From Deseret News archives:
Utah hits pay dirt — record drilling permits
Last year the division handed out 2,062 permits, a 27 percent increase from 1,630 permits issued in 2005.
"What you're seeing is a surge in Utah," said Jim Felton, a spokesman for Denver-based Bill Barrett Corp. "Of the Rocky Mountain states, Utah is perhaps the latecomer to the party. 2006 was the year that the Rockies eclipsed the Gulf Coast in terms of natural gas production."
John Baza, director for the division, said 2006 was the third consecutive year a record has been set.
"Our oil and gas program is just humming," Baza said. "All of our people are busy to the max. If it gets much busier than this we might have to go back to the Legislature and ask for help. Right now I think we're able to cope with it."
Baza said the division employs 29 people, up from 24 in 2004. Even though oil prices have slipped a little, Baza said he anticipates 2007 will be another busy year.
"I think there is always a lag time between industry response and oil price," Baza said. "I don't know that it really has fallen enough that it would change the activity level. Maybe if it dropped back into the mid-$40s (per barrel) then people would start curtailing their drilling activity."
On Tuesday, crude oil in New York plunged to its lowest price in more than 19 months to $51.21 a barrel on the New York Mercantile Exchange.
In 2006, Salt Lake-based Questar Corp. participated in the drilling of roughly 75 to 100 oil and natural gas wells in the Uinta Basin.
"We'll do about the same again this coming year," said Chad Jones, a spokesman for Questar Gas. "There's considerably more activity in the last couple of years just due to the prices."
About 55 percent of all new permits granted in Utah result in an actual drilling operation. Companies have one year to commence drilling after securing a permit, but they can be granted an additional year extension.
About two-thirds of the permits issued in 2006 were in Uintah County, where oil and natural gas discoveries are driving a surge in job growth.
E-mail: danderton@desnews.com
