A new report out on oil and gas production on the Western Slope shows how low it's really gotten, but also shows hope for a silver lining; that the rebound we've been hoping for, could be near.
Industry analyst Carter Mathies tracks rig counts and industry trends for Arista Midstream Services and says recent numbers could be indicative of a bottom-out, “it would suggest that we are very near or at the bottom in terms of industry activity levels".
According to his report, titled "Survival Mode" and "Under Attack", rig counts in the past 180–days have plummeted down 75% in the Piceance Basin, 73% in the Uinta Basin, and 68% in the Green River Basin.
The rig count in the Piceance Basin is down from 102 to 26, putting area activity at levels not seen since 2003, as natural gas prices in the Rocky Mountain region has hit levels not seen since 2002.
He says a decline that large hits all aspects of the economy, "75% decline in your rig count, you're talking about major impacts that's touching a lot of different people".
Western Slope Oil and Gas Association Executive Director Kathy Hall says after with years of gentle regulations, the C.O.G.C.C. hit the industry hard with it's new rules, "there's been an enormous drop off of requests for permits".
Hall says the trickle–down affect is one of the downfalls she's looking most forward to the Western Slope overcoming, "when people lose their jobs, that goes down to that they don't eat in restaurants, they drop their membership at the gym, nails, hair salons...all those things are reliant on a good economy and people making money".
Mathies says although we'll likely never return to the peak production levels we were at, he thinks the return will be enough to sustain a healthy economy, and hopes it will happen sooner than later, "I'm expecting we'll start to see signs of life as early as the very end of this year, but really, safer, second or third quarter of 2010."
Mathies says between services and supplies, as many as thirty businesses rely on just one rig, another part of local economy he hopes will get a chance to get back on its feet.