By Mark Jaffe – The Denver Post – March 8, 2015
After a year in which dollars and oil from drilling rigs flowed freely into Colorado, the nine major drillers on the Front Range are slashing 2015 spending by 30 percent, about $2 billion.
The number of rigs running has already dropped by a third in five months to 44 at the end of February, according to the oil field services company Baker Hughes.
The cuts come as the price of U.S. oil on the spot market has plummeted to $49.61 a barrel from $107.26 in June.
So far, the cutbacks haven’t had a severe impact on the state or on Weld County, the heart of Colorado oil country, partly the result of a diversified economy and continued big-dollar commitments by operators — even after the cuts.
“Hotels and restaurants still look to be full,” said Eric Berglund, CEO of Greeley-based Upstate Colorado Economic Development. “Beyond drilling, there is a large oil and gas industry presence here.”
There are thousands of existing wells that still need to be serviced, pipelines are being built, and gas processing and water recycling plants need employees, Berglund said.
The cuts in spending are returning the industry to about what it spent in 2013, he said.
“We haven’t seen any uptick in unemployment claims in the oil and gas sector,” said Bill Thoennes, a spokesman for the Colorado Department of Labor. “This may be something coming down the road, but we haven’t seen it yet.”