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Despite high prices, Campbell County oil industry not booming

Despite high prices, Campbell County oil industry not booming

Associated Press

GILLETTE — A critical shortage of rigs and personnel to run them are preventing northeast Wyoming production companies from reaping the benefits of record-high crude oil prices.

On Thursday, light, sweet crude oil for May delivery rose $1.03 to settle at $54.84 a barrel on the New York Mercantile Exchange. The markets were closed on Good Friday.

In Campbell County, manpower is a problem for the oil industry because coal and coal-bed methane companies are doing well and siphoning off many available workers, said Jim McLeland, owner of M&K Oil, of Gillette.

"Everyone is very busy right now," he said. "A lot of people who were in the oil industry left when it was in a slump and prices went so low that they couldn't work anymore. Now operators face the twin hurdles of finding reliable people and then taking the time to train them, not to mention that rigs and service equipment are very thin on the ground."

Ballard Oil's Phil Jordan, whose firm has roughly 100 active wells in the county, said his company is exploring more and has been putting more wells on line since 1999, with increased activity in the last three years or so.

"Our biggest problem now is getting things going sooner — obtaining service people and rigs," he said. "Eighty percent of our down time is waiting for workover rigs."

Service companies have discussed buying more rigs, but it's a risky proposition given the volatility of the industry and the lack of people to run them, Ballard said.

Another key factor is the intermountain refineries' oil needs were contracted for by a Canadian pipeline several years ago.

Plus, Wyoming oil is not as pure, and as a result it sells for less.

"Higher prices help Wyoming as a rule," said Kevin Kane, Rocky Mountain regional manager for Citation Oil, which has about 200 active Campbell County wells. "But the price we get on our relatively sour and heavy crude has hefty deducts."

Copyright © 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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