State Will Use CARES Act Funds To Give Oil And Gas Industry A Boost
Gov. Mark Gordon will use $15 million in CARES Act funds to create the Energy Rebound Program, a program intended to boost oil and gas activity in Wyoming. At the moment, there are five active rigs in the state compared to 25 at the beginning of the year.
"These funds will have a direct impact on Wyoming's employment rate and put people back to work in our oil and gas sector which was impacted by COVID-19. It will provide opportunities for employees who lost jobs when drilling ceased," Gordon said in a press release. His office estimates the program will help employ hundreds of workers.
Operators are eligible for up to $500,000 to take advantage of three activities: fracking wells that were drilled, but not yet fracked, re-fracking wells where production had slowed down, and plugging and abandoning idle wells. Given the money comes through federal hands, an operator will need to show those activities were interrupted as of March 13, 2020 or thereafter.
Pete Obermueller, president of the Petroleum Association of Wyoming, said producers of all sizes will likely be able to take advantage of the program.
"This is not a 'We're sorry for your loss, here's the money to make up for it.' This is a 'We will expend some CARES act money with the express purpose of kickstarting Wyoming based projects, including drilling projects, and also reclamation projects'," he said.
Obermueller said the first category, completing wells, is a particularly profitable activity for the state. If $500,000 is enough to push a company to complete a well, "they'll have to come up with their own, $3.5 to $4.5 million to invest in our economy in Wyoming in order to actually do it."
Randall Luthi, Chief Energy Advisory in the Governor's Office, said the program has come together in the last three weeks. He hopes the final rules will be finished this week and then the Wyoming Business Council will roll them out next week.
The application period for the Energy Rebound Program will likely be fairly quick since the CARES act itself requires expenditure of the money to be complete by December 30, 2020.