Gas wells in Moffat County will pump nearly $775,000 in additional sales tax revenue into local government budgets this year, according to preliminary reports.
Moreover, as of May 31 the county had brought in almost twice as much money from gas leases and royalties as it received in all of 2003.
The increase in revenue is providing a much-needed boost to the beleaguered county budget, county commissioners say.
"I think we're going to have an oil boom, and I think it's going to be long lasting," Commissioner Darryl Steele said.
During a trip to the natural gas fields near Rifle last week, Encana Oil and Gas Inc., officials told Steele that 1,000 new wells would be drilled every year through 2010 in Northwest Colorado.
Six hundred of those wells will be drilled in Garfield County, and the remainder will be sunk in Rio Blanco and Moffat counties.
The sales tax numbers came in last week. County Assessor Suzanne Brinks attributed the increase in taxes to higher prices at the wellhead.
Gas companies in Moffat County are taxed on the gas they produce and the equipment they use to produce it.
The assessed value of gas production in Moffat County was $336 million, an increase of $37 million.
Taxes at the wellhead as well as property assessed by the state, such as Craig Station Power Plant, accounted for 27 percent of the county's tax base in 2003, Brinks said.
Preliminary figures on state-assessed property should be in on July 1.
Brinks said she couldn't predict whether the state's property assessment would increase or decrease this year. But the state-assessed value has been declining in recent years.
Fifty-five percent of the revenue will go to the Moffat County School District, 32 percent goes to Moffat County, and the remainder is shared by Dinosaur, Craig, and special tax districts.
The county has seen an increase in lease revenues, primarily because no county-owned mineral rights were leased in 2003, said Jeff Comstock, Moffat County Natural Resources Department director.
But that's no reflection on county employees, Comstock said. The county leases its mineral rights according to demand.
The Rocky Mountains have become a major production area as demand for oil and gas has increased, he said.
Likewise, technology has been improving rapidly, accelerating the development process along with it.
In 2003, the county brought in $87,700 in revenue from mineral leases and production royalties.
As of May 31, the county had brought in $166,039.
Most of that has come from new or renewed leases, and most of the leases have been in exploratory fields near Lay or Great Divide, Comstock said. Proven fields in Powder Wash and Hiawatha continue to produce gas.
Rob Gebhart can be reached at 824-7031 or firstname.lastname@example.org.