Energy workers return for Converse County boom

2012-10-14T10:30:00Z 2013-08-11T20:17:39Z Energy workers return for Converse County boomBy ALEXANDRA SUKHOMLINOVA COCKAR Gillette News Record Casper Star-Tribune Online

GILLETTE — A few years ago, when the coal-bed methane industry was thriving in the Powder River Basin, the employees of Three Rivers Water Service worked 20 hours a day servicing the methane-producing companies.

When they physically couldn’t work anymore, they would just come to the shop, take a nap and go back to work.

“Everybody was pretty touchy. After you worked 100 hours, you are pretty burned up. Your body is just exhausted,” said supervisor Tim Fortner.

Those years were good for the business.

Since then, many coal-bed methane companies have downsized their production in the Powder River Basin, left the area or abandoned their wells. Low natural gas prices — less than $3 per million British thermal units — made it uneconomical to continue coal-bed methane production in the area.

Three Rivers Well Service once employed 25 people. It now has fewer than 10. When business became scarce, about 80 percent of those who used to work for Fortner went to North Dakota, Fortner said.

“Those people in North Dakota, they are making probably some pretty good wages. They are getting a lot of overtime and that’s where the money is. I’ve heard some guys put in 80-100 hours a week,” he said. “Some of my guys who went there bought houses for a terrible price because there’s not a lot for sale.”

Some of his former employees think the boom in North Dakota will last at least 10 years, so they decided they can afford to retire on what they make there, Fortner said.

But some of those workers who had to leave their homes in the Powder River Basin in search of greener pastures elsewhere are now coming back.

Like many areas in Wyoming, Converse County has some minerals, including some coal deposits, oil and uranium. But energy development hadn’t been booming around Douglas for many years.

Today, gas flares burning night and day on an oil rig northeast of Douglas are one glimpse of the development that is happening in the area.

A Chesapeake Energy Corp. oil rig that can be seen from Highway 59 northeast of Douglas is one of the most recent ones that went up in the area. The Oklahoma-based company started exploration and development in Converse County in 2007.

The horizontal well had an initial production rate of 1,270 barrels of oil equivalent per day and 2.4 million cubic feet of gas daily, according to Energy News On Demand, an online news service for the U.S. oil and gas industry.

All of Chesapeake’s oil rigs in the Rockies are now in Converse County. At the end of last year, the company had five rigs in the county. Last month, it leased the eighth rig.

“In the last two to three years, we started to ramp up quite a bit. It was pretty early exploratory play for a couple of years,” said Kelsey Campbell, coordinator of corporate development and government relations for Chesapeake.

“We think we’ve found a pretty good area. We are hoping to add one more rig by the end of this year. We have found kind of a core area here in Converse County that has been very productive for us and so we are kind of focusing on that.”

Converse County sits on the Niobrara Formation that spans Colorado and Wyoming and is one of the seven plays that drive oil production in the U.S. today.

The company rents rigs from Gillette-based Cyclone Drilling and Trinidad Drilling of Canada for its production in the Rockies.

“Rigs are pretty scarce. There is a lot of competition for rigs with North Dakota, Texas, so we are trying to focus the rigs that we have in these core areas,” Campbell said.

Considering how quiet energy development has been in Converse County in the past years, the activity now is fairly hot, said Bj Kristiansen, exploration geologist and a former coordinator of the Coalbed Methane Coalition.

“It doesn’t seem as active because it’s out in the middle of nowhere. They are deep drills and they have a tendency to be on site for a while. They are not getting done in two days like the coal-bed methane [wells], and so the pace is a lot slower,” he said.

After several years of booming, oil development in the Bakken oilfield in North Dakota is leveling off. Plus, constant advances in drilling technology have prompted oil companies, including Anadarko and Devon Energy and servicing companies such as Schlumberger, to turn their attention to Converse County, giving some who left the area for work elsewhere an opportunity to return home.

“A friend of mine who used to work for Schlumberger now works for a company out of Buffalo and he is out in North Dakota. And he heard that they are going to try to bring him back for [Powder River Basin], so he’s hoping to come home. Supply companies like that have been beginning to move back from North Dakota to the PRB,” Kristiansen said.

“There is quite a bit of activity going on in Converse County. We have been pleased to see a resurgence in oil production in some formations in the county, which is most likely attributed to the use of horizontal drilling,” said John Robitaille, vice president of the Petroleum Association of Wyoming.

On average, a rig creates about 25 direct jobs every day and 25 indirect jobs that service the rig, such as water haulers. In addition, it supports another 50 indirect jobs that support the energy industry, like hotel and restaurant workers and accountants.

The growing oil development in Converse County is likely to support a lot of secondary work force that knows how to develop a well, which may include former coal-bed methane workers.

“Anybody in the Gillette area and in Campbell County that was working as support operation can probably find the work down there if they have the contacts and they can get in there,” Kristiansen said. “The volume is not as high as it was in the CBM because they are not putting in 50 holes a day. But there is work out there for those who are well-versed in that kind of work.”

Compared to other parts of the country where drilling is new, Wyoming is lucky in having a lot of experienced energy workers, Campbell said.

“We try to hire locally,” she said. “It’s interesting. We are actually bringing people back to Wyoming from North Dakota, Texas and places where energy has been big for a while, and now that we are starting to see more development here they are coming home. People that have worked in energy industry their whole life but have had to work away from home for the last couple of years are able to work here now.”

Reach Jeremy Fugleberg at 307-266-0623 or jeremy.fugleberg@trib.com. Read his blog at http://trib.com/news/opinion/blogs/boom/ and follow him on Twitter: @jerenergy.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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