The Facts

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Western Values Project aims to provide members of the media, policy makers and the public with an honest, accurate and rhetoric-free source of information about energy development on public lands.

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Oil and Gas Drilling Activity on All Land Types in Montana

oil_gas_drilling_activity_MT
Source: Baker Hughes

Oil and gas exploration has reached a standstill in Montana. Not a single well has been drilled in the state since November 2015, when oil and gas prices fell below $40/BBL and $2/MMBtu, respectively.

State and Federal Drilling Permits Issued in Montana

state_federal_permits_MT

Sources: BLM Oil and Gas Statistics, MT Board of Oil & Gas Conservation 

Well permitting has also reached historic lows in Montana. The Montana Board of Oil and Gas, which issues permits for drilling on state, private and federal lands, issued fewer drilling permits last year than any year over the past decade.

Oil and Gas Production of Federal Minerals in Montana

oil_gas_production_MT

Source: Office of Natural Resources Revenue-Statistical Information 

Even though drilling and permitting declined in Montana last year, federal oil and gas production still increased from FY 2014 levels, as operators pumped more from existing wells to survive the market downturn.1

  1. See, e.g., WPX Energy, Inc. Form 10-Q 2015 3rd Quarter Financial Report at p. 31 (“Our 2015 drilling activity has been greatly reduced in comparison to 2014 as we continue to either drill locations that generate the highest economic returns, preserve leases or optimize drilling rigs already under contract in an effort to reduce the impact of rig release penalties.”).

Acres Nominated for Leasing in Montana

acres_nominated_leasing_MT

Source: BLM Oil and Gas Statistics 

As another likely response to the price climate, interest in new leasing also reached historic lows in Montana last year, as industry nominated less than 15,000 acres of federal land for lease. To compare, the previous year, in FY 2014, industry nominated more than 300,000 acres, and, in FY 2007, nominations topped 1 million acres (when gas averaged $7/MMBtu).

State and Federal Leasing in Montana

state_federal_leasing_MT

Sources: BLM Oil and Gas Statistics, MT Dept. of Natural Resources & Conservation 

For the second consecutive year, less than 100,000 acres of state and federal land were leased in Montana last year.

Federal Lease Status in Montana

federal_lease_status_MT

Sources: BLM Oil and Gas Statistics, BLM LR2000

Less than half of federal leases in Montana were actively producing oil or gas at the end of FY 2015, and more than 20% of all leases were “suspended.” As The Wilderness Society recently disclosed, industry has widely-abused the federal lease suspension program, particularly during times of economic downturn, to extend federal leases beyond their normal primary terms without satisfying normal drilling and development obligations, while also avoiding rental and royalty payments.

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