Oil Production at Okla. City Airports Helps Weather Hard Times

Dec. 29--Capitalizing on oil reserves on airport properties has created revenue for airports in Oklahoma City and helped them weather unpredictable changes in the commercial aviation industry.

Pump jacks are a familiar sight across most of Oklahoma, and the airports of Oklahoma City are no exception. Will Rogers World Airport has about 30 active oil wells, and the land surrounding Wiley Post has five active wells.

The revenue created from drilling has helped the airports make improvements and given them a revenue stream to pony up matching funds for federal grants, said Karen Carney, spokeswoman for Will Rogers World Airport.

As oil prices go up, Oklahoma City is reaping the benefits from climbing oil prices and socking away cash as it continues to pump the wells.

Officials in Fort Worth and Dallas are eyeing gas drilling deals as a lucrative way to pump up revenues as the airlines continue to restructure and downsize their operations. In Oklahoma, drilling around runways and planes has been commonplace since the 1940s.

At their peak, wells at Will Rogers brought $6.3 million in royalties in 1986. Even as the oil becomes harder to get, profits from the wells remain strong. In fiscal year 2004, oil royalties provided more than $2 million in revenue for the airport. That's about 3 percent of the airport's total revenues.

"We've used it as matching funds for federal grants," Carney said. "The royalties have helped us maintain the infrastructure at the airport."

At the last meeting of the Oklahoma City Airport Trust, members approved nearly $2 million in expenditures from the oil fund. Some of those expenses included resealing the asphalt on a runway and upgrading lights on the taxiway.

Oil and gas producers have been tapping into reserves at Wiley Post since the 1940s. Five wells remain in production there and are providing a cash infusion for the general aviation airport.

"Anytime you can produce revenue then it's worth it," said Scott Keith, airport manager. "As long as they keep producing, it keeps helping out."

Drilling on airport property is heavily regulated. The location and size of the wells must be approved by several agencies, including the Federal Aviation Administration.

Where rigs are placed can alter operations at the airports, Keith said.

"Depending on where they put the wells, it's going to impact the approach significantly," Keith said.

Baron Exploration Co. specializes in drilling in municipal areas and has drilled at airports in Texas and Oklahoma.

Drilling on an airport property is highly regulated and specific, said Jack Dake, land manager for Baron, which oversees the drilling and oil production at Wiley Post. The company's top executives are pilots and use the airport regularly, Dake said.

Adhering to strict regulations can be costly. Conditions at the airport dictate rig design, how oil is recovered and access to the well. Municipal commissions as well as county and state commissions are often involved in the process.

"It is likely Oklahoma City has more experience than any other municipality in the harmonious development of its ever-increasingly valuable airport minerals, while maintaining and safely operating airports," Dake said.