Garfield County drilling permits up in 2008, but fewer rigs active |

Garfield County drilling permits up in 2008, but fewer rigs active

John Gardner
Glenwood Springs correspondent
Aspen, CO Colorado

GLENWOOD SPRINGS ” Garfield County recorded 2,888 oil and gas drill permits in 2008 ” the most in the state. The permits are issued by the Colorado Oil and Gas Conservation Commission.

The total represents a record year for permits approved in Garfield County.

And while the number of drilling permit applications thus far in 2009 is on par with 2008, the actual number of drilling rigs is down between 33 and 50 percent, according to Judy Jordan, Garfield County oil and gas liaison

“I’m guessing that we are down in terms of activity and number of rigs in the county by about one-third,” Jordan said.

“Industry publications and production engineers consistently cite the price of (natural) gas, which is extremely low, as the reason for dropping rigs,” Jordan said, citing a report given to the county commissioners on Monday.

Jordan said it’s difficult to assess the total number of operating drill rigs in the county at any given time because the number can change daily. However, as of Dec. 5, 2008, Garfield County had 58 rigs operating out of the 121 drilling rigs operating in the state on that date.

During the peak of 2008, Colorado had 132 working drill rigs with 74 in Garfield County. Jordan estimated the current number of working rigs could be as low as 50 as of Monday.

“That is pretty much across the board,” Jordan said. “Every company is saying that they are lowering their activity due to the low price of gas. That is the issue.”

In some cases, she added, tighter credit markets are a factor in the drop in activity.

“Some of the companies depend on the credit market to keep with financing their ongoing operations,” Jordan said.

Commissioner John Martin expressed concern over the slowdown, predicting the decrease in activity will impact the county’s budget in 2010. Martin said oil and gas development accounts for 67 percent of the county’s revenue and he expects that revenue to drop by as much as 30 percent in 2009.

Weld County had the second highest number of approved drilling permits in the state last year with 2,340, followed by Yuma County at 545, Mesa County at 501, Rio Blanco at 477, La Plata at 328 and Las Animas at 303. All other permits in all other counties accounted for a total of 645.

Six counties account for 84 percent of the 37,270 total active oil and gas wells in the state. Weld County has the highest number with 13,710, followed by Garfield County at 5,465. Yuma, La Plata, Las Animas and Rio Blanco round out the top six, with 3,331; 3,054; 2,888 and 2,637, respectively.

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