Drilling for oil and gas in Wyoming has sunk to the lowest rate since 1999 amid oil prices that are too low for petroleum companies to invest in new exploration.
And just when the pace will pick up is anybody's guess.
Continue Reading Below
Oil prices are gradually climbing again after a sharp slide. After falling below $50 a barrel, the price has rebounded to around $58 but remains well below the more than $100 seen last summer.
This week, the number of rigs drilling for oil and natural gas in Wyoming totaled 23, down from 61 six months ago, marking the slowest pace since May 1999.
"When we were at $80 a barrel, everybody was drilling, everybody was pretty happy," Petroleum Association of Wyoming President Bruce Hinchey said Friday. "But when it gets to $40 or $50, they're not making any money, or very little, and it's not a good time to go out and expand their drilling programs."
At around $60, the feasibility of oil drilling is marginal and depends on circumstances.
"The overhead is different for each company, and each formation is different as well. Some formations require more fracking, some are deeper," Hinchey said.
Low natural gas prices — around $2.40 per thousand cubic feet at the Opal Hub in western Wyoming — likewise have reduced the incentive to drill for gas.
Ten rigs were drilling for oil this week and 13 for natural gas in Wyoming. Until recently, about three-quarters of the active rigs in Wyoming were pursuing oil, Hinchey said.
The nationwide slowdown in drilling has yet to result in a decline in oil production, which remains at or near its highest rate in decades. Wyoming produced 6.8 million barrels of oil in January, the most recent month of available information.
Oil production in Wyoming from October through January was as high as it's been since 1995, according to the U.S. Energy Information Administration.
Follow Mead Gruver at https://twitter.com/meadgruver