Published: December 3, 2020 |

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An oil and gas stimulus program launched by the state this month may be accomplishing what it intended: helping operators here recover from the economic downturn.

Gov. Mark Gordon created Wyoming’s Energy Rebound Program to give companies the money they need to complete specific projects placed on hold due to the COVID-19 pandemic. That could include plugging and abandoning wells, drilling uncompleted wells or re-completing wells.

Earlier this month, Gordon announced he would dedicate $15 million in federal coronavirus relief money to create the economic relief program. Though applications were only open for about one week, the Wyoming Business Council received 65 eligible applications, with demand for the government relief far outstripping available funding.

“The results of this program show the willingness of the oil and gas industry to put people to work in Wyoming, once they get some capital to get them going,” Josh Dorrell, CEO of Wyoming Business Council, said in a statement.

In response to the high demand, Gordon doubled the amount of funding available. He allocated an additional $15 million to the program, bringing the total amount available to $30 million. The additional relief came from leftover federal coronavirus relief dollars that could be shifted to the program, according to the state.

The Wyoming Business Council, the lead agency administering the program, said on Wednesday the program would cover the expenses of 292 oil and gas projects here, thereby creating roughly 5,500 jobs over the next year, according to applicant estimates.

The program will help the operators complete 18 drilled but uncompleted wells and 131 re-completions. It would also fund the plugging and abandonment of 143 wells. Only projects located in Wyoming were funded.

Uncompleted wells have a well bore drilled, but oil and natural gas have yet to be extracted. To complete the well, operators engage in hydraulic fracturing, or fracking. Re-completing takes place when a well has already been drilled and completed, but some oil remains that can still be extracted using other recovery methods.

Back in March, a global oil price war between Russia and Saudi Arabia caused the price of oil to tank. Meanwhile, the pandemic brought the economy to a near standstill, chilling any demand for fuel. Oil and gas operators have struggled to get back on their feet ever since, with Wyoming’s rig count hovering at historic lows for months on end.

“This is a great and appropriate use of CARES Act money to respond to the devastating effects of the pandemic on our economy. The oil and gas operators responded quickly and they need to act quickly in the near future,” Randall Luthi, chief energy advisor to Gordon, said in a statement.

The funding will need to be used by the end of the year to cover the goods and services related to the projects. Approved projects can start immediately.

When applications for the program initially opened, some of Wyoming’s smallest operators said the relief was far too restrictive, according to interviews conducted by the Star-Tribune.

For one, “mom and pop” businesses may be unable to front the costs of undertaking the projects, even if the state would be reimbursing them down the road.

Operators can submit invoices for goods and services completed by the end of the year to the Wyoming Business Council as they go, according to Luthi. Though all invoices are due by Jan. 30, operators can request reimbursement as soon as the transaction has occurred.

“Companies should not be left holding the bag for a long period of time,” Luthi said.

The Petroleum Association of Wyoming considered the program an investment that would have big returns for the state.

“The overwhelming interest in the Energy Rebound Program is a testament to industry’s long-term, strategic development plan for Wyoming. The state’s funding will result in millions of dollars in private investment in Wyoming, spurring new activity, generating taxes and advancing the industry’s commitment to stewardship,” Ryan McConnaughey, communications director for the association, said in a written statement.

Source: Casper Star Tribune

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