A changing landscape in Sheridan County

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SHERIDAN — The landscape of rural Sheridan County now includes an additional element among its vast expanses of rolling hills and grazing livestock.

Near mile marker nine on U.S. Highway 14 East, an oil rig towers dramatically over the largely undeveloped terrain.
For many proponents of increased energy production, it’s a welcome sight.

Whether its operation amounts to extra revenue or added jobs for local residents remains to be seen.
Texas-based Onshore Holdings LLC is the company behind the recently constructed horizontal well.

A subsidiary of Statoil — a Norwegian oil and gas company that employs about 21,000 people in 37 countries — the well represents Onshore’s first foray into the Wyoming oil market.

Statoil spokeswoman Christine Wigand said Onshore recently entered into an agreement with another company, Cirque Resources, regarding oil exploration in Wyoming.

While Cirque is operating most of the other wells covered in the deal, Onshore is leading the charge in Sheridan County.

As for what it might yield, representatives can’t say with certainty.

“We’re basically trying to figure out what’s there,” Wigand said.

Originally leased in 2010, Onshore recently took over the lease that gives the company permission to drill on state land.

Referred to by the company as “Educated Guess,” the site encompasses a 120-acre parcel of land. Wigand said Onshore Holdings plans to drill about 11,000 feet below the surface.

Spudding — the process of breaking into the ground to begin the drilling process — began at the Educated Guess site last week and Wigand estimated the drilling process would take three to four weeks to complete.
“And then, who knows?” she said. “We have to look and see what the drilling tells us.”

Wigand said representatives of Onshore Holdings will analyze their findings and subsequently decide whether expanded drilling at the site is a financially viable option.

That process, however, could take up to a year to complete.

Still, Wigand said Statoil administrators are hopeful that Sheridan County and Wyoming represent new opportunities to increase production of energy in the United States.

“North America is a very exciting area for us,” she said.

While the United State’s dependence on foreign petroleum has declined since peaking in 2005, the country still relied on about 18.6 million barrels of imported petroleum products every day in 2012, according to figures from the U.S. Energy Information Administration.

Should the Educated Guess site go on to produce a fair amount of oil, the local economy stands to benefit via both severance tax revenues and county mill levies.

Unlike some Wyoming counties where surging extractives industries have led to sharp decreases in unemployment, Sheridan County’s jobless rate has remained fairly sluggish in recent years.

The local rate stood at 6.8 percent compared to a statewide average of 4.8 percent in April 2013, according to figures from the Research and Planning section of the Wyoming Department of Workforce Services.

State economists credit energy production with having prompted some of the most dramatic drops in county jobless rates in recent years.

And while Sheridan’s location in the Powder River Basin has historically linked the city to nearby coal production, oil drilling remains a miniscule component of the area’s economy.

Proponents of drilling activity at the Educated Guess site hope the project might play a role in ultimately reversing that trend.

By |June 25th, 2013|

About the Author:

Paolo Cisneros joined The Sheridan Press staff in August 2012. He covers business, energy and public safety. A Chicago native, he graduated with a bachelor’s degree in journalism from the University of Illinois at Urbana-Champaign in 2011.