Louisiana State University scientists estimate the formation holds 7 billion barrels of oil, though that total isn’t proven yet. Most of it is a light, sweet crude that can be sold to refiners for more than $100 a barrel. By comparison, the federal government estimates that the U.S. has about 40 billion barrels of proved oil reserves.
Still, the exploration isn’t without financial risks because of the tricky nature of the rock that holds the oil. Goodrich’s stock took a big dive Feb. 20 when it announced results that failed to meet analysts’ expectations. One key issue was a troublesome well Goodrich drilled elsewhere in Amite County that initially produced a disappointing 500 barrels per day.
For the region’s economy, though, the drilling has already provided a much-needed infusion, even if it’s not an all-out boom yet.
Heavily wooded with only a handful of small towns, Amite County has relied on forestry in recent decades. But Georgia-Pacific LLC closed a plywood mill in Gloster in 2009. Combined with other business closures, Chancery Clerk Ronnie Taylor said Amite County lost as many as 850 jobs. The county’s 4,600 workers had an 8.7 percent unemployment rate in December, higher than Mississippi’s average. Here and there, pastures are reminders of the county’s fading dairy industry.
Bernell McGehee, an accountant in Liberty, said his family leased some forestland south of town to Encana for a $300-an-acre one-time payment. He stands to earn more in royalties if the land produces oil.
“Any debts we’ve had, we’ve pretty much been able to get rid of,” he said.
McGehee is a partner in the Ward’s restaurant in Liberty, Amite County’s only fast-food franchise. He said sales have gone up about 10 percent over the last year, enough to persuade the owners to buy a small lot to add more parking.