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"Kansas is one of the top ten oil producers in the United States, most people don't know that." So says Steve Cochennet, the CEO of publicly traded EnerJex Corporation [EJXR
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] . It is based in Overland Park, Kansas. He and I are walking across an open Kansas plain known as the Black Oaks Field. He goes on, "I can easily spend a hundred million dollars within a hundred miles of Kansas City. So this area alone has great potential."
The potential he's talking about is measured in thousands of barrels of high grade crude. Oil that is already sitting under this two thousand acres of Kansas. In fact, there's oil being pumped out of here every day, has been since it was first drilled in 1917. But the "boom" times for this area have long since passed.
Most of the major oil companies took whatever they could out of Eastern Kansas in the 1940's and 1950's, leaving what was left to small producers like Mark Haas of Haas Petroleum. He and his dad have worked this Black Oaks area for 60 years. You can see the history of Kansas oil etched in the face of Haas' 80-plus year old father as he sits in the front of the pick up. "He doesn't walk too good anymore, " Mark Haas says, "but he still loves to come to the field. Loves to smell the oil."
The landscape is dotted with wells. Wells that have been supporting the Haas company for a long time now, pumping one, maybe two barrels a day. At current prices and with the number of wells the Haas' own leases on, it's a very nice living. But then along came Steve Cochennet and EnerJex. What EnerJex is doing is raising capital and then uses that capital in partnership with lease holders and drillers like the Haas family, to apply the latest technology to these existing oil fields in Kansas. Understand that there is still lots of oil down there, it just won't come up out of the ground very fast, no pressure. And while in the past, the price of oil wouldn't support reinvestment in these fields, today it will.
Brad Kramer is the EnerJex production manager at Black Oaks: "With our current technology, and what we're able to do, we have a 100 per cent success rate at this site.'
What they're doing here is using water to increase pressure in the wells and force the existing oil, down about 17 hundred feet, to the surface. It's expensive, but more than worth it on today's market. EnerJex is in the process of "rolling up" as many of these leases and partnerships as it can.
"So are times good?", I ask Cocchennet. "Good?", he laughs, "Times have never been better." Mark Haas' Dad is all smiles too, sitting in that pick up. He loves the smell of oil.
"MOA" can be seen three days a week on "Power Lunch" on CNBC, and this week, on Thanksgiving Day at 11 am eastern time, you'll be able to see a whole hour of our adventures around the country. Tune it, sit back, and get a good look at business success stories off the beaten path. We'll see you along the road.
Questions? Comments? mikeonamerica@nbcuni.com
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