Wyoming's oil and gas producers say Christmas came early last week when the Bureau of Land Management extended the deadline for compliance with bonding requirements that threatened to shutter small operators across the state.
The Direct Final Rule delays enforcement of Biden-era regulations that would have increased bonding costs by 1,400% while the Trump administration works toward permanent solutions.
"This marks significant progress in addressing the anti-oil and natural gas regulations that were handed down during the previous administration," said Pete Obermueller, president of the Petroleum Association of Wyoming. "While this rule does not cover new bonds and does not fully rescind these outrageous bonding requirements, it does give Wyoming's small operators much needed breathing room on their existing bonds."
PAW’s website announced the news with the headline, “Christmas Comes Early for Operators in Wyoming.”
The Biden administration justified the bonding increases as necessary to protect taxpayers from the cost of plugging “orphaned” wells — wells whose operators have gone out of business or walked away, leaving cleanup costs to the public.
But federal data suggests Wyoming isn't where the orphan well problem lies.
By The Numbers
According to the Department of Interior's Orphaned Wells Program FY 2023 Annual Report, 126,806 documented orphaned wells exist across 26 states.
The vast majority are concentrated in private land states with long production histories: Pennsylvania leads with 26,908 orphaned wells; followed by Ohio with 19,662; Oklahoma with 17,865; Kentucky with 11,728; and Texas with 7,396.
Wyoming, by contrast, has 1,311 documented orphaned wells — roughly 1% of the national total.
In Wyoming, about 65% of oil production and more than 75% of natural gas production happens on federal land, where operators have long been subject to bonding requirements and regulatory scrutiny.
Steve Degenfelder, a landman with Kirkwood Oil and Gas in Casper, said he hopes the delay prompts a closer look at the issue.
"It was nice to hear the increased bonding requirements put in by the Biden administration will be delayed for a period of time," Degenfelder told Cowboy State Daily. "Maybe the BLM in DC or Congress will take a closer look at where most of those orphaned wells really are. As the attached article and USGS maps show, the majority of orphan wells in the country are in private land states."
Despite that reality, Biden administration rules raised single lease bonds from $10,000 to $150,000 and statewide blanket bonds from $25,000 to $500,000 — costs that would exceed the annual gross revenue of more than 25% of Wyoming's operators, according to the Wyoming Oil and Gas Conservation Commission.
Gov. Mark Gordon signed Senate File 20 in early March, creating a $45 million bonding pool to help smaller producers.
That legislative solution now has time to be fully implemented thanks to last week's BLM extension.
The relief caps a turbulent year for Wyoming's oil and gas sector — one marked by regulatory shifts and technological breakthroughs.
Slow Start
The year began with Wyoming's Powder River Basin struggling for relevance despite its potential.
In January, industry analysts told Cowboy State Daily that the basin — home to about 11 of the state's 15 operating rigs — barely registers on national radar.
The Niobrara and Mowry shale formations showed break-even costs consistently above $50 per barrel, making Wyoming uncompetitive against the Permian Basin and North Dakota's Bakken.
In March, analysts at the firm Enverus explained why the oil-friendly Trump administration alone wouldn't spark a drilling boom: pipeline infrastructure gaps, inconsistent well results, and global market dynamics all conspired against rapid expansion.
Big Reserves
Last spring, a U.S. Geological Survey report found 47 million barrels of recoverable oil and 876 billion cubic feet of gas in Wyoming's deeper Paleozoic reservoirs.
Another USGS study found the Mowry Shale formation holds an estimated 473 million barrels of oil and 27 trillion cubic feet of natural gas across southwestern Wyoming, Colorado, and Utah — reserves potentially comparable to the Bakken boom.
In April, the Department of Interior announced it would no longer require environmental impact statements for more than 3,200 oil and gas leases across Western states.
Wyoming held the largest share with 2,147 leases covering nearly 2.25 million acres.
By June, the Trump administration pushed forward the long-stalled Converse County Oil and Gas Project, a 5,000-well development spanning 1.5 million acres that could generate up to $28 billion in federal revenues.
Going Deep
Drilling technology advanced in 2025, as Anschutz Exploration began Wyoming's first 3-mile lateral wells, with Gillette-based Cyclone Drilling pushing toward 4-mile laterals.
Yet analysts warned that OPEC+ production increases could keep prices in the $55-65 range, potentially costing Wyoming jobs.
In late July, legislators advanced a $250 million proposal to boost enhanced oil recovery using carbon dioxide injection, targeting 2 billion barrels in aging conventional fields.
Year's End
Federal lease sales rebounded dramatically in 2025, with six sales scheduled after record lows during the Biden years.
The Dec. 30 sale — required under the "Big Beautiful Bill" Act after more than 33% of acreage went unleased at the Dec. 3 sale — marks the sixth this year.
The industry has filed expressions of interest on more than 5 million acres, though at current sale rates, working through the backlog could take decades.
Looking back, Degenfelder said the year exceeded expectations.
"I would say 2025 has been better than anticipated mainly because of the two Supreme Court decisions raising the bar for appeals based on NEPA analysis and the Big Beautiful Bill Act that was signed by the president July 4, 2025 which reversed many of the Biden administration changes that were designed to make federal lands as unattractive as possible to the oil and gas industry," Degenfelder said. "In a federal state like Wyoming, that is bad for our economy."
One third of Wyoming's oil and gas is produced by small, locally-owned companies, according to PAW. The bonding relief ensures those operators can continue into the new year.
"We will continue to work with the Trump Administration to fully address our concerns as we partner with them to unleash domestic oil and gas production on federal lands," Obermueller said.
David Madison can be reached at david@cowboystatedaily.com.
