The recent global downturn in oil prices is impacting companies who drill in Colorado. In a BizWest report published Friday, reporter Steve Lynn found that Denver-based PDC Energy Inc. has seen some of the steepest declines. Other companies have seen stock prices decline by nearly half the value following highs seen during the summer of 2014.
"The downturn in oil prices comes as oil producers plan to announce their capital spending plans for 2015, and some analysts believe those budgets could see cuts," Lynn said.
PDC Energy Inc. will drill primarily in Weld County in 2015 – but Lynn found it is planning to cut its budget by 14 percent going into the New Year.
"However PDC is still investing half a billion in this area [for 2014]," Lynn said. "They actually idled a rig in Ohio to devote more resources to drilling in Weld County. So they may be spending less in some cases but they may be shifting their capital spending back to this region, it's just not clear yet what other companies are going to do."
Global oil prices began falling from around $100 per barrel in July to $67 in December after OPEC said it would not cut production. For the time being it is still cost effective to drill in Northern Colorado.
"They can drill for around $60 per barrel," Lynn said. "They're getting close to the point where it may not be economic for some oil companies but oil prices are still high enough for them to make money here."
Weld County officials, where companies produced 80 percent of Colorado's record-breaking 64.1 million barrels of oil in 2013, and where property taxes make up the foundation of the county's budget say they are watching the situation. Lynn said it's not known yet if other companies will follow suit.
You can read more of Steve Lynn's report in BizWest.
