Oil prices continued their months-long freefall this week. The US benchmark crude price dropped below $60 a barrel for the first time in five years on Thursday. In Wyoming and other oil producing states, those lower prices are starting to take a toll on companies.
Cyclone Drilling is one of Wyoming's largest drilling contractors. Manager Patrick Hladky says if prices don’t rebound quickly, he’s expecting to idle at least two of the company’s 27 rigs by the end of the month and even more in the first quarter of next year.
“I don’t know what tomorrow brings. It could be a 25 percent reduction, it could be a 50 percent reduction, it could be back to ‘08 numbers, where we see up to an 80 percent reduction in fleet,” he said.
Drilling had been picking up in Wyoming in recent months, but state geologist Tom Drean says sustained low prices could curtail that.
"Another month or two at these prices, there's going to be more concerned [companies] and I do believe there will be a slowdown in drilling activity,” he said.
Most analysts expect the downturn in prices to last through 2015. So far, Wyoming’s rig count is largely unchanged -- 59, compared to an average of 61 in November.