By Aldo Svaldi – The Denver Post – January 3, 2015
The slump in oil and gas prices that started in June has cost Colorado’s petroleum companies billions in lost market value — enough to cover the entire state budget for the upcoming fiscal year.
Thirty public Colorado-based oil and gas companies lost $26.4 billion, or nearly a third of their value, in the second half of 2014, according to a Denver Post analysis.
That amount is on par with the $26.8 billion budget that Gov. John Hickenlooper has proposed for the 2015-16 fiscal year.
The spot price for a barrel of West Texas Intermediate crude, which hit a recent peak of $107.26 a barrel June 20, closed Friday at $52.69.
Flattening global demand, increased domestic production and Saudi Arabia’s decision to no longer control supply to keep prices above $100 per barrel have all combined to push oil prices sharply lower.
As a group, the Colorado petroleum companies lost nearly a third of their total market value in the second half of the year, according to figures from Bloomberg.
Per company, the losses averaged closer to 50 percent, on par with the drop in oil prices since June.
Smaller companies, which often carry more debt and lack the financial backing to outlast a long stretch of depressed prices, were hit the hardest.