STEAMBOAT SPRINGS, Colo.—The slowdown in Colorado’s oil and gas boom has reached Moffat County, where well-drilling applications have fallen sharply.
Only 42 applications have been filed so far this year, compared with at least 125 and as many as 145 in each of the past five years.
Energy companies blame falling prices, a lack of pipeline capacity to ship natural gas to more lucrative markets, and the credit crunch that makes it harder to borrow money to drill.
“We can’t ship it out of the Rockies, and consequently, we can’t sell it for a very good price, compared to the rest of the country,” said Doug Hock, spokesman for EnCana Oil and Gas (USA), one of the largest gas producers in the Rockies.
Hock said the pipeline squeeze together with low prices have been a “one-two punch.”
Questar Corp., which operates a Moffat County gas field through its Wexpro subsidiary, is scaling back its spending in the region, said Paul Matheny, a Questar vice president.
“We have certainly rearranged our drilling plans and significantly decreased the amount of money we’re going to spend on natural gas drilling in the Rockies, at least for one year,” he said.
Wells “cost more to drill than they make in revenues,” Matheny said.
Jeff Comstock, Moffat County Natural Resources Department director, called the drop-off in drilling activity “dramatic.”
He said Moffat County may be especially hard hit because of the difficulty in finding reserves there.
“We’re the place they go when they have extra money,” Comstock said. “We’re the surplus, the bonus. (Companies) may stay in their proven operations elsewhere.”
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Information from: Steamboat Pilot & Today,
