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Thursday, May 5, 2016

Company hunts for oil in SW Iowa

Thursday, September 4, 2008

DES MOINES - A Texas company is hoping to strike oil in Iowa.

According to state records with the Iowa Geological Survey, an oil exploration well was drilled in May near Red Oak in southwest Iowa. It was drilled by Ozona Natural Gas Co. of Conroe, Texas.

Robert McKay of the Iowa Geological Survey says a drilling log shows the well was plugged, but a formal report hasn't been filed.

"They have not said they are going to drill any more wells, but they haven't asked for their bond back," McKay said.

This is the first time in six years that oil hunting has been tried in Iowa. Crews found traces of oil near Clarinda in 2002.

Geological studies in Page County showed a dome-like structure underground that is about 4 miles long and nearly 1 miles wide. Most oil fields in the United States involve similar structures.

About 130 test wells have been drilled in Iowa since the early 1900s, but none resulted in long-term production.

The most recent drilling was done by Ozona in partnership with Nevada-based Friendly Energy Corp.

Jim Dial, president of Ozona, said all information about the drilling was being kept secret for one year for competitive reasons.

Unfortunately, this is a cutthroat business ... and we have a tremendous amount of money at risk by going and drilling a development well," Dial said.

Oil has been produced for decades in northwestern Missouri, including some wells about 20 miles from the Iowa border, according to the Iowa Geological Survey.

Some geologists believe that it's possible that petroleum in an area known at the Forest City Basin, which has produced commercial wells in Missouri, Nebraska and Kansas, may have migrated into Iowa, where it is waiting to be discovered.

The first trace of oil was found from a well that was drilled near Hamburg in 1925. In 1963, the Natural Gas Pipeline Co. of America accidentally struck oil near Keota, and in 1986 CST Oil & Gas Corp. of Englewood, Colo., found oil in a well in the same area.

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