Colorado producers are not drilling enough wells to maintain the state's current rate of oil production, the University of Colorado Leeds School of Business said.
Colorado needs about 170 wells per month, said Brian Lewandowski, associate director of the business research at the Leeds School. He estimated 57 rigs, each drilling 2.8 wells a month on average, need to remain active.
Low oil and gas prices have discouraged drilling and caused rig counts to fall. As of August, only 37 rigs on average were active in Colorado for 2015. Lewandowski forecast that will result in a sharp drop in production, causing more layoffs, lower tax revenues, and other economic hardship.
If all new drilling were to stop, Colorado oil production would drop 50% the first year. In the second year, production would drop another 25%, the study estimated.
Wells completed with hydraulic fracturing deplete rapidly, necessitating continued drilling for production just to stay even. For wells drilled in 2014, output drops 74% the first year, researchers said.
