GILLETTE, Wyo. — According to a report the Wyoming State Geological Survey, or WSGS, released today, oil and gas production have returned to pre-pandemic trends.
Relatively steady production, high prices and resumption of federal oil and gas lease sales made 2022 a largely good year for oil and gas in Wyoming.
In its June 2022 oil and gas lease sale of 129 parcels that totaled about 130,000 acres, the BLM sold 81 parcels, totaling 67,600 acres. That’s down from 570,000 acres in federal fiscal year 2020 and 1.2 million acres in fiscal year 2019. There wasn’t an oil and gas lease sale in 2021. The next one is supposed to occur in the second quarter of 2023.
Companies completed more than 100 oil or gas wells in Wyoming in the first half of 2022, particularly in the southern Powder River Basin or Denver Basin. In 2020 and 2021, most oil and gas well completions were previously drilled.
Converse and Campbell County counties produced about 60% of all of Wyoming’s crude oil over the past two years, the Oil & Natural Gas Resources in Wyoming January 2023 Summary Report said. Laramie County, in the Denver Basin, has become the state’s third top oil-producing county.
The Consensus Revenue Estimating Group in fall 2022 predicted the state would produce 90 million barrels of crude oil in 2022. Final data from last year are still coming in, but at this point, Wyoming appears to be on track to meet that forecast.
“Wyoming’s oil production has doubled in the past 10 years, mostly due to operations in Converse and Campbell counties,” WSGS geologist Derek Lichtner said in a news release. “New discoveries—and known reservoirs with new technologies—have transformed the industry’s activity in Wyoming in a relatively short time.”
Since a 2009 peak, natural gas production has gradually declined.
The Consensus Revenue Estimating Group predicts natural gas production will remain steady or slightly increase in the near future due to high natural gas prices, but production will gradually decline in 2026 and beyond.
Sublette County’s gas fields remain the largest natural gas producers in the state, followed by Sweetwater and Fremont counties. Most new natural gas well completions are in the Greater Green River Basin.
What lies ahead
Predictions for the oil and gas industry vary among organizations and even among groups’ quarterly reports.
The Consensus Revenue Estimating Group predicts oil and gas production volumes should be about the same in 2023. Many industry groups predict global demand for petroleum will keep increasing. Growing demand and forecasts of higher prices will likely keep production high regionally and in Wyoming, but day-to-day uncertainty hinders investments.
“Without these funds, companies are unable to improve and expand operations, resulting in a market in which oil and gas supply is unable to keep pace with demand,” the report said. “In this way, short-term market volatility can grow into long-term uncertainty.”
Wyoming tax revenue partly depends on the oil and gas industry’s operations and market value. Geopolitical, financial and health crises around the country and the world influence market value.
“If anything is certain, it is that Wyoming’s oil and gas industry will continue to adapt to an always changing, often unpredictable world,” the report said.