Oil and gas industry continues to show signs of recovery in Wyoming
Wyoming’s oil and gas industry continues to show signs of recovery from the 2020 pandemic shockwave that drove the price of oil below $0 per barrel, spurred layoffs and stalled production.
At least 18 rotary rigs were active in the state during the second week of October compared to one rig during the same week in 2020, according to Enverus, which tracks rig data on a weekly basis. Wyoming saw a rig count of zero for the first time in its history in June 2020, then again in August 2020.
Most of the drilling activity is targeting oil in the southern Powder River Basin. Ten rotary rigs were active in Converse County during the second week of October and four in Campbell County.
The natural resources and mining sector added 300 jobs from July 2020 to July 2021 to stand at 15,200, according to the Bureau of Labor Statistics and Research & Planning. The unemployment rate for Wyoming’s natural resource and mining sector held at 4.6% in July, a rate that’s generally been steady since July 2020.
Counties where oil and gas and mining activity are concentrated were among the hardest-hit by unemployment during the 2020 pandemic shutdown. That trend still applies.
Sweetwater and Natrona counties both saw 5.8% unemployment in July — the highest in the state — while Campbell County came in at 5.5%, Sublette County at 5.2% and Converse County at 5.0%, according to Workforce Services.
In addition to direct federal COVID-19 stimulus benefits, oil and gas operators in Wyoming received a total $42 million CARES Act funding stimulus from Gov. Mark Gordon’s Energy Rebound Program.
“There’s a sense of cautious optimism,” Paul Ulrich of Jonah Energy said. “We’ve clearly seen activity pick up. We’ve seen much stronger prices than we have in the natural gas world than we have for years and years.”
The price of oil was about $82 per barrel, and the price of natural gas $5.40 per thousand cubic feet, during the second week of October, according to commodity tracker Rigzone.com. If commodity prices hold, Wyoming’s oil and gas industry is expected to continue to make gains — a boon to state revenue, as well as counties that are home to drilling and extraction.
There’s even speculation that some operators might be tempted to revive natural gas drilling projects in south-central and western Wyoming that were in the planning stages in the 2010s but fizzled due to more competitive gas fields elsewhere in the United States. That speculation might also include coal-bed methane gas in the Powder River Basin where thousands of wells have been idle for years.
“Without question, when you’ve got prices that we haven’t seen in, you know, seven, eight years, it’s absolutely going to spur some interest in the new development in new exploration,” Ulrich said.
However, there’s still a lot of uncertainty in the oil and gas industry regarding federal mandates and a review of the federal oil and gas leasing program under the Biden administration. That’s intensified here because there’s a large volume of federal oil and gas in Wyoming compared with other producing states.
Policies surrounding federal oil and gas are “ever-shifting,” so it’s difficult to make bold predictions regarding the industry in Wyoming, Ulrich said.