the Rotary Club of Natchez Wednesday.
With nine wells already in production and another two more near completion, Sojourner hopes that she and all of Southwest Mississippi will begin to see the oil production potential of the Tuscaloosa Marine Shale.
The TMS is an oil-rich geological formation that has been known for years but could not be developed because technology did not exist to extract the oil economically until recent years. The formation lies some 10,000 feet below ground and stretches across the portions of Amite, Wilkinson and Adams counties. Oil experts believe the TMS has the potential to produce billions of barrels of oil.
Sojourner said, come mid-July, oil drillers will know more about the production capability of the region when two more oil wells come online.
“Those two wells in Amite County will be the tell-tale sign,” Sojourner said.
If all goes as hoped, four or six more wells will be completed by the end of the fiscal year.
Sojourner said the passage of a lucrative severance tax break in the last legislative session is helping energy companies lower their production costs.
Reducing the severance tax from 6 percent to 1.3 percent for the first 30 months of production gets drilling companies closer to their per-well costs target of $13 million, she said.
“It also makes ourselves competitive with North Dakota and Texas,” Sojourner said.
As exciting as the recent developments are, Sojourner said she recognizes that many nearby residents are dealing with problems associated with the oil drilling fervor.
One of the biggest headaches is the amount of abuse local roads and infrastructure are taking from truck and construction traffic.
Four-laning U.S. 24 between McComb and Woodville was discussed during the past legislative session, she said.
But, Sojourner said spending millions of dollars on the road would be wasted tax-payer money. After visiting oilfield areas in North Dakota, Sojourner said she witnessed first-hand how similar four-lane projects were “reduced to gravel” in a short amount of time because of oil drilling efforts. Sojourner said that the focus needs to be on making existing roads work.
“We have to focus now on how to create service corridors and route traffic for local communities,” Sojourner said. “We have just got to get it done.”
Another temporary headache residents are experiencing, Sojourner said, is the use of out-of-town companies for tools and other drilling related activities. Sojourner said she thinks companies will be reticent to use local companies until they begin to witness the full potential of the TMS.
Sojourner said she hopes oil companies will begin to approach local companies for materials and services once production levels become more promising.
Sojourner said some industry experts suggest that the TMS could have up to 1,200 wells and create up to 65,000 jobs.
To residents directly affected by oil drilling Sojourner realizes they are experiencing some problems.
“I feel your pain and understand your headaches,” Sojourner said. “But there will be a lot of good to come out of this.”