Oil and gas industry waiting for boom
DOUGLAS — “Let’s wait and see.”
That comment has been popping up far more than oil rigs in recent weeks as those in the industry – from the movers and shakers on down to those actually getting their hands dirty on the ground – are scrutinizing the market price of oil on a daily or even hourly basis.
The price of oil and natural gas and their long-term stability will be the single biggest factor in whether Converse County and other spots in Wyoming will see another boom this year.
Big oil is already in the county, but many of the players are moving slowly and behind the scenes. They’re waiting, like everyone else who lives here, to see if oil prices will hold long enough to make it worthwhile to get back into the fields and put hundreds – if not thousands – of people back to work.
One of those companies is Devon Energy. The company has 190 operated/producing wells in Converse County, spanning six different formations within the Powder River Basin.
The company had originally planned on putting in 50 new wells here during 2021, but that’s no longer the case. Plans have changed, according to Devon Energy Head of Communications Lisa Adams, who said Devon has scaled back activity this year for multiple reasons. She did not elaborate.
“(Fifty) wells is no longer the plan for 2021 . . . the total number of new wells drilled/completed in 2021 will be 18,” Adams confirmed Monday.
The company does not have a drilling rig in Wyoming now, but does have plans to pick up a rig and drill an additional eight wells in Converse County this summer. It has already drilled 10 wells since January.
“With the portfolio that (Devon) has, activity has been cut back in many of the asset areas and the Rockies assets in Wyoming have been a part of this. Devon completed 10 wells in the first quarter of the year in Converse County,” Adams said Monday. “(An) activity plan for 2022 has not been solidified at this time.”
Devon has applied to the Wyoming Department of Environmental Quality (WDEQ) for a permit to construct a new sweet crude oil and natural gas production facility known as the T-55 34-3972 Pad 1 about 13 miles west/northwest of Bill in Converse County and for another additional site known as the Dilts 28-3972 Pad 1 approximately 14 miles west-northwest of Bill, also within Converse County.
Impact Exploration and Production has applied for a permit to WDEQ Air Quality, too, to perform modifications associated with one new well, known as the Juno 426 15-22H, 22 miles north of Glenrock. That’s not all the permits flowing into the state in recent weeks.
Tallgrass Midstream, LLC has applied to DEQ for a permit for the company’s Scott Natural Gas Compressor Station 19 miles north of Douglas, a permit which DEQ said it intends to issue.
Oilfield activity in Converse County is definitely ramping up, but there’s still no hard-and-fast answers as to when the boom will return.
Titan Exploration, Impact Exploration & Production, Grayson Mill Operating, EOG Resources, Anadarko, Anschutz and Devon were on the agenda with the Wyoming Oil & Gas Conservation Commission within the last couple months for varying reasons, although some companies were rescheduled for this summer.
WOGCC Supervisor Mark Watson released his monthly report last week.
Wyoming’s rig count has remained steady, according to Enverus Drill Info, sitting at seven across the state (the same as in March) with three rigs in Campbell County, two in Converse County, and one each in Laramie and Sublette.
Still, Wyoming is behind where it was in 2020, as this time last year the state had a rig count of 10, according to Baker Hughes.
Wyoming’s oil production for January was 7,401,742 barrels of oil as of April 12, a decrease in production by about 19% from this time last year, Watson said.
WOGCC received 466 applications for permits to drill received in March, a significant 188 APD increase from February’ 278.
Meanwhile, county residents are feeling the surge in oil prices. Wyoming gas prices started going up in March. Today, they’re anywhere from a low of $2.54 to a high of $2.91 a gallon in the Cowboy State, according to GasBuddy.com.
Eastgate Sinclair in Glenrock was $2.85/gallon April 18, with Douglas prices averaging about $2.60/gallon.
Brent Crude came in at $67.13 a barrel on Monday, although it reached a year high of $71.38 March 8, according to the U.S. Energy Information Administration (EIA). West Texas Intermediate showed $63.43/barrel, while OPEC Basket rode prices between the two at $65.21.
Despite the fact that oil prices have shown an uptick consistently for weeks now (with only minor fluctuations), no one’s breaking out the crystal glasses and Cristal champagne to celebrate just yet.
Instead, many are suggesting we cork the enthusiasm and just wait and see.