2018 OFFICIAL PUBLICATION OF THE MONTANA PETROLEUM ASSOCIATION
The Continuing Contributions of the Oil and Gas Industry to the Montana Economy CONTINUEd
TABLE 1: Annual Salaries of Oil and Gas Occupations in Montana,
Petroleum Engineers $130,700
Geological and Petroleum Technicians $57,730
Rotary Drill Operators, Oil and Gas $70,270
Service Unit Operators, Oil, Gas, and Mining $57,710
Roustabouts, Oil and Gas $52,380
Helpers--Extraction Workers $35,750
Gas Plant Operators
Petroleum Pump System Operators, $67,270
Refinery Operators, and Gaugers $67,490
Pump Operators, Except Wellhead Pumpers $61,890
Source: U.S. Bureau of Labor Statistics $55,210
The ultimate contribution made by Montana oil and gas activity to
the state economy also comes about as the wages and other spending
by companies and workers propagates through the rest of the economy.
The total impact is estimated with the use of an economic model
that traces and quantifies those interactions.
Oil and Gas Production in Montana
Montana oil production is most prominent in a handful of counties
on the eastern border. The total value of production was $932 million
in 2017, with Richland county accounting for roughly half of Montana
oil, as shown in Table 2.
TABLE 2: Montana Oil and Natural Gas Production, 2017
County Oil (Barrels) Percent Natural Gas Percent of
of Total (MCF) Total
Blaine 3,491,301 13%
Fallon 3,343,448 16% 5,833,222 22%
Hill 3,059,898 11%
Phillips 8,056,783 30%
Richland 9,741,203 47%
Roosevelt 2,538,278 12%
Rest of State 5,068,943 24% 6,414,215 24%
Production 20,691,872 100% 26,855,419 100%
Est. Mkt Value $931,789,483 $83,152,680
Source: Montana Board of Oil and Gas, Energy Information Agency
2017 average domestic crude oil first purchase price ($45.03) and 2017
Henry Hub Natural Gas Spot Price ($3.09)
While oil prices have been stable or slowly rising over the last couple
of years, Montana oil production has remained between 20 and
30 million barrels per year for each of the last six years. In terms of
value, however, it has declined sharply. The average purchase price
per barrel of oil was $45.03 in 2017, up from $40.38 in 2015. However
the total production fell from roughly 28.5 million barrels in 2015 to
20.7 million barrels in 2017 (a reduction of 27.5 percent). This caused
the total value of crude oil production in 2017, $931 million, to fall
roughly 20 percent from the output of $1.1 billion in 2015.
Natural gas has been in a low price environment for some time now.
This has caused output of the state’s wells to decline every year since
2007, with 2017 production only slightly more than a third as large
as what occurred during that peak year. In 2017, more than three
quarters of natural gas production in Montana came from four
counties: Blaine, Fallon, Hill, and Phillips.
The spot price of natural gas in 2017 averaged $3.09, up slightly
from $2.63 in 2015. This increase in price helped to offset a bit of the
impact of low production. In total, Montana produced $83.1 million
worth of natural gas in 2017, roughly 4.2 percent less than the total
value produced in 2015.
The Fiscal Impact of Oil and Gas Production
The declines in production noted above have been offset slightly by
the modest increases in prices, increasing the base for Montana’s tax
on oil and gas production. In 2017, collections of production taxes
totaled $106 million.