Drilling permits were 3rd-highest ever for last year

Colorado in 2010 posted its third-best year ever for oil and gas drilling permitting, according to year-end figures.

The state fell just short of the 6,000 mark last year, with 5,996 permits being issued, said David Neslin, director of the Colorado Oil and Gas Conservation Commission.

Notably, Weld County also ended Garfield County’s five-year reign as the permit leader. The state issued 2,152 permits for Weld County last year and 2,037 for Garfield County.

The state total trails only the 6,368 issued for 2007 and the record 8,027 in 2008, before a sharp slowdown in drilling the following year.

Neslin said that his agency is “pleased and encouraged with the level of activity” last year.

“I think this does show steady growth by the industry although it continues to face the challenge of low (natural) gas prices,” he said.

He said interest in oil development in the Niobrara formation in Weld County helped drive 2010’s permitting activity, as did continuing investment in northwest Colorado’s Piceance Basin by companies such as Williams and EnCana Oil & Gas (USA).

Garfield’s 2010 total still was its third-best ever, behind the 2,888 issued in 2008 and 2,550 in 2007.

Continuing strong interest in the Piceance Basin also was reflected by the fact that Rio Blanco and Mesa counties ranked third and fourth in the state in 2010 permits, at 441 and 306, respectively, followed by Yuma County (299) and La Plata (191).

Rio Blanco’s total, its second highest, is up from 2009’s 348, but down from 477 in 2008. Mesa’s is its third highest, but down from 427 in 2009 and 501 in 2008.

Neslin said he would expect next year’s permit numbers will be affected by his agency’s decision a year ago to make permits last for two years rather than one.

That will affect when companies will refile applications for expired permits.


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