By Bob Moen/AP

Despite recent low prices for oil and gas produced in Wyoming, 2008 was a good year for the industry in the state thanks to strong prices earlier in the year and good production, industry officials say.

However, it appears 2009 could see continued low prices for Wyoming oil and gas, which could mean less money for state coffers and more small energy firms closing their doors.

Natural gas production in Wyoming through last August was up 9.4 percent, according to Don Likwartz, supervisor of the Wyoming Oil and Gas Conservation Commission.

“That will make the 11th year in a row we’ve had an increase in gas production,” Likwartz said. “So that looks very good.”

Gas produced in Wyoming should end up fetching about $6.50 per thousand cubic feet on average for the year, he said. Gas prices averaged about $7.45 through the first eight months before dropping during the last four months of 2008.

Oil prices also dropped in late 2008 but not before averaging around $102 through August, Likwartz said. “I’ve never seen any price go so high so quick and drop so quick,” he said. “I mean usually it goes up for a year, year and a half and then you see the opposite.”

Likwartz said the state should average about the same daily number of oil and gas drilling rigs in 2008 as it had in 2007.

“But I would think we’ll lose some of those large rigs just like the other states are because of the precipitous drop in oil prices and gas prices,” he said. “But I don’t think it will be as bad as some of the other states because we got four companies with expensive specialty rigs that they’ve hired in Jonah and Pinedale.”

Still, Likwartz said the state’s oil production was expected to drop when final numbers for 2008 were tallied. The state had reversed its downward oil production in 2006 and 2007.

Likwartz said he believed the drop in oil production indicates that producers had reached a peak in their efforts over the last couple of years to bring old wells back into production with new technology.

Likwartz said the new year figures to see Wyoming producers continue to receive lower-than-average prices for their products, mainly because of a lack of pipeline space to move it to markets out of the state.

Several small energy companies in Wyoming went out of business in 2008 because of the low prices and the economic downturn, he said.

Bruce Hinchey, president of the Petroleum Association of Wyoming, said 2009 could be a tough year because of low prices for oil and gas, drilling restrictions and rising production costs.

However, he wasn’t prepared to say the current energy boom in Wyoming was going bust.

“We still got a big demand for energy,” Hinchey said.