More Oil and Gas Companies Dropping Rigs

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Tighter rules and regulations on drilling have some oil and gas companies cutting back on their number of rigs.

Ken Leis of Laramie Energy II says they will cut their number in half, "we pretty much had four rigs running in 208, we dropped on rig about a month ago and we're planning on dropping another rig in about a month."

At a forum in Rifle Thursday, several other companies announced cutbacks as well. Antero moved from four rigs down to two, Williams plans on averaging 20 rigs next year, down from 26.

"A big reason is the uncertainty of the oil and gas regulations," says Leis. Dave Reslin the acting director of the Colorado Oil and Gas Commission says hopefully those rules should be finalized next week. "We want to ensure the rules are implemented in as smooth a manner as possible and that we reduce some of this uncertainty and concern as much as we can," says Reslin.

Leis says he is skeptical that the rules will be finalized next week, "we see even if the rules come down in a favorable situation there is still going to be a lot of delays that are going to happen on the permitting process."

Reslin says productivity levels will likely drop 25 to 35 percent down to levels last seen in 2006. "My understanding that the largest factor driving the reduction in activity are the global economic deterioration," says Reslin.

Another factor says Reslin is the drop in the price of oil and gas. Laramie Energy says at the least they want to run one rig next year.

If the new regulations are approved next week they won't be implemented until next year.

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